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Winter 2007 Newsletter

Firm Happenings

Ward, Tyler & Scott, LLC is pleased to announce that two experienced local attorneys will be joining our firm family on November 1, 2007. Rick Bartlett and Sandra Heeke, formerly partners with an established Jeffersonville, Indiana, firm, will bring over fifty collective years of experience. Rick’s primary area of practice is in the estate planning and administration arena. He will work in the Firm's business and estate section. Sandy will bring her knowledge and expertise in representing insurers and their insureds to the firm’s litigation section. Their practices seem like a perfect complement for the firm and its clients. Accompanying them will be Sandy’s former legal assistant, Theresa Lee, who will work as a litigation paralegal. Welcome, Rick, Sandy and Theresa.

As you may have noticed, Ward, Tyler & Scott, LLC now employs a new (like they haven't been around for more than a decade) automated voice attendant system.  It went into operation in mid-September, and we are hopeful that it will prove to be efficient and user-friendly.  As is always the case with changing technology, there have been a few bugs to work out.  We would greatly appreciate your feedback on it and any ideas you might have on how it might better suit your needs.


Scott Tyler was selected by Westfield Group to serve as an attorney representative at its inaugural Westfield Legal Summit. The Westfield Legal Summit involved a panel of attorneys who discussed the practice of law and current legal issues impacting the industry. The summit occurred during Westfield’s annual Defense Days, which took place in August at its home office in Westfield, Ohio. Other than on the golf course, Scott looked like he knew what he was doing.

George Budd was recently elected Secretary/Treasurer of the Floyd County Bar Association. He will serve in that capacity for a one-year term. After that, we may just make him handle the firm's books.

Mick Ward accompanied his brother, Jim, a biochemist, and a group of other adults and youngsters from Good Shepherd Episcopal Church in Lexington, Kentucky, on a Katrina-relief trip to Bayou le Batre (pronounced, the locals say, “By-O Luh Bat tree,”), Alabama, in July of 2007. There he helped build two handicap ramps for some disabled folks and learned firsthand why “Alabama” and “July” don’t belong in the same sentence. Mick reports it was so hot and humid that the first night after work, when he went to recharge his cell phone (which he had been carrying in his pocket), sweat poured out of the inside and he later learned that the internal circuitry had corroded – proving once again that no good deed goes unpunished! In truth, however, Mick admits that he got more out of it than he gave.

Rodney Scott, Ken Doane, George Budd and Peggy Timmel each volunteered for the monthly “Talk to a Lawyer” pro bono program sponsored by Legal Volunteers. They comprised part of a phone bank to respond to legal questions from residents of Clark, Floyd and Harrison counties. Chris King regularly participates in a similar pro bono program sponsored through the Louisville Bar Association, most recently in June. The diverse questions can challenge the most brilliant of legal minds - not that any of those minds were in attendance.

In May, Scott Waters and Allan Hoffer completed teaching a nine-week Real Estate Certification Program for prospective realtors to assist them in preparing for the state licensing test. They anticipate teaching another session over the summer - the realtors, however, have asked us to confiscate their rulers.

Tricia Hofmann and Julie Flanigan were invited by Floyd County Superior Court Judge Susan Orth to the inaugural launch dinner of the Women’s Foundation of Southern Indiana. The Foundation was created in 2005 to serve the needs of women and children in Floyd, Clark and Harrison counties. More information about the Women’s Foundation of Southern Indiana can be found at http://www.cfsouthernindiana.com/Default.aspx?sitemapid=46. Donations are always accepted.

Rodney and Lisa Scott and their family spent part of June following Emma’s travelling soccer team - Mockingbird Soccer Club - "92 Girls at http://eteamz.active.com/mvscg13/. Emma's team won the Kentucky State Cup for the second straight year and proceeded to the Regional Championships in Des Moines, Iowa. Rodney and Lisa now have firsthand knowledge of how corn grows.

Allan Hoffer’s son, Drew, was recently hired to teach eleventh grade history at South Oldham High School. Allan’s daughter, Kendall, was hired as a full-time counselor at Louisville’s Home for the Innocents. Allan's wallet is getting heavier by the minute.

Peggy Timmel gave a presentation to a group of women at a recent One Southern Indiana TGI Friday luncheon. She spoke about the differences between powers of attorney and living wills in Indiana and Kentucky, and also discussed the debate regarding withholding nutrition and hydration (at a lunch nonetheless) and the importance of family involvement in such sensitive discussions.

Client Outcomes

Mick Ward concluded a tax-deferred exchange of industrial properties of substantial value in Park East Industrial Park, in New Albany, Indiana, working closely with other firms. This exchange concluded many months’ work on a very time-sensitive transaction involving complicated real estate and tax issues.

Rodney Scott and Tricia Hofmann secured summary judgment in Sasaki v. Yu in the Clark Circuit Court. Their client, Abel Yu, was trustee of a trust which owned a residence at which Plaintiff fell. However, Plaintiff sued Mr. Yu in his individual capacity only, not in his capacity as a trustee. Neither did he sue the trust. The statute of limitations expired without Plaintiff correcting the problem, and Plaintiff’s Motion to Amend his Complaint was filed too late for the amendment to relate back to the original date of filing. Judge Daniel Donahue agreed with our argument that Mr. Yu owed no duty to Plaintiff and, in his individual capacity, was not a proper defendant.

 

George Budd recently completed a two-day jury trial in Dollens v. Thompson, in the Jackson Circuit Court.  Plaintiff claimed approximately $13,000 in medical expenses and $8,600 in lost wages.  Plaintiff also called an accident reconstruction expert live at the trial.  Nonetheless, the jury ultimately assessed Plaintiff thirty percent of fault for the intersectional accident even though George's client had come from the subordinate road and allegedly ran the stop sign.  The net award was approximately $6,000, less than the amount of our client's qualified settlement offer which entitles our client to $1,000.00 in attorneys' fees and costs. 

Mick Ward helped one of the our clients sell all of the stock in an insurance-brokerage firm. This transaction also involved numerous complicated issues ranging from valuation of the stock (on which he worked closely with a neutral financial advisor with expertise regarding the insurance-industry-sensitive issues involved in such matters), to incentiviced retention agreements for key employees, to continuing employment agreements with the client for continuity of business operations. Mick reports that this too was one of those time-sensitive transactions that often found him waking in the middle of the night to make notes on things he needed to address the next day – and writing himself reminders to renew his fitness-club membership to help him cope with the stress that the responsibility for such deals inevitably involves!

Around the same time, Mick helped some heirs sell a substantial commercial complex which they had inherited to a local developer.

Julie Flanigan achieved a defense verdict after a three-day jury trial in Washington Superior Court before the Honorable Judge Frank Newkirk in Saylor v. Cowles. Plaintiff Audrey Saylor claimed a soft tissue injury to her low back and introduced $14,000 in medical expenses. Plaintiff Leif Saylor aggressively pursued a rather unique consortium claim, with all due respect and honor to the Rolling Stones, based on his wife's inability to attain "satisfaction." Plaintiffs had demanded $160,000 at trial. Qualified settlement offers were issued before trial to both plaintiffs.

  

George Budd also secured a defense verdict in Buckner v. Hurst after a jury trial in the Floyd Superior Court.  On the morning of trial, and after the motions in limine about the medical proof, one of the Plaintiffs agreed to dismiss the personal injury part of his lawsuit and the other Plaintiff decided to proceed only on the property damage issues.  As it turned out, the damage claim did not matter since the jury returned a verdict on liability based on the disputed evidence about who had the "green" light.  Unfortunately, the Qualified Settlement Offer was only made to the personal injury Plaintiff.


THIS WEBSITE AND THE RESULTS DESCRIBED ABOVE ARE NOT INTENDED TO CONSTITUE AN ENDORSEMENT OF ANY PARTICULAR ATTORNEY OR CONSTITUTE A REPRESENTATION ABOUT THE QUALITY OF LEGAL SERVICES. ADDITIONALLY, WARD, TYLER & SCOTT, LLC DOES NOT BELIEVE THAT PAST RESULTS PREDICT FUTURE SUCCESS AND CANNOT WARRANT OR GUARANTEE RESULTS IN PENDING OR FUTURE CASES.



Legal Updates

CONSTRUCTION

Kentucky Enacts New Statute Concerning Construction Contracts

Kentucky Governor Ernie Fletcher signed HB-490 into law on April 5, 2007. The bill, entitled the “Kentucky Fairness in Construction Act,” went into effect on June 26, 2007 and carries with it significant changes for Kentucky construction contracts entered into on and after that date. While this act specifically exempts residential construction and facilities regulated by the Kentucky Public Service Commission, it applies to most all other construction projects in the Commonwealth, both public and private.

In a nutshell, the new law will benefit contractors and subcontractors by 1) prohibiting certain common contract clauses (i.e. “no damage for delay” clauses, waivers of rights to sue on contract or file liens); 2) requiring prompt payment of undisputed amounts to contractors and subcontractors; 3) limiting the retainage allowed to be withheld from payments to the contractor and subcontractor; and 4) extending the time (in some cases) in which a lien can be filed. The statute, as written, does not specifically apply to suppliers of materials or equipment (“materialmen”). However, the statute likely will be extended to apply to materialmen in the future through legislative amendments and/or case law interpreting the new statute.

Contractors and subcontractors working in Kentucky may want to review their standard contracts to ensure they comply with the new act and take advantage of its new benefits. The text of the new law can be found at http://www.lrc.ky.gov/Statrev/ACTS2007/0136.pdf and is codified in Kentucky Revised Statutes 371.400 to 371.425, along with some changes to Kentucky Revised Statutes 376.230.

LITIGATION

Counsel’s Authority (or Lack Thereof) to Bind Client to Terms of Settlement
In Bay v. Pulliam, 2007 WL 2416871 (Ind. Ct. App. 2007), the Bays hired a well-known Bloomington personal injury firm to represent them for injuries Carol Bay allegedly incurred in an auto accident with Pulliam. The law firm actively negotiated with Pulliam’s carrier, Zurich, and ultimately advised Zurich in writing, “Our client has accepted your offer in the amount of $16,700.00.” Defense counsel forwarded the necessary settlement documents to the Bays’ attorney. However, when presented with the terms of the settlement, Carol Bay reported that she had not agreed to the amount. To the contrary, she reported needing to discuss it with her husband. The Bays then rejected the offer in writing.

Defendant filed a Motion to Enforce the settlement agreement, which was granted by the trial court. Surprisingly, the Court of Appeals reversed. It held that the law firm possessed neither actual nor apparent authority to accept the settlement amount. There was no actual authority, as the attorney was not told that amount was acceptable, nor was he given authority to accept whatever he deemed appropriate. In addition, the Bays never made any manifestation to Defendant or his counsel that their attorney had such authority. The fact that counsel was authorized to negotiate was insufficient. The court concluded that Defendant did not take any action to ascertain that the attorney had authority to bind the client. Instead, “it merely assumed that to be the case. Accordingly, Zurich acted at its peril with regard to the settlement.”

Standard for Admissibility of Evidence of Pre-Accident Medical Evidence and Injury
In Armstrong v. Gordon, 871 N.E.2d 287 (Ind. Ct. App. 2007), the Indiana Court of Appeals clarified the standard for a defendant to introduce evidence of a plaintiff’s relevant pre-accident medical condition. Gordon claimed neck injuries as a result of an accident for which Armstrong admitted fault. Prior to that accident, Gordon was involved in two other accidents, had been diagnosed with cervical degenerative disc disease, and underwent fairly substantial treatment for neck-related complaints. At trial, the court inexplicably granted Plaintiff’s motion to exclude evidence about her pre-accident condition, treatment and accidents. All pre-accident records were excluded, and deposition testimony about those issues was stricken.

The Court of Appeals reversed, holding that Armstrong was “entitled to thoroughly challenge [] Gordon’s expert with respect to that expert’s causation opinions.” The trial court’s ruling effectively denied Armstrong that opportunity. The Court of Appeals cited Walker v. Cuppett, 880 N.E.2d 85 (Ind. Ct. App. 2004), noting that the evidence of a plaintiff’s related medical condition is relevant and is an appropriate topic for cross-examining a treating physician. Although Armstrong had an expert who was prepared to – but prevented from – testifying that the post-accident complaints were related to the underlying degenerative problems, no defense expert is necessary.

The Court further clarified what a defendant must establish to introduce such evidence. The defendant must have evidence showing a “logical nexus or causal relationship” between the pre-accident condition and the post-accident complaints. If a defendant satisfies that requirement, as did Armstrong, the evidence is admissible. Finally, the Court also rejected Gordon’s argument that the defense was required to show a “reasonable medical probability” that the post-accident complaints were a result of the pre-accident condition, as opposed to the accident itself. It explained that a “reasonable medical probability” is the standard for a plaintiff’s burden of proof. It is not the standard for the admissibility of evidence.

GOVERNMENT AND BUSINESS LAW

The New “Bobby Knight” Rule for "Open Meetings" in Indiana

Gone forever are the days in Indiana that governing bodies which are subject to the Indiana Open Meetings law may hold a number of small meetings of less than a quorum of members to get around the requirement of giving notice to the public so that the public can attend a “public” meeting. The prohibition against the use of serial meetings is common in many states, but until July 1, 2007 was permitted technically in Indiana. Generally, all public action is subject to the “sunshine law” requiring notice to the public of the meeting, giving interested individuals the opportunity to attend such meetings in person.

The whole issue came up here in Indiana after the Board of Trustees of Indiana University skirted the Open Meetings law in deciding to fire legendary basketball coach, Bob Knight. Although Miles Brand, President of IU at the time, had the authority to fire Coach Knight on his own, he instead elected to secure the support of the Board of Trustees behind his decision. However, to have a board meeting, the University would have been required to comply with the Open Meetings law. Concerned about politics and the emotions of IU alumni, he instead opted to have numerous meetings of less than a quorum of the Board of Trustees to discuss and ultimately arrive at the final conclusion to terminate Coach Knight.

The Indiana Legislature responded by passing Senate Enrolled Act 103, which Governor Daniels signed into law as Public Law 179-2007. This legislation put an end to the use of “serial meetings,” like those convened by President Brand, to avoid public notice and attendance at meetings of governmental bodies. Many quasi-governmental bodies are also subject to the Indiana Open Records and Open Meetings laws and may have to change the way they conduct meetings.

However, the new law still permits some “wiggle room.” Under the new law, a board could still avoid the notice requirement by ensuring that any meeting of three or more members of a governing body occurs no more often than once every seven consecutive days on a particular topic.
See the Governor’s Press Release on the issue at: http://www.mymanmitch.com/news_article.asp?pressid=568

INSURANCE LAW

Waiver of Uninsured/Underinsured Coverage in Umbrella Policies
The Indiana Court of Appeals recently disapproved of the manner used by one insurer to limit its exposure in excess policies. Liberty Mut. Fire Ins. Co. v. Beatty, 870 N.E.2d 546 (Ind. Ct. App. 2007). The Beattys had personal auto and umbrella policies through Liberty Mutual, both of which contained UM/UIM coverage. The umbrella policy afforded $1,000,000 in UM/UIM coverage. While those policies were in effect, Liberty Mutual sent a notice to the Beattys, offering UM/UIM coverage in the sum of one, two, or three million dollars at various rates. In the alternative, the Beattys could check a box indicating that they were rejecting such coverage. Confused, they contacted their agent, who told them they did not need any more coverage, and directed them to check the appropriate box to effect a rejection.

Some months later, Mr. Beatty was subsequently injured in an accident with an uninsured driver. Liberty Mutual paid the full $250,000 UM limits under the personal auto policy, but denied that there was UM coverage under the umbrella. The Beattys filed suit, arguing that the purported rejection was ineffective. The trial court agreed, and granted summary judgment on behalf of the Beattys.

The Court of Appeals agreed. It noted that an insurer has a duty to provide UM/UIM coverage under umbrella policies, as well as underlying auto policies, and that any written rejection of such coverage must be unambiguous. The letter sent to the Beattys was ambiguous, in that it did not indicate whether the cancellation would go into effect immediately or at the time of the next policy renewal. Even more important, it was not clear whether it was a rejection of all UM/UIM coverage under the umbrella policy, or a rejection of any coverage on top of the $1,000,000 already provided under the policy. The court was troubled by Liberty Mutual’s argument that all UM/UIM coverage was waived, as $1,000,000 in such coverage was part of the original umbrella policy for which the Beattys had paid a premium. The court explained that if Liberty Mutual had intended the rejection to apply to all UM/UIM coverage, including the coverage that the Beattys already had, the insurer should have done one of two things. It initially could have secured the Beattys’ written waiver of all UM/UIM coverage and included that waiver in the policy before the policy commenced. Once coverage commenced, it could have modified the policy and reduced the Beattys’ premium to reflect the change in coverages. It could not materially alter the coverage, eliminating UM/UIM coverage entirely, yet retain the full premium.

Subrogation Rights and the “Fully Compensated” Insured
Just this month, the Court of Appeals issued an opinion which obfuscates insurers’ subrogation rights. In State Farm Mut. Auto. Ins. Co. v. Cox, 2007 WL 2554675 (Ind. Ct. App. 2007), an accident occurred between a vehicle operated by Hunt and one operated by McCauley and occupied by Cox. Cox was insured by State Farm and McCauley was insured by Kentucky National. Hunt, who died in the accident, was uninsured. The carriers paid their respective MPC limits ($25,000 from State Farm and $5,000 from Kentucky National) on behalf of Cox. Subsequently, State Farm tendered the $100,000 UM limits to Cox and secured a release in which Cox agreed to “hold in trust for the benefit of [State Farm] all rights or recovery, which he[] shall have against any person or organization legally liable for” Cox’s injuries, and further agreed that State Farm was “authorized to take any action which may be necessary in law or in equity in the name of the undersigned against any such person or organization.” The State Farm policy provided that its right to recover UM payments “applies only after the insured has been fully compensated for the bodily injury.”

Kentucky National subsequently deposited its $50,000 limits to the court for distribution. Subsequently, a bench trial was held, at which the trial court determined Cox’s claim was worth $182,000. Cox and State Farm both made claims for Kentucky National’s tendered funds.
State Farm first argued that if the $50,000 reflected McCauley’s liability limits, then it was entitled to a credit for overpaying $50,000 (in other words, it was entitled to offset the liability limits against its exposure pursuant to the policy and Indiana statute). On the other hand, it reasoned, if the payment was made under Kentucky National’s UM provision, then the anti-stacking provisions of both policies would prevent Cox from recovering both amounts. The trial and appellate court both rejected those arguments. As State Farm repeatedly stated their payment was for UM, not UIM, and the setoff statute was thus inapplicable. In addition, the release squarely framed State Farm’s rights as being subrogation rights in nature, not a right to raise stacking or offset arguments.

Unfortunately for State Farm, the policy clearly provides that the company’s subrogation rights do not arise until after the insured has been “fully compensated.” Even if one includes Kentucky National’s payments, Cox would have received $180,000. The court valued his case at $182,000. He was not – and never will be – fully compensated. As such, State Farm’s subrogation rights will never arise, and the courts determined Cox was entitled to the full amount of the Kentucky National payment.

FOR QUESTIONS ABOUT ANY OF THESE TOPICS, PLEASE FEEL FREE TO CONTACT US.

THIS WEBSITE IS NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. WARD, TYLER & SCOTT, LLC DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION ACCESSIBLE VIA THIS SITE IS STILL ACCURATE, COMPLETE OR CURRENT.

Our Perspective

 

EVERYTHING THAT KEEPS LANDLORDS UP AT NIGHT
by Tricia K. Hofmann

Statutory Duties and Obligations

Indiana Code 32-31-8-5 sets forth statutory duties owed by landlords to their residential tenants. The statute provides that at the time the lease is executed and throughout the tenant’s occupancy, a landlord must

(1) Deliver the rental premises to a tenant in compliance with the rental agreement, and in a safe, clean, and habitable condition.

(2) Comply with all health and housing codes applicable to the rental premises.

(3) Make all reasonable efforts to keep common areas of a rental premises in clean and proper condition.

(4) Provide and maintain the following items in a rental premises in good and safe working condition, if provided on the premises at the time the rental agreement is entered into:
(A) Electrical systems.
(B) Plumbing systems sufficient to accommodate a reasonable supply of hot and cold running water at all times.
(C) Sanitary systems.
(D) Heating, ventilating, and air conditioning systems. A heating system must be sufficient to adequately supply heat at all times.
(E) Elevators, if provided.
(F) Appliances supplied as an inducement to the rental agreement.

IND. C. § 32-31-8-5. To bring suit under the above-quoted statute, a tenant must provide the landlord written notice of the complaint and afford the landlord access to the premises and ample opportunity to correct the problem. IND. C. § 32-31-8-6(b). In the event the landlord refuses to correct the problem, or does not correct the problem within a reasonable time after being notified, the tenant can seek remedies including injunctive relief, actual or consequential damages, and attorney’s fees and costs. IND. C. § 32-31-8-6(d)-(e). Neither the statute nor any cases construing it suggest what constitutes a “reasonable” time for making repairs.

These statutes only apply to the rental of dwellings, defined to include units in apartment buildings, boarding houses or rooming houses, mobile homes, single-family residences or duplexes. IND. C. § 32-31-5-3. There do not exist any similar statutory requirements governing the rental of commercial premises in Indiana.

General Rule – Caveat Lessee

Under common law principles, once a landlord tenders possession and control over premises to his or her tenant, the landlord will not be liable for injuries sustained by the tenant or by others on the premises. As various courts have held:
In the absence of statute, covenant, fraud or concealment, a landlord who gives a tenant full control and possession of leased property will not be liable for personal injuries sustained by the tenant and other persons lawfully upon the leased property.

Pitcock v. Worldwide Recycling, Inc., 582 N.E.2d 412, 414 (Ind. Ct. App. 1991). See also Houin v. Burger, 590 N.E.2d 593, 597 (Ind. Ct. App. 1992); Goddard v. Weaver, 558 N.E.2d 853 (Ind. Ct. App. 1990). This position is commonly known as caveat lessee (let the lessee beware). Pitcock, supra. The landlord owes the same duty to the tenant’s guests that he or she owes to the actual tenant. Slusher v. State, 437 N.E.2d 97, 100 (Ind. Ct. App. 1982). The same duty is imposed “because it is the lessor’s business to afford the lessee the uses of the tenancy.” Id. 3

Common Areas

Several exceptions apply to the doctrine of caveat lessee. First, a landlord retains a duty to maintain any common areas over which the landlord retains control or possession, such as hallways, parking lots or sidewalks. Vandenbosch v. Daily, 785 N.E.2d 666 (Ind. Ct. App. 2003); Frost v. Phenix, 539 N.E.2d 45 (Ind. Ct. App. 1989); Coleman v. DeMoss (1969), 144 Ind.App. 408, 246 N.E.2d 483. The Frost court explained that a landlord
is therefore under an affirmative obligation to exercise reasonable care to inspect and repair such parts of the premises [common ways and areas] for the protection of the lessee. . . . The obligation is one of reasonable care only, and the lessor is not liable where no injury to anyone was reasonably to be anticipated or the condition was not discoverable by reasonable inspection, unless it is shown to have been of such duration as to permit the conclusion that due care would have discovered it.


Frost, 539 N.E.2d at 47 (quoting W. Prosser & W. Keeton, The Law on Torts, § 63 at 441-42 (5th ed. 1984)). However, if the landlord leases the common area to the tenant, and does not retain control over it, the landlord will not have a duty to maintain it. Vandenbosch, supra, at 669; Goddard, supra, at 854.

A landlord has a duty to remove snow and ice accumulations from sidewalks and parking lots used by tenants and/or their guests. Rossow v. Jones, 404 N.E.2d 12 (Ind. Ct. App. 1980). However, if the premises abut a public sidewalk, the landlord does not have any duty to remove snow or ice accumulations from such public walkway. Hirschauer v. C & E Shoe Jobbers, Inc., 436 N.E.2d 107 (Ind. Ct. App. 1982). The landlord does have a duty to refrain from making the condition on the public walkway worse.

It should be noted that a landlord cannot avoid the duty to maintain common areas by inserting exculpatory language in the lease, which would release the landlord from liability for damages arising out of any defects present in those common areas. See Ransburg v. Richards, 770 N.E.2d 393 (Ind. Ct. App. 2002). Indiana courts have expressly held such exculpatory provisions contrary to public policy. Id.

Latent Defects Known to Landlord


The second exception to the caveat lessee doctrine involves latent defects. If there is a latent defect in the premises unknown to the tenant, which the landlord knows about and fails to disclose to the tenant, the landlord can be liable for any damages arising out of that defect. Pitcock, supra. See also Zimmerman v. Moore, 441 N.E.2d 690 (Ind. Ct. App. 1982). As stated, there must be evidence that the landlord actually knew about the defect, and that the tenant did not. If the defect is open and obvious, the landlord has no duty to warn, as the tenant should be able to identify the defect him- or herself and take appropriate action to avoid being harmed by it. Zimmerman, supra.

Public Purpose


The third exception takes this one step further. If the landlord leases premises to a tenant who will use the premises for a public or semi-public purpose, the landlord may be responsible for a wider range of defects. In this scenario, if the landlord knows – or by the exercise of reasonable care, ought to know – about defects or conditions on the premises present at the time of the lease which would render the premises unsafe for their intended purpose, the landlord may be liable. Pitcock, supra, at 415 (citing Walker v. Ellis (1955), 126 Ind.App. 353, 129 N.E.2d 65, 73. In this public use situation, it does not appear that the defect must be latent. Similarly, the landlord’s knowledge need not be established. It is sufficient if he or she should reasonably know of the defect. Again, this only applies to situations in which the premises are held out to the public.

Negligent Repairs


Fourth, if the landlord expressly agrees to repair a defect in the premises and then either does not do so, or does so negligently, the landlord may be liable. Houin, supra. See also Vandenbosch, supra, at 669. Certainly, if the landlord begins the repairs, he or she has a duty to perform them in a safe and reasonable manner. A landlord would be liable for negligently-performed repairs which injure a tenant or guest. As to non-performance, however, the duty is a bit less clear. According to an Indiana Supreme Court opinion, if a landlord agrees to perform a repair after a lease is signed, and during the term of the lease, that agreement to repair may not be enforceable due to a lack of consideration. Childress v. Bowser, 546 N.E.2d 1221 (Ind. 1989). The terms of the written lease constitute the entire contract, and there is no consideration for a subsequent agreement to make repairs. However, in a month-to-month lease, each month would constitute its own tenancy, and the payment of the next month’s lease would constitute consideration for the agreement to repair. Assuming the consideration requirement is met, if a landlord failed to make a repair that he or she agreed to perform, and someone was hurt as a result, the landlord would be liable.

Violation of Statute or Ordinance


Fifth, if a statute or ordinance creates a duty on the part of a landlord toward a tenant, and the landlord violates that statute or ordinance without excuse or justification, the landlord may be liable for any resulting damages. Vandenbosch, supra, at 669-70 (citing Hodge v. Nor-Cen, Inc., 527 N.E.2d 1157 (Ind. Ct. App. 1988), reh’g and trans. denied). Such unjustifiable or inexcusable violations constitute negligence per se, the courts noted. Both the Vandenbosch and Hodge courts refused to expand this exception to include unjustifiable violations of administrative code provisions, however, noting that a violation of an administrative provision does not constitute negligence per se.

Indiana Code 32-31-9 et seq. is one example of a statute which could easily give rise to landlord liability. This section of the Code addresses the rights of tenants who are victims of certain crimes, including domestic or family violence, sex offenses or stalking. IND. C. § 32-31-9-3. Section 32-31-9-12 allows a victim of such a crime to terminate a lease with thirty days’ notice upon proof of a court order of protection or no-contact order. Section 32-31-9-8 prohibits landlords from taking certain adverse actions against tenants who are victims of such crimes or who have terminated leases under section 32-31-9-12. Specifically, a landlord may not terminate or refuse to renew a lease, refuse to enter into a lease, or otherwise retaliate against someone who has either been a victim of such a crime, or who has terminated a lease in the previous twelve months under 32-31-9-12. In addition, and most relevant to a premises liability analysis, the Code sets forth aggressive requirements for changing locks when requested by tenants who are victims of these crimes. If a landlord violates any of these requirements, he or she could have some liability for any resulting damages. However, the statute does expressly note that it “does not make a landlord or the agent of a landlord liable for the actions of a perpetrator or a third party.” IND. C. § 32-31-9-15.

Criminal Conduct


Although not an exception to the caveat lessee doctrine, it is important to note that a landlord ordinarily will not be liable to a tenant for unforeseeable criminal conduct of third parties. However, in some circumstances, such a duty may arise, particularly if the landlord “voluntarily undertakes to perform security measures, but performs the undertaking negligently.” Vertucci v. NHP Mgmt. Co., 701 N.E.2d 604 (Ind. Ct. App. 1998); Nalls v. Blank, 571 N.E.2d 1321, 1323 (Ind. Ct. App. 1991). These cases typically involve burglaries or assaults perpetrated on tenants in buildings that were supposedly secure.

 

Trial Report

 

Caption:
Bryon Scott Benham v. Lyndon Walker


Cause No.:
88C01-0208-CT-235


Court:
Washington Circuit


Judge:
Hon. Daniel B. Burke, Jr.


Carrier:
State Farm Mutual Automobile Insurance Company


Damages Awarded:
$11,478.74 ($6,313.31 after 45% fault apportioned to Plaintiff)


Incurred Medicals:
$19,109.76


Last Demand:
none


Last Offer:
none


QSO:
none


WT&S Attorneys:
Kenneth G. Doane, Jr. and Rodney L. Scott


Synopsis:
This rear-end automobile accident occurred on September 2, 2000.  Both drivers were westbound on State Road 60.Plaintiff stopped alongside the road to assist his wife, who earlier had to make an unanticipated stop in her vehicle for their sick child.  Defendant testified that Plaintiff stopped suddenly and did not signal.  Additionally, he testified that Plaintiff’s truck was equipped with blacked-out taillights which made it difficult to see Plaintiff’s brake lights.  Plaintiff, a 33-year-old male, had a variety of complaints from the accident, including low-back spasm, chest wall pain, pain between the shoulder blades, and neck stiffness.  Plaintiff treated with his family doctor, and had physical therapy and trigger point injections with First Choice Medical Group.  In addition to his injuries and medical expenses, Plaintiff claimed that the accident permanently impaired his ability to continue to work as a machine shop technician, resulting in up to $476,854.00 in lost earnings.  Plaintiff retained a vocational rehabilitation counsel, Constance Brown, to support his impairment of earning capacity claim.  At trial, a motion x-ray was presented by Dr. Nunier of 1st Choice Medical which allegedly demonstrated a permanent soft-tissue injury to Plaintiff’s neck.  Plaintiff also presented his family doctor, an IME doctor, Warren Bilkey, M.D., and vocational rehabilitation counselor, Constance Brown, by video.  Unfortunately, due to relocation for family needs, the Defendant was unavailable to attend the trial.  Therefore, Defendant testified by written deposition. Following a four-day jury trial, the jury entered the above-referenced verdict.P  er the foreperson, four out of six jurors wanted to return a verdict for the defendant.  Thus, as is often the case, this was a compromise verdict.