Cutter v. Jurus
| Decision Date | 30 September 2021 |
| Docket Number | Court of Appeals Case No. 21A-PL-200 |
| Citation | 177 N.E.3d 492 |
| Parties | Becky CUTTER, Appellant-Defendant, v. Linda Rothrock JURUS, Appellee-Plaintiff. |
| Court | Indiana Appellate Court |
Attorneys for Appellant: Nancy A. McCaslin, McCaslin & McCaslin, Elkhart, Indiana, Martin A. McCloskey, McCloskey Law Office, Elkhart, Indiana
Attorney for Appellee: John William Davis, Jr., Davis & Roose, Goshen, Indiana
[1] The equitable doctrine of reformation allows courts to alter written instruments to correct mistakes of fact by the instrument's signers. The trial court reformed two property deeds for a ten-acre parcel of land to include a life estate that had been granted to Linda Rothrock Jurus under prior contracts involving that property. Becky Cutter appeals the trial court's denial of her motion for summary judgment and grant of summary judgment in favor of Jurus. We affirm.
[2] In 2001, Linda Jurus and her husband Bernard Jurus purchased a ten-acre property in Goshen, Indiana, and they lived there in a large white house. They rented a smaller house on the property to Cutter beginning in 2007.
[3] In 2013, Linda and Bernard Jurus signed an "Agreement to Sell Real Estate" to Joseph Bailey. Appellant's App. Vol. II, p. 35. They agreed to sell their land and certain personal property to Bailey for $155,000, to be paid in installments. Cutter was a friend of Bailey, and she signed the Agreement as a witness. The land contract had a closing date of July 17, 2014.
[4] On that same day, the Juruses and Bailey signed an Addendum to the Agreement ("Addendum"). The Addendum granted the Juruses the right to reside on the land "for their natural lifetime." Id. at 36. They agreed to "make all updates, repairs, pay utilities, insurance, taxes [sic] for the Big White House on the property." Id. The couple further agreed that, although they would have an unlimited right of access to the full ten acres, they would not "interfere with any decisions or improvements that the new owner makes." Id. Finally, they acknowledged that Joseph Bailey would take control of leases on the property. Cutter continued to live in the small house as Bailey's tenant or guest.
[5] In January 2014, Bernard Jurus died in Arizona. There is no dispute that Linda Jurus was Bernard's heir and became the sole owner of their life estate interest in the ten-acre property.
[6] On July 28, 2014, Ms. Jurus and Bailey signed a "Contract for the Sale of Real Estate" ("Land Contract"). Id. at 37. The Contract again addressed Jurus’ sale of the 10-acre parcel to Bailey, stating that Bailey would purchase the property subject to Jurus receiving "a life estate in the real estate upon which is erected the main residence, together with ingress and egress." Id. at 39. The Land Contract was recorded with the Elkhart County Recorder's Office ("the Recorder's Office").
[7] In 2015, Jurus hired a title company to prepare a deed and organize a closing. On April 9, 2015, she signed a Warranty Deed ("the Warranty Deed") transferring the land to Bailey. The Warranty Deed stated it was "in full and final satisfaction" of the Land Contract. Id. at 44. The Warranty Deed, unlike the Addendum or the Land Contract, omitted any reference to Jurus having a life estate interest in the land. The Warranty Deed was also filed at the Recorder's Office.
[8] In 2016, Bailey petitioned the Elkhart County's Board of Zoning Appeals ("BZA") for a variance, requesting permission to build a new house. He explained in his petition that the new house would replace the smaller house, while he would keep another house, Structure A, "for a period of time." Id. at 110. Photographs attached to Bailey's petition show that Structure A was the large white house in which Ms. Jurus lived. Bailey further stated in the petition that Structure A "would stay until the lady that lives in it retires to Arizona in a couple of years and then it will be torn down." Id. at 114.
[9] The BZA's staff noted in a report that one of the houses on the property would be removed "at the termination of a life lease." Id. at 117. The minutes of the meeting at which the BZA considered Bailey's variance request reflect that Bailey described Jurus’ home as a "rental property" that would be demolished after the "tenant" retired to Arizona or passed away. Id. at 123. In granting the variance, the BZA directed that Bailey's petition would be reviewed every two years "until the termination of the life lease." Id. at 125. After receiving approval for the variance, Bailey built a new house for Cutter and demolished the small one in which she had lived.
[10] Bailey died in 2018. Under the terms of his will, Cutter was both the personal representative of his estate and the primary beneficiary. On April 29, 2019, after the trial court approved Cutter's proposed distributions of the estate's assets, she signed a Personal Representative's Deed ("Representative's Deed") conveying the land to herself. The Representative's Deed omitted any mention of Jurus having a life estate interest in any part of the property.
[11] Meanwhile, Linda Jurus had continued to live in the big white house, and she discovered the absence of any reference to her life estate in the Warranty Deed and the Representative's Deed. In 2020, she filed a civil complaint, asking the trial court to reform the 2015 and 2019 deeds to include a life estate. The trial court held a hearing, during which Jurus specified she sought a life estate and a right of access as to only the big white house, not to the entire property. The court later granted Jurus the remedy she requested, denying Cutter's cross-motion. This appeal followed.
[12] Cutter argues the trial court should have granted her motion for summary judgment and denied Jurus’ motion. Alternatively, Cutter now claims there are factual disputes that should have led the trial court to deny both motions.
[13] We review summary judgment decisions de novo, applying a standard of review similar to that of the trial court. AM Gen. LLC v. Armour , 46 N.E.3d 436 (Ind. 2015). A party moving for summary judgment must show "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Ind. Trial Rule 56(C). Upon this showing, the nonmoving party then has the burden of demonstrating there is a genuine issue of material fact. AM Gen. , 46 N.E.3d 436.
[14] A trial court's grant of summary judgment is presumptively valid, and the party who lost in the trial court has the burden of demonstrating error. Webb v. City of Carmel , 101 N.E.3d 850 (Ind. Ct. App. 2018). The trial court's findings and conclusions facilitate our review but do not bind us. Cox v. N. Ind. Pub. Serv. Co., Inc. , 848 N.E.2d 690 (Ind. Ct. App. 2006). Cross-motions for summary judgment do not alter our standard of review.
State Auto. Ins. Co. v. DMY Realty Co., LLP , 977 N.E.2d 411 (Ind. Ct. App. 2012).
[15] This case addresses the equitable doctrine of reformation of contracts. A court of equity has authority to reform written documents. Carr Dev. Grp., LLC v. Town of N. Webster , 899 N.E.2d 12 (Ind. Ct. App. 2008). "Equity will reform a written contract between the parties whenever, through mutual mistake, or mistake of one of the parties accompanied by the fraud of the other, it does not, as reduced to writing, correctly express the agreement of the parties." Citizens’ Nat. Bank of Attica v. Judy , 146 Ind. 322, 340, 43 N.E. 259, 264 (1896).
[16] The remedy of reformation is considered "extreme" because written instruments are presumed to reflect the intentions of the parties to those instruments. Estate of Reasor v. Putnam Cnty. , 635 N.E.2d 153, 158 (Ind. 1994). Id. Further, reformation overcomes the Statute of Frauds and has the potential to affect others beyond the immediate dispute. S&S Enters. v. Marathon Ashland Petroleum, LLC , 799 N.E.2d 18 (Ind. Ct. App. 2003).
[17] Reformation is available to remedy only mistakes of fact, not mistakes of law. Estate of Spry v. Greg & Ken, Inc. , 749 N.E.2d 1269 (Ind. Ct. App. 2001). A mistake of fact occurs when "words were inserted that were agreed to be left out, or that words were omitted that were agreed to be inserted." Bd. of Comm'rs of Hamilton Cnty. v. Owens , 138 Ind. 183, 186, 37 N.E. 602, 603 (1894) (quotation omitted). By contrast, a mistake of law regards the legal effect of the contract's terms, not the terms themselves. See Gierhart v. Consol. Rail Corp.-Conrail , 656 N.E.2d 285 (Ind. Ct. App. 1995) (), trans. denied.
[18] In cases involving mutual mistake, a party seeking reformation must show: (1) the true intentions of the parties to an instrument; (2) that a mistake was made; (3) that the mistake was mutual; (4) and that the instrument does not reflect the true intentions of the parties. Estate of Reasor , 635 N.E.2d 153. A party seeking reformation must prove its case by clear and convincing evidence. Id.
[19] Cutter first argues she is entitled to complete outright ownership because she concludes that, under the doctrine of merger, the parties’ intentions must be understood from the terms of the 2015 Warranty Deed alone, rather than along with Jurus and Bailey's prior agreements. We disagree. The doctrine of merger states: "In the absence of fraud or mistake, all prior or contemporaneous negotiations or executory agreements, written or oral, leading up to the execution of a deed are merged therein by the grantee's acceptance of the conveyance in performance thereof." Thompson v. Reising , 114 Ind. App. 456, 462, 51 N.E.2d 488, 491 (1943). But Jurus is raising an equitable claim for reformation based on mistake. We have stated: "[t]he doctrine of merger does not apply and cannot be asserted in an action ... brought to...
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