Indiana Farmers Mutual Insurance Company v. Amber N. Yost, Gretchen L. Poehler, Mandy Shearer, and Anne K. Nania (mem. dec.) ( 2017 )


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  • MEMORANDUM DECISION
    FILED
    Pursuant to Ind. Appellate Rule 65(D), this                      Mar 14 2017, 8:36 am
    Memorandum Decision shall not be regarded as
    precedent or cited before any court except for the                    CLERK
    Indiana Supreme Court
    purpose of establishing the defense of res judicata,                 Court of Appeals
    and Tax Court
    collateral estoppel, or the law of the case.
    ATTORNEY FOR APPELLANT                                 ATTORNEYS FOR APPELLEE AMBER N.
    James P. Cavanaugh, III                                YOST
    Cavanaugh Law                                          Katherine J. Noel
    Indianapolis, Indiana                                  Jacob D. Winkler
    Noel Law
    Kokomo, Indiana
    ATTORNEY FOR APPELLEE GRETCHEN
    L. POEHLER
    Christopher P. Meyer
    Law Offices of the Liberty Mutual Group
    Merrillville, Indiana
    ATTORNEY FOR APPELLEE MANDY
    SHEARER
    Carolyn A.M. Burbrink
    Nationwide Mutual Insurance Company
    Trial Division
    Carmel, Indiana
    IN THE
    COURT OF APPEALS OF INDIANA
    Indiana Farmers Mutual                                     March 14, 2017
    Insurance Company,                                         Court of Appeals Case No.
    79A02-1606-CT-1407
    Appellant-Plaintiff,
    Appeal from the Tippecanoe
    Superior Court
    v.
    The Honorable Randy J. Williams,
    Judge
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017     Page 1 of 17
    Amber N. Yost, Gretchen L.                               Trial Court Cause No. 79D01-1011-
    CT-91
    Poehler, Mandy Shearer, and
    Anne K. Nania,
    Appellees-Defendants.
    Bradford, Judge.
    Case Summary
    [1]   In 2005, Appellees-Defendants Amber N. Yost, Gretchen L. Poehler n/k/a
    Broman (“Poehler”), Mandy Shearer, and Anne K. Nania (collectively, “the
    Appellees”) and Amber Scott signed leases (“the Leases”) for, and were living
    in, the two units of a West Lafayette duplex owned by Kay Lee, LLC. At the
    time, Appellant-Plaintiff Indiana Farmers Mutual Insurance Company was Kay
    Lee’s liability carrier. In May of 2006, a fire occurred in the duplex, causing
    more than $100,000.00 damage to both units and common areas.
    [2]   Indiana Farmers paid on Kay Lee’s claim arising out of the fire and, in 2010,
    brought a subrogation suit against Scott and the Appellees, alleging negligence
    and breach of the Leases. All but Poehler, whose surname had by this time
    changed to Broman, returned service and made appearances. In 2012, Yost
    filed a motion to dismiss, which motion the trial court granted as to both
    counts. In 2014, Scott was dismissed from the lawsuit by stipulation.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 2 of 17
    [3]   In 2015, Indiana Farmers served an alias summons on Poehler, who appeared
    and filed a motion to dismiss for failure to prosecute. Shearer and Nania
    moved for summary judgment on the basis that no genuine issue of material
    fact existed as to the question of whether they had breached the Leases. The
    trial court granted Poehler’s motion to dismiss and Shearer and Nania’s motion
    for summary judgment. Indiana Farmers claims that all of the trial court’s
    orders dismissing the various claims against the Appellees were erroneous. We
    agree with Indiana Farmers that the trial court erred in dismissing the
    negligence and contract claims against Yost, and remand for further
    proceedings. We affirm the trial court’s judgment in all other respects.
    Facts and Procedural History
    [4]   On or about July 26, 2005, Kay Lee entered into the Leases for both halves of a
    duplex in West Lafayette: with Scott and Poehler for unit 422-1 and with Yost,
    Shearer, and Nania for unit 422-2. On or about May 9, 2006, a fire occurred in
    the duplex which caused damage to both units and common areas totaling
    more than $100,000.00.
    [5]   Indiana Farmers, who was Kay Lee’s insurer, paid on the claim and, on
    November 18, 2010, filed suit against Scott and the Appellees for negligence
    and breach of the Leases they executed with Kay Lee. On November 23, 2010,
    summonses were issued for Scott and the Appellees. By December 10, 2010,
    Scott, Yost, Shearer, and Nania had returned service and, by January 3, 2011,
    had all entered appearances.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 3 of 17
    [6]   On February 21, 2012, Yost moved to dismiss or, in the alternative, for
    judgment on the pleadings. Yost argued that Indiana Farmers’ negligence
    claim was not filed within the applicable statute of limitations (an argument she
    would later abandon) and its contract claim must fail for a lack of privity with
    the Lease between her and Kay Lee. On July 2, 2012, the trial court issued an
    order on Yost’s motion, concluding that Indiana Farmers’ negligence claim was
    filed within the relevant statute of limitations but that Indiana Farmers’ lacked
    privity with the Lease between Yost and Kay Lee. The trial court dismissed
    both of Indiana Farmers’ claims against Yost. On August 1, 2012, Indiana
    Farmers filed a motion to correct error,1 which the trial court denied on August
    20, 2012. On September 19, 2012, Indiana Farmers moved to have the matter
    certified for interlocutory appeal, which motion the trial court denied on
    October 12, 2012. On December 4, 2014, a joint stipulation was entered
    dismissing Scott as a party with prejudice, apparently because she was no
    longer living in the duplex when the fire occurred.
    [7]   On November 4, 2015, Indiana Farmers moved for a status conference and for
    the trial court to reconsider its refusal to certify its ruling granting Yost’s motion
    to dismiss for interlocutory appeal. On November 6, 2015, Indiana Farmers
    issued an alias summons on Poehler, whose surname was now Broman;
    Poehler filed an appearance on December 10, 2015.
    1
    Indiana Farmers acknowledges that a motion to correct error was not appropriate at that point because the
    trial court’s order on Yost’s motion was not a final, appealable order.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017           Page 4 of 17
    [8]    Meanwhile, on December 9, 2015, Shearer moved for summary judgment on
    the basis that the Leases did not specifically allow Indiana Farmers to collect its
    subrogated damages in this case. Nania eventually joined Shearer’s summary
    judgment motion. On January 11, 2016, Poehler moved to dismiss on the basis
    that Indiana Farmers had not properly served her and had failed to state a claim
    upon which relief could be granted in any event. On April 26, 2016, the trial
    court held a hearing on pending motions. On May 26, 2016, trial court granted
    Nania and Shearer’s motion for summary judgment and Poehler’s motion to
    dismiss.
    [9]    Indiana Farmers contends that the trial court’s order dismissing both claims
    against Yost was clearly erroneous as the ground cited did not apply to its
    negligence claim, Indiana Farmers was not required to be in privity with the
    Leases in order to maintain its subrogation claims against the Appellees, the
    Leases permit recovery of Indiana Farmers’ subrogated damages because they
    prohibit waste by tenants and require the tenants to return the property in good
    condition, and the trial court erred in granting Poehler’s motion to dismiss.
    [10]   Yost argues that even if the trial court incorrectly dismissed Indiana Farmers’
    claims against her for the reason cited, the record still supported the dismissal;
    Indiana Farmers lacked the necessary privity to bring a contract suit against her;
    and there is no indication that Yost breached her Lease in any event. Poehler
    argues that the trial court properly dismissed Indiana Farmers’ claims against
    her because she was not timely served and because the Lease attached to the
    complaint was the one executed by Yost, Shearer, and Nania for unit 422-2 and
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 5 of 17
    not the one she executed for unit 422-1. Shearer argues that the trial court
    properly granted summary judgment in her favor because Indiana Farmers
    failed to designate evidence sufficient to sustain a finding that she breached her
    Lease.
    Discussion and Decision
    I. Whether the Trial Court Abused its Discretion in
    Granting Poehler’s Motion to Dismiss
    [11]   Although it is not entirely clear, the trial court apparently dismissed Indiana
    Farmers’ claims against Poehler for failure to prosecute pursuant to Indiana
    Trial Rule 41(E), which provides as follows:
    (E) Failure to prosecute civil actions or comply with rules.
    Whenever there has been a failure to comply with these rules or
    when no action has been taken in a civil case for a period of sixty
    [60] days, the court, on motion of a party or on its own motion
    shall order a hearing for the purpose of dismissing such case.
    The court shall enter an order of dismissal at plaintiff’s costs if
    the plaintiff shall not show sufficient cause at or before such
    hearing. Dismissal may be withheld or reinstatement of
    dismissal may be made subject to the condition that the plaintiff
    comply with these rules and diligently prosecute the action and
    upon such terms that the court in its discretion determines to be
    necessary to assure such diligent prosecution.
    [12]   Specifically, Poehler argues dismissal was proper on the basis that Indiana
    Farmers provided her with deficient service.
    The Indiana rules, like the federal rules, have an appropriate
    mechanism in Ind. Rules of Procedure, Trial Rule 41 for
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 6 of 17
    dismissing a complaint for failure to diligently prosecute an
    action and, consequently, adequate protection against
    unreasonable delay in serving process. The failure to diligently
    prosecute a case includes the failure to exercise due diligence in
    securing service of process. T.R. 41(E) provides if there has been
    a failure to comply with the rules or if no action has been taken
    on a case for 60 or more days the trial court on its own motion or
    upon motion of a party shall order a hearing for the purpose of
    dismissing the case.… The nondiligent party, at or before the
    hearing, has an opportunity to show cause as to why his claim
    should not be dismissed for failure to prosecute. If the court in its
    discretion determines due diligence was not exercised, dismissal
    of the cause of action ensues.
    Geiger & Peters, Inc. v. Am. Fletcher Nat. Bank & Trust Co., 
    428 N.E.2d 1279
    , 1282-
    83 (Ind. Ct. App. 1981) (some citations and footnote omitted).
    [13]   Indiana Farmers filed suit in this case in November of 2010, and, despite no
    response, appearance, or any other indication that Poehler was even aware of
    the lawsuit, made no further attempt at service until November of 2015. We
    have little trouble concluding that Indiana Farmers’ delay of over five years is
    presumptively unreasonable. Consequently, the burden fell on Indiana Farmers
    to show cause why its lack of diligence should be excused, which burden the
    trial court apparently concluded2 that Indiana Farmers did not carry.
    2
    Poehler also argued below that Indiana Farmers’ complaint should be dismissed as to her as Indiana
    Farmers only attached the Lease signed by Yost, Shearer, and Nania. At the April 26, 2016, hearing,
    however, the trial court said the following regarding this argument: “I’m not really excited about that
    argument in terms of dismissing the case, so.” Tr. pp. 48-49.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017            Page 7 of 17
    [14]   Indeed, Indiana Farmers did not (and does not) argue that it was diligent in
    attempting to secure service on Poehler, only that Rule 41(E) does not apply
    under the circumstances of this case. We find Indiana Farmers’ arguments to
    be unpersuasive. Indiana Farmers’ first argument is that Rule 41(E)’s
    provisions do not apply to only one defendant out of many in a lawsuit. In
    other words, the claims against one defendant cannot be dismissed when the
    same claims are being diligently pursued against other defendants. There is,
    however, no basis for this in the Rule’s language, and Indiana Farmers has not
    provided us with case law that supports the proposition.
    [15]   Indiana Farmers’ second argument is that dismissal on Rule 41(E) grounds is
    not appropriate because, despite a significant delay, it had resumed active
    prosecution against Poehler. To support this argument, Indiana Farmers relies
    on the Indiana Supreme Court’s opinion in State v. McClaine, 
    261 Ind. 60
    , 
    300 N.E.2d 342
    (1973):
    A motion to dismiss for want of prosecution should not be
    granted if the plaintiff resumes diligent prosecution of his claim,
    even though, at some prior period of time, he has been guilty of
    gross negligence.
    The burden is clearly on the defendant to timely file a motion to
    dismiss pursuant to TR. 41(E). That is to say, the defendant
    must file his motion after the sixty-day period has expired and
    before the plaintiff resumes prosecution. The defendants in this
    case moved to dismiss after the plaintiff filed its request for trial
    and thereby failed to meet the requirements of TR. 41(E).
    
    Id. at 63,
    300 N.E.2d at 344 (some citations omitted).
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 8 of 17
    [16]   McClaine, however, is easily distinguished: The opinion makes it clear that the
    defendant in that case was properly served and aware of the lawsuit against it,
    as it answered the State’s complaint. 
    Id. at 61,
    300 N.E.2d at 343. In this case,
    there is no indication in the record that Poehler had any knowledge of Indiana
    Farmers’ lawsuit before November of 2015, roughly five years after it had been
    filed. We are at a loss to understand how we could require a defendant to file a
    Rule 41(E) motion to dismiss a case of which she is not even aware. Indiana
    Farmers’ reliance on McClaine is unavailing. Indiana Farmers has failed to
    establish that the trial court abused its discretion in granting Poehler’s motion to
    dismiss.3
    II. Whether the Trial Court Abused its Discretion in
    Granting Yost’s Motion to Dismiss
    We review the trial court’s grant or denial of such a motion to
    dismiss [for failure to state a claim upon which relief can be
    granted] pursuant to Trial Rule 12(B)(6) de novo. Snyder v. Town
    of Yorktown, 
    20 N.E.3d 545
    , 550 (Ind. Ct. App. 2014) (citing
    Caesars Riverboat Casino, LLC v. Kephart, 
    934 N.E.2d 1120
    , 1122
    (Ind. 2010)), trans. denied. A motion to dismiss under Trial Rule
    12(B)(6) “‘tests the legal sufficiency of a complaint: that is,
    whether the allegations in the complaint establish any set of
    circumstances under which a plaintiff would be entitled to
    relief.’” Veolia Water Indpls., LLC v. Nat’l Trust Ins. Co., 
    3 N.E.3d 1
    , 4 (Ind. 2014) (quoting Trail v. Boys & Girls Clubs of Nw. Ind., 
    845 N.E.2d 130
    , 134 (Ind. 2006)), clarified on reh’g, 
    12 N.E.3d 240
    .
    3
    Because we decide this issue on Trial Rule 41(E) grounds, we need not address Poehler’s argument that
    Indiana Farmers’ case against her should have been dismissed because Indiana Farmers failed to attach the
    Lease she actually signed to its complaint.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017          Page 9 of 17
    When evaluating the trial court’s grant or denial of a Trial Rule
    12(B)(6) motion, we accept as true the facts alleged in the
    complaint, and only consider the pleadings in the light most
    favorable to the plaintiff and draw every reasonable inference in
    favor of the non-moving party. 
    Snyder, 20 N.E.3d at 550
    . We
    will affirm a dismissal under Trial Rule 12(B)(6) only if it is
    apparent that the facts alleged in the complaint are incapable of
    supporting relief under any set of circumstances. 
    Id. (citing LBM
                   Realty, LLC v. Mannia, 
    981 N.E.2d 569
    , 577 (Ind. Ct. App.
    2012)).
    Lockhart v. State, 
    38 N.E.3d 215
    , 217 (Ind. Ct. App. 2015).
    A. Negligence
    [17]   Indiana Farmers contends that the trial court erroneously dismissed its
    negligence claim against Yost. Indiana Farmers notes that the trial court
    specifically concluded that Indiana Farmers’ negligence claim was filed within
    the applicable statute of limitations and that the ground upon which its contract
    claim was dismissed, even if valid, has nothing to do with its negligence claim.
    We agree with Indiana Farmers. The trial court specifically found that Indiana
    Farmers’ negligence claim was filed within the applicable statute of limitations,
    which was the only argument made by Yost before withdrawing it.
    [18]   Yost argues that the trial court was within its discretion to dismiss Indiana
    Farmers’ negligence claim because the record contained independent bases for
    dismissal. Yost cites the arguments advanced in Shearer’s and Scott’s motions
    to dismiss, served on June 7 and July 29, 2011, respectively, and in which
    motions Yost orally joined. Shearer and Scott both argued that dismissal of
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 10 of 17
    Indiana Farmers’ claims was appropriate due to failure to comply with
    discovery orders pursuant to Trial Rule 37(B)(2)(c) and failure to prosecute
    pursuant to Trial Rule 41(E). Yost, however, does not identify any rule
    violations specific to her, only identifying alleged rule violations as they relate
    to Shearer. Yost has failed to identify an independent ground that would
    support the trial court’s dismissal of Indiana Farmers’ negligence claim against
    her.
    B. Breach of Contract
    [19]   Yost argues that Indiana Farmers failed to state a claim upon which relief could
    be granted based on the Lease because Indiana Farmers lacks privity with the
    Lease. Indiana Farmers contends that, as Kay Lee’s subrogee, it stands in Kay
    Lee’s shoes and may assert Kay Lee’s rights pursuant to the Lease.
    [20]   It is true that “[g]enerally, only those who are parties to a contract or those in
    privity with a party have the right to enforce the contract.” Mislenkov v. Accurate
    Metal Detinning, Inc., 
    743 N.E.2d 286
    , 289 (Ind. Ct. App. 2001). That said,
    subrogation is a doctrine of equity well-established in Indiana which “applies
    whenever a party, not acting as a volunteer, pays the debt of another that, in
    good conscience, should have been paid by the one primarily liable.” Erie Ins.
    Co. v. George, 
    681 N.E.2d 183
    , 186 (Ind. 1997).
    When a claim based on subrogation is recognized, “a court
    substitutes another person in the place of a creditor, so that the
    person in whose favor it is exercised succeeds to the right of the
    creditor in relation to the debt.” It is settled that “[s]ubrogation
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 11 of 17
    confers no greater right than the subrogor had at the time the
    surety or indemnitor became subrogated. The subrog[ee] insurer
    stands in the same position as the subrogor, for one cannot
    acquire by subrogation what another, whose rights he claims, did
    not have.” The ultimate purpose of the doctrine, as with other
    equitable principles such as contribution, is to prevent unjust
    enrichment.
    [21]   
    Id. (internal citations
    omitted). See also Bank of N.Y. v. Nally, 
    820 N.E.2d 644
    ,
    651 (Ind. 2005) (“Subrogation arises from the discharge of a debt and permits
    the party paying off a creditor to succeed to the creditor’s rights in relation to
    the debt.”); Harrison v. State Farm Mut. Auto. Ins. Co., 
    164 Ind. App. 569
    , 573,
    
    330 N.E.2d 126
    , 129 (1975) (“The right of subrogation is purely derivative as
    the insurer succeeds only to the rights of the insured, and no new cause of
    action is created. In other words, the concept of subrogation merely gives the
    insurer the right to prosecute the cause of action which the insured possessed
    against anyone legally responsible for the latter’s harm.”) (citation omitted).
    [22]   Here, Indiana Farmers is attempting to do nothing more than pursue whatever
    causes of action that Kay Lee might have against Yost (and the other
    Appellees) arising out of the duplex fire. As mentioned, the doctrine of
    subrogation exists to prevent unjust enrichment, and preventing Indiana
    Farmers from recovering on a claim that Kay Lee would have recovered on—
    after Indiana Farmers paid out on Kay Lee’s behalf—strikes us as unjust,
    whether that claim sounds in tort or contact. In any event, Yost points to no
    case that creates an exception to the doctrine of subrogation for rights arising
    out of contract, and our research has uncovered none. Indiana Farmers is not
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 12 of 17
    prevented from pursuing claims against Yost arising out of her Lease for a lack
    of privity. We conclude that the trial court erred in dismissing Indiana
    Farmers’ contract claim against Yost.
    III. Whether the Trial Court Erred in Granting Shearer
    and Nania’s Motion for Summary Judgment
    [23]   The trial court apparently granted summary judgment in favor of Shearer and
    Nania on the basis that Indiana Farmers had not established that there was a
    genuine issue of material fact as to whether Shearer or Nania had actually
    breached their Lease.4
    When reviewing a grant or denial of a motion for summary
    judgment our standard of review is the same as it is for the trial
    court. Kroger Co. v. Plonski, 
    930 N.E.2d 1
    , 4 (Ind. 2010). The
    moving party “bears the initial burden of making a prima facie
    showing that there are no genuine issues of material fact and that
    it is entitled to judgment as a matter of law.” Gill v. Evansville
    Sheet Metal Works, Inc., 
    970 N.E.2d 633
    , 637 (Ind. 2012).
    Summary judgment is improper if the movant fails to carry its
    burden, but if it succeeds, then the nonmoving party must come
    forward with evidence establishing the existence of a genuine
    issue of material fact. 
    Id. In determining
    whether summary
    judgment is proper, the reviewing court considers only the
    4
    At some point, it seems that Indiana Farmers either abandoned the negligence claim against Shearer or it
    was dismissed. The record contains some indications that Shearer was out of town when the fire occurred in
    the duplex and that it did not start in her room. In any event, when Shearer argued to the trial court that the
    negligence action against her had been abandoned, Indiana Farmers did not contradict her.
    Moreover, although only Shearer makes this argument on appeal, her summary judgment motion below was
    joined by Nania. Because we have already concluded that a lack of privity does not bar the contract claims
    against Yost, Shearer, and Nania, we must address whether there are genuine issues of material fact as to
    breach as to Shearer and Nania.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017             Page 13 of 17
    evidentiary matter the parties have specifically designated to the
    trial court. See Ind. Trial R. 56(C), (H). We construe all factual
    inferences in the non-moving party’s favor and resolve all doubts
    as to the existence of a material issue against the moving party.
    
    Plonski, 930 N.E.2d at 5
    . The fact that the parties have filed
    cross-motions for summary judgment does not alter our standard
    for review, as we consider each motion separately to determine
    whether the moving party is entitled to judgment as a matter of
    law. Hardy v. Hardy, 
    963 N.E.2d 470
    , 473 (Ind. 2012).
    Reed v. Reid, 
    980 N.E.2d 277
    , 285 (Ind. 2012).
    [24]   Indiana Farmers argues that summary judgment against Shearer and Nania was
    inappropriate because there exist genuine issues of material fact as to their
    potential liability pursuant to provisions prohibiting “waste” and their
    obligation to return the property in clean and good condition, apart from
    reasonable wear.
    [25]   The Lease provides, in part, as follows:
    The Tenant agrees to mow yards and to maintain the leased
    premises, yards, decks, porches, and approaches in a clean, safe,
    sightly and healthful condition at Tenant’s own expense. Tenant
    will keep all walks and approaches free from litter, snow and ice.
    No trash shall be stored in hallways or outside of entry doors.
    Tenant shall pay all charges for service and repair to kitchen and
    bathroom appliances and fixtures resulting from neglect by
    Tenant. Tenant will not commit waste or misuse of the property, and
    will return the premises to Landlord upon expiration, or other
    termination of the Lease for whatever reason, clean and in good
    condition, with the exception of reasonable wear occurring during the
    term of the Lease.
    Appellant’s App. Vol. IV p. 85 (emphasis added).
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 14 of 17
    A. Waste
    [26]   Indiana Farmers contends that there is a genuine issue of material fact that
    Shearer and Nania committed “waste” in breach of their Lease. Waste has
    been defined in Indiana as “the destruction, misuse, alteration, or neglect of the
    premises by one lawfully in possession to the prejudice of an estate or interest
    therein of another.” Beiger Heritage Corp. v. Kilbey, 
    676 N.E.2d 784
    , 787 (Ind.
    Ct. App. 1997) (citation omitted), trans. denied. Indiana Farmers acknowledges
    that either an affirmative act or neglect on the part of at least one of the
    Appellees is necessary to establish that waste occurred. Despite Indiana
    Farmers’ contention that the fire at the duplex must have been caused by one of
    the tenants’ negligence, it has designated no evidence tending to show this. The
    only designated material indicating that one of the tenants caused the damage
    through negligence is contained in Indiana Farmers’ complaint, and allegations
    of negligence, without more, are not evidence. Indiana Farmers’ allegations of
    negligence are insufficient to generate a genuine issue of material fact on the
    question of waste.
    B. Return in Good Condition
    [27]   Indiana Farmers also argues that there is a genuine issue of material fact as to
    whether Shearer and Nania violated their obligation to return the property in
    good condition, with the exception of reasonable damage. Indiana Farmers
    argues that if the property was damaged beyond reasonable wear when returned
    to Kay Lee, the burden is on Shearer and Nania to show why they should not
    be held liable. Although there is some non-binding authority to that effect, see
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 15 of 17
    Henry H. Cross Co. v. Rice, 
    45 F.2d 940
    , 943 (7th Cir. 1930) (“It has been
    returned, but in a worse condition than it was when appellant received it,
    natural wear and decay excepted. In such event it was appellant’s duty to show
    that it is not liable therefor, and it has not done so.”), we think the better rule is
    to require the landlord to establish liability, not require the tenant to establish
    the lack of it.
    The provision for returning the premises in as good condition as
    received, ordinary wear and tear excepted, was a rule of common
    law and is usually understood to mean no more or less when
    inserted in contemporary contracts. It includes that usual
    deterioration which results from the day to day use of the
    premises and from lapse of time. Scott v. Prazma, Wyo., 
    555 P.2d 571
    , 579. It does not cover a deterioration resulting from negligence.
    International & G. N. R. R. Co. v. Young, (Tex. Civ. App.) 
    72 S.W. 68
    .
    Raybestos-Manhattan, Inc. v. Friedman, 
    275 S.E.2d 817
    , 819 (Ga. Ct. App. 1981)
    (emphasis added). A reasonable inference to be drawn from the emphasized
    language above is that it is the landlord’s burden to establish that excessive
    damage to leased property was caused by the tenant’s negligence, not the
    tenant’s burden to disprove it.
    [28]   This result is also consistent with Indiana’s well-established rule that “[w]hen
    there is ambiguity in a contract, it is construed against its drafter.” MPACT
    Const. Grp., LLC v. Superior Concrete Constructors, Inc., 
    802 N.E.2d 901
    , 910 (Ind.
    2004). Because the Lease does not make clear whose burden it is to establish
    that the leased property was not in “good” condition upon return, or that any
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 16 of 17
    wear was “unreasonable,” the rule supports a conclusion that the burden be put
    on the landlord to establish the facts necessary to support tenant liability. As
    mentioned, Indiana Farmers has not designated evidence that would, if true,
    carry its burden to show that the damage to the duplex is the result of
    negligence, recklessness, or intentional acts on the part of Shearer and Nania.
    Consequently, the trial court did not err in entering summary judgment in favor
    of Shearer and Nania.
    Conclusion
    [29]   We conclude that the trial court did not abuse its discretion in dismissing
    Indiana Farmers’ claims against Poehler for failure to prosecute. We further
    conclude that the trial court erred in dismissing Indiana Farmers’ negligence
    and contract claims against Yost, and we remand for further proceedings on
    those claims. Finally, we conclude that the trial court did not err in entering
    summary judgment in favor of Shearer and Nania on Indiana Farmers’ contract
    claims.
    [30]   The judgment of the trial court is affirmed in part, reversed in part, and
    remanded for further proceedings.
    Vaidik, C.J., and Brown, J., concur.
    Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 17 of 17