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Question over landlord’s actions divide Indiana Court of Appeals

September 19, 2013

The Indiana Court of Appeals split over what duties a landlord has to re-lease a commercial space when the current tenant is behind on payments.

Fernando Tudela leased space in an Evansville shopping center from Silco LLC. He quickly fell behind in his payments and eventually Silco filed a complaint for breach of the lease agreement, ejectment, foreclosure of mortgage and conversion.

After the trial court granted summary judgment to Silco, Tudela raised multiple issues on appeal.

In Lily, Inc. d/b/a Weinbach Caferteria and Fernando Tudela v Silco, LLC, 82A05-1209-PL-459, the Court of Appeals affirmed in part the trial court’s order granting summary judgment to Silco. It also reversed and remanded for consideration issues related to attorney fees, mitigation of damages and accounting.

Tudela asserted that Silco did not try to find a new tenant. Specifically, the landlord designated no evidence that it made any effort to re-let the premises and therefore failed to use reasonable diligence to mitigate damages.

Silco countered that Tudela’s deposition was improperly designated and he presented no evidence of his claims.

The Court of Appeals observed that Tudela did designate his deposition and pointed to specific portions in his response to Silco’s motion for summary judgment. Silco also designated portions of Tudela’s deposition.

Writing for the majority, Judge Elaine Brown concluded that based on the designated evidence there is a “genuine issue of fact as to whether Silco failed to use reasonable diligence to mitigate damages.”

Judge Patricia Riley concurred with the COA’s affirmation of the trial court in granting summary judgment to Silco. However, she found no material issues of fact remaining based on the designated evidence as to both attorneys and mitigation of damages.

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