Indiana courts have recognized the contractual nature of leases and the applicability of the law of contracts to leases. The construction of a written contract is a question of law. When interpreting a contract, a reviewing court's paramount goal is to ascertain and effectuate the intent of the parties. That requires the contract to be read as a whole, and the language construed so as not to render any words, phrases, or terms ineffective or meaningless. Where the terms of a contract are clear and unambiguous, a reviewing court will not construe the contract or look at extrinsic evidence, but will apply the contractual provisions.
The tenant executed a lease later assigned to the landlord. Under its terms, the landlord had to maintain the leased premises in good order, condition, and repair. If the landlord breached the lease, the tenant could seek specified relief, but it could not terminate the lease or withhold rent it owed. A few months later, a major water intrusion occurred. The tenant vacated the premises and stopped paying rent. The landlord sued the tenant. The trial court entered judgment for the tenant and awarded damages to it for wrongful eviction.
Did the exclusive-remedy provision of the lease bar the tenant from asserting that it was evicted by acts or omissions of the Landlord?
The exclusive-remedy provision limited only the the tenant's ability to "terminate this Lease or withhold, setoff or abate any rent due thereunder." Upon the occurrence of eviction, either actual or constructive, it is the lessor's act or omission that ends the obligation to pay rent, not the lessee. Therefore, since the trial court's findings that the tenant had been wrongfully evicted were not clearly erroneously, the court held that it was the Landlord's own act or omission that resulted in extinguishing the future rent payment obligations. Furthermore, it was concluded that (1) the exclusive-remedy provision of the Lease did not bar the tenant from asserting a wrongful eviction defense; (2) the trial court's findings that the tenant had been both constructively evicted and actually evicted were not clearly erroneous; and (3) the provision of the Lease defining the time to sue did not bar the tenant from asserting wrongful eviction as a defense or bringing counterclaims when the Landlord initiated the action.