Standard Land Corp. of Indiana v. Bogardus

• Decision Date: 04 December 1972
• Docket Number: No. 1071A195,1071A195
• Citation: 289 N.E.2d 803,154 Ind.App. 283
• Parties: STANDARD LAND CORPORATION OF INDIANA and Pine-Val, Inc., Defendants-Appellants, v. Ralph BOGARDUS et al., Plaintiffs-Appellees, Macke Homes, Inc. et al., Defendants-Appellees.
• Court: Indiana Appellate Court

Page 803

289 N.E.2d 803

154 Ind.App. 283

STANDARD LAND CORPORATION OF INDIANA and Pine-Val, Inc. Defendants-Appellants, v. Ralph BOGARDUS et al., Plaintiffs-Appellees Macke Homes, Inc. et al., Defendants-Appellees.

No. 1071A195.

Court of Appeals of Indiana, First District.

Dec. 4, 1972.

Rehearing Denied Jan. 29, 1973.

David B. Keller and John R. Fleck, Fort Wayne, Keller, Fleck & Holleran, Fort Wayne, of counsel, for defendants-appellants

Mentor Kraus, William F. McNagny, Barrett, Barrett & McNagny, Fort Wayne, for appellees Bogardus, and others.

William D. Swift, Fort Wayne, Phil M. McNagny, Jr., Gates, Gates & McNagny, Columbia City, for appellee Macke.

Paul F. Nieter, John M. Whitmore, Jr., Fort Wayne, for appellee Pine Valley Golf Club, Inc.

LOWDERMILK, Judge.

This appeal comes to us from a finding and judgment adverse to the defendants-appellants, Standard Land Corporation of Indiana and Pine-Val, Inc.

The plaintiffs-appellees have brought action against appellants for declaratory judgment and for injunction and damages.

Defendant-appellee Macke Homes, Inc. filed its cross-complaint for damages.

Answers and replies were filed; a pretrial was had and orders entered.

The cause was tried by the court without the intervention of a jury, after which the trial judge, on April 30, 1971, entered his memorandum opinion of essential evidentiary facts upon which special findings of fact and conclusions of law are predicated.

The transcript in this cause is bound in six volumes, which is cited here to show the voluminous character of the pleadings and exhibits with which the trial court was confronted and from which he made his said memorandum opinion. We have studied the briefs and deduced that the trial judge has done an exemplary job of setting out essential evidentiary facts. We shall, therefore, omit a brief statement of the facts in this cause as they are most adequately set out in the trial judge's Special Findings of Fact on which he entered his Conclusions of Law and which are set out in this opinion.

The court, after rendering special findings of fact, together with conclusions of law thereon, entered judgment, all of which are as follows, to-wit:

'SPECIAL FINDINGS OF FACT

1. Beginning in late spring or early summer of 1964, extensive negotiations were carried on between Standard Land Corporation of Indiana, (hereinafter referred to as 'Standard'), and Macke Homes, Inc. (hereinafter referred to as 'Macke'), concerning the sale by Standard to Macke of approximately 360 acres of farm land located several miles north of Fort Wayne, Indiana, and fronting on what was then U.S. Highway 27. On July 31, 1964, a letter of intent was signed by both Standard and Macke relating to such transaction. On December 4, 1964, the Defendant 2. The sale between Standard and Macke involved a new land development concept for the Fort Wayne area and embodied the establishment of a planned community to be built around an eighteen hole golf course. The idea had originated with Sam Fletcher, who was then President and chief spokesman for Standard, which, by the contract of December 4, 1964, had agreed to construct and maintain the golf course in satisfactory operating condition during the term of said contract. Originally there were to be 730 lots in the addition, which number was later reduced to 642.

Standard, as Seller, and the Defendant, Macke, as Buyer, [154 Ind.App. 289] entered into a conditional sales contract for the sale of said land, a copy of which contract was admitted into evidence was Plaintiffs' Exhibit 1, and which is made a part of these findings of fact and incorporated herein by reference. The construction and application of numerical paragraph 5 of said contract is the pith of this lawsuit.

3. During the early negotiations between Standard and Macke, all legal matters for both parties to such negotiations were being handled by Edward J. Moppert, Jr., who was the son-in-law of Sam Fletcher, officer and director of Standard, as well as an attorney. After several months of negotiations, Macke employed Robert Haller, attorney of Fort Wayne, Indiana, to represent Macke in the final negotiations and purchase of said real estate. Haller's active representation of Macke began in late September, 1964. At that time, Macke furnished Haller with a preliminary draft of an agreement prepared by Moppert which served as the outline for later drafts. Subsequently, there were numerous meetings between Standard and Macke and their attorneys, throughout which Haller served principally as scrivener. During the negotiations about one of the provisions in said paragraph 5 of said contract which pertained to the possible future sale of the golf course by Standard to the residents in the proposed addition and members of the golf club, Fletcher stated that he wanted the residents and members to have the land comprising the golf course at its original cost. Fletcher further stated that the sum of $300.00 per lot was to be paid into an escrow fund which was to be used to pay for the club house, swimming pool, parking lot, etc. Language designed and intended to accomplish this end was embodied in controversial paragraph 5 of the contract.

4. The contract of sale as originally drafted contained a provision that Standard would not sell the golf course prior to the sale of 90% of the developed lots. On the day the contract was signed, being December 4, 1964, this provision was deleted at the insistence of Standard and the parties thereupon agreed, understood, intended and incorporated in said paragraph 5 the provision that Standard would 'maintain or cause to be maintained the golf course in stisfactory operating condition during the term of the contract.'

5. In about March of 1965, during the development of the addition and within the purview of portions of the December 4, 1964, contract, Macke had Haller prepare another agreement for the purpose of setisfying the provision in said contract which stated, 'Buyer hereunder and the Golf Course Corporation shall enter into a written contract governing their relationship and such contract shall include operating rules for the Club, all of which shall be incorporated herein by reference.' The March, 1965, agreement, being Macke Exhibit 9, would appear to have been an attempt to satisfy said condition in said contract. The March, 1965, instrument, as well as all other instruments about which negotiations were later held, were undertaken to implement portions of the December 4, 1964, contract wherein specific reference was made to the necessity for subsequent instruments to define the rights and duties of the parties in the development venture, i.e., rhetorical paragraph 1 relating to the number of salable acres; rhetorical paragraph 5 relating to the relationship '5. Golf Course. As a part of the consideration for this agreement, Seller will construct or cause to be constructed, on an area graphically indicated on the plat attached, marked Exhibit 'A', and made a part hereof, a regulation 18 hole golf course, which course shall be completed and ready for play on or before June 1, 1966. Seller further agrees to maintain or cause to be maintained the golf course in satisfactory operating conditions during the term of this contract. Seller agrees to offer for sale to the members (prior to making any other offer to sell) by paying for the cost of land, golf course improvements only, and subject to the mortgage thereon. Buyer shall contribute Three Hundred ($300.00) Dollars from each lot sale for a membership fee which shall be used to pay for the club house, swimming pool, parking area, etc.'

between the parties and operating rules for the country club; rhetorical paragraph 5 relating to the date by which a certain number of lots shall be purchased by Macke. There is no provision in the first, second, third and fourth grammatical sentences of rhetorical paragraph 5, which provide as follows, to-wit:

for any supplemental agreements or negotiations relating to the portions of said paragraph 5 as above set forth.

Neither the March, 1965, agreement, nor the later agreement prepared by attorney Haller in August, 1965, was signed. No satisfactory explanation was given why the March, 1965, or the August, 1965, agreements were not signed, or else amended so they could be signed. This is an area of the transaction which strongly suggests that Standard intentionally wanted a certain amount of vagueness and uncertainty in the transaction so as to assure it maneuverability, and thus control, in later delings with Macke, lot purchasers and country club members.

6. After the signing of the contract, work was begun almost immediately. Macke developed the addition, including the preparation of the home sites, putting in streets, and the laying of water lines and sewer mains. The golf course was completed by Standard by June 1, 1966. During this period both Standard and Macke worked together to make a success of the new development, and the results were remarkable. In the fall of 1965, Macke started making lot sales and Standard began receiving money from such lot sales to apply upon the purchase price under the terms of the December 4, 1964, contract. The officials of Standard were surprised as to the number and quality of the homes that were being built and the amounts that Macke was receiving from lot sales. Everything appeared to be proceeding far better than had ever been anticipated, to the mutual satisfaction and financial reward to both Macke and Standard. In August, 1966, without consultation as to ultimate cost with either Macke, the lot owners, or members of the Club, Standard started to build a club house, which was completed in December of 1967 at the approximate cost of $250,000.00.

7. Early in the development of the addition, Macke and representatives of Standard jointly prepared and made available to potential lot purchasers a brochure which is Plaintiffs' Exhibit 7...