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03/15/88 PENMANTA CORPORATION v. EDWARD HOLLIS

Filed: March 15, 1988.

PENMANTA CORPORATION, APPELLANT (DEFENDANT BELOW),
v.
EDWARD HOLLIS, APPELLEE (PLAINTIFF BELOW)



APPEAL FROM THE MORGAN SUPERIOR COURT, The Honorable G. Thomas Gray, Judge, CAUSE NO. S84-C333.

Robertson, J., Neal, J. Concurs. Sullivan, J. Concurs With Separate Opinion.

Author: Robertson

ROBERTSON, J.

The defendant-appellant Penmanta Corporation (Penmanta) appeals from a $300,000 jury verdict and judgment in favor of the plaintiff-appellee Edward Hollis (Hollis). For the reasons stated hereafter, we reverse.

Hollis and his wife operated a business in Nashville, Indiana, known as the Toy Chest. They sold toys, crafts and collectibles. As a part of that business, a miniature circus exhibit which was hand carved by Hollis in quarter-inch scale was on display. Admission to the display was 50 cents for adults and 25 cents for children. The display portrayed the Hagenbeck-Wallace Circus as it appeared in 1934. The hand-carved items included circus animals, performers, tents, wagons, and railroad cars.

The business and display was located in a building owned by Penmanta and leased by Hollis. The written real estate lease was executed by the parties on November 28, 1979, and expired by its own terms on December 31, 1982. Although the lease expired, Hollis continued in possession of the property and paid the rent. An early morning fire on August 13, 1983 substantially damaged the circus exhibit. Hollis sought damages from Penmanta based upon Penmanta's negligence, among other things, in maintaining the premises. Penmanta now appeals from the resulting judgment.

Because we reverse, the only issue to be decided is the propriety of the trial court's ruling on Penmanta's motion for summary judgment. The thrust of that ruling was a general finding that the terms and conditions of the written real estate lease, including the exculpatory clause, did not govern the landlord-tenant relationship during the hold-over tenancy.

The lease in question contained an exculpatory clause which barred claims against Penmanta for damage or injury to Hollis or his property resulting from the failure of Penmanta to keep the premises in repair. Another provision in the lease reads:

No holding over by [Hollis] hereunder shall constitute a renewal or extension of the terms of this lease except upon written consent of [Penmanta].

Penmanta's position is summarized in a footnote in Mooney-Mueller-Ward, Inc. v. Woods (1978), 175 Ind. App. 302, 371 N.E.2d 400 at 403:

Hollis agrees with the foregoing quote as a statement of a general rule of law but disagrees with its applicability to the facts of this case because of the previously quoted lease provision requiring the written consent of Penmanta for Hollis to hold over under a lease renewal or extension. Quoting 49 AM.JUR.2d "Landlord and Tenant" § 1136 (1970) Hollis argues that:

Necessarily, rules as to hold over tenancies have no application where there is a contrary mutual understanding as to the tenant's continued occupancy of the premises. Such an agreement takes the place of the presumption as to holding over that the law otherwise raises. In other words, the legal presumption of a renewal of the tenancy from the holding over of the tenant can be rebutted by proof of a contrary intention on the part of the landlord alone, or of both parties, but not on the part of the tenant alone. The parties to a lease may therein expressly provide for or subsequently agree to a holding over, and as to what the nature of the tenancy shall be after the expiration of the term; such a provision or agreement will govern[.]

Initially we observe that our standard of review is:

In reviewing a motion for summary judgment, the appellate court applies the same standard as that employed by trial courts: summary judgment may be granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits and testimony, if any, show that there was no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pike ...


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