Mt. Helix Acquisitions, LLC v. Latanya Ashmore (mem. dec.) ( 2019 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
FILED
regarded as precedent or cited before any Mar 04 2019, 9:56 am
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT
Jeffrey J. Jinks
Carmel, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Mt. Helix Acquisitions, LLC, March 4, 2019
Appellant-Defendant, Court of Appeals Case No.
18A-PL-1284
v. Appeal from the Marion Superior
Court
Latanya Ashmore, The Honorable David J. Dreyer,
Appellee-Plaintiff. Judge
Trial Court Cause No.
49D10-1709-PL-34428
Mathias, Judge.
[1] Mt. Helix Acquisitions, LLC (“Mt. Helix”) appeals from an entry of judgment
from the Marion Superior Court’s review of a Center Township small claims
matter concluding it owed former tenant Latanya Ashmore (“Ashmore”)
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damages in the amount of $7,700. Mt. Helix presents five issues for our court’s
consideration, which we consolidate into two issues:
1. Whether the interactions between Ashmore and Mt. Helix give rise to an
implied warranty of habitability;
2. Whether Ashmore proved her damages claims by a preponderance of the
evidence.
[2] We uphold the portion of the judgment for $2,700 as a result of electric charges
incurred due to the condition of the property. We vacate the portion of the
judgment awarding $5,000 for the loss of residence, homelessness, and hardship
to the family accruing after Ashmore vacated the property, because those
elements of damage were not proved by a preponderance of the evidence.
Facts and Procedural History
[3] On March 31, 2017, Plaintiff Latanya Ashmore filed a complaint in Marion
County Small Claims Court in Center Township. After a hearing on August 5,
2017, Ashmore was awarded $1,414. Mt. Helix appealed the small claims
judgment, and the case was transferred to the Marion Superior Court. On
September 20, 2017, the Superior Court issued an order requiring Ashmore to
re-file her original complaint within twenty days.
[4] When Ashmore did not meet this deadline, Mt. Helix moved to dismiss the
matter on October 19, 2017, which the trial court denied on October 24, 2017.
Ashmore re-filed the Complaint with the trial court on October 26, 2017. The
Amended Complaint alleged, in whole,
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I am asking for a hearing in this court to grant me a judgement
[sic] in the sum of $5,000 because the defendant knowing[ly]
moved me into the property know[ing] the utilities would exceed
the rent. The furnace was outdated, also water heater, air ducts,
and faulty wiring through the residents [sic]. I pray that court
hears me and grant[s] me the judgement [sic].
Appellant’s App. p. 15. On November 15, 2017, Mt. Helix filed its Answer and
Statement of Affirmative Defenses. On December 20, 2017, Mt. Helix filed a
Motion for Summary Judgment, which the trial court denied on December 21,
2017.1 On January 25, 2018, the trial court held a hearing on the matter.
Ashmore appeared in person and Mt. Helix appeared through counsel.
[5] At the hearing, Ashmore testified that Mt. Helix’s property manager advised
her that she was approved for move-in to a property through “HUD,” but she
could not because there were plumbing issues.2 Tr. p. 4. The property manager
then advised her that the company had a “better deal” for her. Tr. p. 5. She saw
the suggested property, felt she had nowhere else to go for her and her children,
and paid the first month’s rent of $650, as well as the deposit, and moved in. Tr.
1
Mt. Helix contends the trial court erred by not giving sufficient consideration to its summary judgment
motion. It is well-settled law that summary judgment is inappropriate if any material facts are in dispute or if
undisputed facts could lead to conflicting material inferences. Ind. Trial Rule 56; Rogers v. Mendel, 758 N.E.2d
946 (Ind. Ct. App. 2001), trans. denied. We cannot conclude on the facts in the Complaint and the Motion for
Summary Judgment in front of the trial court that the denial of Mt. Helix’s Motion for Summary Judgment
was error.
2
The acronym HUD is not explained in the record. However, “HUD” is commonly known as an acronym
used to abbrevieate the United States Department of Housing Urban Development, which, among other
functions, provides rent-assistance and low income housing to individuals in need. See Generally
https://www.hud.gov/
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p. 5. Ashmore testified that the first “light bill” she received was “almost
$600.”3 Tr. p. 5. Ashmore further testified that she called the property manager
and “they” came out several times to try to “winterize the property.” Tr. p. 6.
She applied for assistance because she could not afford the electric bill. Tr. p. 6.
After speaking with the electric company again, she called property
management, and the maintenance worker advised her that the furnace was
outdated and needed a lot of work, the wiring was improperly installed, and the
house needed insulation and roofing.
[6] Her next electric bill was “almost a thousand dollars.” Tr. p. 8. After Ashmore
received this bill, she advised management that she could not stay at the
property because she would be unable to afford to stay due to the high light
bills. Ashmore testified that Mt. Helix then filed for eviction, but dismissed the
eviction due to the high bills. She further testified that the company ultimately
released Ashmore from her lease. Since that time, Ashmore alleges she has been
homeless; she has been turned down for other residences; her family has been
separated; she cannot find anyone to help her with the light bill because it is too
high; the last two years of her life have been ruined; and she cannot find
anywhere to stay “because of the appeal.” Tr pp. 8–9. Mt. Helix appeals the
award of damages.
3
The record refers to the bills at issue interchangeably as the light bill, the utility bill, and the electric bill.
Ashmore confirmed that the property was completely electric, and the bills at issue will be referred to as the
electric bills for the purposes of this opinion. See Tr. p. 15.
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Discussion and Decision
I. Standard of Review
[7] We initially note that Ashmore did not file a brief on appeal. We do not
undertake the burden of developing arguments on behalf of an appellee who
does not file an appellee’s brief and will reverse if the appellant establishes a
prima facie error. Windgate Properties, LLC v. Sanders, 93 N.E.3d 809, 813 (Ind.
Ct. App. 2018). “Prima facie, in this context, means at first sight, on first
appearance, or on the face of it.” Id. “This standard, however, ‘does not relieve
us of our obligation to correctly apply the law to the facts in the record in order
to determine whether reversal is required.’” Id. citing Wharton v. State, 42
N.E.3d 538, 541 (Ind. Ct. App. 2015).
[8] As directed by the General Assembly and affirmed by the court’s rules, the
small claims process is informal and is not bound by the rules of evidence. Ind.
Small Claims Rule 8(A). We will not set aside a judgment entered by a bench
without a jury unless clearly erroneous. Ind. Trial Rule 52(A). In determining
whether a judgment is clearly erroneous, due regard shall be given to the
opportunity of the trial court to judge the credibility of the witnesses. Id. The
appellate tribunal does not reweigh the evidence or determine the credibility of
witnesses but considers only the evidence that supports the judgment and the
reasonable inferences to be drawn from that evidence. City of Dunkirk Water &
Sewage Dept. v. Hall, 657 N.E.2d 115, 116 (Ind. 1995).
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[9] A judgment in favor of a party having the burden of proof will be affirmed if the
evidence was such that from it a reasonable trier of fact could conclude that the
elements of the party’s claim were established by a preponderance of evidence.
Id. “This deferential standard of review is particularly important in small claims
actions, where trials are ‘informal, with the sole objective of dispensing speedy
justice between the parties according to the rules of substantive law.” Id. (citing
S.C.R. 8(A)).
II. Implied Warranty of Habitability
[10] Mt. Helix argues that Ashmore has not proven either breach of implied
warranty of habitability or fraud. Before examining these doctrines, we note
that Indiana Code section 32-31-8 et. seq. establishes a landlord’s obligation
under a rental agreement. Indiana Code section 32-31-8-5 specifically outlines
the obligations of the landlord. It states, in relevant part:
A landlord shall do the following:
…
(4) Provide and maintain the following items in a rental premises
in a good and safe working condition, if provided on the
premises at the time the rental agreement is entered into:
(A) Electrical systems
…
(D) Heating, ventilating, and air conditioning systems. A
heating system must be sufficient to adequately supply heat at
all times.
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Ind. Code §32-31-8-5(4).
[11] Since every Indiana landlord has a statutorily proscribed obligation to provide
and maintain electrical, heating, ventilating, and air conditioning systems in
good and safe working condition, we turn to examine Ashmore’s complaints as
allegations of a breach of implied warranty of habitability.
When a landlord warrants his property to be suitable for living
and then breaches that promise by conveying an unsuitable
apartment, the tenant’s remedy may take several forms, including
conveyance of a suitable property, recission and reformation of
the agreement while the tenant retains possession, recision of the
contract, or damages at law. The thread tying the remedy to the
breach is the nature of the promise: at an agreed rental price, the
landlord will convey to the tenant an apartment he warrants as
suitable for living.
Johnson v. Scandia Associates, Inc., 717 N.E.2d 24 (Ind. 1999).
[12] “Following the trend of several other states, Indiana has reexamined the rights
and duties governing the landlord-tenant relationship. Specifically, Indiana
courts have progressively replaced the common-law doctrine of caveat lessee
with the adoption of an implied warranty of habitability in the context of
residential leases.” Schuman v. Kobets, 760 N.E.2d 682, 684 (Ind. Ct. App.
2002).
This movement away from caveat emptor reflects the recognition
that the modern tenant lacks the skill and “know-how” to inspect
and repair housing to determine if it is fit for its particular
purpose. The landlord, on the other hand, is more familiar with
the dwelling unit and mechanical equipment attached to that
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unity, and is more financially able to ‘discover and cure’ any
faults and break-downs.
Id. at 685 (internal citations omitted). “Even though an implied warranty of
habitability is not imposed by law on every residential lease contract, it may be
imposed in fact in the agreement between the landlord and tenant.” Scandia, 717
N.E. 2d at 31 (emphasis in original)
[13] In the instant matter, Ashmore’s complaint alleges, in whole,
I am asking for a hearing in this court to grant me a judgement
[sic] in the sum of $5,000 because the defendant knowing moved
me into the property know[ing] the utilities would exceed the
rent. The furnace was outdated, also water heater, air ducts, and
faulty wiring through the residents [sic]. I pray that court hears
me and grant me the judgement [sic].
Appellant’s App. p. 15.
[14] At the hearing, Ashmore provided uncontroverted testimony that Ashmore
approached Mt. Helix as a HUD-approved applicant. Ashmore was told that
the HUD-approved property which she was initially seeking was unavailable
due to “plumbing issues.” Tr. p. 4. However, the property manager presented
her with a “better deal” on a “newer” property. Tr. p. 5. Ashmore testified that
she had nowhere else to go, so she entered into the agreement, paid her rent and
deposit, and moved in. The record also contains uncontroverted testimony that,
after Ashmore complained about the surprisingly high electric bills, the
maintenance worker informed her that “basically, the property was – it was old
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and it needed a lot of electricity work done, a lot of furnace work done, it
needed a lot of insulation, even roofing.” Tr. p. 8. Ashmore also testified, “I’m
not an electrician, I’m not a plumber ‘cause if I was I wouldn’t have never
moved onto the property.” Tr. p. 20.
[15] In the small claims context, Ashmore’s testimony regarding her interactions
with the property manager when choosing to enter into the lease has established
an implied warranty of habitability. She has also shown a breach. Because the
implied warranty of habitability has been breached in this matter, we do not
analyze for fraud. We now turn to whether Ashmore proved the two separate
damage awards by a preponderance of the evidence.
III. Damages
[16] Common law acknowledges that “[h]abitability is not the same as no risk of
harm. Conditions which might cause injury can flow from many actors besides
the lessor- builders, independent contractors, or even negligence by visitors. An
apartment can thus provide adequate shelter and amentities, as promised, and
still be a place which presents some risk.” Johnson, 717 N.E.2d at 32 (denying
appellant damages for personal injury when she suffered physical injuries
caused by an electric shock she received when simultaneously touching two
kitchen appliances while cooking in her apartment). “Where the warranty is
express, consequential damages for injury to the person may be available as a
remedy. Where the warranty is implied-in-fact, however, consequential
damages may not be awarded because personal injury is outside the parties’
contemplation.” Id.
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A. Damages for Electric Bills
[17] Here, the damages Ashmore alleges she incurred due to excessively high utility
bills derive directly from the suitability of the property as a residence and factors
in Mt. Helix’s control. Accordingly, we review whether Ashmore proved
damages by a preponderance of the evidence. See City of Dunkirk Water & Sewage
Dept., 657 N.E.2d at 116, supra.
[18] The trial court awarded Ashmore $2,700 for the excessive utility bills incurred
while leasing the property from Mt. Helix. Ashmore testified that Mt. Helix
was unable to move her into a HUD-approved property due to plumbing issues
and directed her toward the property she ultimately leased as a “better deal.”
Ashmore testified that the first electric bill she received was $600. Tr. 5. When
trying to resolve the issue with the high electric bills, Ashmore was told by a
maintenance worker that “basically, the property was – it was old and it needed
a lot of electricity work done, a lot of furnace work done, it needed a lot of
insulation, even roofing.” Tr. p. 8. After this, she received an electricity bill
totaling approximately $1,000. The last bill she received totaled $2,700 for
approximately three months in the property.4
[19] Mt. Helix did not dispute Ashmore’s testimony regarding the amounts of the
bills she was receiving for electricity, except to object to the form of the
4
The lease agreement shows it began on November 11, 2014. Appellant’s App. p. 32. The record is unclear
as to exactly when Ashmore vacated the property; however, Mt. Helix asserts that eviction proceedings
occurred in February of 2015. Appellant’s Br. p. 4.
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evidence offered regarding the amount.5 Ashmore also testified that Mt. Helix
“let her out” of her lease due to the high electric bills. Mt. Helix did not present
any evidence controverting this assertion by Ashmore and states on appeal that
eviction proceedings were filed against Ashmore, “but the case was eventually
dismissed by agreement of the parties.” Appellant’s. Br. p. 4. Moreover, Mt.
Helix was in control of the condition of the furnace, insulation, roofing, and
wiring, which all affect the cost of electricity for the tenant.
[20] Here, in a small claims matter, without reweighing the evidence or judging the
credibility of the witnesses, Ashmore’s uncontroverted testimony regarding the
contents of her electric bills and the admissible hearsay statements of the
maintenance worker was sufficient to prove the amounts of her electric bills by
a preponderance of the evidence.
B. Damages Arising Due to Vacating the Property
[21] The trial court awarded Ashmore with $5,000 for her homelessness resulting
from her difficulties with paying the electric bill for the leased property that led
her to seek to end the agreement. Mt. Helix presents a number of arguments
against this award; however, we review with an eye toward whether Ashmore
5
Mt. Helix challenges the testimonial evidence provided by Ashmore regarding the total amount of her
electric bills as improper pursuant to the “best evidence rule” contained in Indiana Evidence Rule 1002. It
requires that “[a]n original writing, recording, or photograph […] in order to prove its contents unless these
rules or a statute provides otherwise.” Evid. R. 1002. However, the rules of evidence are not binding on small
claims matters, and the trial court properly overruled Mt. Helix’s objections on these grounds. Ind. Small
Claims Rule 8(a).
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was able to prove the contested award of damages by a preponderance of the
evidence. Here, Ashmore introduced only testimonial evidence regarding
homelessness and the resulting hardships she incurred after leaving the
residence at issue. She testified that:
Upon, that, because of this, I have been homeless, I’ve turned ---
I’ve been turned down for places . . . to stay, I’ve been rejected
for help because the light bill is too high for anybody to help me
pay it. Because of this, my family has been separated and
literally, the last two years of my life has been ruined. It’s
happening, because of the appeal I cannot find nowhere to stay.
Tr. pp. 8–9.
[22] The court later attempted to clarify with Ashmore what amounts she was
asking be awarded and for what reason. The exchange reads:
THE COURT: Okay, so when you went to Small Claims Court
what were you asking the Small Claims Court for?
MS. ASHMORE: Five Thousand Dollars.
THE COURT: Okay, and what was that based on?
MS. ASHMORE: It was based on the light bill and me any [sic]
kids being homeless and being turned down for several different
properties from moving and staying from place to place.
THE COURT: And what I saw – what I saw on our record was
that they had --- and this is not --- I’m not bound by anything, this
is not pending or doesn’t have any --- but I saw they made an
entry for $1,400?
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MS. ASHMORE: Yes
THE COURT: What was that based on? I’m trying to get to
what your case was about.
MS. ASHMORE: The –he awarded be for the deposit back. [sic]
THE COURT: Okay, so the money about the deposit or the rent
or some of those expenses, okay.
MS. ASHMORE: Yes
THE COURT: But you had asked for all kinds of other things
and that’s what you’re asking now, right?
MS. ASHMORE: I’m asking now, yes.
THE COURT: Okay, for the 650 that you paid?
MS. ASHMORE: No, because of the current light bill. You
asking why I’m asking for the whole 5,000?
THE COURT: Yeah, right.
MS. ASHMORE: It’s because of the current light bill and just for
hardship on me and my kids from having to move and be
rejected from place to place.
THE COURT: Okay, so you think it’s about $2,000, you’re
saying, right?
MS. ASHMORE: Yes.
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***
THE COURT: Okay, that you say is caused by them ---by this
landlord?
MS. ASHMORE: Yes.
Tr. pp. 9–10. The above testimony is the entirety of the evidence regarding
these damages. Here, taking the evidence as it is, without weighing credibility,
the record contains only Ashmore’s testimony that she suffered homelessness,
had to move, her family was separated and she was “rejected from place to
place.” Ashmore testified that she was asking for $5,000 “because of the current
light bill and just for hardship on me and my kids.” Tr. p. 10. (emphasis added).
She did not provide any further information about specific expenses incurred,
rejected applications, or other hardships. Moreover, Ashmore did not provide
evidence of a direct link between her generalized assertions and Mt. Helix’s
action or inaction regarding matters over which it had any control.
[23] Additionally, it appears that Ashmore asked for $5,000 for the combined utility
expenses and the subsequent hardships she endured, not solely the alleged
hardships occurring after she vacated the property. Without more, these
generalized assertions regarding her hardships do not rise to the level of proving
an award of $5,000 for homelessness by a preponderance of the evidence.
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Conclusion
[24] The interactions between Ashmore and Mt. Helix gave rise to a statutory
warranty of habitability in this matter. Because she was able to prove her
damages for excessive electrical bills by a preponderance of the evidence in this
small claims matter, we affirm the award of $2,700. However, because
Ashmore was unable to meet this same standard to prove damages after she
vacated the property, we reverse the award of $5,000.
Bailey, J., and Bradford, J., concur.
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