Hanover Logansport, Inc. v. Robert C. Anderson, Inc.

• Decision Date: 10 September 1987
• Docket Number: No. 71A03-8607-CV-00179,71A03-8607-CV-00179
• Citation: 512 N.E.2d 465
• Parties: HANOVER LOGANSPORT, INC. and Spatz & Company, Appellant (Defendants Below), v. ROBERT C. ANDERSON, INC., Appellee (Plaintiff Below), James Dettling, d/b/a Discount Liquors, Applicant for Intervention.
• Court: Indiana Appellate Court

Page 465

512 N.E.2d 465

HANOVER LOGANSPORT, INC. and Spatz & Company, Appellant (Defendants Below), v. ROBERT C. ANDERSON, INC., Appellee (Plaintiff Below), James Dettling, d/b/a Discount Liquors, Applicant for Intervention.

No. 71A03-8607-CV-00179.

Court of Appeals of Indiana,

Third District.

Sept. 10, 1987.

Robert J. Palmer, E. Spencer Walton, Jr., May, Oberfell & Lorber, South Bend, for appellant.

David A. Rosenthal, Rosenthal, Greives & O'Bryan, Lafayette, for appellee.

STATON, Judge.

Hanover (defendant below) appeals the trial court's denial of its motion to dismiss.

We reverse.

Hanover is the owner of certain business premises located in a K-Mart Shopping Center in South Bend. Anderson is a corporation which sought to operate a liquor store in that location. On February 23, 1984, Hanover and Anderson entered into a nine-year, eleven-month lease to begin on May 1, 1984. Hanover agreed to remove tenant Discount Liquors before that date. On July 18, 1984, Discount Liquors still occupied the space. Thus, Anderson filed the following complaint:

COMPLAINT FOR BREACH OF CONTRACT AND LEASE

Comes now Robert C. Anderson, Inc., by counsel, and for its complaint against Defendants hereby states:

1. That Plaintiff is a corporation, its principal place of business is located in St. Joseph County, Indiana.

2. Defendant Hanover Logansport, Inc. is the owner of real property located in St. Joseph County, Indiana, commonly known as the K-Mart Shopping Center, South Bend, Indiana and Spatz and Company is the leasing agent of the property for the owner.

3. That on February 23, 1984 the Defendant entered into a lease through its agent Spatz and Company, with Plaintiff, a copy of the lease is attached hereto as Exhibit "A".

4. That the lease was for a period of nine years, eleven months, commencing May 1, 1984 for the space at the K-Mart Plaza, South Bend, Indiana now occupied by Discount Liquors, the address being 1222 Western Avenue.

5. That Defendants agreed to remove the present tenant, Discount Liquors, a retail liquor, beer and wine vendor, from the leased space prior to May 1, 1984; but has refused to remove said tenant and instead has renewed the lease with said tenant.

6. That Plaintiff informed Defendants that prior to transfer of a liquor license it presently held, the present tenant, Discount Liquors, had to be evicted or removed from the premises before the local alcoholic beverage commission would approve said transfer and if such license was denied for the above reason, Plaintiff was foreclosed from applying for a transfer of license to that location for one year.

7. That Defendants refused and continues to refuse to remove said tenant from the premises so that Plaintiff could proceed to apply for and receive approval of the local Alcoholic Beverage Commission for the transfer of its liquor license.

8. That Defendants have breached the terms of the lease by failing to provide occupancy to Plaintiff as required by the lease attached hereto.

9. That Plaintiff desires to enforce the terms of said lease and to obtain occupancy as soon as possible or in the alternative is entitled to loss of profits for the term of the lease in the amount of Five Hundred Thousand Dollars ($500,000.00).

10. That Plaintiff relied on the Defendants representations and contract and agreement as set forth in the lease and Plaintiff relinquished rights to occupy another store in a similar location, and the right to reoccupy said store has been lost by the Plaintiff.

WHEREFORE, Plaintiff hereby prays for judgment against defendant in the amount of Five Hundred Thousand Dollars ($500,000.00) of lost profit or in the alternative an order of the Court granting occupancy pursuant to the lease of February 23, 1984 for the Plaintiff.

Record at pgs. 2-3.

Before trial, on February 7, 1985, Hanover tendered in writing an offer of real estate to Anderson. It stated:

OFFER OF REAL ESTATE TO PLAINTIFFS

COMES NOW the defendant Hanover Logansport, Inc. and Spatz & Company, by counsel, and pursuant to Trial Rule 68 of the Indiana Rules of Procedure hereby tenders to the plaintiff Robert C. Anderson, Inc. the premises leased to Plaintiff Robert C. Anderson, Inc. on February 23, 1984, pursuant to the terms and conditions of said lease attached to the plaintiff's complaint as Exhibit "A."

Record at p. 134.

Anderson accepted in writing the offer of real estate on February 18, 1985. The acceptance stated:

CONDITIONAL ACCEPTANCE OF OFFER OF REAL ESTATE

COMES NOW the Plaintiff, ROBERT C. ANDERSON, INC., and pursuant to T.R. 68 hereby accepts the offer of real estate to Plaintiff, subject to the conditions set forth in said lease being that Plaintiff shall first obtain the approval of the Indiana Alcohol Beverage Commission to transfer a liquor license to the leased premises and approval of the location of the leased premises for operation of a packaged liquor store.

THEREFORE, Plaintiff accepts the offer of real estate on conditions set forth above which conditions shall remain in effect for a period of ninety (90) days after HANOVER LOGANSPORT, INC. and SPATZ & COMPANY present to the Court and to the Plaintiff evidence that the real estate subject to this offer is not encumbered by any existing leasehold interest.

FURTHER, the offer is only accepted for purposes of mitigation of damages and not in settlement of damages arising to Plaintiff caused by Defendants' breach of contract.

Record at pgs. 154-55.

On March 29, 1985, Hanover filed a request for the clerk of the St. Joseph Superior Court to enter judgment "in accordance with the acceptance by plaintiff of defendants' offer of real estate attached hereto as Exhibit "A" previously received on February 20, 1985." (Record at pgs. 152-53.) And, finally, on April 11, 1985, both parties filed an agreed entry stating that "the judgment as stipulated to by the Defendants herein should be recorded of record in the judgment record book of the County of St. Joseph." (Record at p. 158.) ¹ Anderson took possession of the premises within one week of July 1, 1985. ² On September 12, 1985, Hanover filed a motion to dismiss; it was denied by the trial court.

It is well settled that a complaint may not be dismissed for failure to state a claim upon which relief may be granted ³ unless it appears to a certainty on the face of the complaint that the complaining party is not entitled to any relief. Paul v. Metropolitan School District of Lawrence Township (1983), Ind.App., 455 N.E.2d 411, 412. In ruling on a motion to dismiss for failure to state a claim, the lower court is required to view the complaint in a light most favorable to the non-moving party and with every intendment in his favor. Id. The court may only look to the complaint, and well-pleaded material must be taken as admitted. Id. The basic purpose of a T.R. 12(B)(6) motion to dismiss is to test the legal sufficiency of the complaint to state a redressable claim. Thus, the motion is properly utilized to test the legal sufficiency of the complaint; or stated differently, to test the law of the claim, not the facts that support it. Id.

Hanover makes the following argument:

1. The complaint seeks specific performance of the lease or in the alternative money damages for loss of profits over the term of the lease.

2. Hanover made an offer of real estate pursuant to T.R. 68 consistent with one of the alternatives--specific performance--in the complaint.

3. Anderson accepted the offer.

4. Under T.R. 68, the clerk is required to enter judgment.

5. Anderson took possession of the real estate.

6. By accepting the offer of real estate and taking possession of the premises, Anderson chose its remedy and is now barred by law from continuing the litigation.

Anderson argues that (1) an offer of judgment under T.R. 68 may be in part or in whole; and (2) both Hanover and the trial court were on notice that the offer of judgment did not address and dispose of the whole of its claim. Anderson points to that portion of its acceptance which states: "... Further, the offer is only accepted for purposes of mitigation of damages and not in settlement of damages arising to Plaintiff caused by Defendants' breach of contract." In its brief, Anderson states: "The acceptance of said offer specifically states that the lease between the parties would be as contracted, subject to the conditions in the lease, but that the Plaintiff did not waive damages for breach of contract which arose due to the failure of Defendant to honor its contract between the date the offer was signed and the date the Court entered an Order approving the settlment [sic] as to possession." (Emphasis added.) ⁴

Thus, we address the following issue: Whether, by law, a plaintiff, who accepts an offer of judgment which conforms to one of the alternative prayers for relief contained in his complaint, may then seek additional damages arising from the same cause of action.

There are no Indiana cases that address whether an entry of judgment under T.R. 68 can be a partial judgment. In the absence of State law, the Court looks to federal decisions for guidance in interpreting our rules of procedure which are similar to the Federal Rules of Civil Procedure. ⁵ Jackson v. Russell (1986), Ind.App., 491 N.E.2d 1017, 1018. However, the federal courts are split as to whether a consent judgment operates as a bar to subsequent litigation. ⁶

Therefore, we will look to the rationale behind these decisions and T.R. 68 itself to determine our disposition of the case. ⁷ A consent judgment has a dual aspect. It represents an agreement between the parties settling the underlying dispute and providing for the entry of judgment in a pending or contemplated action. See James, Consent Judgments as Collateral Estoppel, 108 U.Pa.L.Rev. 173, 175 (1959). It also represents the entry of such a judgment by a court--with all that this means in the way of committing the force of society to implement the...