Opinion
24A-SC-609
09-05-2024
The Store Manager, LLC, Appellant-Defendant v. Debra Sumner, Appellee-Plaintiff
ATTORNEY FOR APPELLANT Charles E. Traylor Kolb Roellgen & Traylor LLP Vincennes, Indiana ATTORNEY FOR APPELLEE Alphonso Manns Bloomington, Indiana
Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision is not binding precedent for any court and may be cited only for persuasive value or to establish res judicata, collateral estoppel, or law of the case.
Appeal from the Knox Superior Court Trial Court Cause No. 42D02-2308-SC-335 The Honorable Shawna D. Webster, Magistrate Judge
ATTORNEY FOR APPELLANT Charles E. Traylor Kolb Roellgen & Traylor LLP Vincennes, Indiana
ATTORNEY FOR APPELLEE Alphonso Manns Bloomington, Indiana
MEMORANDUM DECISION
Tavitas, Judge
Case Summary
[¶1] Debra Sumner filed a small claims action against The Storage Manager, LLC ("Storage Manager"), claiming that Storage Manager improperly removed Sumner's property from a self-storage facility and destroyed the property. The small claims court found in favor of Sumner. Storage Manager appeals and argues that the small claims court's judgment is: (1) contrary to the parties' intent as expressed in the lease agreement for the storage facility; (2) unsupported by the evidence because Sumner's damages were caused by an independent contractor; and (3) inconsistent and applies an incorrect legal standard. We disagree and, accordingly, affirm.
The caption lists the Appellant's name as The Store Manager, LLC. The evidence elicited at trial, however, indicates that the Appellant's name is The Storage Manager, LLC. Accordingly, we use the latter name.
Issues
[¶2] Storage Manager presents three issues, which we restate as:
I. Whether the small claims court's judgment is contrary to the language of the lease agreement for the storage facility.
II. Whether the small claims court's judgment is unsupported by the evidence because Sumner's damages were caused by an independent contractor.
III. Whether the small claims court applied an inconsistent and incorrect legal standard.
Facts
[¶3] On June 9, 2019, Sumner entered into a Rental and Lease Agreement ("Lease Agreement") with Adams University Self Storage ("43P Storage") to rent a self-storage unit in Vincennes. The Lease Agreement is a two-page form contract that contains twenty-two paragraphs. The pertinent portions of the Lease Agreement provide:
The parties appear to agree that 43P Storage owns or does business as Adams University Self Storage.
8. Occupant's Property. Occupant's property stored on the premises shall remain under the supervision and control of Occupant. Owner exercises neither care, custody [n]or control over Occupant's stored property. The value of Occupant's property stored on the premises shall be deemed for the purpose hereof the value of $100.00 (One Hundred Dollars). Nothing contained herein shall constitute an agreement or admission by Owner that Occupant's stored property [h]as any value.
9. Insurance. Occupant, at Occupant's sole expense, shall maintain a policy of fire, extended coverage, burglary, vandalism, and malicious mischief insurance for the actual cash value of all property stored by Occupant upon the Premises. Such insurance shall designate both Owner and Occupant as insureds thereunder as their respective interest may appear.
Occupant expressly agrees that the insurer under such policy shall not be subrogated to any claim of Occupant against Owner or Owner's agents, servants, or employees, or contracted labor persons.
10. Release of Owners Liability. All properties stored upon the premises by Occupant shall be at Occupant's sole risk. Owner and Owner's agents, servants, or employees/and or contractor labor shall not be liable to Occupant for damage to, or loss of, any property of Occupant while located on the premises arising from any cause what so ever including, without limitation, burglary, fire, water, mysterious disappearance, mold, fungi, rodents, or act of God, even if due in whole or in part to the active or passive acts or omissions o[r] negligence of Owner or Owner's agents, servants, or employees/contract labor. Furthermore, Owner shall have no liability to Occupant for personal injury, or death occurring as a result of Occupant's use of the premises, even if due in whole or in part to the active or passive acts or the omissions or negligence of Owner or Owner's agents, servants, or employees/and or contract labor.
* * * * *
18. No Bailment. Occupant understands and agrees that this agreement is for the lease or rental of real property only and is not a warehouse or bailment contract. Owner does not assume duties of warehouseman or bailee in this transaction and this agreement shall not be construed as imposing such status upon owner.Ex. Vol. pp. 49-50. Sumner used her rented self-storage unit to store personal items that had belonged to her then recently-deceased mother.
The Lease Agreement identified Sumner as the Occupant. Although it does not explicitly identify "Owner," the only other party to the agreement is Adams University Self Storage a/k/a 43P Storage.
See Ind. Code § 26-3-8-16(b) (providing that a rental agreement for a self-storage unit "may specify a limit on the value of personal property that may be stored in a renter's rented space," and that if a self-storage rental agreement specifies such a limit, "the limit specified in the rental agreement is considered the maximum value of the renter's personal property stored in the renter's rented space").
To aid in legibility, we have changed the typeface of the Lease Agreement from small caps to standard capitalization. We also added apostrophes where appropriate to indicate the possessive.
[¶4] On February 1, 2022, Storage Manager entered into a Storage Facility Management Services Agreement ("Management Agreement") with 43P Storage. Pursuant to the Management Agreement, Storage Manager agreed to maintain three self-storage facilities, one of which was the facility that contained Sumner's storage unit.
[¶5] At some point prior to November 2022, someone removed Sumner's items from her storage unit and disposed of them without her consent or providing notice to her as required by statute. See Ind. Code §§ 26-3-8-10 through 26-3-8-15. As explained in more detail below, 43P Storage blamed a person named Russell Dukes, who was contracted by Storage Manager to help maintain certain storage facilities.
[¶6] On November 18, 2022, Sumner filed a small claims notice of claim against 43P Storage in which she sought damages for the loss of her property. The small claims court held a trial on the matter on June 7, 2023, at which 43P Storage argued that it could not be held liable for the actions of its independent contractor, Storage Manager. The small claims court agreed and entered judgment in favor of 43P Storage.
[¶7] On August 30, 2023, Sumner filed a small claims notice of claim against Storage Manager. At the small claims hearing held on January 11, 2024, Storage Manager moved to dismiss Sumner's claim. Storage Manager argued that Dukes was responsible for the improper disposition of Sumner's property, that Dukes was an independent contractor of Storage Manager, and that Storage Manager was, thus, not liable for Dukes' actions. Storage Manager also argued in the alternative that, even if it was liable for Dukes' actions, the Lease Agreement between 43P Storage and Sumner limited Sumner's recovery to $100.
[¶8] In support of its argument, Storage Manager introduced into evidence a document titled "Independent Contractor Agreement" entered into on March 9, 2022, between Eric George (who was listed as "The Facilities Owner") and Dukes. Ex. Vol. p. 25. This Independent Contractor Agreement recited that "The Stor[age] Manager . . . has been retained to provide certain management services to Owner. As part of those management services the [Storage] Manager makes available to Owner, [Storage] Manager's personnel who are designated as Chief 'Pretty' Officers." Id. The Independent Contractor Agreement also provided that Dukes "agrees generally to provide and complete small maintenance tasks, repairs, lawn care and other duties and responsibilities as set out in Exhibit A (hereinafter known as 'Services'), under the direction and instruction of the [Storage] Manager." Id. Storage Manager, however, did not include Exhibit A of the agreement in the trial record, nor did it identify Eric George. The Independent Contractor Agreement does not list the Vincennes storage facility as being part of Dukes' responsibilities, but the CEO and owner of Storage Manager testified that Dukes was hired to maintain the Vincennes location.
On appeal, the Storage Manager does not explain who Eric George is or how he is related to this case.
[¶9] At the conclusion of the hearing, the small claims court took judicial notice of the evidence from the first trial against 43P Storage, to which neither party objected. The small claims court then took the matter under advisement. On February 14, 2024, the small claims court entered an order granting judgment in favor of Sumner. This order provides:
1. 43P Storage, LLC is the owner of a storage facility located in Vincennes, Indiana.
2. The Plaintiff, Debra Sumner, rented a unit for the storage of personal property from 43P Storage, LLC. The unit was physically located at 709 S. 13th Street, Vincennes, IN.
3. 43P Storage, LLC, contracted with The Storage Manager in a Storage Facility Management Services Agreement (hereinafter referred to as "Agreement"), to employ The Storage Manager as an independent contractor to manage the storage location in which the Plaintiff stored personal property.
4. The contract was in effect at the time of the loss claimed by the Plaintiff. 43P Storage, LLC and the Plaintiff, agreed, as evidenced by text messaging and testimony, the rent for the unit was current and the property contained therein was erroneously disposed.
5. In Indiana, the long-standing general rule is that a principal is not liable for the negligence of an independent contractor. Prest-O-Lite Co. v Skeel, 182 Ind. 593, 597 [106 N.E. 365, 367 (1914)]. Indiana also recognizes five (5) exceptions to that principle.
6. The Court previously Ordered a claim by Debra Sumner against 43P Storage, LLC, denied under the independent contractor theory. Any claim arising out of these circumstances as to 43P Storage, LLC is res judicata.
7. The Defendant in this case, The Stor[age] Manager, alleges the same theory of defense and produced an Independent Contractor Agreement and CPO Handbook purporting to establish the independent contractor relationship between The Stor[age] Manager and Russell Dukes for the rental unit located at 709 S. 13th Street, Vincennes, IN.
8. A CPO is an acronym for Chief "Pretty" Officer, personnel responsible for ensuring the facility is maintained and attractive.
9. The Court rejects the Defendant's theory of defense. [Defendant]'s Exhibit A is an Independent Contractor Agreement between "The Facilities" owner, Eric George and Russell Dukes. There was no evidence submitted as to the identity of Eric George or "The Facilities". Furthermore, a specific location to be maintained was not mentioned in the contract. The contract could have been for any location.
10. The Defendant did not produce a contract wherein 43P Storage, LLC or the rental units located at 709 S. 13th Street, Vincennes, IN, contracted with Russell Dukes or any party other than The Stor[age] Manager.
11. The Court determines there was no agreement between 43P Storage, LLC and any individual contracted as a Chief "Pretty" Officer for the 709 S. 13th Street, Vincennes, IN storage facilities.
12. Alternatively, the Independent Contractor Agreement specifies, "Contractor agrees generally to provide and complete small maintenance tasks, repairs, lawn care, and other duties and responsibilities as set out in Exhibit A, under the direction and instruction of the [Storage] Manager." No Exhibit A is attached to the contractor agreement.
13. Defendant's Exhibit B, a CPO Handbook, is merely a handbook and is not the handbook relevant to the time frame the Plaintiff rented the unit with 43P Storage, LLC, as it was last updated November, 2022.
14. The Court rejects the idea that responsibility for the loss of the Plaintiff's property would have been included in the duties and responsibilities of a Chief "Pretty" Officer.
15. The Storage Facility Management Services Agreement introduced as Defendant's Exhibit A under cause number 42D02-2211-SC-407 [Sumner's action against 43P Storage], defines for the Court "Duties and Authority of Manager", included therein, are the delineation of duties of a CPO as someone who maintains the general appearance of the facility through small maintenance tasks and lawncare. More importantly, within this agreement the duties of The Storage Manager are set forth and include rental collection, overlocking, on-line auctions, late notices, auction notices, and reporting, among others. The Court determines all tasks related to the record keeping and disposition of the Plaintiff's property were the sole responsibility of The Storage Manager.
16. The Court determines The Storage Manager is liable to the Plaintiff, Debra Sumner for the loss of property.
17. Under cause number 42D02-2211-SC-407, the Plaintiff presented evidence of her losses, including valuations of the items contained within the storage unit. The value of the items exceeds the $10,000.00 statutory limit for small claims.Appellant's App. Vol. II pp. 5-9 (emphases added). The trial court entered judgment in favor of Sumner in the amount of $10,000 plus court costs and interest. The Storage Manager now appeals.
See Ind. Code § 33-29-2-4(b)(1) (limiting the jurisdiction of a small claims docket to $10,000 and noting that a plaintiff may waive the excess of any claim that exceeds this limit in order to bring it within the jurisdiction of the small claims docket).
Discussion and Decision
Standard of Review
[¶10] Judgments in small claims actions are "subject to review as prescribed by relevant Indiana rules and statutes." Ind. Small Claims Rule 11(A). In the appellate review of small claims trials, we may not set aside the judgment "unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Ind. Trial Rule 52(A); Scott-LaRosa v. Lewis, 44 N.E.3d 89, 93 (Ind.Ct.App. 2015). In determining whether a judgment is clearly erroneous, we do not reweigh the evidence or determine the credibility of witnesses. Scott-LaRosa, 44 N.E.3d at 93. We consider only the evidence that supports the judgment and the reasonable inferences to be drawn from that evidence. Id. A judgment in favor of a party having the burden of proof will be affirmed if the evidence was such that from it a reasonable trier of fact could conclude that the elements of the party's claim were established by a preponderance of evidence. Id. This deferential standard of review is particularly important in small claims actions, where trials are "informal, with the sole objective of dispensing speedy justice between the parties according to the rules of substantive law." Ind. Small Claims Rule 8(A); Scott-LaRosa, 44 N.E.3d at 93.
I. Lease Agreement
[¶11] Storage Manager first claims that the small claims court's judgment is contrary to the language of the Lease Agreement. Sumner notes that she entered into the Lease Agreement with 43P Storage, not Storage Manager. Storage Manager argues that it may avail itself of the terms of the Lease Agreement because it is a third-party beneficiary under that Agreement.
[¶12] Usually, only parties to a contract, or those in privity with the parties, have rights under the contract. M Jewell, LLC v. Bainbridge, 113 N.E.3d 685, 689 (Ind.Ct.App. 2018) (citing OEC-Diasonics, Inc. v. Major, 674 N.E.2d 1312, 1314-15 (Ind. 1996)). One who is not a party to a contract may enforce the contract by demonstrating that the contracting parties "intended to protect him under the agreement by the imposition of a duty in his favor." Id. (citing OEC-Diasonics, 674 N.E.2d at 1315).
[¶13] Sumner argues that Storage Manager waived any argument that it is a third-party beneficiary under the Lease Agreement because Storage Manager never argued to the small claims court that it was a third-party beneficiary. We agree.
[¶14] Storage Manager's argument before the small claims court was based almost entirely on its theory that Dukes was responsible for the improper disposal of Sumner's property and that Dukes was Storage Manager's independent contractor. Thus, for the same reason that 43P Storage was not responsible for any negligence on the part of Storage Manager, Storage Manager claimed that it could not be responsible for any negligence on the part of Dukes. At the end of its argument before the small claims court, the following exchange occurred:
[Defense Counsel]: Your Honor, the only thing I will also add is in the event you find that this -- the independent contractor in this situation isn't similar to the prior one that the contract in which she signed states that all property is valued at $100 in the contract she signed and that she's required to have insurance to insure any additional value of the property in which she believes the property inside the premises to have.
[Sumner]: I did not sign a contract with Storage Manager. I started -
[Defense Counsel]: The contract that she signed with 43P Storage where her merchandise or property was at that point in time.
[Sumner]: And I did have insurance, right? But they're refusing to pay because it's missing . . . and not stolen. And I can't file a police report for the theft because it's missing, not stolen.Tr. Vol. II pp. 11-12.
[¶15] Thus, Storage Manager referred to the Lease Agreement, and Sumner noted that Storage Manager was not a party to the Lease Agreement. In response, Storage Manager did not argue that it was a third-party beneficiary under the Lease Agreement. An appellant cannot present an argument on appeal that it did not first present to the trial court. In re C.G., 157 N.E.3d 543, 547-48 (Ind.Ct.App. 2020).
4"This rule exists because trial courts have the authority to hear and weigh the evidence, to judge the credibility of witnesses, to apply the law to the facts found, and to decide questions raised by the parties. Appellate courts, on the other hand, have the authority to review questions of law and to judge the sufficiency of the evidence supporting a decision. The rule of waiver in part protects the integrity of the trial court; it cannot be found to have erred as to an issue or argument that it never had an opportunity to consider. Conversely, an intermediate court of appeals, for the most part, is not the forum for the initial decisions in a case. Consequently, an argument or issue not presented to the trial court is generally waived for appellate review."Ind. Bureau of Motor Vehicles v. Gurtner, 27 N.E.3d 306, 311 (Ind.Ct.App. 2015) (quoting GKC Ind. Theatres v. Elk Retail Invs, LLC., 764 N.E.2d 647, 651 (Ind.Ct.App. 2002)).
Our Supreme Court has clarified that, in contrast to an appellant, a party who has prevailed at the trial court, i.e., the appellee, "may defend the trial court's ruling on any grounds, including grounds not raised at trial." Citimortgage v. Barabas, 975 N.E.2d 805, 813 (Ind. 2012); accord Gurtner, 27 N.E.3d at 312.
[¶16] Because Storage Manager did not present an argument to the small claims court that it was a third-party beneficiary under the Lease Agreement, it cannot do so for the first time on appeal. Storage Manager's reliance on the language of the Lease Agreement as a defense to Sumner's claims, therefore, fails.
The Lease Agreement was admitted into evidence, and Storage Manager argued that, even if it were held to be liable, its liability was limited by the Agreement. But, contrary to Storage Manager's claim in its reply brief, it did not expressly argue that it was a third-party beneficiary under the Lease Agreement. Instead, it appears that Storage Manager simply assumed that the Lease Agreement applied to Sumner's claims against Storage Manager.
II. Independent Contractor
[¶17] Storage Manager also argues that the small claims court's judgment is unsupported by the evidence because Sumner's property was improperly disposed of by Dukes and that Dukes is an independent contractor of Storage Manager. As noted by the small claims court, it has long been the law in Indiana that, subject to certain exceptions that do not apply here, a principal cannot be held responsible for the negligence of an independent contractor. Pennington v. Mem'l Hosp. of S. Bend, Inc., 223 N.E.3d 1086, 1102 (Ind. 2024); Dow v. Hurst, 146 N.E.3d 990, 996 (Ind.Ct.App. 2020). Thus, Storage Manager argues that it cannot be held liable for the actions of its independent contractor, Dukes.
[¶18] The small claims court, however, found that Storage Manager failed to prove that Dukes was Storage Manager's independent contractor at the storage facility located in Vincennes, where Sumner stored her property. And there was evidence to support this finding. The independent contractor agreement Storage Manager submitted to the small claims court listed Eric George and Dukes as the parties to the agreement. Storage Manager, however, never identified who Eric George is. Nor did the agreement indicate that Dukes' duties included the Vincennes location where Sumner's property was kept. The small claims court, therefore, concluded that, even if Dukes was Storage Manager's independent contractor, Storage Manager did not prove that Dukes' duties included the Vincennes location where Sumner's property was stored.
It was Storage Manager's burden to prove that Dukes, a nonparty, was responsible for Sumner's losses. See Owens Corning Fiberglass Corp. v. Cobb, 754 N.E.2d 905, 911 (Ind. 2001) (holding that the burden of proof of a nonparty defense is upon the defendant).
[¶19] The small claims court also found that, even if Dukes was an independent contractor at the Vincennes location, his duties only included "small maintenance tasks, repairs, lawn care," and other duties as set forth in Exhibit A of the independent contractor agreement. Appellant's App. Vol. II p. 7. However, this exhibit was not admitted at trial. The agreement between Eric George and Dukes defined a "Chief Pretty Officer," such as Dukes, as someone who maintains the appearance of the facility by performing small maintenance tasks and lawncare. In contrast, this same agreement defines the duties of Storage Manager to include rental collection, overlocking, on-line auctions, late notices, auction notices, and reporting, among others. Thus, the small claims court rejected Storage Manager's claims that the improper disposal of Sumner's property was the result of Dukes' negligence and instead determined that it was the result of Storage Manager's negligence.
[¶20] Thus, the facts most favorable to the small claims court's judgment show that Storage Manager entered into an agreement to manage the 43P Storage facility where Sumner stored her property. Even though Sumner was current on her payments, her property was removed from her storage unit and thrown away. Storage Manager admits that Sumner's property was improperly disposed of. Although Storage Manager places the blame for this on Dukes, it failed to prove that Dukes was Storage Manager's independent contractor responsible for throwing the items away. Without reweighing the evidence, we cannot say that the small claims court clearly erred in this finding.
III. Incorrect Legal Standard
[¶21] Lastly, Storage Manager argues that the small claims court's judgment is clearly erroneous because it applies an incorrect and inconsistent legal standard. We disagree.
[¶22] Storage Manager argues that the small claims court implicitly determined that "Dukes is an employee [of Storage Manager] and that his removal of [Sumner]'s items was done within his scope of employment." Appellant's Br. p. 34. Storage Manager then claims that "the trial court's judgment includes a legal conclusion contradicting this determination: the trial court rejected 'that responsibility for the loss of [Sumner]'s property would have been included in the duties and responsibilities of a Chief 'Pretty' Officer.'" Id. (quoting Appellant's App. Vol. II p. 8). This, however, is not how we read the small claims court's order.
[¶23] The small claims court's order does not find that Dukes was Storage Manager's employee or even that Dukes was the one who improperly disposed of Sumner's property. Instead, the small claims court found that Storage Manager failed to prove that Dukes was an independent contractor at the Vincennes storage facility where Sumner's property was located. As discussed above, there was sufficient evidence to support the small claims court's finding. Accordingly, we cannot say that the small claims court applied an improper or inconsistent legal standard in awarding judgment in favor of Sumner.
Conclusion
[¶24] Storage Manager did not argue to the small claims court that it was a third-party beneficiary of the Lease Agreement between Sumner and 43P Storage. Storage Manager's third-party beneficiary arguments are, therefore, waived. The small claims court did not clearly err in determining that Storage Manager failed to prove that Dukes was its independent contractor at the location in question and failed to prove that Dukes was responsible for the improper disposal of Sumner's property. Lastly, the small claims court did not apply an improper or inconsistent legal standard. We, therefore, affirm the small claims court's judgment.
[¶25] Affirmed.
Crone, J., and Bradford, J., concur.