Wagner v. Estate of Fox, 15A01-9809-CV-346.

• Decision Date: 27 September 1999
• Docket Number: No. 15A01-9809-CV-346.,15A01-9809-CV-346.
• Citation: 717 N.E.2d 195
• Parties: James L. WAGNER, David N. Pragar, Barbara T. Pragar, Thomas Pragar and Thomas J. Pragar, Appellants, v. ESTATE OF Leona FOX, Deceased and Larry Smith, Appellees.
• Court: Indiana Appellate Court

717 N.E.2d 195

James L. WAGNER, David N. Pragar, Barbara T. Pragar, Thomas Pragar and Thomas J. Pragar, Appellants, v. ESTATE OF Leona FOX, Deceased and Larry Smith, Appellees.

No. 15A01-9809-CV-346.

Court of Appeals of Indiana.

September 27, 1999.

Frank C. Capozza, Offer Korin, Katz & Korin, P.C., Indianapolis, Indiana, Attorneys for Appellants.

William R. Pfister, Lawrenceburg, Indiana, Attorney for Appellee Estate of Leona Fox.

Terrill D. Albright, David L. Hanselman, Jr., Baker & Daniels, Indianapolis, Indiana, Attorneys for Appellee Larry Smith.

OPINION

MATTINGLY, Judge

David N. Pragar, Barbara T. Pragar, Thomas Pragar and Thomas J. Pragar (collectively "the Pragars") and James L. Wagner appeal from the trial court's denial of their request for specific performance of certain real estate purchase agreements. They raise a number of issues on appeal, which we consolidate and restate as:

1. Whether the trial court abused its discretion by not enforcing the purchase agreements;

2. Whether the trial court's findings are supported by the evidence; and

3. Whether the trial court properly applied the doctrine of laches.

Affirmed.

FACTS AND PROCEDURAL HISTORY

On August 22, 1970, Leona Fox ("Leona") entered into a revocable trust agreement ("the Trust") with the American State Bank ("the Bank"). The primary asset of the Trust was a large tract of land that Leona owned in Dearborn County, Indiana ("the Fox farm"). Under the Trust, Leona conveyed title to all of her real and personal property to the Bank and empowered the Bank to "sell, convey, mortgage, or otherwise encumber" real estate on her behalf. R. at 53, 55.

The Trust originally provided that all of the Trust's assets were to be distributed equally to Leona's children—Everett Fox, Patrick Fox ("Patrick"), Camilla Fox and Marie Miller—upon Leona's death. In 1973, however, Leona executed a will in which she left Patrick only $100 and specified that the rest of her estate was to be distributed in equal shares to her other three children. Leona amended the Trust in 1975 to state that, upon her death, the Trust's assets should be distributed according to her will.

By the early 1980s, the assets of the Trust had been depleted. In 1981, the Bank contracted with Grady Realtors ("Grady") to sell 220 acres of the Fox farm for $200,000. The original listing agreement did not include a house, a barn and approximately 10 acres of land upon which these buildings were located. Norman Gellert was the listing agent for Grady. On April 12, 1983, the Bank used the Fox farm to secure repayment of a $40,000 loan from Dearborn Savings Association.

Between 1981 and 1984, Grady received nine offers on the Fox farm, all of which were rejected by the Bank as trustee. Because the property had not sold, Gellert recommended that the land be divided into four parcels: Parcel A, Parcel B, Parcel C, and Parcel D. Parcel D included the dwelling, buildings and 10 acres which had not previously been on the market. The Bank then relisted the Fox farm for sale as four separate parcels. Thomas Pragar and Thomas J. Pragar¹ became interested in part of the Fox farm through the efforts of Bob Davidson, another Grady broker. On June 2, 1984, Thomas Pragar and Thomas J. Pragar signed an offer to purchase Parcel C for $44,000 and Parcel B², which consisted of approximately 25 acres, for $1,100 per acre. This purchase offer, which was written by Davidson, was accepted by the Bank as trustee on June 4, 1984. Also on June 2, 1984, David N. Pragar³ and his wife Barbara Pragar executed an offer to purchase Parcel B-1 for $1,100 per acre. The Trustee accepted this offer, which was also written by Davidson, on June 2, 1984. On June 4, 1984, Thomas Pragar and Thomas J. Pragar paid Grady $4,000 in earnest money. David N. Pragar and Barbara Pragar each paid Grady $1,000 in earnest money. The closings on all the Pragars' contracts were scheduled on or before July 15, 1984.

On April 9, 1984, Patrick died. On June 25, 1984, three weeks after the Trustee accepted the Pragars' offers to purchase the parcels of the Fox farm, Patrick's widow, Anna, filed suit against Leona, seeking specific performance of an alleged contract between Anna, Patrick and Leona for ownership of the Fox farm. This lawsuit created a cloud on the title to the Fox farm and prevented the Pragars' purchase contracts from closing as scheduled on July 15, 1984. This closing date was never extended by the parties in writing.

Leona died on April 3, 1985. On September 27, 1985, Patrick's heirs filed a will contest against the Bank and Anna filed another action against Leona's estate. Because the Fox family litigation delayed closing on the land contracts, the Pragars and the Trustee entered into an agreement with Grady to hold the Pragars' earnest money deposit in an interest-bearing account.

Through Davidson, Wagner executed an offer to purchase Parcel A of the Fox farm on May 2, 1986. This offer was accepted by the Trust officer on May 7, 1986. Wagner's contract contained a clause which stated that Wagner would obtain a commitment for financing "on or before 30 days after the clearance of legal problems." He paid Grady $3,000 in earnest money. Wagner's contract specified a closing date of September 2, 1986. However, the transaction did not close by that date. Neither was the closing date extended in writing.

By 1986, the Trust had no assets other than the Fox farm. Consequently, the Trust defaulted on payments on the loan from Dearborn Savings. On September 15, 1986, Dearborn Savings filed a mortgage foreclosure action. A decree of foreclosure ordering the Fox farm to be sold was entered on October 30, 1987. Both Gellert and Davidson were aware of the foreclosure action.

In May 1988, Davidson called the Pragars and advised them they should send a letter to the Bank to let the Bank know what their intentions were regarding the parcels of the Fox farm. On May 30, 1988, the Pragars sent two handwritten notes to the Bank, reaffirming their intention to purchase the property. On June 1, 1988, Wagner sent out a similar letter. On June 17, 1988, Anna purchased the judgment of foreclosure from Dearborn Savings. On June 21, 1988, Anna voluntarily stayed a scheduled sheriff's sale.

In 1990, West Shell Realtors ("West Shell"), the successor to Grady, informed the Pragars and Wagner that it no longer wished to hold their earnest money and advised them to deposit it with the county clerk. West Shell made out a check payable for $12,873.61, which represented the Pragars' and Wagner's earnest money of $9,500 plus interest. That check was eventually deposited in the Dearborn Circuit Court.

On November 27, 1991, this court issued a memorandum decision, affirming the Dearborn Circuit Court's judgment against Anna in her lawsuit against the Bank as trustee of Leona's estate and other parties. Subsequently, on September 9, 1993, the Bank filed a petition to sell the Fox farm. Notices of hearing were sent to all interested parties. The Pragars and Wagner immediately filed objections, as did some of Leona's heirs. On March 24, 1994, the trial court found that the Bank owned the real estate as trustee and ordered it to distribute the property in accordance with the Indiana Trust Code. On May 20, 1994, the Bank requested the trial court to find that the Pragar and Wagner land contracts were void and unenforceable so that the land could be sold at sheriff's sale pursuant to Dearborn Savings' decree of foreclosure. The trial court ordered that the Pragar and Wagner purchase agreements "remain valid contracts." R. at 318.

The Bank filed a motion to correct error on July 29, 1994, seeking to avoid completion of the Pragars' and Wagner's purchase agreements. The trial court granted the Bank's motion to correct error on November 1, 1994. The Pragars and Wagner then filed their own motions to correct error, which the trial court denied on February 6, 1995. The Pragars and Wagner appealed that decision. This court affirmed the trial court's decision in an unpublished opinion, Wagner v. Estate of Leona Fox, No. 15A01-9503-CV-60 (Ind. Ct.App. Nov. 29, 1995).

On March 13, 1995, Anna assigned her judgment of foreclosure on the Fox land to Larry Smith for $115,000. Anna's three daughters also approached Smith and asked him if he would be interested in buying their interest in the Fox property. Under Leona's will, Anna's daughters were only entitled to receive $100 each. However, Smith offered them $10,000 for their interest in the Fox farm—$100 cash up front and $9,900 to be paid if Smith acquired 100 percent ownership of the Fox farm. Smith executed purchase agreements to that effect with Anna's daughters in March of 1995.

Everett Fox's children then approached Smith to inquire whether he wanted to buy their interest in the property. On July 9, 1996, all of Everett Fox's children assigned their interest in the Fox farm to Smith for $1,000 cash up front and $9,000 to be paid when Smith acquired free and clear fee simple title to the property. In February of 1997, Smith entered into a similar agreement with Leona's daughters, Camilla Fox and Marie Miller, whereby he paid them $30,000 each up front for their interest in the Fox farm and promised to pay them each an additional $25,000 once he obtained all the interest therein.

Because he had acquired most of the outstanding interests in the Fox farm from Leona's heirs, Smith intervened in the litigation which is the subject of this appeal on July 11, 1996. By agreement of the parties, the trial court scheduled a full hearing on all issues for March 24, 1998. On March 16, 1998, the Pragars and Wagner requested the trial court to enter specific findings of facts and conclusions of law under Ind. Trial Rule 52(A).

On March 24 and 25, 1998, the trial court held a bench trial on the validity and enforceability of the Pragar and Wagner real estate contracts. On June 25, 1998, the trial judge denied the...