Court Opinion

ID: 7073946
Source: CourtListenerOpinion
Date Created: 2022-07-24 08:02:13.247588+00
Date Added: 2024-06-11T16:12:41.673944
License: Public Domain

CHEZEM, Judge,
dissenting.
I respectfully dissent from the majority opinion, as I believe the modified residuum rule should apply to actions in small claims courts.
In this state, a modified residuum rule applies to actions before administrative agencies. As stated by our supreme court in C.T.S. Corp. v. Schoulton (1979), 270 Ind. 34, 39, 383 N.E.2d 293, 296:
Indiana courts have unerringly applied a modified version of the Residuum Rule. It is improper (albeit not reversible error) for the Industrial Board to admit incompetent hearsay and an award must be supported by some competent evidence presented at the hearing.
a * # # # *
The Board can admit all hearsay evidence without fear of automatic reversal. If properly objected to at the hearing and preserved on review and not falling within a recognized exception to the Hearsay Rule, then an award may not be based solely upon such hearsay. But if not objected to, the hearsay (incompetent evidence) may form the basis for an award.
I do not believe the adoption of the modified residuum rule in the small claims context would work, as the majority suggests, to rewrite Small Claims Rule 8(A). That rule permits the admissibility of all evidence in small claims actions, excepting privileged communications and offers of compromise. A judgment of a small claims court will not be reversed because of any alleged error in receiving evidence. See Boostrom v. Bach (1992), Ind.App., 603 N.E.2d 867, vacated on other grounds (1993), Ind., 622 N.E.2d 175 (there was no reversible error in admission of a motion which was unverified and un-sworn, as parties are not bound by rules of evidence). However, a rule that hearsay evidence is admissible in small claims court does: not amount to a declaration that hearsay evidence should have any more probative force than it does in actions before other courts of this state. Small claims courts are bound to "dispense speedy justice ... according to the rules of substantive law." S.C.R. 8S(A). A judgment based solely upon incompetent evidence is not according to the rules of substantive law.
Without application of the modified residuum rule, the same case may receive different outcomes depending on the court in which it was filed. Under the majority opinion, a plaintiff using hearsay evidence to support an element of her claim would prevail in small claims court, yet if she had brought the action on the court's plenary docket her claim would be defeated as the hearsay would not have been received into evidence. Similarly, with the same evidence, a small claims defendant has the ability to defeat a plaintiff's case by simply removing the case from the small claims docket to the court's plenary docket. The competency of evidence to support a judgment should not vary simply because of the docket upon which it is heard. A judgment based on incompetent evidence, when properly objected to, cannot stand:
'Where there is sufficient competent evidence to sustain a finding in a case tried by the court without a jury, the admission of incompetent, irrelevant, and immaterial evidence is not cause for reversal" (Citing cases.)
However, the rule is equally well settled that if it appears from the record that the court's decision was based upon the incompetent evidence, the judgment will be reversed.
Harpe v. Beuoy (1966), 139 Ind.App. 690, 694, 215 N.E.2d 553, 556.
I would adopt the modified residuum rule in the small claims context.
Applying the rule here, the only competent evidence presented to the trial court was that Matuskys had received an itemized list of damages in January after requesting such from Sheffield Square. Because Sheffield Square did not provide Matuskys an itemized *339list of damages within forty-five days of their vacating the apartment, judgment should have been entered for Matuskys. See Chasteen v. Smith (1993), Ind.App., 625 N.E.2d 501 (by operation of statute, the failure of a landlord to comply with the notice of damages requirement constitutes an agreement by the landlord that no damages are due).