Matusky v. Sheffield Square Apartments

639 N.E.2d 336, 1994 Ind. App. LEXIS 1098, 1994 WL 458363

• Court: Indiana Court of Appeals
• Decided: August 25, 1994
• Docket: No. 22A04-9309-CV-333
• Status: Published

Opinions

RATLIFF, Senior Judge.

STATEMENT OF THE CASE

Appellants-defendants, Fran and George Matusky ("Matuskys"), appeal the small claims court's judgment awarding appelice-plaintiff, Sheffield Square Apartments ("Sheffield Square") six hundred ninety dollars ($690.00). We affirm.

ISSUES

Matuskys present two issues for review which we restate as:

I. Whether a small claims judgment is contrary to law when the only evidence supporting an element of the plaintiff's claim is hearsay evidence which was objected to at the hearing.

II. Whether denial of defendant's counterclaim is contrary to Ind.Code 32-7-5-1.

FACTS

On November 24, 1992, Sheffield Square filed a small claims complaint against Ma-tuskys, who had rented an apartment from Sheffield Square until August 31, 1992. Sheffield Square sought damages for back rent, excessive wear and tear to the apartment, and water damage caused by Matusk-ys. On January 8, 1998, Matuskys mailed a letter to Sheffield Square's manager Carrie Randall ("Randall"), which contained payment for the back rent due and requested an itemized list of the alleged damage. After receiving the itemization from Sheffield Square, Matuskys filed a counterclaim for return of their security deposit and an award of attorney fees, alleging that Sheffield Square failed to comply with the Indiana Security Deposits statute¹. At the small claims hearing, the affidavit of Linda Porter ("Porter") was admitted over Matuskys' objection. Porter's affidavit stated that she was the owner of Sheffield Square's parent company and that she had mailed an itemized list of damages to Matuskys on September 24, 1992, within forty-five days of Matuskys vacating the apartment. Fran Matusky testified at the hearing that the only itemized list of damages she had received was from Sheffield Square's attorney in response to her January letter. Judgment was entered on June 16, 1993, in favor of Sheffield Square for $690.00.

DISCUSSION AND DECISION

ISSUE I

Matuskys contend that the small claims court's judgment is contrary to law. Ma-tuskys claim that no competent evidence was presented at the hearing that Sheffield Square had mailed an itemized list of damages to Matuskys within the forty-five day statutory period; the only evidence presented on that point was the hearsay affidavit of Porter. Matuskys correctly note that hearsay evidence is admissible in small claims court. However, they argue that the "modified residuum" rule should apply to actions in small claims court to require that a judgment may not be based on hearsay alone.

We reject Matuskys' invitation to subject small claims procedures to the "modified residuum" requirements. The Small Claims Rules were adopted in order to provide ordinary citizens with a means of obtaining swift and uncomplicated resolution of minor disputes. To that end, the rules specify informal hearings free from the restraints of technical rules of procedure, as provided in S.C. 8(A):

"The trial shall be informal, with the sole objective of dispensing speedy justice between the parties according to the rules of substantive law, and shall not be bound by the statutory provisions or rules of practice, procedure, pleadings or evidence except provisions relating to privileged communications and offers of compromise."

Thus, it is clear that in the small claims setting, all evidence, whether hearsay or not, is admissible save the two designated exeep-tions. Because the affidavit of Linda Porter was neither a privileged communication nor an offer of compromise, it was not within the only exceptions under 8.C. 8(A), and was admissible for all purposes.

The attempt to engraft onto the clear provision of S.C. 8(A) the so-called "modified residuum" rule from the administrative law area is an unwarranted attempt to rewrite the Small Claims Rules, the effect of which would be to impose technical rules upon largely untrained litigants completely thwarting the express purpose of providing an uncomplicated and simple method of resolution of issues in order to dispense speedy justice between the parties.

Matuskys cite Scholten Pattern Works, Inc. v. Roadway Express, Inc., (1989), Wisc.App., 152 Wis.2d 253, 448 NW.2d 670, and Levin v. Bucholtz (1956), 2 A.D.2d 351, 155 N.Y.S.2d 770, for the proposition that a small claims judgment cannot be supported by hearsay alone. For the reasons previously stated, we decline to follow those cases.

If the Small Claims Rules are to be changed, which in our opinion would be a mistake, it is not for this court to do so. The provisions of S.C. 8(A) are clear and unmistakable. There was no error in the admission of the Porter affidavit, and the judgment should be affirmed as to this issue.

ISSUE II

Matuskys contend denial of their counterclaim was contrary to Ind.Code 32-7-5-1, because there was no competent evidence Sheffield sent them an itemized list of damages within forty-five (45) days. This issue is subsumed in our discussion of Issue One. Porter's affidavit was admissible evidence upon which the small claims court could rely in deciding this issue. There is no error.

Judgment affirmed.

NAJAM, J., concurs. CHEZEM, J., dis‘sents with separate opinion.

1 . Ind.Code 32-7-5-14 provides: In case of damage to the rental unit or other obligation against the security deposit, the landlord shall mail to the tenant, within forty-five (45) days after the termination of occupancy, an itemized list of damages claimed for which the security deposit may be used as provided in section 13 of this chapter, including the estimated cost of repair for each damaged item and the amounts and lease on which the landlord intends to assess the tenant. The list must be accompanied by a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord.

Ind.Code 32-7-5-13 provides: A security deposit may be used only for the following purposes:

(1) To reimburse the landlord for actual damages to the rental unit or any ancillary facility that are not the result of ordinary wear and tear expected in the normal course of habitation of a dwelling.

(2) To pay the landlord for all rent in arrear-age under the rental agreement, and rent due for premature termination of the rental agreement by the tenant.

(3) To pay for the last payment period of a residential rental agreement where there is a written agreement between the landlord and the tenant that stipulates the security deposit will serve as the last payment of rent due. (4) To reimburse the landlord for utility or sewer charges paid by the landlord that:

(A) are the obligation of the tenant under the rental agreement; and

(B) are unpaid by the tenant.