Fischer v. Michael
| Citation | 994 N.E.2d 1151 |
| Decision Date | 07 June 2013 |
| Docket Number | No. 49A02–1204–PL–340.,49A02–1204–PL–340. |
| Parties | Gayle FISCHER, Appellant, v. Michael and Noel HEYMANN, Appellees. |
| Court | Court of Appeals of Indiana |
OPINION TEXT STARTS HERE
Gary M. Selig, P.C., Indianapolis, IN, Attorney for Appellant.
J. David Hollingsworth, Brent R. Borg, Church, Church, Hittle & Antrim Fishers, IN, Attorneys for Appellees.
Gayle Fischer brings this interlocutory appeal from the trial court's judgment against Michael and Noel Heymann for $93,972.18 in damages on her breach-of-contract claim. Fischer requests that we vacate the trial court's findings and conclusions on her failure to mitigate and remand with instructions to award actual and consequential damages in the amount of $286,409.43. On cross-appeal, the Heymanns assert that the trial court's specific findings required the court to enter a damage award of $117 for Fischer. We consolidate the parties' arguments and consider the following two issues:
1. Whether the trial court's findings that Fischer would not have been damaged had she agreed to make the repairs identified in the inspection report on or before February 18, 2006, means that Fischer failed in her duty to mitigate her damages; and
2. Whether the trial court abused its discretion when it limited Fischer's award for attorney's fees and court costs in accordance with her failure to mitigate her damages.
We hold that the Heymanns committed an anticipatory breach of the purchase agreement on February 10, 2006; that, given the evidence and the trial court's findings, Fischer's duty to mitigate arose on February 11, 2006, when she learned of the Heymanns' breach; and that Fischer failed to act with reasonable diligence to mitigate her damages at her first opportunity, which was no later than February 18, 2006. We also hold that the trial court acted within its discretion when it limited Fischer's award for attorney's fees and costs. Based on the undisputed evidence and the trial court's finding that Fischer would have incurred virtually no damages had she taken reasonable steps to mitigate on or before February 18, 2006, we reverse the trial court's judgment on damages and remand with instructions that the trial court amend Fischer's damage award to $117, reasonable attorney's fees commensurate with that award, and court costs.
On February 4, 2006, the Heymanns entered into a purchase agreement to purchase a condominium (the “Property”) at the One West Horizontal Property Regime (“One West”) in Indianapolis from Fischer for $315,000, with a closing date of May 31, 2006. The Heymanns agreed to pay cash for the Property. They paid $5,000 in earnest money and, pursuant to paragraph 13 of the agreement, they had the right to terminate the agreement if, upon inspection, the Heymanns
reasonably believe[d] that the Inspection Report reveal[ed] a MAJOR DEFECT with the Property and [Fischer wa]s unable or unwilling to remedy the defect.... ‘Defect’ means a condition that would have a significant adverse effect on the value of the Property that would significantly impair the health or safety of future occupants ... or ... would significantly shorten or adversely affect the expected normal life of the premises.
Fischer v. Heymann, 943 N.E.2d 896, 898 (Ind.Ct.App.2011) (citation omitted), trans. denied (“Fischer I ”). On February 6, the Heymanns timely exercised their right to have the Property independently inspected for defects pursuant to paragraph 13.
The Heymanns hired an inspection company. The company inspected the Property and submitted its report to the Heymanns. In relevant part, the inspection report noted as a “Major Concern[ ]” that “[t]here is no electrical power to the outlets in the half bathroom and second floor bathroom and exterior outlet on the balcony.” Id. at 899 (quotations omitted). The inspection report further stated that the “light over the sink in the half bathroom did not light properly.” Defs. Trial Exh. X at 12.
On February 10, the Heymanns submitted to Fischer a “Buyer's Inspection Response” (the “February 10 demand”) in which they agreed to accept the property if Fischer resolved the following: Id. (quotations omitted). The Heymanns reserved the right to inspect the property again prior to closing, but they demanded that Fischer respond by February 13. Fischer responded on February 13 with an Amendment to Purchase Agreement, on which she checked a box that read “[t]he time for making any responses to inspections is extended to” and wrote in “February 28, 2006.” Id. (quotations omitted). On February 15, the Heymanns responded with their own Amendment to Purchase Agreement, in which they checked a box that read: “The time for making any responses to inspections is extended to February 18, 2006” (the “February 15 demand”). Appellant's Addendum to Brief at 25.2 While paragraph 13 of the purchase agreement did not require that Fischer respond to the Heymanns' conditions, paragraph 18 stated: Id. at 19.
On February 17, the Heymanns prepared an offer on a different condominium unit at One West and executed a mutual release from their purchase agreement with Fischer. But the Heymanns instructed their agents not to deliver the offer or the release until February 19 and only in the event that Fischer did not respond to their demand for repairs by the February 18 deadline. See Fischer I, 943 N.E.2d at 899. As Mr. Heymann later testified, Trial Transcript at 33.3
After Fischer did not respond to the Heymanns' demand for repairs by February 18, on February 19 the Heymanns' agents tendered the mutual release to Fischer, which she refused to sign. Fischer's electrician later resolved the electrical problems by pushing the ground fault interrupter (“GFI”) reset button on the face of the wall outlets, and Fischer replaced a light bulb. Fischer's total cost to fix the electrical problems was $117.
On May 9, Fischer sued the Heymanns for specific performance or, in the alternative, damages. The Heymanns answered and raised a third-party indemnity claim against their agents. The trial court found for the Heymanns and against Fischer after a bench trial, but, on appeal, we reversed. In particular, we concluded:
The substantive findings in the inspection report do not support an objectively reasonable belief that the defect was major. The report indicates there was no electrical power to three outlets, which could be and in fact was easily repaired. Therefore, under an objective standard, this would not have a significant adverse effect on the property's value or significantly impair the health or safety of occupants.
Fischer I, 943 N.E.2d at 901.4 Accordingly, we held that “the Heymanns' attempted termination of the purchase agreement with Fischer was ineffective,” and we remanded to the trial court with instructions that it “determine the extent of damages the Heymanns owe Fischer,” including Fischer's reasonable attorney's fees and court costs. Id. at 903.
On remand, the trial court bifurcated the damages hearing between the Heymanns and Fischer and the Heymanns' indemnification claim against their agents. 5 After an evidentiary hearing on the damages the Heymanns owed Fischer, the court entered the following relevant findings of fact:
Seller's Failure to Mitigate On or Before February 18, 2006
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12. On February 13, 2006, [Fischer] requested until February 28, 2006[,] to respond to the [February 10 demand].
13. On February 15, 2006, [the Heymanns] responded by allowing [Fischer] until February 18, 2006[,] to respond to them and indicate whether [Fischer] would agree to fix the electrical problems identified in the inspection report.
14. [Fischer] did not respond to [the Heymanns] at all after February 15, 2006.
15. There was uncontroverted expert testimony that twenty-four (24) to forty-eight (48) hours is a reasonable time period to provide a seller to agree to fix this type of problem. The [Heymanns] gave [Fischer] more than a reasonable amount of time to agree to fix the identified electrical problems. [Fischer] offered no testimony, expert or otherwise, indicating that [the Heymanns'] request was either unreasonable or that it was impossible for [Fischer] to respond within the time period provided.
* * *
17. Had [Fischer] remained in contact with [the Heymanns] and informed [them] that she would be making the changes prior to closing, [the Heymanns] would have proceeded to closing, and [Fischer] would not have been damaged or incurred any attorney fees or costs associated with the sale of [the Property] whatsoever.
18. However, as determined by the Court of Appeals, the [Heymanns'] request to void the contract was not based on an objectively reasonable belief that the electrical problems constituted a “Major Defect”.... As a result, the Court concluded that [the Heymanns] breached the Purchase Agreement as of ... February 10, 2006. This court, therefore, must determine [Fischer's] damages.
19. There was uncontroverted expert testimony that [Fischer's] offer price for the [Property] was unreasonably high from at least the beginning of 2007 to early 2011.
20. On February 16, 2007, Joe Johnson made an offer of [$240,000] or [$79.00] per square foot on the [Property].
21. Johnson's offer was based on comparative...
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...in Counts 3-8 [Doc. No. 58]. That motion will be addressed by separate order. 2. Ms. Leeman also cites in support Fisher v. Heymann, 994 N.E.2d 1151, 1160-62 (Ind. App. 2013), but that opinion was vacated by Fisher v. Heymann,12 N.E.3d 867 (Ind. 2014). The Indiana Supreme Court held in Fish......
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Fischer v. Heymann
...the Agreement. A divided panel of the Court of Appeals agreed with the Heymanns and awarded only $117 in damages. Fischer v. Heymann, 994 N.E.2d 1151, 1160–62 (Ind.Ct.App.2013) (“Fischer II ”). Judge Bradford dissented. He concluded that requiring Fischer to respond to the Heymanns to mitig......