Court Opinion

ID: 4289367
Source: CourtListenerOpinion
Date Created: 2018-06-28 15:09:52.954299+00
Date Added: 2024-06-11T14:37:33.099561
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),                                FILED
this Memorandum Decision shall not be                             Jun 28 2018, 9:14 am
regarded as precedent or cited before any
                                                                      CLERK
court except for the purpose of establishing                      Indiana Supreme Court
                                                                     Court of Appeals
the defense of res judicata, collateral                                and Tax Court

estoppel, or the law of the case.

ATTORNEYS FOR APPELLANTS                                  ATTORNEY FOR APPELLEE
William A. Ramsey                                         Heidi K. Koeneman
Mark H. Bains                                             Beckman Lawson, LLP
Barrett McNagny LLP                                       Fort Wayne, Indiana
Fort Wayne, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Glenn P. Staller and Glenda W.                            June 28, 2018
Staller,                                                  Court of Appeals Case No.
Appellants-Defendants/Counterclaimants,                   18A-PL-20
                                                          Appeal from the Allen Superior
        v.                                                Court
                                                          The Honorable David J. Avery,
Chunae Gallagher,                                         Judge
Appellee-Plaintiff/Counterclaim Defendant                 Trial Court Cause No.
                                                          02D09-1606-PL-281

Crone, Judge.

Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018               Page 1 of 8
                                             Case Summary
[1]   Glenn P. Staller and Glenda W. Staller (“Sellers”) sold their home to Chunae

      Gallagher (“Buyer”) pursuant to a real estate purchase agreement (“the

      Purchase Agreement”). Two years later, Buyer sued Sellers for fraud alleging

      that, at the time they signed a residential real estate sales disclosure form (“the

      Disclosure Form”) which was provided to Buyer from Sellers as part of the sale

      process, Sellers knowing and intentionally concealed the fact that the roof

      system was defective and that the residence had major structural defects, mold,

      moisture, and water problems. Sellers counterclaimed against Buyer asserting

      their entitlement, pursuant to a contractual provision in the Purchase

      Agreement, to recover attorney’s fees in the event they were the prevailing party

      on Buyer’s fraud claim. Following a bench trial, the trial court entered

      judgment in favor of Sellers on Buyer’s fraud claim but against Sellers on their

      counterclaim for attorney’s fees. Sellers appeal only the trial court’s judgment

      on their counterclaim arguing that the trial court erred in concluding that they

      were not entitled to recover their attorney’s fees. Concluding that Sellers are

      indeed entitled to recover attorney’s fees, we reverse and remand.

                                  Facts and Procedural History
[2]   Sellers sold their home to Buyer on June 20, 2014, pursuant to the Purchase

      Agreement. The Purchase Agreement includes a clause which states,

              Any party to this Agreement who is the prevailing party in any
              legal or equitable proceeding against any other party brought
              under or with relation to the Agreement or transaction shall be

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018   Page 2 of 8
              additionally entitled to recover court costs and reasonable
              attorney’s fees from the non-prevailing party.

      Defendants’ Ex. A at 5. As part of the sale process, Sellers provided Buyer with

      the Disclosure Form. On the Disclosure Form, Sellers stated that to the best of

      their then-current actual knowledge, the home had no mold problem. The

      Sellers disclosed that the roof did leak, that there was roof damage, and that the

      skylights leaked periodically. Buyer had an inspection performed and the

      inspection revealed no mold.

[3]   During the summer of 2016, Buyer discovered mold in the home. On June 14,

      2016, Buyer filed a complaint against Sellers alleging that they fraudulently

      misrepresented the condition of the home they sold to Buyer with respect to the

      roof condition, structural defects, mold, and water damage. Sellers filed their

      answer, affirmative defenses, and counterclaim for attorney’s fees. A bench

      trial was held on August 9, 2017. The trial court subsequently entered

      judgment in favor of Sellers on Buyer’s fraud claim but denied Sellers’s

      counterclaim for attorney’s fees. Sellers filed a motion to correct error alleging

      that the trial court erred in denying their request for attorney’s fees and,

      following a hearing, the trial court issued an order denying the motion to

      correct error. This appeal ensued.

                                     Discussion and Decision
[4]   Sellers’ claim for attorney’s fees is based on a provision contained in a contract

      between the parties. While parties to litigation generally pay their own

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018    Page 3 of 8
      attorney’s fees, they may certainly agree by contract to do otherwise. Reuille v.

      E.E. Brandenberger Constr., Inc., 888 N.E.2d 770, 771 (Ind. 2008). Indeed, “when

      parties have executed a contractual provision agreeing to pay attorney fees,

      such agreement is enforceable according to its terms unless the contract is

      contrary to law or public policy.” Id.

[5]   Interpretation of a contract presents a question of law and is reviewed on appeal

      de novo. King v. Conley, 87 N.E.3d 1146, 1152 (Ind. Ct. App. 2017), trans. denied

      (2018). When interpreting a contract, our paramount goal is to ascertain and

      effectuate the intent of the parties. Id. This requires the contract to be read as a

      whole, and the language construed so as not to render any words, phrases, or

      terms ineffective or meaningless. Id. When the terms of the contract are not

      ambiguous, we will give them their plain and ordinary meaning. Shorter v.

      Shorter, 851 N.E.2d 378, 383 (Ind. Ct. App. 2006).

[6]   As noted above, the Purchase Agreement between Buyer and Sellers includes a

      clause which states,

              Any party to this Agreement who is the prevailing party in any
              legal or equitable proceeding against any other party brought
              under or with relation to the Agreement or transaction shall be
              additionally entitled to recover court costs and reasonable
              attorney’s fees from the non-prevailing party.

[7]   Defendants’ Ex. A at 5. Thus, this provision applies to “any legal or equitable

      proceeding” between the parties “brought under or with relation to the

      Agreement or transaction.” Id. (emphases added).

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018   Page 4 of 8
[8]   In Storch v. Provision Living, LLC, 47 N.E.3d 1270, 1274, (Ind. Ct. App. 2015),

      this Court considered the plain meaning of the word “relate” in the context of

      an attorney fee provision in a residence agreement between an assisted living

      facility and one of its residents.1 Consulting a modern dictionary, we stated that

      “two things ‘relate’ if they simply ‘have relationship or connection.’” Id.

      (citation omitted); see UFG, LLC v. Southwest Corp., 784 N.E.2d 536, 545 (Ind.

      Ct. App. 2003) (courts may properly consult English language dictionaries to

      determine plain and ordinary meaning of words), trans. denied. We

      acknowledged that “this definition is clearly very broad, but parties have the

      right to contract in broad terms if they wish.” Id. Looking to other states for

      guidance, we observed that appellate courts in Colorado have had occasion to

      define “relate” in the attorney fee context and have chosen to do so in a

      similarly broad fashion, holding that such language “encompass[es] all issues

      surrounding the underlying subject matter.” Id. at 1275 (quoting In re Estate of

      Gattis, 318 P.3d 549, 558 (Colo. App. 2013)).

[9]   Accordingly, in this case, the plain meaning of the phrase “with relation to”

      would seem to encompass all issues surrounding the underlying subject matter

      of the Purchase Agreement, that being Sellers’ home. As for the word

      “transaction,” it is broadly defined as “an exchange or transfer of goods,

      services, or funds.” MERRIAM–WEBSTER ONLINE DICTIONARY,

      https://www.merriam-webster.com/dictionary/transaction (last visited June

      1
          We note that the term “relation” used here is simply the noun form of the verb “relate.”

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018                    Page 5 of 8
       13, 2018). In the present context, the transaction that occurred is the sale and

       transfer of Sellers’ home to Buyer.

[10]   Despite the broad language used, the trial court concluded that Buyer’s fraud

       claim was not a “legal or equitable proceeding against any other party brought

       under or with relation to the Agreement or transaction” as contemplated by the

       Purchase Agreement. Appellants’ App. Vol. 2 at 18. It appears that the court

       essentially determined that Sellers could not recover attorney’s fees under the

       terms of the Purchase Agreement because Buyer’s claim was one for fraud as

       opposed to one for breach of contract. However, based on the plain meaning of

       the language used, it is patently clear that the parties intended that the attorney

       fee provision apply to much more than a breach of contract claim brought

       under the Purchase Agreement.

[11]   Indeed, had the parties intended the attorney fee provision to apply only to

       claims of breach of the Agreement itself, the contract could have provided fees

       simply to the prevailing party “in any action brought to enforce this

       [A]greement.” See Storch, 47 N.E.3d at 1273. 2 “Such language is commonly

       2
         On Sellers’ motion to correct error, the trial court considered our opinion in Storch but found it
       distinguishable and inapplicable because the residence agreement at issue in Storch was an executory contract
       as opposed to an executed contract, such as the Purchase Agreement in the present case. See generally 2625
       Bldg. Corp. v. Deutsch, 179 Ind. App. 425, 428, 385 N.E.2d 1189, 1191 (1979) (noting that an executory
       contract is “one in which a party binds himself to do or not do a particular thing” and an executed contract is
       “one in which the object of the agreement is performed and everything that was to be done is done.”)
       (citation omitted). However, this Court made no mention of the executory or executed nature of the
       agreement in Storch, nor did we assign any relevance to that issue in our contract interpretation. We find the
       Storch reasoning applicable and instructive, and we disagree with the trial court that the fact that the Purchase
       Agreement here is an executed contract has any bearing on the rights or obligations bestowed to the parties
       pursuant to the plain meaning of the contract’s terms.

       Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018                          Page 6 of 8
       found in attorney fee provisions.” Id. (citing Kuntz v. EVI, LLC, 999 N.E.2d 425,

       433 (Ind. Ct. App. 2013). The attorney fee provision here goes much further,

       covering not only actions brought “under the Agreement,” but also actions

       brought “with relation to” the Agreement or the “transaction.” Defendants’ Ex.

       A at 5. Were we to adopt the trial court’s narrow interpretation, these latter

       terms and phrases would be rendered meaningless. As we are compelled to

       avoid such outcomes, we must conclude that the plain language of the

       provision contemplates more than actions for breach of the Purchase

       Agreement. Buyer’s fraud claim was unquestionably brought “with relation to”

       the sale “transaction,” and therefore, as the prevailing party, Sellers are entitled

       to recover court costs and reasonable attorney’s fees from Buyer.

[12]   We are not persuaded by Buyer’s argument that the fraud claim is somehow

       outside the purview of the attorney fee provision of the Purchase Agreement

       simply because it was based on Sellers’ alleged misrepresentations on the

       Disclosure Form, and the Disclosure Form expressly provides that it “is not

       intended to be part of any contract between buyer and owner.” Plaintiff’s Ex.

       1. Buyer argues that we are precluded from making any finding “that would

       tie” a fraud claim based on the Disclosure Form to the “subsequently entered

       into” Purchase Agreement. Appellee’s Br. at 10. However, it cannot

       reasonably be argued that Sellers provided Buyer the Disclosure Form for any

       purpose other than as part of the sale process. Although the Disclosure Form

       was not made part of the Purchase Agreement itself, to say that the Disclosure

       Form does not relate to the Agreement or the sale transaction is nonsensical.

       Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018   Page 7 of 8
[13]   The trial court erred in concluding that Sellers were not entitled to recover their

       attorney’s fees pursuant to the Purchase Agreement. Accordingly, we reverse

       the trial court’s judgment on Sellers’ counterclaim and remand so that the trial

       court may calculate reasonable attorney’s fees and award those fees to Sellers.

[14]   Reversed and remanded.

       Bailey, J., and Brown, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 18A-PL-20 | June 28, 2018   Page 8 of 8