On August 2, Dan Maltbie and John Burke, students at Indiana University, entered into a one-year written lease with Breezewood Management Company for the rental of an apartment in an older house in Bloomington, Indiana. When they moved in, they discovered numerous defects: rotting porch floorboards, broken and loose windows, an inoperable front door lock, leaks in the plumbing, a back door that would not close, a missing bathroom door, inadequate water pressure, falling plaster, exposed wiring, and a malfunctioning toilet. Later they discovered a leaking roof, cockroach infestation, the absence of heat and hot water, more leaks in the plumbing, and pigeons in the attic. The city of Bloomington had a minimum housing code in effect at that time. 

Code enforcement officers inspected the apartment and found over 50 violations, 11 of which were “life safety” violations, defined as conditions that might be severely “hazardous to the health of the occupant.” These conditions remained largely uncorrected after notice by the code officers and further complaints by Maltbie and Burke. On May 3 of the following year, Maltbie vacated the apartment, notified Breezewood, and refused to pay any further rent. Breezewood agreed to let Burke remain and pay half the rate of the originally agreed-upon rent. Breezewood then filed suit against Maltbie and Burke for the balance due under the original rental contract plus a number of additional charges. Maltbie and Burke each filed counterclaims against Breezewood, claiming damages and abatement of the rent for breach of the implied warranty of habitability. Was there an implied warranty of habitability in the lease of the property that was breached?