Stewart v. Tt Commercial One, LLC, 29A05-0902-CV-00105.

Decision Date10 August 2009
Docket NumberNo. 29A05-0902-CV-00105.,29A05-0902-CV-00105.
Citation911 N.E.2d 51
PartiesPhillip STEWART and Judith Stewart, Appellants-Respondents, v. TT COMMERCIAL ONE, LLC, Thompson Thrift, Inc., and Omer J. Stocker, Jr., Appellees-Petitioners.
CourtIndiana Appellate Court

David W. Stone IV, Stone Law Office & Legal Research, Anderson, IN, Michael J. Sobieray, Carmel, IN, Attorneys for Appellants.

Jeffrey Kose, Raegan Gibson, Dann Pecar Newman & Kleiman, P.C., Indianapolis, IN, Attorneys for Appellees.


BROWN, Judge.

Phillip Stewart and Judith Stewart (collectively, the "Stewarts") appeal the trial court's grant of summary judgment to TT Commercial One, LLC ("Commercial One"), Thompson Thrift Development, Inc. ("Thompson Thrift"), and Omer J. Stocker, Jr. (collectively, the "TTCO Parties"). The Stewarts raise several issues, which we revise and restate as:

I. Whether the trial court erred by granting summary judgment to the TTCO Parties; and

II. Whether the trial court erred by ordering the Stewarts to pay attorney fees incurred by the TTCO Parties.

We affirm in part, reverse in part, and remand.1

The relevant facts designated by the parties follow. The Stewarts, as landlord, and Thompson Thrift, as tenant, entered into a Ground Lease dated September 1, 2000 for the lease of three parcels of real property located at 821, 831, and 841 Rangeline Road, in Carmel, Indiana. The Stewarts negotiated the terms of the Ground Lease with Stocker, an employee of Thompson Thrift. Thompson Thrift, Commercial One, and the Stewarts executed an Assignment and Assumption of Lease dated November 21, 2000, pursuant to which Commercial One assumed and agreed to perform all of the obligations of Thompson Thrift under the Ground Lease (the Ground Lease and the Assignment and Assumption of Lease, collectively, the "Lease").

Under Section 4.1 of the Lease, rent for the first five years of the lease term was $48,000.00 per year, payable in equal monthly installments of $4,000.00 per month. On the sixty-first month of the lease term, rent was to increase pursuant to Section 4.1 by "the greater of (i) a percentage which ... shall be ten percent (10%), and (ii) the Percentage CPI Increase." Appellant's Appendix at 84. However, the Percentage CPI Increase was not to exceed twenty percent. Subsection (v) of Section 4.1 of the Lease provided:

(v) The "Percentage CPI Increase" shall mean the increase in the Index which has occurred between the Base CPI Month and the Comparison Date, provided the increase does not exceed the Percentage Increase Cap. In the event the Index has decreased, the Percentage CPI Increase shall be zero.

Appellant's Appendix at 85. The "Index" under the Lease was defined as "the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all Urban Consumers (on the basis 1982-1984 = 100)." Id The relevant "Base CPI Month" here was March of 2001, and the "Comparison Date" was March of 2006. Id. at 42, 239-240 The "Percentage Increase Cap" was defined as twenty percent. Id. at 85.

The Index was 176.2 on March 1, 2001 (the relevant Base CPI Month), and the Index was 199.8 on March 1, 2006 (the relevant Comparison Date). Thus, the Index increased 23.6 points during that period of time. The Index's increase of 23.6 points reflects a 13.39% increase over the five-year period of time.

As a part of its calculations to determine its rent adjustment in 2006, Commercial One initially used the figure of 23.6, which represented the increase in the points of the Index over the relevant five-year period. Specifically, because the figure of 23.6 was greater than the Percentage Increase Cap (twenty percent), Commercial One determined that the Percentage CPI Increase which should be used to calculate its adjusted rent was twenty percent. Accordingly, Commercial One began making rent payments to the Stewarts in the amount of $4,800 per month (a twenty-percent increase in the original rent of $4,000).

Commercial One became aware during its refinancing process that it had used the figure of 23.6 in its calculations to determine the adjustment to its rent payments. On December 5, 2006, Thompson Thrift, the predecessor of Commercial One, notified the Stewarts that the rent had been calculated incorrectly, and that the incorrect adjustment had resulted in an overpayment of rent to the Stewarts. Specifically, Thompson Thrift's letter explained that it had mistakenly used the figure of 23.6 (the number of points the Index increased during the relevant five-year period) instead of the percentage 13.39% (the increase in the Index over the same period), and that Commercial One's monthly rent installments should have been $4,535.75 per month (a 13.39% increase in the original rent of $4,000), not $4,800.00 per month. Commercial One reduced its rent payment for December 2006 by $792.75 in order to recoup the previously overpaid rent of $264.25 per month for three months.

On January 3, 2007, the Stewarts notified Thompson Thrift that it had failed to pay the full amount of rent due on December 1, 2006, and that the Stewarts intended to terminate the Lease unless they received payment in full. As a consequence, while it reserved the right to pursue any overpayments, Commercial One paid the Stewarts the balance the Stewarts claimed was due and continued to pay the Stewarts $4,800 per month.

On March 12, 2007, Commercial One filed a complaint to recover any rent overpayments, obtain reasonable attorneys fees and costs, and obtain declaratory relief. On May 25, 2007, the Stewarts filed their answer and cross-claim against Thompson Thrift and Stocker denying Commercial One's substantive allegations and alleging that Stocker committed fraud by representing to the Stewarts that the numeric increase in the points of the Index, and not the percentage increase of the Index, would be used to calculate the rent increases under the Lease. In June 2007, Thompson Thrift and Stocker filed a motion to dismiss the Stewarts' cross-claim, and the trial court denied their motion to dismiss on September 18, 2007. On November 27, 2007, the TTCO Parties filed their answer to the Stewarts' cross-claim denying the Stewarts' substantive allegations.

In September 2008, the TTCO Parties filed a motion for summary judgment on all claims, including the Stewarts' cross-claim. On October 16, 2008, the Stewarts filed a response to the TTCO Parties' summary judgment motion and filed a motion for summary judgment. On October 27, 2008, the Stewarts filed a motion to strike certain portions of Stocker's affidavit. On November 3, 2008, the TTCO Parties filed a motion opposing the Stewarts' motion to strike. On December 10, 2008, the trial court denied the Stewarts' motion to strike portions of Stocker's affidavit. After a hearing, the trial court granted the TTCO Parties' motion for summary judgment on its complaint and on the Stewarts' cross-claim on December 24, 2008. On January 29, 2009, the trial court entered final judgment in favor of the TTCO Parties. Specifically, the trial court: (1) found that the TTCO Parties were entitled to damages against the Stewarts for the amount of Commercial One's aggregate overpayment of rent in the amount of $7,663.25; (2) awarded the TTCO Parties attorney fees and costs associated with the TTCO Parties' action to enforce the Lease; and (3) declared that future rent increases under the Lease were "to be calculated by using the percentage increase in the CPI and not by the raw increase in such index." Appellant's Appendix at 3.


The first issue is whether the trial court erred by granting summary judgment to the TTCO Parties. Our standard of review for a trial court's grant of a motion for summary judgment is well settled. Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(c); Mangold ex rel. Mangold v. Ind. Dep't of Natural Res., 756 N.E.2d 970, 973 (Ind.2001). All facts and reasonable inferences drawn from those facts are construed in favor of the nonmovant. Mangold, 756 N.E.2d at 973. Our review of a summary judgment motion is limited to those materials designated to the trial court. Id. We must carefully review a decision on summary judgment to ensure that a party was not improperly denied its day in court. Id. at 974.

The fact that the parties made cross-motions for summary judgment does not alter our standard of review. Hartford Acc. & Indem. Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind.Ct.App.1997), trans. denied. Instead, we must consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law. Id. Where a trial court enters findings of fact and conclusions thereon in granting a motion for summary judgment, as the trial court did in this case, the entry of specific findings and conclusions does not alter the nature of our review. Rice v. Strunk, 670 N.E.2d 1280, 1283 (Ind.1996). In the summary judgment context, we are not bound by the trial court's specific findings of fact and conclusions thereon. Id. They merely aid our review by providing us with a statement of reasons for the trial court's actions. Id.

The Stewarts argue that the trial court erred when interpreting the rent provisions of the Lease. Indiana courts have recognized the contractual nature of leases and the applicability of the law of contracts to leases. Village Commons, LLC v. Marion County Prosecutor's Office, 882 N.E.2d 210, 215 (Ind.Ct.App.2008) (interpreting default section of lease provision), reh'g denied, trans. denied; see also Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1129 (Ind.1995) (noting that a real estate lease is subject to principles of contract law); Chicago Southshore & South Bend R.R. v. Itel Rail Corp., 658 N.E.2d 624, 629 (Ind. Ct.App.1995) (interpreting provisions of lease); Bicknell Minerals, Inc. v. Tilly, 570 N.E.2d 1307, 1310 (Ind.Ct.App.1991) (interpr...

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