Indiana & Michigan Elec. Co. v. Harlan, 1-1285A324
| Citation | 504 N.E.2d 301 |
| Decision Date | 24 February 1987 |
| Docket Number | No. 1-1285A324,1-1285A324 |
| Parties | INDIANA & MICHIGAN ELECTRIC COMPANY, An Indiana Corporation, and Indiana Franklin Realty, Inc., An Indiana Corporation, Defendants-Appellants v. Emma HARLAN, Plaintiff-Appellee. |
| Court | Court of Appeals of Indiana |
Thomas W. Yoder, C. Erik Chickedantz, Livingston, Dildine, Haynie & Yoder, Fort Wayne, John L. Asbury, Rockville, for defendants-appellants.
Max E. Goodwin, Mann, Chaney, Johnson, Goodwin & Williams, Terre Haute, Hanner, Hanner & Hanner, Rockville, for plaintiff-appellee.
Defendant-appellants, Indiana & Michigan Electric Company (I & M) and Indiana Franklin Realty, Inc. (IFR), appeal a judgment, rendered by the Parke Circuit Court without a jury, ordering I & M and IFR to reconvey real estate acquired from plaintiff-appellee, Emma Harlan (Emma), by fraud, and assessing punitive damages.
We affirm.
In special findings of fact and conclusions of law requested by I & M and IFR, the trial court made the following findings, summarized by us. Emma and her husband, James, owned 60 acres of land in Prairie Creek Township, Vigo County, Indiana, located 3 1/2 miles north of I & M's Breed generating plant in Sullivan County, Indiana. I & M and IFR are wholly owned subsidiaries of American Electric Power Company, Inc. (AEP). I & M, an electric utility, has the right to exercise the power of eminent domain. IFR is a real-estate holding company AEP uses to acquire property not presently needed for utility purposes, but which may be needed for utility purposes in the future.
The remainder of the findings, conclusions, and judgment are set out verbatim as follows:
"3. About December 1972, real estate agent Max Miller, acting for I & M and [IFR], contacted James and Emma Harlan at their home to attempt to acquire their property on behalf of [I & M and IFR]. After several discussions with Harlans, they signed, in February 1973, an option for [IFR] to purchase the above-mentioned 40 and 20 acre parcels and another 80 acre parcel. Subsequently, in May 1973, Miller delivered to Harlans, [IFR's] notice of intention to exercise the option, and in October 1973, they signed a deed, prepared by I & M, conveying the 40 acre and 20 acre parcels to [IFR] for $600 per acre.
4. At all times that Miller called on the Harlans until they signed the deed, [I & M] had not adopted any definite plan for the use of the Harlan property for electric generating facilities. [I & M and IFR] apparently wish to acquire many acres in northern Sullivan and southern Vigo Counties, to be held for possible use at some future date. There were no approved drawings for the use of the Harlan property for any specific purpose. Because of the distance of the real estate from the existing Breed Plant it would appear it would be needed only if four or more generating units were constructed at the Breed Plant. There were no plans for the construction of such unit. [I & M and IFR] and their agents would not disclose these facts to the owners of the real estate.
5. Agent Miller told Harlans I & M had definitely decided to construct additional generating facilities in the vicinity of the Breed plant in the near future, and that it was necessary for [I & M and IFR] to acquire property from Harlans for a reservoir to be constructed as part of such facilities. [I & M and IFR] further represented to Harlans that it would be necessary for I & M to acquire the property through the power of eminent 6. [I & M and IFR] concealed from Harlans the fact that [IFR] was a real estate holding company whose purpose in the AEP System was to hold land which was not immediately needed for utility purposes and might never be needed for utility purposes.
domain if Harlans did not voluntarily sell it.
7. Because of the misrepresentation and concealment of the above material facts, Harlans believed they had no real freedom to choose whether to keep or convey their property. They reasonably believed that they would be sued if they did not sell to [I & M and IFR] 'voluntarily', that they would lose their property anyway, and that because of litigation expenses and fees, they would be worse off than if they conveyed by deed.
8. In reliance on [I & M and IFR's] false representations, and because the true facts were concealed, Emma and James Harlan signed the option, and later signed the deed conveying 60 acres to [IFR].
9. In April 1974, after acquiring the Harlan property, I & M publicly announced it would expand the Breed plant by building two 1300 megawatt generating units at the Breed site. A few weeks later, I & M announced the project, known as Project 2601, had been indefinitely postponed. By March 1975, that project had been cancelled entirely. In any event, assuming I & M did briefly intend to build two additional units at Breed, there are no approved design drawings or other records showing that the Harlan property would have been used for that project. On the contrary, the public announcement of the project stated it would be on a 6300 acre site, which would not logically have encompassed the Harlan property in Vigo County, which was part of more than 9000 acres acquired by [I & M and IFR] in Sullivan and Vigo Counties.
10. Since cancellation of 'Project 2601', [I & M] has had no other approved drawings on any specific plan for expansion of the Breed plant.
11. The Harlan property has never, at any time, been used by [I & M] for any public purpose. [IFR] deeded the property to I & M in 1975, and I & M has continued to lease the 40 acre parcel for farming each year and has received the income from the property.
12. I & M now has no definable plan to add generating facilities at Breed or any other location any time in this century, except for the two 1300 megawatt units now under construction at Rockport.
13. I & M has no present or reasonably forseeable need to use the Harlan property for a proper public utility purpose.
14. [I & M and IFR] have not revealed to the public the fact that I & M has no definite plans for the use of the thousands of acres of real estate which it acquired in the vicinity of the Breed Plant in Sullivan and Vigo Counties including the Harlan property. In this litigation [I & M and IFR] have admitted that there is no likelihood of using the real estate for utility purposes in the next twenty years.
15. [I & M and IFR's] use of the threat of eminent domain to acquire Harlans' property for remote or speculative purposes, their concealment of the lack of any commitment to use the land for a public purpose, and their determination to continue to hold land taken under the threat of eminent domain when no public use is contemplated in this century, has been in reckless disregard of the rights of Indiana citizens, including Emma Harlan, and has been willful, malicious and oppressive.
16. [I & M and IFR] acted together throughout the transactions described above.
17. The facts set forth in each of the above findings have been shown by clear and convincing evidence.
18. James Harlan is now deceased, and Emma Harlan has succeeded to his interest in the 60 acres.
19. [Emma] suffered actual injury from [I & M and IFR's] fraudulent conduct in acquiring and retaining her property. Real estate, which by its nature is 20. The public interest requires an award of punitive damages sufficient to punish [I & M and IFR] for their fraudulent, willful, malicious, oppressive and reckless conduct, as shown by the clear and convincing evidence, and to deter them from such conduct in the future.
unique, and which [Emma] did not wish to sell, was taken from her by [I & M and IFR]. After obtaining the deed to the property, [I & M and IFR] rented the cropland back to Harlans for a year or two, but did not honor their written agreement to rent the ground back to Harlans for the nominal sum of $100.00 per year. Then after she suspected she had been defrauded, [Emma], personally and by her retained attorneys, was required to spend a great amount of time and effort because of [I & M and IFR's] conduct, including investigation and research of the relevant facts, legal research, and pursuit of this litigation and its attendant consumption of time and expense, before and at trial. The dollar amount of the actual injury to [Emma] is obviously substantial, but the evidence does not disclose a dollar amount, for which reason the Court determines that compensatory damages of $1.00 should be awarded to [Emma].
1. The law is with the plaintiff, Emma Harlan, and against [I & M and IFR].
2. [I & M and IFR] have acquired and held the Harlan property through fraud.
3. [I & M and IFR] can only hold the deed to the Harlan property in constructive trust for the grantors. Emma Harlan having succeeded to the interest of James Harlan in the property, it is held in constructive trust for her.
4. Judgment for compensatory and punitive damages should be entered against [I & M and IFR] jointly.
JUDGMENT[I & M and IFR] are hereby ordered to convey to Emma Harlan the 40 acre parcel and the 20 acre parcel which Harlans conveyed to [IFR].
The Court hereby assesses compensatory damages in the amount of One Dollar ($1.00) and punitive damages in the amount of Fifty Thousand Dollars ($50,000.00) against [I & M and IFR], jointly, and in favor of [Emma]...."
Record, vol. IV at 409-13.
I & M and IFR present approximately 50 arguments and subarguments in which they attack each and every finding and conclusion entered by the trial court. Twenty-eight of those arguments claim that the various findings either are not supported by the evidence or are contrary to the evidence. We shall restate the issues as follows:
I. Sufficiency of the evidence.
Point I, argument A(i), (ii), (iii), (iv) and (v) all attack Finding 4; (vi) attacks Finding 5; (vii) attacks Finding 6.
Point I, argument C(i) and (ii) attacks Finding 7; (...
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