Court Opinion

ID: 4536535
Source: CourtListenerOpinion
Date Created: 2020-05-26 16:04:06.267508+00
Date Added: 2024-06-11T08:48:49.554820
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                               May 26 2020, 11:12 am

court except for the purpose of establishing                                   CLERK
                                                                         Indiana Supreme Court
the defense of res judicata, collateral                                     Court of Appeals
                                                                              and Tax Court
estoppel, or the law of the case.

APPELLANT PRO SE
Anthony Pape
Crown Point, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

Anthony Pape,                                            May 26, 2020
Appellant-Defendant,                                     Court of Appeals Case No.
                                                         19A-SC-2426
        v.                                               Appeal from the Lake Superior
                                                         Court
R2C Crown Point, Inc.,                                   The Honorable Julie N. Cantrell,
Appellee-Plaintiff.                                      Judge
                                                         The Honorable Michael N.
                                                         Pagano, Magistrate
                                                         Trial Court Cause No.
                                                         45D09-1906-SC-4083

Riley, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020                     Page 1 of 6
                                STATEMENT OF THE CASE
[1]   Appellant-Defendant, Anthony Pape (Pape), appeals the small claims court’s

      entry of judgment in the amount of $3,033.96 in favor of Appellee-Plaintiff,

      R2C Crown Point, Inc. (R2C).

[2]   We affirm.

                                                    ISSUE
[3]   Pape presents this court with one issue on appeal, which we restate as:

      Whether the small claims court abused its discretion by concluding that Pape

      waived the application of the arbitration clause by filing a counterclaim.

                      FACTS AND PROCEDURAL HISTORY
[4]   On October 17, 2017, Pape, as the buyer, and R2C, as the seller, entered into a

      purchase agreement for certain real estate located in Lake County, Indiana.

      The purchase agreement was governed by Indiana law and included an

      arbitration clause, which stated, in pertinent part:

              Buyer and Seller agree that in the event either party defaults in
              the performance of the obligations of such party under the
              Purchase Agreement, or in the event there is a dispute between
              the Buyer and Seller with respect to their obligations arising out
              of the purchase and sale of the Property, that does not exceed the
              total sum of $3,500, the dispute shall be submitted to binding
              arbitration.

      (Appellant’s App. Vol. II, p. 31).

      Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020   Page 2 of 6
[5]   On April 15, 2019, R2C sent Pape an invoice in the amount of $2,215.22 for

      water used at his property between December 1, 2017 and December 3, 2018,

      with the request to remit payment immediately. Pape failed to remit payment.

      On June 24, 2019, R2C filed its Complaint for payment of the invoice in the

      small claims court. On July 22, 2019, and without submitting any supporting

      evidence, Pape filed a counterclaim in the amount of $2,700, alleging that

              [R2C] is seeking $2,500 for water bill which was supposed to be
              put in my name but they forgot. I held payment until they
              complete punch-list.

      (Appellant’s App. Vol. II, p. 9). On September 13, 2019, the small claims court

      conducted a hearing at which Pape moved to enforce the arbitration clause of

      the purchase agreement. 1 According to Pape, the small claims court denied his

      motion because by “filing a counter claim he [] effectively waived his right to

      arbitrate.” (Appellant’s Br. p. 6). That same day, the small claims court issued

      an Order, finding in favor of R2C, denying Pape’s counterclaim, and ordering

      Pape to pay $3,033.96.

[6]   Pape now appeals. Additional facts will be provided if necessary.

      1
       No transcript of the small claims court proceeding was submitted. Narrated evidence of the court’s
      proceeding was included in Pape’s appellate brief.

      Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020                    Page 3 of 6
                              DISCUSSION AND DECISION
[7]   Pape contends that the small claims court abused its discretion by denying his

      request to arbitrate this cause. Even where parties have entered into a valid and

      enforceable agreement to submit disputes to arbitration, the right to require

      such arbitration may be waived. Capitol Contr. Servs., Inc. v. Farah, LLC, 946

      N.E.2d 624, 628 (Ind. Ct. App. 2011). A finding of waiver of the right to

      arbitrate depends primarily upon whether a party has acted inconsistently with

      that right. Id. Waiver need not be in express terms and may be implied from

      the acts, omissions, or conduct of the parties. Id. “In determining if waiver has

      occurred, courts look at a variety of factors, including the timing of the

      arbitration request, if dispositive motions have been filed, and/or the litigant is

      unfairly manipulating the judicial system by attempting to obtain a second bite

      at the apple due to an unfavorable ruling in another forum.” Id. Waiver of a

      contractual right, including the right to arbitrate, requires the showing of an

      intentional relinquishment of a known right. Northern Ind. Commuter Transp.

      Dist. v. Chicago SouthShore and South Bend R.R., 685 N.E. 2d 680, 695 (Ind.

      1997).

[8]   Whether a waiver of the right to arbitrate has occurred generally is a question of

      fact under the circumstances of each case. Id. Regardless, we review de novo a

      court’s ruling on a motion to compel arbitration, as well as similar motions that

      are of the same effect. Id. We further consider in deciding this case that public

      policy in Indiana favors enforcement of arbitration provisions. Capitol Constr.

      Servs., 946 N.E.2d at 628.

      Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020   Page 4 of 6
[9]    Additionally, we note that Appellee, R2C, did not submit an appellate brief.

       When an appellee does not submit a brief, we do not undertake the burden of

       developing arguments for that party. Spencer v. Spencer, 990 N.E.2d 496, 497

       (Ind. Ct. App. 2013). Instead, we apply a less stringent standard of review and

       may reverse if the appellant establishes prima facie error. Id. Prima facie error is

       “error at first sight, on first appearance, or on the face of it.” Id.

[10]   Without deciding whether the arbitration clause is applicable to this dispute, we

       turn to our supreme court’s decision in MPACT Construction Group LLC v.

       Superior Concrete Constructors, 802 N.E.2d 901, 910 (Ind. 2004), where the court

       held that:

               The filing of counterclaims and cross-claims does not always
               indicate active participation in litigation. While all cross-claims
               are permissive, some counterclaims are compulsory, that is, a
               party must bring them or waive them. A party should not be
               held to have waived its right to arbitrate when, in response to a
               complaint filed against it, it raises counterclaims in order to
               preserve them.

       “A compulsory counterclaim is one that arises out of the transaction or

       occurrence that is the subject-matter of the opposing party’s claim and does not

       require for its adjudication the presence of third parties of whom the court

       cannot acquire jurisdiction.” Ind. Trial Rule 13.

[11]   Here, R2C filed its Complaint for payment of an overdue water bill, while

       Pape’s counterclaim pertains to the completion of a punch-list resulting from

       the sale of real estate and thus, as it cannot be said that Pape’s counterclaim

       Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020   Page 5 of 6
       arises out of R2C’s claim, it necessarily amounts to a permissive counterclaim

       that can waive a party’s right to arbitrate. See id. Furthermore, it does not

       appear that Pape filed a motion to compel arbitration prior to the hearing but

       moved for arbitration only after R2C had presented its evidence during the

       hearing. Accordingly, we find that Pape acted inconsistently with his right to

       arbitrate and, as such, implicitly waived it. See also Tamko v. Roofing Prods., Inc.

       v. Dilloway, 865 N.E.2d 1074, 1079-80 (Ind. Ct. App. 2007) (finding waiver

       where party waited until after plaintiff presented evidence during trial to seek

       arbitration).

                                             CONCLUSION
[12]   Based on the foregoing, we hold that the small claims court did not abuse its

       discretion in concluding that Pape waived his right to arbitrate.

[13]   Affirmed.

[14]   Mathias, J. and Tavitas, J. concur

       Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020   Page 6 of 6