Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 1 of 27



### MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

A TTORNEY S FOR A PPELLANT Curtis T. Hill, Jr. Attorney General of Indiana Benjamin M .L. Jones Deputy Attorney General Indianapolis, Indiana A TTORNEY S FOR A PPELLEE Stephen R. Snyder Randall L. Morgan Snyder Morgan Federoff & Kuchmay LLP Syracuse, Indiana



### I N T H E 

# COURT OF APPEALS OF INDIANA

Indiana Department of Natural Resources , Appellant

- Defendant,

v.


### Webster Lake Conservation Association, Inc. , Appellee

- Plaintiff , September 3, 2020 Court of Appeals Ca se No. 19A

- PL

- 2249 Appeal from the Kosci usko Circuit Court The Honorable Michael W. Reed, Judge Trial Court Cause No. 43C01

- 1902

- PL

- 11

Robb , Judge
.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 2 of 27



# Case Summary and Issue

[1] In 1996, Webster Lake Conservation Association, Inc. ( the “ Association ” ) , owner of a water control facility that was built to maintain the lake level of Webster Lake

— a n Indiana public freshwater lake

— entered into an agreement with the Indiana Department of Natural Resources (“DNR”) for the general maintenance , reconstruction , a nd repair of the water control facility loca ted on the l ake. A dispute arose between the parties as to DNR’s responsibility for the

recons t ruction and repair of the water control facility , which led to t he Association fil ing a complaint against DNR

. The complaint sought a declaratory judgment as to the rights and obligations of DNR under the agreement

. Following a hearing and additional briefing on the matter, t he trial

court entered a declaratory judgment in favor of the Association , finding that
th e agreement wa s a valid and binding agreement betwee n the parties. DNR now appeals, arguing that the trial court erred in enter ing declaratory judgment in favor of the Association

. Concluding the trial court did not err , we affirm

.



# Facts and Procedural H istory

[2] Webster Lake is a public freshwater lake located in Kosciusko County

. The legal lake level for Webster Lake was established in the 1950s. The Association , a corporation that was organized in 1950, is made up of the individuals living around the lake and owns the water control facility that dam s the l ake (the “ Dam”)

. The Dam is controlled by a gated outlet structure which requires periodic operation of the gates to maintain the lake at its lega l l yCourt of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 3 of 27

established level. T he Dam is nearly 200 years o ld and likely originated as a grist mill

.

[3] On April 11, 1996, DNR entered into an agreement (the “1996 Agreement”)
with the Association

. John Simpson, then director of the Division of Water for DNR, executed the 1996 Agreement on behalf of the DNR

. 1 The 1996
A greement provides, in relevant part, as follows:
THEREFORE, it is mutually agreed that:

1. The Association has the responsibility for the general maintenance of the outlet control structure t o maintain, as near as possible, the legally established level o f Webster Lake. The responsibility for reconstruction o r repair o f the outlet control structure shall remain with the Department o f Natural Resources, State of Indiana

.

2. The Association has the sole responsibility o f maintaining Webster Lake as near as possible t o the legally established average normal level in compliance w ith the Department’s direction and guidance by:

a. Opening and closing the gates o f the primary (eastern) control structure only according t o the immediate conditions t o maintain the level of the lake at [the legally established level ]

. b. Keeping , at al l times, the secondary (western) control structure closed, chained and locked, t o be

1 A similar agreement was executed in 1993, but that agreement is not at issue in this proceeding.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 4 of 27 used as an operable structure only during an emergency and with prior authorization from the Department. Keys for the lock w ill be provided t o the operator of the structu re and the Division of Water, Department of Natural Resources.
c. Opening and closing the gate of the secondary (western) control structure, with prior authorization from the Department, at leas t once annually t o keep the structure’s gate from seizing.

d. Keeping on file with the Department at all times a current roster o f the names, addresses and phone numbers o f the designated operator and at least two alternate operators.
Appellant’s Appendix, Volume 2 at 11 (emphasis added)

.

[4] On October 30, 2009, DNR performed a visual inspection of the Dam . In its inspection report, the DNR rated parts of the Dam as being in “ good” or “acceptable” condition , while other p art s were rated “deficient [.]” Id. at 82

- 84.
T he overall con dition of the Dam was fou nd to be “Conditionally Poor [ , ]” and
DNR recommended that the Association ’s “professional engineer , experienced in dam design and construction , ” evaluate the condition of the Dam and “ direct repairs/replacement as needed .” Id. at 84. 2 DNR further recommended that
the Dam “ be brought up to current dam desig n standards .” Id.

2 It is unclear from the record who , if anyone, served as the Association’s professional engineer.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 5 of 27

[5] In 2011 and 2012, DNR performed extensive rehabilitation work on the D am

— for example, DNR rebuilt portions of spillway 3 retaining walls, demolished a deteriorate d fish ladder, and replaced portions of the catwalk and gates. 4 In 2013, DNR “completed a $420,000 repair project to the control structure spillway features” of the Dam

. 5 Id. at 121.

[6] On October 12, 2017, DNR performed another visual inspection of the D am and issued its inspection report on March 21 , 2018

. While p arts of the D am were rated as being in “acceptable” condition, many parts were found to be in

“ deficient ” or “poor ” condition

. Id. at 69

- 72. For ex ample:

• The crest of the D am , which had two homes built “in/on [ the D]am [,] ” wa s in “poor” condition

. Id. at 69.

• The downstream slope of the Dam was found to be deficient because the re appeared to be a few crayfish or crawdad burrows that “if interconnected, could present a problem in a high water seepage situation.” Id. at 70.

3 A “spillway” i s “a passage for surplus water to run over or around an obstruction (such as a dam) [.]” M ERRIAM

- W EBSTER

. C OM , http ://www.merriam

- webster.com/dictionary/ spillway [https://perma.cc/H87U

- R527]

. 4 It is unclear from the record whether the Association asked DNR to perform the repairs or DNR undertook the repairs based upon the findings of the 2009 inspection report.

5 It is unclear from the record when DN R began the se repairs.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 6 of 27

• The principal and auxiliary spillways were found to be deficient due to deterioration and inadequate freeboard 6 between the lake and the top of the D am.

[7] DNR recommended the following to improve the safety of the Dam :

• Clear trees and/or brush from the entire Dam and within twenty

- five feet of all concrete structures.

• Employ an experienced engineer to (among other things) prepare plans and specifications for an adequate spillway

“ [ f ] or overtopping protection ” and “ evaluate the need for current dam design standards and recommended repairs.”

• D evelop a maintenance plan to address “voids under the primary spillway” and the “erosion and deterioration at the end of the primary spillway apron” within the next two years.

• Develop studies and plan s to address the inadequate spillway system , and, “ [a] t a min imum,” remove the two homes built into the embankment between the spillways.

Id. at 71.

6 “Freeboard” is defined as “[t]he distance between [the] normal water level and the top of a structure or mass that rises out of the water, such as a buoy, dam, or ice floe. ” T HE F REE DICTIONARY

. COM , http://www.thefreedictionary.com/freeboard [https://perm a.cc/3526

- BTZ5]

.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 7 of 27

[8] DNR also recommended reclassifying the Dam from a “significant hazard” dam to a “high hazard” dam. 7 Id. at 72. DNR made this recommendation
b ased on modeling tools and emergency planning exercises that showed that “multiple residential and business structures [were] at high risk” in the event of

a “catastrophic breach of the [D ] am.” Id.

[9] Regarding whether previous ly recommend ed maintenance, repairs, and upgrades to the Dam had been performed , DNR checked both the “yes” and “no” boxes in the 2017 inspection report and then provided the following:

The 2011

- 2012 project did not address all of the recommendations from the previous visual inspection. P art of the “all” would include removal of the 2 homes between the east and west spillways. The embankment is the responsibility of the Webster Lake Association. However, many items were addressed with the recent rehab.

Id. at 72 (emphasis added)

.

[10] On August 27, 2018, the Association , by counsel, sent a letter to DNR demanding that DNR undertake the repairs identified in the 2017 inspection report in accordance with the 1996 Agreement. Specifically, the Association

wrote:

7 A “significant hazard” dam is one that “ the failure of which may damage isolated homes and highways, or cause the temporary interruption of public utility services.” Appellant’s App., Vol. 2 at 74. A “ high hazard ” dam is one that “the failure of which may cause the loss of life and serious damage to homes, industrial and commercial buildings, public utilities, major highways, or railroads.” Id. ; Ind. Code § 14

- 27

- 7.5

- 8(b)(1).Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 8 of 27

It appears that a dispute has arisen in regard t o the parties ’ obligations under the 1996 Agreement. The [Dam] is in need o f significant repair and the DNR appears reluctant to perform its obligations. In light of the significant issues with the structure and the need for immediate attention, I have been directed by the Association to contact you to obtain a position statement from [DNR]

. If a prompt response indicating that [DNR] will undertake necessary repairs is not received, I have been directed by the Association t o file the e nclosed complaint against [DNR] asking the Court to enforce the 1996 Agreement.

Id. at 120. On September 5, DNR sent a response letter to the Association’s
counsel reject ing the Association’s demand and den ying any obligation “to address or fund the resolution or rehabilitation” of the D am. Id. at 121. The letter provides in relevant part:
DNR has strived to work in cooperation with the

. . . Association for the operation and maint e n ance of the lake outlet wor ks, and committed substantial staff time to assist the Association in recruiting and training operators, as well as facilitating emergency response p l anning activities. In fact, DNR staff were participating with the Association in emergency response train ing , o n August 27 th , 2018

— the day you drafted and sent your le tter.

The [1996 A] greement is operational l y focused and contains no project c ommitments or obligations owing to DNR . I n addition, DNR is not obligated by the [1996 A] greement to ad dress or fund the resolution or rehabilitation of dam safety deficiencies that develop as this non - State owned dam structu r e deteriorates with age

.

Id.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 9 of 27

[11] On February 7, 2019, t he Association filed a complaint against DNR , seeking a declaratory judgment regardin g the obligations of DNR under the 1996 Agreement and requiring DNR “to undertake reconstruction and repair” of the
D am. Id. at 10

. On March 1, DNR filed a m otion to d ismiss. A fter a hearing on the matter, the trial c ourt directed the Association to amend its complaint. On April 1, the Association filed its amended complaint.

[12] On May 13, DNR filed its answer to the amended complaint , raising the following affirmative defenses :

15. The Amended Complaint fails t o state an actionable c lai m for relief under the Indiana Constitution.
16. The state agency is immune from liability under the terms of Indiana Code subsections 34

- 13

- 3

- 3(1), (2), (7) (11) and (21).

17. Further, [the Association] in this case has failed t o show any action o n their part t o mitigate the need for any repairs.

18. Plaintiff failed t o join parties necessary for a just adjudication.
19. Relief sought in this Amended Complaint is not appropriate for a declaratory judgment.

Id. at 125. DNR separately filed a n Indiana Trial Rule 12(C) m otion for j udgment on the p leadings. On May 28, the Association filed a motion for judgment on the pleadings and a separate response to DNR’s Trial Rule 12(C) motion , seeking a declaratory judgment

.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 10 of 27

[13] A hearin g on the cross - m otion s for judgment on the pleadings was held on July 18, 2019, during which the trial c ourt heard arguments on the issue s the parties raised in their respective motions and responses, as well as new arguments raised by DNR concerning wheth er the 1996 Agreement was a valid contract. DNR specifically argued that the 1996 Agreement lacked consideration and the DNR representative who executed the agreement lacked the authority to do so

. The trial court noted that DNR did not raise the se arguments in its motion for judgment on the pleadings but allowed DNR to continue presenting the arguments at the hearing. The Association maintained that the only issue before the court was whether a valid contract existed betwee n the partie s and asked the trial court for a declaratory judgment that the 1996 Agreement was valid.

[14] At the conclusion of the h earing, the trial c ourt directed the parties to file p ost

argument b rief

s addressing all of the arguments raised at the hearing. On August 27, the trial court issued its final order, which reads in relevant part:

The [Association] argued for declaratory judgment at the hearing held July 18, 2019, indicating the only issue for the Court pending under the Amended Complaint is the va lidity of the [1996 A greement ] as a contract. The Court having considered the argument of counsel, having reviewed the Post

- Argument Briefs, having reviewed the Court ’ s file, and being duly advised in the premises, NOW FINDS that declaratory judgment should be entered in favor of the [Association]

.
IT IS, THEREFORE, ORDERED AND DECLARED that the [1996] Agreement between [the Association ] and [DNR]

. . . is a valid and binding agreement/contract.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 11 of 27

Appealed Order at 1

- 2. DNR now appeals.



# Discussion and Decision
I. Standard of Review

[15] DNR contends that the trial court erred by entering declaratory judgment in
favor of the Association. Pursuant to the Indiana Uniform Declaratory Judgment Act (the “Act”), declaratory judgments have the “force and effect of a final judgment [ , ] ” Ind. Code § 34

- 14

- 1

- 1, and are therefore reviewed in the same manner as other judgments. Because the proceedings before the trial court in this case were based on pleadings and briefs (that is, no evidentiary hearing was held) , a de novo standard of review applies. See Title Servs., LLC v. Womacks , 848 N.E.2d 1151, 1154 (Ind. Ct. App. 2006) (applying de novo standard of review where trial court ruled based on a paper record). In applying the standard, the trial court ’ s order should be affirmed on any legal theory the evidence of record supports. See GKN Co. v. Magness , 744 N.E.2d 397, 401 (Ind. 2001).


## II. Declaratory Judgment

[16] Declaratory judgments are governed by the Act , which in relevant part provides:
Any person

. . . whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, orCourt of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 12 of 27

franchise and obtain a declaration of rights, status , or other l egal relations thereunder.

Ind. Code § 34

- 14

- 1

- 2. The Act is remedial, and its purpose i s to “ settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations; and is to be liberally construed and administered.” I nd. Code § 34

- 14

- 1

- 12. Thus, the purpose of a declaratory judgment action is to qui et and stabilize legal relations and thereby provide a remedy in a case or controversy when there is still an opportunity for peaceable judicial settlement. Volkswagenwerk, A.G. v. Watson , 181 Ind. App. 155, 159, 390 N.E.2d 1082 , 1084

- 85 (1979).

[17] When co nsidering the appropriateness of declaratory judgment , the test to be applied is : (1) whether the issuance of a declaratory judgment will effectively solve the problem, (2) whether it will serve a useful purpose, and (3) whether or not another remedy is mo re effective or efficient. Dible v. City of Lafayette , 713 N.E.2d 269, 272 (Ind. 1999). “The determinative factor is whether the declaratory action will result in a just and more expeditious and economical determination of the entire controversy.” Id. (quoting Volkswagenwerk,
A.G. , 181 Ind. App. at 160, 390 N.E.2d at 108 5). The use of a dec laratory judgment is discretionary with the trial court and is usually unnecessary where a full and adequate remedy is already provided by another form of action. Id. However, pursuant to Indiana Trial Rule 57, ‘“[t]he existence of another adequate remed y does not preclude a judgment for declaratory relief in cases where it is appropriate.’” Id. (quoting Ind. Trial Rule 57).Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 13 of 27

[18] DNR contends that the trial court’s declaratory judgment in favor of the
Association , determining that the 1996 Agreement is a val id contract, should be reversed for a number of reasons

. First, DNR claims that the 1996 Agreement
i s not a valid contract because : (1) it was not supported by consideration, and (2) the director of the DNR’s Division of Water , the signor of the 1996 Agreement, lacked authority to act on behalf of DNR. DNR also asserts that assuming the 1996 Agreement i s a valid contract, DNR terminated the contract in 2018 when it denied any obligation to perform under the contract. We address each of DNR’s argument s in turn.



## III

. Validity of the 1996 Agreement
A. Lack of Consideration

[19] DNR claims that the 1996 Agreement is invalid because it lacks consideration. The Assoc i ation correctly points out that failure of consideration must be specifically pled as an affirmative defense under Indiana Trial Rule 8(C). 8 The Association states, and DNR does not refute, that DNR did not raise the

8 Ind iana Trial Rule 8(C) reads in r elevant part : “ Affirmative defenses

. A responsive pleading shall set forth affirmatively and carry the burden of proving: accord and satisfaction, arbitration and award, discharge in bankruptcy, duress, estoppel, failure of consideration , fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, waiver, lack of jurisdiction over the subject

- matter, lack of jurisdiction over the person, improper venue, insufficiency of p rocess or service of process, the same action pending in another state court of this state, and any other matter constituting an avoidance, matter of abatement, or affirmative defense. A party required to affirmatively plead any matters

. . . shall have t he burden of proving such matters. . . .” (Emphasis added.)Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 14 of 27

affirmative defense of lack of consideration in its answer to the Association’s
amended complaint

.


### 1
. Waiver of Affirmative Defense

[20] Generally, an affirmative defense must be submitted in a responsive pleading at the earliest possible opportunity. Ind. Trial Rule 8(C); see C ity of So uth Bend v. Dollahan , 918 N.E.2d 343, 349 (Ind. Ct. App. 2009) (observing that Trial Rule 8(C) “provides that a party seeking to raise an affirmative defense must specifically plead said defense in its responsive pleading”), trans. denied

. “While [T.R.] 8(C) appears to impose an absolute duty to raise an affirmative defense
in a responsive pleading, Indiana courts have modified the mandatory nature of the rule by interpreting it in conjunction with [T.R.] 15(B) [

. ] ” Elkhart Cty. Farm
Bureau Co

- op. A ss ’

n, Inc. v. Hochstetler

, 418 N.E.2d 280, 282 (Ind. Ct. App. 1981). Trial Rule 15(B) provides: “ When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been rai sed in the pleadings. ”
Either party may timely demand strict adherence to the predetermined route (pleadings) or, if deviation is permitted, the time necessary to prepare to meet the new issue. But when the trial has ended without objection as to the co urse it took, the evidence then controls.

Hochstetler , 418 N.E.2d at 282 (quoting Indianapolis Transit Sys., Inc. v. Williams , 148 Ind. App. 649, 658, 269 N.E.2d 543, 550 (1971)).Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 15 of 27

[21] While our courts have not expressly extended this modification to declaratory judgments, l ater decisions of this c ourt have extended this to matters raised on summary judgment, and have identified the critical issue to be “‘not whether
the defendant could have raised his affirmative defense earlier, ’ but ‘whether the
defendant ’ s failure to raise the affirmative defense earlier prejudiced the plaintiff

. ’ ” Dollahan , 918 N.E.2d at 350 (quoting Borne by Borne v. Nw. Allen Cty. Sch. Corp. , 532 N.E.2d 1196, 1199 (Ind. Ct. App. 1989), trans. denied

. ) “[A] plaintiff must affirmatively show prejudice to his case before [a belatedly raised affirmative defense ] can be rejected.” Id. (allowing city to assert governmental immunity defense first raised in its motion for summary judgment )

. We now examine whether the Association was prejudiced by DNR belated ly raising the lack of consideration defense.

[22] DNR raised the affirmative defense of lack of consideration for the first time at the hearing held on July 18, 2019, where the trial court heard argument s on the parties’ pleadings. T he Association did not object when DNR raised the lack of consideration defense. Nevertheless, t he trial court recognized that DNR was raising the defense for the first time ; and, a t the conclusion of the hearing, directed the parties to file post

- argument briefs , thereby affording the Association a full and fair opportunity to address the defense. Furthermore , the Association has not shown how it was pr ejudiced by DNR’s failure to affirmatively raise the defense in its answer to the Association’s amended complaint. We, t herefore , decline to find that DNR has waived the lack ofCourt of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 16 of 27

consideration issue

. We now decide whether the 1996 Agreement was supported by consideration.



### 2. Consideration

[23] As s tated above, the 1996 Agreement provides that the Association

• “has the responsibility for the general maintenance of the outlet control structure to maintain, as near as possible, the legally established level of Webster Lake [ ; ] ”

• is required to operate the gates of the primary control structure so as to maintain the lake level of Webster Lake ;

• must keep the secondary control structure closed , ch ained, and locked except in an emergency and with prior authorization from DNR;

• must provide t he keys to the lock to DNR;

• is required to at least once annually and with the prior authorization from the DNR, open and close the gates of the secondary control str ucture to keep the gates from seizing ;

• must keep on file with DNR “at all times a current roster of the names, addresses and phone numbers” of the designated operator of the Dam “and at least two alternate operators.”
Appellant’s App ., Vol. 2 at 11. D N R has “[t]he responsibility for reconstruction or repair of the [Dam] .” Id.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 17 of 27

[24] DNR argues that the 1996 Agreement was not valid because of lack of consideration. According to DNR, the 1996 Agreement “ [i] s not supported by consideration because the Association only agreed to do what it was already obligated to do by law.” Brief of Appellant at 12. In support of its argument,
DNR turns our attention to the statutes governing the regulation of dams.
DNR notes that under Indiana Code section 14

- 27

- 7. 5

- 7 , the Association , as the owner of the Dam, i s required to “maintain and keep the structure in the state of repair and operating condition” required by “[t] he exercise of prudence [ , ]” “[d] ue regard for life and property [,]” and “[t] he application of sou nd and accepted technical principle s

. ” Indiana Code section 14

- 27

- 7.5

- 14 provides in relevant part that “[t] he owner of a structure shall

. . . (3) Furnish upon request the plans, specifications, operating and maintenance data, or other information that is pertinent to the structure. ” Under Indiana Code section 14

- 27

- 7.5

- 8 (a)(1)

- (2) , DNR has “ jurisdiction and supervision over the maintenance and repair of structures in, on, or along the rivers, streams, and lakes of Indiana ”
and “ shall e xercise care to see that the structures are maintained in a good and sufficient state of repair and operating condition [.]”

[25] Thus, DNR maintains that under the 1996 Agreement , the Association merely promised to perform pre

- existing obligations. Because the Association owned the Dam, and “was already under a legal obligation to maintain and operate” the Dam and provide information as to who would operat e the Dam, the Association’s “ promise to perform its pre - existing legal obligation was not valid consid eration [and] the 1996 Agreement was merely an unenforceableCourt of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 18 of 27

gratuitous act by DNR. ” Br

. of Appellant at 13

- 14 ( citation and internal quotations omitted)

. We disagree.

[26] T he concept of consideration evolved from the law of contracts

. Monarch Beverage Co. , Inc. v. Ind. Dep ’ t of State Revenue , 589 N.E.2d 1209, 1212 (Ind. Tax
Ct. 1992). And in order to have a legally binding contract there must be generally an offer, acceptance, and consideration. Id. “To constitute consideration, there must b e a benefit accruing to the promisor or a detriment to the promise e .” Paint Shuttle, Inc. v. Cont ’ l Cas. Co. , 733 N.E.2d 513, 523 (Ind.
Ct. App. 2000) (quoting A & S Corp. v. Midwest Commerce Banking Co. , 525 N.E.2d 1290, 1292 (Ind. Ct. App. 1988)), trans. denied

. A benefit is a legal right given to the promisor to which the promisor would not otherwise be entitled.
DiMizio v. Romo , 756 N.E.2d 1018, 1023 (Ind. Ct. App. 2001), trans. denied

. A detriment on the other hand is a legal right the promisee has forborne. Id. “The doing of an act by one at the request of another which may be a detrimental inconvenience, however slight, to the party doing it or may be a benefit, however slight, to the party at whose request it is performed, is legal consideration for a promise by such requesting party.” Harrison

– Floyd Farm
Bureau Co

- op. Ass ’

n v. Reed , 546 N.E.2d 855, 857 (Ind. Ct. App. 1989). In the end, “consideration

— no matter what its form

— consists of a bargained

- for exchange.” Horsesh oe Hammond

. LLC v. Ind. Dep’t of State Revenue , 865 N.E.2d 725, 729 (Ind. Tax Ct. 2007) , trans. denied

. The adequacy of the consideration is

not relevant. See Harrison

– Floyd Farm Bureau Co

- op
. , 546 N.E.2d at 857.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 19 of 27

[27] “[I]t is fundamental that a contract is unenforceable if it fails to obligate the parties to do anything [

. ] ” Licocci v. Cardinal Assocs. , Inc. , 445 N.E.2d 556, 559 (Ind. 1983). Long ago, o ur s upreme c ourt established that a promise to do what one “is already bound to do by law or by contract ” is insufficient consideration.
Ritenour v. Mathews , 42 Ind. 7, 14 (1873)

.

[28] Under the 1996 Agreement, the Association not only agreed to maintain the
Dam and maintain Webster Lake at its legal level, but agreed to do so in a very specific manner, that is, by opening and closing the primary gate , keeping the secondary gate locked (except for opening the gate once each year with prior authorization from DNR ), and providing the keys to the lock to DNR. The Association also agreed to provide to DNR, “ at all times [,]” contact information for the designated and the alternate operators of the Dam. Appellant’s App., Vol. 2 at 11. In exchange, DNR agreed to reconstruct or repair the Dam. However slight the inco nvenience or benefit, v iewing the 1996 Agreement as a whole, we cannot say that the Association was not subjected to a detrimental inconvenience or that DNR did not receive a benefit of the bargain. Thus, the 1996 Agreement was not invalid on the basis of lack of consideration

.


### B . Authority to Execute the Agreement

[29] Next, DNR contends that the 1996 Agreement is not valid because the director of DNR’s Division of Water (“ Director Simpson ”) did not have the authority to execute the agreement on behalf of DNR

. The Association counters that DNR’s argument is waived because DNR (1) failed to affirmative ly plead lackCourt of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 20 of 27

of authority as a defense in its answer to the Association’s amended complaint as required by Indiana Trial Rule 8(C) ; and (2) failed to properly deny the execution of the agreement pursuant to Indiana Trial Rule 9.2. We conclude
that DNR’s argument is not waived under either T rial R ule but find that the
tri al court properly presumed th e execution of the agreement

.



### 1
. Waive r of Affirmative Defense

[30] DNR seeks to invalidate the 1996 Agreement on the ground that Director Simpson lacked the authority to execute the agreement

. As such, it seeks to avoid the agree ment

. A matter of avoidance must be specifically pled as an affirmative defense under Indiana Trial Rule 8(C)

. The Association asserts that DNR has waived the defense for failure to plead it affirmatively under T rial
R ule 8(C). DNR maintains, however, that the defense is not waived because
the Association has failed to show that it was prejudiced by the belated pleading of the defense. We agree with DNR

.

[31] A s with the affirmative defense of lack of consideration, the trial court recognized that the lack of authority defense was not pled in DNR’s answer to the Association’s amended complaint but , nevertheless, allowed DNR to raise the argument at the hearing and then directed the parties to file post

- argument briefs. T he Association had the opportunity to respond to the defense and, thus, was not prejudiced by the late pleading of the defense. The lack of authority a rgument is not waived under T rial R ule 8(C).Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 21 of 27 

### 2. Waiver Under Ind

iana Trial Rule 9.2

[32] Indiana Trial Rule 9

. 2 governs the pleading and proof of written instruments. It provides in relevant part:
(A) When I nstrument or C opy, or an Affidavit of Debt S hall be F iled. When any pleading allowed by these rules is founded on a written instrument, the original, or a copy thereof, shall be included in or filed with the pleading. Such instrument, whether copied in the pleadings or not, shall be taken as part of the record.

. . . (B) Proof of E xecution of I nstruments F iled with P leadings. When a pleading is founded on a written instrument and the instrument or a copy thereof is included in or filed with the pleading, execution of such instrument, indorsement, or assignment shall be deemed to be established and the instrument, if otherwise admissible, shall be deemed admitted into evidence in the action without proving its execution unless execution be denied under oath in the responsive pleading or by an affidavit filed ther ewith

. . . . (C) Oath or A ffidavit of D enial of E xecution M ust be M ade U pon P ersonal K

nowledge. An oath or affidavit denying execution as required and made under subdivision (B) of this rule shall be made upon the personal knowledge of the person making it, and, if general in form (Rule 11(B)), shall be deemed to be made upon such personal knowledge.
(D) Burden of P roving E xecution. The ultimate burden of proving the execution of a written instrument is upon the party claiming its validity, but e xecution is presumed. “Presumed” means that the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which would support a finding of its nonexistence

.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 22 of 27

* * *
(F) Effect of N on - C ompliance

– Amendments. Non

co mpliance with the provisions of this rule requiring a written instrument

. . . to be included with the pleading may be raised by the first responsive pleading or prior motion of a party. The court, in its sound discretion, may order compliance, the reason s for non

- compliance to be added to the pleadings, or allow the action to continue without further pleading. Amendments to correct the omission of a required written instrument, an assignment or indorsement thereof, [ or ] t he omission of a denial of the execution of a written instrument as permitted or required by this rule,

. . . shall be governed by Rule 15 [.]

* * *
(H) “Execution” of a W ritten I nstrument. “Execution” of a written instrument includes the following requir ements:
(1) That a signature was made with express, implied or apparent authority and was not forged;

. . . .

T.R. 9.2(A)

- (H)

. Indiana Trial Rule 15 provides in relevant part: “ When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. ”
T.R. 15(B).

[33] Trial Rule 9

. 2 (B) permits the execution of written instruments, which are the foundation of a pleading but which may be used as evidence in the pleader ’ s case, to be established and challenged at the pleading stage of a lawsuit. Master Copy & Reprod. Ctr., Inc. v. Copyrite, Inc. , 750 N.E.2d 824, 829 (Ind. Ct. App.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 23 of 27

2001) , trans. denied

. The rule does not conclusively establish th e genuineness of

a signature. See Moehlenkamp v. Shatz , 396 N.E.2d 433, 438 (Ind. Ct. App. 1979). Rather, the purpose of the provision is to eliminate the technicalities of formally introducing into evidence matters that are not disputed by either party.
Master Copy & Reprod. Ctr., Inc. , 750 N.E.2d at 83 0

. While execution of a written instrument is presumed, the ultimate burden of proving execution is upon the party claiming its validity. T.R. 9

. 2 (D). “‘ Presumed ’ means that the
trier of fact must find the existence of the fact presumed unless and until evi dence is introduced which would support a finding of its nonexistence.” Id.

[34] Here, the Association ’s amended complaint is founded on a written instrument, and the Association complied with Trial Rule 9

. 2 (A) by filing a copy of the 1996 Agreement with its amended complaint. See Mechanics Laundry & Supply,
Inc. v. Wilder Oil Co., Inc. , 596 N.E.2d 248, 253 (Ind. Ct. App. 1992), trans. denied

. Having done so, the agreement became a part of the record, and
execution of the agreement was deemed established pur suant to Trial Rule
9 .2(B). See id. Unless DNR denied execution of the 1996 Agreement under oath in a responsive pleading or by affidavit filed therewith, the agreement was deemed established without proving its execution. See id. Pursuant to Trial
Rul e 9

. 2 (D), the trial court “must have presumed execution unless and until [ DNR ] introduced evidence supporting a finding otherwise.” See id. However,
DNR did not follow the pleading procedures set forth in Trial Rule 9

. 2 (B) , and its answer to the Association’s amended complaint did not include a denial ofCourt of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 24 of 27

execution within the meaning of the rule

. Thus, DNR’s execution of the agreement was deemed “established.” See T.R. 9.2(B).

[35] W e note that DNR’s failure to comply with the procedures under Trial Rule 9.2(B) would not have preclude d the trial court from allowing DNR to present evidence that Director Simpson lacked the authority to execute the 1996 Agreement

. See

, e.g., Master Copy & Reprod. Ctr., Inc. , 750 N.E.2d at 83 1 ( Appellant’s failure to comply with Trial Rule 9

. 2 (B) procedures did not preclude trial court from allowing Appellant to present evidence at trial that the altered agreement was a unilateral alteration )

. A bsent a denial of execution under oath as described in Trial Rule 9

. 2 (B), execution of the 1996 Agreement was simply presumed, and the agreement was deemed established without proof of execution by the Association

. This presumption could still have be en

r efuted by any evidence that DNR might have present ed

. See id. However , DNR presented no evidence to refute the presumption.

[36] Based on the foregoing, we decline to find that this issue is waived under Indiana Trial Rule 9.2 . However, w e conclude that we need not add ress whether Director Simpson had the authority to execute the 1996 Agreement because execution of the a greement was deemed established . T he trial court properly presumed th e agreement was deemed established , and the agreement is not invalid on the basis of lack of a uthority to execute the agreement.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 25 of 27



## IV. Termination of the 1996 Agreement

[37] Finally, DNR contends that assuming the 1996 Agreement is a vali d contract, the trial court still erred when it declared the agr eement a valid and binding agreement

. DNR maintains that the agreement required continuous performance without a time limit and, thus, could be terminated at will by either party. According to DNR, it exercised its right to terminate the agreement in 201 8 when it sent its letter to the Association disclaiming any responsibility to perform under the agreement and because it did so, the agreement could not be declared valid and binding

. The Association maintains that the agreement remains in effect and binding upon the parties

.

[38] It is ordinary law that a contract containing no specific termination date is terminable at will and that where the parties fix no time for the performance or discharge of obligations created by the contract , they are assumed to have had
in mind a reasonable time

. City of E ast Chicago, Ind

. v. E ast Chicago Second Century, Inc. , 908 N.E.2d 611, 623 (Ind. 2009) ; House of Crane Inc. v. H. Fendrich, Inc., 146 Ind. App. 478, 482 , 256 N.E.2d 578 , 579 (1970). Here, however, w e cannot say that the period of time from April 1996 to present is not a reasonable period of time for an agreement concerning the maintenance, reconstruction, and repair of a dam

.

[39] Furthermore, we note that a party to an at

- will contract cannot avoid its liability to the other party, once that party has performed, sim ply by terminating the

contract. See W

right Mfg. Corp. v. Scott , 172 Ind. App. 154, 161, 360 N.E.2d 2 , 7Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 26 of 27

(1977) ( finding that under an agreement, Appellee was entitled to a 5% commission on orders he secured for Appellant before he was terminated by Appellant because “[Appellee] , before he was terminated

. . . , obtained from various customers blank purchase orders [that ran] through the [following]
year [] ”). Without deciding whether the Association performed as obligated under the agreement or DNR had an accrued liability under the agreement , we conclude that DNR did no t terminate the agreement . The letter that DNR sent to the Association stated that “ DNR is not obligated by the [1996 A] greement to ad dress or fund the resolution or rehabilitation of dam safety deficiencies that develop as this non - State owned dam structure deteriorates with age

. ” Appellant’s App., Vol. 2 at 121. The letter challenged DNR’s obligation under the agreement but did not expres s DNR’s desire to terminate the agreement. The trial court did not err in declaring the 1996 Agreement a valid and binding agreement.


# Conclusion

[40] We conclude that DNR’s argument s regarding the validity of the 1996 Agreement were not waived under either I ndiana Trial Rule s 8(C) or 9.2. T he trial court properly determined that the a greement was supported by consideration, and properly presumed the agreement was deemed established

. And, t he a greement was not terminated by DNR. Th us , the trial court did not err in entering declaratory judgment in f av or of the Association , declaring the 1996 Agreement to be a valid and binding agreement

.Court of Appeals of Indiana | Memorandum Decision 19A

- PL

- 2249 | September 3, 2020 Page 27 of 27

[41] Affirmed.

May, J., and Vaidik, J., concur

.