Court Opinion

ID: 4529788
Source: CourtListenerOpinion
Date Created: 2020-04-29 16:05:09.104642+00
Date Added: 2024-06-11T09:26:54.413170
License: Public Domain

FILED
                                                                     Apr 29 2020, 8:10 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court

ATTORNEYS FOR APPELLANTS                                    ATTORNEY FOR APPELLEES
FLOYD FREEMAN AND CLOVER                                    TRACY AND ROBBYN NASH
HOMES, INC.                                                 Terrence J. Sorg
Andrew R. Falk                                              Brooks Koch & Sorg
Indianapolis, Indiana                                       Indianapolis, Indiana
Jeffrey A. Boggess
Greencastle, Indiana

                                             IN THE
    COURT OF APPEALS OF INDIANA

Floyd Freeman, Individually,                                April 29, 2020
and Clover Homes, Inc.,                                     Court of Appeals Case No.
Appellants-Defendants/Third-Party                           19A-CC-1889
Plaintiffs,                                                 Interlocutory Appeal from the
                                                            Putnam Superior Court
        v.                                                  The Honorable Sarah K. Mullican,
                                                            Special Judge
Timberland Home Center, Inc.,                               Trial Court Cause No.
Plaintiff,                                                  67D01-1806-CC-170

        and

Tracy Nash and Robbyn Nash,
Appellees-Third-Party Defendants,

        and

Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020                           Page 1 of 15
V-Live General Services, LLC,
and Unknown Member of V-
Live General Services, LLC,
Third-Party Defendants

_________________________

V-Live General Services, LLC,
Counterclaimant,

        v.

Floyd Freeman, individually,
and Clover Homes, Inc.,
Counterclaim Defendants

_________________________

V-Live General Services, LLC,
Cross-Claim Plaintiff,

        v.

Timberland Home Center, Inc.,
and Tracy Nash and Robbyn
Nash,
Cross-Claim Defendants

_________________________

V-Live General Services, LLC,
Third-Party Plaintiff,

        v.

Avila Construction, LLC, Jose
Alfredo Avila Rivas,
individually, Look-E Excavating,

Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020   Page 2 of 15
      Inc., William Lookabill,
      individually, Francis Lookabill,
      individually, and Bryan Young
      d/b/a Young Architecture
      Services,
      Third-Party Defendants

      Crone, Judge.

                                                  Case Summary
[1]   Floyd Freeman, individually, and Clover Homes, Inc. (collectively Clover

      Homes), bring this interlocutory appeal of the trial court’s order granting the

      motion to transfer venue filed by Tracy Nash and Robbyn Nash. 1 Clover

      Homes argues that because the original plaintiffs filed this case in a county with

      preferred venue, the trial court erred by transferring the action to another

      county with preferred venue. We agree and therefore reverse.

                                     Facts and Procedural History
[2]   The relevant undisputed facts follow. Around July 26, 2017, Clover Homes

      and the Nashes entered into a contract, in which Clover Homes agreed to sell

      and Nashes agreed to buy a home to be constructed on the Nashes’ property

      located in Hendricks County. Clover Homes opened a commercial charge

      1
          This is an interlocutory appeal of right pursuant to Indiana Trial Rule 14(A)(8).

      Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020                      Page 3 of 15
      account with Timberland Home Center, Inc., to purchase building materials to

      be used in the construction of the home. Freeman executed a personal

      guaranty of Clover Homes’ obligations under the commercial charge account.

      Freeman is a resident of Putnam County. Clover Homes is a domestic

      corporation with its principal place of business in Putnam County. Timberland

      is a domestic corporation with its principal place of business in Clay County.

      Clover Homes also subcontracted with V-Live General Services, LLC, to

      perform work on the Nashes’ home. V-Live is a limited liability company with

      its principal place of business in Marion County. Work was performed on the

      home by Clover Homes through its subcontractors, but in March 2018, the

      Nashes terminated the contract. Clover Homes alleges that the Nashes have

      not paid for all the work done under the contract to build the home and for

      materials provided by Timberland to build the home.

[3]   On May 25, 2018, Clover Homes filed in Hendricks County a notice of

      mechanic’s lien on the Hendricks County lot, which was recorded by the

      Hendricks County recorder. On June 5, 2018, the Nashes served Clover Homes

      notice to commence suit to foreclose its mechanic’s lien within thirty days

      pursuant to Indiana Code Section 32-28-3-10.

[4]   On June 19, 2018, Timberland initiated this action by filing a complaint in the

      Putnam County Superior Court against Clover Homes, seeking payment of the

      balance due on the commercial charge account. On July 3, 2018, Clover

      Homes filed a third-party complaint against the Nashes alleging a breach of

      contract claim (Count 1) and a claim for foreclosure of Clover Homes’

      Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020      Page 4 of 15
      mechanic’s lien (Count 2). Clover Homes later amended the third-party

      complaint to add two counts of defamation against the Nashes. The third-party

      complaint also included a breach of contract claim against V-Live, alleging that

      V-Live breached its agreement with Clover Homes by failing to perform work

      in a workmanlike manner.

[5]   In August 2018, the Nashes filed a motion to dismiss Count 2 of Clover Homes’

      third-party complaint against them for lack of jurisdiction, arguing that Indiana

      Code Section 32-28-3-6 required the foreclosure action to be filed in Hendricks

      County, where the property subject to the lien is located. They later renewed

      the motion on the same basis. Clover Homes filed an opposition to the Nashes’

      motion to dismiss. The Nashes filed a reply, this time arguing that pursuant to

      Indiana Code Section 32-28-3-10 and this Court’s decision in Ford v. Culp

      Custom Homes, Inc., 731 N.E.2d 468 (Ind. Ct. App. 2000), trans. denied, preferred

      venue for the foreclosure claim rested in Hendricks County. The Nashes

      requested that in lieu of dismissal of Count 2, the trial court transfer venue of

      the amended third-party complaint to Hendricks County. Clover Homes filed a

      surrebuttal to the Nashes’ motion to transfer, arguing that pursuant to Indiana

      Trial Rule 75, Putnam County was a preferred venue and because the action

      was initiated in a county of preferred venue, venue could not be transferred.

[6]   In June 2019, the trial court held a hearing on all pending motions, including

      the Nashes’ motion to transfer venue to Hendricks County. The transcript of

      the hearing is not in the record before us. The trial court took the matters under

      advisement, and on July 16, 2019, issued an order transferring the entire action

      Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020        Page 5 of 15
      to Hendricks County. The trial court based its decision on Ford, concluding as

      follows:

              In the present case before this Court, the mechanic’s lien is
              attached to Tracy and Robbyn Nash’s real property which is
              located in Hendricks County, Indiana. The complaint which is
              the subject of this litigation was filed in Putnam County. The
              Court hereby orders this case be transferred to Hendricks County
              where all remaining pleadings and pending motions which have
              not been resolved shall be heard.

      Appealed Order at 3. Clover Homes then initiated this interlocutory appeal.

                                      Discussion and Decision
[7]   Clover Homes argues that the trial court erred by transferring venue of this

      action to Hendricks County because preferred venue had already been

      established in Putnam County. The Nashes frame the issue differently, arguing

      that they were misjoined as third-party defendants and that the trial court erred

      in transferring the entire action instead of severing and transferring only Clover

      Homes’ third-party complaint. Before turning to the substance of these

      arguments, we note that for purposes of determining whether the trial court

      properly transferred this action on the basis of preferred venue, the facts of this

      case are undisputed. As such, the only question before us is whether the trial

      court properly applied the law. When the issue on appeal presents a question of

      law, our review is de novo. Bagsby v. Snedeker, 93 N.E.3d 1127, 1129 (Ind. Ct.

      App. 2018), trans. denied.

      Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020         Page 6 of 15
[8]   As an initial matter, we observe that the Nashes did not present a misjoinder

      argument to the trial court in support of their motion for transfer. “Generally, a

      party may not present an argument or issue to an appellate court unless the

      party raised that argument or issue to the trial court.” Baird v. ASA Collections,

      910 N.E.2d 780, 786 (Ind. Ct. App. 2009), trans. denied (2010). The Nashes

      contend that they effectively raised misjoinder because they moved to transfer

      only Clover Homes’ third-party complaint against them. In their first motion to

      dismiss, the Nashes contended that the trial court did not have jurisdiction over

      the mechanic’s lien foreclosure action based on Indiana Code Section 32-28-3-

      6. After Clover Homes filed its opposition to the motion to dismiss, the Nashes

      then argued that Hendricks County was the preferred venue for Clover Homes’

      third-party complaint against it based on Indiana Code Section 32-28-3-10 and

      Ford. We cannot agree that either of these arguments adequately raised the

      question of whether the Nashes were misjoined in Timberland’s action against

      Clover Homes. Because the Nashes failed to adequately raise a misjoinder

      argument below, they have waived this argument for appellate review. 2 See

      Salsbery Pork Producers, Inc. v. Booth, 967 N.E.2d 1, 3 (Ind. Ct. App. 2012)

      (“Failure to raise an issue before the trial court waives that issue on appeal.”).

      Accordingly, we will address only whether transfer of the action was proper on

      2
         The Nashes also assert that Indiana Trial Rule 21(A), which governs misjoinder of parties, authorizes the
      trial court to drop or add parties at any stage of the action on its own initiative. However, The Nashes do not
      explain how the authority of the trial court to act on its own initiative preserves the issue of misjoinder for
      appellate review.

      Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020                                Page 7 of 15
       the basis that Hendricks County is the preferred venue for the mechanic’s lien

       foreclosure action.

[9]    Indiana Trial Rule 75(A), which governs venue requirements for actions filed in

       Indiana courts, provides,

               Any case may be venued, commenced and decided in any court
               in any county, except, that upon the filing of a pleading or a
               motion to dismiss allowed by Rule 12(B)(3), the court, from
               allegations of the complaint or after hearing evidence thereon or
               considering affidavits or documentary evidence filed with the
               motion or in opposition to it, shall order the case transferred to a
               county or court selected by the party first properly filing such motion or
               pleading if the court determines that the county or court where the action
               was filed does not meet preferred venue requirements or is not
               authorized to decide the case and that the court or county
               selected has preferred venue and is authorized to decide the case.

       (Emphasis added.) Trial Rule 75(D) provides that statutes regarding venue are

       superseded by Trial Rule 75:

               Any provision of these rules and any special or general statute
               relating to venue, the place of trial or the authority of the court to
               hear the case shall be subject to this rule, and the provisions of
               any statute fixing more stringent rules thereon shall be
               ineffective. No statute or rule fixing the place of trial shall be
               deemed a requirement of jurisdiction.

[10]   Our supreme court has explained that “[g]enerally, any case may be venued in

       any court in the state, subject to the right of an objecting party to request that

       the case be transferred to a preferred venue listed in Rule 75(A).” Randolph Cty. v.

       Chamness, 879 N.E.2d 555, 556 (Ind. 2008) (emphasis added). Trial Rule 75(A)

       Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020               Page 8 of 15
contains ten subsections, each setting forth criteria establishing preferred venue.

Based on these criteria, there can be, and often are, multiple preferred venues in

a given case. Id. at 557. The rule, however, does not give priority to any

particular preferred venue. Belcher v. Kroczek, 13 N.E.3d 448, 451 (Ind. Ct. App.

2014) (citing Coffman v. Olson & Co., 872 N.E.2d 145, 147 (Ind. Ct. App. 2007)).

The preferred venue status of a county is determined when an action is

commenced by the filing of a complaint. Scribbles, LLC v. Wedgewood by

Wedgewood, 101 N.E.3d 844, 848 (Ind. Ct. App. 2018), trans. denied; see also

Painters Dist. Coun. 91 v. Calvert Enter. Elec. Servs., Inc., 906 N.E.2d 254, 257 (Ind.

Ct. App. 2009) (“The preferred venue status of a given county can only be

determined as of the time a complaint is filed.”) (quoting Shelton v. Wick, 715
N.E.2d 890, 894 (Ind. Ct. App. 1999), trans. denied (2000)). If the county where

the complaint was filed is a preferred venue, transfer to another county based

on venue is improper. Randolph Cty., 879 N.E.2d at 557; see also Meridian Mut.

Ins. Co. v. Harter, 671 N.E.2d 861, 863 (Ind. 1996) (“Only if the court in which

the action is commenced is not in a county of preferred venue, may the case be

transferred to a court of preferred venue.”); Belcher, 13 N.E.3d at 451 (“[A]

motion to transfer venue cannot be granted when an action has been filed in a

preferred venue.”) (citing Salsbery, 967 N.E.2d at 5). This rule applies even

when a party is joined later in the action as a third-party defendant. City of S.

Bend, Dep’t of Pub. Works v. D&J Gravel Co., 727 N.E.2d 719, 722 (Ind. Ct. App.

2000).

Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020           Page 9 of 15
[11]   The preferred venue subsections in Trial Rule 75(A) at issue here are (1) “the

       county where the greater percentage of individual defendants included in the

       complaint resides, or, if there is no such greater percentage, the place where any

       individual defendant so named resides,” (2) the county where the land or some

       part thereof is located, including without limitation claims to foreclose liens,

       and (4) the county where the principal office of a defendant organization is

       located. Timberland initiated this action by filing its complaint in Putnam

       County. Freeman is a resident of Putnam County, and Clover Homes has its

       principal place of business in Putnam County. Under both subsections (1) and

       (4), Putnam County satisfies the criteria for preferred venue. As mentioned, if

       the county where the complaint was filed is a preferred venue, transfer to

       another county based on venue is improper. Randolph Cty., 879 N.E.2d at 557.

       Nevertheless, the Nashes argue that Hendricks County is the preferred venue

       for Clover Homes’ claims against them because they sent Clover Homes notice

       to commence suit to foreclose its mechanic’s lien pursuant to Indiana Code

       Section 32-28-3-10, and this Court held in Ford, 731 N.E.2d 468, that a

       complaint to enforce a mechanic’s lien should be filed in the county where the

       property under lien is located, and if filed in the wrong county, the case should

       be transferred to the preferred venue.

[12]   Section 32-28-3-10 provides,

               A lien is void if both of the following occur:

                        (1) The owner of property subject to a mechanic’s lien or
                        any person or corporation having an interest in the
       Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020           Page 10 of 15
                        property, including a mortgagee or a lienholder, provides
                        written notice to the owner or holder of the lien to file an
                        action to foreclose the lien.

                        (2) The owner or holder of the lien fails to file an action to
                        foreclose the lien in the county where the property is located not
                        later than thirty (30) days after receiving the notice.

               However, this section does not prevent the claim from being
               collected as other claims are collected by law.

       (Emphasis added.)

[13]   Although the Nashes correctly state the holding in Ford, that case is not

       dipositive of the issue before us. In that case, the Fords entered into a contract

       with Culp Custom Homes to build a home in LaPorte County. Culp began

       construction, but when conflicts arose, the Fords discharged Culp. Culp

       recorded a notice of mechanic’s lien against the property in LaPorte County.

       The Fords’ parents, who had financed the project, served Culp with a notice to

       commence suit within thirty days pursuant to Section 32-8-3-10, the prior

       version of Section 32-28-3-10. Section 32-8-3-10 was silent as to where the

       lienholder was required to file suit. Ford, 731 N.E.2d at 473. Culp filed a

       complaint in the St. Joseph Circuit Court asserting various claims, including the

       foreclosure of its lien. The St. Joseph Circuit Court transferred the case to

       LaPorte Circuit Court. The Fords moved for summary judgment on the issue

       of whether Culp held a valid mechanic’s lien when Culp failed to file suit to

       Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020                    Page 11 of 15
       enforce its lien in the county where the property was located within thirty days.

       The trial court denied the motion, and the Fords appealed.

[14]   On appeal, the Ford court interpreted Section 32-8-3-10 to require that an action

       to foreclose a lien be filed in the county where the property was located, so that

       it was consistent with the other sections pertaining to mechanic’s liens. Id.

       Although Culp had filed its action to foreclose in St. Joseph County, not

       LaPorte County where the property was located, the Ford court did not find that

       Culp’s lien was void. Id. Rather, the Ford court concluded that Section 32-8-3-

       10 “must yield” to Trial Rule 75, which permitted transfer. Id.

[15]   In reaching this decision, the Ford court acknowledged that Trial Rule 75(D)

       rendered ineffective any statute fixing rules more stringent than Trial Rule 75.

       However, the Ford court found that its interpretation of Section 32-8-3-10 was

       consistent with Trial Rule 75(A)(2), which provided that preferred venue on a

       claim to foreclose a lien on land is in the county where the land is located. Id.

       The Ford court then noted that Trial Rule 75(B) authorized the court to transfer

       a case that should have been filed in another court to the proper court and

       further provided that the action shall be deemed commenced as of the date it

       was filed in the original court. Id. Accordingly, the Ford court concluded that

       transfer of the case was proper and that Culp’s complaint was deemed filed as

       of the date it was filed in LaPorte County. Id. at 474.

[16]   The Nashes’ argument that Ford supports transfer in this case is misplaced.

       First, Section 32-8-3-10 has been repealed and replaced with Section 32-28-3-10,

       Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020       Page 12 of 15
       which now explicitly requires that an action to foreclose a mechanic’s lien be

       filed in the county where the property is located. To that extent, Ford has been

       superseded by statute. Second, the Nashes’ argument relies heavily on Ford’s

       holding that its interpretation of Section 32-8-3-10 was consistent with the

       preferred venue category listed in Trial Rule 75(A)(2). Section 32-28-3-10 may

       be consistent with Trial Rule 75(A)(2), but that is not the end of the analysis.

       There may be more than one preferred venue in any given case. Randolph Cty.,
879 N.E.2d at 557. There is no discussion in Ford as to why Culp Custom

       Homes filed its action in St. Joseph County, what its other claims were, or

       whether St. Joseph County satisfied any criteria for preferred venue. Simply

       put, Ford did not address the issue here: whether transfer is proper when

       preferred venue has already been established.

[17]   The Nashes’ argument ignores the legal principles that the preferred venue

       status of a county is determined when an action is commenced by the filing of a

       complaint, Scribbles, 101 N.E.3d at 848, and if the county where the complaint

       was filed is a preferred venue, transfer to another county based on venue is

       improper. Randolph Cty., 879 N.E.2d at 557. Although the Nashes were

       brought into this action by third-party complaint, we can discern no reason, and

       the Nashes offer none, to depart from established principles.

[18]   We note that Trial Rule 21(B), which is not cited by the parties, provides in

       relevant part:

               The court shall have venue and authority over all persons or
               claims required to be joined or permissively joined, impleaded or
       Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020       Page 13 of 15
        included by intervention, interpleader, counterclaim or cross-
        claim if it has venue or is authorized to determine any claim
        asserted between any of the parties thereto, notwithstanding any
        requirement of venue or of jurisdiction over the subject-matter
        applicable to other claims or other parties.

As another panel of this Court explained,

        Trial Rule 21(B) allows a trial court to maintain subject-matter
        jurisdiction and venue over an action when a person or claim is
        joined that would otherwise disrupt the trial court’s subject-
        matter jurisdiction or venue. Thus, if preferred venue were
        established prior to a party’s joinder in the action, Trial Rule
        21(B) would allow the trial court to maintain venue even if the
        joinder would otherwise disturb the trial court’s venue.
        However, if preferred venue had not been established, transfer
        would be required.

City of S. Bend, 727 N.E.2d at 722 (citing Pratt v. Pierce, 713 N.E.2d 312, 316

(Ind. Ct. App. 1999)). In City of South Bend, the court held that a third-party

defendant was entitled to transfer to a county of preferred venue where

preferred venue had not been established before that party was joined. Id. Here,

in contrast, preferred venue was established in Putnam County before the

Nashes were joined in the action as third-party defendants. Because this action

was filed in a preferred venue, the trial court erred in transferring the action to

Hendricks County. Therefore, we reverse the order transferring the action to

Hendricks County.

Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020         Page 14 of 15
[19]   Reversed.

       May, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Opinion 19A-CC-1889 | April 29, 2020   Page 15 of 15