Opinion
No. 79A05-1012-CT-739
10-28-2011
WEIDA LEVEE, LLC, Appellant-Defendant/Counterclaimant, v. DOUG BROOKS AND REGINA BROOKS, Appellees-Plaintiffs/ Counterclaim Defendants.
ATTORNEYS FOR APPELLANT : WILLIAM P. KEALEY JAMES F. OLDS Stuart & Branigin LLP Lafayette, Indiana ATTORNEYS FOR APPELLEES : ANTHONY E. DOWELL GEOFFREY D. SMITH Dowell Baker, P.C. Lafayette, Indiana
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.
ATTORNEYS FOR APPELLANT:
WILLIAM P. KEALEY
JAMES F. OLDS
Stuart & Branigin LLP
Lafayette, Indiana
ATTORNEYS FOR APPELLEES:
ANTHONY E. DOWELL
GEOFFREY D. SMITH
Dowell Baker, P.C.
Lafayette, Indiana
APPEAL FROM THE TIPPECANOE CIRCUIT COURT
The Honorable Donald L. Daniel, Judge
Cause No. 79C01-0801-CT-3
MEMORANDUM DECISION - NOT FOR PUBLICATION
KIRSCH , Judge
Landlord, Weida Levee, LLC ("Weida"), appeals the trial court's order in favor of Doug and Regina Brooks (collectively, the "Brooks") in a case involving a lease of commercial space. On appeal, Weida raises the following restated issues:
I. Whether the trial court erred in construing the real estate lease and in entering summary judgment thereon;The Brooks cross-appeal, raising the following consolidated and restated issue:
II. Whether the trial court erred in awarding damages in an action brought pursuant to the Uniform Declaratory Judgments Act (Ind. Code §§ 34-14-1-1 to -16) and Indiana Trial Rule 57; and
III. Whether the trial court erred when it found that Weida presented no triable issues of fact on its affirmative defenses of waiver, estoppel, and laches.
IV. Whether the trial court erred: (1) in denying the Brooks's motion to amend the pleadings to conform to the evidence, and (2) in denying the Brooks's motion to amend their complaint to add a claim for fraud.
We affirm.
FACTS AND PROCEDURAL HISTORY
In 1989, J & J Thriftway Supermarkets ("J&J") owned a shopping area in West Lafayette, Indiana, which was commonly referred to as Levee Plaza Shopping Center ("Levee Plaza"), and constructed a 7,500 square foot building (the "Laundry Building") upon the premises. In March 2000, J & J transferred to Weida 1.527 acres of Levee Plaza, including the Laundry Building. For property tax purposes, this 1.527 acre parcel was identified as "Tax Parcel 800."
In 2001, the Brooks entered into a sublease for the Laundry Building with Weida's consent. They subsequently exercised a renewal option expiring in 2014. The terms of the sublease and the renewal option incorporated the following provision from the original lease:
Lessor shall pay all real estate taxes and assessments due and payable on the herein demised premises during the term hereof. Provided Lessor submits to Lessee a billing for real estate taxes so paid, together with a receipted bill therefore [sic], within ninety (90) days after such payment shall have been made by Lessor, Lessee shall reimburse Lessor the amount of real estate taxes and assessments paid on the demised premises.Appellant's App. at 27.
Each year, from 2001-2005, Weida sent the Brooks a letter that provided in pertinent part:
As stated in your Lease Agreement, "Lessee shall reimburse Lessor the amount of Lessee's pro rata share of such taxes." Enclosed is a copy of the paid tax bill. Your portion is $. . . .Id. at 234, 236, 238, 240, 241, 244, 248. Each year, upon receipt, the Brooks paid the dollar amount requested. Appellant's Br. at 5.
In 2006, the Brooks became aware that Weida had requested and that they had paid property taxes for all of Tax Parcel 800 since the inception of the sublease. They alerted Weida that they should be liable for only 6.1541% of the entire amount of property taxes for Levee Plaza. Appellant's App. at 49. They then filed a "Complaint for Declaratory Judgment and Damages," requesting (1) declaratory judgment as to the Brooks's property tax reimbursement obligation under the parties' written lease, and (2) damages, which reflected a refund for the amount of taxes that the Brooks had overpaid. Id. at 15-21.
The Brooks filed a motion for summary judgment requesting "that [the trial court] grant summary judgment in [their] favor and declare that they are responsible, as tenants, only for the proportionate share, or 6.1541% of the property tax liability, for the entire [Levee Plaza]." Id. at 137. The trial court granted summary judgment, determining that there were no genuine issues of material fact and that the Lease Agreement was unambiguous as to what "'Leased Premises' means." Id. at 251-57.
In December 2008, October 2009, and December 2009, Weida paid the entire tax bill for Tax Parcel 800, and thereafter, submitted to the Brooks a request for reimbursement of each respective amount. The Brooks recalculated the taxes and reimbursed Weida for their 6.1541% proportionate share of taxes on the entire Levee Plaza. Id. at 417.
The trial court determined that the Brooks were entitled to an award of $64,939.46 in overpaid taxes, plus $32,975.85 in prejudgment interest. Id. at 491. Weida now appeals.
DISCUSSION AND DECISION
I. Entry of Summary Judgment
On appeal from the grant or denial of summary judgment, we face the same issues that were before the trial court and follow the same process. Schaefer v. Kumar, 804 N.E.2d 184, 191 (Ind. Ct. App. 2004), trans. denied. Summary judgment is appropriate only where the designated evidence shows there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id.; Ind. Trial Rule 56(C). "'A genuine issue of material fact exists where facts concerning an issue that would dispose of the litigation are in dispute or where the undisputed material facts are capable of supporting conflicting inferences on such an issue.'" Arrotin Plastic Materials of Ind. v. Wilmington Paper Corp., 865 N.E.2d 1039, 1041 (Ind. Ct. App. 2007) (quoting Schaefer, 804 N.E.2d at 191). We do not weigh the evidence, and we liberally construe all designated evidence in the light most favorable to the nonmoving party. Id. "A grant of summary judgment may be affirmed on any theory supported by the designated materials." Id.
Indiana courts have recognized the contractual nature of leases and the applicability of the law of contracts to leases. Stewart v. TT Commercial One, LLC, 911 N.E.2d 51, 55 (Ind. Ct. App. 2009), trans. denied. Interpretation of the language in a contract is a question of law especially suited for summary judgment proceedings. Simon Prop. Grp., L.P. v. Mich. Sporting Goods Distribs., Inc., 837 N.E.2d 1058, 1070 (Ind. Ct. App. 2005), trans. denied (2006). We review questions of law de novo, and therefore, we give no deference to the trial court's interpretation. Id. Our goal is to give effect to the intent of the parties as expressed within the four corners of the document. Id. We may not construe unambiguous language to give it anything other than its clear, obvious meaning, and we may not add provisions to a contract that were not placed there by the parties. Id. Rather, we determine the meaning of a contract from an examination of all of its provisions, without giving special emphasis to any word, phrase, or paragraph. Id.
Weida maintains that the trial court erred in denying its motion for summary judgment on its counterclaim because Section 12, alone, controls the Brooks's tax obligation under the Lease Agreement. As noted above, Section 12 provides in relevant part:
Lessor shall pay all real estate taxes and assessments due and payable on the herein demised premises during the term hereof. Provided Lessor submits to Lessee a billing for real estate taxes so paid, together with the receipted bill therefore [sic], within ninety (90) days after such payment shall have been made by Lessor, Lessee shall reimburse Lessor the amount of real estate taxes and assessments paid on the demised premises.Appellant's App. at 27 (emphasis added). Because Weida believes the term "demised premises" is synonymous with Tax Parcel 800, Weida contends that Section 12 of the Lease Agreement obligates the tenant to reimburse Weida the full amount of the "receipted bill" for Tax Parcel 800. This amount, Weida suggests, "is calculated based on a single tax bill for a single parcel. Section 12 makes no mention of any other property tax bills on any other tax parcels." Appellant's Br. at 6. Weida maintains that the tenant's "contentions regarding a multi-parcel, multi-tenant formula read away the plain language of Section 12, and therefore must be summarily rejected." Id. at 6-7. We disagree.
Under Indiana law, the contract is to be read as a whole when trying to ascertain the parties' intent, and we will make all attempts to construe the language in a contract so as not to render any words, phrases, or terms ineffective or meaningless. Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494, 501 (Ind. Ct. App. 2007). The court must accept an interpretation of the contract that harmonizes its provisions, as opposed to one that causes the provisions to conflict. Id. Weida fails to address how the following terms of the Lease Agreement fit into its interpretation of the contract:
"Lessor does hereby demise and lease unto Lessee and it does hereby take and lease from Lessor 7,500 sq.ft. of building(s) known as Store(s) located at 360 Brown Street Levee hereinafter referred to as the "leased premises."
. . . .
[Section] 12. . . . Lessor shall pay all real estate taxes and assessments due and payable on the herein demised premises during the term hereof. Provided Lessor submits to Lessee a billing for real estate taxes so paid, together with the receipted bill therefore [sic], within ninety (90) days after such payment shall have been made by Lessor, Lessee shall reimburse Lessor the amount of real estate taxes and assessments paid on the demised premises.
. . . .
[Section] 33. PROPORTIONATE SHARE: Whenever Lessee is to pay a proportionate share of any expense (whether it be for taxes, insurance, maintenance or otherwise), such proportionate share shall be based upon a square footage of the premises covered by this lease of 7,500 feet and that the total areas of the entire premises leased by Lessor to lessees, including the Lessee hereunder is 121,870 square feet.Id. at 23-31 (emphasis added).
The lease provides that the tenants are required to pay only the taxes on the "demised premises" and that tenants' proportionate share of real estate taxes is to be calculated on a ratio of 7,500 to 121,870. Under the plain meaning of the Lease Agreement, the Brooks are not liable for the taxes on the entire Tax Parcel 800. The trial court did not err in so holding.
II. Grant of Damages following Declaratory Judgment
Weida next contends that the trial court erred in concluding that Weida had to reimburse the Brooks for property tax overpayments that they had made from 2001 through 2005. Weida maintains that "[a] claimant can only recover restitution damages by pleading a cause of action upon which restitution damages may be granted." Appellant's Br. at 11. As such, Weida argues that it was error for the trial court to award damages pursuant to Trial Rule 57 and the Declaratory Judgment Act. Appellant's Br. at 12.
Under Indiana law, a party may seek and recover damages in a declaratory judgment action pursuant to Indiana Code 31-14-1-8 and Indiana Trial Rule 57. The former provides:
Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. The application for further relief must be by petition to a court having jurisdiction to grant the relief. If the application is deemed sufficient, the court shall, on reasonable notice, require any adverseInd. Code § 34-14-1-8 (emphasis added). Trial Rule 57 provides:
party whose rights have been adjudicated by the declaratory judgment or decree to show cause why further relief should not be immediately granted.
The procedure for obtaining a declaratory judgment shall be in accordance with these rules, and the right to trial by jury may be demanded under the circumstances and in the manner provided in Rules 38 and 39. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. Declaratory relief shall be allowed even though a property right is not involved. Affirmative relief shall be allowed under such remedy when the right thereto is established. The court may order a speedy hearing of an action for a declaratory judgment and may advance it on the calendar.(emphasis added).
In Artusi v. City of Mishawaka, our court clarified that a party may recover damages in a declaratory judgment action pursuant to Trial Rule 57:
Prior to the adoption of Trial Rule 57 in 1969, Indiana courts could only "declare rights, status, and other legal relations" in declaratory judgment actions under our Declaratory Judgments Act, Ind. Code [§] 34-4-10-1, et seq. [predecessor to Ind. Code § 34-14-1-8]. Executory or coercive relief could not be granted because the text of the act was broader than its title. However, Trial Rule 57 now provides in such actions "[a]ffirmative relief shall be allowed . . . when the right thereto is established." . . .Artusi v. City of Mishawaka, 519 N.E.2d 1246, 1250 (Ind. Ct. App. 1988), trans. denied; see also MAV, Inc., 915 N.E.2d at 1015 (upholding trial court's declaratory judgment and damage award entered in favor of appellee-plaintiff); Wayne Twp. v. Lutheran Hosp. of Fort Wayne, Inc., 590 N.E.2d 1130, 1133 (Ind. Ct. App. 1992) (upholding order awarding money damages that created remedy that did not exist in initial decree for declaratory judgment), trans. denied.
Our Trial Rule 57 is almost a verbatim adoption of Federal Rule 57, and the federal rule authorizes executory and coercive relief as well as a declaration of rights in such cases. Indiana courts now may grant executory or coercive relief in declaratory judgment actions in addition to determining the rights and status of the parties. . . .
"The Uniform Declaratory Judgment Act was not intended to eliminate well-known causes of action or to substitute an appellate court for a court of original jurisdiction, particularly where the issues are ripe for litigation through the normal processes." KLLM, Inc. v. Legg, 826 N.E.2d 136, 145 (Ind. Ct. App. 2005), trans. denied. "Instead, the Act was intended to furnish a 'full and adequate remedy where none existed before,' and a declaratory judgment action should not be resorted to where such a judgment is unnecessary." Id. (citation omitted). "Such a judgment is unnecessary where a full and adequate remedy is already provided by another cause of action." Id. However, "[t]he existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate." Ind. Trial Rule 57. "The test to determine the propriety of declaratory relief is whether the issuance of a declaratory judgment will effectively solve the problem involved, whether it will serve a useful purpose, and whether or not another remedy is more effective or efficient." Boone Cnty. Area Plan Comm'n v. Kennedy, 560 N.E.2d 692, 696 (Ind. Ct. App. 1990), trans. denied.
By means of the Brooks's action for declaratory judgment, the trial court was able to engage in the two-step process of determining the parties' respective rights under the Lease Agreement and thereafter grant the appropriate relief. This solved the issue in an efficient manner. Kennedy, 560 N.E.2d at 696. After the trial court determined that the Brooks should only pay their proportionate share (6.1541%) of the tax liability for the entire Levee Plaza and not the entire tax for the 1.57 acre parcel, Tax Parcel 800, the trial court could proceed with a remedy. Pursuant to Indiana Code section 34-14-1-8, the Brooks filed a motion to show cause why Weida should not reimburse them for the amount of taxes that the trial court concluded they had overpaid. The trial court considered and rejected Weida's response, including the claim of affirmative defenses discussed below, and ordered Weida to pay damages in the amount of $64,939.46 in overpaid taxes—an amount that the parties did not dispute—plus $32,075.85 in prejudgment interest. We cannot say that it was an abuse of discretion for the trial court to grant damages pursuant to the Declaratory Judgment Act and Trial Rule 57.
III. Affirmative Defenses
Weida contends that the trial court erred in granting declaratory judgment and damages in favor of the Brooks after finding that Weida presented no triable issues of fact on its affirmative defenses of waiver, estoppel, and laches. Specifically, Weida cites to inconsistencies between the trial court's November 2010 Order and its January 5, 2009 Order—in the latter of which the trial court found triable issues of fact on the question of affirmative defenses.
The trial court characterized Weida's argument as follows: The Brooks knew they "had the right to pay a tax amount less than the amount Weida [] requested each year, but since [the Brooks] paid the full amount of taxes requested, [they] waived the right, are estopped from asserting back payment for the excess tax amount, and are barred by the doctrine of laches from requesting such back payment." Appellant's App. at 487. The trial court found that Weida provided no evidence that the Brooks knew of the discrepancy in the tax amount (other than noting that, as savvy business people, they should have known). Id. at 487. The trial court further determined that without evidence that they knew of the right to pay less in taxes than Weida charged the Brooks, the affirmative defenses must fail. We agree with the trial court.
Weida first argues that the trial court erred in finding no genuine issue of material fact as to the defense of waiver. "Waiver is an intentional relinquishment of a known right involving both knowledge of the existence of the right and the intention to relinquish it." van de Leuv v. Methodist Hosp. of Ind., Inc., 642 N.E.2d 531, 533 (Ind. Ct. App. 1994). Ordinarily, a party can waive any contractual right provided for his or her benefit. Anderson Prop. Mgmt., LLC v. H. Anthony Miller, Jr., LLC, 943 N.E.2d 1286, 1291 (Ind. Ct. App. 2011). "„A condition in a contract may be waived by the conduct of the party. Once a condition has been waived, and such waiver has been acted upon, the failure to perform the condition cannot be asserted as a breach of contract.'" Id. (quoting Salcedo v. Toepp, 696 N.E.2d 426, 435 (Ind. Ct. App. 1998) (internal citations omitted)).
The burden of proof lies with the party asserting the waiver. City of Indianapolis v. Twin Lakes Enters., Inc., 568 N.E.2d 1073, 1077 (Ind. Ct. App. 1991), trans. denied. Therefore, to establish the affirmative defense of waiver, Weida has to prove that the Brooks knew they had the right to pay a lower amount in taxes and intended to relinquish this known right by paying the entire tax bill submitted by Weida. Here, Weida argues that the prior tenants of the Laundry Building paid all of the taxes for Tax Parcel 800 and that the Brooks paid the same taxes without protest from 2001 through 2005. There is no evidence in the record before us that the Brooks knew of the prior tenants' arrangements.
Moreover, the letters Weida sent to the Brooks requesting reimbursement for property taxes, provided:
This letter is to inform you that the taxes for Brown Street 164-02500-0800 were paid on . . . . As stated in your Lease Agreement, "Lessee shall reimburse Lessor the amount of Lessee's pro rata share of such taxes." Enclosed is a copy of the paid tax bill. Your portion is $. . . .Id. at 234, 236, 238, 240, 241, 244 (emphasis added). Weida's use of the words "pro rata," when read in combination with the terms of the Lease Agreement, reasonably conveyed that the Brooks were paying for only a portion of the entire taxes of Levee Plaza. From this, they could not have known that the requested reimbursement was for an amount greater than they were obligated to pay. We cannot say that Weida met its burden of proving that the Brooks knew they had a right to pay less money and that their payment of the property taxes for all of Tax Parcel 800 was a waiver of that right. The trial court did not err in finding that waiver was not a defense.
Weida next contends that the trial court erred in finding no genuine issue of material fact as to the affirmative defense of estoppel. "Estoppel is . . . a concept by which one's own acts or conduct prevents the claiming of a right to the detriment of another party who was entitled to and did rely on the conduct." Brown v. Branch, 758 N.E.2d 48, 52 (Ind. 2001). "A person with full knowledge of the facts and aware of his rights who nevertheless stands by and acquiesces in conduct inconsistent with those rights may be estopped from subsequently asserting those rights." Miller v. Geels, 643 N.E.2d 922, 930 (Ind. Ct. App. 1994), trans. denied (1995). Weida contends that it relied on the Brooks's voluntary payments under the Lease Agreement, and as such, they are estopped from claiming a refund. Appellant's Br. at 17. We disagree. Here, as above, the Brooks's act of reimbursing Weida was not based on full knowledge of the facts, but instead, on a lack of knowledge that Weida was charging them for the property tax of the entire Tax Parcel 800 instead of the pro rata share set forth in Section 33 of the Lease Agreement and referred to in Weida's letters. The trial court did not err in finding that estoppel was not a defense.
Finally, Weida argues that the trial court erred in finding no genuine issue of material fact as to the defense of laches. Laches is an equitable defense that may be raised to stop a person from asserting a claim that he would normally be entitled to assert. Ind. Real Estate Comm'n v. Ackman, 766 N.E.2d 1269, 1273 (Ind. Ct. App. 2002). "The rationale behind the doctrine of laches is that a person who, for an unreasonable length of time, has neglected to assert a claim against another waives the right to assert his claim when this delay prejudices the person against whom he would assert it." Id. As noted above, the Brooks did not initially know that they had the right to pay less than the amount requested by Weida, and after learning of its possible right, they filed their claim in a timely fashion. The doctrine of laches does not apply. Id. The trial court did not err in granting summary judgment, notwithstanding Weida's assertion of these three affirmative defenses.
IV. The Brooks's Motions to Amend
The Brooks cross-appeal claiming, in the event that we were to reverse the trial court's decision, that the trial court erred in (1) denying the Brooks's motion to amend the pleadings to conform to the evidence, and (2) denying the Brooks's motion to amend the complaint to add a claim for fraud. Because we affirm the trial court's decision, we need not reach the issues raised by the Brooks on cross-appeal.
Affirmed. BAKER, J., and BROWN, J., concur.
We commend the trial court on the thoroughness and clarity of its findings and orders which have greatly facilitated our appellate review of this matter.