Miami Sand & Gravel, LLC v. Nance
| Decision Date | 21 June 2006 |
| Docket Number | No. 06A01-0512-CV-552.,06A01-0512-CV-552. |
| Citation | 849 N.E.2d 671 |
| Parties | MIAMI SAND & GRAVEL, LLC, Appellant-Respondent, v. John E. NANCE & Georgia G. Nance, Appellees-Petitioners. |
| Court | Indiana Appellate Court |
Ralph E. Sipes, Busby Austin Cooper & Farr, Anderson, IN, Attorney for Appellant.
Martin E. Risacher, Church, Church, Hittle & Antrim, Noblesville, IN, Attorney for Appellees.
Appellant-respondent Miami Sand & Gravel, LLC (Miami), appeals from the trial court's grant of summary judgment in favor of appellees-respondents John and Georgia Nance (collectively, the Nances). In particular, Miami argues that the trial court should have dismissed the Nances' petition and complaint because a substantially similar matter was pending in Madison County at the time the Nances filed the instant petition and complaint. Additionally, Miami contends that the trial court erred in concluding that Miami's failure to perform its obligations pursuant to a lease was not the result of force majeure. Concluding that the trial court herein properly exercised jurisdiction over this matter, and finding no other error, we affirm the judgment of the trial court.
These parties have been before this court once before. The background facts, as described in our previous opinion, are as follows:
John and Georgia own land in Madison County, on which is located a gravel pit. Over the years, John and Georgia periodically had attempted to turn the pit into a profitable mining operation. In 1998, Nick and Tonia formed N & N Sand and Gravel ("N & N") for this purpose; John and Georgia loaned Nick and Tonia substantial funds to carry out the operation. However, N & N failed to earn a profit in 1999 and 2000. In 2000, Nick met Mike Pettijohn. The two agreed to form Miami, a new company created to mine gravel from the pit. At the time, Nick grossly exaggerated to Pettijohn the amount of gravel he had been excavating from the pit. Miami was formed as an LLC, with one member being N & N and the other being Central Indiana Sand & Gravel, LLC ("Central Indiana"), a company formed by Pettijohn and two of his relatives.
John and Georgia executed a twenty-year lease giving Miami the exclusive right to mine the gravel pit. The lease required Miami to pay royalties to John and Georgia for minerals sold from the premises at the rate of 20 cents per ton. The lease also provided that the weight of materials was to be measured by scales installed by Miami on the premises. Nick and Tonia were employees of Miami and ran day-to-day operations at the gravel pit.
The Miami business venture quickly deteriorated. From the outset, Miami's operations were being financed almost entirely by cash contributions from Central Indiana and Pettijohn's other businesses, with little or no contribution from N & N. Nick and Pettijohn also had disagreements about whether to focus on excavating and selling gravel or dirt. The Department of Natural Resources temporarily shut down Miami's operations because it lacked a mining permit. Immediately after obtaining the permit, the Mining Safety and Health Administration shut down operations because of safety violations. There were frequent disputes between Tonia, who handled "on-the-scene" paperwork related to the gravel pit's finances, and Susie Pettijohn, who did the same for Central Indiana and Miami, relating to Tonia's poor record keeping.
* * *
On July 27, John, Georgia, Pettijohn, Susie, and two attorneys met to discuss Miami and the overall mining operations. At that meeting, the parties discussed the difficulties Miami had had in installing operational scales at the gravel pit by which materials removed from the pit could be weighed and royalties owed to John and Georgia calculated on that basis, as provided by the mining lease. John and Georgia had been accepting royalty payments from Miami on a pertruckload and estimated weight basis and agreed to continue doing so until scales could be installed. John and Georgia also said that they wanted Miami to continue mining the pit without Nick's involvement. However, by July 31, John and Georgia indicated they had changed their minds and wanted Miami to cease operations and be held in breach of the lease for failing to install scales at the pit.
The antagonism among the parties continued. On August 7, 2001, Pettijohn and his brother went to the pit. The Pettijohns were working at the pit when Nick and an unidentified individual drove onto the property behind some weeds, fired a gunshot, then left the property. Later, after the scales had been installed at the pit, UPS delivered weigh tickets for the scales to John and Georgia's house instead of to the pit office 200 yards away. Tonia was there at the time and advised Georgia to return the tickets to UPS and have them re-sent to the pit, rather than simply walking them to the pit herself.
On August 10, 2001, Miami filed a multi-count complaint against N & N, Nick, Tonia, John, and Georgia. It alleged inter alia that the parties were jointly and severally liable to Miami for conversion and trespass. It also sought to enjoin the parties from interfering with Miami's operation of the gravel pit. In their answer filed separately from Nick and Tonia, John and Georgia denied any wrongdoing. They also filed a cross-complaint, alleging that Miami was in breach of the mining lease. Nick and Tonia raised several cross-claims of their own alleging fraud and conversion by Pettijohn and Miami, and seeking dissolution of Miami and a restoration of assets to N & N.
Nance v. Miami Sand & Gravel, LLC, 825 N.E.2d 826, 831-33 (Ind.Ct.App.2005), trans. denied (Nance I). The trial court found John, Georgia, Nick, and Tonia2 jointly and severally liable for conversion and trespass, awarding damages of approximately $60,000 and costs and attorney fees of approximately $77,000. It also found that all four of the Nances were in contempt of court and imposed a $20,000 fine, for which they were jointly and severally liable. Finally, it entered a permanent injunction preventing John and Georgia from, among other things, doing any act "asserting title to or right to possession of the leasehold property" during the lease's period, which the trial court extended by two years. Id. at 833. John and Georgia appealed.
On appeal, we concluded that there was insufficient evidence supporting a conclusion that John and Georgia were jointly and severally liable for conversion and trespass, and reversed the judgment against them in full except for interest that had accrued on $524 that they had temporarily withheld from—but ultimately returned to—Miami. We also found that there was no evidence establishing that any alleged contemptuous behavior on the part of John and Georgia caused actual damage to Miami and reversed the $20,000 contempt fine. Additionally, we reduced the award of costs to Miami to $104. Finally, we found that the permanent injunction was overly broad and remanded the case to the trial court with instructions to rewrite certain provisions of the injunction.
Between the spring of 2003 and May 14, 2005, Miami ceased all mining operations on the leased premises. The Nances provided affidavits from two individuals whose residences are adjacent to the leased premises, and who attested that they had observed no activity on the leased premises during that period of time.
On January 5, 2005, the Nances filed a verified petition for declaratory judgment and complaint to terminate lease against Miami in the Boone Circuit Court. Among other things, the Nances contend that as the result of a provision in the lease, Miami's cessation of activity between spring of 2003 and May 2005 enables the Nances to terminate the lease. Miami filed a motion to transfer and consolidate with Nance I, which was still pending on remand in Madison County at the time the Nances filed the instant petition and complaint. It also filed a motion to dismiss pursuant to Indiana Trial Rules 12(B)(1) and 12(B)(8). The trial court denied Miami's motions and proceeded to consider the Nances' petition and complaint. Miami raised the following substantive arguments and affirmative defenses: (1) the trial court should have dismissed the Nances' petition and complaint because of the pending matter in Nance I; (2) Miami's cessation of mining activity does not trigger lease termination because it was the result of force majeure stemming from the Nances' refusal to remove certain equipment from the leased premises and because Miami's employees were afraid to come to the pit because they worried they would be caught in gunfire.
On June 6, 2005, the Nances filed a motion for summary judgment and a designation of evidentiary materials. Miami responded by filing Pettijohn's affidavit with the clerk of the court. Neither party filed memoranda in support of their respective positions. The Nances filed a motion to strike Pettijohn's affidavit because it was not based on personal knowledge and contained improper conclusory statements. Although the trial court never specifically ruled on this motion, it later indicated its reluctance to grant summary judgment based upon a "procedural violation.. . ." Tr. p. 21. Following a hearing, the trial court granted the Nances' motion for summary judgment on October 28, 2005, concluding, in pertinent part, as follows:
7. Therefore, the evidence designated in this matter is undisputed that the Respondent failed to perform mining, processing or marketing operation on the Leased Premises for a period of more than 180 consecutive days, that the Respondent failed to cure this default within 60 days after Petitioners provided written notice of the default and that Respondent's failure to perform under the Mining Lease was not prevented by any circumstances or conditions beyond its control.
Because the designated evidentiary matter shows that there is no material issue as to any material fact regarding Respondent's breach...
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