Court Opinion

ID: 2724925
Source: CourtListenerOpinion
Date Created: 2014-09-08 20:43:06.367076+00
Date Added: 2024-06-11T13:26:41.147338
License: Public Domain

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                                     Jun 03 2014, 8:56 am
establishing the defense of res judicata,
collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT:                       ATTORNEYS FOR APPELLEES:

GEORGE M. PLEWS                                BRADLEY R. SUGARMAN
BRIANNA J. SCHROEDER                           THOMAS F. O’GARA
JONATHAN PENN                                  Taft Stettinius & Hollister, LLP
Plews Shadley Racher & Braun, LLP              Indianapolis, Indiana
Indianapolis, Indiana
                                               DONN H. WRAY
                                               NICHOLAS K. GAHL
                                               Katz & Korin, PC
                                               Indianapolis, Indiana

                             IN THE
                  COURT OF APPEALS OF INDIANA

5200 KEYSTONE LIMITED REALTY, LLC,      )
                                        )
       Appellant-Plaintiff,             )
                                        )
              vs.                       )             No. 49A04-1306-CT-311
                                        )
FILMCRAFT LABORATORIES, INC., ERIC      )
J. SPICKLEMIRE, PORTRAIT AMERICA, INC., )
A.C. DEMAREE, INC., RUSS DELLEN, INC.,  )
CLEAN CAR, INC., and THE WAX MUSEUM )
& AUTO SALES, INC.,                     )
                                        )
       Appellees-Defendants.            )

                   APPEAL FROM THE MARION SUPERIOR COURT
                        The Honorable Michael D. Keele, Judge
                           Cause No. 49D07-0310-CT-3394
                                            June 3, 2014

                MEMORANDUM DECISION – NOT FOR PUBLICATION

RILEY, Judge

                                 STATEMENT OF THE CASE

        Appellant-Plaintiff, 5200 Keystone Limited Realty, LLC., (KLR), appeals the trial

court’s grant of summary judgment in favor of Filmcraft Laboratories, Inc. (Filmcraft)1

and Eric J. Spicklemire (Spicklemire), et al., on KLR’s property tax claim

        We affirm.

                                                ISSUE

        KLR raises two issues on appeal, one of which we find dispositive and which we

restate as follows: Whether the trial court erred by concluding that KLR lacked standing

to pursue its property tax claim.

                           FACTS AND PROCEDURAL HISTORY

        Beginning in 1974, Spicklemire and his father leased a property at 5216 North

Keystone Avenue in Indianapolis (the Site) where they operated their film developing

business, Filmcraft. On January 5, 1981, Spicklemire and his father acquired the Site and

Spicklemire became the sole owner after his father passed away in 1994. On May 26,

2000, Spicklemire obtained a loan from Apex Mortgage Corporation (Apex), secured by

a mortgage on the Site.         In July 2001, Spicklemire ceased making loan payments,

Filmcraft closed its operations and vacated the Site. On September 27, 2001, Apex filed

1
  At the request of the respective parties, we recently dismissed with prejudice KLR’s case against
Filmcraft. KLR’s appeal with regard to all other Appellees remains pending and shall be analyzed in this
opinion.

                                                   2
its complaint against Spicklemire, seeking foreclosure on the mortgage. The trial court

issued a foreclosure decree in April 2002. Following a sheriff’s sale on September 30,

2002, Apex obtained title, via sheriff’s deed, to the Site. In 2003, Apex hired an agency

to conduct environmental testing of the soil and groundwater at the Site and discovered

that the Site contained environmental contaminants. Thereafter, on October 9, 2003,

Apex filed another complaint against Filmcraft, requesting contribution from Filmcraft

for future environmental cleanup costs.

       On August 24, 2004, the Marion County Auditor gave Apex notice of delinquent

taxes and special assessments that had become due and owing after September 30, 2002

but which had been assessed in 2001 and 2002 while Spicklemire had ownership of the

Site. On October 7, 2004, the Site was sold at a tax sale. In December 2004, KLR, a

limited liability company, acquired the Site from Apex via quitclaim deed. Thereafter,

KLR was substituted as the plaintiff in the lawsuit against Filmcraft.

       On January 14, 2005, Demetrios Emmanoelides (Emmanoelides), KLR’s sole

member, paid the unpaid back property taxes in the amount of $28,294.47 by personal

check to the Marion County Treasurer to redeem the Site from the tax sale. In March

2005 and May 2005, KLR amended the original complaint to add various other

defendants who previously owned the Site and also added a claim to recover the back

property taxes for which Spicklemire was responsible. On May 24, 2005, KLR filed a

motion for summary judgment on its complaint. After a five-year stay during which the

parties unsuccessfully negotiated the claims, Filmcraft and Spicklemire filed their

respective responses to KLR’s motion and cross-moved for summary judgment. On May

                                             3
31, 2011, the trial court granted KLR’s motion for summary judgment against

Spicklemire and against Filmcraft as to Filmcraft’s obligation under a continuing

guarantee for Spicklemire’s liabilities. Filmcraft appealed; Spicklemire failed to timely

perfect his appeal.   On appeal, we determined Filmcraft was not liable under the

continuing guarantee for Spicklemire’s environmental liability but affirmed the trial court

with respect to its liability for Spicklemire’s property taxes. See Filmcraft Laboratories,

Inc. v. 5200 Keystone Ltd. Realty, LLC, 969 N.E.2d 632 (Ind. Ct. App. 2012).

       On January 15, 2013, KLR moved for summary judgment with respect to the

specific amount of taxes it could recover from Spicklemire. Spicklemire responded,

designated evidence in opposition to KLR’s motion, and moved to vacate the May 31,

2011 Order. After a hearing, the trial court issued its Order on April 12, 2013, vacating

its prior summary judgment ruling and entering summary judgment in favor of

Spicklemire. The trial court concluded, in pertinent part

              The records of the Marion County Treasurer show that
       Emmanoelides paid $28,294.47 to redeem the Site from a tax sale on
       January 14, 2005. KLR testified that Emmanoelides paid this amount out
       of his personal funds and was identified as the “Remitter” on the check he
       used to make that payment. Moreover, after redeeming the Site the Auditor
       provided Emmanoelides with a Tax Sale Redemption Worksheet and a
       receipt entitled “Quietus.” The Redemption Worksheet identified Apex as
       the taxpayer for the Site and Emmanoelides as the person who redeemed
       the Site. Additionally, the “Quietus” receipt certified that the funds had
       been paid to redeem the Site from the tax and had been “[d]eposited with
       the Marion County Treasurer for [the] account of: APEX MTG CORP.”
       These facts clearly establish that Emmanoelides, not KLR, paid the back
       property taxes owed on the Site.
              KLR testified that Emmanoelides made this payment as a capital
       contribution to KLR. However, KLR has failed to designate any evidence
       such as a ledger or an operating agreement. In fact, KLR testified that it
       has not maintained any ledger or other record identifying any capital

                                            4
      contributions to the company. KLR also testified that it has not created any
      notes in favor of Emmanoelides demonstrative of KLR’s obligation to
      repay the amounts he paid for property taxes at the Site out of his personal
      funds. KLR’s self-serving testimony does not turn Emmanoelides’
      payment into a contribution to the company. Rather, Indiana business law
      requires contributions to be made to and maintained in the records of the
      company.
              These facts clearly demonstrate that KLR lacks standing to pursue
      its property tax claim.

(Appellant’s App. pp. 19-20) (internal references omitted).

      On May 13, 2013, KLR filed its motion to correct error together with new

evidence that had not been previously submitted to the trial court. On June 4, 2013, the

trial court denied KLR’s motion.

      KLR now appeals. Additional facts will be provided as necessary.

                            DISCUSSION AND DECISION

                                   I. Scope of Appeal

      Initially, we turn to Spicklemire’s contention that although KLR timely appealed

the trial court’s summary judgment in favor of Spicklemire, it failed to appeal the trial

court’s subsequent denial of KLR’s motion to correct error. Consequently, Spicklemire

asserts that our appellate review is necessarily limited to the trial court’s summary

judgment and the evidence submitted in support of the parties’ respective motions for

summary judgment.

      Indiana Appellate Rule 9(F) requires the appellant to include the date and time of

the judgment or order appealed in his Notice of Appeal. Here, KLR’s Notice of Appeal

specified it was appealing the trial court’s Order of April 12, 2013—Order Vacating the

Court’s May 31, 2011, Order Granting Partial Summary Judgment in Favor of Plaintiff

                                            5
on its Property Tax Claim—and indicated that the subsequent motion to correct error had

been denied on June 4, 2013. Attached to the Notice are copies of the trial court’s April

12, 2013 summary judgment as well as the trial court’s denial of KLR’s motion to correct

error. We conclude that KLR is appealing both Orders.

      Next, we determine whether we may consider the new evidence KLR submitted

with its motion to correct error. Indiana Trial Rule 59(A)(1) provides that a motion to

correct error is a prerequisite for appeal when a party seeks to address “[n]ewly

discovered material evidence . . . capable of production within thirty (30) days of final

judgment which, with reasonable diligence, could not have been discovered and produced

at trial.” To prevail on a motion to correct error premised on newly discovered evidence,

a party must demonstrate that the evidence could not have been discovered and produced

at trial with reasonable diligence; that the evidence is material, relevant, and not merely

cumulative or impeaching; that the evidence is not incompetent; that he exercised due

diligence to discover the evidence in time for the final hearing; that the evidence is

worthy of credit; and, that the evidence raises the strong presumption that a different

result would have been reached upon retrial. Matzat v. Matzat, 854 N.E.2d 918, 920 (Ind.

Ct. App. 2006).

      In its summary judgment, the trial court based its conclusion that KLR lacked

standing to pursue its claim on the absence of designated evidence documenting

Emmanoelides’ capital contributions to KLR. In response, KLR submitted, by way of a

motion to correct error, the operating agreement of KLR and the minutes from the first

meeting of KLR’s member. Based on these newly discovered documents, KLR contends

                                            6
that “[t]hese documents, verified by [Emmanoelides’] payment was a capital contribution

to KLR.” (Appellant’s App. p. 226).

       The only reference pointing to KLR’s reasonable diligence in discovering these

new materials, is a statement included in Emmanoelides’ affidavit filed with its motion,

affirming

       5. Since I executed the [operating] [a]greement and held the first meeting
       of the LLC members in 2004, I have changed residences several times. I
       have looked for these documents in the past but was unable to locate them
       as they were misplaced during my moves.

       6. After the [c]ourt issued its Order of April 12, 2013, I again looked for
       these documents. On or about May 1, 2013, I found the documents.

(Appellant’s App. p. 263).

       It is noteworthy that Spicklemire introduced his standing claim on February 22,

2013, in its response to KLR’s motion for summary judgment. Despite being put on

notice that this claim was raised, Emmanoelides did not appear to have looked for the

documents. Only after the trial court issued its summary judgment finding in favor of

Spicklemire on the standing issue, Emmanoelides was jolted into action and was able to

locate the documents. However, as alluded to by Spicklemire, this newly discovered

operating   agreement     and      schedule   of   initial   capital   contribution   contradict

Emmanoelides’ sworn testimony as KLR’s member that the company never maintained a

ledger of capital contributions.

       We have long recognized that a litigant is obligated “to search for evidence in the

place where, from the nature of the controversy, it would be most likely to be found.”

Hartig v. Stratman, 760 N.E.2d 668, 671 (Ind. Ct. App. 2002). Despite being notified

                                               7
that standing had become an issue, neither Emmanoelides nor KLR’s counsel timely

looked for documents dispelling the claim. Although he had searched for the papers in

the undefined “past,” Emmanoelides clearly was not concerned until after the trial court’s

summary judgment. (Appellant’s App. p. 263). Such an attitude is at odds with the

concept of “reasonable diligence.” See Matzat, 854 N.E.2d at 920. Where parties neglect

to follow-up, they do so at their own peril and may not later turn to the doctrine of newly

discovered evidence for relief. See Hartig, 760 N.E.2d at 671-72. As a result, we are not

now allowed to consider the newly discovered documents.

                                         II. Standing

       KLR contends that the trial court erred in concluding that it lacked standing to

pursue its claim against Spicklemire. Specifically, KLR maintains that Emmanoelides

was appointed as KLR’s sole member and acted on behalf of the company when he paid

Spicklemire’s property taxes.

                                   A. Standard of Review

       Although the final order entered by the trial court was its denial of KLR’s motion

to correct error, that motion was based on the trial court’s summary judgment; therefore,

we review this appeal using the standard applicable to summary judgment reviews. See,

e.g., Pier 1 Imps., Inc. v. Acadia Merrillville Realty, L.P., 991 N.E.2d 965, 968 (Ind. Ct.

App. 2013). Summary judgment is appropriate only when there are no genuine issues of

material fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial

Rule 56(C). A fact is material if its resolution would affect the outcome of the case, and

an issue is genuine if a trier of fact is required to resolve the parties’ differing accounts of

                                               8
the truth . . ., or if the undisputed facts support conflicting reasonable inferences.

Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009).

       In reviewing a trial court’s ruling on summary judgment, this court stands in the

shoes of the trial court, applying the same standards in deciding whether to affirm or

reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley, 891 N.E.2d
604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we must determine

whether there is a genuine issue of material fact and whether the trial court has correctly

applied the law. Id. at 607-08. In doing so, we consider all of the designated evidence in

the light most favorable to the non-moving party. Id. at 608. The party appealing the

grant of summary judgment has the burden of persuading this court that the trial court’s

ruling was improper. Id. When the defendant is the moving party, the defendant must

show that the undisputed facts negate at least one element of the plaintiff’s cause of

action or that the defendant has a factually unchallenged affirmative defense that bars the

plaintiff’s claim. Id. Accordingly, the grant of summary judgment must be reversed if

the record discloses an incorrect application of the law to the facts. Id.

       We observe that in the present case, the trial court entered findings of fact and

conclusions of law in support of its judgment. Special findings are not required in

summary judgment proceedings and are not binding on appeal. Id. However, such

findings offer this court valuable insight into the trial court’s rationale for its decision and

facilitate appellate review. Id.

                                         B. Analysis

                                               9
       In considering whether KLR has standing to bring its claim for payment of back

property taxes, we note that the question of standing is generally one of law, not fact.

Vectren Energy Marketing & Serv., Inc. v. Executive Risk Specialty Ins., Co., 875 N.E.2d
774, 777 (Ind. Ct. App. 2007). Standing is a judicial doctrine that focuses on whether the

complaining party is the proper party to invoke the trial court’s jurisdiction. Id. The

standing requirement “is a limit on the court’s jurisdiction which restrains the judiciary to

resolving real controversies in which the complaining party has a demonstrable injury.”

Id. To establish standing, KLR must demonstrate a personal stake in the outcome of the

lawsuit and must show that it has sustained, or was in the immediate danger of sustaining,

some direct injury as a result of the conduct at issue. Id.

       Turning to Emmanoelides’ status as KLR’s sole member, we are mindful that a

member may act as an agent of the company under the auspices of an agency

relationship.   See Quality Foods, Inc. v. Holloway Assocs Prof’l Eng’rs & Land

Surveyors, Inc., 852 N.E.2d 27, 32 (Ind. Ct. App. 2006). Nevertheless, the existence of a

possible agency relationship alone is not sufficient for the company to incur standing,

rather, it must still satisfy the general principles of a standing requirement: personal

stake and injury. KLR failed to comply with this burden.

       The evidence designated by KLR indicates that Emmanoelides intended to pay

Spicklemire’s back taxes as a capital contribution to KLR on January 14, 2005. He also

testified that because KLR, as a company, did not have any checks, he paid the taxes with

his own personal check. In his deposition testimony, Emmanoelides affirmed that KLR

did not maintain a ledger or operating agreement, nor had the company created any notes

                                             10
in favor of its sole member demonstrating KLR’s obligation to repay the amounts

Emmanoelides had paid out of his personal funds. Pursuant to Ind. Code § 23-18-4-

8(a)(5)(A), a limited liability company must keep at its principal office, “a writing setting

out the amount of cash, if any, and a statement of the agreed value of other property or

services contributed by each member and the times at which or events upon the

happening.”

         Besides Emmanoelides’ own statement that the payment of back taxes should be

characterized as a capital contribution, there is no evidence establishing that KLR has a

personal stake in the outcome of this litigation and has suffered a direct injury.

Generally, “[T]ransparent contentions, mere pleading allegations, and self-serving

unverified statements of facts cannot defeat a motion for summary judgment.”

Raymundo v. Hammond Clinic Ass’n, 449 N.E.2d 276, 282 (Ind. 1983). Therefore, in the

absence of some designated evidence that KLR sustained a demonstrable injury, we

affirm the trial court’s Order concluding that KLR does not have standing to pursue its

claim.

                                      CONCLUSION

         Based on the foregoing, we conclude that the trial court properly concluded that

KLR did not have standing to pursue its claim.

         Affirmed.

MAY, J. concurs

VAIDIK, C.J. concurs in result with separate opinion

                                             11
_______________________________________________________

                              IN THE
                    COURT OF APPEALS OF INDIANA

5200 KEYSTONE LIMITED REALTY, LLC,                 )
                                                   )
       Appellant-Plaintiff                         )
                                                   )
              vs.                                  )   No. 49A04-1306-CT-311
                                                   )
FILMCRAFT LABORATORIES, INC., ERIC J.              )
SPICKLEMIRE, PORTRAIT AMERICA,                     )
INC., A.C. DEMAREE, INC., RUSS DELLEN,             )
INC., CLEAR CAR, INC., and THE WAX                 )
MUSEUEM & AUTO SALES, INC.                         )
                                                   )
       Appellees-Defendants.                       )

VAIDIK, Chief Judge, concurring in result.

        The majority concludes that 5200 Keystone Limited Realty, LLC (“KLR”) lacks

standing to pursue its property-tax claim against Eric J. Spicklemire. I respectfully

concur in result because I believe that KLR is barred from bringing a claim against

Spicklemire for the Site’s tax liabilities.

                                              12
       Under Indiana law, a foreclosure followed by sheriff’s sale terminates any claims

between a mortgagee and a mortgagor relating to the mortgaged land:

       Sound equitable principles certainly require that a deed made upon a sale
       pursuant to a decree of foreclosure of a mortgage on land should be as valid
       as if executed by the mortgagor and mortgagee, and that it should constitute
       an entire bar against each of them, and against all parties to the proceedings
       therein, and against their heirs, respectively, and all persons claiming under
       such heirs.

Dixon v. Eikenberry, 161 Ind. 311, 67 N.E. 915, 917 (1903) (citations omitted); see also

Armstrong v. Keene, 861 N.E.2d 1198, 1201 n.4 (Ind. Ct. App. 2007) (defining

foreclosure as a legal proceeding that terminates a mortgagor’s interest in property),

reh’g denied, trans. denied; Dipert v. Kllingbeck, 124 Ind. App. 18, 112 N.E.2d 306, 309

(1953) (a suit resulting in foreclosure of a real-estate mortgage is an in rem action and all

rights in the real estate are forever concluded by the foreclosure decree), reh’g denied.

       In this case, Apex (the mortgagee) took title to the Site in 2002 after it obtained a

foreclosure judgment against Spicklemire (the mortgagor) and received a sheriff’s deed.

Two years later, KLR took title to the Site via a quitclaim deed from Apex. Applying

Dixon’s logic, when Apex received the sheriff’s deed following foreclosure, it was barred

from later pursuing a property-tax claim against Spicklemire. KLR, Apex’s heir in

ownership of the Site, is likewise barred from bringing a property-tax claim against

Spicklemire. Dixon, 67 N.E. at 917.

       Because I believe KLR is barred from pursuing its property-tax claim against

Spicklemire, I respectfully concur in result.

                                                13