Warehouse owner wins cost of removing property in appeal after lease default

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The owner of a Westfield warehouse is entitled to recover the costs of removing abandoned property in addition to unpaid rent after a tenant defaulted on lease payments, the Indiana Court of Appeals ruled Wednesday in a partial reversal. The cost of removal is twice the unpaid rent, according to the ruling.

Charles Spillman entered into a lease in January 2016 to pay $1,500 per month to lease commercial warehouse space from Mountain Trace Development LLC. By October 2017, Spillman was in default and Mountain Trace filed for eviction on the Hamilton Superior Small Claims docket.

After a hearing on Nov. 27, 2017, the court issued an eviction order requiring Spillman to vacate the premises by Jan. 22, 2018, and declaring that any property not removed at that time would be deemed abandoned.

When the eviction deadline arrived, Mountain Trace was left to remove property including seven trailers, two tractors, a forklift, boxes, furniture, two refrigerators, two pianos and motor engine parts. Mountain Trace incurred $9,000 to remove Spillman’s property. Coupled with the $4,500 in unpaid rent the landlord sought, Mountain Trace was forced to remove the action from the small claims docket to Hamilton Superior Court.

There, the court awarded Mountain Trace unpaid rent and filing fees, but found that because the property was deemed abandoned, Spillman no longer possessed it. The COA reversed, finding that as a matter of common law, Spillman was required to surrender the property “in as good  condition as it was when the parties entered into the lease … ,” Judge Paul Mathias wrote for the panel in Mountain Trace Development, LLC v. Charles Spillman, 19A-CC-995.

After Spillman failed to remove the property, Mathias wrote, “It was reasonably foreseeable that Mountain Trace would incur costs to remove Spillman’s personal property from the warehouse in order to return the warehouse to the condition it was in when the parties entered into the lease. For all of these reasons, the trial court erred when it concluded that Mountain Trace was not entitled to recover the fees it incurred to remove Spillman’s abandoned property from its warehouse.”

The trial court also erred in declining to award Mountain Trace the costs of filing the original small claims action in addition to the filing fee when the case was transferred to the Superior Court civil collections docket.

“Mountain Trace is entitled to recover fees it incurred to remove Spillman’s personal property from its warehouse and the small claims court filing fee,” the panel concluded. “Therefore, we remand this case to the trial court with instructions to include these damages in the judgment awarded to Mountain Trace.”

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