Court Opinion

ID: 3210359
Source: CourtListenerOpinion
Date Created: 2016-06-08 15:04:41.293129+00
Date Added: 2024-06-11T14:29:26.582051
License: Public Domain

MEMORANDUM DECISION                                                   FILED
Pursuant to Ind. Appellate Rule 65(D), this                      Jun 08 2016, 8:27 am

Memorandum Decision shall not be regarded as                          CLERK
precedent or cited before any court except for the                Indiana Supreme Court
                                                                     Court of Appeals
purpose of establishing the defense of res judicata,                   and Tax Court

collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Jeffrey B. Kolb                                           John A. Cremer
Charles E. Traylor                                        Jonathan E. Lamb
Kolb Roellgen & Kirchoff LLP                              Cremer & Cremer
Vincennes, Indiana                                        Indianapolis, Indiana

                                             IN THE
    COURT OF APPEALS OF INDIANA

Thomas Moriarty, as Personal                             June 8, 2016
Representative of the Estate of                          Court of Appeals Case No.
Donna Davis, Deceased,                                   55A01-1507-EU-791
                                                         Appeal from the Morgan Circuit
Appellant/Cross-Appellee,
                                                         Court.
                                                         The Honorable Matthew G. Hanson,
        v.                                               Judge.
                                                         Cause Nos. 55C01-1405-EU-62,
West Morgan, LLC,                                        55C01-1409-PL-1724

Appellee/Cross-Appellant.

Barteau, Senior Judge

Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016        Page 1 of 27
                                        Statement of the Case
                               1
[1]   Thomas Moriarty, as Personal Representative of the Estate of Donna Davis,

      appeals the trial court’s judgment rejecting his claims in part. West Morgan,

      LLC, cross-appeals the portions of the trial court’s judgment that are favorable

      to Moriarty. We affirm in part, reverse in part, and remand with instructions.

                                                        Issues
[2]   Moriarty raises four issues, which we restate as:

               I.       Whether the trial court abused its discretion in
                        determining two of West Morgan’s witnesses were
                        competent to testify, subject to certain limitations.
               II.      Whether the trial court abused its discretion in admitting
                        West Morgan’s Exhibits H and I.
               III.     Whether there is sufficient evidence to support the trial
                        court’s judgment in favor of West Morgan on its claim for
                        specific performance of the land contracts.
               IV.      Whether the trial court’s award of damages in favor of
                        Moriarty is insufficient.

[3]   On cross-appeal, West Morgan raises six issues, which we consolidate and

      restate as:

               I.       Whether the trial court abused its discretion in placing
                        limits on testimony from two of West Morgan’s witnesses.
               II.      Whether the trial court abused its discretion in considering
                        Moriarty’s Exhibit 10.

      1
       Moriarty’s name is spelled several different ways in the briefs and the transcript. We use the spelling he
      provided during his trial testimony.

      Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016                 Page 2 of 27
                 III.     Whether the trial court erred in concluding Moriarty was
                          entitled to damages.
                 IV.      Whether the trial court had personal jurisdiction over John
                          Kennedy.
                 V.       Whether the trial court erred in rejecting West Morgan’s
                          claim for attorney’s fees, and whether West Morgan is
                          entitled to attorney’s fees on appeal.
[4]   For the most part, we will address the claims and cross-appeal claims together.

                                   Facts and Procedural History
[5]   This case arises from an unusual land transaction. Donna Davis owned twenty-

      five acres of land, on which a house was situated, in Morgan County. She

      negotiated to sell the land to West Morgan, LLC, but she also wanted to build a

      new house on the property and live there for a period of time. The record does

      not provide many details on the negotiations, but it appears the parties agreed a

      large portion of the purchase price would be paid in cash.

[6]   John Kennedy formed West Morgan as an “estate planning device” to transfer
                                                        2
      assets to his sons. Tr. Vol. I p. 74. Kennedy’s sons own West Morgan, but he

      is its agent and maintains the company’s records. The company’s business is

      the acquisition, management, and selling of real estate. Kennedy admitted

      West Morgan “is a property holding company[,] it doesn’t really have any

      cash.” Id. at 86.

      2
          The transcript is not consecutively paginated, in violation of Indiana Appellate Rule 28(A)(2).

      Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016                    Page 3 of 27
[7]    Kennedy is also an owner of Sunny Brook, Incorporated. Sunny Brook

       manages apartments and owns a restaurant in Martinsville, Indiana. Kennedy

       maintains Sunny Brook’s records, and Brian Cunningham works for Sunny

       Brook as an operations manager.

[8]    On August 3, 2011, Davis rented a safe deposit box from a local bank.

       Kennedy testified that on that day, he counted out $200,000 in cash and put the

       money into envelopes, using money from Sunny Brook’s accounts. He further

       testified that he obtained the cash from the safe in his office at Sunny Brook’s

       restaurant.

[9]    Cunningham testified that August 4, 2011, he met with Kennedy in his office,

       and Kennedy asked him to double check the money. Cunningham further

       testified that he removed the money from the envelopes, confirmed Kennedy

       had $200,000, and put the money back in the envelopes. Next, Cunningham

       told the trial court that Kennedy took the envelopes to a private room in the

       restaurant.

[10]   Later that day, Davis met with Kennedy, Kennedy’s wife Sally, and Tammy

       Brummett in the private room. Brummett is a notary public and a former

       employee of Sunny Brook. Cunningham stood outside the room during the

       meeting. Davis and Kennedy, who acted as West Morgan’s representative,

       reviewed and signed several documents addressing the sale of Davis’ real estate.

[11]   Davis and West Morgan signed two land contracts, known as Land Contract I

       and Land Contract II. Land Contract I was for the sale of the twenty-five acres,

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 4 of 27
       and it stated the purchase price was $270,000, to be paid in monthly

       installments of no less than $3,000. Land Contract II was for the sale of the

       existing house on the land, and it stated the purchase price was $150,000, to be

       paid upfront. Both contracts indicated West Morgan was entitled to legal

       possession of the property, but Davis would be allowed to stay in the new house

       for three years. Both contracts also indicated the parties would execute a

       written lease agreement. The contracts did not indicate who would pay the

       construction costs for Davis’ new home.

[12]   During the signing meeting, Davis and West Morgan also executed a

       Memorandum of Land Contract, which Kennedy filed with the county recorder

       the next day. In addition, Kennedy signed personal guarantees for both of the

       land contracts. Finally, Davis signed receipts indicating she had received

       $50,000 from West Morgan for Land Contract I and $150,000 from West

       Morgan for Land Contract II.

[13]   After all of the documents were signed and notarized, Kennedy, Sally, and

       Brummett left Davis alone in the room with the envelopes of money. After

       approximately ten minutes, Davis came out of the room, putting the envelopes

       in her bag as she left.

[14]   Over the next several years, West Morgan made monthly installment payments

       to Davis under Land Contract I using funds from Sunny Brook. The payments

       were partially by check and partially in cash. For the first seventeen installment

       payments, West Morgan indicated that it paid $10,000 in cash and $2,000 by

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 5 of 27
       check. Subsequent installment payments consisted of $1,000 in cash and $2,000

       by check. Cunningham counted out the cash for each of the installment

       payments. West Morgan obtained signed receipts from Davis for each

       payment.

[15]   Meanwhile, Davis built a house on the property. The record does not indicate

       whether the parties executed a lease as contemplated in the land contracts.

       There is also no evidence of a separate written agreement between Davis and

       West Morgan assigning responsibility for construction costs.

[16]   Davis died on February 2, 2014. Moriarty, her ex-husband, was her estate’s

       personal representative, and he inventoried its assets. Moriarty and his son

       with Davis, Michael Moriarty (“Michael”), decided Davis had not received all

       of the funds to which she was entitled under the land contracts and had not

       been adequately compensated by West Morgan for the construction costs of the

       new home.

[17]   On June 4, 2014, Moriarty opened Davis’ estate. West Morgan filed a claim

       for specific performance, asserting it had met all of its obligations under Land

       Contracts I and II and was entitled to receive a deed to the property. Moriarty

       claimed an affirmative defense of fraud, stating the receipts for the installment

       payments had been altered to reflect payments that were never made.

[18]   Moriarty also filed a Counterclaim, asserting West Morgan had not made any

       payments under either land contract and the estate was entitled to

       reimbursement of $138,000 for funds Davis spent while building the house.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 6 of 27
       Later, Moriarty filed an Amended Counterclaim, seeking forfeiture of the

       contracts, payment of all amounts owed under the contracts, and compensation

       under the Occupying Claimant’s Statute for costs incurred while building the

       house. Moriarty also alleged fraud, constructive fraud, and violation of the

       Crime Victims Relief Act, requesting treble damages and attorney’s fees. West

       Morgan denied Moriarty’s allegations, asserted Moriarty’s claims were

       frivolous and filed in bad faith, and requested attorney’s fees.

[19]   Next, Moriarty filed a pretrial motion asking the court to determine John

       Kennedy, Sally Kennedy, and Brian Cunningham were not competent to testify

       about West Morgan’s transactions with Davis. West Morgan filed a response.

       The court held oral argument and ruled as follows:

               15) John Kennedy, Sally Kennedy and Brian Cunningham
               (hereinafter “the three”) can testify in regards to their actions
               with the contracts and issues that were legally recorded with the
               state in the normal course of business.
               l6) The three cannot testify to anything that was said by the
               decedent, actions she took or items verbally changed at the
               recording of those documents/date of creation of the contracts.
               17) The three cannot testify to any verbal modifications made by
               the decedent during the course of the transactions after the
               recording of the documents/date of creation.
               18) The three can testify about payments they made and the
               issue of proper weight regarding the receipts/bookkeeping
               practices by the three will be addressed by the court at the
               hearing and in the final ruling.
               19) The three cannot testify to any verbal modifications/actions
               made by the decedent after the date of creation of the
               contract/recording of the documents.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 7 of 27
               20) Nothing in this order precludes [Moriarty] from raising
               objections throughout this testimony if and when they run afoul
               of the dead man’s statute.
       Appellant’s App. p. 19.

[20]   The case was tried to the bench. Cunningham and Kennedy testified as set

       forth above. In addition, the parties each made several offers to prove. During

       one offer to prove, Michael identified and discussed Exhibit 10, which consisted

       of a spreadsheet of expenses, receipts for construction materials, and

       photographs of the house’s interior that Michael concluded accurately set forth

       the amounts Davis spent while building the house.

[21]   The court issued a final judgment in which it determined, “As to the Land

       Contracts I and II, [West Morgan] has fully complied with the contracts and all

       amounts due and owing have been paid.” Id. at 9. Consequently, the court

       ordered Moriarty to give West Morgan title to the property and houses. Next,

       the court determined Moriarty’s Exhibit 10 should have been admitted into

       evidence and would be considered as evidence. The court concluded “John

       Kennedy” owed Moriarty $87,320.31 for construction costs. Id. at 10. The

       court further concluded Moriarty’s fraud claims were without merit. Finally,

       the court denied both parties’ requests for attorney’s fees. Both sides now

       appeal the trial court’s judgment.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 8 of 27
                                    Discussion and Decision
                                       I. Witness Competency
[22]   Moriarty argues the trial court erred by allowing John Kennedy and Brian

       Cunningham to testify about the circumstances surrounding West Morgan’s

       transactions with Davis, claiming Kennedy and Cunningham were not

       competent witnesses because they had personal stakes in those transactions.

       On cross-appeal, West Morgan asserts the court erred by placing any limits on

       those witnesses’ testimony.

[23]   A trial court’s ruling on witness competency is reviewed for abuse of discretion.

       In re Estate of Lambert, 785 N.E.2d 1129, 1132 (Ind. Ct. App. 2003), trans. denied.

       An abuse of discretion will be found when the ruling is against the logic and

       effect of the facts and circumstances before the trial court. Id. at 1132-33.

[24]   In Indiana, the competency of witnesses in estate cases is governed by several

       statutes known collectively and colloquially as “the dead man’s statutes.” The

       key statute provides, in relevant part:

               (a) This section applies to suits or proceedings:
               (1) in which an executor or administrator is a party;
               (2) involving matters that occurred during the lifetime of the
               decedent; and
               (3) where a judgment or allowance may be made or rendered for
               or against the estate represented by the executor or administrator.
               (b) This section does not apply in a proceeding to contest the
               validity of a will or a proceeding to contest the validity of a trust.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 9 of 27
               (c) This section does not apply to a custodian or other qualified
               witness to the extent the witness seeks to introduce evidence that
               is otherwise admissible under Indiana Rule of Evidence 803(6).
               (d) Except as provided in subsection (e), a person:
               (1) who is a necessary party to the issue or record; and
               (2) whose interest is adverse to the estate;
               is not a competent witness as to matters against the estate.
       Ind. Code § 34-45-2-4 (2001).

[25]   Another relevant statute provides:

               (a) Except as provided in subsection (b), a person who acted as
               an agent in the making or continuing of a contract with any
               person who has died, is not a competent witness, in any suit
               upon or involving the contract, as to matters occurring before the
               death of the decedent, on behalf of the principal to the contract,
               against the legal representatives or heirs of the decedent.
               (b) If the person is called by the decedent’s heirs or legal
               representatives, the person is a competent witness, as to matters
               about which the person is interrogated by the heirs or
               representatives.
       Ind. Code § 34-45-2-7 (1998). Any party to an estate case retains the right to

       call and examine any adverse party as a witness, and a trial court may require

       any party to the suit, or any other person, to testify. Ind. Code § 34-45-2-10

       (1998).

[26]   The purpose of these statutes is to protect decedents’ estates from spurious

       claims. Estate of Lambert, 785 N.E.2d at 1132. Claimants to the estate of a

       deceased person should not be permitted to present a court with their version of

       their dealings with the decedent. Koch Dev. Corp. v. Koch, 996 N.E.2d 358, 370

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 10 of 27
       (Ind. Ct. App. 2013), trans. denied. Rather than excluding evidence, the statutes

       prevent a particular class of witnesses from testifying as to claims against the

       estate. Bedree v. Bedree, 747 N.E.2d 1192, 1195 (Ind. Ct. App. 2001), trans.

       denied. Thus, when an administrator of an estate is a party to a lawsuit, as a

       general rule the adverse parties are not competent to testify about transactions

       that took place during the lifetime of the decedent. Estate of Lambert, 785
N.E.2d at 1132. The statutes prevent a claimant from testifying as to matters or

       transactions concerning the decedent, but the claimant may testify about other

       matters that occurred while the decedent was alive. Taylor v. Taylor, 643
N.E.2d 893, 896 (Ind. 1994). In addition, the application of the statutes is

       limited to circumstances in which the decedent, if alive, could have refuted the

       testimony of the surviving party. Bedree, 747 N.E.2d at 1195.

[27]   Before we address the merits of Moriarty’s claims, West Morgan argues

       Moriarty waived his challenge to Kennedy’s competency by questioning

       Kennedy on cross-examination about matters beyond the scope of direct
                        3
       examination. An estate may accredit an otherwise incompetent witness with

       competency to testify for any party to the suit if the estate makes the witness a

       witness for the estate. Matter of Estate of Palamara, 513 N.E.2d 1223, 1232 (Ind.

       Ct. App. 1987). An estate establishes a witness’s competency by calling the

       3
         West Morgan also asserts Moriarty waived his challenge to Cunningham’s competency, but West Morgan
       has not identified any portions of Cunningham’s cross-examination where Moriarty allegedly exceeded the
       scope of direct examination. For this reason, we decline to address the question of waiver as to
       Cunningham.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016         Page 11 of 27
       witness on the estate’s behalf or by cross-examining the witness beyond the

       scope of direct examination. Id.

[28]   On cross-examination, Moriarty asked Kennedy to authenticate his signature

       on a document, Exhibit 2, which had not previously been admitted into

       evidence. After discussion by the court and the parties, Moriarty asked the

       court to admit Exhibit 2 into evidence, and the trial court granted the request.

       Moriarty effectively made Kennedy his witness by asking him to authenticate

       an exhibit that had not been discussed on direct examination. As a result,

       Moriarty waived the protections of the dead man’s statutes as to Kennedy, and

       we will not address Moriarty’s claim that the trial court should have barred

       Kennedy from testifying. See Estate of Palamara, 513 N.E.2d at 1232-33

       (protections of dead man’s statutes waived because party exceeded scope of

       direct examination of other party’s witness).

[29]   Moriarty has preserved his allegation that the trial court should not have

       allowed Cunningham to testify, and we must determine whether the trial court

       erred by allowing him to testify subject to certain limitations. During direct

       examination, Cunningham described his background and the scope of his duties

       as an employee of Sunny Brook. Next, he testified about the day of the signing

       meeting, explaining he had counted the money that was to be delivered to

       Davis, accompanied Kennedy to the meeting room, and moved furniture

       around in preparation for the meeting before Davis arrived. He stood outside

       the room during the meeting. Cunningham also explained that in the months

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 12 of 27
       after the meeting, he counted the money West Morgan used to make

       installment payments to Davis.

[30]   Cunningham did not describe any interactions or transactions with Davis.

       Indeed, Davis was not present during any of the activities Cunningham

       discussed. We conclude Cunningham’s testimony, as limited by the court, did

       not violate the dead man’s statutes, and the court did not abuse its discretion by

       admitting it. See Citizens State Bank v. Kelley, 130 Ind. App. 376, 162 N.E.2d
322, 378-79 (1959) (“An objection to the competency of a witness to testify at

       all as to any matter that occurred during the lifetime of decedent is properly

       overruled where the witness is competent to testify as to some matters.”); Snider

       v. Preachers Aid Soc., 111 Ind. App. 410, 41 N.E.2d 665, 669 (1942) (no violation

       of dead man’s statutes where treasurer testified in general about the appellee’s

       financial operations).

[31]   On cross-appeal, West Morgan claims the court erred by limiting Kennedy and

       Cunningham’s testimony, asserting those witnesses should have been allowed

       to discuss all aspects of West Morgan’s transactions with Davis. In support of

       its claim, West Morgan cites a line of cases for the principle that testimony from

       a witness who is otherwise incompetent to testify may be admitted if the party

       offering the testimony establishes a prima facie case in support of its claim

       through other evidence. Appellee/Cross-Appellant’s Br. pp. 18-19. Those

       cases are distinguishable because the trial courts in each of those cases called

       the witnesses to testify on behalf of the court. See Wilhoite v. Beck, 141 Ind. App.
543, 230 N.E.2d 616, 620 (1967) (“the question presented in the case at bar is

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 13 of 27
       whether the trial court abused its discretion in calling the claimant-appellee as a

       court witness and allowing her to testify”); Alexander’s Estate v. Alexander, 138
Ind. App. 443, 212 N.E.2d 911, 914 (1966) (“Under specifications 16 and 17 the

       appellant points out that the court called appellee Arletha Alexander as the

       court’s witness.”); Heavin v. Sutherlin, 116 Ind. App. 310, 64 N.E.2d 43, 45

       (1945) (“The question presented, in different ways, is whether the court abused

       its discretion in calling the appellee and permitting her to testify as above

       stated.”). Here, West Morgan, not the trial court, called Cunningham and

       Kennedy to testify, so we reject West Morgan’s claim.

[32]   In summary, the trial court did not abuse its discretion in permitting Kennedy

       and Cunningham to testify subject to limitations set by the court pursuant to the

       dead man’s statutes.

                                     II. Admission of Exhibits
[33]   Moriarty and West Morgan challenge the trial court’s decisions to admit certain

       exhibits into evidence. The admission of evidence is left to the sound discretion

       of the trial court, and we will not reverse that decision absent an abuse of

       discretion. Estate of Dyer v. Doyle, 870 N.E.2d 573, 577 (Ind. Ct. App. 2007),

       trans. denied. An abuse of discretion occurs when the trial court’s decision is

       against the logic and effect of the facts and circumstances before it. Id.

[34]   Moriarty claims the trial court erred by admitting Exhibits H (a receipt signed

       by Davis for a payment under Land Contract II) and I (copies of the signed

       receipts for payments under Land Contracts I and II as well as receipts for

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 14 of 27
       installment payments under Land Contract I). Moriarty did not object to the

       admission of Exhibit H at trial, so his claim as to that document is waived.

       Perez v. Bakel, 862 N.E.2d 289, 295 (Ind. Ct. App. 2007) (“Failure to timely

       object waives the right to have the evidence excluded at trial and the right on

       appeal to assert the admission of evidence as erroneous.”). Moriarty

       acknowledges he did not object at trial and instead argues he sought to preclude

       the admission of Exhibit H through a pre-trial motion in limine. Challenging

       the admission of evidence via a motion is limine is insufficient to preserve the

       issue for appeal. Id.

[35]   Turning to Exhibit I, Moriarty argues the receipts are inadmissible because they

       do not qualify as business records as defined by Indiana Evidence Rule 803(6).

       At trial, he did not challenge Exhibit I pursuant to Evidence Rule 803(6).

       Instead, Moriarty objected on grounds of “lack of foundation as to the

       relevance” and challenged the accuracy of the dates on several of the receipts.

       Tr. Vol I, p. 39. A party may not advance an argument on appeal that is

       different from that raised in the trial court. In re J.C., 735 N.E.2d 848, 850 (Ind.

       Ct. App. 2000). Moriarty’s business record argument is waived.

[36]   On cross-appeal, West Morgan argues the trial court erred by considering

       Exhibit 10, which consisted of a spreadsheet of expenses, receipts for

       construction materials and construction work, and photographs of the interior

       of Davis’ house. West Morgan claims Moriarty never asked the trial court to

       accept it as evidence. We agree. The parties and the trial court discussed

       Exhibit 10 but West Morgan never moved to have it admitted as evidence.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 15 of 27
       Moriarty notes his witness Michael discussed Exhibit 10 during an offer to

       prove. An offer to prove is an offer from counsel regarding what a witness

       would say if he or she was allowed to testify. Roach v. State, 695 N.E.2d 934,

       939 (Ind. 1998). Such an offer is not the same as asking the court to accept an

       exhibit into evidence. To the contrary, an offer to prove presumes that an

       exhibit has already been offered and refused by the trial court.

[37]   Even if Moriarty had asked that Exhibit 10 be admitted into evidence, West

       Morgan claims the trial court’s consideration of that exhibit after the hearing

       deprived West Morgan of the opportunity to cross-examine Michael about the

       exhibit or to present rebuttal evidence. We agree. At trial, West Morgan had

       no reason to respond to Exhibit 10 because Moriarty was making a record for

       appeal through an offer to prove. West Morgan was thus denied an

       opportunity to cross-examine Michael about the preparation of the exhibit.

[38]   If Exhibit 10 had been properly offered, the trial court could have acted within

       its discretion in admitting it into evidence. Under the circumstances presented

       in this case, the trial court abused its discretion by relying upon that exhibit. See

       Mann v. Russell’s Trailer Repair, Inc., 787 N.E.2d 922, 929 (Ind. Ct. App. 2003)

       (trial court abused its discretion by considering evidence that had not been

       introduced or admitted at evidentiary hearing), trans. denied.

[39]   Next, we must determine the impact of the erroneous consideration of Exhibit

       10 on the trial court’s judgment. When evidence is improperly admitted in a

       bench trial, it is presumed the trial court disregarded all inadmissible evidence

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 16 of 27
       and weighed only the proper evidence in determining whether the claimant has

       carried the burden of proof. Id. The improper admission of evidence is

       harmless error when the judgment is supported by substantial independent

       evidence to satisfy the reviewing court that there is no substantial likelihood the

       questioned evidence contributed to the judgment. Id.

[40]   In this case, Exhibit 10 was one of only two exhibits cited by the trial court in

       awarding damages to Moriarty on his counterclaim, the other being a ledger

       prepared by Kennedy. The ledger, standing alone, does not support the trial

       court’s award of damages. In addition, the court rejected other documents

       Michael discussed during his testimony. In the absence of Exhibit 10, the trial

       court’s award lacks substantial independent evidence and the court’s reliance

       upon that exhibit cannot have been harmless error. We reverse the trial court’s

       judgment in favor of Moriarty on his counterclaim for construction costs and

       remand for a new evidentiary hearing limited to that counterclaim.

                                III. Moriarty’s Contract Claims
[41]   Moriarty claims the trial court erred in concluding West Morgan paid Davis all

       amounts owed under Land Contracts I and II. West Morgan disagrees,

       asserting competent evidence demonstrates West Morgan fulfilled its

       contractual obligations.

[42]   When the trial court holds a bench trial, the court may “find the facts and state

       its conclusions thereon” even if neither party requests it. Ind. Trial Rule 52(A).

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 17 of 27
       In this case, the trial court issued findings of fact and conclusions thereon

       without a request from either party.

[43]   On appeal from a bench trial, we “shall not set aside the findings or judgment

       unless clearly erroneous, and due regard shall be given to the opportunity of the

       trial court to judge the credibility of the witnesses.” Id. Findings are clearly

       erroneous if they are not supported by substantial evidence of probative value.

       McKibben v. Hughes, 23 N.E.3d 819, 825 (Ind. Ct. App. 2015), trans. denied. A

       judgment is clearly erroneous if it is unsupported by findings and conclusions.

       Erie Ins. Exch. v. Sams, 20 N.E.3d 182, 187 (Ind. Ct. App. 2014), trans. denied. In

       conducting our review, we consider only the evidence and reasonable

       inferences supporting the judgment and do not reweigh evidence or reassess the

       credibility of witnesses. Id.

[44]   Pursuant to Land Contract I, West Morgan agreed to pay Davis $270,000 in

       monthly installments of $3,000, with the final payment due in December 2020.

       West Morgan had the option to pay more than $3,000 per payment. Pursuant

       to Land Contract II, West Morgan agreed to pay $150,000 in one payment.

[45]   According to receipts admitted at trial, at the August 4, 2011 signing meeting

       West Morgan paid Davis $200,000 in cash, with $50,000 directed to Land

       Contract I and $150,000 directed to Land Contract II. In addition, Kennedy

       testified he had counted out $200,000 in cash the day before the meeting, and

       Cunningham testified he double-checked Kennedy’s count on the morning of

       the meeting. Cunningham explained the money was put in envelopes and

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 18 of 27
       Kennedy took the envelopes to the meeting room. After the meeting, Davis left

       with the envelopes.

[46]   Subsequently, West Morgan paid Davis on a monthly basis, partially by check

       and partially in cash, and kept a receipt of each payment. For the first

       seventeen installment payments, West Morgan paid $10,000 in cash and $2,000

       by check. Subsequent installment payments consisted of $1,000 in cash and

       $2,000 by check. Cunningham counted the cash that was included in the

       installment payments. Thus, properly admitted evidence establishes that the

       payments at the signing meeting, plus the installment payments, satisfied West

       Morgan’s financial obligations to Davis under Land Contract I and Land

       Contract II.

[47]   Moriarty argues the envelopes Davis received at the signing meeting were not

       large enough to contain $200,000. He further claims Davis never received the

       $10,000 cash installment payments, citing a certified fraud examiner’s report

       and other evidence as proof Davis did not conduct her financial affairs during

       the installment payment period in a manner consistent with receiving large

       quantities of money. These arguments are requests to reweigh the evidence,

       which our standard of review forbids.

[48]   Moriarty further claims the receipts are, by themselves, insufficient evidence to

       support the trial court’s findings. He cites two cases, both of which are

       distinguishable. Coca-Cola Bottling Co. v. Int’l Filter Co., 62 Ind. App. 421, 113
N.E. 17 (1916), concerned a receipt for the sale of goods. Louisville N.A. & C.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 19 of 27
       Ry. Co. v. Hubbard, 116 Ind. 193 (1888), involved a receipt for services rendered.

       The current case involves contracts for the sale of real estate. In any event,

       Kennedy and Cunningham’s testimony is independent evidence that supports

       the receipts. There is sufficient evidence to support the trial court’s findings of

       fact that West Morgan fully paid Davis pursuant to the Land Contracts.

                               IV. Improvements to Real Estate
[49]   The trial court determined Moriarty was entitled to $87,320.31 as compensation

       for funds Davis spent building a new house on the property. Moriarty argues

       the court’s award is too low. On cross-appeal, West Morgan argues Moriarty is

       not entitled to any compensation at all. As noted above, we have determined

       the trial court’s judgment as to construction costs must be reversed because it is

       not supported by properly admitted evidence, and a new evidentiary hearing

       must be held. We must still address West Morgan’s cross-appeal claim

       because, if the claim has merit, then Moriarty’s counterclaim fails and a new

       hearing is unnecessary. Our standard of review for the trial court’s findings of

       fact and conclusions thereon is set forth in the previous section.

[50]   Moriarty’s claim for reimbursement is based on Indiana Code section 32-30-3.1-

       1 (2002), known as the Occupying Claimant’s Statute:

               If an occupant of real property:
               (1) has color of title to the property;
               (2) in good faith has made valuable improvements to the
               property; and
               (3) after making improvements to the property is found, in a
               court action, not to be the rightful owner of the property;
       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 20 of 27
               an order may not be issued to give the plaintiff possession of the
               property until a complaint that meets the requirements of section
               2 of this chapter has been filed and the provisions of this chapter
               are complied with.

[51]   Indiana Code section 32-30-3.1-2 (2002) provides a complaint seeking

       compensation for improvements to the property must “(1) set forth the grounds

       on which the defendant seeks relief; and (2) state, as accurately as practicable,

       the value of the improvements on the real property and the value of the

       property without the improvements.” In his Amended Counterclaim to West

       Morgan’s claim, Moriarty argued he was entitled to $138,000, plus interest, for

       Davis’ construction expenditures.

[52]   On cross-appeal, West Morgan asserts Moriarty is not entitled to compensation

       under Indiana Code section 32-30-3.1-1 because Davis did not have color of

       title when she made the improvements to the property.

[53]   As defined by the General Assembly, an occupant has color of title to property

       for purposes of the Occupying Claimant’s Statute if he or she “(1) can show a

       connected title in law or equity, derived from the records of any public office; or

       (2) holds the property by purchase or descent from a person claiming title

       derived from public records or by a properly recorded deed.” Ind. Code § 32-

       30-3.1-8 (2002).

[54]   “Under a typical conditional land contract, the vendor retains legal title until

       the total contract price is paid by the vendee.” Skendzel v. Marshall, 261 Ind.
226, 301 N.E.2d 641, 646 (1973). The vendee gains an equitable title to the

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 21 of 27
       property at the time the contract is executed, and “all incidents of ownership

       accrue to the vendee,” but the vendor reserves legal title as a security interest.

       Id.

[55]   Land Contract I is the “typical conditional land contract” envisioned in
                  4
       Skendzel. Pursuant to the contract, Davis granted West Morgan an immediate

       right to possess the property, subject to Davis’ right to remain in her house as a

       lessee for three years. The contract did not require Davis to issue a warranty

       deed to West Morgan at the signing meeting, and the record does not

       demonstrate she issued a deed at the meeting or afterwards. On August 5,

       2011, the day after the signing meeting, West Morgan recorded a

       “Memorandum of Land Contract” with the Morgan County Recorder rather

       than a deed. Petitioner’s Exhibit D.

[56]   The plain language of Land Contract I demonstrates Davis retained legal title to

       the land until West Morgan paid all installments in full. Furthermore, Kennedy

       agreed at trial West Morgan had possession of the land but not “the title.” Tr.

       Vol. I, p. 82.

[57]   West Morgan cites Kolley v. Harris, 553 N.E.2d 164 (Ind. Ct. App. 1990), trans.

       denied, for the principle that the Occupying Claimant’s Statute is inapplicable to

       conditional land contracts. We disagree with West Morgan’s reading of the

       case. In Kolley, a panel of this Court determined the vendees of a conditional

       4
        As discussed above, West Morgan fulfilled its obligations under Land Contract II on the day of the signing
       meeting by paying the contract price in full.

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016             Page 22 of 27
       land contract did not have a cause of action under the Occupying Claimant’s

       Statute because the vendees’ equitable interest in the property was defeasible if

       they breached the contract. Id. at 168. The Court concluded the vendees’

       defeasible title was insufficient to establish color of title. By contrast, in the

       current case Davis, the vendor, retained legal title during the period in which

       West Morgan, the vendee, made installment payments. As a result, Davis had

       color of title to the property during the period she made improvements to the

       property.

[58]   We need not address Moriarty’s claim that the trial court’s award of damages is

       too low. Moriarty argues in the alternative that he is entitled to recover Davis’

       construction costs under a theory of unjust enrichment, and the trial court

       should have allowed him to present that theory. He did not assert unjust

       enrichment in his Counterclaim or Amended Counterclaim. Instead, during

       the bench trial on June 9, 2015, Moriarty moved to amend the pleadings to add

       a claim of unjust enrichment. West Morgan objected, and the trial court denied

       Moriarty’s motion, explaining it was “too late to do that, we don’t play that

       game.” Tr. Vol. II p. 62.

[59]   We review a trial court’s ruling on a motion to amend the pleadings to conform

       to the evidence for an abuse of discretion. Woodward v. Heritage Constr. Co., Inc.,

       887 N.E.2d 994, 998 (Ind. Ct. App. 2008). Pursuant to Indiana Trial Rule

       15(B), “When issues not raised by the pleadings are tried by express or implied

       consent of the parties, they shall be treated in all respects as if they had been

       raised in the pleadings.” Amendments of the pleadings to conform to the

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       evidence are permissible only when the parties have consented to and litigated

       issues not originally raised by the pleadings. Woodward, 887 N.E.2d at 999.

       Such amendments are not a procedural tool to reopen litigation. Id.

[60]   In this case, Moriarty waited until the second day of trial, almost a year after he

       had filed his original Counterclaim, to attempt to plead unjust enrichment in

       connection with his claim for reimbursement of construction costs. West

       Morgan objected to Moriarty’s motion to amend and thus did not consent to try

       a claim of unjust enrichment. The trial court did not abuse its discretion in

       denying Moriarty’s motion to amend the pleadings. As a result, a claim of

       unjust enrichment was not properly presented to the trial court, and we may not

       reverse the trial court’s judgment based on improperly plead claims.

                                       V. Personal Jurisdiction
[61]   On cross-appeal, West Morgan notes the trial court’s final judgment directed

       John Kennedy, not West Morgan, to pay $87,320.31 to Moriarty on his

       counterclaim for unreimbursed construction costs under the Occupying

       Claimant’s Statute. West Morgan claims Kennedy was never a party to this

       case, and the trial court lacked personal jurisdiction over him. Moriarty

       concedes Kennedy was not a party to the case.

[62]   We are reversing the trial court’s judgment for Moriarty on his counterclaim for

       construction costs, so the question of whether the court erred by ordering

       Kennedy to pay Moriarty is moot. Because the parties agree that Kennedy is

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       not a party to the case, any subsequent judgment in favor of Moriarty must be

       entered against West Morgan, not Kennedy.

                                          VI. Attorney’s Fees
[63]   On cross-appeal, West Morgan claims the trial court should have granted its

       request for attorney’s fees because the trial court rejected Moriarty’s fraud

       claim. West Morgan asserts the fraud claim was frivolous, groundless, and

       unreasonable and that Moriarty litigated in bad faith. The statute governing

       attorney’s fees provides, in relevant part:

               In any civil action, the court may award attorney’s fees as part of
               the cost to the prevailing party, if the court finds that either party:
               (1) brought the action or defense on a claim or defense that is
               frivolous, unreasonable, or groundless;
               (2) continued to litigate the action or defense after the party’s
               claim or defense clearly became frivolous, unreasonable, or
               groundless; or
               (3) litigated the action in bad faith.
       Ind. Code § 34-52-1-1 (1998).

[64]   Where, as here, the trial court determines attorney’s fees are not warranted

       under the statute permitting the award of attorney fees for bringing or pursuing

       a frivolous claim, we review the determination de novo. Stephens v. Parkview

       Hosp., Inc., 745 N.E.2d 262, 267 (Ind. Ct. App. 2001).

[65]   West Morgan asserts Moriarty presented no evidence in support of his fraud

       claim. This assertion is incorrect. First, Moriarty presented testimony from the

       notary public who attended the signing meeting. She described the thickness of

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 25 of 27
       the envelopes Davis received from Kennedy during the meeting, and, based on

       her testimony, Moriarty argued the envelopes were too small to have contained

       $200,000 in cash. Second, Moriarty presented a certified fraud examiner’s

       report and testimony in an attempt to demonstrate that, regardless of what the

       installment payment receipts indicated, Davis was not managing her finances in

       a manner consistent with receiving large amounts of cash. Specifically, during

       the times when she was receiving installment payments, she cashed in life

       insurance policies and other investments. This evidence did not convince the

       trial court to rule in Moriarty’s favor on his claims for fraud and payment under

       the land contracts, but we cannot conclude the claims were so lacking in

       evidentiary support as to be frivolous, unreasonable, or groundless. See id. (no

       error in denial of attorney’s fees where the losing party submitted evidence in

       support of its unsuccessful claims).

[66]   West Morgan also claims it is entitled to attorney’s fees due to Moriarty’s

       conduct on appeal, asserting he continues to present frivolous, groundless, and

       unreasonable claims. We may assess damages on appeal, including attorney’s

       fees, “if an appeal, petition, or motion, or response, is frivolous or in bad faith.”

       Ind. Appellate Rule 66(E). We will only assess damages where an appellant,

       acting in bad faith, maintains a wholly frivolous appeal. Fritts v. Fritts, 28
N.E.3d 258, 267 (Ind. Ct. App. 2015).

[67]   The trial in this case involved complex evidentiary issues arising from a

       property transaction that was structured in an unusual manner. Under these

       circumstances, Moriarty’s appellate claims, although entirely unsuccessful,

       Court of Appeals of Indiana | Memorandum Decision 55A01-1507-EU-791 | June 8, 2016   Page 26 of 27
       were not presented in bad faith and are not frivolous. We deny West Morgan’s

       request for appellate attorney’s fees.

                                                Conclusion
[68]   The trial court abused its discretion by relying upon Exhibit 10, and the case

       must be remanded for a new evidentiary hearing limited to Moriarty’s

       counterclaim for construction costs under the Occupying Claimant’s Statute.

       The trial court did not otherwise err. For the reasons stated above, we affirm

       the judgment in part, reverse in part, and remand with instructions.

[69]   Affirmed in part, reversed in part, and remanded with instructions to hold an

       evidentiary hearing limited to Moriarty’s counterclaim for construction costs.

       Bailey, J., and Crone, J., concur.

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