Shannon Gehlhausen f/k/a Shannon Logan, and Brandon Gehlhausen v. Indiana Foundation Service, Inc. ( 2020 )

FILED
Jan 17 2020, 10:01 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Jeffrey O. Meunier Christopher D. Wyant
Carmel, Indiana Wyant Law Office, LLC
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Shannon Gehlhausen f/k/a January 17, 2020
Shannon Logan, and Brandon Court of Appeals Case No.
Gehlhausen, 19A-CT-842
Appellants-Plaintiffs, Appeal from the Hamilton
Superior Court
v. The Honorable Richard Campbell,
Judge
Indiana Foundation Service, Trial Court Cause No.
Inc., 29D04-1603-CT-2114
Appellee-Defendant.
Shepard, Senior Judge.
[1] In purchasing their new home, Shannon and Brandon Gehlhausen acquired a
warranty the sellers had earlier received from Indiana Foundation Service, Inc.,
a firm the sellers had engaged to evaluate and repair a bowing basement wall
that permitted leakage.
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[2] After living in the home for a year and experiencing ongoing leakage, the
Gehlhausens sued three parties: the sellers, a home inspection firm, and
Indiana Foundation. Only the last of these defendants is still in the litigation.
[3] After three years of discovery and preliminary proceedings, the trial court
granted Indiana Foundation summary judgment. The motion for summary
judgment relied on evidence that the wall had not bowed since the repair, which
was the promise made in the warranty. The homeowners said in depositions
that they had no knowledge about whether the wall had bowed since Indiana
Foundation’s repair.
[4] We conclude that this meant there was no genuine issue of fact and that the
trial court was correct to grant judgment to Indiana Foundation.
Case History
[5] In 2014, Daniel and Megan Murphy discovered water infiltration in their
house’s basement and hired Indiana Foundation Service to investigate. IFS
discovered that the basement’s east wall was bowing inward. It recommended
installing a wall anchor system to stabilize the wall and also initially
recommended a waterproofing system to address infiltration. During a second
visit to the house, an IFS representative indicated the waterproofing system
would not be needed, stating that the wall anchor system should also prevent
water infiltration. As a result, the Murphys approved the wall anchor system
but not the waterproofing system.
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[6] IFS installed the wall anchor system on the east wall in September 2014 and
issued a warranty against further movement by that wall. The warranty was
transferable with the property, and we discuss its terms in more detail below.
[7] In January 2015, the Murphys put their home up for sale. The Gehlhausens
wanted to buy the house, and the parties negotiated a purchase agreement.
During the sale process, the Gehlhausens hired Indy Pro Inspection Service,
Inc. to inspect the house and prepare a report.
[8] On March 13, 2015, the Murphys and the Gehlhausens closed on the sale. The
Murphys disclosed the wall anchor system and the warranty to the
Gehlhausens. After the Gehlhausens moved in, water infiltrated the basement
during rains, flowing from the east wall to the opposite end of the basement.
[9] On March 10, 2016, the Gehlhausens sued the Murphys, IFS, and Indy Pro.
They alleged that the Murphys defrauded them, that IFS breached its warranty,
and that Indy Pro was negligent. Indy Pro filed a motion to dismiss, which the
trial court granted with prejudice. The Gehlhausens later filed a stipulation of
dismissal for their claim against the Murphys.
[10] Meanwhile, IFS filed a motion for summary judgment, and the Gehlhausens
responded. On February 15, 2019, the trial court granted IFS’s motion after a
hearing. This appeal followed.
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Analysis
[11] Orders for summary judgment are reviewed de novo, and we apply a similar
standard of review as the trial court. AM Gen. LLC v. Armour, 46 N.E.3d 436(Ind. 2015). The movant must show “there is no genuine issue as to any
material fact” and an entitlement to judgment as a matter of law. Ind. Trial
Rule 56(C). Upon this showing, the nonmoving party then has the burden to
demonstrate that there is a genuine issue of material fact. AM Gen., 46 N.E.3d
436. “An issue of material fact ‘is genuine if a trier of fact is required to resolve
the parties’ differing accounts of the truth.’” Hughley v. State, 15 N.E.3d 1000,
1004 (Ind. 2014) (quoting Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009)).
We construe reasonable inferences in favor of the nonmoving party. Id.[12] “‘Any action based on breach of warranty requires evidence showing not only
the existence of the warranty but that the warranty was broken and that the
breach of warranty was the proximate cause of the loss sustained.’” Frantz v.
Cantrell, 711 N.E.2d 856, 860 (Ind. Ct. App. 1999) (quoting Richards v. Goerg
Boat and Motors, Inc., 179 Ind. App. 102, 109, 284 N.E.2d 1084, 1090 (Ind. Ct.
App. 1979), overruled in part on other grounds by Hyundai Motor Am., Inc. v.
Goodin, 822 N.E.2d 947 (Ind. 2005)).
[13] Indiana Foundation does not dispute that its warranty transferred from the
Murphys to the Gehlhausens with the sale of the house. The Gehlhausens
acknowledge that the warranty is limited to protecting against “further inward
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movement of the east wall of the basement.” Appellants’ Br. p. 9. More
specifically, the warranty provides in relevant part:
Contractor hereby warrants that the wall anchors will stop
further inward movement of the wall(s) repaired for twenty-five
(25) years from the date of installation, or else Contractor will
provide the labor and materials, at no cost to Customer, to
correct the problem with the wall anchors. Walls that are not
anchored entirely from corner to corner, by Contractor, are not
warranted. Anchors are warranted only to stabilize the affected
wall(s) and not straighten them [sic]. If Customer desires further
outward movement in the wall(s) repaired, Customer may
tighten the installed anchors as recommended by the
manufacturer, but assumes all liability for damages due to over-
tightening of the anchors.
Appellants’ App. Vol. 2, p. 117. Notably, the warranty does not address water
infiltration.
[14] In support of its motion for summary judgment, IFS designated portions of the
Gehlhausens’ deposition testimony conceding that they had no personal
knowledge that IFS’s wall anchors were substandard or defective. Id. at 44, 68.
In addition, Brandon Gehlhausen agreed he “did not know of any witnesses”
who would say that IFS’s work was substandard or defective, and Shannon
Gehlhausen was not aware of any evidence that would suggest the anchoring
system was defectively installed or failing. Id. at 44, 68. This evidence
established a prima facie case that there was no dispute of material fact as to
whether IFS breached the warranty.
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[15] As a result, the Gehlhausens bore the burden of identifying a dispute of material
fact as to whether the anchor system failed to stabilize the basement wall. They
designated an affidavit and a report from Daniel Johnson, an engineer. He
stated, in relevant part:
4. In my opinion the east wall of the basement has shifted
into the basement and the wall is not serviceable.
5. In my opinion the wall needs to be replaced or repaired
and the owners are facing significant costs to remedy the
defective condition of the wall.
Id. at 123.
[16] To be sure, Johnson concludes that IFS’s work was not adequate to fix
structural issues in the basement, and he proposes additional solutions in his
report. But our focus is on the terms of the warranty, and Johnson says nothing
about whether the wall shifted into the basement before or after IFS installed its
wall anchor system. Without evidence as to whether the wall anchor system
failed, the Gehlhausens have failed to present a different account of events that
would require a resolution by a trier of fact. As Chief Justice Rush observed for
a unanimous court in Hughley, even a “perfunctory and self-serving affidavit”
by a non-movant may defeat summary judgment if it specifically controverts the
facts offered by the moving party. 15 N.E.3d at 1004 (defendant’s affidavit
sufficient to establish dispute of fact; defendant directly, if summarily, disputed
State’s claim that his money and car were involved in drug dealing). The
affidavit by the Gehlhausens’ engineer did not do so.
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[17] For the reasons stated above, we affirm the judgment of the trial court.
[18] Affirmed.
Baker, J., and Najam, J., concur.
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