Richard Kulbieda v. Sara Alford and Cory Day (mem. dec.), 75A05-1609-SC-2100

Background

Landlord (Kulbieda) leased a house to Tenants (Alford and Day) from March 11, 2015; $950 monthly rent and $900 security deposit. Lease converted to month-to-month after one year unless 30-day written notice given.
Tenants bought a home, moved out in January 2016, but paid rent for January and February and expected lease to remain in effect through March 11, 2016.
Landlord inspected and rekeyed the property in January, spent ~two weeks preparing it, and signed a new lease with replacement renters on January 28, 2016. He refunded February rent but withheld the $900 security deposit claiming expenses.
Tenants sued in small claims court seeking return of the deposit, attorney fees, and costs; Landlord counterclaimed for ~ $3,191.59 in expenses (airfare, rental car, lost wages, cleaning, advertising, landscaping).
Bench trial: Tenants presented no sworn testimony beyond counsel narration; Landlord testified but offered no invoices or documentary evidence and did not admit alleged itemized damage notice into evidence. Small claims court ordered return of the $900 deposit and awarded $1,500 attorney fees.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether landlord lawfully withheld security deposit	Tenants: Landlord failed to provide statutorily required written itemized notice within 45 days; therefore deposit must be returned and landlord liable for attorney fees.	Landlord: He emailed an itemized list on Feb 6 and tenants did not provide a written mailing address, so statutory notice requirement was not triggered.	Court: Landlord waived these arguments by failing to admit the notice or dispute nonreceipt at trial; statutory notice not shown, so landlord must return deposit and pay attorney fees.
Whether Landlord could deduct travel, lost wages, and advertising from deposit	Tenants: Such costs are not authorized uses of a security deposit under statute or the lease.	Landlord: Those were expenses incurred because tenants moved without proper notice and thus recoverable.	Court: Statute and lease limit deductions to actual property damages, accrued rent, certain utilities, and agreed last-rent uses; travel, lost wages, and advertising are not deductible.
Whether asserted cleaning/landscaping costs were deductible	Tenants: No evidence of itemized deductions or supporting invoices; no statutory notice.	Landlord: Testified to about $150 in out-of-pocket cleaning plus personal labor.	Court: Cleaning charges can be valid deductions if proven and included in the itemized notice. Landlord failed to present adequate documentary proof or the required notice, so deposit still must be returned.
Whether Tenants are entitled to appellate attorney fees	Tenants: Landlord’s appeal was frivolous, in bad faith, and aimed to harass/delay; request appellate fees.	Landlord: Pro se belief he complied with statute; appeal not in bad faith.	Court: Denied appellate fees. Although parties presented weak trial proof and Landlord was pro se, the appeal was not frivolous or in bad faith given his claimed belief he had complied.

Key Cases Cited

Trinity Homes, LLC v. Fang, 848 N.E.2d 1065 (Ind. 2006) (standard of review for bench trial findings in small claims appeals)
Rueth v. Quinn, 659 N.E.2d 684 (Ind. Ct. App. 1996) (presumption of findings when trial court issues no written findings; affirm if sustainable on any theory supported by evidence)
Sholes v. Sholes, 760 N.E.2d 156 (Ind. 2001) (courts must respect plain statutory language)
Miller v. Geels, 643 N.E.2d 922 (Ind. Ct. App. 1994) (cleaning costs required by lease may constitute recoverable damages against security deposit)
Thacker v. Wentzel, 797 N.E.2d 342 (Ind. Ct. App. 2003) (standards for awarding appellate attorney fees for frivolous or bad-faith appeals)
Helmuth v. Distance Learning Systems Ind., Inc., 837 N.E.2d 1085 (Ind. Ct. App. 2005) (high threshold to impose appellate sanctions; reserve use to extreme cases)