Attorney for Appellant
James E. Ayers
Wernle, Ristine & Ayers
Crawfordsville, IN
Attorneys for Appellee
Ian A.T. McLean
Crawfordsville, IN
IN THE
INDIANA SUPREME COURT
MARK TURLEY,
Appellant (Plaintiff below),
v.
JOSEPH T. HYTEN,
Appellee (Plaintiff below).
)
) Supreme Court No.
) 79S04-0208-CV-421
)
) Court of Appeals No.
) 79A04-0010-CV-419
)
)
)
APPEAL FROM THE TIPPECANOE SUPERIOR COURT
The Honorable George Heid, Special Judge
Cause No. 79D02-0004-CP-70
ON PETITION TO TRANSFER
August 8, 2002
SULLIVAN, Justice.
Mark Turley sued Joseph Hyten for extensive damage that Hyten caused
to the house Turley had rented him. The trial court and Court of Appeals
held that Hyten was entitled to a refund of his security deposit despite
the damage he caused. We reverse, finding that Turley substantially and
sufficiently complied with the security deposit statute so that he is not
required to refund the security deposit.
Background
Mark Turley, the landlord, and Joseph Hyten, the tenant, entered into
a one-year lease for a house located in Darlington, Indiana (“Darlington
house”), for the period from May 1, 1995 to April 30, 1996. The Darlington
house had previously been Turley’s residence, and since 1995 Turley had
rented the house to tenants. The lease provided for a security deposit of
$450, and for monthly rental payments of $450 due at the beginning of each
month.
Hyten resided in the Darlington house from May 1, 1995 until
February, 1996.[1] On January 29, Hyten telephoned Turley and verbally
informed Turley that Hyten would be vacating the Darlington house on
January 31, 1996. Turley drove by the house several times between January
29 and January 31; at all times Turley noted that Hyten was still in
residence. On February 3, 1996, Turley entered the premises and discovered
the extensive plumbing and water damage caused by a window that Hyten had
left open prior to vacating.
Turley commenced this action to recover for the damages, which
totaled over $5,000. Hyten counter-claimed for his security deposit, along
with other claims. Hyten moved for partial summary judgment on the
security deposit claim, and this was granted on March 10, 2000. The trial
court awarded Hyten the return of his security deposit, in addition to
attorney’s fees and costs. Turley appealed to the Court of Appeals and the
Court of Appeals upheld the trial court’s grant of summary judgment.
Turley v. Hyten, 751 N.E.2d 249 (Ind. Ct. App. 2001). We now grant transfer
and reverse.
Discussion
Turley contends that the Court of Appeals erred in upholding the
trial court’s grant of summary judgment. The Court of Appeals upheld the
trial court’s determination based on two findings: (1) Turley’s notice to
Hyten was insufficient, and (2) Turley was precluded from recovering “other
damages” under Indiana Code §32-7-5-15. Turley, 751 N.E.2d at 252-53. In
this appeal, we need only address the first issue, whether Turley’s notice
to Hyten was sufficient, as this issue is dispositive.
In 1989, the Legislature passed the security deposit statute, Indiana
Code §32-7-5-1 through 32-7-5-19. The specific section relevant to this
case is Indiana Code §32-7-5-14, which 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 … including the estimated cost of repair for each damaged
item and the amounts and lease on which the landlord intends to
assess the tenant.”
We have not previously addressed the sufficiency of a landlord notice
under this section. But the Court of Appeals has dealt with the
requirements of the security deposit statute, and, more specifically, the
notice requirement under Indiana Code §32-7-5-14, on many different
occasions. See Pinnacle Properties v. Saulka, 693 N.E.2d 101 (Ind. Ct.
App. 1998) (whether a “vacate report” was sufficient as an itemized damage
notice required by the statute); Figg v. Bryan Rental Inc., 646 N.E.2d 69
(Ind. Ct. App. 1995) (whether merely referring to unpaid rent was a
sufficiently itemized notice); Meyers v. Langley, 638 N.E.2d 875 (Ind. Ct.
App. 1994) (whether general estimates of repair was sufficient itemization
under the statute); Duchon v. Ross, 599 N.E.2d 621 (Ind. Ct. App. 1992)
(whether providing no estimated costs was sufficient notice).
From these cases, it is apparent that the Court of Appeals has
created a strict compliance rule when it comes to the landlord’s notice of
damages. The Court of Appeals has counted the days to make sure the
landlord’s letter was sent within the prescribed forty-five day time period
and the level of itemization by the landlord has been scrutinized with
great care. See Figg, 646 N.E.2d at 71, 75; Meyers, 638 N.E.2d at 878.
With the exception of the mention of “unpaid rent,” the Court of Appeals
has consistently found for the tenant where the landlord was not extremely
careful to list each damaged item with a corresponding monetary amount.
Compare Figg, 646 N.E.2d at 75 (unpaid rent sufficient) with Saulka, 693
N.E.2d at 104 (itemized vacate report which included a lump sum amount not
sufficient).
When Hyten vacated the house in Darlington, he failed to tell Turley
the exact date of his departure. Hyten had initially called Turley on
January 29, 1996 and told Turley over the phone that Hyten would be
vacating the Darlington house on January 31, 1996. When Turley inspected
the Darlington house on January 31, he found Hyten to still be in
residence. Turley returned to the house on February 3, 1996, and found
that Hyten had vacated the house, but had caused major plumbing damage by
leaving the window next to the thermostat open. In addition to the open
window, the furnace thermostat had been set on high, and as such, the
propane tank which fueled the furnace was empty. The condition in which
Hyten left the house, along with the extremely cold weather conditions,
caused the toilets and water pipes to burst.[2] In order to make the house
habitable, Turley had to replace the entire plumbing system.
Hyten had not failed to inform the gas company that he was vacating
the Darlington house. Hyten had called early in the month of January to
place the bill back in Turley’s name effective January 16, 1996. But Hyten
did not vacate the Darlington house until early February. Turley was
alerted to a potential problem at the house by the water company. Due to
the water damage to the pipes, carpeting and wall paint, Turley was unable
to rent the Darlington house until March, 1996, and did not have a tenant
for the house until May, 1996.
On February 16, 1996, Turley received a letter from Hyten asking for
his security deposit of $450 to be returned. Hyten had also enclosed the
keys to the Darlington house. Turley responded to Hyten’s letter on
February 25, 1996. It is this letter to which Hyten objects, arguing that
the letter did not meet the requirements of Indiana Code §32-7-5-14. The
letter reads as follows:
In response to your registered letter of February 7, 1996, this is
notification to you regarding expenses chargeable to you under the
terms of your lease.
Pictures have been taken, and the Town Marshall was invited in to
see the house in the condition you left it. You left behind trash
and there are many holes in the wall to be patched before it can be
painted. There is also damage to the building.
When you called to say you were moving, you didn’t tell us there
was no heat in the house and all the pipes froze and burst. The
damage to the carpet and floors is very bad. The toilet bowl
burst, to name just a few of the problems. The house will have to
be totally replumbed.
The Water Company called and said you had told them early on in the
month that you were moving and they put the billing back in our
name. That is why they called to tell us something might be wrong
because 24,000 gallons of water had gone through leaving “a pretty
large bill for Mark to have to pay”. Had you told us you were
moving, perhaps this could have been avoided.
All though we don’t have a complete estimate yet, the damage is
already more than $1400.00. After a complete assessment is made,
we will give you a full itemized statement. It will also include
lost rent due to our inability to lease the house again on a timely
basis.
(R. at 58)
With respect to Turley’s letter to Hyten, the Court of Appeals
“acknowledge[d] that [Turley’s] letter rather thoroughly identified various
damaged items and stated that total damages exceeded $1,400… .” But the
court went on to find that Turley’s letter failed to meet the requirements
of Indiana Code §32-7-5-14 because an estimated cost for each of the
damaged items was not given. Turley, 751 N.E.2d at 252. The Court of
Appeals stated that due to this, Hyten “was unable to discern whether the
individual charges that comprised the $1,400 were proper or reasonable.”
Id.
Looking at the facts of this case, however, we reach the opposite
result. We find that the discussion of the security deposit statute in
Meyers v. Langley to be helpful. In Meyers, the landlord had sent a notice
letter to the former tenant with estimates of material and labor to fix the
damages caused by the tenant. In holding that the letter was sufficient
under §32-7-5-14, the court stated, “[t]he purpose of the notice provision
is to inform the tenant that the landlord is keeping the security deposit
and for what reason. It provides the tenant an opportunity to challenge
the costs for which the deposit is being used. That purpose has been
served here.” Meyers, 638 N.E.2d at 878-79.
Under the facts of this case, we find that Indiana Code §32-7-5-14
has been complied with. We find that Turley fulfilled, in good faith and
to the best of his ability under the circumstances with which he was
presented, the purpose of the statute. Turley informed Hyten of the types
of damages that Hyten had caused to the Darlington house. Turley also
informed Hyten that due to the extensive nature of the damages, Turley did
not have a complete estimate of the total amounts each of the repairs would
cost.
Turley’s February 25 letter gave Hyten more than enough information
with which to contest the costs to which his security deposit was being
applied. Hyten’s security deposit was a mere $450, whereas Turley alleged
that the repairs, as of February 25, 1996, would amount to more than $1400.
In addition, Turley alleged in the February 25 letter that Turley would
hold Hyten responsible for lost rent due to Turley’s inability to lease the
Darlington house in a timely fashion. Under the lease between Turley and
Hyten, one month’s rent was equal to the security deposit paid by Hyten at
the beginning of the lease.
Under facts such as these, the purpose of the security deposit
statute has been served.
Conclusion
We grant transfer and reverse the trial court’s grant of partial
summary judgment for Hyten. We remand for proceedings consistent with this
opinion.
SHEPARD, C.J., and BOEHM, J., concur. RUCKER, J. dissents with separate
opinion, in which DICKSON, J. concurs.
IN THE
SUPREME COURT OF INDIANA
MARK TURLEY, )
)
Appellant (Plaintiff), ) Supreme Court Cause
Number
) 79S04-0208-CV-421
v. )
) Court of Appeals Cause Number
JOSEPH T. HYTEN, ) 79A04-0010-CV-419
)
Appellee (Defendant). )
August 8, 2002
RUCKER, Justice, dissenting.
I respectfully dissent. The majority chastises the Court of Appeals
for what it describes as “creat[ing] a strict compliance rule when it comes
to the landlord’s notice of damages.” Slip op. at 4. In my view the Court
of Appeals has done no such thing. Rather, the court has merely applied
long-standing rules of statutory interpretation in reaching its decisions.
The very first step in statutory interpretation is to determine
whether the legislature has spoken clearly and unambiguously on the point
in question. Rheem Mfg. Co. v. Phelps Heating & Air Conditioning, Inc.,
746 N.E.2d 941, 947 (Ind. 2001). “When a statute is clear and unambiguous,
we need not apply any rules of construction other than to require that
words and phrases be taken in their plain, ordinary, and usual sense.
Clear and unambiguous statutory meaning leaves no room for judicial
construction.” Poehlman v. Feferman, 717 N.E.2d 578, 581 (Ind. 1999)
(citation omitted).
The security deposit statute provides in relevant part:
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 for each damaged item and the amounts and lease on
which the landlord intends to assess the tenant.
Ind. Code § 32-7-5-14[3] (emphasis added). This statue is clear,
unequivocal, and could not be any more unambiguous: “the landlord shall .
. . .” We have consistently construed “shall” as obligatory. “When the
word ‘shall’ appears in a statute, it is construed as mandatory rather than
directory unless it appears clear from the context or the purpose of the
statute that the legislature intended a different meaning.” United Rural
Elec. Membership Corp. v. Ind. & Mich. Elec. Co., 549 N.E.2d 1019, 1022
(Ind. 1990); accord Indiana Civil Rights Comm’n v. Indianapolis Newspapers,
Inc., 716 N.E.2d 943, 947 (Ind. 1999); State ex rel. City of Indianapolis
v. Brennan, 231 Ind. 492, 109 N.E.2d 409, 411 (1952).
It is clear to me that the plain language of the statute mandates the
landlord to provide an itemized list including the estimated cost of repair
for each damaged item within forty-five days. As the Court of Appeals has
previously observed, “[t]he notice provision does not impose a difficult
burden on the landlord.” Pinnacle Props. v. Saulka, 693 N.E.2d 101, 104
(Ind. Ct. App. 1998), trans. denied. I agree and would insist that the
landlord do what our legislature said it must do. In this case, Mr. Turley
failed in his obligation to comply with the statute. I therefore dissent
and would affirm the trial court.
DICKSON, J., concurs.
-----------------------
[1] The date of Hyten’s departure is unclear from the record, but was
during the first three days of February.
[2] Turley included in his affidavit, and attached newspaper records, the
weather conditions for January 30-February 3, 1996. The average high for
the five-day period was about 10 degrees and the average low was -1 degree.
[3] Repealed by Pub.L. No. 2-2002, § 128, effective July 1, 2002.
For a similar provision, see Indiana Code section 32-31-3-14, which
provides:
Not more than forty-five (45) days after the termination of occupancy,
a landlord shall mail to a tenant an itemized list of damages claimed
for which the security deposit may be used under section 13 [I.C. § 32-
31-3-13] of this chapter. The list must set forth:
(1) the estimated cost of repair for each damaged item; and
(2) the amounts and lease on which the landlord intends to assess
the tenant.
The landlord shall include with the list a check or money order for
the difference between the damages claimed and the amount of the
security deposit held by the landlord.