RAMBEND REALTY CORP. v. BACKSTREETS BAND

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Docket Number

No. 3-1084A265.

Attorney(S)

Don G. Blackmond, John E. Doran, South Bend, for defendants-appellants. Anthony J. Iemma, Iemma Hughes, Elkhart, for plaintiffs-appellees.

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Smart Summary

Factual and Procedural Background

This action was brought by members of the musical group known as Backstreets Band to recover the value of stolen band instruments. On March 18, 1981, the band entered into a contract with Rambend Realty Corp., operator of a Ramada Inn in South Bend, Indiana, to perform in the Ramada lounge from June 1 through June 13, 1981, for $2300 and four rooms for the band members. The band arrived on the night of May 31, 1981, before their scheduled performances, and unloaded their equipment in the lounge with the assistance of the inn's food and beverage manager, who propped open the lounge door and turned on the lights. The bandleader requested the lounge be locked, but was told it would be secured after a kitchen employee left. The next morning, it was discovered that some of the band's equipment was missing, apparently stolen during the night.

Following a bench trial, judgment was entered in favor of the four band members claiming losses. Rambend Realty Corp. appealed the decision.

Legal Issues Presented

Whether the trial court erred in permitting the discovery depositions of two plaintiffs to be introduced into evidence in their absence.
Whether the trial court erred in admitting certain exhibits listing stolen instruments and their purchase prices over hearsay objections.
Whether the trial court erred in determining that a bailment relationship existed between the band and Rambend and that Rambend was negligent.
Whether the provisions of Indiana Code §§ 32-8-28-1 and 2, limiting innkeeper liability to guests, applied to the plaintiffs' claim.
Whether there was sufficient evidence to support the damage awards for the stolen equipment.

Arguments of the Parties

Appellant's Arguments (Rambend Realty Corp.)

The court erred in admitting the discovery depositions of plaintiffs John Stipe and Scott Longnecker in their absence, arguing they were not admissible under Trial Rule 32(A)(3)(e).
The court improperly admitted plaintiff's exhibits listing stolen instruments and their purchase prices over hearsay objections.
The court erred in finding that a bailment existed and that Rambend was negligent, contending that the statutory provisions limiting innkeeper liability to guests (IC 32-8-28-1 and 2) should apply.
The evidence was insufficient to establish the value of the missing equipment to support damage awards.

Appellees' Arguments (Backstreets Band)

The opinion does not contain a detailed account of the appellees' legal arguments beyond their claims and evidence supporting the loss and negligence findings.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Gates v. Rosenogle, 452 N.E.2d 467 (Ind. App. 1983)	Standard of review for admission of depositions under trial court discretion	Confirmed that admission or exclusion of depositions under TR 32(A)(3)(e) is within trial court discretion; no abuse found here.
Cooper v. Indiana Gas Water Co., 362 N.E.2d 191 (Ind. App. 1977)	Discretionary standard for admission of depositions	Supported the use of trial court discretion in admitting depositions.
Marriage of Lopp, 378 N.E.2d 414 (Ind. 1978)	Presumption that trial judge disregards incompetent evidence in bench trials	Supported presumption that trial judge disregards incompetent evidence, minimizing prejudice from deposition admission.
Weiss v. Weiner, 10 F.R.D. 387 (D.C. Md. 1950)	Interpretation of "procured" absence in deposition admissibility	Adopted the view that "procured" means collusive or unfair inducement to avoid trial testimony; no such procurement found here.
Richmond v. Brooks, 227 F.2d 490 (2d Cir. 1955)	Policy allowing use of depositions when witness absence is due to financial or practical hardship	Supported admission of depositions when witness absence is not procured and is due to legitimate reasons like financial hardship.
Stubbs v. Hook, 467 N.E.2d 29 (Ind. App. 1984)	Elements required to establish bailment	Applied to find sufficient evidence that bailment was created when instruments were placed in lounge and accepted by inn's manager.
Hainey v. Zink, 394 N.E.2d 238 (Ind. App. 1979)	Inference of bailee negligence when goods delivered in good condition are returned damaged or lost	Applied to infer negligence by Rambend for loss of band equipment and placed burden on Rambend to prove lack of negligence.
Spencer v. Glover, 412 N.E.2d 870 (Ind. App. 1980)	Supporting authority for bailment and negligence principles	Used as additional support for bailment negligence principles.
Floyd v. Jay Co. REMC, 405 N.E.2d 630 (Ind. App. 1980)	Standard of proof for amount of damages	Confirmed that less certainty is required to prove amount of loss than the fact of loss; uncertainty resolved against wrongdoer.
Charlie Stuart Oldsmobile, Inc. v. Smith, 357 N.E.2d 247 (Ind. App. 1976)	Damages uncertainty resolved against the wrongdoer on appeal	Supported affirmation of damage awards despite some uncertainty.
Nicholson's Mobile Home Sales, Inc. v. Schramm, 330 N.E.2d 785 (Ind. App. 1975)	Definition and scope of "guest" under innkeeper liability statutes	Used to distinguish that plaintiffs were not guests under the statute, as their presence was business-related, not as paying patrons.
King v. International Harvester Co., 181 S.E.2d 656 (Va. 1971)	Authority on deposition admissibility and witness absence	Referenced as contrary authority to some extent but court adopted the view favoring admissibility under TR 32(A)(3)(b).

Court's Reasoning and Analysis

The court first addressed the admissibility of the depositions of two plaintiffs who were absent at trial. It found that the trial court did not abuse its discretion in admitting the depositions under Indiana Trial Rule 32(A)(3), particularly subsection (b), as the absent witnesses were residents of Ohio pursuing their normal occupations and their absence was not procured by the party offering the depositions. The court adopted federal interpretations of "procured" absence and recognized practical considerations for admitting such evidence.

Regarding the hearsay objection to exhibits listing stolen instruments and their values, the court found no error, noting the exhibits were compiled at the request of the defendant's insurance company and were submitted as claims. The presumption that the trial court disregards incompetent evidence in a bench trial further mitigated any potential prejudice.

On the issue of bailment and negligence, the court rejected Rambend's argument that innkeeper liability statutes applied, reasoning that the band members were not "guests" under the statute since their presence was for business purposes, not as paying patrons. The court found sufficient evidence to conclude a bailment existed when the inn's manager allowed the band to place equipment in the lounge and indicated it would be secured. The court applied precedent establishing an inference of negligence when goods delivered in good condition are lost or damaged and noted evidence of security lapses supporting a finding of negligence by Rambend.

Finally, the court held that the evidence was sufficient to support the damage awards. It cited precedent that less certainty is required to prove the amount of loss than the fact of loss, and any uncertainty should be resolved against the wrongdoer. The court found the valuations of the missing instruments were adequately supported by evidence of purchase price, age, condition, replacement cost, and insurance adjuster testimony on depreciation.

The court declined to address the band's argument concerning the defendant CNA Insurance Company because the issue was not properly preserved for appeal.

Holding and Implications

The Court of Appeals of Indiana affirmed the trial court's judgment in favor of the plaintiffs.

The court upheld the admission of depositions in the absence of the witnesses, the admission of exhibits listing stolen instruments, the finding of a bailment relationship, and the determination of negligence and damages against Rambend Realty Corp. The decision directly affects the parties by affirming the damage awards and liability findings without establishing new legal precedent beyond applying existing principles. No broader implications or changes to the law were announced.

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RAMBEND REALTY CORP., ET AL., DEFENDANTS-APPELLANTS, v. BACKSTREETS BAND, ET AL., PLAINTIFFS-APPELLEES.

GARRARD, Judge.

This action was brought to recover the value of stolen band instruments. The appellees are all members of a musical group known as Backstreets Band. On March 18, 1981, the band entered into an engagement contract with Rambend Realty Corp. (Rambend) which operates a Ramada Inn at South Bend, Indiana. By the terms of the contract the band was to perform in the Ramada lounge from 9:30 p.m. until 2:00 a.m. on June 1 through June 13, 1981. According to the contract the band was to be paid $2300 and its members were to be furnished four rooms at the inn for the duration of their engagement.

The band arrived at the inn about 11:00 p.m. on May 31, 1981, the evening before they were scheduled to begin performing. They had played there before so the band members unloaded their equipment from their vans and took it to the stage area as they had done in the past. They asked the food and beverage manager, Mr. Beal, to let them into the lounge and to turn on the lights. Beal propped open the lounge door to allow the band to bring in the equipment and turned up the lights.

By midnight or 12:30 a.m. the band had moved its instruments and equipment to the bandstand in the lounge. Burch, the bandleader, asked Beal to lock up the lounge and was told that at the time someone was working back in the kitchen but the doors would be secured when the woman left. The band members then retired for the night.

The next morning it was discovered that during the night someone had broken into the liquor cabinet in the bar. Then the band discovered some of its equipment was missing.

Following a bench trial judgment was entered in favor of the four band members who claimed losses.

Rambend's first contention on appeal is that the court erred in permitting the discovery depositions of two of the plaintiffs, John Stipe and Scott Longnecker, to be introduced into evidence in their absence.

Indiana Rules of Procedure, Trial Rule 32(A)(3) provides that the deposition of a witness, whether or not a party, may be used by any party for any purpose if the court finds:

"(b) that the witness is outside the state, unless it appears that the absence of the witness was procured by the party offering the deposition; or

* * * * * *

(e) upon application and notice, that such exceptional circumstances exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open court, to allow the deposition to be used;. . . ."

Rambend principally argues that the depositions were not properly admissible under subsection (e). It appears that admission or exclusion of depositions on this ground is committed to the trial court's discretion. Thus, an abuse of discretion must be shown in order to establish reversible error. Gates v. Rosenogle (1983), Ind. App., 452 N.E.2d 467; Cooper v. Indiana Gas Water Co. (1977), 173 Ind. App. 47, 362 N.E.2d 191.

In this case trial was to the court, so the appellees are aided by the presumption that the trial judge will disregard any incompetent evidence. See, e.g., Marriage of Lopp (1978), 268 Ind. 690, 378 N.E.2d 414, cert. denied Lopp v. Lopp (1979), 439 U.S. 1116, 99 S.Ct. 1023, 59 L.Ed.2d 76.

The depositions were offered only after the other plaintiffs had testified in person and been subject to cross examination. Moreover, it appears that the significance of the deposition testimony was to present some direct evidence concerning the stolen equipment of that deponent.

It was explained that Stipe and Longnecker were in Ohio and had a band engagement to play the night of May 30, 1984. (Trial commenced May 29 and concluded on May 30). The court was urged to allow the depositions because the size of their claims did not justify them flying back in order to appear at trial.

Stipe recovered $284.80; Longnecker $644.15.

We find no abuse of discretion in admission of the depositions. Furthermore, we find that TR 32(A)(3)(b) provides an alternative ground for their admissibility.

Here it is clear that both these plaintiffs were Ohio residents and were in Ohio at the time of trial in pursuit of their normal occupation.

Our rule tracks the federal rule with the substitution of our out-of-state jurisdictional limitation for the 100 mile limit contained in Federal Rule 32.

Construing the qualifying phrase "unless it appears that the absence of the witness was procured by the party offering the deposition," the court in Weiss v. Weiner (D.C.Md. 1950), 10 F.R.D. 387, 389 said:

"The word `procured' in this context would seem to imply that a party had collusively instigated or induced a witness to remove himself from being subjected to a subpoena to testify at the trial, or at least had unfairly and for an improper purpose deliberately absented himself shortly before the trial from the jurisdiction so he could not be examined."

Moreover, as Judge Charles Clark, the draftsman of the rules, explained in Richmond v. Brooks (2d Cir. 1955), 227 F.2d 490, 492:

"The tactical burden assumed by the plaintiff in proceeding to trial in her [own] absence . . . is likely to limit frequent resort to this course; but a suitor not able to afford a New York trip should not be denied all remedy here."

Despite some authority to the contrary, this is the view espoused by Wright Miller, and the one we adopt. The court was entitled to look at the surrounding circumstances and admit the depositions pursuant to TR 32(A)(3)(b).

See, e.g., King v. International Harvester Co. (1971), 212 Va. 78, 181 S.E.2d 656.

8 Wright Miller, Federal Practice Procedure, Section 2147.

Rambend next complains of the introduction of plaintiff's exhibits 7-11 over its hearsay objection. The exhibits listed the stolen instruments and their purchase prices.

Burch testified that the lists were compiled at the request of defendant CNA Insurance Company and were submitted to it. The court indicated it would allow the exhibits as the claims submitted. We find no error in this. Moreover, as previously indicated, the trial court will be presumed to disregard any incompetent evidence.

Rambend's next assignment asserts that the court erred in determining that a bailment was created and that Rambend was negligent. Included is the contention that the court should have applied the provisions of IC 32-8-28-1 and 2 to plaintiffs' claim.

These statutes limit the liability of innkeepers to their guests. IC 32-8-28-6 provides a "`Guest' within the meaning of this act shall include transient guest, permanent guest, tenant, lodger or boarder."

We believe the term "guest" as used in the context of the statute ordinarily refers to one who is a paying patron of the inn or hotel. Although this may not always be the case, the term does denote one who is staying at the inn for his own purposes as opposed to the business purposes of the inn. Cf. Nicholson's Mobile Home Sales, Inc. v. Schramm (1975), 164 Ind. App. 598, 330 N.E.2d 785.

More importantly, it is apparent that the band instruments and equipment were not brought onto the premises in consequence of any guest or quasi-guest capacity of the members of the band. The equipment was there for the performance of the contractual services engaged by Rambend. It was not taken to the bandmembers' rooms, or left in their vehicles. Under the evidence the court could correctly conclude that the claim was not governed by IC 32-8-28-1 et seq.

Moreover, and contrary to Rambend's assertion, the evidence sustained the finding of a bailment. In Stubbs v. Hook (1984), Ind. App., 467 N.E.2d 29, 31 the court noted that to create a bailment the property must be delivered into the bailee's exclusive possession and must be accepted by the bailee. The evidence before the court was sufficient to support as a reasonable inference that this is what occurred when the manager opened the lounge area and permitted the band to place its instruments and equipment there signifying that he would secure the area.

In Hainey v. Zink (1979), 182 Ind. App. 192, 394 N.E.2d 238, 241, the court stated that when goods were delivered in good condition and were returned in damaged condition, an inference arises that the damage was caused through the fault or neglect of the bailee. See also Spencer v. Glover (1980), Ind. App., 412 N.E.2d 870. Here, of course, the goods were not returned at all. Furthermore, the court could have found negligence on the part of Rambend. The police investigation disclosed that none of the locked outer doors had been tampered with. The only unlocked door to the lounge was the entrance from the lobby which was about 30 feet from the hotel desk where a clerk was supposedly on duty throughout the night. In addition it appears that a security guard employed by Rambend was absent from the premises for about 45 minutes.

The bailment was one for mutual benefit. The benefit to Rambend was in the performance of the artists' contract. See 8 Am.Jur.2d, Bailments, Section 24, pp. 755-57.

Under Hainey the burden was upon Rambend to establish its lack of negligence. We cannot say the court erred in concluding it failed to do so.

Finally, Rambend argues there was insufficient evidence of value of the missing equipment to support the damage awards. Again we must disagree.

As the court pointed out in Floyd v. Jay Co. REMC (1980), Ind. App., 405 N.E.2d 630, 633, less certainty is required to prove the amount of a loss than the fact that some loss occurred. In addition, on appeal uncertainty as to the exact amount of damages will be resolved against the wrongdoer. Charlie Stuart Oldsmobile, Inc. v. Smith (1976), 171 Ind. App. 315, 357 N.E.2d 247, 252.

Here the missing items were specifically established. There was evidence of the price paid for each item, its age and condition, and its replacement cost at the time of trial. In addition there was testimony from an insurance adjuster detailing depreciation factors the insurance company would apply on such equipment. It appears that the judgment entered by the court was within the evidence and was adequately supported by the evidence.

In their answer brief the band asserts the court erred in finding for the defendant CNA Insurance Company in their separate claim against it. We are unable to reach this contention since no motion to correct errors or statement in opposition to Rambend's motion was filed to preserve the question for appeal and we are affirming the judgment as to the appellant. TR 59(E) and (G).

Affirmed.

STATON, P.J., and HOFFMAN, J., concur.