                                               Jun 26 2014, 10:09 am


FOR PUBLICATION


APPELLANTS PRO SE:                         ATTORNEY FOR APPELLEES:

LINDSAY WASHMUTH                           JONATHON T. COOK
KRISTOPHER WASHMUTH                        Sansberry Dickmann Freeman Builta
Lapel, Indiana                              & Cook
                                           Anderson, Indiana


                            IN THE
                  COURT OF APPEALS OF INDIANA

LINDSAY WASHMUTH and ,                     )
KRISTOPHER WASHMUTH,                       )
                                           )
     Appellants-Petitioners,               )
                                           )
            vs.                            )      No. 48A04-1310-SC-515
                                           )
JOHNNY WILES and AMY WILES,                )
                                           )
     Appellees-Respondents,                )


                  APPEAL FROM THE MADISON CIRCUIT COURT
                       The Honorable David A. Happe, Judge
                         Cause No. 48C04-1305-SC-2304


                                  June 26, 2014


                           OPINION - FOR PUBLICATION

BARNES, Judge
                                    Case Summary

       Lindsay and Kristopher Washmuth (“Landlords”) appeal the small claims court’s

judgment in favor of Johnny and Amy Wiles (“Tenants”). We reverse and remand.

                                          Issue

      Although Landlords raise several issues, we address one dispositive issue, which

we restate as whether the small claims court properly determined that Landlords failed to

provide Tenants with a timely itemization of damages regarding their security deposit.

                                          Facts

      In October 2010, Tenants entered into a one-year lease with Landlords to rent a

residence at 505 South Main Street in Lapel for $775 per month plus a $1,500 security

deposit. The lease was extended to March 31, 2013, but Tenants did not move out until

April 1, 2013.   On April 29, 2013, Tenants and Landlords exchanged several text

messages regarding the return of the security deposit. Tenants refused to provide their

new address and, instead, directed Landlords to send the itemized list of damages to their

attorney. They provided Landlords with their attorney’s address.

      On May 23, 2013, Tenants filed a small claims court action against Landlords for

the return of their security deposit, attorney fees, and court costs in the amount of

$2,089.00. Upon receiving Tenants’ address in the small claims filing, Landlords mailed

the itemized list of damages to them on May 28, 2013. Landlords claimed $1,921.76 in

damages and refused to return the security deposit to Tenants. That notice was returned

unclaimed. However, Tenants did receive the itemized list on June 8, 2013. On July 1,



                                            2
2013, Landlords filed a counterclaim for damages and unpaid utilities in the amount of

$2,137.36.

       After a hearing, the small claims court entered an order finding that Tenants had

provided Landlords with a permanent address, a post office box in Lapel, on payment

checks while they were still in possession of the property and that Tenants had also

provided Landlords with the address of their lawyer. The small claims court concluded

that Tenants “did provide sufficient notice of their forwarding address, triggering

landlords’ obligation to provide an itemized statement of damages.” App. pp. 10-11.

The small claims court determined that Landlords’ itemized statement was not timely and

that they were required to return the entire security deposit, pay Tenants’ reasonable

attorney fees, and were “limited to recovering unpaid rent on their counterclaim.” Id. at

11.   The small claims court awarded Tenants the $1,500 security deposit, $800 in

attorney fees, and $89 in court costs and awarded Landlords $52 in rent for the holdover

period. Landlords filed a motion to reconsider, which the small claims court denied.

Landlords now appeal.

                                        Analysis

       Judgments in small claims actions are “subject to review as prescribed by relevant

Indiana rules and statutes.” Ind. Small Claims Rule 11(A). Under Indiana Trial Rule

52(A), the clearly erroneous standard applies to appellate review of facts determined in a

bench trial with due regard given to the opportunity of the small claims court to assess

witness credibility. Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1067 (Ind. 2006).

This “deferential standard of review is particularly important in small claims actions,

                                            3
where trials are ‘informal, with the sole objective of dispensing speedy justice between

the parties according to the rules of substantive law.’” Id. at 1067-68 (quoting City of

Dunkirk Water & Sewage Dep’t v. Hall, 657 N.E.2d 115, 116 (Ind. 1995)).

       Landlords argue that they timely notified Tenants of the itemized damages that

were deducted from the security deposit. Our supreme court has held that “[a] security

deposit remains the property of the tenant.” Lae v. Householder, 789 N.E.2d 481, 483

(Ind. 2003). Indiana’s Security Deposit statute, Indiana Code Chapter 32-31-3, provides

“that the landlord must refund the deposit, net of damage claims, within forty-five days

and supply an itemized list of any damages claimed to reduce the amount to be refunded.

Failure to refund and supply the itemized list results in a waiver of any claim for damages

and exposes the landlord to liability for the tenant’s attorney fees.” Id. at 484. The

Security Deposit statute specifically provides, in part:

              (a)    Upon termination of a rental agreement, a landlord
                     shall return to the tenant the security deposit minus any
                     amount applied to:

                     (1)    the payment of accrued rent;

                     (2)    the amount of damages that the landlord has
                            suffered or will reasonably suffer by reason of
                            the tenant’s noncompliance with law or the
                            rental agreement; and

                     (3)    unpaid utility or sewer charges that the tenant is
                            obligated to pay under the rental agreement;

                     all as itemized by the landlord with the amount due in
                     a written notice that is delivered to the tenant not more
                     than forty-five (45) days after termination of the rental
                     agreement and delivery of possession. The landlord is
                     not liable under this chapter until the tenant supplies

                                              4
                    the landlord in writing with a mailing address to which
                    to deliver the notice and amount prescribed by this
                    subsection. Unless otherwise agreed, a tenant is not
                    entitled to apply a security deposit to rent.

             (b)    If a landlord fails to comply with subsection (a), a
                    tenant may recover all of the security deposit due the
                    tenant and reasonable attorney’s fees.

Ind. Code § 32-31-3-12.

      Tenants first argue that they provided Landlords with a forwarding address on a

payment check while they were still residing at the rental house. At the hearing, Tenants

presented a carbon copy of a check made out to Kris Washmuth dated February 13, 2012.

However, the copy does not contain a name or address of the payor. Tenants also

submitted a blank check that contained “Amy B Calfee” as the payor with an address of

“505 S. Main, P.O. Box 333, Lapel, IN.” Exhibit 99. Amy Wiles testified that a post

office box was required in Lapel because the post office did not deliver mail to the

houses.

      Tenants contend that the February 2012 check informed Landlords of their

forwarding address. However, Tenants did not move out of the residence until April

2013. It was clear from the testimony that the post office box was used when they lived

in the rental property. There was no evidence that the post office box in Lapel remained

a proper address for Landlords to send Tenants the itemized list of damages after Tenants

moved out of the Lapel residence. In fact, at the time of the hearing in July 2013,

Tenants lived in Anderson. Further, Landlords should not be required to search through

years of cancelled checks to find a forwarding address for their tenants. We conclude


                                           5
that the small claims court erred when it determined that the post office box allegedly

provided on a check months earlier was a proper address for Landlords to send the

itemized damages.

       On April 29, 2013, Tenants did provide their attorney’s address to Landlords and

direct Landlords to send the itemized damages there. The statute merely requires tenants

to provide “a mailing address to which to deliver the notice and amount prescribed by

this subsection.” I.C. § 32-31-3-12(a). Providing Landlords with the address of Tenants’

attorney was sufficient to trigger Landlords’ duty to send the notice. See Reynolds v.

State, 463 N.E.2d 1087, 1088 (Ind. 1984) (holding that “notice or information given to an

attorney constitutes notice to his client”). If Landlords had forty-five days from the time

they received the address to send the notice, then their May 28, 2013 and June 8, 2013

notices were timely. However, Tenants contend that, because Landlords received the

address within forty-five days of the termination of the lease, they were required to send

the notice within the forty-five-day period after the termination of the lease and that the

notice was untimely.

       Our supreme court has held that “[t]he statute is clear that the landlord’s obligation

begins to run ‘after termination of the rental agreement and delivery of possession.’”

Lae, 789 N.E.2d at 484 (quoting I.C. § 32-31-3-12(a)).          Termination of the rental

agreement occurs after surrender by the tenant and acceptance of surrender by the

landlord. Id. However, the court held that the landlord’s obligation cannot begin to run

until after the tenant has supplied a forwarding address.         Id.   A tenant’s belated

forwarding of an address tolls but does not eliminate the landlord’s liability under the

                                             6
statute. Id. at 485. The court in Lae addressed a situation where the tenants provided a

forwarding address after the initial forty-five day period had expired. It held: “If the

tenant has not supplied an address within the forty-five-day period, we think tolling the

landlord’s obligation until a forwarding address is furnished is more consistent with this

language and with the purpose of the statute.” Id.

      The court cited Raider v. Pea, 613 N.E.2d 870 (Ind. Ct. App. 1993), with approval.

In Raider, we held:

             While the parties refer us to the forty-five day itemized,
             written notice required by Ind. Code § 32-7-5-14 [see now
             Indiana Code Section 32-31-3-14], we cannot ignore the
             language of Ind. Code § 32-7-5-12(a)(3) [see now Indiana
             Code Section 32-31-3-12] which provides that the “landlord
             is not liable under this subsection until supplied by the tenant
             with a mailing address to which to deliver the notice and
             amount prescribed by this subsection.” Id. The “liability”
             referred to is the requirement in the preceding sentence of the
             subsection that the landlord provide an itemized, written
             notice to the tenant of a claim against the security deposit
             within forty-five days after termination of the rental
             agreement. Id. Section 12(a)(3) imposes an affirmative
             obligation upon the tenant to provide a mailing address to the
             landlord to facilitate giving the required forty-five day notice,
             and it tolls the running of the forty-five day period against the
             landlord until the tenant meets his obligation.

Raider, 613 N.E.2d at 872.

      Based on the language of Indiana Code Section 32-31-3-12, Lae, and Raider, we

conclude that, if a tenant immediately provides a forwarding address upon termination of

the rental agreement and delivery of possession, a landlord has forty-five days to deliver

the itemized damages to the tenant.       However, if the tenant fails to provide the

forwarding address upon termination of the rental agreement and delivery of possession,

                                            7
as noted by Raider, under Indiana Code Section 32-31-3-12, the landlord “is not liable . .

. until supplied by the tenant with a mailing address to which to deliver the notice.” The

landlord’s obligation cannot begin to run until after the tenant has supplied a forwarding

address. Lae, 789 N.E.2d at 484. The landlord’s obligation to send the notice is tolled

until it receives the forwarding address. Once a tenant provides the forwarding address, a

landlord then has forty-five days to deliver the notice.1 Consequently, once Tenants

provided Landlords with a mailing address on April 29, 2013, Landlords had forty-five

days to deliver the itemized damages notice to the Tenants, and Landlords’ notices to

Tenants on May 28, 2013, and June 8, 2013, were timely.

                                           Conclusion

       The small claims court erred when it determined that Landlords’ notice to Tenants

was untimely. Consequently, we reverse and remand for the small claims court to

calculate the amount of damages incurred by Landlords and the amount of the security

deposit, if any, that should be returned to Tenants.

       Reversed and remanded.

BAKER, J., and CRONE, J., concur.




1
 Under the Tenants’ proposed interpretation, a landlord would be required to immediately deliver the
notice even if a tenant provided the mailing address on the forty-fourth day.
                                                 8
