The County of Lake, Ind. Board of Commissioners of the County of Lake (Ind.), in their official capacities and the Lake County Treasurer, in his official capacity v. U.S. Research Consultants, Inc.

Mar 12 2015, 9:59 am

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE
Richard M. Davis Kevin W. Vanderground
Kevin G. Kerr Church, Church, Hittle & Antrim
Hoeppner Wagner & Evans LLP Merrillville, Indiana
Valparaiso, Indiana
Rick C. Gikas
Merrillville, Indiana

IN THE
COURT OF APPEALS OF INDIANA

The County of Lake, Indiana; March 12, 2015
Board of Commissioners of the Court of Appeals Case No.
County of Lake (Indiana), in 45A03-1401-CC-42
their official capacities; and The
Lake County Treasurer, in his Appeal from the Lake Superior
official capacity, Court

Appellants-Defendants, The Honorable Calvin P. Hawkins,
Judge
v. Cause No. 45D02-0805-CC-183

U.S. Research Consultants, Inc.,
an Indiana Corporation,
Appellee-Plaintiff.

Robb, Judge.

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 Case Summary and Issue
[1] U.S. Research Consultants, Inc. (“Consultant”) and The County of Lake,

Indiana; the Board of Commissioners of the County of Lake, Indiana, in their

official capacities; and the Lake County Treasurer, in his official capacity

(collectively, the “County”), entered into a series of contracts (the “collection

contracts”) for Consultant to be paid a commission for collecting delinquent

real property taxes on behalf of the County. After the collection contracts were

terminated, Consultant sued the County for breach of contract, alleging unpaid

commissions under the collection contracts. The trial court granted

Consultant’s motion for partial summary judgment and denied the County’s

motion regarding the interpretation of the contract. Based upon that judgment,

the trial court later granted final judgment in excess of one million dollars to

Consultant on its complaint. The County raises several issues, of which we find

the following dispositive: whether the trial court properly interpreted the

collection contracts as a matter of law and therefore properly granted partial

summary judgment to Consultant and denied partial summary judgment to the

County. Concluding the trial court erred as a matter of law in interpreting the

collection contracts and erroneously granted partial summary judgment and

ultimately final judgment to Consultant, we reverse and remand.

Facts and Procedural History
[2] In 2000, the County and Consultant entered into a contract by which the

County assigned real property tax collection cases to Consultant for collection

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and Consultant earned a commission on amounts collected. The initial

contract was for a two-year term beginning January 1, 2000, and provided, in

pertinent part:

2. Scope of Service. The Consultant shall do, perform, and carry out in
a good and professional manner the services for the County,
specifically the Consultant shall:
A. Consultant shall be assigned by the Lake County Treasurer 100%
of the Real Property Tax Collection Cases.
B. Consultant shall report directly to the Lake County Treasurer for
all instructions if necessary to carry out its responsibilities.
***
E. Collect the delinquent monies through an organized procedure to
include filing lawsuits to collect if necessary.
***
I. All payments made by defendants on lawsuits filed with the
Court(s) shall be made to the Clerk of the Court. These funds will then
be transferred by the Clerk of the Court to the County of Lake and its
Treasurer for deposit as payments are made. Payments will be applied
as follows:
1. First to the payment of Court costs until these are paid in
full.
2. The remaining funds will be split between real property
taxes and penalties owed to the County of Lake and
[Consultant’s] fees on a pro rata basis in accordance with the
judgment rendered.
J. To obtain its fees [Consultant] will have to file a claim form with
the County of Lake. [Consultant] will be paid out of the monies
received from the Clerk.
K. If monies are paid on accounts prior to filing suit, these funds will
be paid directly to the Lake County Treasurer who will collect not only
taxes, fines and penalties but any [Consultant’s] fees. The Treasurer
will deposit these funds into separate accounts for taxes, interest,
penalties and [Consultant’s] fees on a pro rata basis. [Consultant] will

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 then file a claim with the County of Lake for fees which should be paid
from the funds established.
***
[Consultant’s] fees to be received must be reasonable and will be
established by the Court as part of the judicial proceedings or by the
Treasurer . . . . Shall not exceed fee following [sic]:
1. If suit is filed, [Consultant] will accept the fees awarded by
the court as reasonable attorney’s fees.
2. If suit is not filed, [Consultant’s] fee will be twenty percent
(20%) of the taxes.
Appellants’ Appendix at 26-28. The same contract was renewed for a second

term in January 2002. See id. at 32-37. On June 4, 2003, the parties entered

into a third contract which changed the terms of Consultant’s compensation:

4. Compensation. The County agrees to pay the Consultant a sum not
to exceed the following:
1. If suit is not filed, Consultant(s) [sic] fee will be fifteen
percent (15%) of the taxes for all projects begun on or after the date
this Agreement is approved by the County. Consultant’s fees for
projects begun before this Agreement is approved by the County shall
be twenty percent (20%) of the taxes.
2. If suit is filed, Consultant(s) [sic] fee will be the amount
determined by the Court.
Id. at 40. A fourth two-year contract was entered into on January 1, 2005 with

these same (altered) compensation terms. The County terminated Consultant’s

contract in November 2006.1

1
The contract included a clause allowing either party to terminate the agreement by giving at least thirty days
written notice. See id. at 47.

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[3] The “organized procedure” for collecting delinquent monies was for the County

to periodically send a disc to Consultant containing information about

properties with delinquent taxes. However, the taxes were divided into “last

year taxes,” or taxes delinquent for less than one year, and “prior year taxes,”

or taxes delinquent for a year or more. See, e.g., id. at 420-23 (Deposition

Exhibit of Treasurer’s records showing “Last Year Tax” and penalties and

“Prior Year Tax” and penalties for the property). The Treasurer instructed

Consultant to collect only on prior year taxes. Marsha DeMure, an employee

of the Treasurer’s office, testified at a deposition that the County assessed a

penalty on every tax that was not paid on its due date. However, Treasurer’s

office practice was that “[e]ven though they had a penalty, they would not be

considered delinquent taxes.” Id. at 98. Consultant “was not able to handle

that because that’s present year” and the Treasurer did not “consider the

present year as delinquent taxes for collection . . . .” Id. In other words, “the

present year is not given to [Consultant] to collect on. . . . [It] cannot collect on

those ‘cause that’s the year we’re in. [What it is] able to collect on are what we

say delinquent[,]” which are more than one year past due. Id. at 101; see also id.

at 220 (DeMure testifying that “[j]ust because you’re in the year that the 2001-

2002 tax was due and it has a penalty on it, it is delinquent, but it’s not

delinquent for who was commissioned to collect these taxes. They were not

considered delinquent for them to collect on.”). Clara Castro, an employee of

Consultant, testified similarly at her deposition:

A: [The Treasurer’s Office] supplied us with a cutoff date. We could
only collect from one date to this date. . . .

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 Q: So how did you learn about this cutoff date?
A: From Marcia [sic] Demure.
***
Q. Okay. And would it be fair to say that was your working
definition of a delinquent tax, was the prior year’s taxes?
A. Right.
***
A: We weren’t allowed to collect [last year taxes].
Id. at 199, 203-04.

[4] To initiate the collection process, Consultant sent a collection letter to taxpayers

with delinquent prior year taxes. See id. at 190 (Castro, testifying that after she

received a disc from the County, she would print out the “sheets that showed

prior year taxes” and do research on those amounts before sending out

collection letters). Consultant was not entitled to a commission on paid taxes

unless a collection letter had first been sent. See id. at 196 (from Castro’s

deposition: “Q. And then those would be the monies based on the prior year

taxes that [Consultant] would be paid his commission? A: Yes.”). Every few

months, Consultant would compare the letters it sent to the County’s tax

payment records and submit a claim for commissions. After the claim was

submitted, Castro and DeMure met and “went through each and every one of

those parcels so that we agreed on the amounts that [Consultant] was

collecting.” Id. at 463. Castro testified regarding Consultant’s commissions:

Q: What was your understanding as to how [Consultant] was being
paid on these taxes that he was collecting?
A: Well, the only thing that I know is that when I generate the report
[that was going to be submitted to the Treasurer for payment], he just
said, “Make sure that everything is prior year taxes.”
Id. at 193.
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[5] Consultant filed its complaint against the County for breach of contract in 2008

alleging it was owed over $200,000 in unpaid commissions. The County filed

an answer meeting the substantive allegations of the Complaint but asserting no

affirmative defenses. In a pre-trial order entered June 12, 2012, the trial court

summarized the parties’ contentions as follows:

D. Plaintiffs [sic] Contentions:
. . . [Consultant contends that], in violation of the express terms of the
contracts, [the County] verbally and unilaterally changed the types of
delinquent taxes upon which [Consultant] was entitled to receive
commissions, and applied these changes in an inconsistent manner to
the detriment of [Consultant]. As a result, [Consultant] contends that
in excess of $1,000,000.00 in commissions are owed . . . .
E. Defendants’ Contentions
. . . [The County] contends that the term “delinquent taxes” had a very
limited applicability pursuant to the course of conduct by the parties
who all knew and understood how the contract was supposed to
operate. [Consultant is] attempting to obtain unjust enrichment by
receiving monies for taxes that they knew they were not entitled to
collect, and conducted no activities in the actual collection process.
Id. at 707-10.

[6] Consultant filed a motion for partial summary judgment in December 2012

seeking a determination as a matter of law

that the contracts at issue in this matter are not vague, but their
meaning can be determined from an examination of the contract
language, that, [sic] parol or extrinsic evidence may not be used to add
restrictions to the contracts’ language governing payment of
commissions, and that the evidence at trial be limited to a
determination of what taxes were collected, and what commissions are
due.

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 Id. at 77. The County filed a response and cross-motion for partial summary

judgment “as the evidence shows that there is no genuine issue as to any

material fact and that [the County is] entitled to partial summary judgment as a

matter of law on all claims by [Consultant] seeking to recover for ‘last years

taxes’.” Id. at 149.

[7] The trial court held a hearing on the cross-motions for partial summary

judgment in June 2013. Counsel for Consultant described the issue before the

court as “whether [Consultant] was entitled to receive a commission on all of

the delinquent taxes that it recovered or just a portion of the delinquent taxes.

And really the key question in this case is the definition of delinquent.”

Transcript at 4. Consultant argued:

[O]nce a tax was more than one day past due, it was assigned a
delinquent penalty. So there’s really no question here as to what a
delinquent tax is. . . . What does it mean to be delinquent? It means it
didn’t get paid on the day it was due.
***
[L]ast year’s taxes were . . . a year past due. The prior year’s taxes
were two years past due. So they were all delinquent.
***
We’d ask the Court to enter partial summary judgment defining the
term “delinquent,” and that’s all we’re asking for.
Id. at 8-13. The County argued:

[T]he issue here is not what the word “delinquent” means. There is no
dispute about what a delinquent tax is or what process may be
provided. The question is what process provides for when a
delinquent tax becomes a tax collection case? And that’s the language
of the contract that [Consultant] asked this Court to ignore.

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 There is no provision in any of the agreements that have been
designated to the Court which in any way say that [Consultant] is
entitled to recover for every delinquent real estate property tax.
What it says is that 100 percent of real estate collection cases will be
assigned to [Consultant]. When a case – a delinquent tax becomes a
collection case is not defined in the contract. And when it will be
assigned to [Consultant] is not defined in the contract. And that is
where the instruction clause comes in.
***
[I]t’s very important to note in this case that throughout the years that
these contracts were in force, [Consultant] expressly understood that it
was only collecting on these prior year taxes. In fact, their testimony is
that they took no steps to, and never sought to collect any of the last
year taxes.
Id. at 19-22. On June 18, 2013, the trial court entered an order granting

Consultant’s motion for partial summary judgment “as it relates to the

definition of ‘delinquent’” and denying the County’s motion. Id. at 19-20. At a

hearing on August 30, 2013, the parties requested clarification of the court’s

order for purposes of going forward. The trial court stated, “in the ruling on the

18th, as I understood ‘delinquency,’ that basically dealt with everything except

the amounts.” Id. at 320.

[8] On September 20, 2013, the County filed a Motion for Leave to Amend its

answer to assert the affirmative defenses of estoppel, waiver, accord and

satisfaction, and laches. Consultant objected to the motion for leave to amend

on grounds of undue delay and prejudice. In short order, Consultant also filed

a motion for summary judgment, alleging it was entitled to judgment as a

matter of law in its favor because:

1. The parties entered into contracts regarding services provided by
[Consultant] for [the County] whereby [Consultant] would be paid
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 commissions.
2. [The County has] breached said contracts.
3. [The County has] alleged that it did not breach said contracts but
this court has effectively ruled otherwise.
4. [The County has] failed to produce any evidence supporting [its]
denial of [Consultant’s] claims and should be prohibited from now
adding to or changing to [sic] the body of evidence as discovery is now
closed.
5. . . . [A]s a result of [the County’s] breach, [Consultant] is owed
$1,076,896.92, plus prejudgment interest and costs.
Id. at 326-27. The County filed a response to the Motion for Summary

Judgment and also filed a Motion to Strike portions of an affidavit and

accompanying exhibits Consultant designated in support of its motion and

request for damages.

[9] The trial court held a hearing on the County’s Motion for Leave to Amend its

answer, Consultant’s Motion for Summary Judgment, and the County’s motion

to strike Consultant’s affidavit. At the conclusion of the hearing, the trial court

ruled from the bench that the County’s motion for leave to amend its answer

was denied, the County’s motion to strike the affidavit was denied, and

Consultant’s motion for summary judgment was granted. In an order

memorializing this ruling, the trial court entered final judgment against the

County and for Consultant “in the amount of $1,076,896.92, together with pre-

judgment interest in the amount of $393,000.00, together with its costs herein.”

Id. at 22. The County now appeals.

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 Discussion and Decision
I. Summary Judgment Standard of Review
[10] We review a summary judgment order de novo. Neu v. Gibson, 928 N.E.2d 556,

559 (Ind. 2010). A summary judgment order will be affirmed when there is no

genuine issue of material fact and the moving party is entitled to summary

judgment as a matter of law. Id. at 559-60; Ind. Trial Rule 56(C). The party

appealing the trial court’s grant of summary judgment has the burden of

persuading the court that the grant of summary judgment was erroneous.

Diversified Invs., LLC v. U.S. Bank, NA, 838 N.E.2d 536, 539 (Ind. Ct. App.

2005), trans. denied. The fact that the parties made cross-motions for summary

judgment does not alter our standard of review; we will consider each motion

separately to determine if the moving party was entitled to summary judgment

as a matter of law. Id.

II. Construction of the Collection Contracts
[11] The County contends the trial court erred in granting Consultant’s motion for

partial summary judgment and in denying its own motion for partial summary

judgment regarding the interpretation of the collection contracts.

[12] “Summary judgment is especially appropriate in the context of contract

interpretation because the construction of a written contract is a question of

law.” TW Gen. Contracting Servs., Inc. v. First Farmers Bank & Trust, 904 N.E.2d

1285, 1287-88 (Ind. Ct. App. 2009). And because the construction of a written

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 contract is a question of law, we review the trial court’s judgment de novo.

Jenkins v. S. Bend Cmty. Sch. Corp., 982 N.E.2d 343, 347 (Ind. Ct. App. 2013),

trans. denied. When a trial court has entered summary judgment in a contract

dispute, it has implicitly determined either that the contract is not ambiguous as

a matter of law and resolution requires only applying the terms of the contract

or that any ambiguity may be resolved without the aid of factual

determinations. Id. Here, the trial court made no specific finding regarding

ambiguity, but the parties agree that the contract is unambiguous. See Brief of

the Appellants at 22; Appellee’s Response Brief at 27-28.

[13] “The ultimate goal of any contract interpretation is to determine the intent of

the parties at the time that they made the agreement.” Citimortgage, Inc. v.

Barabas, 975 N.E.2d 805, 813 (Ind. 2012). Where the terms of a contract are

clear and unambiguous, we determine the parties’ intent from the four corners

of the document. Univ. of S. Ind. Found. v. Baker, 843 N.E.2d 528, 532 (Ind.

2006). We begin by reading the plain language of the contract in context,

“construing it so as to render each word, phrase, and term meaningful,

unambiguous, and harmonious with the whole” when possible. Citimortgage,

Inc., 975 N.E.2d at 813. We should make every attempt to construe the

language of the contract “so as not to render any words, phrases, or terms

ineffective or meaningless.” Fischer v. Heymann, 943 N.E.2d 896, 900 (Ind. Ct.

App. 2011), trans. denied. If necessary, the text of a disputed provision may be

understood by referring to other provisions within the four corners of the

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 document. Claire’s Boutiques, Inc. v. Brownsburg Station Partners LLC, 997 N.E.2d

1093, 1098 (Ind. Ct. App. 2013).

[14] The specific question presented by the cross motions for summary judgment

was what Consultant was hired to collect pursuant to the contract provision

that Consultant was to “[c]ollect the delinquent monies.” See, e.g., Appellants’

App. at 26 (Section 2.E. of January 19, 2000 contract). Consultant took the

position that it was to collect all delinquent taxes and was entitled to

commissions on the total amount, whereas the County took the position that

Consultant was only to collect the past year delinquent taxes as directed by the

Treasurer and was only entitled to commissions on that amount even if

additional delinquent taxes were paid.

[15] The collection contracts do not define the scope of “delinquent monies”

Consultant was hired to collect, and in fact, Section 2.E. of the contract is the

only time the term “delinquent” is used. However, by the contracts’ express

terms, the Consultant was assigned all of the County’s “Real Property Tax

Collection Cases” and was to receive instruction from the Treasurer as to how

to carry out its responsibilities under the contracts. Reading the collection

contracts as Consultant urges focuses on the collection clause at the expense of

the assignment and instruction clauses. Moreover, it misreads the collection

clause as charging Consultant with collecting “delinquent taxes.” Id. All the

clauses are given meaning when the contracts as a whole are construed to mean

that Consultant is to collect “the delinquent monies” associated with the real

property tax collection cases assigned to it at the Treasurer’s instruction and

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 that Consultant earns commissions on those amounts. That the contracts

require Consultant to be assigned one-hundred percent of the real property tax

collection cases means only that no tax collection cases will be assigned to any

other entity for collection, not that Consultant will be assigned all delinquent

tax accounts. In other words, the contracts allow the Treasurer to decide which

cases are tax collection cases, assign those to Consultant and instruct

Consultant to carry out its collection responsibilities with respect to those cases.

The contracts then require Consultant to attempt to collect the delinquent

monies from those collection cases and file a claim for its commissions when

those delinquent monies are paid to the County.

[16] Although we may not look to extrinsic evidence to add to, vary, or explain the

parties’ intent with regard to an unambiguous contract, Baker, 843 N.E.2d at

532, we do note that the evidence designated in support of these cross-motions

supports this interpretation of the collection contracts. County employee

DeMure testified at her deposition that Consultant was not to collect on every

past-due tax but only those specified by the Treasurer. And Castro,

Consultant’s employee, gave testimony at her deposition consistent with

DeMure’s, stating that Consultant was told by the County to collect only on

prior year taxes and consistent with that instruction, it sent collection letters

only on prior year taxes and submitted claims for commissions only on prior

year taxes that were collected. The evidence is undisputed that in discharging

its responsibilities under the contracts, Consultant was collecting only prior year

taxes for the County. Although our resolution of this issue means we need not

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 address the merits of the final judgment in Consultant’s favor, we also note that

even if Consultant was correct that the terms of the contracts meant it could

collect on every real property tax that was at least one day past due, it did not

take the required steps to do so. Again, the undisputed evidence at this stage of

the proceedings was that Consultant only sent collection letters on prior year

taxes and acknowledged that it was only entitled to commissions on taxes

collected after a collection letter was sent.

[17] The trial court erred as a matter of law in determining that the collection

contracts meant Consultant was entitled to collect all delinquent taxes and

therefore erred in granting partial summary judgment to Consultant and

denying summary judgment to the County on this issue. We reverse the trial

court’s June 18, 2013 order granting partial summary judgment to Consultant,

and remand with instructions for the trial court to enter partial summary

judgment for the County on the issue of the interpretation of the collection

contracts and to conduct further proceedings on Consultant’s complaint

regarding whether Consultant is owed any unpaid commissions on prior year

taxes collected and if so, the amount of those unpaid commissions.

Reversed and remanded.

Baker, J., and Kirsch, J., concur.

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