Court Opinion

ID: 4153587
Source: CourtListenerOpinion
Date Created: 2017-03-17 15:06:31.291153+00
Date Added: 2024-06-11T09:36:29.976563
License: Public Domain

MEMORANDUM DECISION

      Pursuant to Ind. Appellate Rule 65(D),
      this Memorandum Decision shall not be                                   FILED
      regarded as precedent or cited before any                           Mar 17 2017, 7:52 am
      court except for the purpose of establishing
      the defense of res judicata, collateral                                 CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
      estoppel, or the law of the case.                                        and Tax Court

      ATTORNEYS FOR APPELLANT                                  ATTORNEY FOR APPELLEE
      George W. Hopper                                         Paul D. Vink
      Michael W. McBride                                       Bose McKinney & Evans LLP
      Cohen & Malad, LLP                                       Indianapolis, Indiana
      Indianapolis, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Sanders Development Group,                               March 17, 2017
      Inc.,                                                    Court of Appeals Case No.
      Appellant-Plaintiff,                                     06A04-1604-PL-941
                                                               Appeal from the Boone Circuit
              v.                                               Court
                                                               The Honorable J. Jeffrey Edens,
      Willow Properties, LLC,                                  Judge
      Appellee-Defendant                                       Trial Court Cause No.
                                                               06C01-1503-PL-184

      Mathias, Judge.

[1]   Sanders Development Group, Inc. (“Sanders Development”) appeals the Boone

      Circuit Court’s entry of summary judgment in favor of Willow Properties, LLC

      (“Willow Properties”). Sanders Development appeals and raises the following

      Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017        Page 1 of 9
      dispositive issue: whether genuine issues of material fact concerning the parties’

      intent in entering into the contract precludes the entry of summary judgment in

      favor of Willow Properties.

[2]   We reverse and remand for proceedings consistent with this opinion.

                                 Facts and Procedural History

[3]   Sanders Development is a property development company owned by Mark

      Sanders. The company has developed approximately thirty residential

      subdivisions since its formation in 1976. Sanders Development typically

      performs the work necessary to convert vacant real estate into developed lots

      ready for sale for home construction.

[4]   In 2001, Mark Sanders, his now ex-wife Linda Sanders, Jeffrey Belskus, and

      Debrorah Belskus formed Willow Properties, a member-managed limited

      liability company. The company’s goal was to develop 168 acres of

      undeveloped real estate located in Zionsville, Indiana, into a subdivision later

      named Willow Ridge.

[5]   Willow Properties and Sanders Development later entered into a contract that

      states in its entirety:

              The undersigned, being the Shareholder(s) and Director(s) of
              Willow Properties, LLC, agree to pay Sanders Development
              Group, Inc., a 7% management fee of the sales price on each
              Willow Properties lot sale, to be paid at the time of closing. This
              agreement is effective January 1, 2002.

      Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 2 of 9
      Appellant’s App. p. 149. The agreement was signed by all four members of

      Willow Properties.

[6]   Thereafter, Sanders Development developed the real estate and received a 7%

      management fee of the sales price of each lot sold. In January 2009, five unsold

      lots remained.

[7]   In early 2009, Mark Sanders and Linda Sanders dissolved their marriage. As a

      result of the dissolution proceedings, Mark transferred his interest in Willow

      Properties to Linda. Mark transferred all records in his possession relating to

      Willow Properties to the remaining three members.

[8]   On August 31, 2010, Lot 52 was sold. Sanders Development did not receive its

      7% management fee at closing. On June 7, 2011, Jeffrey Belskus met with Mark

      Sanders and informed him that Willow Properties was terminating the contract

      between the company and Sanders Development. On that date, four unsold lots

      remained in the subdivision. Between July 14, 2011, and April 10, 2015, the

      remaining four lots were sold, but Sanders Development was not paid its 7%

      management fee at the closings. The total sales price of the last five lots was

      $1,571,000.

[9]   On March 13, 2015, Sanders Development filed a complaint in Boone Circuit

      Court against Willow Properties alleging breach of contract and unjust

      enrichment. Sanders Development claimed that it was owed the 7%

      management fee for the sale of the last five lots in the Willow Ridge

      subdivision.

      Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 3 of 9
[10]   Willow Properties filed a motion for summary judgment on October 30, 2015.

       Sanders Development subsequently filed a response and cross-motion for

       summary judgment. On January 26, 2016, the trial court issued an order

       granting Willow Properties motion for summary judgment with respect to the

       four lots that sold after Willow Properties terminated the contract. However,

       the trial court ordered Willow Properties to pay the 7% management fee to

       Sanders Development for the lot that sold on August 31, 2010. Thereafter,

       Sanders Development filed a motion to correct error, which the trial court

       denied. Sanders Development now appeals.

                                          Standard of Review

[11]   When reviewing a grant of summary judgment, we must draw all reasonable

       inferences in favor of the non-moving party and affirm only “‘if the designated

       evidentiary matter shows that there is no genuine issue as to any material fact

       and that the moving party is entitled to judgment as a matter of law.’” Siner v.

       Kindred Hosp. Ltd. P’ship, 51 N.E.3d 1184, 1187 (Ind. 2016) (quoting Ind. Trial

       Rule 56(C)). Careful scrutiny must be given to a grant of summary judgment to

       ensure that the losing party was not improperly denied its day in court. Id.

       “Indiana’s distinctive summary judgment standard imposes a heavy factual

       burden on the movant to demonstrate the absence of any genuine issue of

       material fact on at least one element of the claim.” Id. Our standard of review is

       not altered by cross-motions for summary judgment. Huntington v. Riggs, 862
N.E.2d 1263, 1266 (Ind. Ct. App. 2007), trans. denied.

       Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 4 of 9
[12]   Cases involving contract interpretation generally are particularly appropriate for

       summary judgment. Rusnak v. Brent Wagner Architects, 55 N.E.3d 834, 840 (Ind.

       Ct. App. 2016), trans. denied. “When the terms of a contract are ambiguous or

       uncertain, however, and its interpretation requires extrinsic evidence, its

       construction is left to the factfinder.” Id. “When summary judgment is granted

       based on the construction of a written contract, the trial court has either

       determined as a matter of law that the contract is not ambiguous or uncertain,

       or that any contract ambiguity can be resolved without the aid of a factual

       determination.” Id. at 840-41.

                                           The Parties’ Intent

[13]   “The goal of contract interpretation is to determine the intent of the parties

       when they made the agreement.” Tender Loving Care Mgmt., Inc. v. Sherls, 14
N.E.3d 67, 72 (Ind. Ct. App. 2014). This court must examine the plain

       language of the contract, read it in context and, whenever possible, construe it

       so as to render every word, phrase, and term meaningful, unambiguous, and

       harmonious with the whole. Id. Construction of the terms of a written contract

       generally is a pure question of law. Id. If, however, a contract is ambiguous, the

       parties may introduce extrinsic evidence of its meaning, and the interpretation

       becomes a question of fact. Broadbent v. Fifth Third Bank, 59 N.E.3d 305, 311

       (Ind. Ct. App. 2016), trans. denied. “A word or phrase is ambiguous if

       reasonable people could differ as to its meaning.” Id. A term is not ambiguous

       solely because the parties disagree about its meaning. Id.

       Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 5 of 9
[14]   If contract language is unambiguous, this court may not look to extrinsic

       evidence to expand, vary, or explain the instrument but must determine the

       parties' intent from the four corners of the instrument. Tender Loving Care Mgmt.,
14 N.E.3d at 72. If the language is ambiguous, the contract terms must be

       construed to determine and give effect to the intent of the parties when they

       entered into the contract. Id. “Courts may properly consider all relevant

       evidence to resolve an ambiguity.” Id. “‘Extrinsic evidence is evidence relating

       to a contract but not appearing on the face of the contract because it comes

       from other sources, such as statements between the parties or the circumstances

       surrounding the agreement.’” Id. (quoting CWE Concrete Const., Inc. v. First Nat’l

       Bank, 814 N.E.2d 720, 724 (Ind. Ct. App. 2004), trans. denied). An ambiguous

       contract should be construed against the party who furnished and drafted the

       agreement. Id.

[15]   Willow Properties and Sanders Development reduced the following agreement

       to writing:

               The undersigned, being the Shareholder(s) and Director(s) of
               Willow Properties, LLC, agree to pay Sanders Development
               Group, Inc., a 7% management fee of the sales price on each
               Willow Properties lot sale, to be paid at the time of closing. This
               agreement is effective January 1, 2002.

       Appellant’s App. p. 149. Willow Properties argues that the term “management”

       is unambiguous and under the plain terms of the contract, Sanders

       Development agreed to manage the subdivision. Sanders Development argues

       Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 6 of 9
       that the term “management” is ambiguous, and therefore, the parties’ intent

       must be established by extrinsic evidence.

[16]   “Management” is defined as “the act or art of managing: the conducting or

       supervising of something (as a business).”1 The Oxford English Dictionary

       defines management as: “organization, supervision, or direction; the

       application of skill or care in the manipulation, use, treatment, or control (of a

       thing or person), or in the conduct of something.”2

[17]   The plain meaning of the term “management” is generally easily understood.

       However, the term, when considered within the four corners of the contract at

       issue, is ambiguous.

[18]   First, the plain language of the contract does not establish that Willow

       Properties hired Sanders Development to manage the subdivision. The contract

       language simply provides that Willow Properties agrees to pay Sanders

       Development a 7% management fee of the sales price of each lot that sells and

       the fee will be paid at closing. From this language, we can infer that Sanders

       Development is required to manage something to receive the fee that Willow

       Properties agreed to pay.

       1
           Merriam-Webster Online, www.merriam-webster.com/dictionary/managment (last visited Feb. 28, 2017).
       2
         Oxford English Dictionary Online, www.oed.com/view/Entry/113218?redircted/From=management#eid
       (last visited Feb. 28, 2017).

       Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017        Page 7 of 9
[19]   However, it is not clear what Sanders Development was tasked with managing

       under the contract. Was the company managing a subdivision? Was the

       company simply managing lots within a subdivision? Was the company

       managing Willow Properties’ real estate that was not yet developed into lots?

       Also, what duties did Willow Properties intend for Sanders Development to

       perform in exchange for payment of the management fee? The answer to this

       last question depends at least in part on whether the lots pre-existed the contract

       or were to be developed after the contract was executed.

[20]   From extrinsic evidence, we know that Willow Properties owned real estate

       that had not yet been developed into lots. We also know that Sanders

       Development was hired to develop the property into lots that could be sold as

       home sites.

[21]   However, the parties disagree on the precise nature of Sanders Development’s

       duties. Sanders Development claims it was hired only to prepare the real estate

       for development, but Willow Properties argues that Sanders Development was

       hired to manage the lots until all lots were sold. In support of these arguments,

       the parties rely primarily on deposition testimony and affidavits, and therefore,

       the credibility of the witnesses is crucial to resolving the fact questions posed in

       this case.

[22]   For these reasons, we conclude that the term “management” is ambiguous and

       the duties that Sanders Development was required to perform in exchange for

       its fee of 7% of the sales price of each lot is a fact question that must be resolved

       Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 8 of 9
       by the fact-finder. Ultimately, it is within the fact-finder’s purview to determine

       whether Sanders Development completed its management of Willow

       Properties’ lots and whether Willow Properties breached the contract by

       refusing to pay the 7% management fee for each lot sold.

[23]   We reverse the entry of summary judgment in Willow Properties’ favor and

       remand for proceedings consistent with this opinion.

       Baker, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 06A04-1604-PL-941 | March 17, 2017   Page 9 of 9