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ATTORNEY FOR APPELLANT
David J. Karnes Dennis, Wenger & Abrell, P.C. Muncie, Indiana

ATTORNEY FOR APPELLEE HOYT
Alan K. Wilson Muncie, Indiana

APPELLEE KORNMANN PROCEEDING WITHOUT ATTORNEY ______________________________________________________________________________

Indiana Supreme Court
_________________________________ No. 18S02-0807-CV-391 STAN KLOTZ, v.

In the

FILED
Jan 22 2009, 12:17 pm
of the supreme court, court of appeals and tax court

CLERK

Appellant/Plaintiff,

SARAH HOYT, CHRISSY KORNMANN, Appellees/Defendants. _________________________________ Appeal from the Delaware Circuit Court, No. 18C04-0701-SC-0110 The Honorable John Feick, Judge _________________________________ On Transfer from the Indiana Court of Appeals, No. 18A02-0707-CV-556 _________________________________ January 22, 2009 Dickson, Justice.

This landlord-tenant dispute centers on Indiana's rental agreement deposit statute. We hold that a landlord's untimely or inadequate statutory damage notice to a tenant precludes only the landlord's claims for physical damage to the premises and does not bar the landlord from recovery of unpaid rent and other losses.

The facts are largely undisputed. The parties signed a residential rental agreement, commencing July 1, 2006 and ending June 30, 2007. The tenants gave the landlord a $600 deposit and paid $600 for the rent for July 2006 and half of the rent for August 2006, but made no further rent

payments. The tenants apparently ceased residing in the premises in August or September 2006, but did not notify the landlord of their departure and did not remove all of their furniture and personal belongings. In November 2006, the landlord sent a letter to the tenants informing them of his intent to begin eviction proceedings because of their non-payment of rent. Receiving no response, the landlord filed an action in small claims court against the tenants in January 2007. The trial court ordered eviction on February 20, 2007, and set a hearing on the damages for March 16, 2007. The landlord had not mailed any notice of damages nor remitted any portion of the tenants' damage deposit, but at the hearing presented in evidence an exhibit detailing the unpaid rent ($6,300.00) and late fees ($4,440.00) through the end of the tenancy and listing damages to the premises ($2,848.94) and attorney fees ($500.00), altogether totaling $11,918.94. The landlord sought a judgment of $6,000, the jurisdictional limit applicable in the small claims proceeding. Following the hearing, the trial court entered judgment against the landlord and ordered the return of the tenants' security deposit.

The landlord brought this appeal, asserting (a) that he established all the requisite elements of his claim for back rent, late fees, damages to the premises, and attorney fees; and (b) that he was not required to return the tenant's damage deposit or provide a notice of damages until the tenants provided him with notice of their new mailing address, and that within forty-five days of the tenants' surrender of possession on February 20, 2007, he provided an itemized summary of damages to the tenants at the trial of the case on March 16, 2007. The tenants admit to breaching the agreement by failing to pay rent after August 2006. See Tr. at 40, 53.

On appeal, only one of the tenants, Sarah Holt, has responded, alternatively arguing that the landlord terminated the lease on November 8, 2006, and that the landlord failed to provide a notice of damages within forty-five days as required by statute, or that if the lease terminated on February 20, 2007, the landlord's trial exhibit itemizing damages should not be deemed sufficient to satisfy the security deposit statute. The Court of Appeals reversed and remanded for the entry of a $6,000 judgment in the landlord's favor. Klotz v. Hoyt, 880 N.E.2d 1234, 1235 (Ind. Ct. App. 2008). We granted transfer.

Central to the resolution of this appeal are the following pertinent provisions from Indiana

2

Code

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Indiana Law