EState of Collins v. McKinney

Decision Date17 March 2011
Docket NumberNo. 02A05-1004-EU-286.,02A05-1004-EU-286.
Citation936 N.E.2d 252
PartiesESTATE OF Jane H. COLLINS, Appellant, v. T. William McKINNEY, Appellee.
CourtIndiana Appellate Court

Eric E. Snouffer, Snouffer & Snouffer, Fort Wayne, IN, Attorney for Appellant.

John C. Theisen, Theisen Bowers & Associates, LLC, Fort Wayne, IN, Attorney for Appellee.

OPINION

BAILEY, Judge.

Case Summary

The Estate of Jane Collins ("Estate" or "Collins Estate") appeals from summary judgment granted to T. William McKinney ("McKinney") on his Petition for Specific Performance of an Option and Purchase Agreement, and from the trial court's determination of damages awarded after a bench trial.

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

Issues

The Estate presents five issues for our review, which we reorder and restate as:

I. Whether the trial court erred in granting McKinney's motion for summary judgment;
II. Whether the trial court erred in finding that the Estate's personal representative had breached the option;
III. Whether the trial court erred in awarding McKinney damages for losses arising from the delay in his purchase and subsequent sale of the real estate;
IV. Whether the trial court erred in its determination of the amount of damages; and
V. Whether the trial court erred in awarding McKinney attorney's fees for bad faith.
Facts and Procedural History
The Options and Leases

On December 27, 1990, McKinney entered into an option to purchase from Robert and Jane Collins (collectively, "the Collinses") certain real estate in Fort Wayne, Indiana, upon which the Collinses had a car dealership ("the Option" or "the 1990 Option"). Among its terms, the Option required that McKinney deliver written notice of his intent to exercise the Option to the "Personal Representative ... or heirs-at-law" within ninety days of the death of the last to die of Robert and Jane Collins. (App. 31.) After this time, the Option would terminate. The Option specified a purchase price of $2,090,000 for the land, subject to any required adjustments as set forth in the Option, and required that the parties close the sale within 120 days of McKinney's exercise of the Option. The Option also provided the legal description of the land in an exhibit.

On November 23, 1999, McKinney entered into a lease with the Collinses for use of the subject real estate ("the Prime Lease"). On the same date, McKinney granted a sublease to Tomkinson Chrysler Jeep, Inc. ("Tomkinson") for that same land ("the Sublease"). The Sublease granted Tomkinson an option to purchase the subject real estate conditioned, in part, upon the death of the last of the Collinses to survive if McKinney himself predeceased the Collinses. The Collinses signed the Prime Lease and executed a separate consent to the Sublease with an acknowledgement of the conditional option in the Sublease.

At the same time as the execution of the Prime Lease and Sublease, McKinney and the Collinses executed a new Exhibit A to the 1990 Option. The new Exhibit provided a legal description of the subject real estate reflecting Robert Collins's grant of land to the City of Fort Wayne in 1994.

The 2004 Suit

On August 19, 2004, after the death of Robert Collins, Jane Collins provided notice to McKinney through counsel that shedeemed certain of his actions to violate the terms of the Prime Lease and Sublease. Unable to resolve the matter with Jane Collins, McKinney filed a Complaint for Declaratory Judgment against Jane Collins, seeking a declaration that (1) McKinney did not require Jane Collins's consent to assign the Tomkinson sublease to Glenbrook Dodge, Inc.; (2) the Prime Lease, Sublease, and Option were valid and legitimate agreements and not subject to avoidance for undue influence, failure of consideration, or lack of consideration; and (3) McKinney was not in breach of the Prime Lease or Sublease.1 Jane Collins in turn sought to void the Prime Lease and Sublease, alleging undue influence, constructive fraud, lack of consideration, and failure of consideration, or in the alternative to obtain judgment against McKinney for breaching these agreements. Jane Collins also sought to void the Option for lack of consideration and undue influence.

McKinney moved for summary judgment, which the trial court granted on the questions of undue influence in obtaining Jane Collins's signature on the Option, failure of consideration for the Option, and the existence of valid consideration for the Option. The interpretation of the Prime Lease and Sublease and whether McKinney had breached these agreements were addressed at the first trial and upon a prior appeal, but are not material to the case before us. See Collins v. McKinney, 871 N.E.2d 363 (Ind.Ct.App.2007).

The Instant Case

Jane Collins died on June 2, 2007. McKinney sought to exercise the Option in a letter dated July 27, 2007, and attempted to serve the letter bearing notice of his intent via U.S. Mail, United Parcel Service ("UPS"), and hand-delivery to Ray Collins, Robert and Jane Collins's son, in his capacity as Personal Representative for Jane Collins's estate. McKinney did not receive a response to these notices.

McKinney filed his Verified Petition for Specific Performance on October 31, 2007, seeking to require the Estate to respond to his notice of intent to exercise the Option and to sell the property at issue in the Option. In its response the Estate acknowledged its refusal to respond to McKinney's notice and alleged as affirmative defenses that (1) McKinney's notice was not consistent with the requirements for notice in the Option; (2) the legal description attached to the Option was "improper, vague, and is believed to have been altered" after execution of the Option (App. 64); and (3) any rights McKinney had under the Option were terminated due to breach of the Prime Lease.

On May 8, 2008, McKinney moved for summary judgment, submitting at the same time his designation of evidence and supporting brief. The Estate moved to strike certain of McKinney's exhibits, designated its claimed issues of material fact, and responded to the merits of McKinney's motion on June 30, 2008.

The trial court heard argument on the motions on July 3, 2008. The court struck one affidavit, denied the Estate's motion to strike two additional exhibits, and took the motion to strike under advisement for the remaining exhibits the Estate opposed. The motion for summary judgment was also taken under advisement. The court granted McKinney seven days to submit additional documentation in support ofthese exhibits, and granted the Estate an additional seven days beyond that to respond to that submission. McKinney filed an affidavit in support of the remaining exhibits on July 9, 2008; the record is devoid of any response from the Collins Estate.

On August 18, 2008, the court granted summary judgment to McKinney and ordered the Estate to close the sale pursuant to its award of specific performance to McKinney. The court reserved the issue of damages for later adjudication and gave McKinney leave to submit an additional petition for payment of damages.

On November 24, 2008, McKinney filed a Verified Information for Rule to Show Cause why Ray Collins should not be held in contempt of court for refusal to comply with the trial court's order for specific performance. After hearing evidence, on January 15, 2009, the Court appointed Lake City Bank as Special Administrator for the purposes of specific performance of the Option. The court suspended Ray Collins as the Estate's Personal Representative at that time. On February 2, 2009, Ray Collins was reinstated as Personal Representative for all but the real estate under the Option, and the court directed Lake City Bank to retain proceeds from the sale of the land until further order. Lake City Bank filed a notice of sale with the Court on April 3, 2009, one day after the Estate filed a motion to declare the Option void for failure to close the sale.

On May 1, 2009, McKinney filed his petition for an award of damages and expenses with the court.

On January 19, 2010, a bench trial was held to determine McKinney's damages. On March 25, 2010, after the parties submitted post-trial briefs and proposed findings of fact and conclusions of law, the trial court ruled in favor of McKinney, awarding him damages and fees of $760,084.33 plus costs and attorney's fees.

This appeal followed.

Additional facts will be supplied as required.

Discussion and Decision
Motion for Summary Judgment

The Collins Estate claims two errors should have precluded summary judgment. First, the Estate asserts that Trial Rule 56(E) restricts the trial court from using McKinney's exhibits and from allowing McKinney to submit additional documentation in support of its exhibits. Second, the Estate asserts that even if that evidence was properly designated and admissible, genuine issues of material fact remained as to the accuracy and authenticity of the legal description attached to the Option, thereby precluding a grant of summary judgment in McKinney's favor. Because the Estate fails to make citations to authority or the record or otherwise adequately articulate its argument on its second point beyond repeating the import of its affirmative defenses, its contention on this issue is waived. See Ind. Appellate Rule 46(A)(8)(a). We thus consider only the Estate's articulated and developed argument that the trial court abused its discretion in the admission of summary judgment materials.

The Estate claims that the trial court erred in permitting McKinney to file a post-hearing affidavit in support of his motion for summary judgment. The Estate relies on Trial Rule 56(E), which states in part that "[s]worn or certified copies not previously self-authenticated of all papers or parts thereof referred to in an affidavit shall be attached" to such affidavits. The Estate urges that the trial court should have disregarded McKinney's evidence in support of his motion for summary judgment because he...

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