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High court rules on landlord-tenant dispute

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Landlords must refund a security deposit and can't get money back for property damage if they don't adequately or timely notify tenants about those claims, but landlords can still recover unpaid rent and other losses, the Indiana Supreme Court ruled today.

In a landlord-tenant dispute involving Indiana's statutes on back-rent payment and return of a security deposit, justices ruled 4-1 in favor of the landlord in Stan Klotz v. Sarah Hoyt and Chrissy Kornmann, No. 18S02-0807-CV-391.

Tenants Sarah Hoyt and Chrissy Kornmann had entered a yearlong rental agreement in July 2006, paying Stan Klotz a $600 security deposit and rent for July and half of August but made no other payments. The court shows they stopped living there sometime in August or September 2006, and the landlord sent a letter about the intent to start eviction proceedings that November because of their non-payment of rent. They didn't respond, and he filed a small claim in January 2007. Klotz presented evidence that the total amount was almost $11,919 in unpaid rent, late fees, damages, and attorney fees, but he asked the court for a judgment of $6,000 - the small claims' statutory limit.

Delaware Circuit Judge John Feick dismissed Klotz's breach-of-lease complaint in 2007, but early last year an Indiana Court of Appeals panel reversed that decision in Klotz v. Hoyt, 880 N.E.2d 1234, 1235 (Ind. Ct. App. 2008)  and remanded with instructions to enter judgment in favor of the landlord for $6,000.

Justices took the case to resolve conflicting precedent on the issue, four agreeing with the conclusion the Court of Appeals had reached. Writing for the majority, Justice Brent Dickson wrote that the court is harmonizing conflicting provisions of Indiana Code 32-31-3-12 to 16 relating to deposits and notice of damage claims.

Chief Justice Randall T. Shepard concurred in result but penned his own response offering thoughts on an additional legal question about small claims procedures.

"Because we do not receive very many appeals from the 300,000 small claims cases litigated each year in Indiana, I would go a bit further and answer a question posed by this appeal but not answered in the Court's opinion," he wrote, noting that a legitimate claim of a landlord or tenant shouldn't always be dictated by a required 45-day mailing deadline before a hearing.

"Our state (and most others) has always believed that such informal approaches to small claims disputes make for substantial justice to litigants on both sides of the 'versus,'" he wrote.

In his dissent, Justice Frank Sullivan wrote that the majority misreads part of the state statute.

"Simply put, if occupancy ends with a tenant owing a landlord more than the amount of the security deposit in damages ... subsection (c) expressly authorized the landlord to recover the additional amount - but only so long as the landlord has complied with [other sections]," he wrote.

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  1. "Am I bugging you? I don't mean to bug ya." If what I wrote below is too much social philosophy for Indiana attorneys, just take ten this vacay to watch The Lego Movie with kiddies and sing along where appropriate: https://www.youtube.com/watch?v=etzMjoH0rJw

  2. I've got some free speech to share here about who is at work via the cat's paw of the ACLU stamping out Christian observances.... 2 Thessalonians chap 2: "And we also thank God continually because, when you received the word of God, which you heard from us, you accepted it not as a human word, but as it actually is, the word of God, which is indeed at work in you who believe. For you, brothers and sisters, became imitators of God’s churches in Judea, which are in Christ Jesus: You suffered from your own people the same things those churches suffered from the Jews who killed the Lord Jesus and the prophets and also drove us out. They displease God and are hostile to everyone in their effort to keep us from speaking to the Gentiles so that they may be saved. In this way they always heap up their sins to the limit. The wrath of God has come upon them at last."

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