Court Opinion

ID: 4257701
Source: CourtListenerOpinion
Date Created: 2018-03-23 15:11:33.983873+00
Date Added: 2024-06-11T13:28:19.244276
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                       FILED
regarded as precedent or cited before any                               Mar 23 2018, 8:53 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
Jon D. Madison
DeFur Voran, LLP
Muncie, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

The Housing Authority of the                             March 23, 2018
City of Muncie, Indiana,                                 Court of Appeals Case No.
Appellant-Plaintiff,                                     18A02-1710-SC-2399
                                                         Appeal from the Delaware Circuit
        v.                                               Court
                                                         The Honorable Thomas A.
Jeff Hager,                                              Cannon, Jr., Judge
Appellee-Respondent.                                     Trial Court Cause No.
                                                         18C05-1708-SC-1333

Riley, Judge.

Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018           Page 1 of 8
                                STATEMENT OF THE CASE
[1]   Appellant-Plaintiff, The Housing Authority of the City of Muncie (MHA),

      appeals the small claims court Order of Dismissal, dismissing its Complaint

      against Appellee-Defendant, Jeff Hager (Hager), for breach of the lease

      agreement.

[2]   We affirm.

                                                    ISSUE
[3]   MHA presents us with one issue on appeal, which we restate as: Whether the

      small claims court properly dismissed its Complaint against Hager.

                      FACTS AND PROCEDURAL HISTORY
[4]   MHA is a public housing agency providing low income housing to residents in

      Muncie, Indiana. Hager has been a resident of Earthstone Terrace, one of

      MHA’s apartment communities, since executing a lease in 2009. Every year,

      all the residents are required to go through a recertification process to determine

      the amount of assistance each resident is entitled to receive based on his or her

      income. Hager’s recertification is due annually in June, and up through May

      2015 his monthly rent had been $0. On May 11, 2015, Hager submitted his

      Zero, Low or Undocumented Income Checklist and Worksheet. Based on the

      information provided by Hager on the Worksheet, his monthly rent was

      recalculated and determined to be $117 as of June 2015. After receiving the

      rent statement, Hager realized he had made a mistake on the Worksheet, and

      on June 22, 2015, he submitted a revised Zero, Low or Undocumented Income
      Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018   Page 2 of 8
      Checklist and Worksheet. This revision resulted in a zero rent charge

      commencing in July 2015. Because Hager never paid the $117 rent assessed in

      June, MHA’s late fee policy applied to the balance due. Accordingly, MHA

      assessed a monthly $10 late fee for the next three months. Pursuant to a notice

      dated July 22, 2015, the monthly late fee for all residents was increased to $25,

      effective September 1, 2015. As of September 1, 2017, Hager owed a total of

      $747 based on one delinquent monthly rent payment and subsequently incurred

      monthly late fees.

[5]   On October 18, 2016, MHA sent a termination of lease notice to Hager and on

      November 16, 2016, MHA ordered Hager to vacate the apartment. On August

      8, 2017, MHA filed its Complaint in the small claims court, alleging that

      “[t]here is currently due and owing from [Hager] to [MHA] the sum of $747.00

      for rent and expenses through July 2017,” and demanding “judgment against

      [Hager] in the amount of $747.00 for rent and expenses through July 2017

      together with immediate possession of the aforesaid real estate[.]” (Appellant’s

      App. Vol. II., pp. 63-64). On September 7, 21, and 28, 2017, respectively, the

      trial court conducted a hearing on MHA’s Complaint. At the close of MHA’s

      presentation of its case-in-chief, Hager made a motion to dismiss the case

      pursuant to Indiana Trial Rule 41(B), which was granted by the trial court. The

      trial court’s Order of Dismissal concluded that:

              Upon the weight of the evidence and the law [MHA] has not met
              its burden of showing that there has been a material breach of the
              lease between the parties and therefore [MHA] is not entitled to
              evict [Hager] and the return of possession of the leasehold

      Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018   Page 3 of 8
              premises. Further, the court finds that there is no unpaid rent or
              charges due [MHA] from [Hager]. [MHA’s] Notice of Claim,
              and Complaint on Lease and for ejectment is dismissed with
              prejudice.

      (Appellant’s App. Vol. II, p. 86).

[6]   MHA now appeals. Additional facts will be provided if necessary.

                              DISCUSSION AND DECISION
[7]   Judgments in small claims actions are “subject to review as prescribed by

      relevant Indiana rules and statutes.” Ind. Small Claims Rule 11(A). Under

      Indiana Trial Rule 52(A), the clearly erroneous standard applies to appellate

      review of facts determined in a bench trial with due regard given to the

      opportunity of the trial court to assess witness credibility. 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.’” Trinity Homes, LLC v. Fang,

      848 N.E.2d 1065, 1037-68 (Ind. 2006) (quoting S.C.R. 8(A)). But this

      deferential standard does not apply to the substantive rules of law, which are

      reviewed de novo just as they are in appeals from a court of general jurisdiction.

      Id. at 1068. Similarly, where a small claims case turns solely on documentary

      evidence, we review de novo, just as we review summary judgment rulings and

      other “paper records.” Id. The only issue in this case turns on the meaning of

      the lease, which is a pure question of law and is reviewed de novo. Id.

      Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018   Page 4 of 8
[8]    We observe that Hager has filed no brief. When the appellee has failed to

       submit an answer brief, we need not undertake the burden of developing an

       argument on the appellee’s behalf. Id. Rather, we will reverse the small claims

       court’s judgment if the appellant’s case presents a cause of prima facie error. See

       id. Prima facie, in this context is defined as, “at first sight, on first appearance,

       or on the face of it.” Santana v. Santana, 708 N.E.2d 886, 887 (Ind. Ct. App.

       1999). Where an appellant is unable to meet this burden, we will affirm. Id.

[9]    A lease is construed in the same manner as any other contract. T-3 Martinsville,

       LLC v. US Holding, LLC, 911 N.E.2d 100, 111 (Ind. Ct. App. 2009), trans. denied.

       When construing the meaning of a contract, our primary task is to determine

       and effectuate the intent of the parties. Id. First, we must determine whether

       the language of the contract is ambiguous. Id. The unambiguous language of a

       contract is conclusive upon the parties to the contract and upon the courts. Id.

       If the language of the instrument is unambiguous, the parties’ intent will be

       determined from the four corners of the contract. Id. If, on the other hand, a

       contract is ambiguous, its meaning must be determined by examining extrinsic

       evidence and its construction is a matter for the fact-finder. Id.

[10]   The lease agreement entered into between MHA and Hager provides, in

       pertinent part, as follows:

               XIV. Termination of the Lease:

               In terminating the Lease, the following procedures shall be
               followed by [MHA] and Tenant:

       Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018   Page 5 of 8
               (a) This Lease may be terminated only for serious or repeated
                   violations of material terms of the Lease, such as failure to
                   make payments due under the Lease or to fulfill Tenant
                   obligations set forth in Section IX above, or for other good
                   cause.

                   Such serious or repeated violations of terms shall include but
                   not be limited to:

                   (1) The failure to pay rent or other payments when due;

                   (2) Repeated late payment, which shall be defined as failure to
                       pay the amount of rent or other charges due by the 5th day
                       of the month. Four such late payments within a 12 month
                       period shall constitute a repeated late payment;

                   (3) Failure to pay utility bills when Tenant is responsible for
                       paying such bills directly to the supplier of utilities;

                       ****

       (Appellant’s App. Vol. II, p. 23).

[11]   “Whether a breach is material is generally a question of fact to be decided by

       the trier of fact.” State v. Int’l Bus. Machines Corp., 51 N.E.3d 150, 158 (Ind.

       2016). A material breach is often described as one that goes to the “heart of the

       contract.” Id. at 159. Here, the lease clarified a material breach to be “serious

       or repeated violations of material terms of the Lease” and further enumerated

       some possible instances of material breaches. (Appellant’s App. Vol. II, p. 23).

       MHA’s Complaint alleged that MHA “made demand upon [Hager] for the

       Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018   Page 6 of 8
       amount of delinquent rental payments and expenses due to [MHA] and the

       demand for said payments has been refused.” (Appellant’s App. Vol. II, pp. 63-

       64). During the hearing, MHA presented evidence that Hager, due to his

       mistaken completion of the Zero, Low or Undocumented Income Checklist and

       Worksheet, incurred one, single rental payment of $117. Based on Hager’s

       continuing refusal to pay his balance, MHA assessed a monthly late fee on the

       rental payment, resulting in an accrued balance of $747 by September 2017.

       We cannot conclude that the single missed rent payment, together with the late

       fee deriving from this one occurrence, fits the contractual specification of

       “serious or repeated violations” of a material term of the lease agreement.

       (Appellant’s App. Vol. II, p. 23).

[12]   Nevertheless, MHA contends in its appellate brief, that Hager’s lease was not

       only terminated because of his failure to pay rent and late charges, but also

       because of “Hager’s failure to pay his utility bills resulting in disconnection of

       service[.]” (Appellant’s Br. p. 10). However, the Complaint did not include a

       “short and plain statement of” of this ground for MHA’s decision to terminate

       the lease. See Ind. Trial Rule 8(A)(1). Even in its “demand,” MHA only

       requested “judgment against [Hager] in the amount of $747.00 for rent and

       expenses[.]” (Appellant’s App. Vol. II, p. 64). Accordingly, we conclude that,

       Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018   Page 7 of 8
       based on the evidence before us, MHA did not establish that Hager committed

       a material breach of the lease. 1

                                             CONCLUSION
[13]   Based on the foregoing, we hold that the small claims court properly dismissed

       MHA’s claim against Hager with prejudice.

[14]   Affirmed.

[15]   May, J. and Mathias, J. concur

       1
         Because we hold that MHA did not establish a material breach of contract, we need not address MHA’s
       claim that the small claims court erroneously found that no unpaid rent or charges were due.

       Court of Appeals of Indiana | Memorandum Decision 18A02-1710-SC-2399 | March 23, 2018         Page 8 of 8