Cricket Ridge, LLC v. Wright

• Decision Date: 26 February 2008
• Docket Number: No. 41A01-0705-CV-237.,41A01-0705-CV-237.
• Citation: 880 N.E.2d 1271
• Parties: CRICKET RIDGE, LLC, Appellant-Defendant, v. Joseph Richard WRIGHT, Appellee-Plaintiff.
• Court: Indiana Appellate Court

880 N.E.2d 1271

CRICKET RIDGE, LLC, Appellant-Defendant, v. Joseph Richard WRIGHT, Appellee-Plaintiff.

No. 41A01-0705-CV-237.

Court of Appeals of Indiana.

February 26, 2008.

Stephen L. Huddleston, Huddleston & Huddleston, Franklin, IN, Attorney for Appellant.

Martin N. Howe, Indianapolis, IN, Attorney for Appellee.

OPINION

BRADFORD, Judge.

Appellant-Defendant Cricket Ridge, LLC, appeals from the trial court's judgment in favor of Appellee-Plaintiff Joseph Richard Wright. Cricket Ridge raises eight issues, which we consolidate and restate as follows:

I. Whether a comprehensive settlement between Wright and Cricket Ridge constituted a single contract or several;

II. Whether Cricket Ridge is entitled to judgment and attorney's fees on its counterclaim;

III. Whether the accumulation of interest should have terminated on certain money Cricket Ridge deposited with the trial court clerk; and

IV. Whether the trial court miscalculated damages.

We affirm in part, reverse in part, and remand with instructions.

FACTS AND PROCEDURAL HISTORY

In 1996, Wright decided to sell his 230-acre Johnson County farm. To that end, Wright contacted Fred Johnson, a real estate developer who had been referred to Wright. After negotiations, the farm was divided into six parcels of varying size which were to be sold to Hitrin Development, LLC (in which Johnson had an interest), through real estate contracts or the exercise of options to purchase. Parcels A (9.406 acres), D (8.123 acres), F (57.284 acres), and G (40.487 acres) were to be residential, parcel B (10.952 acres) commercial, and parcel C (110.046 acres) a golf course.

Hitrin agreed to purchase parcel A in December of 1996 for $128,000, of which Wright received $68,000 at closing. In August of 1998, Hitrin agreed to purchase parcel D pursuant to a real estate contract. In 2000, Wright sued Hitrin, Johnson, and Michael Ennis (who also had an interest in Hitrin), alleging nonpayment according to the purchase agreements for parcels A and D.¹

Johnson formed Cricket Ridge in January of 2002 for the sole purpose of receiving his interest in Hitrin, which apparently had been dissolved following a dispute between Johnson and. Ennis. After discussion, Johnson and Wright agreed to settle the 2000 lawsuits, and multiple settlement agreements were produced and signed by the parties on February 21, 2002. The agreement for parcel A provided that Cricket Ridge would pay an additional $56,000 for the land; $28,000 would be paid on February 21, 2002, and the balance by December 31, 2002. The agreement for parcel D provided that Cricket Ridge would pay Wright $2902 for each lot that was platted as a residential subdivision, estimated to be between twenty-seven and thirty-one lots altogether. The agreement, however, also provided that, no later than January 1, 2003, Cricket Ridge was to make a monthly payment of $2902 to Wright "continuing on or before the first day in each calendar month thereafter through March, 2005," or twenty-seven payments. Ex. 3 tab 7 p. 2. The provision for monthly payments made no reference to a plat. As of trial, parcel D had never been platted or otherwise developed.

The agreements also included an option granted to Cricket Ridge to purchase parcel F that had to be exercised by October 15, 2005. Cricket Ridge had the option to purchase all or part of parcel F for either $10,000 per acre plus $1250 per subdivided lot or $12,000 per acre. Finally, the agreements included an option for Cricket Ridge to purchase parcel G. The agreements were presented to Wright's attorney as a package with a cover sheet, entitled "Fred C. Johnson, Joseph Richard Wright, Et Al-Closing Respecting Restructure of Real Estate Purchase and Options" with each separate agreement separated by tabs. Plaintiff's Ex. 23 tab B p. 2.

As it happened, Cricket Ridge did not pay Wright the $28,000 balance due for parcel A by December 31, 2002. Additionally, Cricket Ridge made no payments to Wright related to parcel D. On October 30, 2003, Wright filed a breach-of-contract suit against Cricket Ridge, Hitrin, and Johnson ("Defendants") and amended the complaint on January 6, 2004. In, paragraph twelve of the amended complaint, Wright averred that, "[a] comprehensive settlement [of the 2000 lawsuits] was reached and includes multiple subparts, all negotiated contemporaneously and in consideration of the other[,]" and paragraph thirteen claimed that the comprehensive settlement was signed on February 21, 2002. Appellant's App. p. 84.

On April 14, 2004, Defendants requested and received permission to deposit $51,527.15 with the Johnson County Clerk and directed that the amount be applied to the principals owed on parcels A and D as well as to interest and various other fees. Although notice of Defendants' request was served on Wright's attorney, the amount was never offered to Wright as a tender of Cricket Ridge's obligation to him.

On April 13, 2005, Johnson's attorney informed Wright's attorney that Johnson intended to exercise his option to purchase parcel F and wished to close on the property by May 15, 2005. On April 19, 2005, Wright's attorney replied that Wright would not consider a closing on parcel F until the principal and interest due on parcels A and D, along with attorney's fees, title work, and filing fees, was paid, an amount purported to be $146,283.07.

The Defendants' answer to Wright's amended complaint, filed May 9, 2006, read, in part, "The Defendants admit the material allegations contained in rhetorical paragraphs 3-10, 12, 16, and 29 of Count I of the Plaintiffs Amended Complaint." Appellant's App. 99. Cricket Ridge also filed a counterclaim against Wright, alleging that Wright had breached the terms of the comprehensive settlement by refusing to allow it to exercise its option to purchase parcel F and praying for specific performance.

After a bench trial, the trial court entered judgment in favor of Wright against Cricket Ridge in the sum of $20,213.68, ordered that Wright's mortgage on parcel D was foreclosed as a $20,000 lien and that it would be sold in a Sheriffs sale, entered judgment in favor of Hitrin and Johnson in his individual capacity, ordered that Cricket Ridge take nothing by way of its counterclaim, ordered that Wright was relieved of any obligation to sell parcels F and G to Cricket Ridge, and ordered that sums deposited with the Johnson County Clerk be paid to Wright and "certify the amount so paid to the Court with such amount in excess of [$55,957.80] being applied upon the Judgment hereinabove set forth." Appellant's App. pp. 80-81. The trial court based the damages related to parcel D on a price of $89,962, as though it had platted for thirty-one lots.

DISCUSSION AND DECISION

Standard of Review

When, as here, the trial court enters findings of fact and conclusions thereon, we apply the following two-tiered standard of review: we determine whether the evidence supports the findings and the findings support the judgment. Clark v. Crowe, 778 N.E.2d 835, 839 (Ind.Ct.App. 2002). The trial court's findings of fact and conclusions thereon will be set aside only if they are clearly erroneous, that is, if the record contains no facts or inferences supporting them. Id. at 839-40. A judgment is clearly erroneous when a review of the record leaves us with a firm conviction that a mistake has been made. Id. at 840. This court neither reweighs the evidence nor assesses the credibility of witnesses, but considers only the evidence most favorable to the judgment. Id.

I. Whether Cricket Ridge and Wright's Comprehensive Settlement is One Contract

The main issue in this case is whether the February 21, 2002, comprehensive settlement between Cricket Ridge and Wright was a single contract such that Cricket Ridge's breach of some subparts relieved Wright of his duty to perform any other subpart. In other words, the question is whether Wright was still obligated to allow Cricket Ridge to exercise its option on parcel F when it failed to perform its contractual duties as to parcels A and D.²

Most of the Indiana cases that have examined this issue have turned on the question of whether the various agreements were supported by separate consideration; if so, separate contracts exist, if not, one contract does. We do not, however, believe that such a narrow approach is appropriate in this case. While Indiana courts have recognized that the commonality (or divisibility) of consideration is usually dispositive, this case, in our view, should stand as an exception to that general rule. See, e.g., Heritage Dev. of Ind., Inc. v. Opportunity Options, Inc., 773 N.E.2d 881, 891 (Ind.Ct.App.2002) ("The usual test of the severability of a contract is the entirety or divisibility of the consideration[.]"), trans. dismissed (2003).

Keeping in mind that "[w]hen interpreting a contract, our paramount goal is to ascertain and effectuate the intent of the parties[,]" we believe that an approach that takes all circumstances into account is best. First Nat. Bank & Trust v. Indpls. Pub. Hous. Agency, 864 N.E.2d 340, 350 (Ind.Ct.App.2007). Because Indiana courts have not spoken on this precise question, we look to foreign jurisprudence, summarized below, for guidance:

The essential test of whether a transaction involving a number of promises constitutes one contract or more than one contract is whether the parties assented to all the promises as a single whole so that there would be no bargain whatever if any promise or set of promises were to be stricken, out. In such a case, the essential question is whether the parties gave a single assent to the whole transaction or assented separately to several things, and this is a question of fact. If there is a single assent to a whole transaction involving several things or acts, there is only one contract; if there are separate assents to several things, there is more than one contract.

In making the determination whether a particular...