14 N.E.3d 767
Ind. Ct. App.2014Background
- Hi-Tec owns a five-building apartment complex with below-grade units that include a mold-related rent credit for dehumidifiers.
- Brittany Murphy and Jay Frazier moved into a below-grade apartment in 2009; Lorie and Kendall Murphy signed as lessees though Lorie did not sign the lease.
- The lease contained an exculpatory mold clause waiving landlord liability and a provision releasing the landlord from personal injury damages.
- mold was later discovered in Brittany’s apartment, and Hi-Tec moved the tenants to an above-grade unit; Brittany and her parents incurred medical expenses and disrupted living conditions.
- Plaintiffs filed suit for negligence, breach of contract, and fraud; the trial court redacted the mold-exculpatory clause prior to trial; a jury verdict awarded Brittany and her parents compensatory damages and Brittany punitive damages, with Jay receiving none.
- The trial court denied Hi-Tec’s motion to correct error; on appeal, the court vacated portions of the compensatory damages and affirmed the punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the mold exculpatory clause is void as public policy | Murphy argues clause should be void | Hi-Tec argues clause remains valid | Exculpatory clause void as to mold-based damages |
| Whether jury properly allocated fault to Hi-Tec | Plaintiffs claim Hi-Tec fully responsible | Hi-Tec argues comparative fault could apply | Evidence supported 100% fault finding for Hi-Tec; no abuse of discretion |
| Whether compensatory damages to Kendall and Lorie were legally supportable | Kendall and Lorie recover for damages linked to Brittany’s injury | Damages to Kendall and Lorie for non-party injuries lack basis | Remand to reduce Kendall’s damages to $2,360; reverse Kendall for non-party claims; reverse Lorie entirely |
| Whether punitive damages proof was sufficient | Murphy seeks punitive to deter mold-related conduct | Hi-Tec contends insufficient probative evidence | Punitive damages upheld at $15,000; sufficient clear and convincing evidence |
Key Cases Cited
- Ransburg v. Richards, 770 N.E.2d 393 (Ind. Ct. App. 2002) (public policy limits on exculpatory lease provisions; landlord liability for latent defects)
- Trotter v. Nelson, 684 N.E.2d 1150 (Ind. 1997) (public policy balancing of housing exculpatory clauses)
- Erwin v. Roe, 928 N.E.2d 609 (Ind. Ct. App. 2010) (landlord liability for latent known defects not disclosed)
- Prange v. Martin, 629 N.E.2d 915 (Ind. Ct. App. 1994) (damages standards for negligence cases; scope of compensation)
- Gresser v. Dow Chem. Co., 989 N.E.2d 339 (Ind. Ct. App. 2013) (punitive damages standard; clear and convincing evidence required)