Court Opinion

ID: 4092465
Source: CourtListenerOpinion
Date Created: 2016-10-25 15:06:44.45904+00
Date Added: 2024-06-11T14:36:21.974273
License: Public Domain

FILED
                                                                    Oct 25 2016, 8:50 am
      OPINION ON REHEARING
                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court

      ATTORNEYS FOR APPELLANTS                                 ATTORNEY FOR APPELLEE
      Jenny R. Buchheit                                        David W. Stone IV
      Seth M. Thomas                                           Stone Law Office & Legal Research
      Ice Miller LLP                                           Anderson, Indiana
      Indianapolis, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Randy Faulkner & Associates,                             October 25, 2016
      Inc. and Randall W. Faulkner,                            Court of Appeals Case No.
      Appellants-Defendants,                                   41A01-1506-PL-706
                                                               Appeal from the Johnson Superior
              v.                                               Court
                                                               The Honorable Kevin M. Barton,
      The Restoration Church, Inc.,                            Judge
      Appellee-Plaintiff.                                      Trial Court Cause No.
                                                               41D01-1305-PL-68

      Robb, Judge.

[1]   In Randy Faulkner & Assoc., Inc. v. Restoration Church, 2016 WL 3755926 (Ind.

      Ct. App. Jul. 14, 2016), we held, in part, that Randy Faulkner and Associates,

      Inc. (“RFA”) had not by its conduct waived its right to receive timely written

      notice of The Restoration Church’s (the “Church”) intent to renew its lease on

      property owned by RFA. We therefore reversed the trial court’s judgment in

      Court of Appeals of Indiana | Opinion on Rehearing 41A01-1506-PL-706 | October 25, 2016   Page 1 of 3
      favor of the Church on its breach of contract claim against RFA. The Church

      has now filed a petition for rehearing.

[2]   The parties’ lease agreement provided the Church had to give timely notice of

      its intent to renew the lease each year. The Church failed to give the required

      notice each year, although it continued to pay rent and occupy the premises.

      Eventually, RFA gave the Church notice to vacate the premises and cancelled

      the lease. The Church then sued RFA for breach of contract, among other

      things. With respect to the breach of contract claim, the trial court determined

      RFA had waived its right under the lease agreement to receive timely notice of

      the Church’s intent to renew when it accepted untimely notices and annual rent

      payments.

[3]   Based on several specific provisions in the lease agreement, we concluded that

      holding over and paying rent is not sufficient notice of intent to renew when the

      lease specifically provided for written notice of intent to renew in advance of a

      lease term ending. Therefore, we held RFA had not waived the condition

      precedent to an additional lease term by accepting the Church’s rent payments.

      Id. at *8. In its petition for rehearing, the Church alleges this court failed to

      consider Section Forty-One of the lease in its analysis. Section Forty-One

      states: “Lessor and Lessee expressly covenant one to another that this Lease

      agreement shall be interpreted and construed consistently with the principles of

      good faith and fair dealing.” Appendix of Appellants at 135. The Church

      asserts this general “good faith” provision imposes a duty on the parties to the

      lease and RFA breached this duty when it “lulled” the Church into believing

      Court of Appeals of Indiana | Opinion on Rehearing 41A01-1506-PL-706 | October 25, 2016   Page 2 of 3
      the specific notice of renewal provision would not be enforced. Appellee’s

      Petition for Rehearing at 8. This, despite a specific non-waiver provision in the

      lease providing that RFA’s failure to insist on strict performance of a term in

      one instance “shall not be deemed a waiver of any subsequent breach or default

      . . . .” Appendix at 130. In essence, the Church would have a single, general

      provision of the lease supersede the several specific and express provisions

      applicable here. At most, Section Forty-One imposes a duty on both parties to

      act in accordance with the provisions of the lease. Cf. Casa D’Angelo, Inc. v. A&R

      Realty Co., 553 N.E.2d 515, 519 (Ind. Ct. App. 1990) (stating the allegation “not

      in good faith” means nothing more than that a party has acted in violation of

      implied obligations of a contract), trans. denied. It does not impose a specific

      duty on RFA to explicitly state it has waived a provision this time but will not

      do so again, especially in light of a specific provision in the lease which says

      exactly that.

[4]   We grant rehearing for the purpose of addressing the Church’s argument about

      this additional provision of the lease, but for the reasons stated above, reaffirm

      our decision in all respects.

      Crone, J., concurs.

      Riley, J., dissents without separate opinion.

      Court of Appeals of Indiana | Opinion on Rehearing 41A01-1506-PL-706 | October 25, 2016   Page 3 of 3