One Dupont Centre, LLC v. Dupont Auburn, LLC

• Citation: 819 N.E.2d 507
• Decision Date: 21 December 2004
• Docket Number: No. 02A05-0312-CV-624.,02A05-0312-CV-624.
• Court: Court of Appeals of Indiana
• Parties: ONE DUPONT CENTRE, LLC and Ronald Cohen, Appellants-Plaintiffs, v. DUPONT AUBURN, LLC, Appellee-Defendant.

819 N.E.2d 507

ONE DUPONT CENTRE, LLC and Ronald Cohen, Appellants-Plaintiffs, v. DUPONT AUBURN, LLC, Appellee-Defendant.

No. 02A05-0312-CV-624.

Court of Appeals of Indiana.

December 21, 2004.

Stephen R. Snyder, Randall L. Morgan, Snyder, Birch, Cornwell & Morgan, LLP, Syracuse, IN, Attorneys for Appellants.

Larry L. Barnard, Carson Boxberger LLP, Fort Wayne, IN, Attorney for Appellee.

OPINION

VAIDIK, Judge.

Case Summary

Dr. Ronald Cohen appeals the trial court's denial of his complaint for a permanent injunction arising from a dispute with a neighboring landowner. Cohen purchased land adjacent to a pond to construct a professional building overlooking that pond. The seller explained that the adjacent land would be a common area perpetually. Several years later, the adjacent land was sold, and while the pond was retained, an office building was constructed on the land. Because we find no irrevocable license and that no restrictive covenants barred the development of the land, we affirm.

Facts and Procedural History

Cohen and One Dupont, LLC, ("Cohen") own real estate on the outside ring of a circular drive at a Fort Wayne medical park ("Park") upon which they constructed a building that houses, among other things, Cohen's orthodontics practice. Cohen obtained the land in July 1995 from the St. Joseph Medical Center of Fort Wayne, Inc. ("Hospital") in exchange for an off-site parcel of land that Cohen had previously purchased for the purpose of constructing a building for his orthodontics practice. Before obtaining the land, Cohen negotiated primarily with Bernard Niezer, the Hospital's Vice President of Planning and Business Development and its Chief Operating Officer. Niezer had the responsibility of directing the Park's development and, once development was complete, operating the Park. Cohen, his architect, and Niezer met and discussed the site plan for the Park — including the location of the available lots and the common areas.

A primary consideration in Cohen's ultimate decision to obtain the land was the fact that it was contiguous to one of the Park's common areas, a parcel of land also in the outside ring containing a retention pond ("Pond Parcel"). In fact, the trial court specifically found that Cohen would not have purchased his land if commercial development of the Pond Parcel had been represented to be allowed. The pond largely influenced the building's design. The operatory area of Cohen's practice overlooks it. The walls in that area contain tall, wide windows with all six of Cohen's procedure-chairs facing the windows. Moreover, from a market value standpoint Cohen paid a higher price for his lot in part because of its proximity to the Pond Parcel. Another consideration in Cohen's choosing of his land was the visibility of the building and its sign from Dupont Road, although the building's sign ultimately was not placed where it could be seen from Dupont Road.

Before obtaining the land, Cohen had received information from at least three sources that the Pond Parcel was a common area that was not for sale and would not be developed. First, during negotiations Cohen asked Niezer about purchasing the Pond Parcel. Niezer said that the Pond Parcel was not for sale because it was a common area and would remain so perpetually. Second, the site plan showed that there was to be no development on the Pond Parcel. Third, the Park's development consultants, Sturges, Griffin, Trent & Co.¹, informed Cohen that the Pond Parcel was not for sale and it would not be developed. However, the Exchange Agreement — through which Cohen exchanged his off-site land for the real estate in the Park — did not restrict the right of the Hospital to develop the Pond Parcel.

In June 1995, the Hospital prepared and submitted a Primary Development Plan ("1995 Plan") to the Allen County Plan Commission ("Commission") for the commercial development of the Park real estate. This 1995 Plan sought approval for commercial development and designated common areas of the Park. The 1995 Plan showed that the Pond Parcel was specifically labeled "Common Area A"; however, this Plan was never recorded. On March 7, 1996, the Hospital executed and filed the Declarations of Easements and Restrictive Covenants. On March 12, 1996, the Restrictive Covenants ("1996 Covenants") were recorded in the Allen County Recorder's Office. Two days later, Cohen received a deed from the Hospital that conveyed his land; this deed was recorded March 16, 1996. Thus, Cohen took title to the land subject to the 1996 Covenants, which had been recorded. In July 1998, the Hospital gifted the real estate on the outside ring to the St. Joseph Community Health Foundation ("Foundation"). As part of this conveyance, the Hospital and Cohen executed Amended Easements and Restrictive Covenants ("1998 Covenants"). They were intended to allow for development of the land on the inside of the circular drive; they incorporated by reference the 1995 Plan that defined the land on the outside ring. Before signing, Cohen asked Niezer if the real estate on the outside ring would be modified with the conveyance. Niezer informed Cohen that he was not aware of any changes. The 1998 Covenants were filed and recorded in the Allen County Recorder's Office.

The 1996 Covenants provided in pertinent part:

"Common Area" shall mean and refer to the rights-of-way, roadway easements, retention pond and its allied easements as dedicated by separate instrument currently, by amendment to this agreement, or as dedicated by separate instrument in the future, as well as culverts, median strips, including landscaping, and identification signs located in [the] Park.

Appellants' App. p. 13 (emphasis in original). The 1998 Covenants were substantially similar to the 1996 Covenants, but the 1998 Covenants also provided: "Such dedication shall be effective upon the recording of the instruments referred to hereinabove or upon conveyance of the Association." Id. at 16. The 1996 Covenants also provided, in pertinent part:

To the extent constructed and dedicated in the future or currently existing at the time of the execution of this restrictive covenant, all owners shall have the right to use the Common Area in ... [the Park].... The Developer reserves the right to convey the Common Area to the Association for the benefit of all owners; however, the Developer, or his successor in interest, shall be required to convey the Common Area to the Association no later than the time that the improvements upon all of the Real Estate within [the Park] have been completed.

Id. at 13 (emphasis added). The 1998 Covenants also provided for conveyance of the Common Areas to the Association and similarly provided that the dedication of the common area within the Park would be effective upon any common area being dedicated in a separate instrument or when that land was conveyed to the Association after the execution and recording of the 1998 Covenants. The 1998 Covenants did incorporate by reference the 1995 Plan in the 1998 Covenants' definition of "Out Parcel Real Estate" as follows:

"Out Parcel Real Estate" shall mean those certain lots or parcels of land ... contained within the Real Estate and located around the exterior of the Ring Road as shown on the Development Plan for the [Park], which Out Parcel Real Estate is depicted on the [1995] Site Plan for the [Park] attached hereto ... and incorporated herein by this reference.

Id. at 16-17 (emphasis in original).

Significantly for this case, the 1995 Plan, which did show the Pond Parcel as a common area, was never "dedicated by a separate instrument" as a common area even though the 1995 Plan (showing the Pond Parcel as a common area) was incorporated by reference in the 1998 Covenants under its definition of "Out Parcel Real Estate." Moreover, at no time did any other separate instrument so dedicate the Pond Parcel. Additionally, the Pond Parcel was never conveyed as a common area to the Association. In April or May of 1998, Sturges, Griffin, Trent & Co. told a third party that the Pond Parcel was not available for development. In July or August of that year, Samuel Schenkel of Sturges, Griffin, Trent & Co. assumed the responsibility of overseeing the construction of the final phase of the Park's development and assisting in the brokerage of the lots on the outer ring owned by the Foundation. In late 1998, Mike Carr called on behalf of the Foundation and asked whether the Pond Parcel could be sold; apparently, the Foundation wanted to dispose of all properties on the outer ring in order to use the proceeds for its missions. Schenkel's response was that the Pond Parcel was a good piece of land to be potentially sold.

In the fall of 1998, Cohen learned that the Pond Parcel was potentially to be developed. At a meeting in late fall/early winter of 1998, Cohen viewed a plan that said that the Pond Parcel was available for sale or development. Cohen objected to the development of the Pond Parcel via letter, a copy of which was received by Schenkel. Sturges, Griffin, Trent & Co. placed a brokerage sign on the Pond Parcel and put the Pond Parcel in its marketing materials for the Park. Subsequently, Schenkel, Cohen and the counsel for the Foundation met to discuss the Pond Parcel; at the meeting Cohen explained that the property should not be developed. Schenkel and the Foundation's counsel disagreed and explained that the Foundation had the right to develop the property.

One year after Schenkel began his attempts to sell the Pond Parcel, he received an inquiry from Lowell Griffin — a former principal of Sturges, Griffin, Trent & Co., not involved in developing the Park — about purchasing the Pond Parcel. Griffin was inquiring on behalf of the stockbrokerage firm of Raymond James & Assocs., Inc. ("Raymond James"). Griffin learned in late December 1999 or early January 2000 that Cohen was concerned about the sale of the Pond Parcel. For tax purposes...