Schuman v. Kobets

• Decision Date: 15 January 2002
• Docket Number: No. 49A05-0103-CV-91.,49A05-0103-CV-91.
• Citation: 760 N.E.2d 682
• Parties: Linda K. SCHUMAN, Appellant-Plaintiff, v. Ernest M. KOBETS & Susan G. Kobets d/b/a Lynnleigh Apartments, Appellees-Defendants.
• Court: Indiana Appellate Court

760 N.E.2d 682

Linda K. SCHUMAN, Appellant-Plaintiff, v. Ernest M. KOBETS & Susan G. Kobets d/b/a Lynnleigh Apartments, Appellees-Defendants.

No. 49A05-0103-CV-91.

Court of Appeals of Indiana.

January 15, 2002.

Timothy E. Peterson, D. Robert Webster, Bamberger & Feibleman, Indianapolis, IN, for Appellant.

Nana Quay-Smith, Karl L. Mulvaney, Daniel R. Fagan, James P. Strenski, Bingham McHale LLP, Indianapolis, IN, for Appellee.

OPINION

FRIEDLANDER, Judge.

Linda Schuman appeals the trial court's grant of a motion for partial judgment on the pleadings in favor of Earnest and Susan Kobets d/b/a Lynnleigh Apartments. Schuman presents several issues for review which we consolidate and restate into the following issue: Did the trial court err when it granted the Kobetses' motion for partial judgment on the pleadings?

We affirm.

The facts most favorable to the nonmovant reveal that Linda Schuman rented an apartment from Ernest and Susan Kobets d/b/a Lynnleigh Apartments from April 1989 to November 1993 under an oral month-to-month lease. In June 1990, pigeons began roosting in a broken window casing of the dining room window and in the wall next to the bathroom window of Schuman's apartment. Despite repeated requests, the Kobetses failed to make the needed repairs. In July of the same year, Schuman began suffering from enlarged lymph nodes and other maladies, including a cough and fever.

In August 1990, Schuman was diagnosed with histoplasmosis.¹ Schuman reported her diagnosis to the Kobetses, after which the Kobetses proceeded to remove the pigeons and repair the windows and walls. Schuman then sought reimbursement for her doctor bills from her landlords. The Kobetses ignored Schuman's demands for payment. Apparently, Schuman let the matter rest without initiating litigation. Schuman's doctor had told her that her illness would pass in a few months, and in the fall of 1990, Schuman's histoplasmosis symptoms did eventually disappear.

In the early fall of 1995, however, Schuman's histoplasmosis symptoms resurfaced. This time, Schuman was hospitalized and nearly died. Schuman's mother, Rachel Stuckey, came from her home in Fort Wayne to be at her daughter's bedside. After Schuman's release from the hospital, Stuckey took her daughter back to Fort Wayne to care for her.

As a result of contracting histoplasmosis, Schuman incurred $3,000 in medical bills in 1990 and over $135,000 in medical bills between 1995 and 1996, was forced to delay her employment as a registered nurse for over one year, and missed three months of full-time employment between 1995 and 1996. Schuman has also been informed that the histoplasmosis could resurface at any time.

On June 4, 1996, Schuman filed a Complaint for Personal Injury under three theories of liability: common law negligence; breach of implied warranty of habitation and use; and breach of city ordinances 19-2 and 19-4 insofar as the apartments constituted a "nuisance" under the same. Stuckey also filed suit for negligent infliction of emotional distress. All claims were summarily dismissed by the trial court and affirmed by the court of appeals. On transfer, the supreme court affirmed the dismissal of all tort claims, but reversed and remanded with respect to Schuman's implied warranty of habitability claim. On remand, the Kobetses moved for partial judgment on the pleadings with respect to the damages available to Schuman based on the implied warranty claim. On January 10, 2001, the trial court granted the Kobet's motion and ordered that recovery in Schuman's claim for breach of implied warranty of habitability be limited to economic damages, thereby precluding any consequential damages.

Pursuant to Indiana Trial Rule 12(C), if on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56. Because materials submitted outside of the pleadings were considered by the trial court, we will review this case as a ruling on a motion for summary judgment.

When reviewing a grant of summary judgment, we apply the same standard as the trial court. Summary judgment is appropriate only where the designated evidentiary material shows that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Hayden v. Paragon Steakhouse, 731 N.E.2d 456 (Ind.Ct.App.2000). Once established, the burden then shifts to the nonmovant to respond with specifically designated facts that establish the existence of a genuine issue for trial. Id.

On review, we may not search the entire record to support the judgment, but may only consider that evidence which was specifically designated to the trial court. A presumption of validity clothes a trial court's grant of summary judgment, and the appellant has the burden of demonstrating to this Court that the trial court's grant of summary judgment was erroneous. However, we must carefully assess the trial court's decision to ensure the non-movant was not improperly denied his day in court.

Id. at 458 (citations omitted). We resolve all facts and reasonable inferences therefrom in favor of the nonmoving party. Merchants Nat'l Bank v. Simrell's Sports Bar & Grill, Inc., 741 N.E.2d 383 (Ind.Ct. App.2000).

Following the trend of several other states, Indiana has reexamined the rights and duties governing the landlord-tenant relationship. Specifically, Indiana courts have progressively replaced the common-law doctrine of caveat lessee with the adoption of an implied warranty of habitability in the context of residential leases. See Breezewood Mgmt. Co. v. Maltbie, 411 N.E.2d 670 (Ind.Ct.App.1980) (holding that the tenants had a reasonable expectation that their housing would conform to the minimum housing code in effect, and when it did not conform, the landlord breached an implied warranty of habitability); Barnes v. Mac Brown and Co., Inc., 264 Ind. 227, 342 N.E.2d 619 (Ind.1976) (extending a builder's implied warranty of habitability to a subsequent purchaser, limiting liability to latent defects not discoverable by a subsequent purchaser's reasonable inspection of the premises before the sale); Theis v. Heuer, 264 Ind. 1, 280 N.E.2d 300 (Ind.1972) (holding that the rule of caveat emptor is no longer valid with regard to the sale of a new residence by the builder-vendor to the immediate purchaser). Although an implied warranty of habitability is not imposed by law on every residential lease contract, it may arise from the course of dealing between the parties and may be evidenced by acts done in the course of performance or by ordinary practices in the trade. Johnson v. Scandia Assoc., Inc., 717 N.E.2d 24 (Ind.1999).

This movement away from caveat emptor reflects the recognition that the modern tenant lacks the skill and "know-how" to inspect and repair housing to determine if it is fit for its particular purpose. Boston Housing Authority v. Hemingway, 363 Mass. 184, 293 N.E.2d 831 (1973). The landlord, on the other hand, is more familiar with the dwelling unit and mechanical equipment attached to that unit, and is more financially able to "discover and cure" any faults and break-downs. Hilder v. St. Peter, 144 Vt. 150, 478 A.2d 202, 207 (1984) (quoting Green v. Superior Court, 10 Cal.3d 616, 111 Cal.Rptr. 704, 517 P.2d 1168, 1172 (1974)). Given the changing circumstances, imposing the doctrine of caveat lessee on residential leases would in effect shield landlords from liability and place tenants in an inferior bargaining position in comparison to that of the landlord. Thus, Indiana courts have consistently acknowledged the landlord's duty to render the premises habitable even in the absence of an express covenant.

Although Indiana clearly recognizes the implied warranty of habitability in the context of landlord-tenant disputes, it is less obvious whether the implied warranty provides the basis for relief on claims of personal injury. See Hodge v. Nor-Cen, Inc., 527 N.E.2d 1157 (Ind.Ct.App.1988) (declining to address the extension of the warranty of habitability to personal injury claims); Old Town Dev. Co. v. Langford, 349 N.E.2d 744 (Ind.Ct.App.1976) (holding that upon breach of an implied warranty of habitability, landlord is liable to tenant for all damages available under traditional remedies for breach of contract and for personal injury and personal property damage in tort under traditional negligence principles), trans. granted 267 Ind. 176, 369 N.E.2d 404 (Ind.1977) (vacating the court of appeals decision and later dismissing without further opinion because the parties had settled the matter and the question became moot). Until recently, discussions regarding remedies available under the implied warranty of habitability were limited. Previous cases indicated that the proper measure of damages for a landlord's breach of an implied warranty of habitability is the difference between the rents paid for the apartment as warranted and its fair rental value in the substandard condition, compensating the tenants for their economic loss. Breezewood Mgmt. Co. v. Maltbie, 411 N.E.2d 670. Upon review, Schuman requests that we extend the remedies available under contract law to include the expenses she has incurred as a result of the personal injuries sustained from the Kobetses' breach of implied warranty of habitability.

Schuman argues that consequential damages, including personal injury damages, are recoverable in...