FILED
Jul 14 2016, 8:44 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE
Jenny R. Buchheit Jeffrey C. Rocker
Seth M. Thomas Jeffrey L. Beck
Ice Miller LLP Beck Rocker, P.C.
Indianapolis, Indiana Columbus, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Randy Faulkner & Associates, July 14, 2016
Inc. and Randall W. Faulkner, Court of Appeals Case No.
Appellants-Defendants, 41A01-1506-PL-706
Appeal from the Johnson Superior
v. Court
The Honorable Kevin M. Barton,
The Restoration Church, Inc., Judge
Appellee-Plaintiff. Trial Court Cause No.
41D01-1305-PL-68
Robb, Judge.
Case Summary and Issues
[1] In 2009, The Restoration Church, Inc. (“the Church”) leased premises from
Randy Faulkner and Associates, Inc. (“RFA”). In 2012, RFA gave the Church
written notice to vacate the premises. After vacating the premises, the Church
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filed suit against RFA and Randall W. Faulkner, the owner of RFA, for breach
of contract, among other claims. RFA and Faulkner countersued the Church
for breach of contract and various tort claims, including defamation and
tortious interference with a business relationship. Some of the parties’ claims
were decided by summary judgment, but the parties’ breach of contract claims
and RFA’s and Faulkner’s tort claims remained. Following a four-day bench
trial, the trial court entered judgment for the Church on the parties’ breach of
contract claims and awarded the Church in excess of $322,000 in damages.
The trial court also entered judgment for RFA and Faulkner on their claim of
tortious interference with a business relationship, but concluded they were not
entitled to any damages because their evidence was speculative.
[2] RFA and Faulkner present four issues on appeal and the Church presents one
issue on cross-appeal. We consolidate the issues into two dispositive issues: 1)
whether the trial court erred when it found that RFA had waived its right to
receive thirty days’ written notice of the Church’s intent to renew the parties’
lease agreement; and 2) whether the trial court clearly erred when it concluded
that RFA’s and Faulkner’s evidence of damages on their claim for tortious
interference with a business relationship was speculative.
[3] We conclude the trial court’s determination that RFA had waived its right to
receive written notice of the Church’s intent to renew the parties’ lease
agreement is not supported by sufficient evidence. We also conclude the trial
court’s determination that RFA’s and Faulkner’s evidence of damages on their
tort claim was speculative is not clearly erroneous. Accordingly, we reverse the
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trial court’s judgment for the Church on the Church’s breach of contract claim
and vacate the corresponding damage award, affirm the trial court’s judgment
that RFA and Faulkner are entitled to no damages on their tort claim, and
remand for further proceedings.
Facts and Procedural History 1
[4] RFA purchased a complex of buildings known as “Polk Place” in Greenwood,
Indiana in December 2008. Throughout 2009, several members of the Church
invested many hours of labor and the Church itself invested $435,906.79 to
restore a building on the property for use as a worship center. On October 7,
2009, RFA and the Church entered into a lease agreement for the property. At
the time, Faulkner, the owner of RFA, attended the Church. Although RFA
believed the fair rental value of the restored property to be $14,000 per month,
RFA agreed to rent the property to the Church for one year at $100 per month,
and RFA agreed to provide the Church with six one-year options to renew that
agreement.
[5] In particular, the lease agreement, which was negotiated by counsel for both
RFA and the Church, states, in relevant part, as follows:
SECTION ONE
SUBJECT AND PURPOSE
1
We held oral argument on June 2, 2016, in French Lick, Indiana, as part of the Indiana State Bar
Association’s Solo and Small Firm Conference.
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Lessor [RFA] leases the building and land . . . known as “Polk
Place,” . . . to Lessee [the Church] for Lessee’s use of operating a
church and the related ministries of a church.
SECTION TWO
TERM AND RENT
A. Lessor demises the above-described premises for a term of
one year, commencing [***date***],[2] and terminating on
[***date***], at 11:59 p.m., or sooner as provided in this Lease
agreement, at the annual rental of [***FAIR MARKET
VALUE***] Dollars ($***), payable in equal installments of [***]
Dollars ($***) in advance on the first day of each month for that
month’s rental, during the term of this Lease agreement.
However, so long as Lessee is not in breach of any provision of this
Lease or in holdover status Lessor agrees to accept payment of One
Hundred Dollars ($100.00) per month plus a cash donation receipt
for the balance (or by some other such method to maximize
Lessor’s tax benefit from foregoing the majority of the rent as
Lessor’s accountant may direct).
***
SECTION THIRTEEN
DEFAULT OR BREACH
Each of the following events shall constitute a default or breach
of this Lease agreement by Lessee:
2
As the trial court noted in its order, “[t]he dates of the lease term and the fair market value were omitted
from Section Two. The document retains language used to mark the space.” Appendix of Appellants at 41.
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***
(3) If Lessee shall fail to pay Lessor any rent or additional
rent when the rent shall become due and shall not make the
payment within seven (7) days after notice thereof by Lessor to
Lessee.
(4) If Lessee shall fail to perform or comply with any of the
conditions of this Lease agreement and if the nonperformance shall
continue for a period of seven (7) days after notice of nonperformance [is]
given by Lessor to Lessee or, if the performance cannot be
reasonably had within the seven (7) day period, Lessee shall not
in good faith have commenced to diligently proceed to
completion of performance.
***
SECTION FOURTEEN
EFFECT OF DEFAULT
In the event of any default under this Lease agreement, as set
forth in Section Thirteen, the rights of Lessor shall be as follows:
(1) Lessor shall have the right to cancel and terminate this
Lease agreement, as well as all of the right, title, and interest of
Lessee under this Lease agreement, by giving to Lessee not less
than thirty days’ notice of the cancellation and termination. On
expiration of the time fixed in the notice, this Lease agreement
and the right, title, and interest of Lessee under this Lease
agreement, shall terminate in the same manner and with the
same force and effect, except as to Lessee’s liability, as if the date
fixed in the notice of cancellation and termination were the end
of the term originally set forth in this Lease agreement.
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***
SECTION FIFTEEN
HOLDOVER BY LESSEE; PROVISION FOR MONTH-TO-
MONTH TENANCY; NOT CONSTRUED AS RENEWAL
OR EXTENSION OF LEASE
The failure of Lessee to surrender the demised premises on the date
provided for the termination of this Lease term, and the subsequent
holding over by Lessee, with or without the consent of Lessor, shall result
in the creation of a tenancy from month-to-month. This holding over
shall not result in a renewal or extension of this Lease, and the month-to-
month tenancy may be terminated at any time by Lessor giving Lessee
thirty days’ written notice of the intention to terminate the tenancy. All
other terms and conditions of this Lease agreement shall remain in force
during any month-to-month tenancy under this provision.
SECTION SIXTEEN
HOLDOVER BY LESSEE; INCREASE IN AMOUNT OF
RENT
If Lessee retains possession of the demised premises or any part of
the demised premises after the termination of this Lease agreement by
lapse of time or otherwise, Lessee shall pay to Lessor the monthly
installments of rent, at double the rate payable for the month
immediately preceding such holding over, computed on a per-
month basis, for each month or part of a month (without
reduction for any such partial month) that Lessee thus remains in
possession.[3] In addition, Lessee shall pay to Lessor all direct
3
The parties agree that this provision of the lease agreement means that the rent due from a holdover tenant
would be $200 per month, or $2,400 per year, where the rent under the original term was $100 per month, or
$1,200 per year.
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and consequential damages sustained by reason of Lessee’s
retention of possession of the demised premises.
The provisions of this Section shall not be deemed to limit or exclude any
of Lessor’s rights of reentry or any other right granted to Lessor under this
Lease agreement or under law.
***
SECTION TWENTY-SEVEN
WAIVERS
The failure of Lessor to insist on strict performance of any of the terms
and conditions of this Lease agreement on a specific instance shall be
deemed a waiver of the rights or remedies that Lessor may have regarding
that specific instance only, and [it] shall not be deemed a waiver of
any subsequent breach or default in any terms and conditions.
***
SECTION THIRTY-ONE
OPTION TO RENEW
Lessor grants to Lessee an option to renew this Lease agreement
six times for periods of One (1) year per renewal, with all other
terms and conditions of the renewal Lease to be the same as
those in this Lease agreement. To exercise this option, Lessee must
give Lessor written notice of the intention to do so at least thirty days
before this Lease agreement or any subsequent renewal period expires.
Provided, however, that the right to renew this Lease agreement
shall be valid only so long as Lessee has at all times been in full
compliance with the substantive portions of this Lease.
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The right to exercise any renewals provided for in this Lease shall
be contingent upon the Lessee maintaining its current statement
of faith and bylaws (copies attached hereto) or maintaining any
subsequent statement of faith and/or bylaws as may be
acceptable to Lessor, and upon David L. Stephenson remaining
pastor over the Lessee’s church, and upon the premises being
used solely for the purpose of operating a church and the related
ministries of a church. The parties agree that this provision is
part and parcel and of the essence of this agreement.
***
SECTION THIRTY-THREE
REMEDIES OF LESSOR
A. The rights and remedies given to Lessor in this Lease agreement
are distinct, separate, and cumulative, and no one of them, whether or
not exercised by Lessor, shall be deemed to be in exclusion of any of the
others in this Lease agreement, by law, or by equity . . . .
***
C. No receipt of money by Lessor from Lessee after default or
cancellation of this Lease agreement in any lawful manner shall (1)
reinstate, continue, or extend the term or affect any notice given to Lessee,
(2) operate as a waiver of the right of Lessor to enforce the payment of
rent and additional rent then due or falling due, or (3) operate as a
waiver of the right of Lessor to recover possession of the demised premises
by proper suit, action, proceeding, or other remedy. After (1) service of
notice of termination and forfeiture as provided in this Lease
agreement and the expiration of the time specified in such notice,
(2) the commencement of any suit, action, proceeding, or other
remedy, or (3) final order or judgment for possession of the
demised premises, Lessor may demand, receive, and collect any
monies due . . . .
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App. of Appellants at 120-35 (emphases added).
[6] During the course of the tenancy, Faulkner’s relationship with the Church, its
members, and Pastor Stephenson soured. Faulkner later learned that Pastor
Stephenson had made numerous statements to other Church members that
were not favorable to Faulkner. In particular, as a result of statements made to
him by Pastor Stephenson, Tim Wood left his employment at RFA and as a
salesman at The Christian Phonebook, another business owned by Faulkner.
Because of the timing of Wood’s departure and Wood’s knowledge of The
Christian Phonebook’s clientele, Faulkner decided to sell that business in 2013
for $165,000, although he believed the business was worth between $180,000
and $190,000. Faulkner had originally purchased The Christian Phonebook in
2006 for $135,000.
[7] Also during the course of the tenancy, the Church never provided RFA with
timely, written notices of its intent to renew the lease agreement for any of the
years in which such a notice was called for under the lease. In fact, on
September 24, 2010, shortly before the expiration of the original term of the
lease, RFA gave notice to the Church that the Church had not yet provided
written notice of its intent to renew, which had been due on September 6. The
Church did not respond to the September 24, 2010, notice until nearly two
weeks later, on October 7, 2010, at which time the Church provided RFA a
check for $1,200 along with a written statement of the Church’s intent to renew
the lease. On the check, the Church denoted that the payment was for one
year’s rent. RFA accepted the check.
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[8] In October of 2011 and in October of 2012, the Church again wrote RFA
checks for $1,200, or one year’s worth of rent at $100 per month, which RFA
accepted. It is also not disputed that, throughout the Church’s tenancy, the
Church never provided RFA with cash-donation receipts, which were to state
the difference between the Church’s actual rent and the fair rental value for the
property, or $13,900 per month, as required under Section Two of the lease
agreement.
[9] On July 27, 2012, RFA gave the Church written notice to vacate the premises
within sixty days. Thereafter, Cindy Stephenson, Pastor Stephenson’s wife,
manufactured false documents that purported to express the Church’s timely
notices of intent to renew for the prior years. In response to those false
documents, RFA ordered the Church to vacate the premises by September 6,
2012, which the Church did. The one-year term for that year would have ended
on October 6, 2012.
[10] On October 15, 2012, the Church filed suit against RFA and Faulkner for
breach of contract, among other claims. On December 20, RFA and Faulkner
countersued the Church for breach of contract and various tort claims,
including tortious interference with a business relationship. In late 2014, the
court held a four-day bench trial, following which it entered lengthy findings of
fact and conclusions, entering judgment, in relevant part, for the Church on the
parties’ breach of contract claims and for RFA and Faulkner on their claim of
tortious interference with a business relationship. The court awarded damages
to the Church for breach of contract in an amount in excess of $322,000. The
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court also concluded that RFA and Faulkner were not entitled to any damages
on their claim for tortious interference with a business relationship because their
evidence of damages was speculative. And the court fined the Church $2,500
as a sanction for Cindy’s manufacturing of false documents. This appeal
ensued.
Discussion and Decision
I. Standard of Review
[11] The parties appeal the trial court’s judgment in which the court entered findings
of fact and conclusions thereon following a bench trial. Generally, our standard
of review is as follows:
We may not set aside the findings or judgment unless they are
clearly erroneous. In our review, we first consider whether the
evidence supports the factual findings. Second, we consider
whether the findings support the judgment. Findings are clearly
erroneous only when the record contains no facts to support
them either directly or by inference. A judgment is clearly
erroneous if it relies on an incorrect legal standard. We give due
regard to the trial court’s ability to assess the credibility of
witnesses. While we defer substantially to findings of fact, we do
not defer to conclusions of law. We do not reweigh the evidence;
rather we consider the evidence most favorable to the judgment
with all reasonable inferences drawn in favor of the judgment.
State v. Int’l Bus. Machs. Corp., 51 N.E.3d 150, 158 (Ind. 2016) (citations and
quotation marks omitted).
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II. Waiver of the Condition Precedent
[12] We first address the parties’ arguments regarding whether RFA waived its right
under the lease agreement to receive, at least thirty days prior to the expiration
of the lease term, written notice from the Church of the Church’s intent to
renew the lease. The interpretation of a contract is a question of law that we
review de novo. Techna-Fit, Inc. v. Fluid Transfer Prods., Inc., 45 N.E.3d 399, 413
(Ind. Ct. App. 2015). We must give effect to the intentions of the parties, which
are ascertained from the language of the contract in light of the surrounding
circumstances. HK New Plan Marwood Sunshine Cheyenne, LLC v. Onofrey Food
Servs., Inc., 846 N.E.2d 318, 322 (Ind. Ct. App. 2006).
[13] However, as our supreme court has held:
It has long been the law in this state that “[t]he performance of a
condition precedent may be waived in many ways.” Johnson v.
Bucklen, 9 Ind. App. 154, 157, 36 N.E. 176, 177 (1894). One
such way is by the conduct of the parties to the contract.
[W]hether there has been a waiver of a contract provision is
ordinarily a question of fact.
Harrison v. Thomas, 761 N.E.2d 816, 820 (Ind. 2002) (first alteration original to
Harrison) (citation omitted). It is well-established that conditions precedent
such as notice-of-intent-to-renew provisions are to the benefit of the lessor.
Norris Ave. Prof’l Bldg. P’ship v. Coordinated Health, LLC, 28 N.E.3d 296, 302 (Ind.
Ct. App. 2015), trans. denied. As such, the lessor can waive those provisions
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while demanding the lessee to perform under the contract. Id.; Harrison, 761
N.E.2d at 820.
[14] Here, the trial court concluded that RFA demonstrated its waiver of the
condition precedent when RFA accepted the Church’s untimely notices of the
Church’s intent to renew and the Church’s annual rent payments.4 We cannot
agree. While waiver is ordinarily a question of fact, this court has long held
that, “if notice is stipulated in the lease, . . . the mere holding over and payment
of rent [i]s not sufficient notice under the contract.” Carsten v. Eickhoff, 163 Ind.
App. 294, 299-300, 323 N.E.2d 664, 667-68 (1975). “The reasoning behind
demanding exact compliance with the terms of the option . . . is that the lessor
is bound to grant the additional term while the lessee is free to accept or reject
it.” Id. “Thus, the courts will not hold the lessor to his promise any longer than
he has agreed to be held.” Id.
[15] In Carsten, the parties entered a lease agreement providing for a three year initial
lease with four ten-year options to renew. The lessees were required to notify
the lessors in person or by certified mail at least sixty days prior to the
expiration of a lease term in order to renew. The lessees did not provide any
notice sixty days prior to the expiration of the initial three year term, but
continued to perform under the lease. Nearly two years after the expiration of
4
RFA asserts that the trial court erred when it relied on parts of a prior summary judgment order in its final
judgment without complying with Indiana Trial Rule 56(D). We need not discuss this issue on appeal,
however. Those findings discuss whether RFA invoiced the Church for one year’s rent, but at oral argument
counsel for the Church conceded that RFA never sent the Church any such invoices.
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the initial term, the lessors informed the lessees that they considered the lease to
be terminated and demanded the lessees vacate the premises. We concluded
the notice requirement in the lease “evidence[d] an intent of the parties that
there was to be no ‘extension’ or ‘renewal’ of the lease without the required
notice [and therefore] the giving of the required notice is a condition precedent
to the right of renewal.” Id. at 668. Moreover, we held in response to the
lessees’ argument that the lessors were estopped from denying the renewal term
that in the absence of fraud, accident, surprise or mistake, “[m]ere silence on
the part of the lessor is not a waiver unless he has a duty to speak.” Id. at 669.
The lessors’ acceptance of payment under the lease during the two years
following the expiration of the lease did not constitute acquiescence in a ten-
year term and was not inconsistent with a tenancy from year to year. Id.
[16] We conclude that Carsten is controlling on these facts. Pursuant to the language
of the parties’ lease agreement and the undisputed facts, RFA has not agreed to
be held to providing the Church with any of the Church’s claimed option terms.
Rather, as with the lessee in Carsten, the Church failed to provide RFA with
proper notice of the Church’s intent to renew the lease. Instead, the Church
merely held over and paid the same rent it had been paying. As a matter of
law, the trial court erred when it concluded that that evidence demonstrated
RFA’s waiver of the condition precedent. See id.
[17] The lease agreement and the undisputed facts demonstrate that the Church
defaulted on its option to renew the lease in October of 2010. Again, Section
Thirteen of the lease agreement plainly states that, “[i]f Lessee shall fail to
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perform or comply with any of the conditions of this Lease agreement and if the
nonperformance shall continue for a period of seven (7) days after notice of
nonperformance [is] given by Lessor to Lessee,” the lessee shall be in default on
those conditions. App. of Appellants at 126. The facts demonstrate that the
Church did not comply with the condition to provide written notice of the
Church’s intent to renew the lease agreement thirty days prior to the expiration
of the original lease term. In light of the Church’s failure to provide that notice,
on September 24, 2010, RFA notified the Church of its nonperformance. But
the Church did not respond to RFA’s notice within seven days as required by
Section Thirteen; instead, the Church responded nearly two full weeks later, on
October 7, 2010. The Church’s response was not simply untimely; it happened
after the original lease term expired on October 6. Cf. Powers v. City of Lafayette,
622 N.E.2d 1311, 1314-15 (Ind. Ct. App. 1993) (holding that the lessee’s late
notice was nonetheless prior to the expiration of the lease, which, along with
other facts, supported the lessor’s intent to waive the condition precedent),
trans. denied. Pursuant to the lease agreement’s plain language and given the
Church’s untimely response, the Church defaulted on its option to renew the
lease.5
5
The point of RFA’s September 24, 2010, letter is not to say that it provided the Church an opportunity to
comply with the thirty days’ notice requirement, as that window had closed. Rather, the point is that the
letter established RFA’s intent to hold the Church to Section Thirteen of the lease agreement on default if the
Church continued its noncompliance.
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[18] Further, the lease agreement expressly provides that RFA’s acceptance of
ensuing rent payments from the Church could not circumvent the Church’s
default. In particular, Section Thirty-Three states that “[n]o receipt of money
by Lessor from Lessee after default . . . shall (1) reinstate, continue, or extend
the term . . . [of the] Lessee . . . or (3) operate as a waiver of the right of Lessor
to recover possession of the demised premises . . . .” Appellants’ App. at 132.
And, because the Church was, as a matter of law, a holdover tenant, Section
Fifteen of the lease is also relevant. That Section states that “holding over shall
not result in a renewal or extension of this Lease” and, in the event of a
holdover, “[a]ll other terms and conditions of this Lease agreement shall remain
in force . . . .” Id. at 127. By the lease agreement’s plain terms, merely holding
over and paying the same rent does not entitle the lessee to a renewal of the
lease and does not evince an intent by the lessor to allow such a renewal after
the lessee’s default. See, e.g., HK New Plan, 846 N.E.2d at 325 (holding that,
“[u]nder the clear language of the Lease . . . , [the lessor] did not waive [the
lessee’s] default by accepting late payments”).
[19] Nonetheless, the Church argues, and the trial court agreed, that the instant facts
are more similar to those in Norris than those in Carsten. In Norris, we
recognized that a lessor can demonstrate its intent to waive its right to written
notice of a lessee’s attempt to exercise an option term when the lessor accepts
increased rent payments from the lessee that are in compliance with the lease
agreement’s requirements for the option terms. 28 N.E.3d at 302-03. In so
holding, we explained that, under Indiana common law, holding over renews
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the original lease terms, and, by accepting the rent payments that were in
accordance with the lease rather than common law, the lessor was aware of the
lessee’s intent to exercise the option terms. Id. at 303. We further noted that
the lessor had the right to rely on the lessee’s apparent exercise of the option
terms. Id.
[20] The crux of the Church’s reliance on Norris is that, here, the lease agreement
required a holdover tenant to pay double the rent of a non-holdover tenant.
Accordingly, the Church continues, by not paying that increased rent, the
Church, like the lessee in Norris, made its intent to exercise the option terms
apparent. Thus, the Church asserts RFA manifested its intent to waive the
condition precedent of written notice from the Church by accepting the
Church’s rent payments following the original term.
[21] We cannot agree with the Church that the instant facts are like those in Norris.
Although the lease agreement called for a materially different rent payment
from a holdover tenant than from a non-holdover tenant, that is not dispositive
in light of the totality of the lease agreement. Unlike in Norris, the lease
agreement here expressly prohibits finding that the lessor’s failure to insist on
the higher rent payment evinces an intent by the lessor to waive its right to the
condition precedent to renew the lease.
[22] In particular, Section Twenty-Seven of the lease agreement states that “[t]he
failure of the Lessor to insist on strict performance of any of the terms and
conditions of this Lease agreement on a specific instance,” such as the failure to
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insist on a holdover tenant’s strict compliance with the increased rent due in a
holdover term, “shall be deemed a waiver of the rights or remedies that Lessor
may have regarding that specific instance only . . . .” Appellant’s App. at 130
(emphasis added). Thus, Section Twenty-Seven prohibits using the lessor’s
failure to insist on strict performance in one instance to demonstrate a waiver in
another instance. Further, Section Thirty-Three specifies that the “rights and
remedies given to Lessor in this Lease agreement are distinct, separate, and
cumulative, and no one of them, whether or not exercised by Lessor, shall be
deemed to be in exclusion of any of the others in this Lease agreement, by law,
or by equity . . . .” Id. at 132. Section Sixteen, which describes a holdover
tenancy, itself mandates that its provisions “shall not be deemed to limit or
exclude any of the Lessor’s rights of reentry or any other right granted to
Lessor . . . .” Id. at 127. And, again, Sections Fifteen and Thirty-Three prohibit
the conclusion that the lessor intended to renew the lease after a default simply
because the lessor accepted a partial rent payment.
[23] The Church’s reliance on Norris, in effect, would require us to conclude that
RFA’s waiver of its right to the increased payments due from a holdover tenant
operates to waive RFA’s right to receive written notice of the Church’s intent to
exercise its option terms. But that conclusion is contrary to the lease
agreement’s several non-waiver provisions, which reserved the rights of the
lessor. Further, in light of the lease agreement’s several non-waiver provisions,
the Church had no right to rely on RFA’s acceptance of the Church’s rent
payments following the Church’s default; RFA’s failure to demand the higher
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rent did not diminish or abrogate any of RFA’s other rights under the lease. In
other words, the lease agreement here is materially different from the lease
agreement in Norris, and the material facts found by the trial court to support
RFA’s waiver of its right to written notice, as a condition precedent to the
exercise of the option terms, do not properly account for the language of the
lease agreement.
[24] In sum, case law, the lease agreement, and the undisputed facts make clear that
the Church was a holdover tenant following the expiration of the lease
agreement’s original term. As a holdover tenant, the Church continued to pay
the same rent it had been paying, and RFA waived its right to the increased rent
payments due from the Church as a holdover tenant. But the lease agreement
makes clear that RFA’s waiver of its right to collect the increased rent cannot
operate to waive another right under the lease agreement. Accordingly, the trial
court erred when it found that the Church’s continued occupancy and RFA’s
continued acceptance of rent demonstrated RFA’s intent to waive its right to
written notice from the Church of the Church’s intent to exercise the option
terms. Because RFA was dealing with a holdover tenant in July of 2012, RFA
was within its rights under the lease agreement to evict the Church so long as
RFA provided the Church with at least thirty days’ written notice, which it is
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undisputed that RFA did.6 Hence, RFA did not breach its contract with the
Church, and it owes the Church no damages on that claim.
II. Tort Damages
[25] RFA and Faulkner also argue that the trial court erred in awarding them no
damages on their claim that the Church had tortiously interfered with their
business relationships with Wood by causing Wood to leave his employment at
RFA and The Christian Phonebook, the latter of which, according to Faulkner,
caused Faulkner to sell that business at a discounted price. We reject RFA’s
and Faulkner’s arguments on this issue. Their only argument with respect to
damages is that Faulkner’s testimony supports the conclusion that he had to sell
The Christian Phonebook at a discounted price. Again, the trial court expressly
found that testimony to be speculative. Thus, RFA’s and Faulkner’s argument
on damages is simply a request for this court to credit evidence that the trial
court expressly refused to credit, contrary to our standard of review. Because
RFA and Faulkner cannot show that the trial court clearly erred when it
discredited their only evidence of damages, we affirm on this issue.
6
In its brief on appeal, the Church relies on Pierce v. Yochum, 164 Ind. App. 443, 330 N.E.2d 102 (1975), for
the proposition that, once the facts demonstrate that one party to a contract has waived a contractual
provision, that party is estopped from later demanding strict compliance with that provision absent notice.
But as we hold that the facts here do not demonstrate RFA’s waiver in the first instance, Pierce is inapposite.
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Conclusion
[26] The trial court’s determination that RFA waived its right to receive written
notice of the Church’s intent to renew the parties’ lease agreement is not
supported by sufficient evidence, and we therefore reverse the trial court’s
judgment and damage award for the Church on its breach of contract claim.
The trial court’s determination that RFA and Faulkner failed to meet their
burden of proof to show damages on their claim for tortious interference with a
business relationship is not clearly erroneous, however, and we affirm that part
of the judgment. Accordingly, we affirm in part, reverse in part, and remand
for the trial court to amend its judgment consistent with this opinion.
[27] Affirmed in part, reversed in part, and remanded for further proceedings.
Riley, J., and Crone, J., concur.
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Randy Faulkner & Associates, Inc. v. Restoration Church, Inc.
Combined Opinion