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Monday, November 29, 2004

Indiana Decisions - Three posted today by Court of Appeals

Lola Reum v. Marcia Mercer (Nov. 29, 2004 IndCtApp) [Real Estate; Statutory Construction]
Najam, Judge

Lola Reum appeals the trial court’s judgment in favor of Marcia Mercer on Mercer’s complaint alleging fraud in the sale of Reum’s home. Reum presents the following dispositive issue for our review: whether the trial court erred when it concluded that Reum had actual knowledge of an existing defect in her home’s septic system at the time of the sale. We reverse. * * *

[T]here is no evidence and there are no reasonable inferences to be drawn from the evidence that Reum had actual knowledge of any existing defect at the time that she completed the disclosure form and sold the home to Mercer in 2001.

Mercer would have us interpret the statute [IC 32-21-5] to mean that a seller is required to disclose any and all defects that have ever occurred in a home that were not professionally repaired, regardless of undisputed evidence showing that the seller had no knowledge of an existing defect at the time of disclosure. But there is simply no basis in the plain language of the statute or relevant case law to support that interpretation. A seller is only required to disclose existing defects of which she has actual knowledge at the time of the disclosure. See Verrall, 810 N.E.2d at 1164 (holding summary judgment inappropriate because question of fact “regarding [sellers’] knowledge of the extent of water leakage at the time the Disclosure Form was completed.”); Kashman, 766 N.E.2d at 422 (noting no designated evidence that sellers had actual knowledge of “any existing termite damage to the home at the time they completed the Disclosure Form”); see also Pennycuff v. Fetter, 409 N.E.2d 1179, 1180 (Ind. Ct. App. 1980) (holding no showing of fraud where there was “absolutely no evidence that the [seller] knew, during the sale negotiations, of their negligence [in causing water pipes to burst] or that the pipes had burst, if indeed they were at the time. What was not open to observation to the [buyers] was not open to the [seller].”).

We hold that the trial court’s judgment in favor of Mercer is clearly erroneous. We reverse and remand with instructions that the trial court enter judgment in favor of Reum. In addition, since the trial court found that the prevailing party in this case is entitled to costs and attorney’s fees under the terms of the parties’ purchase agreement, we instruct the trial court to award Reum her reasonable attorney’s fees. Reversed.
SULLIVAN, J., and BARNES, J., concur.

Mark Kinnaird v. Indiana Family and Social Services, et al. (Nov. 29, 2004 IndCtApp) [Administrative Law]
Najam, Judge
Mark E. Kinnaird appeals from the trial court’s denial of his Motion to Set Aside the Indiana Family and Social Services Administration’s (“IFSSA”) final agency action terminating Kinnaird’s Section 8 housing benefits. He presents a single dispositive issue on appeal, namely, whether the trial court applied the correct standard in its judicial review of the IFSSA’s final agency action. We affirm. * * *

In short, we hold that Kinnaird received fair notice that he was required to advise the Housing Agency about his 130 day incarceration. And, 24 CFR § 982.552 provides in relevant part that the Housing Agency may deny or terminate program assistance for a participant who violates “any family obligations under the program.” Appellant’s App. at 78. The requirement that Kinnaird notify the Housing Agency of an extended absence is listed under a section of the Contract entitled “Obligations of the Family.” When he failed to provide the required notice, he was in violation of the terms of the Contract. As such, the Housing Agency had discretion to terminate Kinnaird’s benefits under the program and to deny his request that he be reinstated as a Section 8 participant. Affirmed.
KIRSCH, C.J., and VAIDIK, J., concur.

Collections, Inc. v. Joe D. Wolfe (Oct. 29, 2004 IndCtApp) [Contracts]
[Originally issued as NFP]
Sharpnack, Judge
Collections, Inc. (“Collections”) appeals the small claims court’s judgment on its claim against Joe D. Wolfe. Collections raises one issue, which we restate as whether the small claims court’s damage award is clearly erroneous because it did not award Collections the full amount of damages specified in the contract. We reverse and remand. * * *

Similarly, here, the three-year term was an essential element of the Agreement. Although the Agreement may seem harsh because Wolfe had completed all but three months of the Agreement, we are constrained to interpret the Agreement that the parties made. The Agreement clearly provided that: (1) “Should [Wolfe] cease to be employed for any reason . . . on or before December 13, 2002, [Wolfe] shall return the full amount of the “Bonus” to [the Hospital] . . . ;” and (2) “If this Agreement is terminated by [Wolfe], repayment terms of the Agreement will apply.” Thus, if Wolfe terminated his employment before December 13, 2002, he was required to repay the entire bonus. Because Wolfe terminated his employment three months before the end of the Agreement’s term, the repayment provisions of the Agreement require him to repay the entire $4,500.00 bonus. Consequently, we conclude that the small claims court erred by entering a judgment that only required Wolfe to repay $500.00 of the $4,500.00 bonus.

For the foregoing reasons, we reverse the judgment of the small claims court and remand for proceedings consistent with this opinion. Reversed and remanded.
BAILEY, J. and MAY, J. concur

Posted by Marcia Oddi on November 29, 2004 02:22 PM
Posted to Indiana Decisions