Court Opinion

ID: 3169588
Source: CourtListenerOpinion
Date Created: 2016-01-14 16:03:50.433007+00
Date Added: 2024-06-11T11:58:12.277901
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before any                                Jan 14 2016, 8:00 am
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Kelleigh I. Fagan                                        John J. Moore
Bruce M. Bittner                                         DONINGER TUOHY & BAILEY LLP
CHURCH CHURCH HITTLE & ANTRIM                            Indianapolis, Indiana
Noblesville, Indiana

Brent R. Borg
CHURCH CHURCH HITTLE & ANTRIM
Fishers, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Pecan Shoppe of Whitestown,                              January 14, 2016
Inc.,                                                    Court of Appeals Case No.
Appellant-Plaintiff,                                     06A05-1504-PL-177
                                                         Appeal from the Boone County
        v.                                               Superior Court 1
                                                         The Honorable Matthew C.
SJC, Inc.,                                               Kincaid, Judge
Appellee-Defendant                                       Trial Court Cause No.
                                                         06D01-1305-PL-287

Altice, Judge.

                                          Case Summary

Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016          Page 1 of 10
[1]   Pecan Shoppe of Whitestown, Inc. (Pecan Shoppe) appeals the trial court’s

      entry of summary judgment in favor of SJC, Inc. (SJC) on Pecan Shoppe’s

      claim for breach of contract. Pecan Shoppe argues that the trial court

      improperly determined that its complaint was filed outside the applicable

      statute of limitations.

[2]   We affirm.

                                       Facts & Procedural History

[3]   On November 11, 1999, Pecan Shoppe and SJC entered into an Asset Purchase

      Agreement (Purchase Agreement), whereby SJC agreed to purchase certain

      assets, including Pecan Shoppe’s interest in a lease of real estate located at the

      southeast corner of I-65 and Whitestown Parkway in Zionsville (the Property).

      The Purchase Agreement was closed on December 1, 1999, and provided that

      SJC would pay Pecan Shoppe a purchase price of $850,000. In addition to the

      purchase price, the Purchase Agreement contained two provisions for

      additional consideration to be paid to Pecan Shoppe if SJC developed

      additional uses on the Property (Use Premiums). Specifically, Section 2.5(d)

      (the Second-Use Premium) of the Purchase Agreement provided:

              [SJC] shall, in addition, and only in the event that [SJC] obtains
              all necessary legal authority and no judicial action precludes
              [SJC]’s implementation of the authorized development of the
              Real Property for two (2) uses, pay to [Pecan Shoppe] an
              addition to the Purchase Price in the sum of One Hundred Fifty
              Thousand Dollars, with interest at the rate of Seven Percent (7%)
              per annum accruing from the date of approval of the second use

      Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016   Page 2 of 10
              is final and unappealable, which addition to the Purchase price
              (the “Second Use Premium”) shall be due and payable on the
              first day of the first full month following the fifth (5 th) anniversary
              of the Closing Date.

      Appellant’s Appendix at 32. Section 2.5(e) (the Third-Use Premium) of the

      Contract provided:

              [SJC] shall, in addition, and only in the event that [SJC] obtains
              all necessary legal authority and no judicial action precludes
              [SJC]’s implementation of the authorized development of the
              Real Property for three (3) uses, or if [SJC]’s development of the
              Real Property renders a third use impossible, pay to [Pecan
              Shoppe] an addition to the Purchase Price in the sum of One
              Hundred Fifty Thousand Dollars, with interest at the rate of
              Seven Percent (7%) per annum accruing from the date that
              approval of the third use is final and unappealable, which
              addition to the Purchase Price (the “Third Use Premium”) shall
              be due and payable on the first day of the first full month
              following the fifth (5th) anniversary of the Closing Date.

      Id. at 32-33. The parties agree that January 1, 2005 was the first day of the first

      full month following the fifth anniversary of the closing date of the Contract.

[4]   Prior to the Purchase Agreement with SJC, Pecan Shoppe operated a gas

      station, a convenience store, and a restaurant out of a single-tenant building

      located on the Property. SJC subsequently tore down the single-tenant building

      and replaced it with a three-tenant building, out of which SJC operated a gas

      station and a convenience store. A Starbucks opened in one of the tenant

      spaces in July 2003. In October 2007, a single-bay drive through carwash

      opened in the commercial space at the end of the building opposite the

      Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016   Page 3 of 10
      Starbucks. On January 31, 2011, a Cracker Barrel restaurant opened on vacant

      ground located on the Property.

[5]   On May 13, 2013, Pecan Shoppe filed a complaint against SJC seeking

      damages for breach of contract based upon SJC’s failure to pay the Use

      Premiums set forth in Sections 2.5(d) and (e) of the Purchase Agreement.1 In

      an amended answer, SJC raised a statute of limitation defense, asserting that

      more than six years had passed since the Use Premiums were due and payable

      under the terms of the Purchase Agreement.2 SJC filed a motion for summary

      judgment on December 19, 2014. Pecan Shoppe filed its response in opposition

      to summary judgment on January 28, 2015. The trial court held a hearing on

      SJC’s summary judgment motion on April 10, 2015. That same day, the trial

      court entered a written order, including findings of fact and conclusions of law,

      granting summary judgment in favor of SJC. Specifically, the court found as

      follows:

               39. The Purchase Agreement unambiguously provides that the
               use premiums were due on January 1, 2005. With this clear
               language as to the due date, there is no need for the Court, as
               Plaintiff’s affidavit invites, to delve into a consideration of
               testimony concerning intent, other extraneous documents, or to

      1
        In its complaint, Pecan Shoppe alleged that uses of the Property had “expanded to include the operation of
      a Cracker Barrel, a Starbucks, and a car wash.” Appellant’s Appendix at 59.
      2
       The parties do not dispute that a six-year statute of limitation applies to the matter at hand. See Ind. Code §
      34-11-2-9 (“[a]n action upon . . . written contracts for the payment of money executed after August 31, 1982,
      must be commenced within six (6) years after the cause of action accrues”). The parties dispute concerns
      when the cause of action, if any, accrued.

      Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016              Page 4 of 10
               hear what some signatory to the contract thinks it means or now
               wishes it means.

                                                          ***

               40. If Pecan Shoppes of Whitestown thought SJC breached the
               contractual provisions to pay the use premiums – maybe it did –
               the unambiguous deadline to file suit considering the six (6) year
               statute of limitations was January 1, 2011. Pecan Shoppes [sic]
               of Whitestown’s Complaint was not timely filed and Plaintiff is
               thereby entitled to take nothing by way of its Complaint.

      Appellant’s Appendix at 9. Pecan Shoppe now appeals.

                                             Discussion & Decision

[6]   Pecan Shoppe argues the trial court erred in concluding that the language

      employed in the Use Premium provisions unambiguously provided that the

      deadline for payment thereof was January 1, 2005.3 Pecan Shoppes asserts that

      while the language of Sections 2.5(d) and (e) is not itself ambiguous, a latent

      ambiguity becomes evident in applying the terms of the Purchase Agreement to

      the circumstances herein. According to Pecan Shoppe, the uses for which it

      seeks payment of the Use Premiums4 came into existence after the January 1,

      3
        The implication of this conclusion is that the six-year statute of limitations began to run at that point in
      time, regardless of whether the Property had been put to a second or third use such that SJC’s obligation to
      pay the Use Premiums was triggered.
      4
        As noted in Footnote 1, supra, Pecan Shoppe alleged in its Complaint that the Property had been put to
      three additional uses, including operation of a Starbucks, a Cracker Barrel, and a car wash. In responding to
      SJC’s motion for summary judgment, Pecan Shoppe asserted that it is not claiming that operation of the
      Starbucks triggered SJC’s obligation to pay a Use Premium.

      Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016              Page 5 of 10
      2005 payment deadline set forth in the Purchase Agreement. Pecan Shoppe

      therefore asserts that because the Purchase Agreement is silent as to a deadline

      for Use Payments triggered after the anniversary date, SJC’s obligation to pay

      the Use Premiums would have been triggered when those uses, i.e., the car

      wash in 2007 and the Cracker Barrel in 2011, were approved and became “final

      and unappealable.” Id. at 32, 33. Under Pecan Shoppe’s interpretation of the

      Purchase Agreement, its cause of action did not accrue until SJC’s obligation to

      pay the Use Premiums was triggered, and therefore, summary judgment was

      inappropriate as its Complaint was timely filed.

[7]   We review summary judgment de novo, applying the same standard as the trial

      court: “Drawing all reasonable inferences in favor of . . . the non-moving

      parties, summary judgment is appropriate ‘if the designated evidentiary matter

      shows that there is no genuine issue as to any material fact and that the moving

      party is entitled to judgment as a matter of law.’” Williams v. Tharp, 914 N.E.2d
756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A fact is ‘material’ if its resolution

      would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is

      required to resolve the parties’ differing accounts of the truth, or if the

      undisputed material facts support conflicting reasonable inferences.” Id.

      (internal citations omitted).

[8]   The initial burden is on the summary-judgment movant to “demonstrate [ ] the

      absence of any genuine issue of fact as to a determinative issue,” at which point

      the burden shifts to the non-movant to “come forward with contrary evidence”

      showing an issue for the trier of fact. Id. at 761-62 (internal quotation marks

      Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016   Page 6 of 10
       and substitution omitted). And “[a]lthough the non-moving party has the

       burden on appeal of persuading us that the grant of summary judgment was

       erroneous, we carefully assess the trial court’s decision to ensure that he was

       not improperly denied his day in court.” McSwane v. Bloomington Hosp. &

       Healthcare Sys., 916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks

       omitted).

[9]    The goal of contract interpretation is to determine the intent of the parties when

       the agreement was made. Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 813

       (Ind. 2012). To the extent that this case requires that we interpret the terms of

       the Purchase Agreement, we note that “[i]nterpretation of a contract is a pure

       question of law and is reviewed de novo.” Cmty. Anesthesia & Pain Treatment,

       L.L.C. v. St. Mary Med. Ctr., Inc., 26 N.E.3d 70, 76 (Ind. Ct. App. 2015) (citation

       omitted). “If a contract’s terms are clear and unambiguous, courts must give

       those terms their clear and ordinary meaning.” Id. “‘We will make all attempts

       to construe the language of a contract so as not to render any words, phrases, or

       terms ineffective or meaningless.’” Id. (quoting Rogers v. Lockard, 767 N.E.2d
982, 992 (Ind. Ct. App. 2002)).

[10]   “A contract is ambiguous if a reasonable person would find the contract subject

       to more than one interpretation.” Citimortgage, 975 N.E.2d at 813; see also

       Tender Loving Care Mgmt., Inc. v. Sherls, 14 N.E.3d 67, 72 (Ind. Ct. App. 2014).

       “When a contract’s terms are ambiguous or uncertain and its interpretation

       requires extrinsic evidence, its construction is a matter for the factfinder.”

       Cmty. Anesthesia & Pain Treatment, 26 N.E.3d at 76-7. “An ambiguous contract

       Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016   Page 7 of 10
       will be construed against the party who drafted it.” Id. at 77. If the language is

       unambiguous, however, we 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. “A contract is not ambiguous merely because

       the parties disagree as to its proper construction.” Beazer Homes Ind., LLP v.

       Carriage Courts Homeowners Ass’n, Inc., 905 N.E.2d 20, 23 (Ind. Ct. App. 2009),

       trans. denied.

[11]   As noted above, Pecan Shoppe concedes that in and of itself the language of

       Sections 2.5(d) and (e) “does not create an ambiguity.” Appellant’s Brief at 7.

       Pecan Shoppe nevertheless asserts that a latent ambiguity 5 becomes evident

       when the language setting out the Use Premiums is applied to the

       circumstances herein. Specifically, Pecan Shoppe notes that Sections 2.5(d) and

       (e) are silent as to payment of Use Premiums for uses that arise after the fifth

       anniversary and characterizes this silence as a latent ambiguity. In further

       support of its position, Pecan Shoppe designated evidence in opposition to

       summary judgment suggesting the parties contemplated payment of Use

       Premiums even if the uses triggering such payment obligation came into being

       after the fifth anniversary. Such extrinsic evidence may be considered only if

       5
         Ambiguity in a contract may be one of two types: patent or latent. A patent ambiguity is “‘apparent on the
       face of the instrument and arises from an inconsistency or inherent uncertainty of language used so that it
       either conveys no definite meaning or a confused meaning.’” Simon Prop. Group, L.P. v. Mich. Sporting Goods
       Distrib., Inc., 837 N.E.2d 1058, 1070-71 (Ind. Ct. App. 2005) (quoting Oxford Fin. Group, Ltd. v. Evans, 795
N.E.2d 1135, 1143 (Ind. Ct. App. 2003)), trans. denied. A latent ambiguity “‘arises only upon attempting to
       implement the contract.’” Id. at 1071 (quoting Oxford Fin. Group, 795 N.E.2d at 1144).

       Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016          Page 8 of 10
       the Purchase Agreement is deemed to have a latent ambiguity. See Simon Prop.

       Group, 837 N.E.2d at 1071.

[12]   We disagree with Pecan Shoppe’s interpretation of the Purchase Agreement.

       First, the Purchase Agreement clearly sets out that the Use Premiums “shall be

       due and payable on the first day of the first full month following the fifth (5 th)

       anniversary of the Closing Date.” Appellant’s Appendix at 32, 33. Finding this

       provision to be unambiguous as to the deadline for payment of the Use

       Premiums, we need only look within the four corners of the instrument and are

       not at liberty to consider extrinsic evidence. See Simon Prop. Group, 837 N.E.2d

       at 1071. There is nothing in the Purchase Agreement that provides for payment

       of Use Premiums after the five-year anniversary of the closing date.

[13]   Second, Pecan Shoppe’s interpretation would require this court to interpret the

       Purchase Agreement so as to provide for an open-ended and undefined date on

       which the second and third Use Premiums were due and payable. We reject

       Pecan Shoppe’s suggestion that we need only impose a reasonable time for

       performance. In Harrison v. Thomas, 761 N.E.2d 816 (Ind. 2002), relied upon by

       Pecan Shoppe, the Court concluded that a contract provision setting the time

       for closing on a real estate contract was unambiguous. In responding to a

       contrary argument, the court noted that “[w]hen the parties to an agreement do

       not fix a concrete time for performance, the law implies a reasonable time.” Id.

       at 819 (emphasis supplied). Here, the parties did set a fixed deadline for the

       payment of the Use Premiums. There is therefore no need to imply a

       reasonable time limit for the payment of the Use Premiums.

       Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016   Page 9 of 10
[14]   Having concluded that the Purchase Agreement clearly and unambiguously

       provides that the Use Premiums were due and payable on January 1, 2005, it

       follows that Pecan Shoppe’s cause of action accrued and the statute of

       limitations began to run on that date. The limitations period for Pecan Shoppe

       to bring a claim against SJC for the payment of the Use Premiums expired on

       or about January 1, 2011. Pecan Shoppe waited more than two years after the

       limitations period expired before it pursued its claim for breach of contract.

       Accordingly, Pecan Shoppe’s complaint was untimely. The trial court properly

       granted summary judgment in favor of SJC.

[15]   Judgment affirmed.

       Riley, J., and Brown, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 06A05-1504-PL-177 | January 14, 2016   Page 10 of 10