City of Plymouth, Indiana and City of Plymouth Redevelopment Commission v. Michael Kinder & Sons, Inc. ( 2019 )

FILED
Dec 18 2019, 8:33 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
Janette E. Surrisi Robert W. Eherenman
Wyland, Humphrey, Clevenger & Melanie L. Farr
Surrisi, LLP Haller & Colvin, P.C.
Plymouth, Indiana Fort Wayne, Indiana
IN THE
COURT OF APPEALS OF INDIANA
City of Plymouth, Indiana and December 18, 2019
City of Plymouth Court of Appeals Case No.
Redevelopment Commission, 19A-PL-1214
Appellants-Defendants, Appeal from the Marshall Circuit
Court
v. The Honorable Curtis D. Palmer,
Judge
Michael Kinder & Sons, Inc., Trial Court Cause No.
Appellee-Plaintiff. 50C01-1803-PL-8
Najam, Judge.
Statement of the Case
[1] The City of Plymouth (“the City”) and the City of Plymouth Redevelopment
Commission (“the Commission”) appeal from the trial court’s order granting a
motion to enforce a mediation agreement (“the agreement”) filed by Michael
Kinder and Sons, Inc. (“Kinder”). The City and the Commission present a
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single issue for our review, namely, whether the trial court erred when it
granted the motion to enforce the parties’ agreement. We reverse and remand
for further proceedings.
Facts and Procedural History
[2] On March 14, 2018, Kinder filed a complaint against the City, the Commission,
and Marshall County Wellness and Life Enhancement, Inc. (“Wellness”)
alleging breach of contract and unjust enrichment. After various motions were
filed, 1 Kinder, the City, and the President of the Commission attended a
mediation conference on January 25, 2019. At the conclusion of that
conference, Kinder, the City, and the President of the Commission executed an
agreement, which states as follows:
At a mediation session held on January 25, 2019, the parties
agreed to settle all litigation arising out of the above captioned
case as follows:
1) The Defendant shall, subject to the approval of the City of
Plymouth Redevelopment Commission keep its offer to settle this
litigation for the payment of $130,000.00 to the Plaintiff open.
2) If the Plaintiff accepts the defendants [sic] offer to pay
$130,000 to settle this case then the case shall be settled.
3) If the case is settled then the litigation shall be dismissed with
prejudice and all parties shall execute a mutual release.
1
Kinder filed a motion for default judgment against Wellness. That motion is still pending in the trial court.
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Appellants’ App. Vol. 3 at 61 (emphases added). 2
[3] On February 12, Kinder’s counsel emailed the City’s counsel to inform the City
that Kinder had “decided to accept the City’s last mediation offer of $130,000.”
Id. at 63. Kinder’s counsel also included a draft release and settlement
agreement with the email. On February 14, the City’s counsel emailed Kinder’s
counsel to inform him that the Commission would “discuss the settlement in
[an] executive session” scheduled for the following Tuesday. Id. at 69. On
February 20, the City’s counsel emailed Kinder’s counsel again and stated that
the Commission “wanted to review some additional materials” and had
scheduled another executive session for March “to further discuss the matter.”
Id. at 71. In an email dated March 5, the City’s counsel stated that the City
wanted to “strike paragraph 10 from the settlement agreement” but was
“otherwise . . . fine with the language.” Id. at 73. The City’s counsel also
stated that the Commission had not been able to reconvene for an executive
session and might not be able to reconvene until March 19th.
[4] Finally, on March 20, the City’s counsel sent an email to Kinder’s counsel
stating as follows:
We were finally able to convene the full membership of the
Redevelopment Commission last night for consideration of the
settlement. After much deliberation in [an] executive session,
2
Alternative Dispute Resolution Rule 2.7(E)(1) requires a mediator to report to the trial court whether the
parties reached an agreement. On March 22, 2019, the mediator, Senior Judge Terry C. Shewmaker,
informed the court and the parties by email that, notwithstanding the mediation, “the case was not settled.”
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unfortunately, the settlement was unable to win the support of
majority of the Commission. I can reach out to the mediator to
request that he advise the court of this result.
Id. at 82.
[5] On March 28, Kinder filed its Motion to Enforce Written Mediation
Agreement with the trial court. In that Motion, Kinder stated in relevant part:
4. The mediation conference was held in the Elkhart County
Courthouse and lasted approximately from 1:30 p.m. to 4:30
p.m. While [Kinder] did not accept the last offer from the City
and the Commission at the conclusion of the mediation session,
the parties entered into a signed, written Mediation Agreement,
which kept the last offer open after the mediation, with the
condition that it would be kept open “subject to the approval of the City
of Plymouth Redevelopment Commission.”
5. The written Mediation Agreement also provided that if “the
Plaintiff accepts the defendants offer to pay $130,000.00 to settle
this case then the case shall be settled.”
6. On February 12, 2019, [Kinder] accepted the City’s and the
Commission’s last mediation offer, as set forth in the written,
signed Mediation Agreement. After the conclusion of the
mediation session and prior to February 12th, neither the City
nor the Commission ever notified [Kinder] that the offer had
been withdrawn or had not been kept open. Along with the
acceptance of the City’s and Commission’s last offer in the
written Mediation Agreement, [Kinder] tendered a proposed
settlement agreement.
Id. at 54-55 (emphasis added).
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[6] The City filed a response to Kinder’s motion and stated in relevant part that
“[t]he Mediation Agreement set forth a contingent offer[. A]bsent that
contingency being met, the agreement is, at best, merely an unenforceable
agreement to agree. The contingency, the approval of the Commission, wasn’t
met. So, there was no offer for [Kinder] to accept.” Id. at 86. Following a
hearing, on April 30, 2019, the trial court granted Kinder’s motion, “thereby
enforcing the mediated settlement agreement attached to said Motion . . . ,
requiring [the City] to pay [Kinder] the sum of $130,000 in full settlement of all
claims.” Appellants’ App. Vol. 2 at 11. This interlocutory appeal as a matter of
right ensued. 3
Discussion and Decision
[7] The City and the Commission contend that the trial court erred when it granted
Kinder’s motion to enforce the agreement. Construction of the terms of a
written contract generally is a pure question of law, which we review de novo.
See Layne v. Layne, 77 N.E.3d 1254, 1265 (2017), trans. denied. The goal of
contract interpretation is to determine the intent of the parties when they made
the agreement. Id. This court must examine the plain language of the contract,
3
The City and the Commission purport to bring this interlocutory appeal as a matter of right under Indiana
Appellate Rule 14(A)(1) (“for the payment of money”). However, our Supreme Court has observed that an
order for the payment of money is appealable as of right only if it requires a party “to pay a specific amount
at a specific time.” Huber v. Montgomery Cty. Sheriff, 940 N.E.2d 1182, 1185 (Ind. 2010). Here, the trial
court’s order does not state a time for the payment of the $130,000. However, the court’s order incorporates
by reference the parties’ agreement, which compels the City and the Commission to “execute a mutual
release.” Accordingly, the trial court’s order is an interlocutory order appealable as a matter of right under
Indiana Appellate Rule 14(A)(2) (“to compel the execution of any document”).
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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. 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. Id.
[8] Here, the parties do not dispute that the mediation agreement is unambiguous,
and we agree. Accordingly, we examine the plain language of the agreement as
contained in the four corners of the instrument, and we may not look to
extrinsic evidence. See id. The parties concur that the agreement did not
constitute a final settlement. 4 They disagree, however, in their interpretation of
the agreement. The City and the Commission assert that the agreement
constituted a contingent offer to Kinder to settle for $130,000, the contingency
being the approval of the Commission. But Kinder asserts that the agreement
constituted an offer of $130,000 to settle the litigation that was to be kept open
unless the Commission rescinded the offer before Kinder accepted it. In its
motion to enforce the agreement, Kinder acknowledged that the agreement
“kept the last offer open after the mediation, with the condition that it would be
kept open ‘subject to the approval of the City of Plymouth Redevelopment
Commission.’” Appellants’ App. Vol. 3 at 54 (emphasis added). But on
appeal, Kinder contends that “[t]here is nothing within the terms of the
4
The agreement explicitly refers to an offer contingent on approval by the Commission and a settlement
contingent on Kinder’s acceptance of that offer.
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Mediation Agreement that the Commission would need to authorize the
making of the offer of $130,000.” Appellee’s Br. at 27.
[9] “A condition precedent is either a condition which must be performed before
the agreement of the parties shall become a binding contract, or it may be a
condition which must be fulfilled before the duty to perform an existing
contract arises.” Dvorak v. Christ, 692 N.E.2d 920, 924 (Ind. Ct. App. 1998),
trans. denied. Here, the plain language of the agreement unambiguously states
that the City’s promise to “keep its offer” to settle open was “subject to”
approval by the Commission. Appellants’ App. Vol. 3 at 61. Thus, any
settlement between the parties was subject to a condition precedent, and it is
undisputed that the condition was not satisfied. 5 That is, the Commission never
approved the offer to settle with Kinder for $130,000.
[10] Kinder posits an agreement that would set up a race between Kinder and the
Commission. Either the Commission could rescind the offer, or Kinder could
accept it, and whichever occurred first would determine the outcome of the
mediation. We decline Kinder’s invitation to add words to the agreement that
are simply not there. The agreement clearly required that the Commission
approve the offer before Kinder could accept it. We construe the provisions of
an agreement “to render each word, phrase, and term meaningful,
5
We reject Kinder’s contention that the City waived the condition precedent. Nothing in the record shows
that Kinder argued waiver to the trial court. It is well settled that a party may not raise an issue for the first
time on appeal. See Sage v. State, 114 N.E.3d 923, 928 n.1 (Ind. Ct. App. 2018).
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unambiguous, and harmonious with the whole,” Citimortgage, Inc. v. Barabas,
975 N.E.2d 805, 813 (Ind. 2012), and we agree with the City and the
Commission that Kinder’s interpretation of the agreement would render the
“subject to the approval of the Commission” provision mere surplusage.
Appellants’ Br. at 28. The requirement that the City keep its offer to settle open
was clearly and unambiguously subject to a condition precedent, namely, the
approval of the Commission.
[11] Our Supreme Court’s decision in Indiana State Highway Commission v. Curtis, 704
N.E.2d 1015 (Ind. 1998), is instructive here. In Curtis, the Court considered
whether an agreement “that explicitly requires the approval of a component of a
party [is] binding on the party without that approval.” 704 N.E.2d 1015, 1017
(Ind. 1998). Just prior to trial, the parties “arrived at an agreed amount for a
monetary settlement from the State and the State’s grant of an easement onto
State property to install a new septic system.” Id. Paragraph five of the parties’
written agreement “granted the Suttons[, who had purchased the subject
property from the named plaintiffs, the Curtises,] access over State property”
and paragraph seven provided that “access through State Road 10’s existing
guardrail and any driveway therefrom as described in paragraph five (5) of this
agreement is subject to approval by INDOT.” Id. (emphasis added). Prior to
obtaining INDOT’s approval of the access as described in paragraph seven of
the parties’ agreement, the Suttons filed a motion to enforce the parties’
settlement agreement.
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[12] The trial court granted the Suttons’ motion to enforce the agreement, but, on
transfer, our Supreme Court held as follows:
INDOT’s approval of the easement provisions is a condition of
the settlement agreement. The condition was supplied by the
parties when they agreed explicitly in the settlement document
that the easement provisions required INDOT’s approval.
As a general rule, an express condition must be fulfilled or no
liability can arise on the promise that the condition qualifies. 5
WILLISTON, CONTRACTS § 675 (3rd ed. 1961);
RESTATEMENT (SECOND) OF CONTRACTS § 225 (1981)
(if a condition does not occur, performance of a duty subject to a
condition cannot become due and if the condition can no longer
occur, the duty is discharged). Indiana courts have consistently
recognized this rule. The Court of Appeals held in Blakley[ v.
Currence, 172 Ind.App. 668, 670, 361 N.E.2d 921, 922 (1977),]
that an agreement containing the clause “subject to loan
approval” did not become a binding contract because approval was not
obtained. 361 N.E.2d at 923. Similarly, in Wetzel v. Andrews, 136
Ind.App. 117, 198 N.E.2d 19 (1964), the Court of Appeals held
that a lease was not valid where the condition precedent of
statutorily required approval by the governmental entity was not
met. . . .
***
. . . [U]pholding the right of a party to insist on [approval by an
agency as a condition of settlement] . . . ultimately facilitates
settlement by permitting an agreement to be made with an
enforceable condition, even if the condition is likely to be
fulfilled. Accordingly, as a matter of contract law, because
INDOT approval was required by the settlement agreement, and
that approval was not obtained, the agreement, as to the
easement provisions, is not enforceable.
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Id. at 1018-20 (emphasis added).
[13] Likewise, here, we hold that the mediation agreement required that the
Commission approve the settlement offer of $130,000 before Kinder could
accept it. This was a condition precedent supplied by the parties. See id. at
1018. Kinder’s reliance on the second numbered paragraph of the agreement as
if it were a stand-alone provision is misplaced. Because the Commission did
not approve the offer, there was no offer for Kinder to accept. The trial court
erred when it granted Kinder’s motion to enforce the parties’ agreement.
[14] Reversed and remanded for further proceedings.
Vaidik, C.J., and Tavitas, J., concur.
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