# Beatriz Morales v. Housing Authority of South Bend and Attorney General of Indiana

> Indiana Court of Appeals · March 24, 2014

URL: https://www.frixlaw.com/law-library/cases/2725335

## Case

- **Court:** Indiana Court of Appeals
- **Decided:** March 24, 2014
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## How later opinions describe it (automated extraction)

- noting that while “failure to comply with the appellate rules does not necessarily result in waiver of an issue, it is appropriate where noncompliance impedes our review”

## Opinion text

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
MAR 24 2014, 9:28 am
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE
HOUSING AUTHORITY OF SOUTH
KENT HULL BEND:
Indiana Legal Services, Inc.
South Bend, Indiana MICHAEL V. KNIGHT
Barnes & Thornburg LLP
South Bend, Indiana

ATTORNEYS FOR
APPELLEE/INTERVENOR
ATTORNEY GENERAL OF INDIANA:

GREGORY F. ZOELLER
Attorney General of Indiana

FRANCES BARROW
Deputy Attorney General
Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

BEATRIZ MORALES, )
Appellant-Defendant, )
)
vs. ) No. 71A03-1308-SC-311
)
HOUSING AUTHORITY OF SOUTH BEND, )
Appellee-Plaintiff, )
)
and )
)
ATTORNEY GENERAL OF INDIANA, )
Appellee/Intervenor-Plaintiff. )
APPEAL FROM THE ST. JOSEPH SUPERIOR COURT
The Honorable David T. Ready, Judge
The Honorable J. Eric Smithburn, Judge
Cause No. 71D01-1208-SC-7057

March 24, 2014

MEMORANDUM DECISION - NOT FOR PUBLICATION

BAILEY, Judge

Case Summary

Beatriz Morales (“Morales”) appeals the trial court’s entry of judgment and order of

eviction in favor of the Housing Authority of South Bend (“the Housing Authority”). During

the proceedings before the trial court, Morales challenged the constitutionality of a statute,

and the Office of the Indiana Attorney General appeared on behalf of the State of Indiana

(“the State”). The trial court found no constitutional infirmity, and Morales also appeals that

determination.

We affirm.

Issues

Morales presents three issues for our review. We restate these as:

I. Whether, because of the nature of Morales’s counterclaims, the trial
court lacked subject matter jurisdiction over the case and thus erred
when it did not transfer the case from the small claims to the plenary
docket;

II. Whether the trial court’s judgment is void because the process for
appointing magistrates to the trial court in St. Joseph County is a
special law prohibited under the Indiana Constitution; and

2
III. Whether the trial court’s entry of judgment against Morales and its
determination of the damages owed to the Housing Authority was
erroneous.

Facts and Procedural History

Morales signed a lease and moved into a residence owned by the Housing Authority in

October 2000. On August 2, 2012, under the same lease, Morales moved into a residence on

Twyckenham Drive in South Bend (“the residence”).1 On August 7, 2012, the Housing

Authority delivered to Morales notice that after fourteen days, it would file suit to evict her

from the residence if she did not pay past-due rent and other fees totaling $472.00.

On August 23, 2012, the Housing Authority filed a notice of claim in the small claims

division of St. Joseph Superior Court. The notice of claim alleged that Morales was $472.00

in arrears on her rent for the residence. The Housing Authority also filed an application for

immediate possession of the residence.

On October 16, 2012, Morales filed a motion to establish an escrow payment of

$261.00 pending a ruling in a pair of cases that had been consolidated on the plenary docket,

in which Morales had filed a motion to intervene. On October 17, 2012, the Housing

Authority filed its exception to Morales’s offer of surety, contending that Morales had not

paid rent since July 2012, and that the offered surety of $261 was insufficient in light of the

claimed arrears.

1
A representative of the Housing Authority, Joann Watford, testified that residents enter into a single lease,
under which rent is reassessed and living quarters reassigned pursuant to the terms of the lease.

3
On October 18, 2012, a hearing was conducted on the Housing Authority’s application

for immediate possession of the residence. The trial court denied the application for

immediate possession on October 22, 2012.

The case had been set for a trial in the small claims court on November 16, 2012. On

November 2, 2012, Morales answered the Housing Authority’s notice of claim, and also

asserted counterclaims and requested a jury trial. In her counterclaims, Morales alleged that

the Housing Authority had violated its duties under the U.S. Housing Act of 1973 and the

Fair Housing Act, as amended and as implemented by U.S. Department of Housing and

Urban Development regulations, and that Morales was an intended beneficiary of these laws.

Morales also claimed that the Housing Authority had discriminated against her on the basis

of gender and national origin, and that the Housing Authority had not properly calculated her

rent obligations in light of her income and changes in the amount of child support she

received. Morales thus alleged that the Housing Authority had violated her due process

rights under the Federal Constitution, due course of law rights under the Indiana

Constitution, and statutory rights under federal law. Morales’s counterclaims prayed for the

following relief:

A. Transfer this case to the plenary docket of the St. Joseph Superior Court
with waiver of transfer fee based upon the affidavit of indigence
previously filed in this case by Ms. Morales;

B. Give notice of this action to the attorney general of Indiana, pursuant to
I.C. § 34-14-1-11, that Ms. Morales challenges as unconstitutional Ind.
Small Claims R. 2(B)(1) in that the rule violates the equal protection
and due process clauses of the Fourteenth Amendment to the
Constitution of the United States, Article 1 [sic] § 12 of the

4
Constitution of the State of Indiana […] and Article IV, [sic] § 23 of
the Constitution of the State of Indiana[…];

C. On each claim, award compensatory damages exceeding $10,000 and
exemplary damages exceeding $10,000;

D. Award declaratory judgment determining the rights and duties of the
parties;

E. Upon motion, with notice and opportunity to be heard to [the Housing
Authority], grant preliminary and permanent injunctions;

F. Establish a receivership to take control of all or part of [the Housing
Authority’s] property in South Bend, IN, with attendant administrative
operations, so that Ms. Morales and her fellow residents are protected
from injury and exploitation;

G. Award reasonable attorney fees, as allowed by 42 U.S.C. § 1988[,] 43
U.S.C. § 3601, et seq., or any other applicable authority;

H. Award such other relief [as is] appropriate.

(Appellant’s App’x at 57-58.)

On November 5, 2012, the Housing Authority filed a motion to strike Morales’s

request for a jury trial. On November 7, 2012, the trial court denied Morales’s request for a

jury trial as “untimely, un-verified and therefore waived.” (Appellant’s App’x on 18.)

On November 12, 2012, after the trial court scheduled a hearing for December 6,

2012, without transferring the case to the plenary docket and ordering a jury trial, Morales

filed a motion for immediate transfer of the case to the plenary docket. Morales based her

motion on the nature of the relief requested in her counterclaim which, she asserted, removed

the claim from the subject matter jurisdiction of the small claims court. The Housing

Authority filed a motion in opposition to this request. On November 27, 2012, the trial court

5
held a hearing on Morales’s motion to transfer the case to the plenary docket. On December

11, 2012, the court denied the motion to transfer.

Morales moved the trial court to certify for interlocutory appeal the order denying her

motion for immediate transfer of the case to the plenary docket. The trial court denied this

motion on January 17, 2013.

On February 13, 2013, trial commenced and evidence was heard. The trial was

continued to April 25, 2013, and further evidence was presented on that date. At the

conclusion of the trial, the court reserved judgment pending additional briefing from the

parties.

On May 3, 2013, Morales filed a motion to dismiss the case, claiming that the trial

court lacked subject matter jurisdiction over the case. Morales’s motion claimed that Indiana

Code section 33-33-71-69, which sets forth the process by which magistrates may be

appointed to office, violated Article 4, sections 22 and 23 of the Indiana Constitution,

concerning the enactment of special laws. The Indiana Attorney General, representing the

State of Indiana, responded to Morales’s motion on May 31, 2013, argued that Morales

lacked standing to advance the argument, and defended the constitutionality of the statute.

The dispositive orders in the case were entered by senior judges J. Eric Smithburn and David

Ready.

On July 3, 2013, the trial court denied Morales’s motion to dismiss.

On July 9, 2013, the trial court entered judgment in favor of the Housing Authority

and against Morales, and awarded the Housing Authority immediate possession of the

6
residence. On August 6, 2013, the trial court entered judgment and awarded the Housing

Authority damages totaling $6,000, which included past-due rent, late fees, cleaning fees,

court costs, and attorney’s fees.

This appeal ensued.

Discussion and Decision

Transfer to Plenary Docket

Morales’s first contention on appeal is that the trial court erred when it denied her

motion for a jury trial or to transfer the case to the plenary docket, because the small claims

court lacked jurisdiction over her crossclaims.

The small claims courts dockets of the various Indiana superior courts are governed by

Indiana Code section 33-29-2-1, et seq. The statute provides:

Small claims courts have jurisdiction over the following matters:

(1) Civil actions in which the amount sought or value of the property sought to
be recovered is not more than six thousand dollars ($6,000). The plaintiff in a
statement of claim or the defendant in a counterclaim may waive the excess of
any claim that exceeds six thousand dollars ($6,000) in order to bring it within
the jurisdiction of the small claims docket.

(2) Possessory actions between landlord and tenant in which the rent due at the
time the action is filed does not exceed six thousand dollars ($6,000).

(3) Emergency possessory actions between a landlord and tenant under IC 32-
31-6.

I.C. § 33-29-2-4(b).

Ordinarily, filing a claim in the small claims docket waives the plaintiff’s right to a

jury trial. I.C. § 33-29-2-7(a). However:

7
(b) A defendant may, not later than ten (10) days following service of the
complaint in a small claims case, demand a trial by jury by filing an affidavit
that:

(1) states that there are questions of fact requiring a trial by jury;

(2) specifies those questions of fact; and

(3) states that the demand is in good faith.

(c) Notice of the defendant's right to a jury trial, and the ten (10) day period in
which to file for a jury trial, shall be clearly stated on the notice of claim or on
an additional sheet to be served with the notice of claim on the defendant.

(d) Upon the deposit of seventy dollars ($70) in the small claims docket by the
defendant, the court shall transfer the claim to the plenary docket. Upon
transfer, the claim then loses its status as a small claim.

I.C. § 33-29-2-7.

Under certain circumstances, a party that lacks financial resources may nevertheless

pursue a remedy at law. Indiana Code section 34-10-1-1 provides that “an indigent person

who does not have sufficient means to prosecute or defend an action may apply to the court

in which the action is intended to be brought, for leave to prosecute or defend as an indigent

person.” Section 33-37-3-2 further provides:

(a) Except as provided in subsection (b), a person entitled to bring a civil
action or to petition for the appointment of a guardian under IC 29-3-5 may do
so without paying the required fees or other court costs if the person files a
statement in court, under oath and in writing:

(1) declaring that the person is unable to make the payments or to give
security for the payments because of the person's indigency;

(2) declaring that the person believes that the person is entitled to the
redress sought in the action; and

(3) setting forth briefly the nature of the action.

8
(b) If a person brings a civil action or petition for the appointment of a
guardian under IC 29-3-5, a clerk shall waive the payment of required fees or
other court costs by the person without court approval if:

(1) the person is represented by an attorney:

(A) who is employed by Indiana Legal Services or another civil
legal aid program; or

(B) who:

(i) is serving as a pro bono attorney; and

(ii) obtained the person as a client through a direct
referral from a pro bono district associated with one (1)
of the fourteen (14) administrative districts in Indiana
established by the Indiana Rules of Court Administrative
Rule 3(A); and

(2) the attorney files a statement with the clerk that:

(A) seeks relief from paying the required fees or other court
costs;

(B) declares that the person believes that the person is entitled to
the redress sought in the action;

(C) sets forth briefly the nature of the action;

(D) is accompanied by an approved affidavit of indigency; and

(E) is signed by the attorney.

(c) This section does not prohibit a court from reviewing and modifying a
finding of indigency by the court or a clerk if a person who received relief
from the payment of required fees or other court costs ceases to qualify for the
relief.

Here, Morales contends that she was entitled to proceed in forma pauperis on her

counterclaim against the Housing Authority, although she did not pay a fee or file an

9
affidavit of indigency in this case. The Small Claims Rules set forth the procedural

requirements for pursuing a counterclaim in small claims courts:

(A) Time and Manner of Filing. If the defendant has any claim against the
plaintiff, the defendant may bring or mail a statement of such claim to the
small claims court within such time as will allow the court to mail a copy to
the plaintiff and be received by the plaintiff at least seven (7) calendar days
prior to the trial. If such counterclaim is not received within this time the
plaintiff may request a continuance pursuant to S.C. 9. The counterclaim must
conform with the requirements of S.C. 2(B)(4).

(B) Counterclaim in Excess of Jurisdiction. Any defendant pursuing a
counterclaim to decision waives the excess of the defendant's claim over the
jurisdictional maximum of the small claims docket and may not later bring a
separate action for the remainder of such claim.

Ind. Small Claims Rule 5.

This Court interpreted this rule in a case upon which Morales now relies, Buckmaster

v. Platter, 426 N.E.2d 148 (Ind. Ct. App. 1981). In Buckmaster, the plaintiffs, the

Buckmasters, sued the Platters in small claims court, seeking to evict the Platters from real

estate. The Platters counterclaimed for specific performance of an option contract to

purchase the real estate. As a threshold question in the Buckmasters’ appeal, this Court

addressed “whether the small claims division of a superior court has jurisdiction to order

specific performance of an option contract.” Id. at 150. The Court concluded that because

the statute did not expressly provide the small claims court with jurisdiction over equitable

matters, the small claims division of the Allen Superior Court in Buckmaster could not

properly grant the relief of specific performance sought by the Platters. Id. at 150 (also

observing in a footnote that this rationale would extend as well to exclude from the small

claims court’s jurisdiction prayers for injunctive relief, id. at n. 1).

10
Accordingly, the Buckmaster Court reversed the trial court’s order granting the

Platters’ requested remedy of specific performance. Interpreting Small Claims Rule 5, the

Buckmaster Court went on to state:

The statute gives a litigant various options. He may assert his counterclaim in
the small claims division if it is within the jurisdiction of that court. He may
also choose to file his counterclaim in the small claims division although the
amount claimed is in excess of the jurisdictional amount on the condition that
he waives the excess. Finally, the non-mandatory language of S.C.R. 5(A)
indicates that a person need not file a counterclaim but may file a separate
cause of action either in the small claims division or in the regular civil docket
of the superior court.

Id.

This Court later interpreted Small Claims Rule 5 as it pertained to in forma pauperis

proceedings in Stout v. Kokomo Manor Apartments, 677 N.E.2d 1060 (Ind. Ct. App. 1997).

In that case, Stout, the defendant in a landlord-tenant dispute on the small claims docket of

the Howard Superior Court, sought a jury trial and transfer to the plenary docket. Id. at 1065-

66. Stout did not pay the $10 fee then required by the statute, and her motion for a jury trial

was denied. Id. at 1066-67. Upon appeal, Stout contended that she was entitled to proceed

in forma pauperis under then-effective Indiana Code sections 33-19-3-2 and 34-1-1-3.2 Id.

Reviewing the record, we observed that while the trial court was aware that Stout received

federal assistance for payment of rent, she did not “[bring] her indigent status to the attention

of the trial court before the trial,” nor did she apply “for leave to proceed with a jury trial

without the payment of the required deposit at any time.” Id. at 1067. Rather, Stout moved

2
Section 33-19-3-2 has been superseded by Section 33-37-3-2; Section 34-1-1-3 has been superseded by
Section 34-10-1-1.

11
for leave to proceed in forma pauperis only on appeal. Id. Accordingly, we concluded that

Stout did not give the trial court an “opportunity to determine whether she had sufficient

means to pay the deposit or to decide whether the case could proceed with a jury trial …

without the payment of the deposit,” and thus found no error in the small claims court’s

adjudication of the case without a jury or transfer to the plenary docket. Id.

Here, Morales filed counterclaims in response to the Housing Authority’s landlord-

tenant action. These counterclaims sought, inter alia, (1) damages totaling $20,000, well in

excess of the small claims court’s jurisdiction; (2) preliminary and permanent injunctions,

that is, equitable relief; (3) placement of part or all of the Housing Authority’s properties into

receivership; and (4) attorney’s fees. Morales filed these counterclaims in the small claims

division of the St. Joseph Superior Court; she now contends that, as a result of her

counterclaims, the small claims court lacked jurisdiction over the entirety of the case and

should have transferred the entire matter to the plenary docket.

In response, the Housing Authority contends that the trial court did not err when it

denied the motion to transfer the case to the plenary docket because Morales did not properly

pursue the transfer. Specifically, the Housing Authority notes that Morales did not pay the

$70 fee set forth in Section 33-29-2-7 and did not file her affidavit to proceed in forma

pauperis before or contemporaneously with her motion to transfer. Morales argues in

response that 1) the small claims court lost subject matter jurisdiction over the case solely by

virtue of the allegations in the counterclaim; and 2) she was not required to file an application

to proceed in forma pauperis because she had filed a motion to intervene in another case

12
pending on the court’s plenary docket and had submitted an affidavit of indigence in that

case, and thus the small claims court should have taken notice of this affidavit.

As to the first of these responses, we disagree with Morales. Section 33-29-2-7 does

not remove a defendant’s counterclaim from the small claims docket until after the $70 fee is

paid: “[u]pon the deposit … the court shall transfer the claim to the plenary docket,” at

which point “the claim then loses its status as a small claim.” I.C. § 33-29-2-7(d) (emphasis

added). Moreover, our Small Claims Rules make it plain that a counterclaiming party may

waive asserted claims beyond the jurisdictional limits: “[a]ny defendant pursuing a

counterclaim to decision waives the excess of the defendant's claim over the jurisdictional

maximum of the small claims docket and may not later bring a separate action.” S.C.R. 5(B).

Filing a counterclaim in a small-claims case that falls outside the statutory jurisdictional

limits of the small claims docket does not ipso facto deprive the small claims court of subject

matter jurisdiction.

Nor do we agree with Morales’s second contention. Morales argues that her case can

be distinguished from Stout because, she argues, she provided notice of her indigence to the

small claims court. Here, Morales’s counsel was employed by Indiana Legal Services. See

I.C. § 33-37-3-2(b)(1). Morales claims that the small claims court and the Housing Authority

were adequately informed of her indigence, and directs us to statements of counsel during a

January 17, 2013 hearing and to documents related to a separate case in which Morales had

sought to intervene.

13
However, the hearing on Morales’s motion to transfer to the plenary docket was

conducted on November 27, 2012. Our review of the record in that hearing reveals

statements of counsel that Morales was present and available to testify as to her financial

condition. Morales did not testify at that hearing, and she had not provided the statement

required by Section 33-37-3-2(b)(2) either to the clerk of the court or to the small claims

court in the instant case. And while Morales argues that she had submitted such

documentation in another case on the plenary docket, the statute requires that the attorney’s

statement “sets forth briefly the nature of the action,” that is, of the action for which leave is

sought. I.C. § 33-37-3-2(b)(2)(C). Indeed, we find no submission to the small claims court

in this case concerning her financial status until April 12, 2013, after the trial had already

commenced and some evidence had been heard.

Under these circumstances, we cannot conclude that Morales timely applied for leave

to proceed in forma pauperis on her counterclaims against the Housing Authority. We

accordingly conclude that the small claims court did not lack subject matter jurisdiction over

Morales’s counterclaims, and find no error in the small claims court’s denial of her motion to

transfer the case to the plenary docket.

Magistrate Appointment

We turn next to Morales’s contention that the small claims court’s judgment is void

because the legislative provisions governing appointment of magistrates to the St. Joseph

Superior Court is a special law prohibited under Article 4, Sections 22 and 23 of the Indiana

Constitution.

14
The statute Morales challenges is Indiana Code section 33-33-71-69, which provides:

(a) The court may appoint two (2) full-time magistrates under IC 33-23-5 to
serve the court using the selection method provided by IC 36-1-8-10(b)(1) or
IC 36-1-8-10(b)(2). Not more than one (1) of the magistrates appointed under
this section may be a member of the same political party.

(b) A magistrate continues in office until removed by the judges of the court.

Morales contends that this statutory scheme is a special law barred under the Indiana

Constitution. The St. Joseph Superior Court employs its magistrates to resolve small claims

cases; the purportedly impermissible nature of the statute appointing the magistrates renders

judgments of the small claims court void, the argument goes, because the small claims court

itself was established contrary to the requirements of the Indiana Constitution.

Where a case challenges the constitutional validity of a statute, we must consider the

threshold question of standing before turning to the merits of the challenge itself. Pence v.

State, 652 N.E.2d 486, 487 (Ind. 1995). Whether a party has standing is purely a legal

question and does not require deference to the trial court’s determination of that issue. Wood

v. Walden, 899 N.E.2d 728, 731 (Ind. Ct. App. 2009). Except in certain circumstances, it is

not enough that a statute is constitutionally infirm; to show standing to challenge the

constitutionality of a statute, the challenger “must show adequate injury or the immediate

danger of sustaining some injury.” Pence, 652 N.E.2d at 488. “An actual dispute involving

those harmed is what confers jurisdiction upon the judiciary” to resolve a claim that a statute

is constitutionally invalid. Id. This is a restraint upon the power of the courts in this state

that emerges from the Indiana Constitution’s separation of powers clause, id., and serves as

an important check on the exercise of judicial power by Indiana courts. Id. at 487.

15
Moreover, our courts generally avoid addressing constitutional questions if a case can be

resolved on other grounds. Girl Scouts of S. Ill. v. Vincennes Ind. Girls, Inc., 988 N.E.2d

250, 254 (Ind. 2013).

Here, Morales complains that the statutory procedure for appointing magistrates to the

St. Joseph Superior Court is an unconstitutional special law. Assuming arguendo that the

statute is unconstitutional, our review of the record does not indicate that Morales was

injured, because there is no indication in the record that the magistrates of the St. Joseph

Superior Court entered any order or judgment on her case. All of the orders provided to this

Court were signed by one of three judges: Senior Judges David Ready and J. Eric Smithburn,

and Superior Court Chief Judge Michael Scopelitis. Indeed, we note that Morales’s

challenge to the constitutionality of the statute in the guise of her motion to dismiss arose

only after the trial itself was conducted, but before judgment was rendered in the case.

Under the circumstances, Morales faced no injury from the statute’s provisions

concerning appointment of magistrates to the St. Joseph Superior Court. She accordingly

lacks standing to challenge the constitutionality of the statute’s provisions.

Judgment and Damages

We turn to the final issue Morales presents for our review, whether the small claims

court’s entry of judgment and assessment of damages against her was in error.

Small-claims court judgments are “subject to review as prescribed by relevant Indiana

rules and statutes.” S.C.R. 11(A). Pursuant to Trial Rule 52(A), facts determined in a bench

trial are subject to review for clear error. Vance v. Lozano, 981 N.E.2d 554, 557 (Ind. Ct.

16
App. 2012). We give due regard to the trial court’s opportunity to assess witness credibility,

which is especially important in the small-claims setting, “where trials are designed to

speedily dispense justice by applying substantive law between the parties in an informal

setting.” Id. That deference does not extend to rulings on matters of substantive law, which

we review de novo just as in appeals from courts of general jurisdiction. Id. at 557-58.

Each party bears the same burden of proof in a small-claims action as in a regular civil

action. S.C.R. 4(a); Vance, 981 N.E.2d at 558. A party seeking relief must bear the burden

of proof to demonstrate that it is entitled to the recovery it seeks. Vance, 981 N.E.2d at 558.

Upon appellate review, we consider the evidence in a light most favorable to the judgment,

together with the reasonable inferences that may be drawn therefrom. Id. We reverse only if

the evidence leads to but one conclusion and the trial court reached the opposite conclusion.

Id.

Morales raises several points in her challenge to the small claims court’s entry of

judgment against her. Several of these address information that Morales contends the

Housing Authority possessed. Morales claims that the Housing Authority disregarded this

information, and that the trial court should have admitted it into evidence and taken it into

account in its decision, specifically with regard to proper calculation of her rent. She also

contends that the trial court erred in accepting the Housing Authority’s calculation of

damages, that the late-charge schedule in the lease is a penalty clause that invalidates the

lease, and that the Housing Authority failed to mitigate its damages. We address each

contention in turn.

17
Evidence

Morales, as part of her argument on this issue, contends that the small claims court

erroneously excluded from evidence e-mails sent between her counsel and counsel for the

Housing Association. Those e-mails, Morales argues, provided the Housing Authority with

notice of Morales’s financial situation. Yet Morales has not provided us with copies of the

materials she argues the court erroneously excluded. Absent copies of the e-mails, we are

unable to review the trial court’s evidentiary rulings. Having failed to provide such

materials, Morales has waived any related claim of error. See Ind. Appellate Rule

46(A)(8)(a) (requiring that “[e]ach contention must be supported by citations to … the

Appendix or parts of the Record on Appeal relied upon”); Vandenburgh v. Vandenburgh,

916 N.E.2d 723, 730 (Ind. Ct. App. 2009) (noting that while “failure to comply with the

appellate rules does not necessarily result in waiver of an issue, it is appropriate where

noncompliance impedes our review”).

Morales also claims that the Indiana Rules of Professional Conduct, which bind

attorneys admitted to the practice of law in Indiana, precluded her from personally contacting

the Housing Authority to provide income verification that would allow her to obtain an

adjustment of her rent. This assertion is flatly incorrect.

The Rules provide:

In representing a client, a lawyer shall not communicate about the subject of
the representation with a person the lawyer knows to be represented by another
lawyer in the matter, unless the lawyer has the consent of the other lawyer or is
authorized by law or a court order.

18
Ind. Professional Conduct Rule 4.2 (emphasis added.) The language of the rule governs the

conduct of lawyers toward the clients of other attorneys; the rule does not bind the parties

themselves from direct communication with one another. The comments to the rule state as

much: “parties to a matter may communicate directly with each other, and a lawyer is not

prohibited from advising a client concerning a communication that the client is legally

entitled to make.” Prof. Cond. R. 4.2 comment 4. Morales was not precluded from

communicating directly with the Housing Authority concerning her financial situation for

purposes of adjusting her rent.

Calculation of Damages

Morales next argues that the Housing Authority’s calculation of damages was

incorrect, and accordingly the small claims court erred when it granted the Housing Authority

damages equivalent to the jurisdictional limit of $6,000. Morales rests this claim on various

grounds. We have already found no error associated with two of these grounds—the small

claims court’s purported error in excluding e-mail messages sent between the parties’ counsel

and the claimed inability of Morales to communicate personally with the Housing

Association.

At bottom, Morales rests the claim of improper calculation of rent on the claim that

the Housing Authority did not properly evaluate her income for purposes of adjusting her rent

during either the annual rent assessment process or during the course of the lease on the

residence. She argues that the Housing Authority had notice of her limited income as a result

of its receipt of her affidavit of indigence and motion to proceed in forma pauperis in a prior

19
case, and that the Housing Authority improperly disregarded that and other evidence of her

financial situation in setting her rent.

The lease provides:

A. Redetermination of Rent. On an annual basis, HASB [the Housing
Authority] shall determine whether the Resident is eligible for HASB
housing, whether the rental amount paid by the Resident under this
Lease should be increased, decreased, or remain the same, and whether
the size of the Dwelling Unit occupied by the Resident is appropriate to
the Resident’s needs…. The initial amount and subsequent rental
amount determinations shall remain in effect for the period between
annual re-determination of rent unless during such period:

***

(ii) The Resident requests a redetermination of rent due to a
decrease in family income or a change in other circumstances
and HASB grants such a request.

(Appellant’s App’x at 31.)

Further, the lease provides for a grievance procedure:

All disputes concerning the obligations of the Resident or HASB under this
Lease other than those involving violent or drug-related criminal activity or the
health, safety, or right to peaceful enjoyment of the premises by other
Residents or HASB employees shall be resolved in accordance with the HASB
Grievance Procedure which is in effect at the time such grievance or appeal
arises, and a copy of which is posted in the HASB central management office
and is incorporated in this Lease by reference.

(Appellant’s App’x at 43.)

Morales notes that the Brooke Amendment to the United States Housing Act, 42

U.S.C. § 1437 et seq., limits the portion of an individual’s income that may be assessed for

rent by a public housing authority. Morales further observes that pursuant to Wright v. City

of Roanoke Redevelop. & Housing Auth., 479 U.S. 418 (1987), residents in rental properties

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managed by the Housing Authority may pursue a claim against the housing authority under

42 U.S.C. § 1983 where the residents claim the housing authority acts contrary to the

requirements of the Brook Amendment with respect to the determination of rent. Id. at 429-

432.

Morales pursued such a claim here in her counterclaims, but the trial court ruled

against her. We conclude there was sufficient evidence to support the trial court’s decision.

Morales and Joann Watford (“Watford”), the Housing Authority’s property manager for

Morales’s residence, each testified that Morales met with the Housing Authority on July 31,

2012, and submitted materials for purposes of the annual rent redetermination process

provided for in the lease. Watford testified that, based upon the documents she received

from Morales, the monthly lease payment for Morales’s residence was $216 and would

increase to $274 in October 2012. Morales signed forms acknowledging the accuracy of the

income statements and the revised rental payments. And while Morales testified that she was

not employed consistently and had stopped receiving child support payments, Watford

testified that Morales did not dispute these amounts, that Morales had successfully requested

rent adjustments on three prior occasions, and that Morales did not submit any request for

reassessment of her lease payments after the July 31, 2012 redetermination.

To the extent Morales points to evidence that favors her position, including referring

to her petition to proceed in forma pauperis in another case, we decline her invitation to

reweigh evidence.

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Liquidated Damages

We now turn to Morale’s next argument, that the late-payment fees specified by the

lease are excessive liquidated damages and therefore invalid.

“A liquidated damages clause provides for the forfeiture of a stated sum of money

upon a breach of contract without proof of damages.” Dean V. Kruse Found., Inc. v. Gates,

973 N.E.2d 583, 591 (Ind. Ct. App. 2012), trans. denied. Such provisions are generally

enforceable when the damages arising from a breach of contract “would be uncertain and

difficult to ascertain.” Coffman v. Olson & Co., P.C., 906 N.E.2d 201, 208 (Ind. Ct. App.

2009), trans. denied.

However, Indiana courts will not enforce liquidated damages provisions that operate

as penalties. Corvee, Inc. v. French, 943 N.E.2d 844, 847 (Ind. Ct. App. 2011). Whether a

liquidated damages provision is valid is a question of law. Id. Even though damages may be

uncertain, to be enforceable “‘the stipulated sum must fairly be allowed as compensation for

the breach.’” Id. (quoting Olcott Int’l & Co., Inc. v. Micro Data Base Sys., Inc., 793 N.E.2d

1063, 1077 (Ind. Ct. App. 2003), trans. denied). “A party seeking to enforce a liquidated

damages clause need not prove actual damages, but may be required to show a correlation

between the liquidated damages and actual damages in order to assure that a sum charged

may be fairly attributed to the breach.” Id.

Here, Morales contends that the late fee scale set forth in the lease is an impermissible

liquidated damages provision. However, Morales’s brief develops no argument in this

regard, instead citing a few cases and making a bald claim of error. Failure to use cogent

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argumentation as required by our appellate rules results in waiver. App. R. 46(a)(8)(A);

Lyles v. State, 834 N.E.2d 1035, 1050 (Ind. Ct. App. 2005), trans. denied. Morales has

accordingly waived our review of this issue.

Mitigation

Finally, Morales contends that the Housing Authority did not properly mitigate

damages arising from her breach. The requirement that a party mitigate damages is a

common law duty independent of the terms of a contract, and where the non-breaching party

fails to mitigate damages, the breaching party is entitled to set off the amount of the damages.

Geller v. Kinney, 980 N.E.2d 390, 399 (Ind. Ct. App. 2012).

Here, Morales contends that the Housing Authority failed to reassess her rent in light

of her reduced income and petition to proceed in forma pauperis, incurring exorbitant

attorney fees when summary judgment was available, and rejecting an offer to pay rent into

escrow. As we noted above, Morales did not avail herself of the reassessment procedure as

she had in the past, was not barred from doing so, and did not contest the rent amount at the

time of her annual recertification in July 2012. As to the Housing Authority’s choice of

litigation strategy, we note that Morales successfully opposed the Housing Authority’s

application for immediate possession, asserted counterclaims, and on multiple occasions

sought to continue or postpone proceedings in the case. As to escrow payments, we note that

Morales proposed to pay an amount less than the face value of the rent already due, and there

is no evidence that Morales attempted to pay any rent subsequent to the motion to pay money

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into escrow. Accordingly, we find no basis upon which to conclude that Morales was

entitled to set off of damages assessed in this case.

Conclusion

We find no error in the small claims court’s denial of Morales’s motion to transfer the

case to the plenary docket. Morales lacked the requisite standing to challenge the

constitutionality of the statutory scheme for appointing magistrates to the St. Joseph Superior

Court. The small claims court did not err in entering judgment against Morales, or in

assessing damages against Morales.

Affirmed.

FRIEDLANDER, J., and KIRSCH, J., concur.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/2725335. Public record. Not legal advice.