Pursuant to Ind. Appellate Rule 65(D), this

Memorandum Decision shall not be regarded as precedent or cited before any court except fo r the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT S : ATTORNEYS FOR APPELLEE S : KEVIN R. PATMORE DAVID L. JONES Patmore Law Office ROBERT W. ROCK Santa Claus, Indiana Jones

– Wallace, LLC Evansville, Indiana


## IN THE COURT OF APPEALS OF INDIANA

THE CARL KAETZEL TRUST U/ T/D/ ) December 10, 1977, ) and ) THE ROBERTA KAETZEL TRUST U/T/D ) December 10, 1977, ) and ) CARL KAETZEL, ROBERTA KAETZEL, ) TIMOTHY KAETZE L and JILL KAETZEL, ) ) No. 74A01

- 1201

- PL

- 36 Appellant s - Plaintiffs, ) ) vs. ) ) JON MARC K AETZEL and BEVERLY K. ) KAETZEL, ) ) Appellee s - Defendants. )

APPEAL FROM THE SPENCER CIRCUIT COURT The Honorable David O. Kelley , Special Judge Cause No. 74C01

- 0609

- PL

- 4252 July 27, 2012 MEMORANDUM DECISION

– NOT FOR PUBLICATION BAKER, Judge App ellants

- plaintiffs, the C arl Kaetzel Trust and the Roberta Kaetzel Trust, Carl, Roberta, Timothy, and Jill Kaetzel (collectively, the plaintiffs), appeal the trial court’s judgment entered in favor of appellees

- defendants, Jon and Beverly Kaetzel (collecti vely, the Kaetzels), on their claims for rescission of a deed and constructive fraud that related
to certain real property

. Specifically, the plaintiffs claim that the trial court erred when it enter ed judgment for the Kaetzels on the ir claim for rescissio n and constructive fraud

. The K aetzels cross

appeal, claiming that the trial court erred when it did not enter specific findings of fact and conclusions of law as to other issues in the case, namely with regard to their counterclaim that they brought agai nst Timothy Kaetzel regarding his nonpayment of property taxes and insurance premiums on the property. The Kaetzels contend that Timothy’s failure to pay should have extinguish ed his life estate on the property. We conclude that the trial court properl y determined, pursuant to remand from this
court, that the plaintiffs were not entitled to the remedy of rescission and that judgment was properly entered for the Kaetzel s with regard to the other counts that were set forth in the complaint. However, we r eject the Kaetzels ’ claim on cross

- appeal that Timothy, as the holder of a life estate in the property, should have been ejected from the premises in these circumstances.3 FACTS Carl and Roberta have been married for sixty

- one years and have three adult children: Jon, Timothy, and Jill. In 1977, Carl and Roberta executed identical trusts , each conveying their undivided one

- half interest in 280 acres of real estate to the “ Carl Kaetzel and Roberta Kaetzel Family Trusts ” (collectively, the trusts) . The p roperty consisted of the “ Home Place , ” 120 acres ; the Schmidt Farm , forty acres ; the Heilman
Farm , eighty acres; and the Byers Farm , forty acres (collectively the “p roperty”). Tr. p. 6, 10, 17. The Home Place contains two residences, one inhabited by Ca rl and Roberta, and another by Tim othy. The Home Place also consists of several outbuildings, lakes , gardens, lawns , and cropland. The t rusts named Carl, Roberta, and Jon as Trustees. In 1987, the t rusts were amended and specifically g ranted Jon an o ption to purchase the Home Place and the Heilman Farm for $150,000, or for $100,000 if coal had been removed from the land while Carl and Roberta were still living. Carl and Roberta wanted their farm to remain in the Kaetzel family. From the creation of the t rusts until the conveyance that is at issue here, Carl and Roberta maintained complete control over all of their personal an d real property, including the t rusts. S ometime in 2003, Carl purchased a Case 1570 tractor, which he intended to use
in assi sting with the farming operations. When Carl developed some health problems, Jon continued to use the tractor. However, Carl demanded the return of the tractor at some point. Jon returned the tractor, but the transmission had allegedly been damaged.
Jon ’s understanding about his use of the tractor was that if it required repair s , he should4

be responsible for paying th ose costs . The purported estimate to fix the transmission during Jon’ s use of the tractor amounted to $10,000. In late 2003, the Kaetzels had property taken by the State in a condemnation action and wished to reinvest the proceeds of the condemnation for tax purposes. Jon approached Carl and inquire d whether he might be interested in selling any of the real

es tate owned by the t rusts, and Carl informed Jon that he would sell him the Home Place property for $150,000. The parties agreed that the sale of the Home Place would be subject to life estates such that Carl, Roberta and Tim othy could “go on living like [they] always did.” Id. at 19, 61, 95, 108, 110. The Kaetzels accepted the offer, and Jon had his attorney prepare a warranty d eed to accomplish the transfer

. On February 20, 2004, Jon delivered the d eed and mortgage to his parent’ s hom e for them to review. Carl stated that there were no problems with the deed. On February 21, 2004, Carl a nd Roberta, as trustees , sold the p roperty to the Kaetzels for $150,000 and executed a warranty deed conveying the p roperty to them. Neither Carl nor Roberta recall ed reading the d eed prior to executing the document, and they did not consult with their other children or legal counsel before executing it. In actuality, the deed conveys the Home Place, the Schmitt Farm, the Byers Farm and the
Heilman Farm to the Kaetzels from the t rusts, and rese rved a life estate in favor of
Tim othy for his residence and twelve feet surrounding the structure, which Jon had surveyed at the advice of his attorney.5

Tim othy was also required to pay taxes on the home, provide insurance on the residence in an amount “in the sole discretion of” the Kaetzels , and maintain the home “in a condition satisfactory to” them. Tr. p. 177

- 78. Jon did not inform Carl or Roberta th at he had the boundaries of Tim othy’s life es tate surveyed, or that Tim othy’s life estate was limi ted as described in the deed. The d eed also grants Carl and Roberta a separate life estate only “for their residence and its appurtenances.” Ex. F. When t he deed was signed, the Kaetzel s wrote a check for $86,000 to Carl and
Roberta. Payment was accepte d , and the money was deposited in their personal checking
account. Fourteen months following the sale of the p roperty, Jon tendered the unpaid balance in the amount of $64,000 on April 1, 2005, which was the due date of the mortgage . Carl and Roberta als o accepted that payment and deposited those funds into their personal checking account. Carl and Roberta claimed that they sustained d amages because they d id not like the way that Jon started treating the family a fter he took possession of the p roperty. Supposedly, Jon “quit speaking to” his par ents. Tr. p. 113. When Carl stopped receiving rental checks from a tenant that resided on the Schmitt farm, he discovered the d eed that he and Roberta had executed contained properties in addition to the Home
P lace. Jon informed Carl that, with regard to t he Home Place, the life estate “only included the house, garage and the lawn on the west side of the driveway

. ” Tr. p. 26. Jon also explained that the animals Carl owned would be required to stay in this par ticular

area . At some point, Jon established various rules that he required to be followed6

because Tim othy had “clearly overstepped [his] bounds

. ” Ex. M. In fact, Jon thre atened
t o prevent Tim othy from reaching his residence by way of the only access ove r which
Tim othy had no life estate interest

. Tr. p. 168

. Jon dug up some of the flowers and tore up the yard, moved all of Carl’ s tools from the shop barn into the rain, and threatened to “get rid of” all of the animals that Carl owned . Jon stacked rou nd ba les of hay in a wall around Tim othy’s home, threatened to build fencing to prevent Carl from fishing in the pond, and contacted the police when he believed that Carl, Roberta , or Tim othy “got out of line , ” such as for “cussing” at Jon for tearing up t he lawn with a skid loader , and engaging in other “ terroristic ” activities that Carl could not recall. Tr. p. 35.
W hen Carl and Roberta discovered the discrepancy between what they had intended to convey and wha t the d eed actually conveyed, they initially took no action because they wanted peace in the family. After the police had been called numerous times, and Jon had threatened to prevent access to the property and talked about getting “rid of” the pets, tr. p. 172

- 73, Carl attempted to have Jon agree to allow them to continue to use the Home Place in a manner that was consistent with their initial understanding. However, Jon refused to do so. On September 18, 20 06, the Plaintiffs filed a six

- count c omplaint against the Kaetzels, alleging breach of tru st (Count I), rescission of the deed (Count II), constructive fraud that relat ed to the d eed (Count III), the return of the tractor, (Count IV), repayment of monies that had been loaned (Count V), and t respass (Count VI).7

On November 17, 2008, the Kaetzel s filed a two count c ounterclaim that sought judgment against Tim othy for the payment of delinquent property taxes and to extinguish his cond itional life estate in the property

. Following a bench trial, the trial c ourt issued findings of fact, conclusions of law , and judgment, on November 13, 2009, finding that Jon had committed a breach of trust by purchasing trust property and that he was indebted to Carl and Roberta in the amount of $26,000. The trial court set aside the d eed and issued judgment on C ou nt V in the amount of the indebtedness. Jon appealed the trial court’s decision, and on June 30, 2010, we issued a memorandum d ecision, reversing the trial court’s judgment that previously found the deed to be void and instr ucted the trial court to enter judgment in favor of the Kaetzels on the breach of trust claim. Kaetzel v. The Carl Kaetzel Trust, et. al. , No. 74A01

- 1001

- PL

- 30, slip op. at 11 (Ind. Ct. App. June 30, 2010)

. We also ordered the trial court on remand to “enter findings and conclusions on all remaining claims, if any , ” and to calculate the prejudgment interest from September 18, 2006, owed with regard to the loan that was alleged in Count V. Id. at 12

- 13

. W e determined that the terms of the trust provided Jon with an option to purchase trust property , and because the terms of the trust specifically authorized the transaction, no breach of trust occurred. Id. at 9. We concluded that Jon was a bona fide purchaser because he purchased the property in good faith, for valuable consideratio n, and without notice of outstanding rights of others . Moreover, we found that there was “no other reason to invalidate the sale and purcha se of the property.” Id. at 11

.8

On December 27, 2011, the trial court issued amended findings of fact, conclusio ns of law, and j udgment . It determined that because we held on appeal that Jon was a “bona fide purchaser” that insulates him from committing a breach of trust in a
trustee

- beneficiary relationship, our conclusions precluded the trial court from making

an y findings with respect to the rescission and constructive fraud claims set forth in
Counts I, II , and III. Thus, judgment was issued in favor o f the Kaetzels with regard to those common law claims.
As for Count IV , the claim that concerned the bailment of the tractor, the trial
court made additional findings of fact and conclusions of law, and d ismissed the claim because the t ractor had been returned during the pendency of this matter . Although the tractor was alleged to have been damaged, it was deter mined that “ Carl and Roberta did not allege any special damages related to the tractor and they cannot attempt to prove and/or recover alleged damages not alleged in the Complaint even though the evidence suggested the tractor was returned in a state of di srepair. ” Appellants’ App. p. 24. Therefore, the trial court declared Count IV “moot ” and it was dismissed. Id. at 26. As to Count V, the trial court found that the Kaetzels owed Carl the sum of $26,000 plus prejudgment interest at the statutory rate of eight percent to be calculated from the date that the complaint was filed . Moreover, the trial court determined that post

- judgment interest should be calculated at the statutory rate of eight percent starting from the date of the judgment , and that inter est should not be compounded.9

T he trial court next determined that the life estate to the “residence and its appurtenances” reserved in the deed essentially was a nonexclusive license to use only the residence and “lands directly surrounding the house, a s well as the roadway to the home and gardening areas,” so long as they did not interfere with the Kaetzels’ use of the property. Id. at 27. Finally, it was concluded that
7. [The Kaetzels] are granted judgment against Timothy . . . on their countercla im in the sum of . . . $2,397.15 plus post

- judgment interest at the statutory rate of eight percent to begin on the date of said Judgment and until such sum is paid and satisfied. Appellants’ App. p. 27. The p laintiffs now appeal , and the Kaetzels cros s appeal

. DISCUSSION AND DECISION
I. Standard of Review When the trial court enters findings of fact and conclusions of law, we appl y a
two

- tiered standard of review. City of South Bend v. Dollahan , 918 N.E.2d 343, 349 (Ind. Ct. App. 2009)

. First, we mu st determine whether the evidence supports the findings; and, second, whether the findings support the judgment. Id. We will not reweigh the evidence or assess the credibility of witnesses, but instead will consider only the evidence most favorable to th e judgment. Id. A trial court’ s findings and conclusions will only be set aside if they are clearly erroneous

— that is , if the record contains no facts or inferences to support them. Hardy v. Hardy , 910 N.E.2d 851, 856 (Ind. Ct. App. 2009). A judgment i s clearly erroneous when a review of the record leaves us with a firm convictio n that a mistake has been made. Fraternal Order of Police, Evansville Lodge10

No. 73 v. City of Evansville , 940 N.E.2d 314, 318 (Ind. Ct. App. 2010), trans. denied

. Finally, we will apply a de novo standard of review to conclusions of law. Johnson v. Johnson , 920 N.E.2d 253, 255

- 56 (Ind. 2010). II. The Plaintiffs’ Claims
A. Rescission of the Deed and Constructive Fraud The plaintiffs argue that the trial court should have set aside the warranty deed. Specifically, the plaintiffs maintain that the trial court made improper findings that Jon was a bona fide purchaser and that the deed was not void. In addressing this contention, we initially observe that the law of the case doct rine forbids the relitigation of issue s that have been resolved by an appellate court. Dutchme n Mfg., Inc. v. Reynolds , 891 N.E.2d 1074, 1082

- 83 (Ind. Ct. App. 2008). More particularly, “all issues decided directly or by implication in a prior decision a re binding in all further portions of the same case.” Id. In this case, the p laintiffs’ request for rescission was based upon Carl and Roberta’ s breach of trust and fraud theories. Tr. p. 37, 114. The y based the rescission claim upon the theory they we re “ unaware ” o f the terms and content of the warranty d eed. Id. at 114

- 15. Also, in the a ppelle e/cross

- appellants’ brief, the petition for rehearing, and the petition to t ransfer that was filed in the initial appeal, the p laintiffs specifically raised an d consistently argued for relief pursuant to their rescission and constructive fraud theories.11

We clearly decided, as a matter of law, that there was no “reason to invalidate the sale and purchase of the Property” and that the “ Deed is not void.” There i s no other reasonable construction of our initial opinion. Th us, the holding is the law of th e case and not subject to re

- argument and re

- litigation

. Dutchme n Mfg., Inc. , 891 N.E.2d at
1082

- 83. As a result, we reject the p laintiffs’ requests to set asid e the warranty d eed at this juncture and affirm the trial court’s judgment as to Counts I

- III.

B. Dismissal of Count IV

— Damages to the Tractor The plaintiffs next contend that the trial court erred in dismissing Count IV of the complaint, which relate d to the alleged damages to the tractor. The plaintiffs contend that the dismissal was improper because they did not and could not have discovered the damages until after it was returned. The evidence in this case shows that Carl purchased the tractor to help farm and for his son to use on the farm. The arrangement was not a bailment because the tractor was not in Jon’s exclusive possession. Rather, the evidence established that the tractor was meant for both of their uses. See Norris Auto

. Serv

. v. Me lton , 526 N.E.2d 1023, 1025 (Ind. Ct. App. 1988) (observing that a bailment is created when the bailor delivers his personal property into the exclusive possession of the bailee). Also, even assuming that C arl had a valid legal claim and could seek damag es, he failed to carry his burden in this regard. Damages must be proven with reasonable certainty. Noble Romans, Inc. v. Ward , 760 N.E.2d 1132, 1140 (Ind. Ct. App. 2002). Carl testified that his tractor would no longer operate in “ low range. ” Tr. p. 3 8. But Carl12

admitted that he drove the tractor home from Jon’ s and allowed a neighbor, who was interested in buying the tractor, to test drive the tractor when it was claimed by the interested buyer that it would no longer operate in first gear. Carl p resented no evidence of the model year, the fair market value of the tractor, or an estimate from a mechanic to repair the tractor. In short, Carl speculated that the repair costs might be “ around $10,000 , ” because Timothy had a similar, but smaller,
trac tor that cost around $7,000 to overhau l nearly ten years ago. Id. at 39. In our view, Carl’ s self

- serving testimony and speculation about what the cost might be , failed to satisfy h is burden of proof regarding the alleged damages to the
tractor. See Nob le Romans , 760 N.E.2d at 1140 ( holding that damages may not be awarded on the mere basis of conjecture or speculation); see also Marathon Oil Co. v. Collins , 744 N.E.2d 474, 482 (Ind. Ct. App. 2001) ( observing that evidence of damages must be sufficient to allow the trier of fact to estimate the amount with a reasonable degree of certainty and exactness). For this additional reason, we conclude that the trial court properly entered judgment for the Kaetzels with regard to Count IV of the complaint.
C. Tr espass The p laintiffs argue that the trial court erred in concluding that the life estate reserved in the deed was only a limited, nonexclusive and conditional right to use some of the property at issue. The plaintiffs argue that “the trial court’s own f inding that Jon and Beverly have exercised rights in derogation to Carl and Robert’s life estate13

unarguably constitutes a trespass

. . . and that the dismissal of this count is “plain error.” Appellants’ Br. p. 22.
In Count VI of their Complaint, the Pla intiffs alleged that “Carl’s and Robert’ s [sic] residence includes numerous barns, sheds and outbuildings, a garden and other appurtenances , which Jon has claim ed as his property.” Appellants’ App. p. 34. Notwithstanding this allegation, the undisputed ev idence at trial was that the parties agreed that Jon has not taken any action to infringe or intervene with Carl and Roberta’ s continued use of their life estate. Tr. p. 44

- 46, 115

- 16, 122

- 26, 180, 206. The trial court’s findings of f

act also demonstrate that the p laintiffs continue to use their property as they traditionally had. See Appellants’ App. p. 20. Therefore, the trial court reasonably concluded that no trespass had occurred. Indeed, the trial court, in its findings, recognized t he establish ed rule that an action for trespass to real estate cannot be maintained for an invasion of a right

- of

- way or an
easement. State ex rel. Green v. Gibson Circuit Court , 246 Ind. 446, 449, 206 N.E.2d 135, 137 (1965). Here, the easement permits Jon to pass o ver areas of the life estate

— the “mixed use area”

— for purposes of farming activities, and permits Carl and Roberta to continue to use the appurtenant area as they have , provided they do not interfere with the farming operation. And it has been held that i f an individual has a fair and reasonable belief that they have a right to be on the property of another, then that person is not guilty of trespass. Olsen v. State , 663 N.E.2d 1194, 1196 (Ind. Ct. App. 1996)

. For all of these14

reasons, we affirm the tri al court’s judgment in favor of the Kaetzels with regard to the trespass count. III. Cross

- Appeal

— Ruling With Regard to the Kaetzels’ Counter

- Claim Finally, we address the Kaetzels’ cross - appeal, where they claim that the trial
court failed to properly rule on their counterclaim as to the validity of Timothy’s life estate in the property. T he Kaetzels contend that because Timothy failed to pay the taxes and insurance as required by the terms of his life estate , his interest in the property was terminat ed by operation of law. In addressing this issue, we agree with the Kaetzels’ proposition that a conditional life estate terminates upon either the death of the grantee or upon the happening of the condition or contingency that limits the life estate. S ims v. Gay , 109 Ind. 501, 9 N.E. 120, 122 (1886). However, as the plaintiffs point out, no one was aware that the life estate retained for Timothy in the deed included only a few feet around his home, with no access or ability to use buildings appur tenant to his home, despite Jon’s assurance to his parents that the deed included language p ermit ting Carl, Roberta and Tim othy to live on the Home Place as they “had always lived. ” Tr. p. 108. Indeed, only Jon was aware that a survey had been performed , and T im othy did not know that a d eed had even been executed by his parents.
Tim othy does not dispute that Jon , in fact, made a property tax and insurance payment on the life estate property after he failed to do so. Likewise, the plaintiffs are aware that due to the recordation of the d eed , they are presumed to have constructive15

notice of the contents of it, despite the fact that no one other tha n Jon and his legal counsel wer e aware of the contents of the d eed when it was executed. Although the Kaetzels mainta in that the Sims case compels Tim othy ’s ejectment from the property , we note that Sims does not even involve the disposition of a life estate

. Rather, it was determined in that case that an estate in land granted to a surviving spouse is limited to the pe riod of her widowhood, and our Supreme Court’s holding was that remarriage terminates an estate which is limited in such a fashion. In these circumstances, we cannot say that the minor violation of the condition of the life estate in this instance should r esult in the forfeiture of Timothy’s interest. More specifically, our courts have repeatedly determined that “forfeitures are generally disfavored by the law,” even where the remedy of forfeiture is specifically agre ed upon and required by parties’ contra cts and default is clear. Rather, the law favors the award of damages proportionate to the damages actually resulting from the non

- payment, non

performance, or non

- enjoyment

. Skendzel v. Marshall , 301 N.E.2d 641, 644 (Ind. 1973). Indeed, we have previ ously considered the propriety of applying a forfeiture clause of a contract by considering the factors set forth in Collins v. McKinney , 871 N.E.2d 363 (Ind. Ct. App. 2007) : (A) the extent to which the injured party will be deprived of the benefit which h e reasonably expected;
(B) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;16

(C) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(D) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; and
(E) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.”

Ream v. Yankee Park Homeowner’ s Ass ’n , 915 N.E.2d 536 (Ind. Ct. App. 2009). In our view, the trial c ourt properly granted judgment in Jon’s favor for the taxes and insurance that h e paid when Tim othy failed to do so . Thus, Jon was adequately compensated for any loss that he suffered a s a result of Tim othy’s failure to pay. On the other hand, invo king the remedy of forfeiture will result in an eviction of Tim othy from his childhoo d home for the remainder of his life, which also effectively leaves Carl and Roberta without a caretaker . Instead, Carl and Roberta will be at the mercy of the Kaetzels.
Al so, while the evidence shows that Jon has sued Tim othy on two other occasions for ejectment and recoupment of these same taxes and insurance, he notably has not sued
Tim othy for any additional taxes and insurance . Thus, it is reasonable to assume that
Tim othy made these payments after being informed that he now has only a life estate

o ver the residence and is obligated to make these payments. Finally, no evidence was presented reflecting that Timothy failed to comport with any standards of good faith and17

fair dealing. Therefore, even if a nonexistent forfe iture clause could be implied in the d eed

— along with the right

- of

- way or easement

— the trial court was co rrect in not ordering ejectment or forfeiture because of Tim othy’s failure to make these payments in a timely manner. Thus, the Kaetzels do not prevail on their counterclaim. The judgment of the trial court is affirmed. KIRSCH, J., and BROWN, J., concur.