Downs v. Radentz

• Decision Date: 11 September 2019
• Docket Number: Court of Appeals Case No. 19A-PL-382
• Citation: 132 N.E.3d 58
• Parties: Thomas K. DOWNS and Laura H. Downs, Appellants-Defendants, v. Stephen S. RADENTZ and Magdalena B. Czader, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

132 N.E.3d 58

Thomas K. DOWNS and Laura H. Downs, Appellants-Defendants,

v.Stephen S. RADENTZ and Magdalena B. Czader, Appellees-Plaintiffs.

Court of Appeals Case No. 19A-PL-382

Court of Appeals of Indiana.

FILED September 11, 2019

Attorneys for Appellants: Daniel L. Taylor, J. Kent Minnette, Taylor, Chadd, Minnette, Schneider & Clutter, P.C., Crawfordsville, Indiana

Attorneys for Appellees: E. Scott Treadway, Raymond J. Biederman, Mattingly Burke Cohen & Biederman LLP, Indianapolis, Indiana

Najam, Judge.

Statement of the Case

[1] Thomas and Laura Downs (collectively "Sellers") appeal the trial court's judgment in favor of Stephen Radentz and Magdalena Czader (collectively "Buyers") on Buyers' complaint seeking specific performance of the parties' agreement for the sale of real estate. Sellers present two issues for our review:

1. Whether the trial court erred when it applied the parol evidence rule and excluded certain evidence at trial.

2. Whether the trial court's finding that the parties entered into a valid and enforceable settlement agreement is clearly erroneous.

[2] Buyers cross appeal and ask that we award them appellate attorney's fees.

[3] We affirm and remand with instructions.

Facts and Procedural History

[4] On September 5, 2017, Sellers listed for sale their residence located on ten acres in Zionsville ("the property"). On September 18, Buyers made an offer to purchase the property. After the parties proposed offers and counter-offers, they agreed on a purchase price of $1.2 million and executed a purchase agreement. However, following disagreements regarding inspections and appraisals, on November 27, Buyers filed with the trial court a complaint for specific performance. Over the course of the next several months, the parties negotiated a settlement agreement, which Sellers executed on August 12, 2018.

[5] The settlement agreement incorporated by reference the parties' purchase agreement, which required in relevant part that Sellers provide a survey "certified as of a current date" and that was "reasonably satisfactory to Buyer." Appellees' App. Vol. 2 at 45. On August 16, before Buyers had executed the settlement agreement, Sellers' attorney sent Buyers' attorney a letter stating in relevant part as follows: "Pursuant to the Settlement Agreement , please find enclosed the original Anderson and Associates survey of the [property from 1996] along with a copy of the original title policy." Defendants' Ex. C (emphasis added).

[6] In response to that letter, Buyers informed Sellers that the 1996 survey was not acceptable and did not comply with the terms of the purchase agreement. On August 20, after Sellers had refused to provide a different survey, Buyers' attorney sent an email to Sellers' attorney's office stating:

My client[s] are precariously close to walking away from the settlement. We expect a current survey of the property. The documents provided were decades old and of little value to us or the title company.

Please advise by the close of business today whether we can expect a current survey. Otherwise, let's move forward with the litigation.

Defendants' Ex. D. In particular, Buyers requested a current "ALTA"¹ survey of the property. Tr. at 98.

[7] Despite not having received a current survey of the property, Buyers executed the settlement agreement on August 30. Still, Sellers refused to permit Buyers access to the property to perform inspections or appraisals. On September 30, Buyers filed with the trial court a motion to enforce the settlement agreement. Following an evidentiary hearing, the trial court entered judgment for Buyers and found and concluded as follows:

3. [Buyers] substantially performed or offered to perform their contract obligations in relation to the Purchase Agreement. The undisputed testimony from [Radentz], Barbara Ward, broker for [Buyers], and Robbin Edwards, broker for [Sellers], was that the [Buyers] fulfilled all conditions precedent under the Purchase Agreement.

4. [Sellers] breached the Purchase Agreement by failing to satisfy the terms of the same.

* * *

11. [Buyers] and [Sellers] entered into a written Settlement and Release Agreement, dated August 30, 2018 (the "Settlement Agreement")....

12. The Settlement Agreement was executed by [Sellers] on August 12, 2018, and executed by [Buyers] on August 30, 2018.

13. [Sellers] each testified, and the Court finds, that [Sellers] knowingly and voluntarily executed the Settlement Agreement.

14. [Sellers] each testified, and the Court finds, that [Sellers] were represented by legal counsel during the negotiation and preparation of the Settlement Agreement.

15. [Sellers] each testified, and the Court finds, that [Sellers] intended to be bound by the terms and conditions of the Settlement Agreement.

16. [Sellers] each testified, and the Court finds, that [Sellers] did not revoke[ ] or withdraw the Settlement Agreement prior to written acceptance by [Buyers] on August 30, 2018.

17. The Settlement Agreement contained the following provisions:

17. The Parties acknowledge that (1) they have read and considered this Agreement carefully; (2) that it was negotiated at arm's length by Parties of equal bargaining power; (3) that they had the opportunity to have their attorneys negotiate this Agreement and to discuss such Agreement in detail with their attorneys, but elected, in their sole discretion, not to do so; (4) that they have been given a reasonable period of time (as long as they deemed necessary) to consider this Agreement before signing ; (5) that they fully understand the extent and impact of its provisions; ...

18. This Agreement has no terms other than those expressly set forth herein. Each Party to this Agreement represents and warrants to the other Party that it is not signing this Agreement in reliance upon any term, representation or warranty other than those expressly set forth in this Agreement. This Agreement shall not be modified in any respect except by a writing executed by both Parties.

19.[sic] Multiple undisputed witnesses, including both parties' real property brokers, testified and the Court finds [Buyers] fully complied with the terms of the Settlement Agreement, including attempting to perform required inspections.

20. The undisputed evidence also established [Sellers] breached the Settlement Agreement on multiple occasions, including refusing to allow access to the Property, refusing to reschedule inspections, refusing to provide a current survey, and refusing to pay attorneys' fees, all of which are required by the terms of the Settlement Agreement.

21. The Court finds the Settlement Agreement is unambiguous.

* * *

23. The Court finds the Settlement Agreement is valid and enforceable.

Appellants' App. Vol. 2 at 11-13 (emphasis added).² The trial court then entered judgment in favor of Buyers and ordered Sellers to comply with the agreement. The trial court also ordered Sellers to pay Buyers' attorney's fees and "additional damages," to be determined at a future hearing. Id. at 15. Accordingly, this appeal is not from a final judgment, as Sellers assert in their notice of appeal. Rather, this is an interlocutory appeal of right under Indiana Appellate Rule 14(A)(4). This appeal ensued.

Discussion and Decision

Issue One: Parol Evidence

[8] Sellers contend that the trial court erred when it excluded from the evidence at trial an email from Sellers' attorney dated August 9, 2018. They maintain that this issue turns on the construction of the parol evidence rule, not its application to any particular set of facts, and that our review is de novo . Cook v. Whitsell-Sherman , 796 N.E.2d 271, 277 (Ind. 2003). Sellers' argument is two-fold. Sellers first assert that the email was admissible as an exception to the parol evidence rule because it shows that no contract was ever formed. Sellers also assert that the email was admissible because it is relevant to the issue of whether the settlement agreement was only partially or completely integrated. We address each contention in turn.

[9] Initially, we note that Sellers were bound by the terms of the settlement agreement when they executed it on August 12. Appellants' Br. at 5. As this Court has held,

[i]n situations where fewer than all the proposed parties execute [a] document we look to the intent of the parties as determined by the language of the contract to determine who may be liable under the agreement. It should be assumed that all the parties who sign [a contract] are bound by it unless it affirmatively appears that they did not intend to be bound unless others also signed.

Kruse Classic Auction, Co. v. Aetna Cas. & Sur. Co. , 511 N.E.2d 326, 328 (Ind. Ct. App. 1987), trans. denied ; see also Int'l Creative Mgmt., Inc. v. D & R Ent. Co. , 670 N.E.2d 1305, 1311 (Ind. Ct. App. 1996), trans. denied . And here, "there was no express intention or affirmation in the contract that [Sellers] not be bound unless [Buyers] also signed." See Kruse Classic Auction , 511 N.E.2d at 328. Accordingly, when they executed the settlement agreement on August 12, Sellers were bound by it, including the provision that gave Buyers "a reasonable period of time (as long as they deemed necessary) to consider this agreement before signing." Appellees' App. Vol. 2 at 40. Once executed by Sellers, the settlement agreement was, in effect, an offer to Buyers, which, as the trial court found, Buyers had accepted before the offer was revoked. See Rosi v. Business Furniture Corp. , 615 N.E.2d 431, 435 (Ind. 1993) (stating a contract is formed by the exchange of an offer and acceptance between the contracting parties. To form a contract, one party must extend an offer, and the other party must communicate acceptance of the offer to the offeror).

Contract Formation

[10] In general, where, as here, the parties to an agreement have reduced the agreement to a written document and have included an integration clause that the written document embodies the complete agreement between the parties, the parol evidence rule...