Lake County Title Co. v. Root Enterprises, Inc.

Citation339 N.E.2d 103,167 Ind.App. 559
Decision Date31 December 1975
Docket NumberNo. 3--274A28,3--274A28
PartiesLAKE COUNTY TITLE COMPANY, a Division of Chicago Title Insurance Company, Appellant-Defendant below, v. ROOT ENTERPRISES, INC., Appellee-Plaintiff below.
CourtCourt of Appeals of Indiana

Edmond J. Leeney, Patrick J. Galvin, Hammond, for appellant; Galvin, Galvin & Leeney, Hammond, of counsel.

Glenn J. Tabor, Duane W. Hartman, Blachly, Tabor, Bozik & Hartman, Valparaiso, for appellee.

STATON, Presiding Judge.

Root Enterprises, Inc. deposited in escrow $35,000.00 with the Lake County Title Company. This deposit was for the construction of a building that Root had agreed to lease to Truck Owners and Operators National Association, Inc. (Toona). The lease agreement provided that Toona was to contract for the construction and pay any construction cost over $35,000.00. Toona's general contractor, Planned Construction, Inc., left the construction site in late May 1969 after a dispute. The building was almost completed, but many subcontractors had not been paid. Root paid various subcontractors more than $20,000.00 in addition to $30,000.00 that had been disbursed to Planned Construction, Inc. out of the escrow account. Root brought this action against the Title Company, since Title Company had made payments out of escrow in violation of the escrow agreement. Root received a judgment for $15,419.04, and the Title Company brings this appeal which raises these issues for our review:

(1) Was a second motion to correct errors required to perfect the Title Company's appeal?

(2) Was the trial court's judgment contrary to law?

(3) Was the evidence sufficient to support the trial court's findings?

Our opinion concludes that the Title Company properly perfected its appeal when it filed a second motion to correct errors. It further concludes that an error of law was made as to part of the judgment rendered by the trial court and that the evidence was not sufficient to support some of the trial court's findings. The trial court's judgment is reversed in part and affirmed in part.

I. Perfecting Appeal

On August 31, 1972, the trial court adopted special findings of fact and conclusions of law when it entered judgment for Root in the sum of $20,394.04. On October 30, 1972, the Title Company timely filed a motion to correct errors. On August 31, 1973, the trial court granted in part the Title Company's motion to correct errors by reducing the original judgment to $15,419.04. This reduction was apparently a credit for $4,975.00 which Title Company as an escrow agent had returned to Root. The August 31, 1973, entry was as follows:

'The Court having heard the arguments of counsel and the Court having examined the briefs submitted by counsel, all in connection with defendant's motion to correct errors, now grants defendant's motion to correct errors in the following particulars, to-wit:

'1. That the original judgment entered herein in the amount of $20,394.04 should be reduced to $15,419.04, and the same is hereby so reduced; and,

'2. That the title of the pleading signed by this Court on August 31, 1972, which reads as follows,

'The Court, at the request of the Defendant, Makes the following Findings of Fact' is hereby stricken and in its place, the following title is inserted:

'Findings of Fact and Conclusions of law;'

and overrules defendant's motion to correct errors in all other respects.

'Judgment accordingly.'

In ruling on Title Company's first motion to correct errors, the trial court entered no new findings of fact or conclusions of law.

On October 24, 1973, Title Company filed a second motion to correct errors addressed to the judgment entered on August 31, 1973. This motion was overruled on November 19, 1973. Title Company filed the praecipe for transcript of the record on November 26, 1973, and filed the record in this Court on February 15, 1974.

Root contends that the praecipe and the record were not timely filed and that the appeal should be dismissed. The question is whether the second motion to correct errors was required. If the second motion was required, then the praecipe and the record were timely filed after the court's ruling on this second motion. If the second motion was not required, then the praecipe and the record were not timely filed after the court's ruling on the first motion to correct errors.

We have examined the cases which purport to guide lawyers in determining when a second motion to correct errors is required to perfect an appeal to this Court. Consistently, the appellate tribunals have dismissed appeals because a second motion to correct errors was not filed. See State v. Deprez (1973), 260 Ind. 413, 296 N.E.2d 120; Davis v. Davis (1974), Ind.App., 306 N.E.2d 377; Wyss v. Wyss (1974), Ind.App., 311 N.E.2d 621; State v. Kushner (1974), Ind.App., 312 N.E.2d 523; Koziol v. Lake County Plan Comm'n (1974), Ind.App., 315 N.E.2d 374; Weber v. Penn-Harris-Madison School Corp. (1974), Ind.App., 317 N.E.2d 811; Hansbrough v. Indiana Revenue Bd. (1975), Ind.App., 326 N.E.2d 599. In each of the above cases, the trial court, in ruling on the first motion to correct errors, either expressly vacated its earlier judgment or made new or additional findings of fact or conclusions of law, and entered a new judgment. It might be contended that the present case is distinguishable from these cases because in the present case the first judgment was not expressly vacated and no new or additional findings of fact or conclusions of law were entered when the judgment was modified.

Nonetheless, in the above cases, the rule is stated more broadly than the facts of each case required. In Davis v. Davis, supra, 306 N.E.2d at 380, the court said:

'(I)f a trial court grants or denies a motion to correct errors which is accompanied by a new entry or judgment consisting of additional findings, amendments, or other alterations of the prior judgment, the party aggrieved thereby must file a motion to correct errors addressed to the new entry which has become the final judgment from which appeal is taken.' (emphasis added). 1

In Weber v. Penn-Harris-Madison School Corp., supra, 317 N.E.2d at 813, the court stated:

'This Court reads Deprez to mean that if the trial court, in ruling on the motion to correct errors, does anything other than simply granting or denying the motion, that ruling becomes a new judgment to which a new motion to correct errors must be directed. Therefore, any amendment of a judgment creates a new judgment which requires a motion to correct errors.' (emphasis added).

In granting in part Title Company's motion to correct errors, the trial court entered a new judgment against Title Company for $15,419.04. The previous judgment for $20,394.04 was no longer of any effect. Title Company filed a second motion to correct errors addressed to the last judgment entered. We conclude that, if the guiding cases are read to mean what they say, Title Company correctly filed a second motion to correct errors. The original judgment was amended, and we have held that 'any amendment of a judgment creates a new judgment which requires a second motion to correct errors.' 2

We conclude that the second motion to correct errors was necessary to perfect this appeal.

II. Escrow Agreement

Root was the owner of certain real estate in Lake County, Indiana. On August 28, 1968, Root, as Lessor, and Truck Owners and Operators National Association, Inc. (Toona), as Lessee, entered into an agreement entitled 'Lease of Land With Building To Be Erected.' Pursuant to this lease agreement, Toona agreed to build a building on Root's land at a cost to Root of $35,000.00. Toona was to absorb any cost in excess of that price. The lease agreement provided that Root was to pay the sum of $35,000.00 to an escrow agent. The Title Company was designated as the escrow agent, and it accepted the duties set out in the lease agreement, which were enumerated as follows:

(A) '(T)he escrow agent shall pay Lessee or designee the following sums at the following times upon the certificate of Lessee:

(1) Ten thousand dollars ($10,000.00) upon the completion of the foundation;

(2) Ten thousand dollars ($10,000.00) upon the completion of the roof;

(3) Ten thousand dollars ($10,000.00) upon substantial completion of the building ready for occupancy;

(4) The balance of five thousand dollars ($5,000.00) upon full and final completion of the building and presentation to the escrow agent of an executed release of liens or copies of receipts from all contractors showing payment in full for the finished construction.'

(B) 'The escrow agent shall obtain partial waiver of lien agreements on each pay out as provided for above.'

(C) 'At the time of the first pay out, the lessee shall furnish an affidavit showing all of the contractors hired for the building program and the contract price payable to each of them.'

Toona designated Planned Construction, Inc. (PCI) to be in charge of construction of the building, and all payments were to be made to PCI as designee. Title Company, as escrow agent, issued checks as follows:

$10,000.00 to PCI on January 20, 1969

$10,000.00 to PCI on March 21, 1969

$10,000.00 to PCI on May 20, 1969

$4,975.00 to Root on September 16, 1969, upon Root's demand. (This amount represented the balance of $5,000.00 less a $25.00 escrow fee retained by Lake County Title Co.)

Title Company issued the first three checks to PCI totaling $30,000.00 without ever having received a Lessee's certificate and without ever having received a signed affidavit showing all contractors and the contract price payable to each. 3 Title Company issued the first and second checks without having received any partial or final lien waivers. When Title Company issued the third check, only the following lien waivers had been received:

(1) Larry Child Excavating--final waiver dated 3/13/69;

(2) Andy's Sheet Metal Co.--final waiver dated 5/8/69;

(...

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