Case Notes - Recent Court Decisions

Chad J. Melchi - 12/30/2008

1. Commercial Lease.  A tenant under a commercial lease brought a breach of contract and conversion action against  the landlord and corporation that shared office with the landlord, alleging that the tenant was overcharged for its share of real estate taxes due under lease.  The trial court entered summary judgment in favor of the landlord on the conversion claim, in favor of the corporation on the contract and conversion claims, and in favor of the tenant on its breach of contract claim against landlord.  An appeal was taken.
   
   The Indiana Court of Appeals affirmed in part, reversed in part and remanded, holding that: (1) under the law of Ohio, which applied, in this case, a the genuine issue of material fact precluded summary judgment on the breach of contract claim against the landlord; (2) the landlord could not be liable for criminal conversion; (3) the corporation could not be liable for alleged breach of lease; and (4) the corporation could not be liable for criminal conversion.  French-Tex Cleaners, Inc. v. Cafaro Co., 893 N.E.2d 1156 (Ind. Ct. App. 2008).
   
   
2. Loan Guarantors.  Plaintiffs, shareholders in restaurant-owning corporations and guarantors of loans given to corporations, brought an action for contribution against defendants, who were also shareholders and co-guarantors,  seeking to collect a share of the amounts plaintiffs had paid to corporations' creditors to obtain releases from deficiency judgments, and seeking to collect a share of the amounts plaintiffs had paid to the State of Indiana for delinquent sales taxes.  After a bench trial, the trial court entered judgment in favor of the plaintiffs, and the defendants appealed.
   
   The Indiana Court of Appeals affirmed, holding that: (1) the general ten-year statute of limitations applied to the action and claims; (2) the statute of limitations began to run at the time when the guarantors had made payments to the creditors; (3) co-guarantors were jointly and severally liable to the guarantors for equal pro rata shares of the amounts the guarantors had paid to creditors, less the amounts co-guarantors had themselves paid to creditors; and (4) the superior court, not the tax court, had subject-matter jurisdiction over the action for contribution for delinquent sales taxes paid to state.  Balvich v. Spicer, 894 N.E.2d 235 (Ind. Ct. App. 2008).
   
   
3. Evidence.  A surviving tenant, and the administratix of the tenant's estate, brought an action against the landlord's insurer for spoliation of evidence based upon the landlord's disposal of couch from the premises following a deadly fire.  The trial court denied the insurer's motion for summary judgment, and entered judgment on the jury's verdict in plaintiffs' favor.  The insurer appealed.
   
   The appellate court reversed and remanded the trial judgment, holding that the landlord's insurer did not owe a duty to the plaintiffs to preserve the couch following the fire on the premises.  American National Property and Cas. Co. v. Bowers, 893 N.E.2d 1068 (Ind. Ct. App. 2008).
   
   
4. Landlord Tenant.  A landlord brought an action for declaratory judgment claiming that a city lacked authority to transfer the tenants' unpaid balance for sewer usage to the landlord.  The trial court entered judgment for the city and the landlord appealed.  The Court of Appeals reversed and remanded.  Transfer was granted.
   
   The Supreme Court of Indiana affirmed the judgment of the trial court, holding that the city could transfer tenants' delinquent sewer balances to the landlord's account.  Pinnacle Properties Development Group, LLC v. City of Jeffersonville, 893 N.E.2d 726 (Ind. 2008).
   
   
5. Mechanic's Lien.  Mechanic's lienholders brought an action against owner-mortgagor to foreclose liens, mortgagee brought action against owner-mortgagor to foreclose mortgage, and actions were consolidated.  The trial court granted the mortgagee's motion for partial summary judgment, and the mechanic's lienholders appealed.
   
   The appellate court affirmed, holding that (1) the mechanic's lienholder lacked standing to challenge the mortgagee's foreclosure action, and (2) mortgage lien had priority over later-recorded mechanic's liens on commercial property to the extent the funds from the loan secured by the mortgage were for the specific project that gave rise to the mechanic's liens.  Harold McComb & Son, Inc. v. JPMorgan Chase Bank, N.A., 892 N.E.2d 1255 (Ind. Ct. App. 2008).
   
   
6. Products Liability.  A products liability claimant sought review of an order of the trial court granting a farm machinery manufacturer's motion to strike the claimant's expert affidavit, which, absent other evidence on the issue of potential design defects, led to the summary dismissal of action.  The Indiana Court of Appeals reversed and remanded.
   
   On the manufacturer's petition for rehearing, the Indiana Court of Appeals held that genuine issues of material fact precluded summary judgment in favor of the manufacturer and the previous opinion was affirmed.  Fueger v. CNH America LLC, 893 N.E.2d 330 (Ind. Ct. App. 2008).