COA reinstates small claims case after COVID cancelation of vacation

A small claims case arising from a COVID-canceled vacation will return to the trial court after the Indiana Court of Appeals found dismissal was improper.

The case of Terrence Brodnik v. Cottage Rents LLC, 20A-SC-2036, involves, according to COA Judge Leanna Weissmann, a disparity between what the defendant said and what the defendant meant.

In this case, the defendant is Cottage Rents LLC, a vacation rental company that rented lodging in Florida to Terrence Brodnik. When Brodnik canceled his vacation due to COVID-19, he filed a small claims case against Cottage Rents for a refund. The Hendricks Superior Court dismissed with prejudice based on what Cottage Rents said: the trial court lacked subject matter jurisdiction and Brodnik failed to state a claim upon which relief could be granted.

Brodnik, however, appealed based on what Weissmann said Cottage Rents meant: that the court lacked personal jurisdiction over the company. While the dismissal was pursuant to Indiana Trial Rules 12(B)(1) and 12(B)(6), “the motion (to dismiss) and subsequent briefing appear to have argued lack of personal jurisdiction, a basis for dismissal under a third rule: Trial Rule 12(B)(2).”

“However, we must navigate this appeal through the channel created by the trial court’s judgment,” Weissmann wrote in a Monday opinion. “We therefore analyze Brodnik’s claims within the context of a dismissal for lack of subject matter jurisdiction under Trial Rule 12(B)(1) and failure to state a claim under Trial Rule 12(B)(6).” In a footnote, the panel expressly declined to address Brodnik’s claim under Rule 12(B)(2).

Turning to the merits, Weissmann noted that “(t)he parties agree that dismissing Brodnik’s claim with prejudice was improper, and they are correct.”

“A dismissal with prejudice is a dismissal on the merits,” she wrote. “… The trial court dismissed this case for lack of jurisdiction, which is not an adjudication on the merits. Instead, it means the court lacks the power to reach the merits.”

Further, Weissmann continued, a dismissal for failure to state a claim is not res judicata.

Brodnik also claimed his due process rights were violated when the trial court immediately granted the motion to dismiss his claim without giving him the opportunity to respond. That argument might have prevailed if the dismissal were based on Rule 12(B)(2), the judge wrote, but not under Rules 12(B)(1) and (6).

“The lack of subject matter jurisdiction can be raised at any time, including by the court’s own motion,” she wrote. “… Additionally, motions for failure to state a claim are based on the complaint itself and do not require that plaintiffs have an opportunity to respond before dismissal.”

Even so, the dismissal was still erroneous, Weissmann continued. That’s because the small claims court “very cleary” has subject matter jurisdiction pursuant to Indiana Code § 33-29-2-4(b)(1), and because Brodnik “alleged facts sufficient to identify the dispute.”

“Because dismissal under both Trial Rules 12(B)(1) and 12(B)(6) was improper, we reverse and remand for further proceedings,” Weissmann concluded. “We also remind the trial court that, if it is to consider a motion to dismiss for lack of personal jurisdiction under Trial Rule 12(B)(2), it would be wise to accept evidence from both sides, as ‘matters of jurisdiction are often not apparent on the face of the complaint.’”

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