Village Commons, LLC v. The Marion County Prosecutor's Office

Facts

On June 2, 1999, D leased property from Lombard and thereafter Lombard sold the property to P and assigned the Lease to P. D sued the space for its grand jury administration. P was required to maintain all equipment used in common with other tenants--such as elevators, plumbing, heating, and similar equipment--and to maintain the premises in good order, condition and repair. In the event of breach, the lease provided that the D could 'sue for injunctive relief or to recover damages for any loss resulting from the breach, but [it] shall not be entitled to terminate this Lease or withhold, setoff or abate any rent due thereunder.' In 2001, there were water problems from the outside and leaks from building equipment, which damaged property secured by D and affected the areas that D occupied or used. Leaks occurred on March 11, June 25, August 2, and August 16. On August 24 and 28 P took an inventory of water spots on ceiling tiles and other water damage throughout D's leased area and noted several spots and other damage that had been caused by sweating pipes or leaks. On August 28 and September 10 leaks were again noted, which were either caused by cracks in the sidewalk or steam from Indianapolis Power and Light's underground pipes. P hired Indoor Air Management (IAM) to conduct microbiological sampling and visual inspections. IAM reported visual signs of water damage. P caulked and sprayed sealant on the sidewalk above on several occasions, but these actions did not stop the leaking. The drywall was scheduled to be repaired, but another leak delayed the work. Another leak was discovered outside of an office on January 22, 2002, and was noticeably worse on January 29, 2002. On Memorial Day 2002, the main water supply pipe in the building's air conditioning system broke causing a leak in D's evidence room. Approximately seventy boxes of evidence were damaged. On June 10, 2002, mold spores were detected. P had its maintenance man perform demolition and replace drywall. P's maintenance man did not perform several of the tasks recommended by the expert who detected the spores. Problems persisted and into 2002, and at least one D's employees complained of suffering from unusual coughing and sneezing for a prolonged period of time. Another of D's employees experienced headaches while working at the leased premises. Problems continued into 2003, and on January 28, 2003, a major water intrusion was discovered in the main evidence room. An employee photographed a stream of water pouring from the ceiling. On January 30, 2003, D elected to vacate the leased premises. January 2003, was the last month that D paid rent leaving three years and eleven months, or $380,477.37, unpaid according to the terms of the Lease. On February 23, 2004, P filed against D for breaching the lease. D counterclaimed on a wrongful eviction theory. D alleged that it had been constructively evicted in August 2002. After a bench trial the trial court held that D's defenses and counterclaim were not barred by the Lease's exclusive-remedy provisions; (2) D was 'actually' evicted in October 2002 and then 'constructively' evicted in January 2003; and (3) assuming the Landlord could recover against the D, the Landlord did not mitigate its damages reasonably. D was awarded $ 7,664 and costs on its wrongful eviction counterclaim. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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