Court Opinion

ID: 4465283
Source: CourtListenerOpinion
Date Created: 2019-12-18 17:03:55.225088+00
Date Added: 2024-06-11T14:25:33.676090
License: Public Domain

FILED
                                                                              Dec 18 2019, 8:33 am

                                                                                  CLERK
                                                                              Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court

      ATTORNEY FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
      Janette E. Surrisi                                        Robert W. Eherenman
      Wyland, Humphrey, Clevenger &                             Melanie L. Farr
      Surrisi, LLP                                              Haller & Colvin, P.C.
      Plymouth, Indiana                                         Fort Wayne, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      City of Plymouth, Indiana and                             December 18, 2019
      City of Plymouth                                          Court of Appeals Case No.
      Redevelopment Commission,                                 19A-PL-1214
      Appellants-Defendants,                                    Appeal from the Marshall Circuit
                                                                Court
              v.                                                The Honorable Curtis D. Palmer,
                                                                Judge
      Michael Kinder & Sons, Inc.,                              Trial Court Cause No.
      Appellee-Plaintiff.                                       50C01-1803-PL-8

      Najam, Judge.

                                        Statement of the Case
[1]   The City of Plymouth (“the City”) and the City of Plymouth Redevelopment

      Commission (“the Commission”) appeal from the trial court’s order granting a

      motion to enforce a mediation agreement (“the agreement”) filed by Michael

      Kinder and Sons, Inc. (“Kinder”). The City and the Commission present a

      Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019                           Page 1 of 10
      single issue for our review, namely, whether the trial court erred when it

      granted the motion to enforce the parties’ agreement. We reverse and remand

      for further proceedings.

                                     Facts and Procedural History
[2]   On March 14, 2018, Kinder filed a complaint against the City, the Commission,

      and Marshall County Wellness and Life Enhancement, Inc. (“Wellness”)

      alleging breach of contract and unjust enrichment. After various motions were

      filed, 1 Kinder, the City, and the President of the Commission attended a

      mediation conference on January 25, 2019. At the conclusion of that

      conference, Kinder, the City, and the President of the Commission executed an

      agreement, which states as follows:

                 At a mediation session held on January 25, 2019, the parties
                 agreed to settle all litigation arising out of the above captioned
                 case as follows:

                 1) The Defendant shall, subject to the approval of the City of
                 Plymouth Redevelopment Commission keep its offer to settle this
                 litigation for the payment of $130,000.00 to the Plaintiff open.

                 2) If the Plaintiff accepts the defendants [sic] offer to pay
                 $130,000 to settle this case then the case shall be settled.

                 3) If the case is settled then the litigation shall be dismissed with
                 prejudice and all parties shall execute a mutual release.

      1
          Kinder filed a motion for default judgment against Wellness. That motion is still pending in the trial court.

      Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019                                Page 2 of 10
      Appellants’ App. Vol. 3 at 61 (emphases added). 2

[3]   On February 12, Kinder’s counsel emailed the City’s counsel to inform the City

      that Kinder had “decided to accept the City’s last mediation offer of $130,000.”

      Id. at 63. Kinder’s counsel also included a draft release and settlement

      agreement with the email. On February 14, the City’s counsel emailed Kinder’s

      counsel to inform him that the Commission would “discuss the settlement in

      [an] executive session” scheduled for the following Tuesday. Id. at 69. On

      February 20, the City’s counsel emailed Kinder’s counsel again and stated that

      the Commission “wanted to review some additional materials” and had

      scheduled another executive session for March “to further discuss the matter.”

      Id. at 71. In an email dated March 5, the City’s counsel stated that the City

      wanted to “strike paragraph 10 from the settlement agreement” but was

      “otherwise . . . fine with the language.” Id. at 73. The City’s counsel also

      stated that the Commission had not been able to reconvene for an executive

      session and might not be able to reconvene until March 19th.

[4]   Finally, on March 20, the City’s counsel sent an email to Kinder’s counsel

      stating as follows:

               We were finally able to convene the full membership of the
               Redevelopment Commission last night for consideration of the
               settlement. After much deliberation in [an] executive session,

      2
        Alternative Dispute Resolution Rule 2.7(E)(1) requires a mediator to report to the trial court whether the
      parties reached an agreement. On March 22, 2019, the mediator, Senior Judge Terry C. Shewmaker,
      informed the court and the parties by email that, notwithstanding the mediation, “the case was not settled.”

      Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019                            Page 3 of 10
              unfortunately, the settlement was unable to win the support of
              majority of the Commission. I can reach out to the mediator to
              request that he advise the court of this result.

      Id. at 82.

[5]   On March 28, Kinder filed its Motion to Enforce Written Mediation

      Agreement with the trial court. In that Motion, Kinder stated in relevant part:

              4. The mediation conference was held in the Elkhart County
              Courthouse and lasted approximately from 1:30 p.m. to 4:30
              p.m. While [Kinder] did not accept the last offer from the City
              and the Commission at the conclusion of the mediation session,
              the parties entered into a signed, written Mediation Agreement,
              which kept the last offer open after the mediation, with the
              condition that it would be kept open “subject to the approval of the City
              of Plymouth Redevelopment Commission.”

              5. The written Mediation Agreement also provided that if “the
              Plaintiff accepts the defendants offer to pay $130,000.00 to settle
              this case then the case shall be settled.”

              6. On February 12, 2019, [Kinder] accepted the City’s and the
              Commission’s last mediation offer, as set forth in the written,
              signed Mediation Agreement. After the conclusion of the
              mediation session and prior to February 12th, neither the City
              nor the Commission ever notified [Kinder] that the offer had
              been withdrawn or had not been kept open. Along with the
              acceptance of the City’s and Commission’s last offer in the
              written Mediation Agreement, [Kinder] tendered a proposed
              settlement agreement.

      Id. at 54-55 (emphasis added).

      Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019               Page 4 of 10
[6]   The City filed a response to Kinder’s motion and stated in relevant part that

      “[t]he Mediation Agreement set forth a contingent offer[. A]bsent that

      contingency being met, the agreement is, at best, merely an unenforceable

      agreement to agree. The contingency, the approval of the Commission, wasn’t

      met. So, there was no offer for [Kinder] to accept.” Id. at 86. Following a

      hearing, on April 30, 2019, the trial court granted Kinder’s motion, “thereby

      enforcing the mediated settlement agreement attached to said Motion . . . ,

      requiring [the City] to pay [Kinder] the sum of $130,000 in full settlement of all

      claims.” Appellants’ App. Vol. 2 at 11. This interlocutory appeal as a matter of

      right ensued. 3

                                       Discussion and Decision
[7]   The City and the Commission contend that the trial court erred when it granted

      Kinder’s motion to enforce the agreement. Construction of the terms of a

      written contract generally is a pure question of law, which we review de novo.

      See Layne v. Layne, 77 N.E.3d 1254, 1265 (2017), trans. denied. The goal of

      contract interpretation is to determine the intent of the parties when they made

      the agreement. Id. This court must examine the plain language of the contract,

      3
        The City and the Commission purport to bring this interlocutory appeal as a matter of right under Indiana
      Appellate Rule 14(A)(1) (“for the payment of money”). However, our Supreme Court has observed that an
      order for the payment of money is appealable as of right only if it requires a party “to pay a specific amount
      at a specific time.” Huber v. Montgomery Cty. Sheriff, 940 N.E.2d 1182, 1185 (Ind. 2010). Here, the trial
      court’s order does not state a time for the payment of the $130,000. However, the court’s order incorporates
      by reference the parties’ agreement, which compels the City and the Commission to “execute a mutual
      release.” Accordingly, the trial court’s order is an interlocutory order appealable as a matter of right under
      Indiana Appellate Rule 14(A)(2) (“to compel the execution of any document”).

      Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019                             Page 5 of 10
      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. 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. Id.

[8]   Here, the parties do not dispute that the mediation agreement is unambiguous,

      and we agree. Accordingly, we examine the plain language of the agreement as

      contained in the four corners of the instrument, and we may not look to

      extrinsic evidence. See id. The parties concur that the agreement did not

      constitute a final settlement. 4 They disagree, however, in their interpretation of

      the agreement. The City and the Commission assert that the agreement

      constituted a contingent offer to Kinder to settle for $130,000, the contingency

      being the approval of the Commission. But Kinder asserts that the agreement

      constituted an offer of $130,000 to settle the litigation that was to be kept open

      unless the Commission rescinded the offer before Kinder accepted it. In its

      motion to enforce the agreement, Kinder acknowledged that the agreement

      “kept the last offer open after the mediation, with the condition that it would be

      kept open ‘subject to the approval of the City of Plymouth Redevelopment

      Commission.’” Appellants’ App. Vol. 3 at 54 (emphasis added). But on

      appeal, Kinder contends that “[t]here is nothing within the terms of the

      4
        The agreement explicitly refers to an offer contingent on approval by the Commission and a settlement
      contingent on Kinder’s acceptance of that offer.

      Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019                          Page 6 of 10
       Mediation Agreement that the Commission would need to authorize the

       making of the offer of $130,000.” Appellee’s Br. at 27.

[9]    “A condition precedent is either a condition which must be performed before

       the agreement of the parties shall become a binding contract, or it may be a

       condition which must be fulfilled before the duty to perform an existing

       contract arises.” Dvorak v. Christ, 692 N.E.2d 920, 924 (Ind. Ct. App. 1998),

       trans. denied. Here, the plain language of the agreement unambiguously states

       that the City’s promise to “keep its offer” to settle open was “subject to”

       approval by the Commission. Appellants’ App. Vol. 3 at 61. Thus, any

       settlement between the parties was subject to a condition precedent, and it is

       undisputed that the condition was not satisfied. 5 That is, the Commission never

       approved the offer to settle with Kinder for $130,000.

[10]   Kinder posits an agreement that would set up a race between Kinder and the

       Commission. Either the Commission could rescind the offer, or Kinder could

       accept it, and whichever occurred first would determine the outcome of the

       mediation. We decline Kinder’s invitation to add words to the agreement that

       are simply not there. The agreement clearly required that the Commission

       approve the offer before Kinder could accept it. We construe the provisions of

       an agreement “to render each word, phrase, and term meaningful,

       5
         We reject Kinder’s contention that the City waived the condition precedent. Nothing in the record shows
       that Kinder argued waiver to the trial court. It is well settled that a party may not raise an issue for the first
       time on appeal. See Sage v. State, 114 N.E.3d 923, 928 n.1 (Ind. Ct. App. 2018).

       Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019                                 Page 7 of 10
       unambiguous, and harmonious with the whole,” Citimortgage, Inc. v. Barabas,

       975 N.E.2d 805, 813 (Ind. 2012), and we agree with the City and the

       Commission that Kinder’s interpretation of the agreement would render the

       “subject to the approval of the Commission” provision mere surplusage.

       Appellants’ Br. at 28. The requirement that the City keep its offer to settle open

       was clearly and unambiguously subject to a condition precedent, namely, the

       approval of the Commission.

[11]   Our Supreme Court’s decision in Indiana State Highway Commission v. Curtis, 704
N.E.2d 1015 (Ind. 1998), is instructive here. In Curtis, the Court considered

       whether an agreement “that explicitly requires the approval of a component of a

       party [is] binding on the party without that approval.” 704 N.E.2d 1015, 1017

       (Ind. 1998). Just prior to trial, the parties “arrived at an agreed amount for a

       monetary settlement from the State and the State’s grant of an easement onto

       State property to install a new septic system.” Id. Paragraph five of the parties’

       written agreement “granted the Suttons[, who had purchased the subject

       property from the named plaintiffs, the Curtises,] access over State property”

       and paragraph seven provided that “access through State Road 10’s existing

       guardrail and any driveway therefrom as described in paragraph five (5) of this

       agreement is subject to approval by INDOT.” Id. (emphasis added). Prior to

       obtaining INDOT’s approval of the access as described in paragraph seven of

       the parties’ agreement, the Suttons filed a motion to enforce the parties’

       settlement agreement.

       Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019     Page 8 of 10
[12]   The trial court granted the Suttons’ motion to enforce the agreement, but, on

       transfer, our Supreme Court held as follows:

               INDOT’s approval of the easement provisions is a condition of
               the settlement agreement. The condition was supplied by the
               parties when they agreed explicitly in the settlement document
               that the easement provisions required INDOT’s approval.

               As a general rule, an express condition must be fulfilled or no
               liability can arise on the promise that the condition qualifies. 5
               WILLISTON, CONTRACTS § 675 (3rd ed. 1961);
               RESTATEMENT (SECOND) OF CONTRACTS § 225 (1981)
               (if a condition does not occur, performance of a duty subject to a
               condition cannot become due and if the condition can no longer
               occur, the duty is discharged). Indiana courts have consistently
               recognized this rule. The Court of Appeals held in Blakley[ v.
               Currence, 172 Ind.App. 668, 670, 361 N.E.2d 921, 922 (1977),]
               that an agreement containing the clause “subject to loan
               approval” did not become a binding contract because approval was not
               obtained. 361 N.E.2d at 923. Similarly, in Wetzel v. Andrews, 136
               Ind.App. 117, 198 N.E.2d 19 (1964), the Court of Appeals held
               that a lease was not valid where the condition precedent of
               statutorily required approval by the governmental entity was not
               met. . . .

                                                        ***

               . . . [U]pholding the right of a party to insist on [approval by an
               agency as a condition of settlement] . . . ultimately facilitates
               settlement by permitting an agreement to be made with an
               enforceable condition, even if the condition is likely to be
               fulfilled. Accordingly, as a matter of contract law, because
               INDOT approval was required by the settlement agreement, and
               that approval was not obtained, the agreement, as to the
               easement provisions, is not enforceable.

       Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019      Page 9 of 10
       Id. at 1018-20 (emphasis added).

[13]   Likewise, here, we hold that the mediation agreement required that the

       Commission approve the settlement offer of $130,000 before Kinder could

       accept it. This was a condition precedent supplied by the parties. See id. at

       1018. Kinder’s reliance on the second numbered paragraph of the agreement as

       if it were a stand-alone provision is misplaced. Because the Commission did

       not approve the offer, there was no offer for Kinder to accept. The trial court

       erred when it granted Kinder’s motion to enforce the parties’ agreement.

[14]   Reversed and remanded for further proceedings.

       Vaidik, C.J., and Tavitas, J., concur.

       Court of Appeals of Indiana | Opinion 19A-PL-1214 | December 18, 2019   Page 10 of 10