Johnson v. Rutoskey

• Decision Date: 27 December 1984
• Docket Number: No. 2-1083A383,2-1083A383
• Citation: 472 N.E.2d 620
• Parties: Judith Ann JOHNSON, Appellant (Defendant Below), v. Joseph RUTOSKEY and Anna Rutoskey, Appellees (Plaintiffs Below).
• Court: Indiana Appellate Court

Page 620

472 N.E.2d 620

Judith Ann JOHNSON, Appellant (Defendant Below), v. Joseph RUTOSKEY and Anna Rutoskey, Appellees (Plaintiffs Below).

No. 2-1083A383.

Court of Appeals of Indiana Second District.

Dec. 27, 1984.

Frank E. Spencer, Indianapolis, for appellant.

Bruce M. Pennamped, Forbes, Kias & Pennamped, P.C., Indianapolis, for appellees.

SULLIVAN, Judge.

This is an appeal from summary judgment in favor of Joseph and Anna Rutoskey upon an action by the Rutoskeys to quiet title to certain real estate which was the subject of a land sale contract between the Rutoskeys (the vendors), and Judith Ann Johnson (the purchaser), appellant herein.

Johnson alleges the following errors upon appeal:

(1) That she was denied effective assistance of counsel, and as a result thereof, was denied a fair trial in violation of the 14th Amendment of the United States Constitution;

(2) That the trial court erred and abused its discretion by failing to consider her affidavit which was appended to her motion to correct errors;

(3) That the trial court erred in granting summary judgment against Johnson for forfeiture rather than requiring foreclosure; and

(4) That the trial court erred by awarding, in addition to forfeiture, damages for the delinquent installments, unpaid taxes, and attorneys fees.

On March 14, 1980, the Rutoskeys and Johnson entered into a contract for the sale of real estate which was to be used for residential purposes. The agreed upon price was $52,000. The contract provided for a $10,000 down payment, with the remaining balance of $42,000 to be paid within twenty-four (24) months from the date of execution bearing interest at a rate of eleven percent (11%) per annum, computed semi-annually. The contract, however, required only that the monthly installments of principal and interest during that 24 month period be in the amount of $425 each. ¹ Under the contract, purchaser was obligated to assume and pay the taxes on the real estate beginning with the installment due and payable May 10, 1980. The contract contained an acceleration clause, permitting the vendors, upon default, to declare the unpaid balance immediately due and payable. In addition, the contract contained a forfeiture provision by which the parties agreed that, upon the commission of any material breach by the purchaser, and unless the purchaser had paid more than $12,000 toward the purchase price, the vendors could, at their option, cancel the contract, take possession of the real estate, and declare a forfeiture.

In July, 1982, ² purchaser defaulted on the contract by failing to make the installment payment then due, or any payment thereafter. In addition she did not pay the real estate taxes which were due and payable in November, 1981 and thereafter, nor did she pay the balance due on the contract within twenty-four (24) months of the execution date, March 14, 1980, nor did purchaser's payments toward the principal balance exceed $12,000.

In September, 1982, the vendors brought suit seeking to quiet title in themselves, and seeking forfeiture, as per the terms of the land contract. In addition, they sought damages for waste. In March, 1983, upon vendors' motion, and after hearing, the trial court entered summary judgment for vendors, cancelling the land contract, and awarding damages to the vendors for the unpaid real estate taxes, the unpaid installments which were owing up to that time, and attorney fees.

There is no dispute concerning the fact of purchaser's default under the terms of the contract. However, the parties do disagree as to the appropriate remedy, i.e., forfeiture as opposed to foreclosure, and as to the propriety of the award of damages and attorney fees.

I. INEFFECTIVE ASSISTANCE OF COUNSEL

Purchaser argues that the representation by her attorney was so wholly inadequate and incompetent as to deny her a fair trial under the 14th and 6th Amendments of the United States Constitution, and to warrant reversal of the summary judgment so that she might proceed to trial.

Purchaser has confused her remedies. Ineffective assistance of counsel may be asserted only upon the appeal of a criminal case in which the defendant, who has a right to counsel under the 6th and 14th Amendments, asserts that the ineffective assistance of his trial counsel constituted denial of a fair trial. Ineffective assistance of counsel is not a basis for reversal in civil cases of this nature. ³ See Weenig v. Wood (2d Dist.1976) 169 Ind.App. 413, 349 N.E.2d 235, 243. Purchaser's proper recourse upon this allegation, assuming arguendo that it has any merit, lies in a separate civil action.

II.

TRIAL COURT'S FAILURE TO CONSIDER AFFIDAVIT APPENDED TO

MOTION TO CORRECT ERROR

Purchaser contends that the trial court erred and abused its discretion by failing or refusing, upon her motion to correct error, to consider the information set forth in her affidavit, which related to the value of improvements she had made to the real estate. She maintains that this information affects her equitable rights in the real estate, and that because her attorney negligently failed to establish this evidence before the trial court upon the motion for summary judgment, she should be permitted to present the evidence belatedly in her motion to correct error.

Generally error may not be predicated upon evidence which was not before the trial court at the time of summary judgment. Wisconics Engineering, Inc. v. Fisher (2d Dist.1984) Ind.App., 466 N.E.2d 745; Kahf v. Charleston South Apartments (2d Dist.1984) Ind.App., 461 N.E.2d 723. An exception exists in the case of newly discovered evidence, which may, by affidavit, be asserted upon the motion to correct error if the proponent could not, with reasonable diligence, have earlier discovered and produced such evidence. Trial Rules 59(A)(6) and 59(H)(1). However, the evidence contained in purchaser's affidavit is not newly discovered evidence, nor does she so argue. Therefore, there are no grounds upon which the trial court could properly have considered her affidavit. The trial court committed no error by refusing to consider the alleged improvements to the real estate which were asserted upon the motion to correct error.

III. FORFEITURE V. FORECLOSURE

Purchaser maintains that the trial court erred in granting summary judgment for forfeiture rather than foreclosure, and urges that there is a material factual issue as to the amount of equity she has in the property, such as would preclude forfeiture under Skendzel v. Marshall (1973) 261 Ind. 226, 301 N.E.2d 641, cert. denied, 415 U.S. 921, 94 S.Ct. 1421, 39 L.Ed.2d 476.

Vendors contend that the forfeiture provision in the contract should be enforced because it is the product of an express and freely entered into agreement between themselves and purchaser, set forth in clear and unambiguous language, and that to refuse to enforce the forfeiture clause would constitute a redrafting of the parties' contractual agreement. Furthermore, vendors argue that because the contract permits forfeiture only if the amount of principal paid does not exceed $12,000, the clause should be construed as (1) a liquidated damages provision, or (2) a mutually agreed upon "equity threshold" such that payment of less than $12,000 in principal constitutes "minimal equity," which, under Skendzel v. Marshall, supra, permits forfeiture.

The contract's forfeiture provision states:

"In the event Buyer deserts or abandons the real estate or commits any other willful breach of this Contract which materially diminishes the security intended to be given to Seller under and by virtue of this Contract, then, it is expressly agreed by Buyer that unless Buyer shall have paid more than Twelve Thousand and no/100 Dollars ($12,000.00) of the purchase price, Seller may, at Seller's option, cancel this Contract and take possession of the real estate and remove Buyer therefrom, without any demand and to the full extent permitted by applicable law. In the event of Seller's cancellation upon such default by Buyer, all rights and demands of Buyer under this Contract and in and to the real estate shall cease and terminate and Buyer shall have no further right, title or interest, legal or equitable, in and to the real estate and Seller shall have the right to retain all amounts paid by Buyer toward the purchase price as an agreed payment for Buyer's possession of the real estate prior to such default. Such retention shall not bar Seller's right to recover damages for unlawful detention of the real estate after default, for any failure to pay taxes or insurance, for failure to maintain the real estate at any time, for waste committed thereon or for any other damages suffered by Seller, including reasonable attorney's fees incurred by Seller in enforcing any right hereunder or in removing any encumbrance on the real estate made or suffered by Buyer. All of Seller's remedies shall be cumulative and not exclusive. Failure of Seller to exercise any remedy at any time shall not operate as a waiver of the right of Seller to exercise any remedy for the same or any subsequent default at any time thereafter." Record at 14.

In Skendzel v. Marshall, supra, 301 N.E.2d 641, our supreme court held that in all but a few specific instances, the proper relief to be granted a vendor upon the vendee's material breach of a land sale contract was not a forfeiture but a judgment of foreclosure pursuant to Trial Rule 69(C) and the mortgage foreclosure statute, I.C. 32-8-16-1. The court outlined the limited situations in which forfeiture would be justified:

"This is not to suggest that a forfeiture is an inappropriate remedy for the breach of all land contracts. In the case of an abandoning, absconding vendee, forfeiture is a logical and equitable remedy. Forfeiture would also be appropriate where the vendee has paid a minimal amount on the contract at the time of default and seeks to retain possession while the vendor is paying...