Court Opinion

ID: 4583999
Source: CourtListenerOpinion
Date Created: 2020-11-05 17:04:03.793098+00
Date Added: 2024-06-11T13:46:14.696562
License: Public Domain

FILED
                                                                            Nov 05 2020, 9:06 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court

      ATTORNEY FOR APPELLANT                                    ATTORNEY FOR APPELLEE
      Karen Celestino-Horseman                                  James K. Wisco
      Indianapolis, Indiana                                     Martinsville, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Kenneth Stephens,                                         November 5, 2020
      Appellant-Defendant,                                      Court of Appeals Case No.
                                                                20A-PL-562
              v.                                                Appeal from the Morgan Superior
                                                                Court
      Richard Tabscott,                                         The Honorable Peter R. Foley,
      Appellee-Plaintiff.                                       Judge
                                                                The Honorable Terry E. Iacoli,
                                                                Special Judge
                                                                Trial Court Cause No.
                                                                55D01-1902-PL-393

      Altice, Judge.

                                                Case Summary

[1]   Richard Tabscott entered into an oral agreement to transfer certain real

      property (the Property) that he owned in Morgan County to Kenneth Stephens.

      The men later recorded a warranty deed executed by Tabscott, which conveyed

      the Property to Stephens purportedly in exchange for $16,000. Stephens took

      Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020                           Page 1 of 14
      possession of the Property, but he never paid any money to Tabscott and, as

      found by the trial court, never had any intention to pay. Tabscott eventually

      filed a complaint against Stephens to, among other things, recover the purchase

      price for the Property. Stephens asserted the Statute of Frauds as a defense.

[2]   Following an evidentiary hearing, the trial court entered judgment in favor of

      Tabscott, ordering Stephens to pay $16,000 for the Property and $4000 in

      attorney’s fees. Stephens raises a number of issues on appeal, which we

      consolidate and restate as the following:

              1. Did the trial court err by refusing to apply the Statute of
              Frauds?

              2. Was the award of attorney’s fees improper?

[3]   We affirm and remand.

                                        Facts & Procedural History

[4]   Stephens began working at Tabscott’s longtime place of employment around

      the beginning of 2017. Shortly thereafter, Stephens needed a place to live, and

      Tabscott indicated that the Property was unoccupied and available. Stephens

      moved into the home on the Property in April 2017. Stephens paid no rent but

      did pay the utility bills and maintain the Property, while Tabscott continued to

      pay the property taxes. At some point, the parties entered into an oral

      agreement for Stephens to purchase the Property for, according to Tabscott,

      Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020       Page 2 of 14
      $16,000, but there was a delay in the purchase because Stephens needed to wait

      for unrelated litigation to be settled.

[5]   With the understanding that the other litigation had been resolved, Tabscott

      and his wife Kim eventually obtained a warranty deed form from Office Depot,

      and Kim filled out the form. The warranty deed was then executed by Tabscott

      and notarized on August 22, 2018. The warranty deed expressly indicated that

      Tabscott granted the Property to Stephens “[f]or valuable consideration in the

      sum of $16,000.00 the receipt of which is hereby acknowledged.” 1 Appendix at

      62. Stephens acknowledges, however, that he never paid any money to

      Tabscott for the Property either before or after execution of the deed.

[6]   On September 21, 2018, Stephens and Tabscott met at the Morgan County

      Recorder’s Office to record the deed. Stephens was to pay Tabscott at the time,

      but he arrived with no check or money for Tabscott. Stephens urged Tabscott

      to proceed with recording the deed and promised to pay him. Based on

      Stephens’s promise, Tabscott recorded the deed. Over the next month or so,

      Tabscott repeatedly asked Stephens about payment, and Stephens indicated that

      the money was still tied up. Tabscott then contacted an attorney, who sent a

      demand letter to no avail.

[7]   On February 22, 2019, Tabscott filed the instant complaint against Stephens.

      He alleged breach of contract, fraud, theft, and conversion and sought to

      1
          The quoted language was part of the form aside from the handwritten dollar amount.

      Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020                      Page 3 of 14
      recover payment from Stephens for the Property or reformation of the deed, as

      well as treble damages and attorney’s fees. In response, Stephens pled the

      affirmative defense of the Statute of Frauds, among other things.

[8]   The matter proceeded to a short bench trial on December 10, 2019. In addition

      to his own testimony, Tabscott presented the testimony of two coworkers,

      Daniel Freeman and Jeff Green. Freeman testified that in late 2018 he

      overheard heated exchanges between Tabscott and Stephens regarding payment

      and heard Stephens indicate that he was waiting on a check to come in.

      Similarly, Green testified:

              I just saw, heard [Tabscott] asking for money for the property,
              and [Stephens] telling him he had the money for the property and
              pulling up something on his cell phone and showing him some
              account, bank account or something, and he was telling him that
              he had the money and that he was waiting to get it.

      Transcript at 31-32.

[9]   Stephens testified in his own defense. He acknowledged that there was an oral

      agreement regarding the conveyance of the Property and that he never paid any

      money to Tabscott. Stephens claimed, however, that the consideration for the

      Property was his act of finding a legal document 2 for Tabscott inside the home

      2
       Stephens indicated that this document was a deed for property owned by Tabscott in Florida. Tabscott,
      however, testified that there was no deed for the Florida property. Rather, the documents found by Stephens
      were in a leather-bound binder that contained a trust and death certificates of his deceased wife’s parents.
      Tabscott acknowledged that Stephens found this but testified that there was no agreement to give him the
      Property in exchange for this act.

      Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020                             Page 4 of 14
       on the Property. Stephens described the volume of paperwork he had to go

       through as a “hoarder’s house full.” Id. at 42. Stephens testified that he located

       the document in late 2017 and provided it to Tabscott. Stephens claimed that

       when the deed for the Property was recorded about a year later, he believed he

       had satisfied the consideration due and that the $16,000 figure placed on the

       deed was just an “arbitrary number.” Id. at 51. Stephens denied having any

       conversations regarding payment at work and implied that Green and Freeman

       were making that up because they were friends with Tabscott.

[10]   On February 28, 2020, the trial court issued an order, which included specific

       findings of fact and conclusions. The court found that there was an oral

       agreement between the parties for Stephens to purchase the Property for

       $16,000. Pursuant to this agreement and Stephens’s promise to pay, Tabscott

       conveyed the Property to Stephens by warranty deed, but Stephens never paid

       any of the purchase price. Providing a lengthy legal analysis, the trial court

       rejected Stephens’s argument that a strict application of the Statute of Frauds

       disposed of Tabscott’s claims. In failing to pay the purchase price, the trial

       court found that Stephens had committed breach of contract, theft, and

       conversion. The court also found that Stephens had fraudulently induced

       Tabscott to transfer the Property with no intention to pay the agreed price.

       Based on its findings and conclusions, the court ordered as follows:

               1. The Court finds for Plaintiff on all counts alleged;

               2. Judgment shall be entered against Defendant in favor of
               Plaintiff in the amount of Twenty Thousand Dollars
       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020       Page 5 of 14
               ($20,000.00), said judgment being comprised of the Sixteen
               Thousand Dollars ($16,000.00) owed for the property and Four
               Thousand Dollars ($4,000.00) in reasonable attorney fees, in
               accordance with treble damages.

               3. If Defendant is unable to deliver said payment to Plaintiff
               within ninety (90) days, the Court will issue an Order reforming
               the deed and transferring the Property back to Plaintiff.

               4. If said deed is issued, the judgment will then be reduced to
               Four Thousand Dollars ($4,000.00).

       Appendix at 17. Stephens now appeals.

                                              Standard of Review

[11]   The trial court’s judgment included sua sponte findings and conclusions

       pursuant to Indiana Trial Rule 52(A). On review, we will not set aside the trial

       court’s findings or judgment unless clearly erroneous, and due regard will be

       given to the opportunity of the trial court to judge the credibility of the

       witnesses. Steele-Giri v. Steele, 51 N.E.3d 119, 123 (Ind. 2016). Further, we will

       review the issues covered by the findings with a two-tiered standard, asking

       “whether the evidence supports the findings, and whether the findings support

       the judgment.” Id. “Any issue not covered by the findings is reviewed under

       the general judgment standard, meaning a reviewing court should affirm based

       on any legal theory supported by the evidence.” Id. at 123-24. Finally, any

       legal conclusions made by the trial court will be reviewed de novo. Perkinson v.

       Perkinson, 989 N.E.2d 758, 761 (Ind. 2013).

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020           Page 6 of 14
[12]   We recognize that Tabscott has not filed an appellee’s brief. As a result, we will

       not undertake the burden of developing arguments on his behalf and will

       reverse if Stephens establishes prima facie error. See Duty v. CIT

       Group/Consumer Fin., Inc., 86 N.E.3d 214, 215 (Ind. Ct. App. 2017). Prima

       facie, in this context, means at first sight, on first appearance, or on the face of

       it. Id. “This standard, however, ‘does not relieve us of our obligation to

       correctly apply the law to the facts in the record in order to determine whether

       reversal is required.’” WindGate Properties, LLC v. Sanders, 93 N.E.3d 809, 813

       (Ind. Ct. App. 2018) (quoting Wharton v. State, 42 N.E.3d 539, 541 (Ind. Ct.

       App. 2015)).

                                            Discussion & Decision

                                              1. Statute of Frauds

[13]   Stephens’s primary argument on appeal is that the trial court erred by not

       applying the Statute of Frauds to bar Tabscott from attempting to enforce the

       oral contract. Essentially, he contends that the parties provided contradictory

       evidence regarding the consideration for the agreement, which was never

       reduced to writing, and that this is “exactly the situation intended to be avoided

       by the Statute of Frauds.” Appellant’s Brief at 15.

[14]   Ind. Code § 32-21-1-1(b) provides in relevant part:

               A person may not bring any of the following actions unless the
               promise, contract, or agreement on which the action is based, or
               a memorandum or note describing the promise, contract, or

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020         Page 7 of 14
               agreement on which the action is based, is in writing and signed
               by the party against whom the action is brought or by the party’s
               authorized agent:

                                                        ****

               (4) An action involving any contract for the sale of land.

       “The Statute is intended to preclude fraudulent claims that would probably

       arise when one person’s word is pitted against another’s and that would open

       wide the floodgates of litigation.” Jernas v. Gumz, 53 N.E.3d 434, 446 (Ind. Ct.

       App. 2016), trans. denied. Nevertheless, oral contracts for the conveyance of

       land are not void, but voidable and, thus, the statute affects only the

       enforceability of contracts that have not yet been performed. See id. at 445.

       Further, oral contracts for the sale of land “may be enforced by a court of equity

       under the doctrine of part performance.” Summerlot v. Summerlot, 408 N.E.2d

       820, 828 (Ind. Ct. App. 1980). “Where one party to an oral contract in reliance

       on that contract has performed his part of the agreement to such an extent that

       repudiation of the contract would lead to an unjust or fraudulent result, equity

       will disregard the requirement of a writing and enforce the oral agreement.” Id.

[15]   In this case, Tabscott has by all accounts performed his part of the agreement.

       The Property has been transferred by warranty deed to Stephens, and Stephens

       has accepted such transfer. Indeed, Stephens possesses and claims the property

       as his own by virtue of the warranty deed, which he accompanied Tabscott to

       record. Under these circumstances, it has long been understood that an action

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020       Page 8 of 14
       by the seller of land to recover the purchase price is not foreclosed by the

       Statute of Frauds. See e.g. Powell v. Nusbaum, 136 N.E. 571, 572 (Ind. 1922)

       (“[The contracts] were taken out of the statutes by the execution of the deed.

       [Appellee] will not be heard to say that she will not pay the purchase money for

       the real estate she possesses and is enjoying because the contract through which

       she received the same was unenforceable.”); Worley v. Sipe, 12 N.E. 385, 386

       (Ind. 1887) (“The sale of the land was perfected and fully executed by the

       execution of the deed, and the possession given to and accepted by appellant.

       Nothing remained but the payment of the purchase money. That may be

       recovered notwithstanding the statute.”); Ayers v. Slifer, 89 Ind. 433, 439 (1883)

       (“The execution of a deed upon an oral agreement takes the case out of the

       statute of frauds.”); Arnold v. Stephenson, 79 Ind. 126, 128 (1881) (“We

       accordingly hold that, where the agreement is so far performed that the

       purchaser acquires a perfect title and full possession of the property, the vendor

       may recover the stipulated price.”); Tinkler v. Swaynie, 71 Ind. 562, 567 (1880)

       (“The consideration for land conveyed, unless itself within the operation of the

       statute, may always be enforced or recovered, though the contract for the

       conveyance was verbal.”).

[16]   A purchaser such as Stephens cannot escape liability for the purchase price on

       the ground that the Statute of Frauds prohibits the enforcement of verbal

       contracts for the sale of an interest in land. See Arnold, 79 Ind. 126 at 128.

               “When so much of a contract as would bring it within the Statute
               of Frauds has been executed, all the remaining stipulations

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020        Page 9 of 14
               become valid and enforceable, and the parties to the contract
               regain all the rights of action they would have had at common
               law.” Browne Statute of Frauds, sec. 117. This rule secures
               justice. Appellee obtained a title by the sheriff’s sale, and the
               most rigid adherence to the requirements of the statute could
               have given him [not]hing more. … Appellee has secured all he
               bargained for, and he ought to pay what he promised.

       Id. at 128-29. If this were not so, the Statute of Frauds could be used as a

       means of perpetrating a fraud. Id. at 129.

[17]   In sum, although the oral contract for the sale of the Property was voidable, and

       all actions to enforce it by specific performance could have been defeated under

       the Statute of Frauds, there was no inhibition on its execution, which was

       complete, except for the payment of the purchase money. See Powell, 136 N.E.

       at 573. I.C. § 32-21-1-2 provides: “The consideration that is the basis of a

       promise, contract, or agreement described in section 1 of this chapter does not

       need to be in writing but may be proved.” See also Hays v. Peck, 107 Ind. 389, 8

       N.E. 274, 274 (1886) (“It is settled by our decisions that the consideration of a

       deed may be shown by parol evidence, and that, for this purpose, it may be

       shown that the grantee verbally agreed, as part of the consideration, to pay an

       existing incumbrance.”). As Tabscott was not seeking to enforce a contract for

       the sale of land, but to collect the purchase money on account of such sale, the

       trial court properly permitted him to do so, notwithstanding the Statute of

       Frauds. See Powell, 136 N.E. at 573. Further, the parole evidence presented at

       trial amply supports the trial court’s determination that the agreed-upon

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020         Page 10 of 14
       consideration owed by Stephens is $16,000. We affirm the judgment in this

       amount.

                                               2. Attorney’s Fees

[18]   The trial court awarded Tabscott $4000 in attorney’s fees “in accordance with

       treble damages.” Appendix at 17. While the basis of this award is not further

       explained in the order, we note that Tabscott requested attorney’s fees and

       treble damages pursuant to Ind. Code § 34-24-3-1.

[19]   Under I.C. § 34-24-3-1, a person who proves the elements of the crimes of theft

       or conversion by a preponderance of the evidence in a civil suit can recover the

       costs of the action, reasonable attorney fees, and up to three times the actual

       damages. Banks v. Jamison, 12 N.E.3d 968, 983 (Ind. Ct. App. 2014). Both

       crimes require proof that a person knowingly or intentionally exerted

       unauthorized control over the property of another person, with theft requiring

       additional proof that the person intended to deprive the owner of any part of the

       property’s value or use. Ind. Code §§ 35-43-4-2 (theft), -3 (conversion).

[20]   In any such action, criminal intent must be proven. Larson v. Karagan, 979

       N.E.2d 655, 661 (Ind. Ct. App. 2012). “It is this mens rea requirement that

       differentiates criminal conversion from the more innocent breach of contract or

       failure to pay a debt – situations the criminal conversion and theft statutes were

       not intended to cover.” Id. Moreover, “[i]t is well established that refusal to

       pay a debt will not generally support a conversion claim.” Bowden v. Agnew, 2

       N.E.3d 743, 750 (Ind. Ct. App. 2014).

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020     Page 11 of 14
[21]   On appeal, Stephens argues that Tabscott failed to establish by a preponderance

       of the evidence that Stephens knowingly or intentionally exerted unauthorized

       control over the Property and that Tabscott established, at most, only a mere

       breach of contract. “A person engages in conduct ‘intentionally’ if, when he

       engages in the conduct, it is his conscious objective to do so.” Ind. Code § 35-

       41-2-2(a). He engages in conduct “‘knowingly’ if, when he engages in the

       conduct, he is aware of a high probability that he is doing so.” I.C. § 35-41-2-

       2(b). Further, a person’s control over the property of another is “unauthorized”

       if it is exerted “by creating or confirming a false impression in the other person”

       or “by promising performance that the person knows will not be performed[.]”

       I.C. § 35-43-4-1(b)(4), (6).

[22]   The evidence supports the trial court’s finding that Stephens accepted and

       encouraged the deed transfer while promising to pay $16,000 to Tabscott but

       with no intention to do so. In other words, Stephens did not simply breach the

       agreement; he entered into it fraudulently. His own testimony shows that he

       never intended to pay any money to Tabscott in exchange for the Property.

       And Tabscott’s testimony, supported in part by Green and Freeman,

       established that Stephens made promises to pay said money both before and

       after the deed transfer and that Stephens strung Tabscott along for some time

       promising payment. Stephens suggests, on appeal, that he believed in good

       faith that he did not owe Tabscott any money and that his consideration for the

       Property was satisfied when he located the document related to the Florida

       property well before the deed transfer. We reject this bald invitation to reweigh

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020      Page 12 of 14
       the evidence and assess witness credibility. The evidence supports the trial

       court’s conclusions that Stephens committed theft and conversion.

[23]   Having prevailed under I.C. § 34-24-3-1, Tabscott was entitled to an award of

       reasonable attorney’s fees. See Patricia Ann Brown, C.P.A. v. Brown, 776 N.E.2d

       394, 397-98 (Ind. Ct. App. 2002) (observing that an award of attorney’s fees is

       mandatory under the statute where actual damages have been proven and

       attorney’s fees have been incurred by claimant), trans. denied. The amount of

       such an award was within the trial court’s discretion. See id. at 398. Here,

       however, Tabscott presented no evidence regarding his attorney’s fees. The

       only reference he made to the amount of attorney’s fees is in his submission of

       proposed findings and conclusions in which he asked for $5000 “in reasonable

       attorney fees, in accordance with treble damages.” Appendix at 79. The trial

       court awarded $4000 in fees. While this amount might certainly be reasonable

       upon submission of evidence, we can find no support for it in the record.

       Accordingly, we remand for the trial court to hold a hearing regarding the

       reasonable attorney’s fees incurred by Tabscott. 3 See Bruno v. Wells Fargo Bank,

       N.A., 850 N.E.2d 940, 951 (Ind. Ct. App. 2006) (remanding for reconsideration

       3
         Stephens also challenges the trial court’s ability to reform the deed. Reformation is an extreme equitable
       remedy that is “appropriate only in limited circumstances” including “where there has been a mistake on the
       part of one party accompanied by fraud or inequitable conduct by the other party.” Peterson v. First State
       Bank, 737 N.E.2d 1226, 1229 (Ind. Ct. App. 2000). While we do not find Stephens’s arguments on this issue
       particularly persuasive, we need not address the merits because the trial court has not, in fact, ordered
       reformation and, thus, the issue is not yet properly before us. See Appendix at 17 (“If Defendant is unable to
       deliver said payment to Plaintiff within ninety (90) days, the Court will issue an Order reforming the deed and
       transferring the Property back to Plaintiff.”) (emphasis supplied).

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020                              Page 13 of 14
       of attorney’s fees where party failed to provide sufficient evidence to assist the

       trial court in determining a reasonable amount of attorney’s fees”).

[24]   Judgment affirmed and remanded.

       Riley, J. and May, J., concur.

       Court of Appeals of Indiana | Opinion 20A-PL-562 | November 5, 2020       Page 14 of 14