Pinnacle Properties Development Group, LLC v. Alexandra Gales (mem. dec.)

Opinion

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), FILED this Memorandum Decision shall not be Jun 23 2016, 8:48 am regarded as precedent or cited before any court except for the purpose of establishing CLERK Indiana Supreme Court Court of Appeals the defense of res judicata, collateral and Tax Court

estoppel, or the law of the case.

ATTORNEY FOR APPELLANT William Perry McCall, III Mosley Bertrand and McCall Jeffersonville, Indiana

IN THE COURT OF APPEALS OF INDIANA

Pinnacle Properties June 23, 2016 Development Group, LLC, Court of Appeals Case No. Appellant-Defendant, 10A01-1512-SC-2271 Appeal from the Clark Circuit v. Court The Honorable Kenneth R. Alexandra Gales, Abbott, Magistrate Appellee-Plaintiff Trial Court Cause No. 10C03-1508-SC-1278

Crone, Judge.

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 1 of 9 Case Summary

[1] Pinnacle Properties Development Group, LLC (“Pinnacle”) appeals a $975

judgment in favor of residential tenant Alexandra Gales in her small claims

action for the return of rent, security deposit, utility deposit, and administrative

fees paid to Pinnacle, as well as damages for pain and suffering. We affirm.

Facts and Procedural History [2] The facts most favorable to the judgment are as follows. In November 2014,

Gales submitted a leasing application for an apartment at one of Pinnacle’s

residential properties. She was accepted and selected a floorplan suitable for

her and her four-year-old daughter. On November 26, 2014, she paid Pinnacle

a $250 security deposit and a nonrefundable $250 administration fee. The

leasing agent gave her a unit number, but she was not allowed to view her unit

before her scheduled move-in date of December 5, 2014.

[3] On move-in day, Gales went to the leasing office, where she signed the lease

agreement and paid one month’s rent of $625 plus a $100 utility deposit. The

leasing agent accompanied her to her unit to conduct a walk-through

inspection. When she entered her unit, she immediately noticed that there was

no electricity. She was told that she should contact the power company to

initiate service but later discovered that service could not be initiated because

the meter had been removed. During her walk-through, she also observed a

shattered sliding glass door and a dirty toilet that was devoid of water. The

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 2 of 9 leasing agent turned on the water valve to the toilet, and it flooded the

bathroom and soaked the carpet.

[4] The leasing agent proposed moving Gales to an adjacent unit, but the floorplan

did not meet Gales’s specifications. The agent also proposed postponing the

move-in and prorating the rent until Pinnacle could rectify the issues. That

same day, Gales told the leasing agent that she wanted to cancel the lease and

receive a refund because her unit was not in a habitable condition. The leasing

agent agreed to the refund and cancellation.

[5] Gales repeatedly attempted to contact Pinnacle’s owner about her refund, but

her messages were not returned. In August 2015, she filed a complaint against

Pinnacle in small claims court, seeking a refund of her rent, security deposit,

utility deposit, administration fee, and damages for pain and suffering, all

totaling $2500. She attached a copy of the lease agreement to her complaint.

[6] After a September 2015 hearing, the trial court concluded that Gales was

entitled to the return of the $625 for rent, plus the $250 security deposit and

$100 utility deposit. In total, the trial court entered judgment in Gales’s favor

for $975, plus court costs and post-judgment interest. Pinnacle filed a motion to

correct error, which the trial court denied. Pinnacle now appeals. Additional

facts will be provided as necessary.

Discussion and Decision [7] Pinnacle claims that the trial court committed reversible error in awarding

Gales $975 plus costs and interest. As a preliminary matter, we observe that Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 3 of 9 Gales has not filed an appellee’s brief. Where an appellee fails to file a brief, we

do not undertake to develop arguments on her behalf; rather, we may reverse

upon a prima facie showing of reversible error. Morton v. Ivacic, 898 N.E.2d

1196, 1199 (Ind. 2008). Prima facie error is error “at first sight, on first

appearance, or on the face [of] it.” Id.

[8] We review a trial court’s denial of a motion to correct error using an abuse of

discretion standard. Garrett v. Spear, 24 N.E.3d 472, 473 (Ind. Ct. App. 2014).

Where, as here, the appeal involves “claims tried by the court without a jury

or with an advisory jury, at law or in equity, the court on appeal shall not

set aside the findings or judgment unless clearly erroneous, and due

regard shall be given to the opportunity of the trial court to judge the

credibility of the witnesses.” Ind. Trial Rule 52(A); see also Morton, 898

N.E.2d at 1198-99. “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 parties according to the rules of

substantive law.” Id. at 1199 (citation omitted).

[9] Pinnacle predicates its arguments in large part on Gales having signed the lease

agreement and inspection form. Indiana courts have long recognized the

contractual nature of leases and the applicability of contract law to leases.

Stewart v. TT Comm’l One, LLC, 911 N.E.2d 51, 55 (Ind. Ct. App. 2009), trans.

denied. Contract interpretation is a question of law which we review de novo.

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 4 of 9 Brill v. Regent Comm’ns, Inc., 12 N.E.3d 299, 306 (Ind. Ct. App. 2014), trans.

denied.

[10] Significantly, however, Pinnacle has failed to submit either the lease agreement

or the inspection form for our review and, in fact, has not filed an appellate

appendix at all. 1 While it would be within our purview to dismiss Pinnacle’s

appeal for providing a highly deficient record, we nevertheless choose to

address the merits and conclude that we may affirm the judgment of the trial

court on the record before us. 2

[11] While we emphasize that we cannot review agreements that have not been

submitted on appeal, 3 we note that the trial court did have access to the lease

agreement, which was attached to Gales’s complaint (also not submitted on

appeal). In its order denying Pinnacle’s motion to correct error, the trial found

in pertinent part as follows:

1 Indiana Appellate Rule 49(B) states that a party’s “failure to include any item in an Appendix shall not waive any issue or argument.” Even so, Appellate Rule 49(A) clearly contemplates that an appendix will be filed: “The appellant shall file its Appendix with its appellant’s brief.” (Emphasis added.) Similarly, Appellate Rule 50(A)(1) reads, “The purpose of an Appendix in civil appeals ... is to present the Court with copies of only those parts of the record on appeal that are necessary for the Court to decide the issues presented.” In addition to the chronological case summary, appealed order, pleadings, and various other documents, Rule 50(A)(2) requires that the appendix include “other documents from the Clerk’s Record in chronological order that are necessary for resolution of the issues raised on appeal[.]” 2 See Hughes v. King, 808 N.E.2d 146, 147 (Ind. Ct. App. 2004) (dismissing appeal of summary judgment where appellant failed to provide motions for and in opposition to summary judgment as well as copies of designated evidence); cf., Bambi’s Roofing, Inc. v. Moriarty, 859 N.E.2d 347, 352 (Ind. Ct. App. 2006) (noting highly deficient record that impeded de novo review but opting to address merits rather than dismiss appeal). 3 In its brief, Pinnacle cites paragraph 14 of the lease agreement, which purportedly addresses the tenant’s verification that the premises was in a good and clean condition. However, we have no copy of the lease before us and nevertheless note that Gales had not been afforded the opportunity to see her unit before she signed the lease.

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 5 of 9 2) Prior to December 5, 2014, the Plaintiff applied to be a tenant with the Defendant/landlord. Although she was not allowed to view the specific apartment, she was told that she would be receiving apartment #31.

3) On November 26, 2014, the Plaintiff paid to the Defendant the amount of $250.00 for a security deposit, and $250.00 as an administrative fee.

4) On December 5, 2014, the Plaintiff went to the leasing office of the Defendant to execute the Lease Agreement and she also paid one month’s rent in the amount of $625.00 and a utility deposit of $100.00. Upon payment, the leasing agent escorted the Plaintiff to the apartment for the first time. Upon entering the apartment the parties noticed that there was not electrical service for the apartment (no existing meter), the sliding glass door was shattered, and the water to the toilet was not flowing.

5) The leasing agent turned the water valve to the toilet on and water began flooding the floor of the apartment bathroom, soaking the carpet.

6) After discussing the potential of moving the move-in date and prorating rent, the Plaintiff stated that because the apartment was not in livable condition she wanted to cancel the lease and receive a refund. She testified that the leasing agent agreed to cancel the lease and refund her money.

7) At trial, Bob McEwen testified as the representative of the Defendant. He stated that all he knows personally about was the toilet problem. He also stated that he had no personal knowledge about any agreement to grant a refund, or not to grant a refund.

8) The Plaintiff’s testimony as to the refund agreement was therefore not contradicted by any witnesses.

9) After trial the Court granted a refund of the lease payment of

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 6 of 9 $625.00 as the Plaintiff never moved into the leased premises before the agreement to terminate the lease and refund her money. The Court also granted a refund of the $250.00 security deposit and the $100.00 utility deposit as she could not have caused any damages to the premises or used any utility services.

10) The Court did not grant a refund of the administrative fee, as such fee was presumably earned prior to execution of the lease agreement for matters such as taking and reviewing the application, preparation of the lease, and other similar matters.

11) Because of the undisputed evidence that the Plaintiff and Defendant agreed to a cancellation of the lease agreement and refund of her monies, the Defendants[’] arguments that the Plaintiff breached a valid and binding contract, and that her actions resulted in a premature termination of the rental agreement are unfounded.

Appellant’s Br. at 9-10.

[12] The evidence presented at the hearing supports the trial court’s findings and

conclusions. Gales testified concerning her payment of the security deposit,

administration fee, first month’s rent, and utility deposit, all before being

allowed to enter and conduct a walk-through inspection of her unit. When she

discovered the lack of electricity, shattered sliding door, and flooding from the

toilet, she listed the defects on the inspection form and apparently signed it, but

she made it known to the leasing agent that she could not move in under such

conditions. The alternative of moving to another unit was unsatisfactory due to

that unit’s unsuitable floorplan. The five-day potential postponement of

occupancy and proration of rent simply would not work, as the lack of electrical

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 7 of 9 service was further complicated by her discovery that the electric company

could not initiate service due to the absence of a meter.

[13] Most importantly, Gales notified the leasing agent of her cancellation of the

lease and expectation of a refund due to the uninhabitable premises. She

testified that the leasing agent agreed to the cancellation and refund. This

testimony was never controverted at the hearing because the leasing agent was

neither present to testify nor was her testimony otherwise obtained. Instead,

Pinnacle offered the testimony of a Pinnacle employee who had no personal

knowledge about any of Gales’s issues except for the toilet, as he had helped the

maintenance man repair the valve.

[14] Moreover, Gales signed the lease with the reasonable expectation of receiving a

habitable leasehold. See Breezewood Mg’t. Co. v. Maltbie, 411 N.E.2d 670, 675

(Ind. Ct. App. 1980) (holding that tenants had reasonable expectation that their

basic housing needs would be met: heating, plumbing, electricity, and

structural integrity and that landlord breached implied warranty of habitability

for failing to provide and maintain a habitable leasehold). She did not receive a

habitable leasehold and could not have been expected to move herself and her

four-year-old child into a flooded, unheated, and unlit unit, especially in

December. Her attempts to follow up with Pinnacle’s owner were ignored. As

for the refund, the meager record supports the trial court’s conclusion that she

was entitled to $625 for her first month’s rent, as she never lived in the

uninhabitable unit; the $250 for the security deposit, as she did not cause any

damage to a unit in which she never lived; and $100 for the utility deposit, as

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 8 of 9 she never initiated any such services. Pinnacle does not specifically contest the

award of costs and post-judgment interest. In short, the evidence is sufficient to

support the trial court’s judgment. Accordingly, we affirm.

[15] Affirmed.

Najam, J., and Robb, J., concur.

Court of Appeals of Indiana | Memorandum Decision 10A01-1512-SC-2271 | June 23, 2016 Page 9 of 9