Drew v. Southgate Dev.

• Docket Number: 21A-PL-2642
• Decision Date: 08 August 2022
• Parties: Cherie M. Drew, Appellant-Plaintiff, v. Southgate Development LLC and Charlestown Enterprises, Inc., Appellees-Defendants.
• Court: Indiana Appellate Court

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Cherie M. Drew, Appellant-Plaintiff, v. Southgate Development LLC and Charlestown Enterprises, Inc., Appellees-Defendants.

No. 21A-PL-2642

Court of Appeals of Indiana

August 8, 2022

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.

Appeal from the Clark Circuit Court The Honorable Daniel E. Moore Judge Trial Court Cause No. 10C01-2103-PL-27

ATTORNEY FOR APPELLANT Jordan M. White Wyatt, Tarrant &amp Combs, LLP Louisville, Kentucky

ATTORNEYS FOR APPELLEE - SOUTHGATE DEVELOPMENT LLC Ralph C. Melbourne Jason A. Lopp Church Langdon Lopp & Banet, LLC New Albany, Indiana

ATTORNEY FOR APPELLEE - CHARLESTOWN ENTERPRISES, INC. C. Gregory Fifer Applegate Fifer Pulliam LLC Jeffersonville, Indiana

MEMORANDUM DECISION

Mathias, Judge.

[¶1] Approximately three years after she and her now-deceased husband purchased the undeveloped, Clark County real property at issue, Cherie M. Drew discovered that the property ("the Drew Property") did not have legal access to a public right of way. She filed a complaint against Southgate Development LLC ("Southgate"), the known owner of property adjacent to hers, and Charlestown Enterprises, Inc. ("Charlestown"), the company that sold her the property. The first count of the complaint was a request for a declaratory judgment that the Drew Property had an easement of necessity over Southgate's property. Following oral argument on Drew's subsequent motion for declaratory judgment, the trial court denied the motion.

[¶2] Drew appeals and presents three issues for our review, which we consolidate and restate as the following two issues:

1. Whether the trial court erred when it denied her motion for declaratory judgment.

2. Whether the trial court erred when it concluded that the

Southgate property is not encumbered by an easement of necessity because Southgate was a bona fide purchaser.

[¶3] We affirm in part, reverse in part, and remand for further proceedings.^[1]

Facts and Procedural History

[¶4] In 2016, Drew and her now-deceased husband, Nathan, purchased the Drew Property from Charlestown. At that time, Drew "believed . . . that [her] [p]roperty had legal access to a publicly-dedicated road across certain other real property owned by the Charlestown Christian Church" ("the Church"). Appellant's App. Vol. 2 p. 18. According to Drew, that belief "was founded upon the warranties of title contained in the Deed and oral statements made during the sales process by the President" of Charlestown, John Wood. Id. Near the time of closing, Wood allegedly told Drew that Ray Lee Drive, which runs "alongside the Church," was the "legal access point" for the Drew Property. Id. Charlestown owned a second tract of real property adjacent to the Drew Property on the side opposite the Church and, in April 2017, Charlestown sold that property to Charlestown Venture, LLC ("CV"). In June 2017, CV sold the second tract to Southgate ("the Southgate Property").

[¶5] In 2019, "while listing the Drew Property for sale," Drew learned that her property was, in fact, landlocked, with no access to a public road. Appellant's Br. p. 10. What Drew believed was "Ray Lee Drive" was actually "a private easement for ingress and egress benefitting [the Church.]" Id. That easement, a small road, did not extend to the boundary of the Drew Property. After "the parties to that easement . . . refused to entertain [Drew's] offer to expand and extend the use of the easement to benefit the Drew Property as a means of legal access[,]" and after "multiple title searches did not disclose any means of legal access" to her property, Drew filed a complaint seeking a declaratory judgment against Southgate and alleging a breach of warranty and a breach of implied covenant of good faith and fair dealing against Charlestown. Appellant's App. Vol. 2 pp. 18-19. In her complaint, Drew alleged in relevant part that an implied

easement by necessity over the Southgate Property, which was the last parcel of real property in unity of title and under common ownership with the Drew Property, arose by operation of law at the time that the Southgate Property conveyance resulted in the Drew Property becoming landlocked and now runs with the Southgate Property under Indiana law.

Id. at 20.

[¶6] In its answer, Southgate admitted to several of Drew's allegations, including that its property shared unity of title with the Drew Property, that the Drew Property "is landlocked," and that the severance of the unity of title "ultimately result[ed] in the Drew Property becoming landlocked[.]" Id. at 19. But Southgate denied that Drew has an implied easement of necessity over the Southgate Property, and Southgate denied that the easement of necessity "arose by operation of law at the time that the Southgate Property conveyance resulted in the Drew Property becoming landlocked[.]" Id. at 20. Also in its answer, Southgate asserted affirmative defenses, including that Drew's claims are barred by the doctrines of laches, unclean hands, and waiver.

[¶7] Thereafter, Drew filed a "Motion for Declaratory Judgment," in which she alleged that she was entitled to declaratory judgment on the easement of necessity claim because there were "no material facts" in dispute. Id. at 50. In particular, Drew alleged that Southgate had "expressly admitted the facts which give rise to the easement implied by necessity under Indiana law[,]" namely, that the properties have unity of title and "an implied easement is absolutely necessary for the use and enjoyment of the Drew Property." Id. at 50, 52. In its response to Drew's motion, Southgate alleged in relevant part that "material fact issues remain which preclude the entry of declaratory judgment[,]" including questions of fact regarding whether Southgate is a bona fide purchaser. Id. at 62. Following a hearing, at which none of the parties presented evidence, the trial court issued findings and conclusions denying Drew's motion for declaratory judgment. This appeal ensued.^[2]

Discussion and Decision

Issue One: Declaratory Judgment

[¶8] Drew contends that the trial court erred when it denied her motion for declaratory judgment. Initially, the parties assert that the trial court entered findings and conclusions pursuant to Trial Rule 52(A), which they allege, governs our standard of review. However, because the parties did not submit evidence at the hearing on Drew's motion for declaratory judgment, the trial court ruled on a paper record. "Where, as here, the trial court has entered factual findings based only on a paper record, this Court will conduct its own de novo review of that record." House of Prayer Ministries, Inc. v. Rush Cnty. Bd. of Zoning Appeals, 91 N.E.3d 1053, 1058 (Ind.Ct.App. 2018), trans. denied. And where the issue presented on appeal is a pure question of law, we review the matter de novo. State v. Moss-Dwyer, 686 N.E.2d 109, 110 (Ind. 1997).

[¶9] Indiana Trial Rule 57 provides in relevant part as follows:

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. . . . Affirmative relief shall be allowed under such remedy when the right thereto is established.

(Emphasis added.) "'The use of a declaratory judgment is discretionary with the court and is usually unnecessary where a full and adequate remedy is already provided by another form of action.'" Dible v. City of Lafayette, 713 N.E.2d 269, 272 (Ind. 1999) (quoting Volkswagenwerk, A.G. v. Watson, 181 Ind.App. 155, 390 N.E.2d 1082, 1085 (1979) (citation omitted)).

[¶10] Drew maintains that the undisputed facts, as established both in her verified complaint and by Southgate's admissions in its answer, demonstrate that she is entitled to an easement of necessity as a matter of law. In William C. Haak Trust v. Wilusz, 949 N.E.2d 833, 836 (Ind.Ct.App. 2011), this Court explained that

[a]n easement of necessity will be implied when "there has been a severance of the unity of ownership of a tract of land in such a way as to leave one part without access to a public road." Whitt v. Ferris, 596 N.E.2d 230, 233 (Ind.Ct.App. 1992). An easement of necessity may arise, if ever, only at the time that the parcel is divided and only because of inaccessibility then existing. Ind. v. Innkeepers of New Castle, Inc., 271 Ind. 286, 392 N.E.2d 459, 464 (1979). To demonstrate that an easement of necessity should be implied, a plaintiff must establish both unity of title at the time that tracts of land were severed from one another and the necessity of the easement.

(Emphasis added.)

[¶11] Drew relies on Haak in her brief on appeal, and she acknowledges the two elements set out therein that she is required to prove: (1) unity of title at the time of severance; and (2) necessity of the easement at the time of severance. See id. Drew alleges that the parties do not dispute the facts supporting both elements. Thus, she maintains that the trial court was required to grant her motion for declaratory judgment, as a matter of law. Because facts are still disputed, Drew is incorrect.

[¶12] As Drew contends, in its answer to paragraph 21 of Drew's complaint, Southgate admitted that its property shared unity of title with the Drew Property at the time of the 2017 severance and that the Drew Property ultimately became landlocked. Appellant's App. Vol. 2 pp. 19, 35. Southgate however, denied paragraphs 22 and...