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Thursday, January 22, 2009

Ind. Decisions - Supreme Court rules on Indiana's rental agreement deposit statute

In Stan Klotz v. Sarah Hoyt and Chrissy Kornmann, an 11-page, 4-1 opinion, Justice Dickson writes:

This landlord-tenant dispute centers on Indiana's rental agreement deposit statute. We hold that a landlord's untimely or inadequate statutory damage notice to a tenant precludes only the landlord's claims for physical damage to the premises and does not bar the landlord from recovery of unpaid rent and other losses. * * *

We hold that a failure to timely comply with the notice of damages requirement subjects a landlord to forfeiture of all claims for physical damage to the premises, to refund of a tenant's damage deposit, and to payment of the tenant's statutory attorney's fees incurred by the tenant in seeking return of the deposit and in resisting the landlord's claim for premises damages, but such failure does not preclude a landlord from recovery of unpaid rent or other damages to which the landlord may otherwise be entitled. Here, the landlord's total claims so exceed the $6,000.00 small claims jurisdictional limit that the inadequacy of the landlord's purported notice of damages is immaterial, even though it would preclude his recovery of the portion of his claim that consists of physical damages to the premises and attorney fees, and would require him to refund the tenants damage deposit and resulting attorney fees. This cause is remanded to the trial court for entry of a judgment for the landlord in the sum of $6,000.00.

Boehm, and Rucker, JJ., concur.

Shepard, C.J., concurs in result with separate opinion. [which begins] I join in today‟s disposition and in directing that judgment be entered for $6,000. The Court‟s harmonization of the several sections of the statutes on rentals and security deposits is especially helpful.

Because we do not receive very many appeals from the 300,000 small claims cases litigated each year in Indiana, I would go a bit further and answer a question posed by this appeal but not answered in the Court‟s opinion. * * *

Sullivan, J., dissents with separate opinion. * * * I believe that this result is mandated by our decision in Lae v. Householder, where we said that, “[f]ailure to refund and supply the itemized list results in a waiver of any claim for damages and exposes the landlord to liability for the tenant‟s attorney fees.” 789 N.E.2d 481, 484 (Ind. 2003).

Here are earlier ILB entries on this case.

Posted by Marcia Oddi on January 22, 2009 02:08 PM
Posted to Ind. Sup.Ct. Decisions