MEMORANDUM DECISION
                                                                      FILED
Pursuant to Ind. Appellate Rule 65(D), this                      Mar 14 2017, 8:36 am
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the                    CLERK
                                                                  Indiana Supreme Court
purpose of establishing the defense of res judicata,                 Court of Appeals
                                                                       and Tax Court
collateral estoppel, or the law of the case.



ATTORNEY FOR APPELLANT                                 ATTORNEYS FOR APPELLEE AMBER N.
James P. Cavanaugh, III                                YOST
Cavanaugh Law                                          Katherine J. Noel
Indianapolis, Indiana                                  Jacob D. Winkler
                                                       Noel Law
                                                       Kokomo, Indiana
                                                       ATTORNEY FOR APPELLEE GRETCHEN
                                                       L. POEHLER
                                                       Christopher P. Meyer
                                                       Law Offices of the Liberty Mutual Group
                                                       Merrillville, Indiana
                                                       ATTORNEY FOR APPELLEE MANDY
                                                       SHEARER
                                                       Carolyn A.M. Burbrink
                                                       Nationwide Mutual Insurance Company
                                                       Trial Division
                                                       Carmel, Indiana




                                             IN THE
    COURT OF APPEALS OF INDIANA

Indiana Farmers Mutual                                     March 14, 2017
Insurance Company,                                         Court of Appeals Case No.
                                                           79A02-1606-CT-1407
Appellant-Plaintiff,
                                                           Appeal from the Tippecanoe
                                                           Superior Court
        v.
                                                           The Honorable Randy J. Williams,
                                                           Judge



Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017     Page 1 of 17
      Amber N. Yost, Gretchen L.                               Trial Court Cause No. 79D01-1011-
                                                               CT-91
      Poehler, Mandy Shearer, and
      Anne K. Nania,
      Appellees-Defendants.




      Bradford, Judge.



                                          Case Summary
[1]   In 2005, Appellees-Defendants Amber N. Yost, Gretchen L. Poehler n/k/a

      Broman (“Poehler”), Mandy Shearer, and Anne K. Nania (collectively, “the

      Appellees”) and Amber Scott signed leases (“the Leases”) for, and were living

      in, the two units of a West Lafayette duplex owned by Kay Lee, LLC. At the

      time, Appellant-Plaintiff Indiana Farmers Mutual Insurance Company was Kay

      Lee’s liability carrier. In May of 2006, a fire occurred in the duplex, causing

      more than $100,000.00 damage to both units and common areas.


[2]   Indiana Farmers paid on Kay Lee’s claim arising out of the fire and, in 2010,

      brought a subrogation suit against Scott and the Appellees, alleging negligence

      and breach of the Leases. All but Poehler, whose surname had by this time

      changed to Broman, returned service and made appearances. In 2012, Yost

      filed a motion to dismiss, which motion the trial court granted as to both

      counts. In 2014, Scott was dismissed from the lawsuit by stipulation.




      Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 2 of 17
[3]   In 2015, Indiana Farmers served an alias summons on Poehler, who appeared

      and filed a motion to dismiss for failure to prosecute. Shearer and Nania

      moved for summary judgment on the basis that no genuine issue of material

      fact existed as to the question of whether they had breached the Leases. The

      trial court granted Poehler’s motion to dismiss and Shearer and Nania’s motion

      for summary judgment. Indiana Farmers claims that all of the trial court’s

      orders dismissing the various claims against the Appellees were erroneous. We

      agree with Indiana Farmers that the trial court erred in dismissing the

      negligence and contract claims against Yost, and remand for further

      proceedings. We affirm the trial court’s judgment in all other respects.



                            Facts and Procedural History
[4]   On or about July 26, 2005, Kay Lee entered into the Leases for both halves of a

      duplex in West Lafayette: with Scott and Poehler for unit 422-1 and with Yost,

      Shearer, and Nania for unit 422-2. On or about May 9, 2006, a fire occurred in

      the duplex which caused damage to both units and common areas totaling

      more than $100,000.00.


[5]   Indiana Farmers, who was Kay Lee’s insurer, paid on the claim and, on

      November 18, 2010, filed suit against Scott and the Appellees for negligence

      and breach of the Leases they executed with Kay Lee. On November 23, 2010,

      summonses were issued for Scott and the Appellees. By December 10, 2010,

      Scott, Yost, Shearer, and Nania had returned service and, by January 3, 2011,

      had all entered appearances.

      Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 3 of 17
[6]   On February 21, 2012, Yost moved to dismiss or, in the alternative, for

      judgment on the pleadings. Yost argued that Indiana Farmers’ negligence

      claim was not filed within the applicable statute of limitations (an argument she

      would later abandon) and its contract claim must fail for a lack of privity with

      the Lease between her and Kay Lee. On July 2, 2012, the trial court issued an

      order on Yost’s motion, concluding that Indiana Farmers’ negligence claim was

      filed within the relevant statute of limitations but that Indiana Farmers’ lacked

      privity with the Lease between Yost and Kay Lee. The trial court dismissed

      both of Indiana Farmers’ claims against Yost. On August 1, 2012, Indiana

      Farmers filed a motion to correct error,1 which the trial court denied on August

      20, 2012. On September 19, 2012, Indiana Farmers moved to have the matter

      certified for interlocutory appeal, which motion the trial court denied on

      October 12, 2012. On December 4, 2014, a joint stipulation was entered

      dismissing Scott as a party with prejudice, apparently because she was no

      longer living in the duplex when the fire occurred.


[7]   On November 4, 2015, Indiana Farmers moved for a status conference and for

      the trial court to reconsider its refusal to certify its ruling granting Yost’s motion

      to dismiss for interlocutory appeal. On November 6, 2015, Indiana Farmers

      issued an alias summons on Poehler, whose surname was now Broman;

      Poehler filed an appearance on December 10, 2015.




      1
         Indiana Farmers acknowledges that a motion to correct error was not appropriate at that point because the
      trial court’s order on Yost’s motion was not a final, appealable order.

      Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017           Page 4 of 17
[8]    Meanwhile, on December 9, 2015, Shearer moved for summary judgment on

       the basis that the Leases did not specifically allow Indiana Farmers to collect its

       subrogated damages in this case. Nania eventually joined Shearer’s summary

       judgment motion. On January 11, 2016, Poehler moved to dismiss on the basis

       that Indiana Farmers had not properly served her and had failed to state a claim

       upon which relief could be granted in any event. On April 26, 2016, the trial

       court held a hearing on pending motions. On May 26, 2016, trial court granted

       Nania and Shearer’s motion for summary judgment and Poehler’s motion to

       dismiss.


[9]    Indiana Farmers contends that the trial court’s order dismissing both claims

       against Yost was clearly erroneous as the ground cited did not apply to its

       negligence claim, Indiana Farmers was not required to be in privity with the

       Leases in order to maintain its subrogation claims against the Appellees, the

       Leases permit recovery of Indiana Farmers’ subrogated damages because they

       prohibit waste by tenants and require the tenants to return the property in good

       condition, and the trial court erred in granting Poehler’s motion to dismiss.


[10]   Yost argues that even if the trial court incorrectly dismissed Indiana Farmers’

       claims against her for the reason cited, the record still supported the dismissal;

       Indiana Farmers lacked the necessary privity to bring a contract suit against her;

       and there is no indication that Yost breached her Lease in any event. Poehler

       argues that the trial court properly dismissed Indiana Farmers’ claims against

       her because she was not timely served and because the Lease attached to the

       complaint was the one executed by Yost, Shearer, and Nania for unit 422-2 and

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 5 of 17
       not the one she executed for unit 422-1. Shearer argues that the trial court

       properly granted summary judgment in her favor because Indiana Farmers

       failed to designate evidence sufficient to sustain a finding that she breached her

       Lease.


                                  Discussion and Decision
            I. Whether the Trial Court Abused its Discretion in
                 Granting Poehler’s Motion to Dismiss
[11]   Although it is not entirely clear, the trial court apparently dismissed Indiana

       Farmers’ claims against Poehler for failure to prosecute pursuant to Indiana

       Trial Rule 41(E), which provides as follows:


                (E) Failure to prosecute civil actions or comply with rules.
                Whenever there has been a failure to comply with these rules or
                when no action has been taken in a civil case for a period of sixty
                [60] days, the court, on motion of a party or on its own motion
                shall order a hearing for the purpose of dismissing such case.
                The court shall enter an order of dismissal at plaintiff’s costs if
                the plaintiff shall not show sufficient cause at or before such
                hearing. Dismissal may be withheld or reinstatement of
                dismissal may be made subject to the condition that the plaintiff
                comply with these rules and diligently prosecute the action and
                upon such terms that the court in its discretion determines to be
                necessary to assure such diligent prosecution.

[12]   Specifically, Poehler argues dismissal was proper on the basis that Indiana

       Farmers provided her with deficient service.


                The Indiana rules, like the federal rules, have an appropriate
                mechanism in Ind. Rules of Procedure, Trial Rule 41 for

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 6 of 17
                dismissing a complaint for failure to diligently prosecute an
                action and, consequently, adequate protection against
                unreasonable delay in serving process. The failure to diligently
                prosecute a case includes the failure to exercise due diligence in
                securing service of process. T.R. 41(E) provides if there has been
                a failure to comply with the rules or if no action has been taken
                on a case for 60 or more days the trial court on its own motion or
                upon motion of a party shall order a hearing for the purpose of
                dismissing the case.… The nondiligent party, at or before the
                hearing, has an opportunity to show cause as to why his claim
                should not be dismissed for failure to prosecute. If the court in its
                discretion determines due diligence was not exercised, dismissal
                of the cause of action ensues.

       Geiger & Peters, Inc. v. Am. Fletcher Nat. Bank & Trust Co., 428 N.E.2d 1279, 1282-

       83 (Ind. Ct. App. 1981) (some citations and footnote omitted).


[13]   Indiana Farmers filed suit in this case in November of 2010, and, despite no

       response, appearance, or any other indication that Poehler was even aware of

       the lawsuit, made no further attempt at service until November of 2015. We

       have little trouble concluding that Indiana Farmers’ delay of over five years is

       presumptively unreasonable. Consequently, the burden fell on Indiana Farmers

       to show cause why its lack of diligence should be excused, which burden the

       trial court apparently concluded2 that Indiana Farmers did not carry.




       2
         Poehler also argued below that Indiana Farmers’ complaint should be dismissed as to her as Indiana
       Farmers only attached the Lease signed by Yost, Shearer, and Nania. At the April 26, 2016, hearing,
       however, the trial court said the following regarding this argument: “I’m not really excited about that
       argument in terms of dismissing the case, so.” Tr. pp. 48-49.

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017            Page 7 of 17
[14]   Indeed, Indiana Farmers did not (and does not) argue that it was diligent in

       attempting to secure service on Poehler, only that Rule 41(E) does not apply

       under the circumstances of this case. We find Indiana Farmers’ arguments to

       be unpersuasive. Indiana Farmers’ first argument is that Rule 41(E)’s

       provisions do not apply to only one defendant out of many in a lawsuit. In

       other words, the claims against one defendant cannot be dismissed when the

       same claims are being diligently pursued against other defendants. There is,

       however, no basis for this in the Rule’s language, and Indiana Farmers has not

       provided us with case law that supports the proposition.


[15]   Indiana Farmers’ second argument is that dismissal on Rule 41(E) grounds is

       not appropriate because, despite a significant delay, it had resumed active

       prosecution against Poehler. To support this argument, Indiana Farmers relies

       on the Indiana Supreme Court’s opinion in State v. McClaine, 261 Ind. 60, 300

       N.E.2d 342 (1973):

               A motion to dismiss for want of prosecution should not be
               granted if the plaintiff resumes diligent prosecution of his claim,
               even though, at some prior period of time, he has been guilty of
               gross negligence.
               The burden is clearly on the defendant to timely file a motion to
               dismiss pursuant to TR. 41(E). That is to say, the defendant
               must file his motion after the sixty-day period has expired and
               before the plaintiff resumes prosecution. The defendants in this
               case moved to dismiss after the plaintiff filed its request for trial
               and thereby failed to meet the requirements of TR. 41(E).

       Id. at 63, 300 N.E.2d at 344 (some citations omitted).



       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 8 of 17
[16]   McClaine, however, is easily distinguished: The opinion makes it clear that the

       defendant in that case was properly served and aware of the lawsuit against it,

       as it answered the State’s complaint. Id. at 61, 300 N.E.2d at 343. In this case,

       there is no indication in the record that Poehler had any knowledge of Indiana

       Farmers’ lawsuit before November of 2015, roughly five years after it had been

       filed. We are at a loss to understand how we could require a defendant to file a

       Rule 41(E) motion to dismiss a case of which she is not even aware. Indiana

       Farmers’ reliance on McClaine is unavailing. Indiana Farmers has failed to

       establish that the trial court abused its discretion in granting Poehler’s motion to

       dismiss.3


           II. Whether the Trial Court Abused its Discretion in
                  Granting Yost’s Motion to Dismiss
               We review the trial court’s grant or denial of such a motion to
               dismiss [for failure to state a claim upon which relief can be
               granted] pursuant to Trial Rule 12(B)(6) de novo. Snyder v. Town
               of Yorktown, 20 N.E.3d 545, 550 (Ind. Ct. App. 2014) (citing
               Caesars Riverboat Casino, LLC v. Kephart, 934 N.E.2d 1120, 1122
               (Ind. 2010)), trans. denied. A motion to dismiss under Trial Rule
               12(B)(6) “‘tests the legal sufficiency of a complaint: that is,
               whether the allegations in the complaint establish any set of
               circumstances under which a plaintiff would be entitled to
               relief.’” Veolia Water Indpls., LLC v. Nat’l Trust Ins. Co., 3 N.E.3d
               1, 4 (Ind. 2014) (quoting Trail v. Boys & Girls Clubs of Nw. Ind., 845
               N.E.2d 130, 134 (Ind. 2006)), clarified on reh’g, 12 N.E.3d 240.



       3
         Because we decide this issue on Trial Rule 41(E) grounds, we need not address Poehler’s argument that
       Indiana Farmers’ case against her should have been dismissed because Indiana Farmers failed to attach the
       Lease she actually signed to its complaint.

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017          Page 9 of 17
               When evaluating the trial court’s grant or denial of a Trial Rule
               12(B)(6) motion, we accept as true the facts alleged in the
               complaint, and only consider the pleadings in the light most
               favorable to the plaintiff and draw every reasonable inference in
               favor of the non-moving party. Snyder, 20 N.E.3d at 550. We
               will affirm a dismissal under Trial Rule 12(B)(6) only if it is
               apparent that the facts alleged in the complaint are incapable of
               supporting relief under any set of circumstances. Id. (citing LBM
               Realty, LLC v. Mannia, 981 N.E.2d 569, 577 (Ind. Ct. App.
               2012)).

       Lockhart v. State, 38 N.E.3d 215, 217 (Ind. Ct. App. 2015).


                                              A. Negligence
[17]   Indiana Farmers contends that the trial court erroneously dismissed its

       negligence claim against Yost. Indiana Farmers notes that the trial court

       specifically concluded that Indiana Farmers’ negligence claim was filed within

       the applicable statute of limitations and that the ground upon which its contract

       claim was dismissed, even if valid, has nothing to do with its negligence claim.

       We agree with Indiana Farmers. The trial court specifically found that Indiana

       Farmers’ negligence claim was filed within the applicable statute of limitations,

       which was the only argument made by Yost before withdrawing it.


[18]   Yost argues that the trial court was within its discretion to dismiss Indiana

       Farmers’ negligence claim because the record contained independent bases for

       dismissal. Yost cites the arguments advanced in Shearer’s and Scott’s motions

       to dismiss, served on June 7 and July 29, 2011, respectively, and in which

       motions Yost orally joined. Shearer and Scott both argued that dismissal of


       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 10 of 17
       Indiana Farmers’ claims was appropriate due to failure to comply with

       discovery orders pursuant to Trial Rule 37(B)(2)(c) and failure to prosecute

       pursuant to Trial Rule 41(E). Yost, however, does not identify any rule

       violations specific to her, only identifying alleged rule violations as they relate

       to Shearer. Yost has failed to identify an independent ground that would

       support the trial court’s dismissal of Indiana Farmers’ negligence claim against

       her.


                                        B. Breach of Contract
[19]   Yost argues that Indiana Farmers failed to state a claim upon which relief could

       be granted based on the Lease because Indiana Farmers lacks privity with the

       Lease. Indiana Farmers contends that, as Kay Lee’s subrogee, it stands in Kay

       Lee’s shoes and may assert Kay Lee’s rights pursuant to the Lease.


[20]   It is true that “[g]enerally, only those who are parties to a contract or those in

       privity with a party have the right to enforce the contract.” Mislenkov v. Accurate

       Metal Detinning, Inc., 743 N.E.2d 286, 289 (Ind. Ct. App. 2001). That said,

       subrogation is a doctrine of equity well-established in Indiana which “applies

       whenever a party, not acting as a volunteer, pays the debt of another that, in

       good conscience, should have been paid by the one primarily liable.” Erie Ins.

       Co. v. George, 681 N.E.2d 183, 186 (Ind. 1997).


               When a claim based on subrogation is recognized, “a court
               substitutes another person in the place of a creditor, so that the
               person in whose favor it is exercised succeeds to the right of the
               creditor in relation to the debt.” It is settled that “[s]ubrogation

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 11 of 17
               confers no greater right than the subrogor had at the time the
               surety or indemnitor became subrogated. The subrog[ee] insurer
               stands in the same position as the subrogor, for one cannot
               acquire by subrogation what another, whose rights he claims, did
               not have.” The ultimate purpose of the doctrine, as with other
               equitable principles such as contribution, is to prevent unjust
               enrichment.

[21]   Id. (internal citations omitted). See also Bank of N.Y. v. Nally, 820 N.E.2d 644,

       651 (Ind. 2005) (“Subrogation arises from the discharge of a debt and permits

       the party paying off a creditor to succeed to the creditor’s rights in relation to

       the debt.”); Harrison v. State Farm Mut. Auto. Ins. Co., 164 Ind. App. 569, 573,

       330 N.E.2d 126, 129 (1975) (“The right of subrogation is purely derivative as

       the insurer succeeds only to the rights of the insured, and no new cause of

       action is created. In other words, the concept of subrogation merely gives the

       insurer the right to prosecute the cause of action which the insured possessed

       against anyone legally responsible for the latter’s harm.”) (citation omitted).


[22]   Here, Indiana Farmers is attempting to do nothing more than pursue whatever

       causes of action that Kay Lee might have against Yost (and the other

       Appellees) arising out of the duplex fire. As mentioned, the doctrine of

       subrogation exists to prevent unjust enrichment, and preventing Indiana

       Farmers from recovering on a claim that Kay Lee would have recovered on—

       after Indiana Farmers paid out on Kay Lee’s behalf—strikes us as unjust,

       whether that claim sounds in tort or contact. In any event, Yost points to no

       case that creates an exception to the doctrine of subrogation for rights arising

       out of contract, and our research has uncovered none. Indiana Farmers is not

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 12 of 17
       prevented from pursuing claims against Yost arising out of her Lease for a lack

       of privity. We conclude that the trial court erred in dismissing Indiana

       Farmers’ contract claim against Yost.


           III. Whether the Trial Court Erred in Granting Shearer
                and Nania’s Motion for Summary Judgment
[23]   The trial court apparently granted summary judgment in favor of Shearer and

       Nania on the basis that Indiana Farmers had not established that there was a

       genuine issue of material fact as to whether Shearer or Nania had actually

       breached their Lease.4

                When reviewing a grant or denial of a motion for summary
                judgment our standard of review is the same as it is for the trial
                court. Kroger Co. v. Plonski, 930 N.E.2d 1, 4 (Ind. 2010). The
                moving party “bears the initial burden of making a prima facie
                showing that there are no genuine issues of material fact and that
                it is entitled to judgment as a matter of law.” Gill v. Evansville
                Sheet Metal Works, Inc., 970 N.E.2d 633, 637 (Ind. 2012).
                Summary judgment is improper if the movant fails to carry its
                burden, but if it succeeds, then the nonmoving party must come
                forward with evidence establishing the existence of a genuine
                issue of material fact. Id. In determining whether summary
                judgment is proper, the reviewing court considers only the



       4
         At some point, it seems that Indiana Farmers either abandoned the negligence claim against Shearer or it
       was dismissed. The record contains some indications that Shearer was out of town when the fire occurred in
       the duplex and that it did not start in her room. In any event, when Shearer argued to the trial court that the
       negligence action against her had been abandoned, Indiana Farmers did not contradict her.
       Moreover, although only Shearer makes this argument on appeal, her summary judgment motion below was
       joined by Nania. Because we have already concluded that a lack of privity does not bar the contract claims
       against Yost, Shearer, and Nania, we must address whether there are genuine issues of material fact as to
       breach as to Shearer and Nania.

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017             Page 13 of 17
               evidentiary matter the parties have specifically designated to the
               trial court. See Ind. Trial R. 56(C), (H). We construe all factual
               inferences in the non-moving party’s favor and resolve all doubts
               as to the existence of a material issue against the moving party.
               Plonski, 930 N.E.2d at 5. The fact that the parties have filed
               cross-motions for summary judgment does not alter our standard
               for review, as we consider each motion separately to determine
               whether the moving party is entitled to judgment as a matter of
               law. Hardy v. Hardy, 963 N.E.2d 470, 473 (Ind. 2012).

       Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012).


[24]   Indiana Farmers argues that summary judgment against Shearer and Nania was

       inappropriate because there exist genuine issues of material fact as to their

       potential liability pursuant to provisions prohibiting “waste” and their

       obligation to return the property in clean and good condition, apart from

       reasonable wear.


[25]   The Lease provides, in part, as follows:


               The Tenant agrees to mow yards and to maintain the leased
               premises, yards, decks, porches, and approaches in a clean, safe,
               sightly and healthful condition at Tenant’s own expense. Tenant
               will keep all walks and approaches free from litter, snow and ice.
               No trash shall be stored in hallways or outside of entry doors.
               Tenant shall pay all charges for service and repair to kitchen and
               bathroom appliances and fixtures resulting from neglect by
               Tenant. Tenant will not commit waste or misuse of the property, and
               will return the premises to Landlord upon expiration, or other
               termination of the Lease for whatever reason, clean and in good
               condition, with the exception of reasonable wear occurring during the
               term of the Lease.

       Appellant’s App. Vol. IV p. 85 (emphasis added).
       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 14 of 17
                                                  A. Waste
[26]   Indiana Farmers contends that there is a genuine issue of material fact that

       Shearer and Nania committed “waste” in breach of their Lease. Waste has

       been defined in Indiana as “the destruction, misuse, alteration, or neglect of the

       premises by one lawfully in possession to the prejudice of an estate or interest

       therein of another.” Beiger Heritage Corp. v. Kilbey, 676 N.E.2d 784, 787 (Ind.

       Ct. App. 1997) (citation omitted), trans. denied. Indiana Farmers acknowledges

       that either an affirmative act or neglect on the part of at least one of the

       Appellees is necessary to establish that waste occurred. Despite Indiana

       Farmers’ contention that the fire at the duplex must have been caused by one of

       the tenants’ negligence, it has designated no evidence tending to show this. The

       only designated material indicating that one of the tenants caused the damage

       through negligence is contained in Indiana Farmers’ complaint, and allegations

       of negligence, without more, are not evidence. Indiana Farmers’ allegations of

       negligence are insufficient to generate a genuine issue of material fact on the

       question of waste.


                                 B. Return in Good Condition
[27]   Indiana Farmers also argues that there is a genuine issue of material fact as to

       whether Shearer and Nania violated their obligation to return the property in

       good condition, with the exception of reasonable damage. Indiana Farmers

       argues that if the property was damaged beyond reasonable wear when returned

       to Kay Lee, the burden is on Shearer and Nania to show why they should not

       be held liable. Although there is some non-binding authority to that effect, see

       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 15 of 17
       Henry H. Cross Co. v. Rice, 45 F.2d 940, 943 (7th Cir. 1930) (“It has been

       returned, but in a worse condition than it was when appellant received it,

       natural wear and decay excepted. In such event it was appellant’s duty to show

       that it is not liable therefor, and it has not done so.”), we think the better rule is

       to require the landlord to establish liability, not require the tenant to establish

       the lack of it.

               The provision for returning the premises in as good condition as
               received, ordinary wear and tear excepted, was a rule of common
               law and is usually understood to mean no more or less when
               inserted in contemporary contracts. It includes that usual
               deterioration which results from the day to day use of the
               premises and from lapse of time. Scott v. Prazma, Wyo., 555 P.2d
               571, 579. It does not cover a deterioration resulting from negligence.
               International & G. N. R. R. Co. v. Young, (Tex. Civ. App.) 72 S.W.
               68.

       Raybestos-Manhattan, Inc. v. Friedman, 275 S.E.2d 817, 819 (Ga. Ct. App. 1981)

       (emphasis added). A reasonable inference to be drawn from the emphasized

       language above is that it is the landlord’s burden to establish that excessive

       damage to leased property was caused by the tenant’s negligence, not the

       tenant’s burden to disprove it.


[28]   This result is also consistent with Indiana’s well-established rule that “[w]hen

       there is ambiguity in a contract, it is construed against its drafter.” MPACT

       Const. Grp., LLC v. Superior Concrete Constructors, Inc., 802 N.E.2d 901, 910 (Ind.

       2004). Because the Lease does not make clear whose burden it is to establish

       that the leased property was not in “good” condition upon return, or that any


       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 16 of 17
       wear was “unreasonable,” the rule supports a conclusion that the burden be put

       on the landlord to establish the facts necessary to support tenant liability. As

       mentioned, Indiana Farmers has not designated evidence that would, if true,

       carry its burden to show that the damage to the duplex is the result of

       negligence, recklessness, or intentional acts on the part of Shearer and Nania.

       Consequently, the trial court did not err in entering summary judgment in favor

       of Shearer and Nania.



                                               Conclusion
[29]   We conclude that the trial court did not abuse its discretion in dismissing

       Indiana Farmers’ claims against Poehler for failure to prosecute. We further

       conclude that the trial court erred in dismissing Indiana Farmers’ negligence

       and contract claims against Yost, and we remand for further proceedings on

       those claims. Finally, we conclude that the trial court did not err in entering

       summary judgment in favor of Shearer and Nania on Indiana Farmers’ contract

       claims.


[30]   The judgment of the trial court is affirmed in part, reversed in part, and

       remanded for further proceedings.


       Vaidik, C.J., and Brown, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 79A02-1606-CT-1407 | March 14, 2017   Page 17 of 17
