Court Opinion

ID: 2789942
Source: CourtListenerOpinion
Date Created: 2015-03-30 15:09:21.608166+00
Date Added: 2024-06-11T11:28:52.511677
License: Public Domain

MEMORANDUM DECISION
                                                                          Mar 30 2015, 9:36 am
      Pursuant to Ind. Appellate Rule 65(D), this
      Memorandum Decision shall not be regarded as
      precedent or cited before any court except for the
      purpose of establishing the defense of res judicata,
      collateral estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEE
      Lindsey A. Grossnickle                                   Jeffrey S. Arnold
      Bloom Gates & Whiteleather, LLP                          Columbia City, Indiana
      Columbia City, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      David R. Ulrich and                                      March 30, 2015
      Marcia K. Ulrich,                                        Court of Appeals Case No.
                                                               92A05-1408-PL-363
      Appellants-Plaintiffs,
                                                               Appeal from the Whitley Superior
              v.                                               Court

                                                               The Honorable Douglas M. Fahl,
      Brad R. Minear and                                       Judge
      Miranda G. Minear,
                                                               Case No. 92D01-1311-PL-353
      Appellees-Defendants

      Crone, Judge.

                                               Case Summary
[1]   In the mid-1990s, David R. Ulrich and Marcia K. Ulrich purchased a house in a

      Columbia City subdivision. The subdivision lots are subject to six restrictive

      Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015       Page 1 of 14
      covenants; number 4 prohibits the real estate from being used for commercial

      purposes. In 2013, Brad R. Minear and Miranda G. Minear purchased a house

      in the same subdivision and posted a yard sign reading, “Future home of

      Minear Real Estate.” Tr. at 60. The Ulrichs filed a complaint for injunctive

      relief to enforce covenant number 4 against the Minears. At an evidentiary

      hearing, the Ulrichs asserted for the first time that they were entitled to relief

      based on res judicata. The trial court issued an order denying the Ulrichs’

      complaint, finding that they had acquiesced to other property owners’

      violations of covenant number 4 and that their assertion of res judicata was

      untimely.

[2]   On appeal, the Ulrichs argue that the trial court erred in denying their

      complaint. We conclude that ample evidence supports the trial court’s finding

      of acquiescence and that res judicata is inapplicable. Therefore, we affirm.

                                  Facts and Procedural History1
[3]   The relevant facts are undisputed. In the mid-1990s, the Ulrichs purchased a

      house on North Park Drive in the North Park Subdivision (“the Subdivision”)

      in Columbia City. North Park Drive is an east-west dead-end street that

      intersects Main Street at its eastern end. The Ulrichs’ house is closer to the cul-

      1
        We remind the Ulrichs’ counsel that an appellant’s statement of facts “shall be stated in accordance with
      the standard of review appropriate to the judgment or order being appealed” and “shall be in narrative form
      and shall not be a witness by witness summary of the testimony.” Ind. Appellate Rule 46(A)(6).

      Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015            Page 2 of 14
      de-sac than to Main Street. The Subdivision’s twenty-seven lots are subject to

      the following restrictive covenants via warranty deed:

              1. No outdoor toilets shall be erected or maintained, and all sewage
              must be drained into a septic tank which shall meet Indiana State
              Board of Health rules.

              2. No house shall be build [sic] closer to the street then [sic] the first
              house constructed in the line of lots in which the above described lots
              is situated.

              3. No house shall be constructed upon the above described real estate
              which shall consist of less than seven hundred fifty (750) square feet of
              floor space on the first floor.

              4. Said real estate shall be used for residential purposes only and shall
              not be used for any commercial, mercantile or manufacturing purpose.

              5. No buildings except a residence and garage shall be constructed on
              said lot. Such residence shall be a single family dwelling or a two
              family dwelling consisting of one apratment [sic] upstairs and one
              apartment downstaris [sic], and no other type of duplex shall be
              permitted.

              6. All buildings constructed shall be of neat design and sturdy and
              attractive construction.
      Plaintiffs’ Ex. D. The Ulrichs’ property comprises lot 8 and the west half of lot

      7, which are zoned residential.

[4]   In November 2013, the Minears purchased a house in the Subdivision four

      houses east of the Ulrichs. The Minears’ property fronts both North Park Drive

      and Main Street and comprises lot 2 and the east half of lot 3, which are zoned

      general business. The Minears posted a yard sign reading, “Future home of

      Minear Real Estate.” Tr. at 60.

      Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 3 of 14
[5]   Later that month, the Ulrichs filed a complaint for injunctive relief to enforce

      covenant number 4 against the Minears. The Minears filed an answer asserting

      that the Ulrichs “are estopped from asserting the restrictive and enforceable

      nature of the covenants” because they “or their predecessors in right have

      agreed, either expressly or impliedly, with the commercial nature of this

      subdivision, particularly those lots located on main Columbia City

      thoroughfares.” Appellants’ App. at 8.

[6]   An evidentiary hearing was held in June 2014. On July 9, 2014, the trial court

      issued an order with the following relevant findings and conclusions:

              2. The parties agree that the original subdivision contained six (6)
              Restrictive Covenants that all parties agree “run with the land.”

              3. Restrictive Covenant number 1 is currently being violated by all
              parties at issue and no modification of the Covenants has been sought
              or recorded by the landowners.

              4. Restrictive Covenant numbers 2, 3, and 5 are currently being
              violated on lots 23, 24, 25, 26, and 27 by the erection and operation of
              a senior living facility.

              5. The landowners have not sought to enforce the Restrictive
              Covenants on said lots nor have they recorded a variance for the
              violation of said Restrictive Covenants.

              6. Lot number 1 and a portion of lot number 3, commonly referred to
              as the S & S Construction Company property, violate Restrictive
              Covenant number 5 [sic2].

      2
       In light of finding number 7, it appears that “Covenant number 5” should be “Covenant number 4.” We
      presume that this is a scrivener’s error.

      Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015       Page 4 of 14
        7. The landowners have not sought to enforce the Restrictive
        Covenants on said lots nor have they recorded a variance for the
        violation of said Restrictive Covenants. The Court notes that Plaintiffs
        testified that, at some point in time, an agreement was reached with
        the property owner for a limited variance; however, the variance was
        never reduced to writing nor did the landowner of lot 1 and a portion
        of lot 3 testify that he had agreed to said variance. All parties agree
        that the property is currently being used for commercial purposes. The
        Court finds that the issue of whether the house itself or the garage is
        being used is irrelevant to the issue. The “property” is being used for
        commercial purposes.

        8. Lot number 20 violates Restrictive Covenant numbers 4 and 5;
        however, a variance was obtained and properly signed by the
        landowners. Therefore, said violation does not prevent the
        landowners from enforcing the Restrictive Covenants on other
        properties.

        9. Lot number 19 violates Restrictive Covenant number 4, and the
        landowners have not sought to enforce the Restrictive Covenants nor
        have they recorded a variance for the violation of said Covenants.

        10. Lot numbers 21 and 22 violate Restrictive Covenant numbers 4
        and 5, and the landowners have not sought to enforce the Restrictive
        Covenants nor have they recorded a variance for the violation of said
        Covenants.

        11. Plaintiffs’ request of the Court to grant Plaintiffs’ relief based on
        the doctrine of Res Judicata should be denied as untimely filed and
        Plaintiffs’ presentation at trial did not give Defendants an opportunity
        to explore the facts of the prior Plaintiffs’ dismissal or provide the
        Court with sufficient information to determine whether the doctrine
        should be applied to the current matter.

        12. The Restrictive Covenants supersede the City of Columbia City’s
        zoning applications and the allegations by Defendants that the
        property is zoned for general business has no bearing on the Court’s

Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 5 of 14
               decision.[3]

               13. Plaintiffs’ assertion that Defendants come into the matter with
               “unclean hands” is unfounded, and the Court denies the same. To the
               contrary, the Court finds that Plaintiffs are currently in violation of
               Restrictive Covenant number 1 and they themselves do not possess
               “clean hands.”

               14. The presence of Ace Hardware to the west of the subdivision at
               issue has no bearing on the Court’s decision for the reason that the
               business’s expansion has not changed the nature and character of the
               subdivision.

               15. The Restrictive Covenants for the subdivision at issue have been
               violated and degraded to the point that they are virtually
               unenforceable on any of the properties. The only Covenant that
               arguably is not currently being violated is Covenant number 6, which
               is wholly subjective and most likely unenforceable on its face.

               16. The landowners have acquiesced in the violation of the Covenants
               to such a degree that it would be inappropriate to single out one
               property owner and attempt to enforce only certain Covenants against
               that property owner. The Court notes that Plaintiffs have not asserted
               a violation against Defendants for violation of Covenant number 1.
               All parties agree that Defendants are currently violating said
               Covenant, as are a majority of the other landowners.

               17. Plaintiffs’ Complaint for Injunctive Relief should be denied.
      Id. at 65-67.

[7]   The Ulrichs now appeal. Additional facts will be provided as necessary.

      3
        See Highland Springs S. Homeowners Ass’n v. Reinstatler, 907 N.E.2d 1067, 1073 (Ind. Ct. App. 2009)
      (“[Z]oning ordinances and laws cannot relieve real estate from valid private restrictive covenants”) (quoting
      Suess v. Vogelgesang, 151 Ind. App. 631, 639, 281 N.E.2d 536, 541 (1972), trans. denied), trans. denied.

      Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015              Page 6 of 14
                                     Discussion and Decision

                                         Standard of Review
[8]   The Ulrichs assert that the trial court erred in denying their complaint for

      injunctive relief. “The granting or refusing of injunctive relief is a matter within

      the trial court’s discretion.” Oakes v. Hattabaugh, 631 N.E.2d 949, 953 (Ind. Ct.

      App. 1994), trans. denied. “A mandatory or prohibitory injunction is an

      extraordinary equitable remedy which should be granted with caution. The

      plaintiff has the burden of demonstrating certain and irreparable injury.” Id.

      (citation omitted).

              A party who had the burden of proof at trial appeals from a negative
              judgment and will prevail only if it establishes that the judgment is
              contrary to law. A judgment is contrary to law when the evidence is
              without conflict and all reasonable inferences to be drawn from the
              evidence lead only to one conclusion, but the trial court reached a
              different conclusion. In addition, where, as here, the trial court issues
              findings of fact and conclusions [thereon], its findings and conclusions
              shall not be set aside unless clearly erroneous. We review the
              judgment by determining whether the evidence supports the findings
              and whether the findings support the judgment. We consider only the
              evidence favorable to the judgment and all reasonable inferences to be
              drawn from that evidence.
      Harness v. Parkar, 965 N.E.2d 756, 760 (Ind. Ct. App. 2012) (citations omitted).

      We will neither reweigh evidence nor judge witness credibility. Estate of Kappel

      v. Kappel, 979 N.E.2d 642, 651 (Ind. Ct. App. 2012).

      Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 7 of 14
        Section 1 – The trial court did not err in denying the Ulrichs’
           complaint for injunctive relief based on acquiescence.
[9]    The Ulrichs filed their complaint to enforce covenant number 4 against the

       Minears, who wanted to use their property for commercial purposes. A

       restrictive covenant is a contract between a grantor and a grantee that restricts

       the grantee’s use of land. Hrisomalos v. Smith, 600 N.E.2d 1363, 1366 (Ind. Ct.

       App. 1992). “The general purpose of a restrictive covenant is to maintain or

       enhance the value of adjacent property by controlling the nature and use of

       surrounding properties. Restrictive covenants are disfavored in the law.”

       Holliday v. Crooked Creek Vill. Homeowners Ass’n, 759 N.E.2d 1088, 1092 (Ind. Ct.

       App. 2001) (citation omitted).

[10]   “A party defending against an equitable enforcement of a restrictive covenant

       may plead the defense of acquiescence where the party seeking the injunction

       acquiesced in similar violations.” Stewart v. Jackson, 635 N.E.2d 186, 194 (Ind.

       Ct. App. 1994), trans. denied. “[W]hen analyzing a defense of acquiescence, the

       primary concern is the effect of the prior violations upon the ability of the

       proponent of the restriction to enjoy the benefits of the covenant compared to

       the potential abridgement of the proponent’s enjoyment of the covenant’s

       benefit caused by the violation sought to be enjoined.” Hrisomalos, 600 N.E.2d

       at 1368.

               The trial court must consider three factors to determine acquiescence:
               1) the location of the objecting landowners relative to both the
               property upon which the nonconforming use is sought to be enjoined
               and the property upon which a nonconforming use has been allowed;

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 8 of 14
               2) the similarity of the prior nonconforming use to the nonconforming
               use sought to be enjoined; and, 3) the frequency of prior
               nonconforming uses.
       Stewart, 635 N.E.2d at 194.

[11]   As mentioned above, the Subdivision comprises twenty-seven lots. Eighteen

       lots front North Park Drive (lots 2 through 11 on the north, and lots 12 through

       19 on the south). Lots 2 and 19 also abut Main Street. Lot 1 abuts the northern

       boundary of lot 2 and Main Street, and lot 20 abuts the southern boundary of

       lot 19 and Main Street. Lots 21 through 27 abut what appears to be an alley or

       a utility easement on the southern boundaries of lots 12 through 18 and 20 and

       front the north side of Diplomat Drive. Lot 21 also abuts Main Street.

       Plaintiffs’ Ex. A.

[12]   The trial court found that lot 1 and a portion of lot 3 were being used for

       commercial purposes by S & S Construction Company and that covenant

       number 4 was not enforced on those lots. The Ulrichs complain that “[t]he trial

       court assumes facts not in evidence” because David testified that “the owner of

       S & S petitioned the neighborhood to conduct business” on those lots and that

               the neighborhood agreed for the garage to be utilized for business
               purposes. There was no evidence to the contrary. Ulrich was not
               asked to produce a document which memorialized the neighborhood’s
               consent. The trial court assumed it was not reduced to writing.
               However, the question was never asked.
       Appellants’ Br. at 15. The Ulrichs cite no authority for the proposition that the

       Minears were required to prove a negative, i.e., that no written agreement

       existed. And the trial court was not obligated to believe David’s testimony,

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 9 of 14
       even if it was uncontradicted. See Thompson v. State, 804 N.E.2d 1146, 1149

       (Ind. 2004) (“As a general rule, factfinders are not required to believe a witness's

       testimony even when it is uncontradicted.”).4 We may not reassess the trial

       court’s credibility determination on appeal. Estate of Kappel, 979 N.E.2d at 651.

[13]   The trial court also found that lots 19, 21, and 22 violate covenant number 4

       and that the covenant was not enforced on those lots. The record reflects that

       lot 19 contains a parking lot for the bank located on lot 20. Lot 21 contains a

       gas station, and lot 22 contains a rental truck parking lot. The Ulrichs argue

       that “[t]he trial court assumed there were no recorded modifications or

       neighborhood agreements allowing commercial activity on those lots.”

       Appellants’ Br. at 15. Again, the Ulrichs were not required to prove that no

       written agreements existed. The Minears’ counsel asked David if the

       Subdivision’s homeowners “always resisted any inroads into setting aside [the]

       covenants,” and he replied, “They have always had their input into any change

       that the neighborhood has gone through.” Tr. at 55. The trial court was not

       required to believe this testimony, and even if it did, it reasonably could have

       inferred that no written agreements existed because none were mentioned with

       respect to lots 19, 21, and 22.

[14]   Turning now to the three factors listed in Stewart, 635 N.E.2d 186, the evidence

       most favorable to the trial court’s judgment establishes that (1) the Ulrichs live

       4
        As was the trial court, we are unpersuaded by the Ulrichs’ argument that the lots are not used for
       commercial purposes because S & S operates out of a garage.

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015            Page 10 of 14
       on the same street as or only one street over from all the commercial enterprises

       at issue; (2) the parking lots and gas station reasonably could be considered

       more substantial violations of covenant number 4 than the Minears’ real estate

       business; and (3) the parking lots and gas station have been around since at least

       the 1990s, and the construction company began doing business after the 2000

       dismissal of a lawsuit filed by the former owners of the Minears’ property, who

       wanted to build a commercial building. Based on the foregoing, “we find

       ample evidence supporting the defense of acquiescence.” Id. at 194. Therefore,

       we conclude that the trial court did not clearly err in denying the Ulrichs’

       complaint for injunctive relief on this basis.5

                            Section 2 – Res judicata is inapplicable.
[15]   Apparently intending to show that the validity of covenant number 4 as to the

       Minears’ property was res judicata, the Ulrichs offered into evidence a 1998

       complaint that the property’s prior owners had filed against the Ulrichs and

       other Subdivision lot owners to “amend and modify” covenant number 4 to

       allow the “establishment and erection of a commercial building”; the complaint

       alleged that this was “consistent with both the current and past use of the real

       5
         In their reply brief, the Ulrichs contend that “[i]t was the Minears’ burden to show the changes are so
       radical as to practically destroy the essential objects and purposes of the covenant.” Appellants’ Reply Br. at
       4 (citing Hrisomalos, 600 N.E.2d at 1366). This language relates to public policy considerations and not
       specifically to an acquiescence defense. See Hrisomalos, 600 N.E.2d at 1366 (“[P]ublic policy requires the
       invalidation of restrictive covenants when there have been changes in the character of the subject land that
       are ‘so radical as practically to destroy the essential objects and purposes of the agreement.’ Numerous
       personal defenses to actions in equity seeking to enforce restrictive covenants also exist. Such defenses include
       the familiar equitable defenses of clean hands, laches and estoppel as well as the defense of acquiescence.”)
       (emphasis added) (citation omitted).

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015               Page 11 of 14
       estate in question as all adjourning [sic] lots on both sides of Main Street have

       been used for a commercial purpose for many years.” Plaintiff’s Ex. H at 4.

       The Minears objected on relevancy grounds, noted that the complaint had been

       dismissed with prejudice (on the plaintiffs’ motion in 2000), Plaintiffs’ Ex. I,

       and expressed doubt as to the dismissal’s “res judicata effect.” Tr. at 12.

       Ultimately, the trial court ruled as follows: “It’ll come in. I’ll look at it. I’ll

       consider it, but I may or may not determine whether or not it has … it has any

       controlling effect on the case.” Id. at 14. In its order, the trial court determined

       that the Ulrichs’ request for relief based on res judicata “should be denied as

       untimely filed” and that their “presentation at trial did not give [the Minears]

       an opportunity to explore the facts of the prior Plaintiffs’ dismissal or provide

       the Court with sufficient information to determine whether the doctrine should

       be applied to the current matter.” Appellants’ App. at 66.

[16]   The Ulrichs contend that the trial court erred in finding their request untimely,

       noting that the Minears did not object on this basis. We need not address the

       Ulrichs’ timeliness argument because we conclude that res judicata is

       inapplicable. “The doctrine of res judicata serves to prevent the litigation of

       matters that have already been litigated. Res judicata consists of two distinct

       components: claim preclusion and issue preclusion.” TacCo Falcon Point, Inc. v.

       Atl. Ltd. P’Ship XII, 937 N.E.2d 1212, 1218 (Ind. Ct. App. 2010). The Ulrichs

       assert that claim preclusion applies here.

               Claim preclusion is applicable when a final judgment on the merits has
               been rendered and acts to bar a subsequent action on the same claim
               between the same parties. When claim preclusion applies, all matters

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 12 of 14
               that were or might have been litigated are deemed conclusively
               decided by the judgment in the prior action. Claim preclusion applies
               when the following four factors are present: (1) the former judgment
               was rendered by a court of competent jurisdiction; (2) the former
               judgment was rendered on the merits; (3) the matter now at issue was,
               or could have been, determined in the prior action; and (4) the
               controversy adjudicated in the former action was between parties to
               the present suit or their privies.
       Id. at 1218-19 (citations omitted).

[17]   “[E]ither party may move to dismiss a claim and a dismissal with prejudice

       constitutes a dismissal on the merits.” Afolabi v. Atl. Mortg. & Invest. Corp., 849
N.E.2d 1170, 1173 (Ind. Ct. App. 2006). “Thus, a dismissal with prejudice is

       conclusive of the rights of the parties and is res judicata as to any questions that

       might have been litigated. In determining whether the doctrine should apply, it

       is helpful to inquire whether identical evidence will support the issues involved

       in both actions.” Id. (citation omitted).

[18]   The Ulrichs argue,

               Here, the former judgment was rendered by a competent jurisdiction;
               the former judgment was rendered on the merits; restrictive covenant
               Number 4 was in issue in the 1998 cause and is the sole issue in the
               present cause; and the controversy adjudicated in the former action
               was between, among others, the Ulrichs and privies of the Minears.
       Appellants’ Br. at 12. Our supreme court has explained, however, that “where

       additional facts are pleaded in the subsequent complaint, bringing different

       questions of fact or law before the court, the judgment in the first action is no

       bar or estoppel by record to the second.” Stuck v. Town of Beech Grove, 201 Ind.
66, 163 N.E. 483, 485 (1928).

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015   Page 13 of 14
[19]   The 1998 lawsuit was brought by the Minears’ predecessors to amend or

       modify covenant number 4 to allow for the construction of a commercial

       building on the premises, whereas the Ulrichs filed their lawsuit to enforce the

       covenant against the Minears, who wanted to use the house for commercial

       purposes and sought to nullify the covenant based on acquiescence. Thus, the

       facts and legal issues of the two cases are different. And because the first case

       was dismissed on the plaintiffs’ motion and the Ulrichs offered no evidence as

       to the reasons for dismissal, we cannot tell what, if anything, was adjudicated in

       that case. Therefore, we conclude that res judicata is inapplicable and affirm

       the trial court’s denial of the Ulrichs’ complaint for injunctive relief.6

[20]   Affirmed.

       Friedlander, J., and Kirsch, J., concur.

       6
         Given our resolution of this appeal, we need not address the Ulrichs’ arguments about the trial court’s
       consideration of other covenants and its finding regarding unclean hands. See Borth v. Borth, 806 N.E.2d 866,
       870 (Ind. Ct. App. 2004) (“Where trial court findings on one legal theory are adequate, findings on another
       legal theory amount to mere surplusage and cannot constitute a basis for reversal even if erroneous.”).

       Court of Appeals of Indiana | Memorandum Decision 92A05-1408-PL-363 | March 30, 2015            Page 14 of 14