An Indiana man prohibited by state order from traveling to a Florida vacation home during the COVID-19 pandemic had a right to rescind his rental contract, a split Court of Appeals of Indiana ruled Wednesday in reversing a small claims court’s decision.
The appellate court majority remanded the case to determine what, if any, restitution is due to the man under the circumstances.
In 2019, Terrence Brodnik planned a Florida vacation for late March 2020.
After reserving the “Salt Air Cottage” from Cottage Rents LLC, Brodnik prepaid more than $6,000, according to court records.
A few weeks ahead of the planned vacation, the COVID-19 pandemic hit.
Five days before Brodnik’s planned arrival date in Florida, Gov. Eric Holcomb issued an executive order prohibiting all but essential travel. The order prevented Brodnik from traveling to his Florida vacation home.
Brodnik contacted the owner of Cottage Rents, Robert Toler Jr., about “what would happen” if he was “unable to travel due to the pandemic.”
Toler offered Brodnik “a replacement week … within the next twelve (12) months.” He also offered to discount a “certain week” by $2,500.
Brodnik declined, explaining that because of his family’s incompatible schedules, there “wasn’t really an option in getting there within the next” year.
In August 2020, Brodnik sued Cottage Rents in small claims court, seeking a refund. Brodnik argued, among other things, that the rental contract was unenforceable because of the Florida doctrine of impossibility.
The small claims court entered judgment for Cottage Rents. In its written judgment, the court implicitly found the contract was enforceable.
But the appellate court, applying Florida law and concluding the doctrine of impossibility applies, reversed and remanded with instructions for the trial court to balance the equities and determine restitution.
Writing for the court, Judge Dana Kenworthy noted Cottage Rents’ argument that Brodnik cannot claim impossibility because he prepaid for the vacation.
The appellate court disagreed.
“The impossibility doctrine addresses ‘the tension between the changes a party bargains to avoid and the changes, unbargained for and radical, that make enforcement of the bargain unwise,’” Kenworthy wrote, citing Cook v. Deltona Corp., 753 F.2d 1552 (11th Cir. 1985).
Kenworthy wrote that the state’s executive order amounted to an unforeseeable supervening event that “radically altered the world in which the parties were expected to fulfill their promises.”
The appellate court concluded the doctrine of impossibility applies under those circumstances. And because the doctrine of impossibility applies, Brodnik could avoid the contract, including all provisions concerning cancellation, Kenworthy wrote.
“We therefore conclude the small claims court erred in entering judgment for Rental Company on the basis that Vacationer ‘failed to comply with the terms of the contract,’” Kenworthy wrote.
Judge Cale Bradford concurred.
Judge Paul Mathias dissented in a separate opinion.
In his dissent, Mathias wrote that he disagreed that Brodnik’s performance under the contract was rendered impossible, as a matter of law, due to the governor’s stay-at-home order.
“It is undisputed that Brodnik did not give written notice to Cottage Rents that he was terminating the agreement,” Mathias wrote.
Mathias also wrote that Cottage Rents presented evidence that, despite the governor’s order, Brodnik had the ability to comply with the cancellation policy but failed to do so.
The dissenting judge said the small claims court did not err as a matter of law when it declined to apply the impossibility doctrine.
The case is Terrence Brodnik v. Cottage Rents LLC, 22A-SC-1103.