Title: Estate of Reasor v. Putnam County
Citation: 635 N.E.2d 153
Docket Number: 55S05-9405-CV-487
State: Indiana
Issuer: Indiana Supreme Court
Date: May 27, 1994

635 N.E.2d 153 (1994)
The ESTATE OF Bertha L. REASOR, Appellant (Defendant, Counterclaimant, Third-Party Plaintiff, and Counterdefendant below)
v.
PUTNAM COUNTY, Indiana, S. Page Cotton, Jr., Narda G. Cotton a/k/a Narda Cotton, John F. Hiemenz, Jr., Joann M. Hiemenz, Anthony William Harmless, James E. Ross, Judith D. Ross, Edward G. Ypma, Eleanor S. Ypma, Appellees (Plaintiffs and Counterdefendants below), Alan Stanley and Alan Stanley and Associates, Inc., Appellees (Third-Party Defendants and Counterclaimants below).
No. 55S05-9405-CV-487.

Supreme Court of Indiana.
May 27, 1994.
Rehearing Denied November 14, 1994.
*154 Gregory W. Black, Deckard, O'Brien, Black, Danville, for appellant.
Robert J. Lowe, Greencastle, for appellees.
SULLIVAN, Justice.
This case comes to us on a petition to transfer the decision of the Court of Appeals in Reasor v. Putnam County (1993), Ind. App., 615 N.E.2d 131. This case began as an action to reform the deeds to certain properties that once belonged to Bertha Reasor and her husband, Walker. The Court of Appeals adequately stated the facts, and we shall simply quote them from its opinion:
Reasor v. Putnam County, 615 N.E.2d  at 133-36. The Court of Appeals decided four issues:
Id. at 136. The Court of Appeals summarized its decision as follows:
Id. at 141.
In the time since the Court of Appeals' decision, Bertha Reasor has died; the case continues with her estate now as the Appellant.
We now grant transfer to discuss the degree of proof required in a reformation action, the alleged negligence of Allen Stanley, and whether Putnam County must maintain Reasor Hills Drive at twenty-four feet.
When a trial court has made special findings of fact, as it did in this case, an appellate court reviews the sufficiency of the evidence in a two-step process. First, it must determine whether the evidence supports the trial court's findings of fact; second, it must determine whether those findings of fact support the trial court's conclusions of law. Kaminszky v. Kukuch (1990), Ind. App., 553 N.E.2d 868, 870, trans. denied. An appellate court "shall not set aside the findings or judgment unless clearly erroneous," Ind.Trial Rule 52(A); Egly v. Blackford County Dept. of Public Welfare (1992), Ind., 592 N.E.2d 1232, 1234-35; and it shall not reweigh the evidence or determine the credibility of witnesses. Indianapolis Convention &amp; Visitors Ass'n, Inc. v. Indianapolis Newspapers, Inc. (1991), Ind., 577 N.E.2d 208, 211. Findings are clearly erroneous only when the record contains no facts to support them either directly or by inference. Id. at 211-12. A judgment is clearly erroneous when it is unsupported by the findings of fact and the conclusions relying on those findings. DeHaan v. DeHaan (1991), Ind. App., 572 N.E.2d 1315, 1320, trans denied.[3]
As the Court of Appeals pointed out in its opinion, reformation is "an extreme equitable remedy to relieve the parties of mutual mistake or of fraud. Board of Comm'rs of Hamilton County v. Owens (1894), 138 Ind. 183, 186, 37 N.E. 602." Reasor, 615 N.E.2d  at 136. See also Citizens Nat'l Bank v. Judy (1896), 146 Ind. 322, 340, 43 N.E. 259, 265; Kruse, Kruse &amp; Miklosko, Inc. v. Beedy (1976), 170 Ind. App. 373, 396-97, 353 N.E.2d 514, 529; Pearson v. Winfield (1974), 160 Ind. App. 613, 618, 313 N.E.2d 95, 99. The remedy of reformation is extreme because written instruments are presumed to reflect the intentions of the parties to those instruments. Casa D'Angelo, Inc. v. A &amp; R Realty Co. (1990), Ind. App., 553 N.E.2d 515, 521, trans. denied; Ethyl Corp. v. Forcum-Lannom Assoc's, Inc. (1982), Ind. App., 433 N.E.2d 1214, 1217.[4]
In cases involving mutual mistake such as this one, the party seeking reformation must establish the true intentions of the parties to an instrument, that a mistake was made, that the mistake was mutual, and that the instrument therefore does not reflect the true intentions of the parties. Judy, 146 Ind. at 344-45, 43 N.E.  at 266; Pearson, 160 Ind. App. at 618, 313 N.E.2d  at 99. As the Court of Appeals in Pearson explained:
Id. at 618-19, 313 N.E.2d  at 99.
In Indiana, historically, a party seeking reformation of a written instrument has *159 had to show the intent of the parties to the instrument and the mistake that was made in the instrument by proof that is "clear and satisfactory." Judy, 146 Ind. at 347, 43 N.E. at 266;[5]Pearson, 160 Ind. App. at 618, 313 N.E.2d  at 99.[6] The parties in this case dispute the meaning of "clear and satisfactory," and the interpretation of this phrase is critical in this case because the trial court explicitly made its findings based on a preponderance of the evidence.
The Court of Appeals determined that "clear and satisfactory" means that more than a preponderance of the evidence is required, and held that "the party seeking reformation must show by clear and convincing evidence that a mistake has been made." Reasor, 615 N.E.2d  at 137. As the Court of Appeals noted, the Seventh Circuit required clear and convincing evidence of a mutual mistake when applying Indiana law in a reformation case.[7] Also, other jurisdictions require more than a preponderance of the evidence.[8] And indeed, there is direct Indiana precedent for requiring clear and convincing evidence in reformation actions. Stack v. Commercial Towel &amp; Uniform Service (1950), 120 Ind. App. 483, 492, 91 N.E.2d 790, 794 ("The law is well recognized that courts of equity will allow reformation for any substantial mistake of fact when established by clear and convincing evidence.").
In Travelers Indem. Co. v. Armstrong (1982), Ind., 442 N.E.2d 349, we decided that only clear and convincing evidence of malice, fraud, gross negligence or oppressiveness will support an award of punitive damages. Justice Prentice, writing for the Court, discussed in more general terms when a standard of proof higher than a preponderance of the evidence ought to be required:
442 N.E.2d  at 360-61 (emphasis in the original) (citations omitted).
Reformation, when granted in equity, overcomes the presumption that the written instrument expresses the parties' intentions; it overcomes the Statute of Frauds, Colbo v. Buyer (1956), 235 Ind. 518, 528, 134 N.E.2d 45, 50; and it has the potential to affect others beyond any immediate dispute via the recording system. The Court of Appeals was entirely correct to hold that to succeed in a reformation action a party must show either mutual mistake or fraud by clear and convincing evidence. We approve that holding and add that a party seeking reformation must also show the original intent or agreement of the parties by clear and convincing evidence.
Because the trial court explicitly made its findings by a preponderance of the evidence, those findings cannot support its conclusions of law; and its judgment with respect to the reformation of the deeds in question is clearly erroneous. We will not reweigh the evidence. We must remand the entire reformation portion of this case to the trial court so that it may determine which of its findings are supported by clear and convincing evidence and whether it is necessary to supplement what is already a thirteen volume record with additional evidence from the parties.
Although we are in no position to reweigh the evidence in this case, we will offer several observations about the facts as they come to us. First, the trial court found that the deed for Reasor Hills Drive from the Reasors to the County was inadequate on its face and that all parties agreed that it needed reformation. Finding of Fact No. 6. In Conclusion of Law No. 7, the trial court said that "the Bryant and Ypma boundaries [Lots No. 2 &amp; No. 3] as shown on plaintiff's exhibit No. 37 should be redrawn to be adjacent to the road." We do not find anywhere in the record that the trial court specifically orders the reformation of the deed to the road. There are two conflicting surveys in this case, neither of which shows Lots No. 2 and No. 3 adjacent to the road. The Stanley survey shows the boundaries north of the road; the Shartle survey shows them overlapping the road.
The trial court specifically found by a preponderance of the evidence that Reasor Hills Drive is in the same location as when Putnam County accepted it from the Reasors. Conclusion of Law No. 11. If the trial court finds the evidence clear and convincing not only that a mistake was made in the deed for Reasor Hills Drive, but also that the intent of the parties was that road be where it is today, then it should order the deed reformed to reflect that fact.[9] If the trial court then finds the evidence clear and convincing that the other deeds are also inadequate and that the parties intended that all lots be bounded to the south by the road, reformation *161 of the legal descriptions in the appropriate deeds either by resurvey or on the basis of existing information should pose little difficulty.
With respect to the fifty-foot easement between Lots No. 5 and No. 6, the trial court determined by a preponderance of the evidence:
Conclusion of Law No. 8. The Court of Appeals affirmed the trial court's decision requiring Stanley to purchase from Cotton the land necessary to create a 50 foot easement between Lots No. 5 and No. 6 since the deed for Lot No. 6 reflects the 50 foot easement but Cotton paid for land up to the 35 foot mark.
We disagree with the Court of Appeals and the trial court on this issue. In a reformation action, it is the intent of the parties that controls. If Walker Reasor told Stanley to make a deed reflecting a 50 foot easement, that is evidence that Reasor intended that there be a 50 foot easement, but it is not the controlling fact establishing that the problem is not with the deed to Lot No. 5 but with the land occupied. Similarly, that the deeds to Lots No. 7 and No. 8 assume a 50 foot easement between Lots No. 5 and No. 6 may be additional evidence of Reasor's intent. However, if the trial court finds the evidence clear and convincing that Reasor and Cotton intended that Cotton receive land up to the 35 foot mark, any duty owed to Reasor by Stanley is irrelevant, and the trial court should order that the deed for Lot No. 6 be reformed to reflect the 35 foot easement and that the deeds for Lots No. 7 and No. 8 be reformed correspondingly.
Alan Stanley marked a fence line along the southern boundary of the Reasor property and he did so without consulting the deeds either for the Reasor property or for the eight lots to the south. On appeal, Reasor argued that the trial court erroneously failed to find Stanley negligent for failing to consult the deeds. Because the fence line lies to the north of the line reflected in the deeds, Reasor argues that she was injured by Stanley's negligence in a number of ways. The Court of Appeals agreed with Reasor's argument and ordered the trial court to determine damages. Reasor, 615 N.E.2d  at 138-39.
There is no question that professionals may be held liable in tort if they fail to exercise reasonable care in the fulfillment of their contractual duties.[10]Flint &amp; Walling Mfg. Co. v. Beckett (1906), 167 Ind. 491, 498, 79 N.E. 503, 505. See also Essex v. Ryan (1983), Ind. App., 446 N.E.2d 368, 371 and cases cited there. Surveyors are no exception. Id.
The issue presented to us is whether a surveyor is negligent per se for failing to consult deeds when marking a fence line. In almost every imaginable case, we think a surveyor would be negligent in not consulting existing deeds for legal descriptions when he or she undertakes to mark a fence line. But we have before us the exceptional case and therefore reject the per se rule that the Court of Appeals applied.
The trial court concluded "that there was a meeting of the minds between the Reasors and the purchasers of the lots as to what real estate was to be conveyed, but due to errors or inadequacies in the conveying documents, the descriptions do not accurately reflect the true intention of the parties." Conclusion of Law No. 3. It is our understanding that all the deeds in this case were inadequate or ambiguous on their face, that they were negligently prepared by Alan Stanley, that Stanley has admitted as much, and that it was the trial court's judgment that Stanley bear the *162 cost of reforming all of the deeds. To apply a per se rule in this case would hold Stanley negligent for failing to rely on the deeds that he himself had negligently prepared and that were, in any case, inadequate on their face. This is too much, especially since it might well have been negligent of Stanley to rely on those deeds in view of his personal knowledge both of the parties and of the history of the transfers.
We are not saying that Stanley is not liable to Reasor in connection with his marking of the fence line. Because we are remanding the entire reformation portion of this case to the trial court, we cannot say where the final property lines will lie after reformation of the deeds. If, however, the Reasor's fence still lies to the north of where it should after reformation of the deeds, and if the misplacement of the fence was proximately caused by Stanley's original negligent preparation of the deeds, then Stanley will be liable to Reasor for damages arising from the misplacement of the fence.
Reasor Hills Drive is now, on its travelled portion, ten to sixteen feet wide. One of Reasor's counterclaims against the County requested an order that the County maintain the road at twenty-four feet. The basis of Reasor's counterclaim was a 1954 county ordinance that reads:
(R. 2721.) The trial court found:
Conclusion of Law No. 11. The Court of Appeals reversed the trial court and ordered Putnam County to widen Reasor Hills Drive and maintain it at twenty-four feet. As a basis for its decision, the Court of Appeals relied on the statutory provisions of Indiana Code § 8-17-1-16 (1993), which provides:
It also relied on the provisions of Indiana Code §§ 8-17-3-1, 2 and 4, which impose on county surveyors and boards of county commissioners the duty of repairing and maintaining roads. Reasor, 615 N.E.2d  at 140.
The County successfully argued at trial that the 1954 county ordinance set standards which must be met before the County may accept a road. We agree with the County and the trial court. Indiana Code § 8-17-1-1 (1993) provides:
Indiana Code § 8-17-1-2 (1993) provides:
First, the 1954 Putnam County ordinance by its own terms clearly created no duty on the part of the County to maintain roads once they have been accepted. Secondly, Indiana Code § 8-17-1-16 imposes no duty on a county to maintain a road until it has been improved under Chapter 1 of Article 17 and therefore has become part of the county highway system. Chapter 1 of Article 17 provides the county executive with the authority to improve county roads. We therefore hold, as the statutory scheme requires, that a county has no duty to maintain a highway that it has accepted until it has improved that highway and that highway has therefore become part of the county highway system.[11] The Court of Appeals feared that the County's argument "could lead to a situation where [the County] could maintain a road at whatever width it desires as long as it was twenty-four feet wide when it was accepted," and "could result in a county full of roads which are not passable by vehicle." Reasor, 615 N.E.2d  at 140. As the County ordinance reads and the state statutes stand, whether Putnam County will be full of impassable, unimproved roads remains up to the people of Putnam County and not the courts.
Accordingly, we now grant transfer, vacate the decision of the Court of Appeals, Ind.Appellate Rule 11(B)(3), and take the following action: 1) we remand the reformation portion of the case to the trial court for it to make new findings of fact and conclusions of law on the basis of evidence that it finds clear and convincing; 2) we also remand Reasor's negligence claim against Stanley for the trial court to determine by a preponderance of the evidence whether Stanley's negligent preparation of the deeds involved in this case proximately caused the misplacement of Reasor's south fence line; 3) we affirm the trial court's judgment that Putnam County is under no duty to maintain Reasor Hills Drive at twenty-four feet; and 4) we incorporate by reference that part of the opinion of the Court of Appeals dealing with Reasor's allegation of fraud. App.R. 11(B)(3).
SHEPARD, C.J., and DeBRULER and DICKSON, JJ., concur.
GIVAN, J., dissents without opinion. He believes that the opinion of the Court of Appeals is correct.
[1]  Lots No. 2 and No. 3.
[2]  The trial court found for Stanley on the issues of fraud, misrepresentation, breach of fiduciary duty, and interference in the contractual relations of others. Conclusion of Law No. 10 (R. 387).
[3]  See also Bauer v. Harris (1993), Ind. App., 617 N.E.2d 923, 926: "If the special findings do not support the judgment, our review is concluded. We may not search outside the trial court's findings for evidence which supports the judgment." (Citations omitted).
[4]  See also 66 Am.Jur.2d Reformation of Instruments § 123 (1973); 76 C.J.S. Reformation of Instruments § 82a (1952).
[5]  "In every case, it must clearly and satisfactorily appear that the precise terms of the contract had been orally agreed upon, and that the writing afterwards signed fails to be, as it was intended, an execution of such previous agreement, but, on the contrary, expresses a different contract, and that this is the result of mutual mistake."
[6]  "A party seeking reformation on the ground of mutual mistake must establish by clear and satisfactory proof the true intentions common to all parties to the instrument, that a mistake was made, and that the mistake was mutual and consequently the instrument, as written, does not state the true intention or agreement of the parties." See also Habbe v. Viele (1897), 148 Ind. 116, 122, 45 N.E. 783, 785 ("A person who seeks to rectify a deed on the ground of a mistake must establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently, in the minds of all parties, down to the time of its execution." (internal quotation marks omitted)); Board of Comm'rs of Hamilton County v. Owens (1894), 138 Ind. 183, 187, 37 N.E. 602, 603 (written instruments will be reformed only where there is "`the clearest and most satisfactory proof of the mistake and of the agreement between the parties.'" (quoting, Gray v. Woods (1837), 4 Blackf. 432, 432); Hileman v. Wright (1857), 9 Ind. 126, 127-28 (requiring "the clearest, most satisfactory proof of the actual agreement and the mistake" and "proof establishing the mistake beyond a reasonable controversy."). But cf. Harmon v. Pohle (1914), 55 Ind. App. 439, 445-46, 103 N.E. 1087, 1089 ("The party seeking reformation of a written instrument must give clear and satisfactory proof of the provisions of the actual contract between the parties and of the mutual mistake of fact... . It need not be of `the most persuasive character,' but to authorize the granting of such relief the facts essential thereto must be clearly and fully established by a fair preponderance of the evidence.").
[7]  Holly Stores v. Judie, 179 F.2d 730, 737 (7th Cir.1950), cert. denied, 340 U.S. 814, 71 S. Ct. 43, 95 L. Ed. 598 (1950).
[8]  See generally 66 Am.Jur.2d Reformation of Instruments §§ 122-23 (2d ed. 1973); 76 C.J.S. Reformation of Instruments § 84 (1952). See also Pomeroy, A Treatise on Equity Jurisprudence § 859a (5th ed. 1941).
[9]  We note also that in a reformation case such as this where the deeds are inadequate or ambiguous, the fact finder should consider, together with parol and other evidence of the original intent of the parties, what land the parties currently occupy or have occupied in the past.
[10]  The professional occupation of land surveyor is regulated by Article 21.5 of Title 25 of the Indiana Code. Surveyors must be educated, tested, and licensed. They must pursue continuing education after they are licensed; they are also subject to disciplinary sanctions.
[11]  We disapprove, therefore, Gotshall v. Cass County (1992), Ind. App., 593 N.E.2d 210, trans. denied, in which the Court of Appeals at the very least implied that once it had accepted a road, Cass County had a duty to maintain it. See Id. at 212. To reiterate, there is no statutory duty to maintain a road until a county itself has improved the road. By statute, it is the act of improvement by a county that makes a road part of the county highway system and that triggers the statutory obligation of maintenance.