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Justices uphold $94,000 in damages, fees for failed condo sale

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The Indiana Supreme Court agreed with the trial court that a seller of a condo whose buyers backed out of the purchase agreement over failed repairs could have mitigated her damages by selling the condo in 2007 to a different buyer instead of waiting until 2011 and accepting a lower price.

Michael and Noel Heymann entered into a purchase agreement in 2006 to buy an Indianapolis condo from Gayle Fischer for $315,000. An inspection of the property revealed several outlets did not have power and a light did not work properly. The Heymanns believed this constituted a “major defect” as defined in their agreement that allowed them to demand Fischer to fix the issues or walk away from the deal. Fischer failed to timely respond to their demand, but she did eventually fix the problem. They Heymanns tried to get out of the deal, but Fischer sued them.

The case made it to the Court of Appeals twice – the first time, the Court of Appeals ordered the trial court to determine damages owed to Fischer because the Heymanns’ demand itself breached the agreement because it stemmed from an objectively unreasonable belief that the electrical problem was a “major defect.” The trial court concluded Fischer failed to mitigate her damages because she could have accepted an offer to sell the condo in 2007 for $240,000 instead of waiting to sell it for $180,000 in 2011. The judge found she’s only entitled to approximately $94,000 in damages – the difference between the original $315,000 price and the $240,000 offer, plus other costs and attorney fees that accrued during that time.

A divided Court of Appeals reversed, agreeing with the Heymanns’ argument that Fischer could have avoided all damages except the $117 repair bill for the lights if she had responded to their demand to fix the electrical problem.

But the justices agreed with the trial court in Gayle Fischer v. Michael and Noel Heymann, 49S02-1309-PL-620. The trial court acted within its discretion by finding that Fischer could have mitigated her damages by selling the condo in 2007 as well as in refusing to find that her duty to mitigate required yielding to the Heymanns’ breach.

“Just as breaching parties may not take advantage of their breach to relieve them of their contractual duties, neither may they take advantage of their breach to require non-breaching parties to perform beyond their contractual duties,” Justice Loretta Rush wrote. “And just as non-breaching parties may not place themselves in a better position because of the breach, neither may breaching parties.

“Holding otherwise would require sellers like Fischer to choose between surrendering to the terms of a breach or forfeiting damages whenever a buyer breaches an agreement by conditioning purchase on strict compliance with an unreasonable demand. This predicament would let buyers demand minor repairs with impunity and undermine sellers’ ability to enforce the “major defects” clause of countless real-estate contracts. To the  contrary, if the contract terms permit, sellers may refuse to replace the bathroom mirror, produce the warranty for household appliances, or — as in Fischer’s case — timely repair an electrical problem by pushing the reset button on three outlets and replacing a light bulb.

The justices pointed to the evidence that Fischer’s asking price for the condo was unreasonably high from 2007 to 2011, when it sold, and that she could have sold in 2007 but made an “unreasonable” counteroffer, thus killing the deal to affirm her damages award. The justices affirmed the trial court’s award of $93,972.18.

 

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  3. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  4. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  5. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

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