Is anyone liable for child?s death at abandoned home?

Pat Murphy, The Daily Record Newswire

Is there anyone to sue when a child dies because of an unsafe condition on one of the millions of abandoned properties in the U.S.?

One state court just scratched mortgage holders and homeowners associations off the list of potential targets.

On May 31, 2008, five-year-old Sheyenne Jenkins was spending the day at her grandparents’ home in the Ian’s Pointe subdivision in Avon, Indiana. The grandparents lived two houses down from a home that had been abandoned five months earlier by its owner, Kermit Avedon. When he left, Avedon called HSBC Mortgage Services, which held the mortgage on his home, to inform the company that he was abandoning the property.

Sometime during her visit with her grandparents, Sheyenne wandered off and drowned in an in-ground pool on the Avedon property. Although the pool had a cover, it had collapsed into the pool because of rain water that had accumulated on top, creating the dangerous condition that would trap the little girl.

Sheyenne’s mother, Serena Erwin, hired lawyers to pursue a wrongful death suit. But Erwin’s lawyers faced the problem of finding viable defendants. Avedon had cancelled his homeowners insurance when he abandoned the property. Avedon himself had filed for bankruptcy.

Erwin’s lawyers ended up suing HSBC Mortgage Services and Ian’s Point Homeowners Association. According to Erwin’s lawsuit, both HSBC and the homeowners association were negligent because both entities had received complaints about the dangerous condition of the pool on the abandoned property, yet failed to take steps to eliminate the hazard.

An Indiana trial court found that the defendants had not breached a duty of care. Last week, the Indiana Court of Appeals affirmed the trial court’s grant of summary judgment.

It came down to basic premises liability law. Neither HSBC nor Ian’s Point were “possessors” of the Avedon property, so they owed no duty to those coming onto the premises.

Regarding HSBC, the appeals court pointed out that the mortgage holder had not even commenced foreclosure proceedings at the time of Sheyenne’s death:

Mother acknowledges that HSBC would not acquire legal ownership of the property until it was foreclosed upon, but she argues that “a mortgagee may be in possession of the mortgaged property notwithstanding the provisions of the mortgage or statute of frauds.” Even if we assume this to be true, still none of the cases cited by Mother establish that a mortgagor may unilaterally transform a mortgagee into a mortgagee in possession and transfer the mortgagor’s duties as possessor of the property.

Moreover, the court observed that, because Avedon had filed for bankruptcy, his former home had become an asset of his bankruptcy estate. In sum, Erwin didn’t have a case against HSBC:

While we understand Mother’s displeasure with the limbo in which untold numbers of vacant properties find themselves, the legislature is the place to assert her public policy arguments. On the current state of the law, a phone call such as Avedon’s does not automatically transform the mortgagee into the possessor of the property. Rather, the alleged subsequent possessor must take some action to occupy the land with intent to control it. Further, actions taken by a vendor/mortgagee to protect its financial investment, such as paying taxes and securing insurance, generally do not establish control over the property rising to the level of a possessor of the property.

Erwin fared no better in her claim against Ian’s Point. The court specifically rejected the notion that a duty of care arose from the homeowners association’s declaration of covenants, conditions and restrictions.

“[W]hile it is apparent that Avedon had violated a number of covenants, conditions, and restrictions, the [association] had no legal obligation pursuant to the Declaration to act upon the violations,” the court said.