Mayfair Investment Corp. v. Bryant

Decision Date08 March 2010
Docket NumberNo. 49A02-0805-CV-398.,49A02-0805-CV-398.
PartiesMAYFAIR INVESTMENT CORP., a Delaware corporation, and IB 17, LLC, Appellants-Plaintiffs, v. Wallace Patterson BRYANT, et al., Appellees-Defendants.
CourtIndiana Appellate Court

Michael J. Lewinski, Abigail Cella, Ice Miller LLP, Indianapolis, IN, Attorneys for Appellants.

Marvin Mitchell, Mitchell Hurst Jacobs & Dick, LLP, Indianapolis, IN, Attorney for Appellees.

OPINION

BROWN, Judge.

Mayfair Investment Corp. and IB 17, LLC1 ("Mayfair" and "Mansur," respectively, and collectively, "Appellants") appeal the trial court's judgment ordering physical partition of property owned by Mayfair and by certain descendants of John and Evaline Holliday (collectively, the "Holliday Heirs"2). Appellants raise one issue, which we revise and restate as whether the trial court's judgment ordering physical partition of the property was clearly erroneous. We affirm.

The relevant facts follow. On April 24, 1919, John and Evaline Holliday, as lessors, entered into a ninety-nine year ground lease with L. Strauss & Co. for a parcel of land in downtown Indianapolis, Marion County, Indiana, ("Tract I") described as follows:

Beginning at the Northwest corner of [Lot One (1) in Square Fifty-five (55) in the City of Indianapolis], thence running South on and along the East line of Illinois Street, forty-five (45) feet to a point, thence East parallel with Market Street, eighty (80) feet to a point, thence North forty-five (45) feet to the South line of Market Street, thence West along the South line of Market Street to the place of beginning.

Appellants' Appendix at 487. Tract I is composed of approximately 3,600 square feet and is one of three tracts (individually identified as, "Tract I," "Tract II," and "Tract III") that underlie the Illinois Building, a ten story office building which was built in 1926 (Tracts I, II, III and the Illinois Building collectively, the "Unified Property"). In 2018, at the expiration of the ground leases,3 the Illinois Building will revert to the owners/lessors of the three tracts. Tract I comprises 28.07 percent of the total area underlying the Illinois Building; Tracts II and III comprise the other 71.93 percent, or 9,225 of the total 12,825 square feet. Mayfair is the owner of Tracts II and III.

Beginning in 1991, Mansur began attempts at acquiring the Holliday Heirs' interests in Tract I. On September 30, 1998, Nancy Root, another descendant of John and Evaline Holliday, sold her one-sixth interest in Tract I to Mansur.4 At some point, Mayfair acquired this one-sixth interest from Mansur.

On January 20, 2006, Mayfair filed a "Petition to Compel Partition of Real Property." Id. at 22. Mayfair's complaint sought "partition by sale as a parcel of real estate" for all of Tract I. Id. at 39. On October 17, 2006, the trial court granted Mayfair's motion to amend their complaint and add Mansur as a party plaintiff. On August 7, 2007, the trial court granted Appellants' motion for partial summary judgment and ordered that "Mayfair is entitled to an order of partition." Id. at 58. However, the trial court left the issue of whether to partition the parcel by sale or by physical partition "until the parties request a hearing to resolve the issues or enter a stipulation." Id. at 59. On December 20, 2007, the Appellants' complaint was again amended, adding other parties who were subsequently dismissed.

On February 29, 2008, a hearing was held on the issue. The Appellants called two witnesses who each testified to the effect that "if [Mayfair] were to be awarded . . . six hundred square feet[5] . . . as compared to receiving the sale proceeds of [Mayfair's] percentage interest in [Tract I], that there would be less value received via the division of . . . this six hundred square foot piece as compared to those sale proceeds." Transcript at 77; see also id. at 184. The Appellants' first witness, Julie Christensen, who was an employee of Mansur, testified regarding the potential damage to Mayfair were the court to order physical partition. Specifically, Christensen testified:

One thing is that there would be significantly more investors and buyers in the market that would be interested in a thirty-six hundred square foot tract just because of the useability [sic] of it, the ability to put a number of uses on that tract. I, and brokers that I know in the market, as I understand it, would find it very difficult to use a six hundred square foot tract in downtown Indianapolis. Uses would be very limited.

Id. at 78. Christensen also testified that "[t]he six hundred feet, even if adjacent to [Tracts II and III], still wind up with a parcel in total . . . that is not a square, rectangular shaped parcel. That adds additional complexity which, in my mind, is of lesser value as well." Id. at 85. Christensen also testified that while she believed that there would be "some damages," she could not give a value to that damage amount. Id. at 90-91.

The Appellants also called Jeff Henry, a realtor with thirty-five years of experience. Henry testified that he had not "seen a lot of demand through the years" for six hundred square foot parcels of land, and that "[t]here's just not that many users or that much demand for six hundred square feet. It's very difficult, particularly if we're talking about taking a piece of ground and building a building. It's just not very practical." Id. at 179-180. Henry also testified that he had not made a determination as to the amount of damages that would be incurred by Mayfair by a physical partition of Tract I.

The Holliday Heirs called as a witness Michael Lady, who works as the managing director of a real estate appraisal and consulting firm. Lady testified that Tract I "could be partitioned without any damage" to Mayfair or the Holliday Heirs. Id. at 220. Lady testified that the owners of Tract I would not incur any harm or damage were it to be physically partitioned because "there wouldn't be a change in the highest and best use of the land if it were divided from what it is today. Highest and best use is that use which is going to bring the highest return if the property sold." Id. at 226. Regarding the actual six hundred square feet that might be physically partitioned from Tract I, Lady testified that because the highest and best use will be in the parcel's "assemblage value,"6 and that therefore "[t]hey're valuing it on a square foot basis," the actual six hundred feet partitioned out of the Holliday Heirs' portion Tract I is irrelevant.7 Id. at 245. Lady testified, as to the usability of a potential six hundred foot parcel, as follows:

Well, it'd still be subject to a lease, they would still get one-sixth of the income, they would still get the right of one-sixth of the reversion of the building, and it would still—if anybody wanted to put this together at the end of the lease term and create a redevelopment site— it would still be a key part of the redevelopment site.

Id. at 237.

Lady also testified that if the court ordered a sale of Tract I, and if that sale had the characteristics of a "forced sale," Lady believed that the "one-sixth interest of a forced sale would probably be less than the one-sixth strip." Id. at 221. Lady testified that "typically a forced sale would indicate that [a piece of property is] going to sell for less than market value" because a court-ordered sale does not involve a willing seller. Id. at 234. On cross examination, Lady testified that the danger of a court-ordered sale could be minimized as long as the seller had the right to set a minimum bid price.

Evidence was also presented on the values of the various land interests. Evidence was presented that an appraisal for the date of January 24, 2006, determined the fair market value of Tract I to be $670,000. The appraisal also determined the Unified Property's "hypothetical fee simple market value, assuming the subject site and current improvements are unencumbered by the existing lease" to be $6,070,000. Lady testified that this $6,070,000 figure represented the Unified Property's value should the ground lease be terminated. Lady described the valuation procedure for arriving at the $6,070,000 figure as follows:

[T]he valuation procedures that were in play during the appraisal, which are the correct and proper procedures of valuation, have already discounted this value tremendously. They've discounted it because there's a below market lease that has ten years remaining on the lease, or twelve point two five years, and they've discounted it because it's a partial interest underneath a bigger building with different ownerships. And so they've discounted it down by using a discount rate of eleven percent and then taking forty percent off the reversion value. And that's about as pretty high as discounting as you can get. . . . [Y]ou wouldn't discount it any more than that. . . .

Id. at 236-237. The undiscounted appraisal value for the Unified Property was $11,643,000.8

On April 4, 2008, the trial court ordered physical partition of Tract I. The trial court attached a diagram depicting Mayfair's six hundred square foot portion of Tract I which adjoined Tract II. The Holliday Heirs remained the owners of the remaining 3,000 square feet of Tract I. Each party held their new parcel "free and clear of any claims" of the other party. Appellants' Appendix at 17. The trial court entered the following findings and conclusions, among others:

11. Mayfair would suffer no damage by reason of an in kind division because the value of Mayfair's 16-2/3% tenant-in-common interest is equal to the value of a part of [Tract I] equal to 16-2/3% of the land area provided it adjoins [Tract II], and it is also equal to 16-2/3% of the market value of all of [Tract I].

12. The highest and best use of [Tract I], or any part of [Tract I], is assemblage and the assemblage value applies to the entire [Tract I] as well as to any subparts. In fact, the assemblage...

To continue reading

Request your trial
5 cases
  • Reed v. White
    • United States
    • Court of Appeals of Indiana
    • March 22, 2021
    ...The complaint is sufficient under Indiana Code Section 34-13-3-5(c) to require White and Chaney to respond thereto. See Guillen , 922 N.E.2d at 123 (reversing dismissal of offender's complaint alleging prison officials negligently or deliberately violated both the Indiana Constitution and p......
  • Johnston v. Johnston
    • United States
    • Court of Appeals of Indiana
    • July 13, 2010
    ...the express provisions of the.Page 8partition statutes in order to accomplish an equitable division." Mayfair Inv. Corp. v. Bryant, 922 N.E.2d 123, 131 (Ind. Ct. App. 2010) (quoting Culley v. McFadden Lake Corp., 674 N.E.2d 208, 212 (Ind. Ct. App. 1996)). Donald and Terry argue that the tri......
  • Christman v. Christman, 85A02-0910-CV-1014
    • United States
    • Court of Appeals of Indiana
    • July 23, 2010
    ...and equitable rights of the parties are within the cognizance and protecting power of the courts. Mayfair Investment Corp. v. Bryant, 922 N.E.2d 123, 130-31 (Ind. Ct. App. 2010). The ultimate goal of any partition proceeding is that it be equitable to the parties involved. Id. at 131. This ......
  • Missig v. State Farm Fire & Cas. Co.
    • United States
    • Court of Appeals of Indiana
    • September 17, 2013
    ...... Mayfair Investment Corp. v. Bryant, 922 N.E.2d 123, 131 ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT