Court Opinion

ID: 2726028
Source: CourtListenerOpinion
Date Created: 2014-09-08 20:57:18.91663+00
Date Added: 2024-06-11T10:03:10.281925
License: Public Domain

Nov 27 2013, 5:49 am

FOR PUBLICATION

ATTORNEYS FOR APPELLANT:                    ATTORNEYS FOR APPELLEE:

ERIC S. PAVLACK                             BRYAN H. BABB
COLIN E. FLORA                              DOUGLAS R. BROWN
Pavlack Law, LLC                            JOEL T. NAGLE
Indianapolis, Indiana                       Bose McKinney & Evans, LLP
                                            Indianapolis, Indiana

                              IN THE
                    COURT OF APPEALS OF INDIANA

DIANE S. BROWN BELL, on behalf of herself   )
and all others similarly situated,          )
                                            )
       Appellant,                           )
                                            )
              vs.                           )        No. 49A04-1305-PL-210
                                            )
THE BRYANT COMPANY, INC.,                   )
                                            )
       Appellee.                            )

                    APPEAL FROM THE MARION SUPERIOR COURT
                         The Honorable John F. Hanley, Judge
                           Cause No. 49D11-1205-PL-21281

                                 November 27, 2013

                          OPINION - FOR PUBLICATION

FRIEDLANDER, Judge
       Diane S. Brown Bell appeals the grant of a motion to dismiss filed pursuant to Indiana

Trial Rule 12(B)(6), dismissing her class action complaint against The Bryant Company, Inc.

(Bryant) on grounds that it failed to state a claim upon which relief could be granted. Bell

presents two issues for review, which we restate as follows:

       1.     Did the trial court err in granting Bryant’s motion to dismiss?

       2.     Does Bell’s complaint state a claim that may be certified as a class
              action?

       We reverse and remand.

       As we will explain below, in addressing this appeal, we will take as true the facts

alleged in Bell’s complaint. So viewed, Bell owned rental property (the Property) in

Indianapolis, Indiana. On April 13, 2010, Bell and Bryant entered into a written property

management agreement (the Agreement), under which Bell hired Bryant as the “sole and

exclusive” leasing and managing agent for the Property. Appellant’s Appendix at 17.

Locating a tenant for the Property was one of Bryant’s responsibilities under the Agreement.

Bryant was also authorized under the Agreement to execute leases for the Property on behalf

of Bell.

       Approximately two months after the Agreement was executed, Bryant procured a

tenant, Wendy L. Winkle, who subsequently signed a lease (the Lease) to rent the property.

Pursuant to the Lease, Winkle was obligated to pay $1800 per month in rent. The lease also

called for Winkle to remit to Bryant a $50 late charge in the event Winkle’s rent payment was

more than 6 days late, a $35 fee for each dishonored check, and a $45 fee in the event that

Winkle, without good reason, changed the date of one of the two inspections per year called

                                             2
for under the lease. Winkle’s original lease expired on June 30, 2011, but effective May 11,

2011, the lease was extended to a second annual term, which ended on June 30, 2012.

During the course of Winkle’s tenancy, she occasionally paid $50 late fees to Bryant. In May

2012, Bell learned that Bryant had kept late fees that Winkle had paid. Bell sent a letter to

Bryant demanding payment of the late fees that Bryant had retained. Bryant refused.

       In response, Bell filed the present class action on behalf of herself and on behalf of “a

proposed class of similarly-situated [sic] current and former property owners who entered

into agreements with The Bryant Co., Inc. to lease and manage their properties”, alleging

breach of contract and conversion. Id. at 7. Bryant filed an answer denying the allegations in

Bell’s complaint and asserting a counterclaim under the theories of breach of contract and, in

the alternative, recovery under the equitable theory of promissory estoppel.

       Bell contends the trial court erred in granting Bryant’s motion to dismiss, which was

filed under T.R. 12(B)(6). We note, however, that Bryant filed this motion after filing its

answer. “A [T.R.] 12(B)(6) motion filed after an answer will be treated as a motion for

judgment on the pleadings under [T.R.] 12(C).” DeHart v. Anderson, 383 N.E.2d 431, 436,

178 Ind. App. 581, 588 (1978). Therefore, notwithstanding the fact that the parties and the

trial court below argued the motion to dismiss under T.R. 12(B)(6), we review it pursuant to

the standard applicable to T.R. 12(C).

       We review de novo a trial court’s ruling on a T.R. 12(C) motion for judgment on the

pleadings. Woodruff v. Ind. Family & Soc. Servs. Admin., 964 N.E.2d 784 (Ind. 2012), cert.

denied, 133 S.C. 233. When reviewing a T.R. 12(C) motion, we consider any facts of which

                                               3
we may take judicial notice. Consol. Ins. Co. v. Nat’l Water Servs., LLC, 994 N.E.2d 1192

(Ind. Ct. App. 2013). Also, we accept as true the well-pleaded material facts alleged in the

complaint, and base our ruling solely on the pleadings. Murray v. City of Lawrenceburg, 925

N.E.2d 728 (Ind. 2010). “The ‘pleadings’ consist of a complaint and an answer, a reply to

any counterclaim, an answer to a cross-claim, a third-party complaint, and an answer to a

third-party complaint.” Consol. Ins. Co. v. Nat’l Water Servs., LLC, 994 N.E.2d at 1196

(quoting Waldrip v. Waldrip, 976 N.E.2d 102, 110 (Ind. Ct. App. 2012)). “Pleadings” also

consist of any written instruments attached to a pleading. See T.R. 10(C) (“[a] copy of any

written instrument which is an exhibit to a pleading is a part thereof for all purposes”). A

motion for judgment on the pleadings under T.R. 12(C) should be granted “only where it is

clear from the face of the complaint that under no circumstances could relief be granted.”

Murray v. City of Lawrenceburg, 925 N.E.2d at 731 (quoting Forte v. Connerwood

Healthcare, Inc., 745 N.E.2d 796, 801 (Ind. 2001)).

       The business relationship between Bell and Bryant, which included the allocation of

the late fees for late rent payments, was governed by the Agreement. Therefore, we must

examine its provisions to determine whether Bell stated a claim for breach of contract that

would survive a T.R. 12(C) motion for judgment on the pleadings.

       When construing the meaning of a contract, our primary task is to determine and

effectuate the intent of the parties. Ryan v. Lawyers Title Ins. Corp., 959 N.E.2d 870 (Ind.

Ct. App. 2011). We attempt to determine the parties’ intent at the time the contract was made,

“which is ascertained by the language used to express their rights and duties.” Niezer v. Todd

                                              4
Realty, Inc., 913 N.E.2d 211, 215 (Ind. Ct. App. 2009), trans. denied. We must first

determine whether the contract’s language is ambiguous. “[U]nambiguous contractual

language is conclusive upon the parties and the courts.” Id. In such a case, the parties’ intent

is determined from the four corners of the instrument. Niezer v. Todd Realty, Inc., 913

N.E.2d 211. On the other hand, if a contract is ambiguous or uncertain, its meaning must be

determined by examining extrinsic evidence – a task usually reserved for the fact-finder. Id.

In the present posture, however, we are asked to review such evidence as may be found in the

pleadings and documents attached thereto pursuant to T.R.10(C) and determine whether the

court correctly decided as a matter of law that Bell was not entitled to recovery.

       As a final matter, we note that the order dismissing Bell’s complaint did not indicate

the basis for the dismissal. “[W]hen a trial court grants a motion to dismiss without reciting

the grounds relied upon, it must be presumed upon review that the court granted the motion

to dismiss on all the grounds in the motion.” Godby v. Whitehead, 837 N.E.2d 146, 149 (Ind.

Ct. App. 2005), trans. denied. Accordingly, our review includes an examination of the

complaint and the arguments in Bryant’s motion to dismiss.

       Bryant’s motion to dismiss was premised upon the following three arguments: (1) Bell

did not adhere to the termination-notice date set out in the Agreement and consequently may

not pursue a claim for breach of contract; (2) because the collection of late fees is “not

customarily a part of the usual leasing services performed by a property manager” within the

meaning of the Agreement, Appellant’s Appendix at 19, Bryant was entitled to receive

additional compensation therefor, including the entire amount of late fees paid by the renter;

                                               5
and (3) the statement on the Lease to the effect that “Lessee will pay to agent … [a] late

charge of Fifty Dollars ($50.00) if payment is more than six (6) days past due”, id. at 24,

indicates that Bryant was to retain the fee. We will address these arguments in turn.

       In the memorandum in support of its motion to dismiss, Bryant stated: “As the Bryant

Co. demonstrates in its Opposition to Bell’s Motion to Dismiss, the Management Agreement

unambiguously sets forth a termination-notice date, which Bell failed to adhere to.” Id. at 58.

The gist and relevance of this argument is not apparent to us. Regardless, we need not

consider it because Bryant has not made this argument on appeal.

       Bryant’s second argument before the trial court in favor of dismissal was that the

Agreement provided that Bryant was entitled to receive additional compensation for activities

“not customarily a part of the usual leasing services performed by a property manager” within

the meaning of the Agreement. Id. at 19. Bryant contended that the collection of late fees

was not customarily a part of typical leasing services, and therefore it was entitled to receive

additional compensation for performing that task, which in this case included retaining the

entire amount of late fees paid by Winkle. We can find nothing in the Agreement that either

stipulates or refutes the notion that the collection of late rent is a customary part of leasing

services. Indeed, the parties provide scant argument on this question. According to Bell, it is

something akin to a truism: “[t]here can be no question that occasionally receiving a tenant’s

rent payments late is a common part of the services customarily a part of the usual leasing

services performed by a property manager.” Appellant’s Brief at 17. Bryant does not dispute

this. In fact, Bryant does not address the question at all. It seems, therefore, that we are left

                                               6
to decide this matter based upon Bell’s assertion and our own common sense. Upon those

considerations, we agree with Bell. Accordingly, Bryant was not entitled to retain the

entirety of late payment fees on the basis that it was compensation for services not

customarily performed by a property manager.

       The third and final basis argued before the trial court was that the Lease allocated late-

fee payments in their entirety to Bryant when it provided: “Lessee will pay to agent … [a]

late charge of Fifty Dollars ($50.00) if payment is more than six (6) days past due”.

Appellant’s Appendix at 24. Bryant claims this provision reflects the parties’ intent that

Bryant had a right to retain the full amount of late charges collected from Winkle.

       When construing the meaning of a contract, we read it as a whole and seek a meaning

that harmonizes its provisions, not one that causes them to conflict. Niezer v. Todd Realty,

Inc., 913 N.E.2d 211. The provision of which the above-quoted language is but a small

portion reads in its entirety as follows:

       Lessee will pay to Agent, at [a post office box in Indianapolis], as rent for said
       premises, the sum of $1800.00 per month payable in advance on the 25th day
       of each month, by check or money order (cash cannot be accepted), and a late
       charge of Fifty Dollars ($50.00) if payment is more than six (6) days past due;
       and in addition, a late charge of Fifty Dollars ($50.00) for each additional
       month during which such installment remains unpaid. The imposition of each
       late charge, however, shall not be constituted as a waiver of such default nor
       prevent Agent from exercising any of the other rights and remedies granted
       hereunder. Lessee shall pay to Agent a Thirty-Five Dollar ($35.00) fee for
       each returned unpaid check. If a late payment results in a service charge being
       levied against the property by mortgagee or vendor, Lessee assumes the cost of
       said penalty.

Appellant’s Appendix at 24. Pursuant to the foregoing provision, Winkle was to pay Bryant

all fees associated with the rental. This included the fee for late payment, an additional fee

                                               7
for payments that were more than one month late, a fee for returned, unpaid checks, and, of

course the rent itself. Bryant concedes that the rent payment, although collected by Bryant,

was the property of Bell, subject to the ten-percent fee retained by Bryant under the

Agreement. Bryant contends, however, that the other fees listed in this provision were

intended to go exclusively to Bryant.

       The parties agree that the Lease is in pari materia with the Agreement. The latter

governs the relationship between Bell and Bryant as principal and agent, while the former

governs the relationship between Bell and Winkle as landlord and tenant. The provision to

which Bryant cites is a part of the Lease, which allocates rights and responsibilities between

Bell and Winkle, not Bell and Bryant, and not Bryant and Winkle. Bryant’s status in the

lease document is clearly delineated: “THIS LEASE, made this 21st day of June, 2010,

between The Bryant Co., Inc., and/or its assigns, Agent for Owner, party of the first part,

hereinafter called Agent, and Wendy L. Winkle, party of the second part, hereinafter called

lessee [.]” Id. (emphasis supplied).

       “Agency is a relationship resulting from the manifestation of consent by one party to

another that the latter will act as an agent for the former.” Demming v. Underwood, 943

N.E.2d 878, 884 (Ind. Ct. App. 2011) (quoting Smith v. Brown, 778 N.E.2d 490, 495 (Ind. Ct.

App. 2002)), trans. denied. “The basic theory of the agency device is to enable a person,

through the services of another, to broaden the scope of his activities and receive the product

of another’s efforts, paying such other for what he does but retaining for himself any net

benefit resulting from the work performed.” Harold Gill Reuschlein & William A. Gregory,

                                              8
The Law of Agency and Partnership § 1, at 3 (2d ed. 1990). In other words, an agent acts on

behalf of its principal and for the principal’s benefit. See McAdams v. Dorothy Edwards

Realtors, Inc., 604 N.E.2d 607, 611 (Ind. 1992) (“[u]nless otherwise agreed, an agent is

subject to a duty to his principal to act solely for the benefit of his principal”). (Emphasis in

original). We can find no language in the Lease, which we reiterate governs the relationship

between Winkle and Bell, that constitutes an agreement that Bryant was acting on its own

behalf in collecting from Winkle the fees set out above. Bryant’s claim that the Agreement

contains provisions to this effect is unavailing.

       The Agreement provides that Bryant was to be paid: (1) a sum equal to ten percent of

the gross rents collected by Bryant; (2) a seven-percent sales commission in the event that

Bryant sold the property on behalf of Bell during the term of the Agreement; and (3) fees

associated with the aforementioned performance of “any services not customarily a part of

the usual leasing services performed by a property manager.” Appellant’s Appendix at 19.

Of these, the third option provides the only plausible basis for Bryant’s claim that it was

entitled to retain fees associated with late payment of rent. We have already rejected this

claim. Therefore, we find no basis in the Agreement or the Lease upon which Bryant was

entitled to retain those fees in their entirety. Thus, with respect to Bell’s claim that she was

entitled to the late fees retained by Bryant, it is far from “clear from the face of the complaint

that under no circumstances could relief be granted.” Murray v. City of Lawrenceburg, 925

N.E.2d at 731 (quoting Forte v. Connerwood Healthcare, Inc., 745 N.E.2d at 801). At a

minimum, this means that the trial court erred in granting Bryant’s motion for judgment on

                                                9
the pleadings with respect to Bell’s claim.

                                              2.

       Finally, we note that in the motion for judgment on the pleadings below, Bryant

argued that Bell’s class-action claim must fail because the class action may not be premised

upon a case in which parol evidence is necessary to resolve individualized questions of law.

On appeal, Bryant makes “[o]ne final point.” Appellant’s Brief at 9. It claims, “because the

trial court never certified Bell’s Class Action, Bryant’s arguments related to dismissal of

class action claims based on contractual ambiguity grounds are inapplicable. In like manner,

Bell’s argument under part ‘III’ of her brief is immaterial to the issue before this Court.” Id.

Bell disagrees, contending that because the trial court did not explain its decision to grant

Bryant’s motion for judgment on the pleadings, any argument in that brief upon which the

trial court could have based its ruling must be addressed. It would be appropriate to resolve

this issue on grounds of waiver because Bryant has failed to renew this argument upon

appeal. If we were to do so, however, and the trial court did grant Bryant’s motion on this

basis, nothing would prevent the trial court from doing so again. Therefore, we will address

the issue on its merits.

       Bryant argued in its motion for judgment on the pleadings that Bell’s complaint

should be dismissed because “a class action cannot lie in a case involving parole [sic]

evidence necessary to resolve individualized questions of law and fact as between numerous

contracting parties [.]” Appellant’s Appendix at 65. Bryant did not elaborate upon this

contention beyond the above-quoted statement, and the statement was unsupported by

                                              10
citation to authority.    We presume this statement represents an argument that class

certification is improper where there is an ambiguity in the contract upon which the lawsuit is

based, because the resolution of the ambiguity would involve consideration of issues that

would be individualized among the various members of the purported class.

       T.R. 23 governs class action proceedings. In order to maintain a class action, a

plaintiff must satisfy the four requirements of T.R. 23(A). Those requirements are:

       (A) Prerequisites to a class action. One or more members of a class may sue or
       be sued as representative parties on behalf of all only if:
              (1) the class is so numerous that joinder of all members is
              impracticable;
              (2) there are questions of law or fact common to the class;
              (3) the claims or defenses of the representative parties are typical of the
              claims or defenses of the class; and
              (4) the representative parties will fairly and adequately protect the
              interests of the class.

If the plaintiffs satisfied the four requirements of T.R. 23(A), they must then satisfy at least

one of the requirements of T.R. 23(B). See 7-Eleven, Inc. v. Bowens, 857 N.E.2d 382 (Ind.

Ct. App. 2006). The determination of whether an action is maintainable as a class action is

committed to trial court’s sound discretion, and it will be reviewed for an abuse of that

discretion. Associated Med. Networks, Ltd. v. Lewis, 824 N.E.2d 679 (Ind. 2005).              “The

satisfaction of the requirements for class certification is a question of fact for the trial court.”

7-Eleven, Inc. v. Bowens, 857 N.E.2d at 388.

       Considering the foregoing, it is apparent to us that in order to determine whether

certification of the class here is appropriate under T.R. 23, the trial court will be required to

consider matters beyond the pleadings. Accordingly, this could not provide a valid basis for

                                                11
granting a T.R. 12(C) judgment on the pleadings in favor of Bryant. Therefore, judgment is

reversed and this cause is remanded for further proceedings consistent with this opinion.

      Judgment reversed and remanded.

BAKER, J., and VAIDIK, J., concur.

                                            12