Jackson v. Blanchard

• Decision Date: 27 October 1992
• Docket Number: No. 85A04-9202-CV-36,85A04-9202-CV-36
• Citation: 601 N.E.2d 411
• Parties: Ronald JACKSON and Willa Jackson, Appellant (Plaintiffs Below), v. Robert R. BLANCHARD, Helen M. Blanchard, Maynard L. Shellhamer, and Philip Schlemmer, Appellee (Defendants Below).
• Court: Indiana Appellate Court

Page 411

601 N.E.2d 411

Ronald JACKSON and Willa Jackson, Appellant (Plaintiffs Below), v. Robert R. BLANCHARD, Helen M. Blanchard, Maynard L Shellhamer, and Philip Schlemmer, Appellee (Defendants Below).

No. 85A04-9202-CV-36.

Court of Appeals of Indiana Fourth District.

Oct. 27, 1992.

Joseph W. Eddingfield, Wabash, for appellants, Ronald Jackson and Willa Jackson.

Elden E. Stoops, Jr., Daggett Schlitt & Stoops, P.C., for appellees, Robert R. Blanchard & Helen M. Blanchard.

Donald R. Metz, Tiede, Metz & Downs, Schlemmer & Shellhammer, Wabash, for appellees, Maynard L. Shellhammer and Philip Schlemmer.

MILLER, Judge.

In November of 1988, Ronald and Willa Jackson purchased the Corner Cupboard Restaurant from Phil Schlemmer and Maynard L. Shellhammer, who had recently become the latest in a series of assignees under a sales contract for the purchase of the restaurant executed between persons not parties to this action and the original owners, Bob and Helen Blanchard. After the sale, the Jacksons discovered that: (1) a certain well on the restaurant property, which all the parties assumed was operable, was in fact "plugged" and unable to supply water; (2) two other landowners were hooked into the restaurant's septic discharge line (which apparently led to frequent clogging); (3) the outflow of the septic system was illegally dumping into an open ditch; and (4) several underground petroleum storage tanks were buried on the restaurant property.

The Jacksons brought suit against both the Blanchards and Schlemmer and Shellhammer claiming fraud and, in the alternative, mutual mistake. The trial court, however, granted summary judgment to Schlemmer and Shellhammer, finding that there were no mutual mistakes of fact. The trial court next concluded that because there was no privity of contract between the Blanchards and the Jacksons, the Blanchards were entitled to summary judgment on Jackson's claim of fraud.

We affirm.

FACTS AND PROCEDURAL HISTORY

The Blanchards were the owners of the Corner Cupboard Restaurant, located in Wabash County, Indiana. In 1985, the Blanchards sold their restaurant on contract. After nearly three years and the substitution of various purchasers to the sales contract, Schlemmer and Shellhammer became the new assignees under the contract and took over operations of the Corner Cupboard.

In November of 1988, Schlemmer and Shellhammer sold the Corner Cupboard to the Jacksons. ¹ Prior to finalizing the sale, Jackson and Schlemmer discussed a variety of matters, including the septic system and a certain well located on the restaurant property. Schlemmer told Jackson that, according to what he had been told, there was a workable well located on the property, but that neither he nor the previous owners before him had ever used it; instead, they had always purchased their water from the filling station across the street. R. at 210. Schlemmer also told Jackson that the septic system had backed up on occasion, but that, to the best of his knowledge, this problem had been fixed. R. at 240. Aside from these brief discussions, there were no other discussions between Jackson and Schlemmer about the well or the septic system. In addition, the Jacksons did not conduct an independent inspection of the well or the septic system.

It was not until the closing that the Jacksons first met the Blanchards, whose sole purpose for being there was to give the Jacksons a warranty deed to the restaurant. Prior to executing the deed, Jackson and Blanchard discussed the well.

Blanchard explained to Jackson that there was a working well on the property, but that neither he nor Schlemmer and Shellhammer had ever used it. Essentially, Blanchard simply told Jackson what he had already been told by Schlemmer--that none of the previous owners had utilized the well and had instead purchased their water from the neighboring gas station. R. at 218.

Not long after the sale, the Jacksons discovered that an inspection of the premises might have been in order. First, after attempting to supply the restaurant with water from the well, Jackson realized that it was plugged and that his only recourse was to drill a new well. Next, after experiencing frequent problems with the septic system, Jackson discovered not only that two other landowners were hooked into the septic discharge line, but that the discharge line was illegally dumping into a lake, thus (according to a letter from the county health department), subjecting him to penalties of up to $25,000 per day. Finally, after the pavement of his parking lot started buckling, Jackson further discovered that a previous owner had buried numerous underground petroleum storage tanks throughout the restaurant property.

Feeling that they had been served a raw deal, the Jacksons filed suit against both the Blanchards and Schlemmer and Shellhammer, alleging that they had knowingly misrepresented the condition of the restaurant. In the alternative, the Jacksons sought rescission of the assignment contract from Schlemmer and Shellhammer based on mutual mistake of fact. In June, 1991, Schlemmer and Shellhammer moved for summary judgment. The trial court held a hearing on their motion on August 30, 1991, ² at which time the Blanchards, pursuant to Ind. Trial Rule 56(B), made an oral motion for summary judgment. After hearing argument by all parties, the trial court requested the parties to submit briefs detailing their contentions and took the matter under advisement. On October 9, 1991, the trial court entered the following order:

The Court having previously taken this cause under advisement and having heard argument of the parties, the Court now grants Judgment in favor of the Defendant Schlemmer and Shellhammer and finds that no genuine issue of material fact exists and that they are entitled to summary judgment as a matter of law.

The Court further considers the matters submitted herein with regard to the Defendant's Blanchard and finds that no privity of contract existed between the Plaintiffs herein and the Defendants Blanchard and that they are also entitled to Summary Judgment as a matter of law.

R. at 272.

DECISION

The Jacksons argue that genuine issues of material fact existed which should have prevented the trial court's grant of summary judgment against their claims of mutual mistake and fraud. On an appeal from the grant of summary judgment, we apply the same standard applicable in the trial court. Malachowski v. Bank One, Indianapolis (1992), Ind., 590 N.E.2d 559, 562. Before engaging in what would be our usual, somewhat mechanistic recitation of the standard of review for summary judgments, we must first point out recent amendments to T.R. 56 which significantly limit the scope of the record we, as the reviewing court, may consider when determining the propriety of summary judgment in a given case.

Prior to the 1991 amendments, a movant for summary judgment only needed to state that his motion was supported by "the pleadings, depositions, answers to interrogatories, admissions and affidavits," and then leave it to the trial court to canvass the record in order to determine if: (1) there were no issues of material fact; and (2) the movant was entitled to judgment as a matter of law. Further, when reviewing such determinations, it was common practice for this court to engage in a sweeping search of the entire record in assessing the propriety of the trial court's decision. See, e.g., Kolczynski v. Maxton Motors, Inc. (1989), Ind.App., 538 N.E.2d 275, 276, trans. denied ("summary judgment will be affirmed if it is sustainable upon any theory supported by the record").

However, on January 1, 1991, amendments to T.R. 56 significantly changed the evidentiary showing required before a moving party is entitled to summary judgment. T.R. 56(C), which sets out the basic formula for summary judgment, now provides:

At the time of filing the motion or response, a party shall designate to the court all parts of pleadings, depositions, answers to interrogatories, admissions, matters of judicial notice, and any other matters on which it relies for purposes of the motion. A party opposing the motion shall also designate to the court each material issue of fact, which that party asserts precludes entry of summary judgment and the evidence relevant thereto.... [T]he court shall make its determination from evidentiary matter designated to the court.

(emphasis added). In addition, T.R. 56(H) was specifically added to further impress upon us, as the reviewing court, the need for the parties to strictly comply with amended T.R. 56(C):

No judgment rendered on the motion shall be reversed on the ground that there is a genuine issue of material fact unless the material fact and the evidence relevant thereto shall have been specifically designated to the trial court.

(emphasis added).

As the 1991 amendments now make clear, we, as the reviewing court, are no longer free to search the entire record in determining the propriety of the trial court's grant of summary judgment. On the contrary, it is only those portions of the record that were specifically designated to the trial court that comprise the entire record for appellate review. The only exception to this is when we are reviewing a grant of summary judgment that had been entered in the trial court before January 1, 1991, the effective date of the 1991 amendments. In such a case, because reviewing courts must apply the same standard that was applicable in the trial courts, see, Malachowski, supra, 590 N.E.2d at 562, it would not be contrary to amended T.R. 56 for the reviewing court to scan the entire record in determining the propriety of the trial court's decision since this was the standard available to the trial court under the then-applicable version of T.R. 56. ³ However, in all other cases, where the trial court makes its determination under amended T.R. 56, we may affirm the trial court's grant of summary judgment using...