Tomahawk Village Apartments v. Farren

• Citation: 571 N.E.2d 1286
• Decision Date: 23 May 1991
• Docket Number: No. 49A04-9003-CV-123,49A04-9003-CV-123
• Parties: TOMAHAWK VILLAGE APARTMENTS (Phase I) An Indiana Limited Partnership, Jonathan Piser, individually and as a general partner of Tomahawk Village Apartments (Phase I) and Indiana Limited Partnership, and the Lake County Trust Company as Trustee under Trust Number 1767, Appellants-Defendants, v. Ronald E. FARREN, Appellee-Plaintiff. 1
• Court: Court of Appeals of Indiana

Page 1286

571 N.E.2d 1286

TOMAHAWK VILLAGE APARTMENTS (Phase I) An Indiana Limited Partnership, Jonathan Piser, individually and as a general partner of Tomahawk Village Apartments (Phase I) and Indiana Limited Partnership, and the Lake County Trust Company as Trustee under Trust Number 1767, Appellants-Defendants, v. Ronald E. FARREN, Appellee-Plaintiff.

No. 49A04-9003-CV-123. ¹

Court of Appeals of Indiana Fifth District.

May 23, 1991.

Michael R. Franceschini, Steers, Sullivan, McNamar & Rogers, Indianapolis, Stephen B. Cohen, Skokie, Ill., for appellants-defendants.

Nancy L. Cross, Ancel, Miroff & Frank, Indianapolis, for appellee-plaintiff.

SHARPNACK, Judge.

Appellants, Tomahawk Village apartments, Jonathan Piser individually and as general partner of Tomahawk Village Apartments, and Lake County Trust Company (hereinafter "Tomahawk") appeal from a permanent injunction against them and an award of damages to them. We affirm.

The following is a statement of the facts most favorable to the judgment. Tomahawk Village Apartments is owned by the Lake County Trust company as Trustee under Trust No. 1767, which Trust holds legal title to the property. The beneficial owner of Tomahawk Village Apartments is defendant, Tomahawk Village Apartments, a limited partnership of which defendant, Jonathan Piser, is a general partner.

What is now Fox Run Apartments was originally owned by the Lake County Trust Company as Trustee under Trust No. 1768. The Fox Run Apartments were, until recently, known as Tomahawk Village Apartments, Phase II. Fox Run apartments has had several changes in ownership, most recently having been acquired by the plaintiff and appellee, Farren.

Fox Run has tennis courts and a basketball court and Tomahawk Village has a pool and clubhouse facility. These recreational facilities are the subject of cross easements created by a "Grant and Creation of Right to Share Adjoining Recreational Facilities" (hereinafter "grant") which reads in pertinent part:

That in pursuance of this agreement and in the joint and mutual consideration of Ten Dollars ($10.00) and other valuable consideration each paid to the other, the receipt whereof is hereby acknowledged, the 'Grantors' do hereby create, grant and convey unto 'Grantees', their ... successor and assigns, a non-exclusive easement, license, and right to use the property of 'Grantors', and the 'Grantees' do hereby create, grant and convey unto 'Grantors', their ... successors and assigns, a non-exclusive easement, ... and right to use the property of "Grantees", to wit: [the facilities in question] for ingress and egress and for the use, enjoyment and benefit of 'Grantees', their tenants, ... in common with 'Grantor', their tenants,....

The easement herein granted shall be perpetual and shall be an appurtenance to and shall run with the title to the lands of 'Grantees'....

* * * * * *

The 'Grantees' and the 'Grantors' further covenant and agree that all costs for maintenance, upkeep, repair and replacement of the premises to be used jointly by virtue of the mutual grants made herein shall be shared equally between them and the respective rules and regulations set by the owners of the respective premises shall govern the use and enjoyment of those facilities by all those hereinafter subject to the terms of this agreement.

The grant and a subsequent modification of it, which is not relevant to this case, were executed in 1973 at a time when the two complexes were under common management. Upon acquiring Fox Run in May of 1988, Farren initiated personal contact with Piser in an informal attempt to work out the logistics of the shared recreational facilities. On or about June 1, 1988, Piser informed Farren that, in addition to his liability under the grant for 50% of all repair and maintenance expenses, he would be required to pay a $300 pool security deposit for each of his 256 apartment units wishing to use the pool as a precondition of pool use. Upon informing Farren of the security requirement, Piser offered to sell Tomahawk Village Apartments to Farren for $30,000 per unit. When Farren responded that he had purchased Fox Run for $12,000 per unit, Piser told him that if he bought Tomahawk Village for thirty thousand per unit, he would still have paid a reasonable price for the combined properties. Piser later reduced the security requirement to $100 per unit. At that time, some of the leases for Fox Run only required a security deposit of $99.

Farren refused to pay the security deposit and Tomahawk denied Fox Run tenants use of the pool facilities despite extreme temperatures. They were not allowed to use the pool until the court issued a temporary restraining order on June 8, 1988, requiring that they be allowed access to the facilities.

In addition to attempting to institute a security deposit requirement, Piser also invoiced Farren for maintenance and repair expenses. Included among the charges for which Tomahawk invoiced Farren was a monthly "management fee" of $150 as well as costs for opening the pool, an operation which was performed by Tomahawk's employees. Farren did not pay immediately and questioned the legitimacy of some of the charges. On June 30, by letter of counsel, Farren expressed his questions regarding some of the charges and requested further documentation. However, Farren enclosed a check for $1000 to indicate his "good faith" and to be applied against what he owed until the particular charges could be clarified. Tomahawk retained the check but did not negotiate it.

Farren did not pay any of the expenses for which he was invoiced during the course of the litigation. Ms. Brown, Farren's property manager from April 1989 through the course of the litigation, testified that the reason she did not pay was that she disputed the legitimacy of, or was not provided with sufficient documentation for, several of the invoices from 1988. She also testified that when she tried to contact Mrs. Miller, Tomahawk's resident manager, and Sue Amonett, Tomahawk's property manager, she could not get them to talk about any problems regarding the pool.

The following is a brief procedural history of the controversy. On June 8, 1988, Farren was granted a temporary injunction against Tomahawk prohibiting it from charging a security deposit from Farren's tenants and requiring it to allow Farren's tenant's access to the pool and clubhouse facilities located on Tomahawk's premises. On June 24, 1988, the court entered a preliminary injunction.

On August 3, 1988, Tomahawk filed a counterclaim and third party claim alleging that Farren and his predecessor in title had breached the terms of the easements by failing to maintain the tennis courts located on Fox Run's property for the use and benefit of Tomahawk's tenants and by refusing to pay one half the costs of maintenance and repair of the pool and clubhouse facilities as required by the terms of the grant.

The court heard evidence and took the case under advisement on November 1, 1989. On November 14, 1989 the parties entered into a stipulation regarding amounts owed by each for maintenance and repair of their respective properties, although disagreeing on the legitimacy of certain charges. The court entered its findings of facts, conclusions of law and judgment the same day. The court's order awarded damages to Tomahawk in the amount of $8,751 after set-off. In addition, the court permanently enjoined the defendants from interfering with the use of the shared facilities by Farren's tenants subject only to uniform application of reasonable rules and regulations applicable to all users. The court specifically found that the security deposit required by defendants was not within the authority of the grant.

Tomahawk raises four issues for review which we restate as:

1. Does the grant prohibit Tomahawk from requiring a security deposit intended to discourage pool use by Fox Run Tenants and does the record support the court's finding that the deposit was arbitrary and intended to discourage pool use?

2. Did the court err in granting the injunction because Farren first breached the contract by refusing to pay his share of maintenance and repair costs and continued in his refusal to pay throughout the course of the litigation, thus relieving Tomahawk of its duties under the grant or requiring the court to deny his request for injunction due to his "unclean hands"?

3. Did Tomahawk waive the issue of whether the trial court committed error by not issuing an injunction against Farren to pay his share of maintenance and repair costs?

4. Were the damages awarded to Tomahawk on its counterclaim inadequate?

Farren pleaded, and the trial court found, that Tomahawk denied the tenants of Fox Run access to the pool facilities because he did not agree to post a security deposit. It is undisputed that Fox Run tenants have the right to use the facilities pursuant to the grant. There is no dispute that an injunction is proper if Fox Run tenants have been improperly denied this right. Tomahawk claims that the grant gives it the right to condition the use of the pool upon compliance with its rule requiring a security deposit. We must therefore decide whether Tomahawk had the authority under the grant to do so.

Our threshold consideration is whether the terms of the grant clearly state whether Tomahawk had the right to require a security deposit as a precondition to pool use. Our resolution of this question determines the standard of review we must apply. If the terms of the grant are clear with respect to this issue, its meaning is a question of law and we simply apply the plain meaning of the grant without reference to the trial court's interpretation of the instrument. If, however, the language is ambiguous, the meaning of the agreement is a question of fact to be determined by the trier of fact. Piskorowski v. Shell Oil Co. (1980), Ind.App., 403 N.E.2d 838, 844.

The primary standard we apply to determine whether...