JPMCC 2006–CIBC14 Eads Parkway, LLC v. DBL Axel, LLC

• Decision Date: 02 January 2013
• Docket Number: No. 15A01–1201–PL–23.,15A01–1201–PL–23.
• Citation: 977 N.E.2d 354
• Parties: JPMCC 2006–CIBC14 EADS PARKWAY, LLC, Appellant, v. DBL AXEL, LLC, David Richman, Lynette Gridley, as Trustee of the Hartunian Family TRUST (u/d/t dated November 8, 1989), Black Diamond Realty, LLC, Gary Hartunian, and Tyson Korkmaz, Appellees.
• Court: Indiana Appellate Court

977 N.E.2d 354

JPMCC 2006–CIBC14 EADS PARKWAY, LLC, Appellant,

v.DBL AXEL, LLC, David Richman, Lynette Gridley, as Trustee of the Hartunian Family TRUST (u/d/t dated November 8, 1989), Black Diamond Realty, LLC, Gary Hartunian, and Tyson Korkmaz, Appellees.

No. 15A01–1201–PL–23.

Court of Appeals of Indiana.

Aug. 15, 2012.

Rehearing Denied Jan. 2, 2013.

Dawn R. Rosemond, Lisa D. Updike, Barnes & Thornburg LLP, Fort Wayne, IN, Alan K. Mills, Barnes & Thornburg LLP, Indianapolis, IN, Attorneys for Appellant.

Stephen J. Peters, Rory O'Bryan, David I. Rubin, Harrison & Moberly, LLP, Indianapolis, IN, Michael J. Alerding, Scott A. Kreider, Alerding Castor Hewitt, LLP, Indianapolis, IN, Attorneys for Appellees.

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

JPMCC 2006–CIBC14 Eads Parkway, LLC (“JPMCC”) appeals the trial court's partial denial of its motion for summary judgment and partial grant of summary judgment in favor of DBL Axel, LLC (“DBL”); David Richman; Lynette Gridley, as Trustee of the Hartunian Family Trust; Black Diamond Realty, LLC (“Black Diamond”); Gary Hartunian; and Tyson Korkmaz.¹ JPMCC raises the following three issues for our review:

1. Whether the trial court erred when it denied JPMCC's motion for summary judgment on DBL's complaint for declaratory judgment;

2. Whether the trial court erred when it denied JPMCC's motion for summary judgment and granted DBL's motion for summary judgment on JPMCC's various tort claims against DBL; and

3. Whether the trial court erred when it granted summary judgment for Richman and the Hartunian Family Trust on JPMCC's claim that they breached their guaranty.

We affirm in part, reverse in part, and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

DBL is a single-asset company. In 2005, Richman held a ten-percent membership interest in DBL and the Hartunian Family Trust held a ninety-percent membership interest. We have discussed the relationship between DBL and JPMCC as follows:

DBL received a loan which was secured by a Mortgage and Security Agreement (the “Mortgage”) in certain real property in Dearborn County commonly known as Dearborn Plaza in Lawrenceburg, Indiana (the “Property”), which was eventually assigned to [JPMCC ²]. In March 2008, the City filed a Complaint for the Appropriation of Real Estate to acquire a portion of the Property and two temporary right-of-way easements [“the condemnation action”]. DBL defaulted on the loan in August 2008.

On March 6, 2009, DBL and the City entered into the Settlement Agreement [in a separate civil action brought by DBL against the City] in which the City agreed to pay DBL $1,725,600 in installments of $1,005,600 immediately, $360,000 on or before January 5, 2010, and $360,000 on or before January 5, 2011, as nuisance damages [the “Settlement Agreement” or “the nuisance award”]. On March 9, 2009, DBL and the City filed Agreed Findings and Judgment (the “Agreed Judgment”) on the City's Complaint for the Appropriation of Real Estate, and the City obtained the portions of the Property and easements it sought and agreed to pay $224,600 to DBL and [JPMCC] [“the condemnation award”]. Also in March 2009, DBL negotiated a check from the City for $1,005,600. On April 30, 2009, DBL filed a complaint [against JPMCC] requesting a declaratory judgment as to how the $224,600 would be applied to its mortgage....

DBL Axel, LLC v. LaSalle Bank Nat'l Ass'n, 946 N.E.2d 1173, 1174 (Ind.Ct.App.2011). As collateral, Richman and the Hartunian Family Trust signed a limited guaranty of the Mortgage and other loan documents (and are hereafter referred to collectively as “the Guarantors”).³ Richman eventually assigned his membership interest in DBL to Korkmaz.

During the course of DBL's declaratory judgment action, the court appointed a receiver to take possession of and to manage the Property. JPMCC learned of the $1,725,600 nuisance award DBL had received from the City from the receiver.

On June 1, 2009, JPMCC filed its Answer, Counterclaim against DBL, and Third–Party Complaint against the Guarantors, which it amended on September 24, 2010. JPMCC alleged the following ten counts in its amended counterclaim and third-party complaint:

• Count I: breach of contract by DBL based on its failure to pay the amounts due and owing on the loan, including DBL's failure to pay over to JPMCC the $224,600 condemnation award and the $1,725,600 nuisance award.

• Count II: theft and conversion by DBL when DBL refused to immediately remit to JPMCC the condemnation award and the nuisance award.

• Count III: constructive fraud by DBL when it did not immediately inform JPMCC of the nuisance award.

• Count IV: actual fraud by DBL when it concealed the existence of the nuisance award from JPMCC.

• Count V: fraudulent conveyance by DBL when it disbursed the first two installments ⁴ of the City's nuisance payments to its members, attorneys, and a lower priority lien holder on the Property, Black Diamond.

• Count VI: criminal mischief when DBL disbursed the first two installments of the City's nuisance payments without JPMCC's consent.

• Count VII: breach of guaranty against the Guarantors.

• Count VIII: a request for replevin of the Property.

• Count IX: a request for foreclosure on the Property.

• Count X: a request for the immediate appointment of a receiver.

Appellees' App. at 57–74.⁵

On January 31, 2011, the parties filed cross-motions for summary judgment. On May 12, the trial court held a hearing on the parties' numerous pending motions, including the summary judgment requests. On December 16, the trial court entered the following final judgment: judgment for JPMCC and against DBL on JPMCC's Counts I, VIII, and IX (the “Breach of Contract Claims”); judgment for DBL and against JPMCC on JPMCC's Counts II, III, IV, V, VI, and X (the “Tort Claims”); judgment for the Guarantors and against JPMCC on JPMCC's breach of guaranty claims (the “Breach of Guaranty Claims”); and judgment against JPMCC on JPMCC's request for summary judgment on DBL's complaint for declaratory judgment. This appeal ensued.

DISCUSSION AND DECISION

Standard of Review

JPMCC appeals the trial court's denial of its motion for summary judgment on DBL's declaratory judgment action, on the Tort Claims JPMCC asserted against DBL, and on the Breach of Guaranty Claims it asserted against the Guarantors.⁶ Our standard of review for summary judgment appeals is well established:

When reviewing a grant of summary judgment, our standard of review is the same as that of the trial court. Considering only those facts that the parties designated to the trial court, we must determine whether there is a “genuine issue as to any material fact” and whether “the moving party is entitled to a judgment a matter of law.” In answering these questions, the reviewing court construes all factual inferences in the non-moving party's favor and resolves all doubts as to the existence of a material issue against the moving party. The moving party bears the burden of making a prima facie showing that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law; and once the movant satisfies the burden, the burden then shifts to the non-moving party to designate and produce evidence of facts showing the existence of a genuine issue of material fact.

Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269–70 (Ind.2009) (citations omitted). The party appealing from a summary judgment decision has the burden of persuading this court that the grant or denial of summary judgment was erroneous.

Knoebel v. Clark County Superior Court No. 1, 901 N.E.2d 529, 531–32 (Ind.Ct.App.2009). Where the facts are undisputed and the issue presented is a pure question of law, we review the matter de novo. Crum v. City of Terre Haute ex rel. Dep't of Redev., 812 N.E.2d 164, 166 (Ind.Ct.App.2004).

Further, much of this appeal is based on the interpretation of written contracts. Our standard of review for interpreting the parties' written contracts is de novo. Gerstbauer v. Styers, 898 N.E.2d 369, 379 (Ind.Ct.App.2008). The goal of contract interpretation is to ascertain and enforce the parties' intent as manifested in their contracts. See Gregg v. Cooper, 812 N.E.2d 210, 215 (Ind.Ct.App.2004), trans. denied. To that end, we construe a contract as a whole and consider all of the provisions of the contract, not just individual words, phrases, or paragraphs. See id. An ambiguity exists where a provision is susceptible to more than one interpretation and reasonable persons would differ as to its meaning. Id. However, when a contract is clear and unambiguous, the language must be given its plain meaning. See, e.g., Tippecanoe Valley Sch. Corp. v. Landis, 698 N.E.2d 1218, 1221 (Ind.Ct.App.1998), trans. denied.

Issue One: The Declaratory Judgment Action

JPMCC first challenges the trial court's denial of its request for summary judgment on DBL's complaint for declaratory judgment. In its complaint, DBL requested that the trial court interpret the parties' loan documents to determine the amount of the $224,600 condemnation award that DBL had to remit to JPMCC and how any such amount would be applied to the loan.

This issue is controlled by the following paragraphs of the Mortgage agreement:

Section 1.1. PROPERTY MORTGAGED. Borrower does hereby irrevocably, unconditionally and absolutely mortgage, grant, bargain, sell, pledge, enfeoff, assign, warrant, transfer and convey to Lender (with power of sale), and does hereby grant a first priority security to Lender in, the following property, rights, interests and estates now owned, or hereafter acquired, by Borrower ...:

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(f) Condemnation Awards. All awards or payments, including interest thereon, which may heretofore and hereafter be made with respect to the Property, whether from the exercise of the right of eminent domain ..., or for a change of grade, or for any other injury to or decrease in the value of the Property[.]

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