Pinkowski v. Calumet Tp. of Lake County, 45A04-0601-CV-13.
| Decision Date | 21 August 2006 |
| Docket Number | No. 45A04-0601-CV-13.,45A04-0601-CV-13. |
| Citation | 852 N.E.2d 971 |
| Court | Indiana Appellate Court |
| Parties | Max PINKOWSKI and Edward Bernstein d/b/a E & M Realty and Eleanor Pinkowski, Appellants-Defendants, v. CALUMET TOWNSHIP OF LAKE COUNTY, Indiana, Appellee-Plaintiff. |
David Paul Allen, Hammond, IN, Attorney for Appellants.
Dock McDowell, Jr., McDowell Law Firm Merrillville, IN, Attorney for Appellee.
This appeal involves certain improved real estate in Gary, commonly known as 1900 West 41st Avenue, that was used as a facility for the township trustee. Appellants-defendants Max Pinkowski and Edward Bernstein, d/b/a E & M Realty, and Eleanor Pinkowski (collectively, the Lessors), appeal from the trial court's grant of summary judgment in favor of appellee-plaintiff Calumet Township of Lake County, Indiana (the Township). Specifically, the Lessors contend that granting summary judgment and specific performance in favor of the Township was error because the designated evidence established that the Township failed to properly exercise the option to purchase the property that was set forth in the parties' lease agreement (Agreement) and the subsequently executed Option contract (Option). In essence, the Lessors maintain that because the option to purchase the property had expired before the Township exercised it, its motion for summary judgment should have been granted.
Concluding that the trial court properly granted the Township's motion for summary judgment, and determining that the remedy of specific performance was properly ordered in this case, we affirm the judgment and remand this cause to the trial court for further proceedings consistent with this opinion.
The undisputed facts are that in January 1984, the Lessors and the Township executed the Agreement, which was to expire on December 31, 1993. The first rental payment was "due and payable on the 1st day of January, 1984, and a like sum on the 1st day of each month thereafter during the term of this lease, with interest at the rate of ten . . . percent per annum upon each installment after the same becomes due, and with attorney fees in the event of default." Appellant's App. p. 123. Under the Agreement, the Lessors agreed to maintain the exterior portions of the building in good repair, and the Township would not make any alterations or additions to the premises without the Lessors' written consent.
The Agreement was subsequently modified with an Addendum on August 1, 1984. The Addendum contained provisions for the Township to rent more space that the Lessors had constructed on the premises at their expense in exchange for additional rent. All other provisions and terms of the original Agreement were to remain the same.
Pursuant to the "Remedies of Lessor," the Agreement provided:
If said rent, or any part thereof, shall at any time be in arrears and unpaid, and without any demand being made therefore, or if said lessee or his assigns shall fail to keep and perform any of the covenants, agreements or conditions of this lease, on his part to be kept and performed, and such default is not cured within thirty (30) days after written notice from Lessor setting forth the nature of such default, . . . it shall be lawful for Lessor, his heirs or assigns without notice or process of law, to enter into said premises, and again have, repossess and enjoy the same as if this lease had not been made, and thereupon this lease and everything herein contained on the part of said Lessor to be done and performed shall cease, terminate and be utterly void, all at the election of Lessor; without prejudice, however, to the right of the Lessor to recover from said Lessee, or assigns, all rent due up to the time of such entry. Failure on the part of Lessor to avail himself of any right or remedy hereunder shall not constitute a waiver thereof as to any future default or breach by Lessee or assigns of the Lessee.
Appellant's App. p. 126-27 (emphasis supplied). Thereafter, on June 8, 1995, the parties agreed to, and executed, a ten-year "Lease Renewal and Modification," (Renewal) that was to expire on December 31, 2003. Id. at 434. The Renewal was prepared by the Lessors' legal counsel, David Allen. In relevant part, the Renewal provision stated:
LEASE RENEWAL
In consideration of the [Lease Extension], Lessee does agree to pay rent . . . payable in installments of $6,496.88 per month, the first payment being due and payable on the 1st day of January, 1994, and a like sum on the 1st day of each month thereafter during the term of this lease, with interest at the rate of ten . . . percent per annum upon each installment after the same becomes due, and with attorney fees in the event of default.
Past Capital Improvements. Lessor hereby approves and ratifies all capital improvements made to the premises by Lessee through the date of Lessor's execution of this Lease Renewal and Modification.
Remodeling and Future Capital Improvements. Lessor hereby approves and ratifies any past remodeling (including installation of interior partitions) and stipulates that Lessee may perform future remodeling (including installation of interior partitions) without prior notice to or consent from Lessor.
Lessor hereby approves the submitted plans for the addition of a vehicle garage and for the expansion of paved parking by approximately 11,000 square feet. Lessee agrees that such additions or improvements shall be at the sole expense of Lessee and that Lessee shall be entitled to no lien, — equitable or otherwise — for the cost or value of such additions or improvements. Lessee is solely responsible for the clearing of trees and shrubs, grading, drainage, and fill necessary to the paved parking expansion. Lessee further agrees that maintenance and repair of the vehicle garage, including its exterior portions, shall be the sole responsibility of Lessee at Lessee's expense.
. . .
As to any remodeling, additions, or improvements performed by Lessee, Lessee must use plans, materials, and workmanship such as not to damage or commit waste upon the premises.
Id. at 130-31 (emphasis added).
On July 19, 1995, the Lessors executed an option to purchase the property in favor of the Township. The Option was captioned at the top of the first page of an addendum to the Agreement and read as follows: "Re: Real Estate Lease of January 1984 and Addendum of August 1984 for 41st Ave. Multipurpose Center." Id. at 132. The text of the Option provided as follows:
In consideration of the renewal and modification of the captioned Real Estate Lease, Lessee is awarded an option to purchase upon the terms stated. If the Lease, as renewed and modified, is still in effect as of November 1, 2003 and if Lessee is not in default or in arrears on any payments due hereunder, then Lessee may — by giving notice in writing to Lessor between November 1, 2003 and November 30, 2003 (inclusive) — purchase the real estate for cash at a fixed price of . . . $200,000. For purposes of this option, notice is deemed given when mailed to the address to which monthly rent is then sent.
Upon exercise of the Option to Purchase, closing would be scheduled for the earliest mutually convenient date during the month of January, 2004. Rent would be pro-rated to date of closing . . . .
Beginning in January 2002, the Township never paid the rent on the first day of each month. In fact, the Lessors routinely "billed" the Township for the amount due, and the rent was eventually paid on an average of approximately eight days late each month. Appellant's Br. p. 51-52. In November 2003, the Township did not pay rent on November 1, but on November 3, Mary Elgin, a trustee for the Township, sent a letter to Allen that provided, in pertinent part, as follows:
Calumet Township proposes to enter into negotiations leading to the possible purchase of the property located at 1900 West 41st Avenue in Gary . . . . This proposition is being directed to you in conformance with the "Option to Purchase" clause of the Addendum to Lease Renewal and Modification signed by my predecessor on June 8, 1995, which stipulates, in part: "If the Lease, as renewed and modified, is still in effect as of November 1, 2003, and if Lessee is not in default or in arrears on any payments due hereunder, the Lessee may — by giving notice in writing to Lessor between November 1, 2003 and November 30, 2003 (inclusive) — purchase the real estate for cash . . ." Please reply as soon as possible so that we may conclude this matter in a timely manner.
Id. at 134 (emphasis added). Allen responded on Friday, November 7, 2003, stating that:
I regard that letter as a proposal to negotiate a "possible purchase" of the multi-purpose center. I do not regard the letter as an unconditional exercise of the Option to Purchase granted in 1995 as a part of the lease Renewal. There are no negotiable terms to the Option to Purchase, which calls for a cash purchase price of $200,000, payable at a January closing. Unless I have misread your letter, the Township is not proposing to proceed on those terms. If it is your intent to exercise the Option to Purchase according to its terms, I need some additional notice to that effect by November 30, 2003.
Id. at 135 (emphases added). In a letter dated November 24, 2003, McDowell sent additional correspondence to Allen, which provided as follows:
On behalf of the Calumet Township of Lake County, Indiana, and in my capacity as Township attorney, notice is hereby given that:
1. The Lease between the Calumet Township of Lake County, Indiana (`LESSEE') AND Max Pinkowski and Edward Bernstein d/b/a E & M Realty (`LESSORS') is currently in effect and was in effect as of November 1, 2003.
2. The Calumet Township of Lake County, Indiana is not in default or in arrears on any payments due on or concerning the Lease;
3. The effective date of this notice is November 24, 2003;
4. Notice is herewith given...
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