Indianapolis Downs, LLC v. Herr

Decision Date20 September 2005
Docket NumberNo. 49A02-0501-CV-71.,49A02-0501-CV-71.
Citation834 N.E.2d 699
PartiesINDIANAPOLIS DOWNS, LLC, d/b/a Indiana Downs, Appellant-Defendant, v. Richard S. HERR and A. Geraldine Herr As Trustees of the Richard S. Herr and A. Geraldine Herr Trust, Appellees-Plaintiffs.
CourtIndiana Supreme Court

Mary F. Schmid, James W. Brauer, Sonia S. Chen, Stewart & Irwin, P.C., Indianapolis, for Appellant.

Gene R. Leeuw, John M. Mead, Leeuw Oberlies & Campbell, P.C., Indianapolis, for Appellees.


ROBB, Judge.

Indianapolis Downs, LLC, doing business as Indiana Downs ("Indianapolis Downs") appeals from the trial court's denial of its motion for summary judgment in an action instituted against it by Richard S. Herr and A. Geraldine Herr, as trustees of the Richard S. Herr and A. Geraldine Herr Trust (the "Trust"). We affirm.


Indianapolis Downs raises one issue for our review, which we restate as whether the trial court properly denied summary judgment to Indianapolis Downs on the Trust's Complaint.

Facts and Procedural History

The Trust owns land, including a lake, on the southwest corner of Interstate 74 and Fairland Road in Shelby County, Indiana. For many years prior to 2002, the Fairland Recreation Club, Inc. ("FRC"), of which the Herrs are the sole shareholders, operated a recreation center on that land known as Fairland Recreation Center. Fairland Recreation Center provided swimming, fishing, camping, and other seasonal outdoor entertainment areas. In 2002, Indianapolis Downs constructed a horse racing facility at the northwest corner of that intersection.

Indianapolis Downs' racing facility was to be built in a flood plain. In order to raise the soil level, two deep ponds were dug on the property and the soil therefrom was "de-watered" and spread over the property. The water that was removed from the soil was initially pumped toward Interstate 74, where it traveled to the Trust's land and significantly increased the level of Fairland Lake. After complaints were made, Indianapolis Downs diverted the water away from the Trust's land, causing the depletion of the lake.

In May of 2002, FRC filed a lawsuit against Indianapolis Downs, seeking damages from Indianapolis Downs' allegedly intentional conduct in first pumping water into Fairland Lake and then diverting water from the Lake. Specifically, FRC alleged that as a result of Indianapolis Downs' intentional actions, Fairland Recreation Center was forced to delay and ultimately cancel its beach season and was substantially and irreparably harmed. FRC also alleged that Indianapolis Downs was unjustly enriched by its conduct; however, the trial court did not allow FRC to present the issue of unjust enrichment to the jury. The jury returned a verdict for FRC awarding compensatory damages of $26,800 and punitive damages of $120,000. Neither party appealed the verdict.

Thereafter, the Trust instituted this action, alleging damage to their real estate and seeking damages for trespass and unjust enrichment. Indianapolis Downs filed a motion for summary judgment, alleging that the Trust's complaint was barred by collateral estoppel and res judicata. The trial court denied Indianapolis Downs' motion,1 and Indianapolis Downs thereafter properly initiated this interlocutory appeal. Additional facts will be provided as necessary.

Discussion and Decision
I. Summary Judgment Standard of Review

On appeal from the grant or denial of a motion for summary judgment, our standard of review is the same as that of the trial court: summary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Am. Home Assurance Co. v. Allen, 814 N.E.2d 662, 666 (Ind.Ct.App.2004). A party seeking summary judgment bears the burden of making a prima facie showing that there are no genuine issues of material fact and that the party is entitled to judgment as a matter of law. Tack's Steel Corp. v. ARC Const. Co., Inc., 821 N.E.2d 883, 888 (Ind.Ct.App.2005). Once the moving party satisfies this burden through evidence designated to the trial court pursuant to Trial Rule 56, the non-moving party may not rest on its pleadings, but must designate specific facts demonstrating the existence of a genuine issue for trial. Id. Neither the trial court nor the reviewing court may look beyond the evidence specifically designated to the trial court. Best Homes, Inc. v. Rainwater, 714 N.E.2d 702, 705 (Ind.Ct.App.1999). The court must accept as true those facts alleged by the nonmoving party, construe the evidence in favor of the nonmovant, and resolve all doubts against the moving party. Shambaugh & Son, Inc. v. Carlisle, 763 N.E.2d 459, 461 (Ind.2002).

On appeal, the trial court's order granting or denying a motion for summary judgment is cloaked with a presumption of validity. Sizemore v. Erie Ins. Exch., 789 N.E.2d 1037, 1038 (Ind.Ct.App.2003). A party appealing from an order granting summary judgment has the burden of persuading us that the decision was erroneous. Id. at 1038-39.

II. Res Judicata

The doctrine of res judicata prevents the repetitious litigation of disputes that are essentially the same. French v. French, 821 N.E.2d 891, 896 (Ind.Ct.App.2005). The principle of res judicata is divided into two branches: claim preclusion and issue preclusion, also referred to as collateral estoppel. Id. Indianapolis Downs' appeal raises both claim preclusion and collateral estoppel issues.

A. Claim Preclusion

Claim preclusion applies where a final judgment on the merits has been rendered and acts as a complete bar to a subsequent action on the same issue or claim between those parties and their privies. Id. When claim preclusion applies, all matters that were or might have been litigated are deemed conclusively decided by the judgment in the prior action. Dawson v. Estate of Ott, 796 N.E.2d 1190, 1195 (Ind.Ct.App.2003). The following four requirements must be satisfied for a claim to be precluded under the doctrine of res judicata: (1) the former judgment must have been rendered by a court of competent jurisdiction; (2) the former judgment must have been rendered on the merits; (3) the matter now in issue was, or could have been, determined in the prior action; and (4) the controversy adjudicated in the former action must have been between the parties to the present suit or their privies. Small v. Centocor, Inc., 731 N.E.2d 22, 26 (Ind.Ct.App.2000), trans. denied. In determining whether claim preclusion should apply, it is helpful to inquire whether identical evidence will support the issues involved in both actions. Richter v. Asbestos Insulating & Roofing, 790 N.E.2d 1000, 1003 (Ind.Ct.App.2003), trans. denied.

"A party is not allowed to split a cause of action, pursuing it in a piecemeal fashion and subjecting a defendant to needless multiple suits." Indiana State Highway Comm'n v. Speidel, 181 Ind.App. 448, 392 N.E.2d 1172, 1175 (1979). However, two or more separate causes of action may arise from the same occurrence, and in such case a judgment on one action does not bar suit on the second. Gorski v. Deering, 465 N.E.2d 759, 762 (Ind.Ct.App.1984).

In Gorski, a vehicle driven by Deering collided with a truck driven by Gorski in which Gorski's son and daughter were passengers. Gorski sued Deering for injuries sustained by his daughter in the accident. A jury returned a verdict in Deering's favor. Gorski thereafter sued Deering for his own injuries, lost wages, and property damage. The trial court granted Deering's motion for summary judgment on the basis of res judicata. On appeal, we reversed, noting that the first action sought damages for the daughter's injuries and the second for Gorski's injuries. Although both claims arose from the same incident, each required proof of injury and damages the other did not require, and therefore the second action was not barred by claim preclusion. Id.

Here, we have a similar situation. Although both the claims raised in the FRC lawsuit and the claims made in this lawsuit arose from the same incidents, they are separate claims: the first for damage to FRC's business and the second for damage to the Trust's real estate. Each claim requires proof that the other does not. Moreover, although the Herrs are involved in both FRC and the Trust, FRC and the Trust are two separate entities with separate, if complementary, interests. FRC, having no legal interest in the real estate, could not pursue a claim for damage to that real estate in its action. Certainly, FRC and the Trust could have joined as plaintiffs in one action and consolidated their claims, but they were not required to do so. See Ind. Trial Rule 20(A)(1) ("All persons may join in one [1] action as plaintiffs if they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of the...

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