Robert Geller and Judy Geller v. Kurt P. Kinney, Holly Kinney, and A.M. Rentals, Inc.
980 N.E.2d 390
Ind. Ct. App.2012Background
- Gellers sue Kinneys and A.M. Rentals over a lease; trial court favored Kinneys and against Gellers on A.M. claims.
- Lease and Management Agreement with A.M. allegedly required A.M. to investigate tenants and disclose adverse facts.
- Trial court found A.M. breached statutory duties under Indiana Code 25-34.1-10-10(a)(3)(C) but enforced an exculpatory clause.
- Gellers alleged A.M. failed to disclose adverse facts about Kinneys’ credit and finances; damages sought exceed $70,000.
- Kinneys breached lease; Gellers alleged unpaid rent and damages; sale of home occurred after mitigation.
- Court concluded the sale mitigated damages and that A.M.’s exculpatory clause barred Count III.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether exculpatory clause shields A.M. from statutory duties. | Gellers contend clause does not cover statutory duties. | A.M. argues clause bars liability for good faith errors in duties. | Exculpatory clause enforced; not clearly erroneous; public policy not violated. |
| Whether damages were properly mitigated by sale of the home. | Gellers argue savings clause defeats mitigation duties. | Kinneys/AM defend that mitigation applies; contract allows sale as mitigation. | Mitigation upheld; sale of home not clearly erroneous as mitigation. |
Key Cases Cited
- Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126 (Ind. 1995) (strong public policy presumption; enforceability of contracts)
- Nylen v. Park Doral Apartments, 535 N.E.2d 178 (Ind.Ct.App. 1989) (mitigation doctrine; savings clauses may coexist)
- Van Prooyen Builders, Inc. v. Lambert, 907 N.E.2d 1032 (Ind.Ct.App. 2009) (integration of contract terms with implied law)
- Miller v. Geels, 643 N.E.2d 922 (Ind.Ct.App. 1994) (implied incorporation of law into contract terms)
- Greg Allen Const. Co. v. Estelle, 798 N.E.2d 171 (Ind.2003) (risk allocation and contract interpretation principles)
- Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494 (Ind.Ct.App. 2007) (mitigation duty; contract terms vs. common law duty)
- AquaSource, Inc. v. Wind Dance Farm, Inc., 838 N.E.2d 535 (Ind.Ct.App. 2005) (good faith standard; diligence under same facts)