TIPPECANOE ASSOC. II, LLC v. Kimco Lafayette 671, Inc.

• Decision Date: 06 July 2004
• Docket Number: No. 79A05-0302-CV-85.,79A05-0302-CV-85.
• Citation: 811 N.E.2d 438
• Parties: TIPPECANOE ASSOCIATES II, LLC, Appellant-Defendant, v. KIMCO LAFAYETTE 671, INC., Appellee-Plaintiff.
• Court: Indiana Appellate Court

811 N.E.2d 438

TIPPECANOE ASSOCIATES II, LLC, Appellant-Defendant, v. KIMCO LAFAYETTE 671, INC., Appellee-Plaintiff.

No. 79A05-0302-CV-85.

Court of Appeals of Indiana.

July 6, 2004.

Charles R. Vaughan, Linda H. Havel, Vaughan and Vaughan, Lafayette, IN, Attorneys for Appellant.

Stephen R. Pennell, Stuart & Branigin, LLP, Lafayette, IN, Attorney for Appellee.

OPINION

MAY, Judge.

Tippecanoe Associates II, LLC ("Tippecanoe") appeals the trial court's grant of declaratory judgment in favor of Kimco Lafayette 671, Inc. ("Kimco"). Tippecanoe raises two issues, which we reorder and restate as:

1. Whether the trial judge abused his discretion when he refused to recuse himself; and

2. Whether the trial court's declaratory judgment in favor of Kimco was clearly erroneous.¹

We affirm in part and reverse in part.

FACTS AND PROCEDURAL HISTORY

In 1973, SES Development Company ("SES") owned the Sagamore Shopping Center ("shopping center") located at the intersection of the State Road 52 by-pass and State Road 26 in Lafayette, Indiana. On April 27, 1973, Kroger Company ("Kroger") leased one of the stores in the shopping center from SES for a term of twenty years, with an option to extend the lease by four successive terms of five years each.² The lease contains the following restrictive covenant:

Landlord covenants and agrees, from and after the decree hereof and for so long as this lease shall be in effect, not to lease, rent, occupy, or suffer or permit to be occupied, any part of the Shopping Center premises or any other premises owned or controlled directly or indirectly either by Landlord, its successors, heirs or assigns, or Landlord's principal owners, stockholders, directors, or officers, or their assignees (hereinafter called owners) which are within 2 miles of the Shopping Center premises for the purpose of conducting therein or for the use as a food store or a food department or for the storage or sale for off-premises consumption of groceries, meats, produce, dairy products, or bakery products, or any of them; and further, that if Landlord or owners own any land, or hereinafter during the term of this lease Landlord or Owners acquire any land within such distance of the Shopping Center, neither will convey the same without imposing thereon a restriction to secure compliance with the terms of this lease.... This covenant shall run with the land. Landlord acknowledges that in the event of any breach hereof Tenant's remedies at law would be inadequate and therefore, in such event, Tenant shall be entitled to cancel this lease or to relief by injunction, or otherwise, at Tenant's option, and Tenant's remedies shall be cumulative rather than exclusive.

(Appellant's App. at 14.)

The agreement also provided:

Tenant may sublet or assign the demised premises at any time provided the business which such subtenant or assignee proposes to conduct does not conflict with exclusive rights granted by Landlord in leases to other tenants. Tenant [illegible] notify Landlord of its intent to sublet or assign and the nature of the business proposed to be conducted by the subtenant or assignee. If such notice is given and Landlord does not object within [illegible] days, it shall be conclusively presumed that the proposed business does not conflict with any exclusive rights. Landlord shall, at any time Tenant may request, supply to Tenant copies from leases to other tenants of all clauses granting exclusive rights to conduct various businesses in the Shopping Center. In the event of assignment or sublease, Tenant is hereby put on notice that Landlord prefers a qualified supermarket operator.

(Id. at 17.)

On March 25, 1983, Kroger assigned its rights to Pay Less Super Markets, Inc., effective April 1, 1983. On June 1, 1984, Pay Less Super Markets sub-leased the space to H.H. Gregg Appliances, Inc., who remains the tenant to this day.

On January 15, 1997, Kimco purchased the shopping center. At that time, 79,020 square feet of the 183,440 square feet in the shopping center were occupied by Target.

On January 14, 2000, Pay Less Super Markets assigned to Pay Less Holdings, Inc. its rights to the lease from SES, now owned by Kimco, and in the sub-lease with H.H. Gregg. Thereafter, Pay Less Holdings assigned its rights to both the lease and sub-lease to Tippecanoe.

In April of 2000, Target moved out of its space at the shopping center, leaving nearly half of the shopping center space unoccupied. In November 2000, Kimco mass-mailed a solicitation to several hundred prospective tenants. Kimco also attempted to find a tenant through advertisements, attendance at trade shows, and contact with other prospective tenants. The only prospective tenant Kimco located is Schnucks, a Missouri corporation that operates grocery stores. Kimco and Schnucks reached a tentative agreement regarding the essential terms of a lease for the space previously rented by Target.

On December 6, 2001, Kimco filed a complaint asking the trial court to declare unenforceable the restrictive covenant in Tippecanoe's lease that prohibits Kimco from renting space in the shopping center to a grocery store. After a hearing, the trial court granted Kimco's request and declared the restrictive covenant unenforceable. Tippecanoe appeals. Additional facts relevant to each issue will be provided below.

DISCUSSION AND DECISION

1. Recusal

Tippecanoe asserts the trial judge erred when he did not recuse himself.³ Tippecanoe claims the judge abused his discretion by denying its motion for recusal based on an historical conflict of interest and by failing to recuse himself sua sponte because his campaign manager is affiliated with the law firm representing Kimco.

A trial court judge must "hear and decide matters assigned to the judge except those in which disqualification is required." Ind. Judicial Conduct Canon 3(B)(1). However, judges also have a duty to promote public confidence in the impartiality and integrity of the judiciary. Jud. Canon 2(B). Accordingly, the code requires a judge to "disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned." Jud. Canon 3(E).

The test for disqualification under that canon is "whether an objective person, knowledgeable of all the circumstances, would have a reasonable basis for doubting the judge's impartiality." Tyson v. State, 622 N.E.2d 457, 459 (Ind.1993). "The question is not whether the judge's impartiality is impaired in fact, but whether there exists a reasonable basis for questioning a judge's impartiality." Id. In Indiana, we prefer to err on the side of unnecessary recusal. See id. at 460 ("Indiana practice has always leaned toward recusal where reasonable questions about impartiality exist.... [I]n a close case where impartiality might reasonably be questioned, a judge must recuse.").

Nevertheless, timeliness is important when a party requests recusal. Id. As with most other issues, counsel may not wait until after the court rules unfavorably on the merits to raise concerns about a judge's impartiality. Id. In fact, on more than one occasion we have held that a party has waived any argument regarding a judge's impartiality by failing to raise the issue in a timely manner. See, e.g., Inlow v. Henderson, Daily, Withrow & DeVoe, 787 N.E.2d 385, 400 (Ind.Ct.App.2003),

trans. denied 804 N.E.2d 756 (Ind.2003); Southwood v. Carlson, 704 N.E.2d 163, 167-68 (Ind.Ct.App.1999) (party waived objection to judge's failure to recuse sua sponte where party failed to raise relationship between judge and one witness until after summary judgment granted for other party).

The facts in this case are similar to the facts in Inlow, where the Inlow children failed to question the judge's impartiality until they appealed the trial court's dismissal of their amended complaint. Inlow, 787 N.E.2d at 400. On appeal, the Inlows claimed the trial judge's impartiality could reasonably be questioned because the judge received campaign contributions from Henderson Daily and three individual attorneys at Henderson Daily. In addition, the treasurer of the judge's campaign committee was an attorney at the law firm that represented another party in the action. We denied the Inlows' request to reverse and remand for a change of judge, noting the Inlows "fail to explain what prevented them from discovering [the contributions and treasurer's identity] in time to bring it before the dismissal was granted or at the very least before the case was fully briefed on appeal." Id.

On appeal, Tippecanoe argues:

Prior to and at the time of trial in the instant case, the trial court judge was sitting as an interim judge running for election. [Tippecanoe] did not learn until after trial that James McGlone, the former managing partner and an active "of counsel" attorney for Kimco's trial counsel was the campaign manager for the judge, and at no time prior to or during trial, did the judge ever notify counsel of the same.

(Appellant's Br. at 28.) Tippecanoe has not explained why it was unable to learn this information before the trial court ruled in favor of Kimco, and this argument is waived. See Inlow, 787 N.E.2d at 400

.

Tippecanoe's other ground for error is that the trial court abused its discretion by denying Tippecanoe's motion for recusal based on an historical conflict of interest. Tippecanoe indicates the judge was a partner at a law firm that represented Tippecanoe County. In 1986, Tippecanoe County, and thus someone at the judge's prior law firm, reviewed a request by TA-I for dedication of a drainage ditch to allow development of a shopping center, "Tippy Court," which is within two miles of the Sagamore Shopping Center. Tippecanoe argues:

Although it was not clear from the petition and order what was discussed at the meetings, by necessity it had to include TA-I's development of Tippy Court. TA-I's original motivation in developing Tippy Court was relevant at trial because it pertained

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