St. Joseph Bank & Trust Co. of South Bend v. Wackenhut Corp.

• Decision Date: 18 August 1976
• Docket Number: No. 3--576A114,3--576A114
• Parties: ST. JOSEPH BANK & TRUST COMPANY OF SOUTH BEND, Indiana, Trustee, Appellant, v. The WACKENHUT CORPORATION, Appellee.
• Court: Indiana Appellate Court

Page 842

352 N.E.2d 842

170 Ind.App. 288

ST. JOSEPH BANK & TRUST COMPANY OF SOUTH BEND, Indiana, Trustee, Appellant, v. The WACKENHUT CORPORATION, Appellee.

No. 3--576A114.

Court of Appeals of Indiana, Third District.

Aug. 18, 1976.

James H. Pankow, South Bend, for appellant.

Richard E. Steinbronn, Thornburg, McGill, Deahl, Harman Carey & Murray, Elkhart, for appellee.

LOWDERMILK, Judge.

CASE SUMMARY:

Plaintiff-appellant St. Joseph Bank and Trust Co. of South Bend appeals from summary judgment for defendant-appellee Wackenhut Corporation.

We reverse.

FACTS:

St. Joseph's predecessor in interest leased certain real property to Delta Homes Corp. for a period of ten years: from April 15, 1970, through April 14, 1980. Delta engaged Wackenhut to provide security guard service on the leased premises.

Late during the night of January 4, 1973, or early the next morning, fire damaged the leased property, rendering it untenantable for more than two months. A Wackenhut guard was on duty at the time of the fire.

On February 1, 1973, Delta--pursuant to a lease provision--terminated the lease because the premises had been damaged so as to become untenantable.

St. Joseph initiated this action alleging that Wackenhut was negligent in hiring and training its guards and, through the acts of those agents, was negligent in performing security duties. St. Joseph prayed for recovery of the rents lost because of Delta's termination and also sought pounitive damages.

In its opinion on Wackenhut's motion for summary judgment, the trial court stated, in pertinent part:

'. . . (I)t was understood by the parties at the time of hearing on said motion and by the briefs filed that for the purpose of ruling on the motion the Court could assume that defendant was negligent as alleged and the only issue is whether or not as a matter of law the damages sought by plaintiff are recoverable. If damages are recoverable under the assumed facts then the question is how much and whether punitive as well as compensatory are recoverable and in that event the motion should be overruled. If as a matter of law such damages are not recoverable then the motion should be sustained.

'Based upon said stipulated and assumed facts the principle applicable according to the case law of Indiana as the Court understands it to be and to have existed in this jurisdiction for many years is whether or not the damages sustained by plaintiff were reasonably foreseeable to an ordinarily prudent person or to state it another way in terms of proximate cause, whether or not the damages were too remote or speculative and therefore not to be reasonably anticipated by the tort feasor. This principle is stated as follows in 57 A.J.2d Negligence Sec., page 514:

"When the result complained of is not reasonably foreseeable in the exercise of ordinary care under all the facts as they existed, an essential element of actionable negligence is lacking; an injury which could not have been foreseen or reasonably anticipated as the probable result of an act of negligence is not actionable, and is viewed as either the remote cause, or no cause whatever of the injury.' In support of this statement an Indiana case is cited, 170 Ind. 1, 83 N.E. 626.

'The Supreme Court of Massachusetts in an early case set out in 171 Mass. 536, 51 N.E. 1, stated it as follows:

"In an action for negligent injury to property, where the Court is able, on all the evidence, to see that the injury was not probable, but was a remote result of negligence, it should so rule as a matter of law and not submit the question to the jury.' The Court further stated:

"The question is not whether it was a possible consequence, but whether it was probable, that is, likely to occur, according to the usual experience of mankind.'

'In the case at bar and applying the above stated principles the Court is of the opinion that the loss of rental for the unexpired term of the lease involved was not reasonably foreseeable by an ordinarily prudent person under all the assumed facts and circumstances and that it was remote and indeed speculative.

'In the first place, the defendant was not a party to the lease and nothing is before the Court showing that it, at the time of the fire, was even aware that there was a lease of the building involved. The defendant should not be reasonably charged with remote consequences of the termination of the lease from the occurrence of the fire such as loss of rental for the unexpired portion of the term under such a fact situation. Moreover, neither should defendant be charged with having reasonably foreseen that the economic conditions after the fire would be such that the restored building could not be released or if re-leased at what rental.

'In the second place, to hold otherwise, as pointed out by defendant's counsel, would be tantamount to a guarantee by the defendant of the rental for seven years, the unexpired term of the lease. Such a guarantee of the rental would be awarding plaintiff a windfall which it did not have in the first place since the lease could have been terminated before the end of its term for any number of reasons, including the possible insolvency of the lessee.

'The damages claimed, therefore, in addition to being remote and not reasonably foreseeable were based upon future speculative profits and for this additional reason are not recoverable under the settled law of Indiana.

'For the reasons stated the Court finds there is no genuine issue of a material fact to be tried and that as a matter of law defendant's motion for summary judgment is sustained.'

Thus the trial court's holding that the damages requested by St. Joseph were not recoverable was based on conclusions that Wackenhut's negligence was not the proximate cause of Delta's termination and that a finding for St. Joseph would amount to a windfall recovery of future speculative profits.

ISSUES:

The procedure dictated by Ind. Rules of Procedure, Trial Rule 56(C) and the arguments of the parties present the following issues:

1. Whether there was a genuine issue as to any...