MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Mar 17 2017, 7:52 am
court except for the purpose of establishing
the defense of res judicata, collateral CLERK
Indiana Supreme Court
Court of Appeals
estoppel, or the law of the case. and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
George W. Hopper Paul D. Vink
Michael W. McBride Bose McKinney & Evans LLP
Cohen & Malad, LLP Indianapolis, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Sanders Development Group, March 17, 2017
Inc., Court of Appeals Case No.
Appellant-Plaintiff, 06A04-1604-PL-941
Appeal from the Boone Circuit
v. Court
The Honorable J. Jeffrey Edens,
Willow Properties, LLC, Judge
Appellee-Defendant Trial Court Cause No.
06C01-1503-PL-184
Mathias, Judge.
[1] Sanders Development Group, Inc. (“Sanders Development”) appeals the Boone
Circuit Court’s entry of summary judgment in favor of Willow Properties, LLC
(“Willow Properties”). Sanders Development appeals and raises the following
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dispositive issue: whether genuine issues of material fact concerning the parties’
intent in entering into the contract precludes the entry of summary judgment in
favor of Willow Properties.
[2] We reverse and remand for proceedings consistent with this opinion.
Facts and Procedural History
[3] Sanders Development is a property development company owned by Mark
Sanders. The company has developed approximately thirty residential
subdivisions since its formation in 1976. Sanders Development typically
performs the work necessary to convert vacant real estate into developed lots
ready for sale for home construction.
[4] In 2001, Mark Sanders, his now ex-wife Linda Sanders, Jeffrey Belskus, and
Debrorah Belskus formed Willow Properties, a member-managed limited
liability company. The company’s goal was to develop 168 acres of
undeveloped real estate located in Zionsville, Indiana, into a subdivision later
named Willow Ridge.
[5] Willow Properties and Sanders Development later entered into a contract that
states in its entirety:
The undersigned, being the Shareholder(s) and Director(s) of
Willow Properties, LLC, agree to pay Sanders Development
Group, Inc., a 7% management fee of the sales price on each
Willow Properties lot sale, to be paid at the time of closing. This
agreement is effective January 1, 2002.
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Appellant’s App. p. 149. The agreement was signed by all four members of
Willow Properties.
[6] Thereafter, Sanders Development developed the real estate and received a 7%
management fee of the sales price of each lot sold. In January 2009, five unsold
lots remained.
[7] In early 2009, Mark Sanders and Linda Sanders dissolved their marriage. As a
result of the dissolution proceedings, Mark transferred his interest in Willow
Properties to Linda. Mark transferred all records in his possession relating to
Willow Properties to the remaining three members.
[8] On August 31, 2010, Lot 52 was sold. Sanders Development did not receive its
7% management fee at closing. On June 7, 2011, Jeffrey Belskus met with Mark
Sanders and informed him that Willow Properties was terminating the contract
between the company and Sanders Development. On that date, four unsold lots
remained in the subdivision. Between July 14, 2011, and April 10, 2015, the
remaining four lots were sold, but Sanders Development was not paid its 7%
management fee at the closings. The total sales price of the last five lots was
$1,571,000.
[9] On March 13, 2015, Sanders Development filed a complaint in Boone Circuit
Court against Willow Properties alleging breach of contract and unjust
enrichment. Sanders Development claimed that it was owed the 7%
management fee for the sale of the last five lots in the Willow Ridge
subdivision.
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[10] Willow Properties filed a motion for summary judgment on October 30, 2015.
Sanders Development subsequently filed a response and cross-motion for
summary judgment. On January 26, 2016, the trial court issued an order
granting Willow Properties motion for summary judgment with respect to the
four lots that sold after Willow Properties terminated the contract. However,
the trial court ordered Willow Properties to pay the 7% management fee to
Sanders Development for the lot that sold on August 31, 2010. Thereafter,
Sanders Development filed a motion to correct error, which the trial court
denied. Sanders Development now appeals.
Standard of Review
[11] When reviewing a grant of summary judgment, we must draw all reasonable
inferences in favor of the non-moving party and affirm only “‘if the designated
evidentiary matter shows that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of law.’” Siner v.
Kindred Hosp. Ltd. P’ship, 51 N.E.3d 1184, 1187 (Ind. 2016) (quoting Ind. Trial
Rule 56(C)). Careful scrutiny must be given to a grant of summary judgment to
ensure that the losing party was not improperly denied its day in court. Id.
“Indiana’s distinctive summary judgment standard imposes a heavy factual
burden on the movant to demonstrate the absence of any genuine issue of
material fact on at least one element of the claim.” Id. Our standard of review is
not altered by cross-motions for summary judgment. Huntington v. Riggs, 862
N.E.2d 1263, 1266 (Ind. Ct. App. 2007), trans. denied.
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[12] Cases involving contract interpretation generally are particularly appropriate for
summary judgment. Rusnak v. Brent Wagner Architects, 55 N.E.3d 834, 840 (Ind.
Ct. App. 2016), trans. denied. “When the terms of a contract are ambiguous or
uncertain, however, and its interpretation requires extrinsic evidence, its
construction is left to the factfinder.” Id. “When summary judgment is granted
based on the construction of a written contract, the trial court has either
determined as a matter of law that the contract is not ambiguous or uncertain,
or that any contract ambiguity can be resolved without the aid of a factual
determination.” Id. at 840-41.
The Parties’ Intent
[13] “The goal of contract interpretation is to determine the intent of the parties
when they made the agreement.” Tender Loving Care Mgmt., Inc. v. Sherls, 14
N.E.3d 67, 72 (Ind. Ct. App. 2014). This court must examine the plain
language of the contract, read it in context and, whenever possible, construe it
so as to render every word, phrase, and term meaningful, unambiguous, and
harmonious with the whole. Id. Construction of the terms of a written contract
generally is a pure question of law. Id. If, however, a contract is ambiguous, the
parties may introduce extrinsic evidence of its meaning, and the interpretation
becomes a question of fact. Broadbent v. Fifth Third Bank, 59 N.E.3d 305, 311
(Ind. Ct. App. 2016), trans. denied. “A word or phrase is ambiguous if
reasonable people could differ as to its meaning.” Id. A term is not ambiguous
solely because the parties disagree about its meaning. Id.
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[14] If contract language is unambiguous, this court may not look to extrinsic
evidence to expand, vary, or explain the instrument but must determine the
parties' intent from the four corners of the instrument. Tender Loving Care Mgmt.,
14 N.E.3d at 72. If the language is ambiguous, the contract terms must be
construed to determine and give effect to the intent of the parties when they
entered into the contract. Id. “Courts may properly consider all relevant
evidence to resolve an ambiguity.” Id. “‘Extrinsic evidence is evidence relating
to a contract but not appearing on the face of the contract because it comes
from other sources, such as statements between the parties or the circumstances
surrounding the agreement.’” Id. (quoting CWE Concrete Const., Inc. v. First Nat’l
Bank, 814 N.E.2d 720, 724 (Ind. Ct. App. 2004), trans. denied). An ambiguous
contract should be construed against the party who furnished and drafted the
agreement. Id.
[15] Willow Properties and Sanders Development reduced the following agreement
to writing:
The undersigned, being the Shareholder(s) and Director(s) of
Willow Properties, LLC, agree to pay Sanders Development
Group, Inc., a 7% management fee of the sales price on each
Willow Properties lot sale, to be paid at the time of closing. This
agreement is effective January 1, 2002.
Appellant’s App. p. 149. Willow Properties argues that the term “management”
is unambiguous and under the plain terms of the contract, Sanders
Development agreed to manage the subdivision. Sanders Development argues
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that the term “management” is ambiguous, and therefore, the parties’ intent
must be established by extrinsic evidence.
[16] “Management” is defined as “the act or art of managing: the conducting or
supervising of something (as a business).”1 The Oxford English Dictionary
defines management as: “organization, supervision, or direction; the
application of skill or care in the manipulation, use, treatment, or control (of a
thing or person), or in the conduct of something.”2
[17] The plain meaning of the term “management” is generally easily understood.
However, the term, when considered within the four corners of the contract at
issue, is ambiguous.
[18] First, the plain language of the contract does not establish that Willow
Properties hired Sanders Development to manage the subdivision. The contract
language simply provides that Willow Properties agrees to pay Sanders
Development a 7% management fee of the sales price of each lot that sells and
the fee will be paid at closing. From this language, we can infer that Sanders
Development is required to manage something to receive the fee that Willow
Properties agreed to pay.
1
Merriam-Webster Online, www.merriam-webster.com/dictionary/managment (last visited Feb. 28, 2017).
2
Oxford English Dictionary Online, www.oed.com/view/Entry/113218?redircted/From=management#eid
(last visited Feb. 28, 2017).
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[19] However, it is not clear what Sanders Development was tasked with managing
under the contract. Was the company managing a subdivision? Was the
company simply managing lots within a subdivision? Was the company
managing Willow Properties’ real estate that was not yet developed into lots?
Also, what duties did Willow Properties intend for Sanders Development to
perform in exchange for payment of the management fee? The answer to this
last question depends at least in part on whether the lots pre-existed the contract
or were to be developed after the contract was executed.
[20] From extrinsic evidence, we know that Willow Properties owned real estate
that had not yet been developed into lots. We also know that Sanders
Development was hired to develop the property into lots that could be sold as
home sites.
[21] However, the parties disagree on the precise nature of Sanders Development’s
duties. Sanders Development claims it was hired only to prepare the real estate
for development, but Willow Properties argues that Sanders Development was
hired to manage the lots until all lots were sold. In support of these arguments,
the parties rely primarily on deposition testimony and affidavits, and therefore,
the credibility of the witnesses is crucial to resolving the fact questions posed in
this case.
[22] For these reasons, we conclude that the term “management” is ambiguous and
the duties that Sanders Development was required to perform in exchange for
its fee of 7% of the sales price of each lot is a fact question that must be resolved
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by the fact-finder. Ultimately, it is within the fact-finder’s purview to determine
whether Sanders Development completed its management of Willow
Properties’ lots and whether Willow Properties breached the contract by
refusing to pay the 7% management fee for each lot sold.
[23] We reverse the entry of summary judgment in Willow Properties’ favor and
remand for proceedings consistent with this opinion.
Baker, J., and Pyle, J., concur.
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