Gayle Fischer v. Michael and Noel Heymann
12 N.E.3d 867
| Ind. | 2014Background
- In Feb 2006 the Heymanns agreed to buy Fischer’s condo for $315,000; they paid $5,000 earnest money and the contract allowed termination for "major defects" but not for routine/minor repairs.
- After inspection showed three powerless outlets, the Heymanns demanded Fischer fix the electrical issue; Fischer did not respond timely and later repaired it for $117; the buyers terminated and tendered a mutual release which Fischer refused to sign.
- Fischer sued May 2006 for specific performance or damages; the trial court initially found the buyers’ termination reasonable, but the Court of Appeals reversed in Fischer I, holding the buyers breached by unreasonably demanding repair.
- On remand Fischer sought roughly $306,600 (loss in sale price, carrying costs, closing costs, fees, and costs); the trial court reduced damages, finding Fischer unreasonably failed to mitigate by rejecting a $240,000 2007 offer and listing at an unreasonably high price.
- The Court of Appeals in Fischer II awarded only $117 to Fischer (buyer's view) but this Court granted transfer; the Indiana Supreme Court reviewed whether the trial court properly found Fischer failed to mitigate and whether she was required to accept the buyers’ repair demand.
- The Supreme Court affirmed the trial court: Fischer was not required to surrender to the buyers’ breach (so she need not have yielded to the repair demand), but she unreasonably failed to mitigate by rejecting the $240,000 offer and keeping an excessive listing price; total award affirmed at $93,972.18 with limited attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fischer had a duty to mitigate by acceding to the Heymanns’ repair demand | Fischer: No — the demand was a breach; she need not surrender to it to mitigate | Heymanns: Yes — Fischer could have preserved the contract by responding and avoiding damages | Held: Fischer was not required to yield to the buyers’ breach; trial court properly considered Fischer I and could find she reasonably declined to accept the demand |
| Whether Fischer unreasonably failed to mitigate by rejecting a $240,000 2007 offer | Fischer: Declining was reasonable given market uncertainty and speculative closing ability | Heymanns: Fischer unreasonably listed too high and rejected a viable $240,000 offer, so damages should be reduced | Held: Trial court’s finding that Fischer unreasonably listed at a high price and rejected the $240,000 offer is supported by the record; damages reduced accordingly |
| Proper measure of damages (selling-price differential and carrying costs) | Fischer: Entitled to full loss (difference to 2011 sale) plus full carrying costs and fees | Heymanns: Damages should be minimized if Fischer failed to mitigate | Held: Court affirmed the trial court’s calculation—award based on difference to the 2007 $240,000 offer plus carrying costs up to the date she rejected that offer |
| Award of attorney fees under contract provision | Fischer: Fees incurred after 2007 should be recoverable because litigation would have continued even if she sold to third party | Heymanns: Fees should be limited because Fischer failed to mitigate | Held: Trial court acted within discretion to limit fees to those incurred through Feb 16, 2007, considering result achieved; award affirmed |
Key Cases Cited
- Fischer v. Heymann, 943 N.E.2d 896 (Ind. Ct. App. 2011) (Court of Appeals holding buyers breached by unreasonable repair demand)
- Fischer v. Heymann, 994 N.E.2d 1151 (Ind. Ct. App. 2013) (Court of Appeals decision on remand reducing damages; differed on mitigation issue)
- City of Indianapolis v. Twin Lakes Enters., Inc., 568 N.E.2d 1073 (Ind. Ct. App. 1991) (non-breaching party’s options after repudiation and requirement to remain ready to perform)
- Berkel & Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d 649 (Ind. Ct. App. 2004) (computation of damages is within trial court discretion)
- Roche Diagnostics Operations, Inc. v. Marsh Supermarkets, LLC, 987 N.E.2d 72 (Ind. Ct. App. 2013) (non-breaching party entitled to damages equal to loss actually suffered, not to be placed in a better position)