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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. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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