Anthony Pape v. R2C Crown Point, Inc. (mem. dec.) ( 2020 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any May 26 2020, 11:12 am
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
APPELLANT PRO SE
Anthony Pape
Crown Point, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Anthony Pape, May 26, 2020
Appellant-Defendant, Court of Appeals Case No.
19A-SC-2426
v. Appeal from the Lake Superior
Court
R2C Crown Point, Inc., The Honorable Julie N. Cantrell,
Appellee-Plaintiff. Judge
The Honorable Michael N.
Pagano, Magistrate
Trial Court Cause No.
45D09-1906-SC-4083
Riley, Judge.
Court of Appeals of Indiana | Memorandum Decision 19A-SC-2426 | May 26, 2020 Page 1 of 6
STATEMENT OF THE CASE
[1] Appellant-Defendant, Anthony Pape (Pape), appeals the small claims court’s
entry of judgment in the amount of $3,033.96 in favor of Appellee-Plaintiff,
R2C Crown Point, Inc. (R2C).
[2] We affirm.
ISSUE
[3] Pape presents this court with one issue on appeal, which we restate as:
Whether the small claims court abused its discretion by concluding that Pape
waived the application of the arbitration clause by filing a counterclaim.
FACTS AND PROCEDURAL HISTORY
[4] On October 17, 2017, Pape, as the buyer, and R2C, as the seller, entered into a
purchase agreement for certain real estate located in Lake County, Indiana.
The purchase agreement was governed by Indiana law and included an
arbitration clause, which stated, in pertinent part:
Buyer and Seller agree that in the event either party defaults in
the performance of the obligations of such party under the
Purchase Agreement, or in the event there is a dispute between
the Buyer and Seller with respect to their obligations arising out
of the purchase and sale of the Property, that does not exceed the
total sum of $3,500, the dispute shall be submitted to binding
arbitration.
(Appellant’s App. Vol. II, p. 31).
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[5] On April 15, 2019, R2C sent Pape an invoice in the amount of $2,215.22 for
water used at his property between December 1, 2017 and December 3, 2018,
with the request to remit payment immediately. Pape failed to remit payment.
On June 24, 2019, R2C filed its Complaint for payment of the invoice in the
small claims court. On July 22, 2019, and without submitting any supporting
evidence, Pape filed a counterclaim in the amount of $2,700, alleging that
[R2C] is seeking $2,500 for water bill which was supposed to be
put in my name but they forgot. I held payment until they
complete punch-list.
(Appellant’s App. Vol. II, p. 9). On September 13, 2019, the small claims court
conducted a hearing at which Pape moved to enforce the arbitration clause of
the purchase agreement. 1 According to Pape, the small claims court denied his
motion because by “filing a counter claim he [] effectively waived his right to
arbitrate.” (Appellant’s Br. p. 6). That same day, the small claims court issued
an Order, finding in favor of R2C, denying Pape’s counterclaim, and ordering
Pape to pay $3,033.96.
[6] Pape now appeals. Additional facts will be provided if necessary.
1
No transcript of the small claims court proceeding was submitted. Narrated evidence of the court’s
proceeding was included in Pape’s appellate brief.
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DISCUSSION AND DECISION
[7] Pape contends that the small claims court abused its discretion by denying his
request to arbitrate this cause. Even where parties have entered into a valid and
enforceable agreement to submit disputes to arbitration, the right to require
such arbitration may be waived. Capitol Contr. Servs., Inc. v. Farah, LLC, 946
N.E.2d 624, 628 (Ind. Ct. App. 2011). A finding of waiver of the right to
arbitrate depends primarily upon whether a party has acted inconsistently with
that right. Id. Waiver need not be in express terms and may be implied from
the acts, omissions, or conduct of the parties. Id. “In determining if waiver has
occurred, courts look at a variety of factors, including the timing of the
arbitration request, if dispositive motions have been filed, and/or the litigant is
unfairly manipulating the judicial system by attempting to obtain a second bite
at the apple due to an unfavorable ruling in another forum.” Id. Waiver of a
contractual right, including the right to arbitrate, requires the showing of an
intentional relinquishment of a known right. Northern Ind. Commuter Transp.
Dist. v. Chicago SouthShore and South Bend R.R., 685 N.E. 2d 680, 695 (Ind.
1997).
[8] Whether a waiver of the right to arbitrate has occurred generally is a question of
fact under the circumstances of each case. Id. Regardless, we review de novo a
court’s ruling on a motion to compel arbitration, as well as similar motions that
are of the same effect. Id. We further consider in deciding this case that public
policy in Indiana favors enforcement of arbitration provisions. Capitol Constr.
Servs., 946 N.E.2d at 628.
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[9] Additionally, we note that Appellee, R2C, did not submit an appellate brief.
When an appellee does not submit a brief, we do not undertake the burden of
developing arguments for that party. Spencer v. Spencer, 990 N.E.2d 496, 497
(Ind. Ct. App. 2013). Instead, we apply a less stringent standard of review and
may reverse if the appellant establishes prima facie error. Id. Prima facie error is
“error at first sight, on first appearance, or on the face of it.” Id.[10] Without deciding whether the arbitration clause is applicable to this dispute, we
turn to our supreme court’s decision in MPACT Construction Group LLC v.
Superior Concrete Constructors, 802 N.E.2d 901, 910 (Ind. 2004), where the court
held that:
The filing of counterclaims and cross-claims does not always
indicate active participation in litigation. While all cross-claims
are permissive, some counterclaims are compulsory, that is, a
party must bring them or waive them. A party should not be
held to have waived its right to arbitrate when, in response to a
complaint filed against it, it raises counterclaims in order to
preserve them.
“A compulsory counterclaim is one that arises out of the transaction or
occurrence that is the subject-matter of the opposing party’s claim and does not
require for its adjudication the presence of third parties of whom the court
cannot acquire jurisdiction.” Ind. Trial Rule 13.
[11] Here, R2C filed its Complaint for payment of an overdue water bill, while
Pape’s counterclaim pertains to the completion of a punch-list resulting from
the sale of real estate and thus, as it cannot be said that Pape’s counterclaim
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arises out of R2C’s claim, it necessarily amounts to a permissive counterclaim
that can waive a party’s right to arbitrate. See id. Furthermore, it does not
appear that Pape filed a motion to compel arbitration prior to the hearing but
moved for arbitration only after R2C had presented its evidence during the
hearing. Accordingly, we find that Pape acted inconsistently with his right to
arbitrate and, as such, implicitly waived it. See also Tamko v. Roofing Prods., Inc.
v. Dilloway, 865 N.E.2d 1074, 1079-80 (Ind. Ct. App. 2007) (finding waiver
where party waited until after plaintiff presented evidence during trial to seek
arbitration).
CONCLUSION
[12] Based on the foregoing, we hold that the small claims court did not abuse its
discretion in concluding that Pape waived his right to arbitrate.
[13] Affirmed.
[14] Mathias, J. and Tavitas, J. concur
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