Keith A. Eenigenburg and Sandra Eenigenburg v. Joan Andreotti (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
Oct 11 2016, 8:35 am
regarded as precedent or cited before any
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.
ATTORNEYS FOR APPELLANTS ATTORNEY FOR APPELLEE
Harold Abrahamson Margo R. Babineaux
Jonathan E. Halm Meinzer & Babineaux LLC
Abrahamson, Reed & Bilse Saint John, Indiana
Hammond, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Keith A. Eenigenburg and October 11, 2016
Sandra Eenigenburg, Court of Appeals Case No.
Appellants-Defendants, 45A05-1601-CC-66
Appeal from the Lake Superior
v. Court
The Honorable Calvin D.
Joan Andreotti, Hawkins, Judge
Appellee-Plaintiff. Trial Court Cause No.
45D02-1303-CC-149
Brown, Judge.
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[1] Keith A. Eenigenburg (“Keith”) and Sandra Eenigenburg (“Sandra,” and
together with Keith, the “Eenigenburgs”) appeal from the trial court’s order in
favor of Joan Andreotti. The Eenigenburgs raise four issues which we
consolidate and restate as whether the court’s order is clearly erroneous. We
affirm.
Facts and Procedural History
[2] In 2001, Keith contacted Andreotti inquiring if she would be interested in
selling the Eenigenburgs a twenty-two acre parcel of real property in Cedar
Lake, Indiana (the “Property”). At the time, Andreotti had not listed the
Property for sale but agreed to sell it to the Eenigenburgs, and on May 31, 2001,
the parties entered into an installment sale contract (the “Contract”) for a price
of $650,000. Under the terms of the Contract, the Eenigenburgs paid Andreotti
the sum of $5,000 as earnest money with an additional $195,000 to be paid at
closing and a balance of $450,000 payable in monthly installments of $3,625.17
at an interest rate of seven and one-half percent commencing on July 1, 2001,
and payable until “the full amount of the purchase price, together with interest
has been paid.” Plaintiff’s Exhibit 1 at 2.1 The Contract also provided that the
Eenigenburgs were responsible for paying all real estate taxes on the Property.
The Eenigenburgs paid Andreotti pursuant to the Contract’s terms of payment
until late in 2006 when Keith informed her that he was experiencing financial
1
The Contract also provided that in “no event shall the term of the Contract exceed twenty (20) years.”
Plaintiff’s Exhibit 1 at 2.
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difficulties due to losing rental properties that he owned in Hammond, Indiana,
to the City of Hammond. He requested that Andreotti modify the Contract’s
payment terms, and in December 2006 Andreotti agreed to reduce the
Contract’s interest rate to six and one-half percent effective January 1, 2007,
which agreement was memorialized in an amendment to the Contract dated
December 15, 2006, and reduced the Eenigenburgs’ monthly payment to
$2,800.
[3] In 2007, at around the same time that Andreotti agreed to reduce the Contract’s
interest rate, the Eenigenburgs listed the Property for sale for a price of
$1,500,000. In 2010, Andreotti received a tax delinquency notice for the
Property stating that the 2009 real estate taxes had not been paid, which
resulted in a sum due of $27,860.51 inclusive of penalties and interest.
Andreotti requested that the Eenigenburgs, pursuant to the Contract, pay the
tax bill, and after they failed to do so, she paid the full amount of the 2009 tax
liability. Throughout 2010, Keith informed Andreotti about his continuing
financial hardship and requested that she reduce the interest rate on the
Contract, and, in December 2010, Andreotti reduced the interest rate from six
and one-half percent to five percent, which lowered the Eenigenburgs’ monthly
payment to $2,000.
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[4] In May 2011 the Eenigenburgs received an offer to purchase the Property from
Jeffrey Lane and Mary Jo Wiltshire (the “Lanes”).2 Around Memorial Day of
2011, Keith informed Andreotti that the Lanes could pay a $300,000 down
payment at closing. In June 2011, Keith gave Andreotti the $5,000 earnest
money deposit he had received from the Lanes. In July 2011, Andreotti
received a tax delinquency notice stating that for 2010, $2,953.79 were owed in
taxes on the Property, which she then paid to Lake County. Also, in July 2011,
the Eenigenburgs received an additional $50,000 down payment from the
Lanes. On August 1, 2011, the Eenigenburgs and the Lanes closed on the sale
of the Property at Meridian Title for a purchase price of $837,000 with $55,000
indicated as the down payment, which included the Lanes’ initial $5,000
earnest money payment and their subsequent $50,000 down payment.3
Andreotti was present at the closing but was situated in a separate conference
room away from the Eenigenburgs and the Lanes. The Contract had an
outstanding balance of $370,102.30.4 Andreotti was presented with a warranty
deed conveying the Property from Andreotti, as trustee of the Joan Andreotti
trust to Sandra, which she signed, in exchange for a check for $290,000, and a
2
Jeffrey Lane and Mary Jo Wiltshire married after they purchased the Property from the Eenigenburgs and
Mary Jo uses Lane as her surname. Jeffrey Lane died on November 11, 2014.
3
The contract between the Eenigenburgs and the Lanes lists a purchase price of $832,000 due to a $5,000
credit for preparation for a survey, which was a sum Andreotti loaned to Keith prior to the closing.
4
Andreotti’s amended complaint states that the amount she is owed under the Contract is $372,265.98, and
she explained in trial that the discrepancy of $2,163.68 was due to an error in her calculations as she was
transferring numbers from one ledger to another.
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$5,000 promissory note in her favor by the Eenigenburgs.5 Andreotti was not
aware of the additional $50,000 down payment the Eenigenburgs received from
the Lanes until three weeks after the closing when the Lanes contacted her after
the closing inquiring about the septic and grease traps on the Property, at which
time they stated the full amount they had paid as a down payment.
[5] On March 25, 2013, Andreotti filed a complaint alleging breach of contract,
unjust enrichment, breach of promissory note, and foreclosure of a common
law lien. On May 8, 2013, Andreotti filed a motion to dismiss her common law
lien claim, and the court granted the motion that same day. The Eenigenburgs
filed an answer to Andreotti’s complaint on June 28, 2013. On August 15,
2013, Andreotti filed an amended complaint (the “Amended Complaint”)
which included a claim that the Eenigenburgs committed misrepresentation and
fraud in the inducement based on their actions leading up to and at the closing.
The Eenigenburgs filed an answer to Andreotti’s Amended Complaint, and
around that time they paid Andreotti $2,000 on the unpaid balance of the
promissory note. On August 19, 2015, the court approved the parties’ proposed
pretrial order which contained the parties’ stipulation of facts. On October 19,
2015, the court held a one-day bench trial. At the start of the trial, the
Eenigenburgs, by counsel, requested that the court enter special findings
5
Keith testified that, due to his financial problems, he “felt it was prudent on my part to just have [Sandra’s]
name on it.” Transcript at 109. Andreotti also testified that Keith “had other financial problems and he
wanted to avoid having any more liens put against him, so, therefore, he put [the deed] in his wife’s name to
protect himself.” Id. at 44.
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pursuant to Ind. Trial Rule 52(A) which the court granted. Andreotti, Mary Jo,
and Keith testified at the trial.
[6] Andreotti stated that initially she had “a good business relationship with the
Eenigenburgs,” Transcript at 31, and felt that she had “heartaches in common”
with them. Id. at 38. She testified that around June of 2011 the Eenigenburgs
received an offer on the Property and that “Keith came over with a $5,000
check” from the Lanes and told Andreotti that “[h]e didn’t give me the actual
amount when I asked him what they was paying. He said it was less that he
had paid me. That he would not even be getting his down payment back.” Id.
at 35. Andreotti stated that Keith did not tell her what the actual price of the
sale was but that “[h]e told around that,” and did not at any point between the
Lanes’ offer and the August 1, 2011 closing mention that he had received an
additional $50,000 deposit from the Lanes. Id. at 36. When asked whether she
and Keith discussed a reduction in the outstanding balance on the Contract that
was owed to her, Andreotti replied that “Keith came over repeatedly, and I told
him I could not take less than what was owed because I had obligations to other
people. . . . and I could not take less than the amount.” Id. at 37-38. She
testified that, at the closing, she was taken to an individual room, that the title
company presented her with a warranty deed conveying the Property to Sandra,
as well as a check for $290,000 and a $5,000 promissory note in her favor by the
Eenigenburgs, and that she asked where the other parties were and was told
they were in a separate room. Andreotti indicated that she was not presented
with any closing documents, a HUD statement, or the contract between the
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Eenigenburgs and the Lanes. She stated that Keith had previously told her that
if she “did not accept the offer, we would lose the buyer,” that the Lanes “could
not come up with the balance of the money” due her, and that she “positively
did not” know anything about the additional $50,000 the Eenigenburgs received
because Keith “hid that quite well.” Id. at 48. Andreotti further testified that
she did not know either the contract price or the additional $50,000 the Lanes
had paid the Eenigenburgs prior to the closing and that, as she was leaving the
closing, she was introduced to the Lanes, who had asked to meet her, by a clerk
from the title company, and that she was shown “nothing” in addition to the
warranty deed that she signed, the check, and the promissory note. Id. at 49.
Andreotti testified that some time after the closing, she spoke with Jeffrey and
he stated to her, “that they could have come up with the full amount,” and that
she “did not know [Keith] had received another 50,000” until Mr. Lane told her
what he had paid for the Property. Id. at 50.
[7] On cross-examination, Andreotti stated she had been involved in the real estate
business since 1970, along with her husband when he was alive, which involved
remodeling distressed properties and holding them for rental. She further stated
that as part of her work in real estate she had prepared contracts and leases.
Andreotti testified that, as to whether she had a conversation with Keith in the
spring of 2011 regarding whether she would accept $300,000 as a “cash-out” in
connection with the Property, she acknowledged that she had such a
conversation, “[b]ut at the time, I told him I could not.” Id. at 78-79. Andreotti
stated that “she needed the full amount.” Id. at 80. She acknowledged that in
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2010 she had previously indicated to Keith that she would accept $300,000 if
the purchase price on the sale was $650,000, and that Keith subsequently told
her “many times” that he had found a purchaser who could pay a down
payment of $300,000 cash but never stated the full purchase price. Id. at 81.
Andreotti further testified that within a three-week period after the closing, she
learned that the Lanes purchased the Property for $837,000, with $350,000 paid
in total for the down payment, and that, until she spoke with the Lanes, she
“was of the opinion [the purchase price] was less than he had - - the 650,000 he
had paid me.” Id. at 87.
[8] On redirect, Andreotti explained that in prior real estate closings at which she
had participated she had always had the disclosure statements, HUD
statements, closing statements, and all other closing documents before her. She
further indicated that she had never participated in a closing where she was
placed in a separate conference room, and she said that “there was a written
document whereby [Keith] had written, requesting that I not be in the closing
and that they not disclose the purchase price in his own writing.” Id. at 91.
[9] The court asked Andreotti if she was forced by any party to sign the deed, and
she stated that she was not, that there was no coercion, and she signed because
of her “own mind and [her] circumstances.” Id. at 95.
[10] Andreotti’s counsel asked her on redirect to clarify the circumstances that
caused her to sign the deed, and she stated:
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Well, my family situation; my son was dying. I had a lot of
medical bills and things which I naturally was responsible for. I
had two grandchildren I know I was going to have to try to
educate, which being swindled out of this, my granddaughters
did not go to college. Their children are in debt.
Id. at 96. She added that she felt pressure to sign the deed because “[Keith] told
me if I did not accept the $300,000, we would lose the buyer.” Id. at 97.
[11] On re-cross-examination, Andreotti was asked when Keith told her this, and
she stated: “Repeatedly. He was at my house at least two or three times three
days before closing.” Id.
[12] Mary Jo testified that she has resided at the Property since the August 1, 2011
closing and that the Property was purchased from the Eenigenburgs. She stated
that she and her husband initially paid $5,000 in earnest money and later paid
Sandra an additional $50,000. Mary Jo testified that she first met Andreotti
after she and her husband had signed all the closing documents and that her
husband contacted Andreotti after the closing date regarding the condition of
the Property. On cross-examination, she stated that in exchange for paying an
additional $50,000 Keith reduced the interest rate on their contract.
[13] Keith testified that he and Sandra purchased the Property from Andreotti in
2001 pursuant to the Contract, listed the Property for sale in 2007 for
$1,500,000 due to financial difficulty related to his and his brother’s rental
property business, acknowledged that Andreotti paid the real estate taxes due in
2009 and 2010, and that he had received two modifications to the interest rate.
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He stated that prior to 2011 he had not received any other offers to purchase the
Property and that when he received the Lanes’ offer he told Andreotti about it
around Memorial Day of 2011. Keith indicated that he discussed the terms of
the offer with Andreotti, but when asked whether he told her the price of the
offer, he replied “[p]rice? The total amount? No, I didn’t.” Id. at 126. Keith
testified that he knew in May 2011 that the price “was going to be between 800-
and 900,000,” and added that he did not “think we would have gone any
further with it had it been, you know, much lower.” Id. at 127. He stated that
he did not recall telling Andreotti that he was not receiving any more from the
Lanes than the $650,000 purchase price of the Property, but he acknowledged
that he was “thinking more of what I paid with the interest and everything” in
determining what he meant by the price of the Property. Id.
[14] Keith stated that he did not know if he spoke to Andreotti within three days of
the closing, that he spoke to Andreotti about the fact that she was taking less
than what was due on the Contract, that he called Andreotti to inform her of
the Lanes’ down payment of $300,000, and that he received the additional
$50,000 about three and one-half weeks after the original down payment offer
of $300,000. He acknowledged that an amount greater than $300,000 was due
on the Contract, but stated that he asked Andreotti if $300,000 “would satisfy
her contract,” that in June he presented her with a check for $5,000, and then in
July he received an additional $50,000 check from the Lanes. Id. at 135. Keith
stated that Andreotti told him he should “take the deal” offered by the Lanes
for the Property and that, after Andreotti had accepted the deal, he began
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discussing with George Burrell about whether Burrell had any properties for
sale. Id. at 136.6 Keith acknowledged that he received $55,000 in total from the
Lanes, that his wife owns a property on Polk Street purchased from Burrell, and
he acknowledged that Andreotti was kept separate from the Eenigenburgs and
the Lanes at the closing. When asked whether he had asked anyone to refrain
from telling Andreotti the actual purchase price, he replied, “I can’t recall any
discussion about purchase price. I didn’t know it was that important,” but
acknowledged that he never told Andreotti about the purchase price.
Regarding the additional $50,000 he received from the Lanes, the following
exchange occurred:
[Andreotti’s Counsel]: Do you feel any obligation with respect to
that $50,000 that you received from the Lanes? Did you feel any
obligation to turn that over to Joan?
[Keith]: I don’t know - - you know, we made a purchase deal
and we – you know, we made a purchase deal and we agreed to
those terms and I don’t know if it had to go beyond that point.
Id. at 143. Keith stated that he did not provide Andreotti with the contract the
Lanes signed for the Property and that, at the time of the closing, he owed
Andreotti “in the general area of around 370,000.” Id. at 152.
6
Keith was acquainted with Burrell because Burrell had performed maintenance work on some of Keith’s
rental properties.
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[15] On cross-examination, Keith testified that the total amount he paid Andreotti
for the Property, including principal and interest, was $896,763.26, that when
he first met with the Lanes, Jeffrey “indicated to me at that time that he was
only able to come up with $300,000,” that he then called Andreotti to inform
her of the $300,000 down payment, and that Andreotti “called us on the
[Memorial Day] holiday and had indicated to take the offer.” Id. at 159. He
testified that, when Andreotti told him she would take $300,000 she did not
express any conditions, and that, when Andreotti indicated her acceptance, the
Eenigenburgs “celebrated with Subway sandwiches.” Id. He stated that, at that
time, the Eenigenburgs were making plans to move into Sandra’s parents’
home. Keith testified that in late June he met Burrell at a Casey’s station in
Cedar Lake about purchasing a house and that Burrell “suggested to me to go
to my buyer and give them a reduction in interest on the contract if they could
come up with an additional $50,000,” and that in early July the Lanes agreed to
pay an additional $50,000 in exchange for an interest rate reduction. Id. at 161.
Keith stated that the deal he had with Andreotti for $300,000 was “already a
finished process” and that the sale of the Property to the Lanes was not
contingent on their ability to pay the additional $50,000. Id. at 166.
[16] Both during and after the trial, the parties submitted initial and supplemental
affidavits of attorney’s fees. On December 11, 2015, the court issued findings of
facts and conclusions thereon and entered a judgment in favor of Andreotti in
the amount of $72,265.98 and awarded her $9,611.11 in attorney fees. The
court’s order provides, in part, that:
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FINDINGS OF FACT
7. That at the closing in August 2011, [Andreotti] received the
sum of Two Hundred Ninety Five Thousand ($295,000.00)
Dollars from the Title Company and a promissory note from the
[Eenigenburgs] in the sum of Five Thousand ($5,000.00) Dollars.
*****
10. That prior to May of 2011, the [Eenigenburgs] had the
[Property] on the market for sale. They received no offers until
May 2011, at which time they received a purchase offer from the
[Lanes].
11. That at that time the balance due on the [Contract] including
the taxes paid by [Andreotti], was the approximate [sum] of
Three Hundred Seventy Thousand One Hundred Two
($370,102.30) Dollars and Thirty Cents.
12. That the down payment on the purchase price offered by the
[Lanes] for the [Property] was Three Hundred Thousand
($300,000.00) Dollars.
13. That [the Eenigenburgs] contacted [Andreotti] and advised
her that this was the only offer they had received on the
[Property] and the Three Hundred Thousand ($300,000.00)
Dollars was the maximum amount that the [Lanes] could pay as
a down payment, but it was not the actual offer. [Keith],
conveyed this offer to [Andreotti] and asked her to think about it.
14. That over the Memorial Day weekend of 2011, the
[Eenigenburgs] received a telephone call from [Andreotti]
indicating that she would accept the sum of Three Hundred
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Thousand ($300,000.00) Dollars in full payment of the [Contract]
balance.
15. That the closing was scheduled for August 1, 2011.
*****
21. That the [Eenigenburgs] did not disclose to [Andreotti] the
actual purchase price or the terms of the real estate offer and
contract that they agreed to with the [Lanes].
22. That, [Keith] told [Andreotti] that the total she would receive
from the closing between the [Eenigenburgs] and the [Lanes] was
the sum of Three Hundred Thousand ($300,000.00) Dollars even
though the [Contract] balance between the parties as of the date
of closing was about Three Hundred Seventy Thousand One
Hundred Two ($370,102.30) Dollars and Thirty Cents, including
the tax payments that [Andreotti] made in the sum of Thirty
Thousand Eight Hundred Fourteen ($30,814.30) Dollars and
Thirty Cents that [the Eenigenburgs] failed to pay.
23. That [Andreotti] never agreed, verbally or otherwise, to
accept any amount less than what was due to her on the
remaining principal balance on the [Contract] and the tax
payments that she made that [the Eenigenburgs] failed to pay.
24. That the actual purchase price between [the Eenigenburgs]
and the [Lanes] was Eight Hundred Thirty Seven Thousand
($837,000.00) Dollars.
25. That from May through August of 2011, [Andreotti]
repeatedly asked [Keith] what the purchase price was for the
contract with the [Lanes]; [Keith] never disclosed that price to
[Andreotti] and would only suggest that he was losing money on
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this deal and that he was not even getting the price that he paid
for the [Property].
26. That from May through August of 2011, based upon the
many conversations with [Keith], and the representations that he
made along with his intentional omission of the purchase price
and Fifty Thousand ($50,000.00) Dollars deposit, [Andreotti]
believed that the [Lanes] agreed to a purchase price less than
what the [Eenigenburgs] agreed to pay for the property, believed
that the [Eenigenburgs] were in dire financial straits, that the
[Eenigenburgs] had to move in with [Sandra’s] parent’s, that the
[Eenigenburgs] were taking a loss on the property, that the
[Lanes] would walk away if the [Eenigenburgs] did not follow
through with the sale, and that the [Eenigenburgs] could no
longer make payments on the contract with [Andreotti].
27. That up to the date of closing, August 1, 2011, [Keith],
continued to make statements to [Andreotti] that the only cash
that the [Lanes] could come up with was Three Hundred
Thousand ($300,000.00) dollars despite the fact that the
[Eenigenburgs] received an additional Fifty Thousand
($50,000.00) Dollars in cash from the [Lanes] in July, 2011.
28. That during the closing, a Meridian Title Representative
presented [Andreotti] with a Deed to [Sandra]; [Andreotti]
executed said Deed.
29. That thereafter a Meridian Title Representative presented
[Andreotti] with a check in the sum of Two Hundred Ninety
Thousand ($290,000.00) Dollars and a promissory note from the
[Eenigenburgs] for Five Thousand ($5,000.00) Dollars.
30. That the sum of Seventy Two Thousand Two Hundred Sixty
Five ($72,265.98) Dollars and Ninety Eight Cents, including the
taxes, remained and still remain due and owing to [Andreotti].
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CONCLUSIONS OF LAW
*****
9. [Andreotti] agreed to accept the sum of Three Hundred
Thousand ($300,000.00) Dollars in full payment of the balance
due under the [Contract] based upon the knowing
misrepresentations of [Keith] about the sale price of the
[Property] in question and the down payment on same.
10. [Andreotti] is entitled to judgment against the
[Eenigenburgs] based on their willful misrepresentations
concerning the amounts that they were going to derive from the
sale of the subject [Property] in the aggregate sum of Seventy
Two Thousand Two Hundred Sixty Five ($72,265.98) Dollars
and Ninety Eight Cents.
11. The [Contract] entered into by and between the parties
provided for attorney fees for the prevailing party.
12. [Andreotti], as the prevailing party, is entitled to recover of
and from [the Eenigenburgs] the sum of Nine Thousand Six
Hundred Eleven ($9,611.11) Dollars and Eleven Cents for
attorney’s fees and costs, which the Court finds to be reasonable.
Appellant’s Appendix at 12-17.
Discussion
[17] The issue is whether the trial court’s findings of fact and conclusions of law
entered pursuant to Ind. Trial Rule 52(A) are clearly erroneous. “Where a trial
court has made special findings pursuant to a party’s request under Trial Rule
52(A), the reviewing court may affirm the judgment on any legal theory
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supported by the findings.” Mitchell v. Mitchell, 695 N.E.2d 920, 923 (Ind.
1998). We may not set aside the findings or judgment unless they are clearly
erroneous. Menard, Inc. v. Dage-MTI, Inc., 726 N.E.2d 1206, 1210 (Ind. 2000),
reh’g denied. In our review, we first consider whether the evidence supports the
factual findings. Id. Second, we consider whether the findings support the
judgment. Id. “Findings are clearly erroneous only when the record contains
no facts to support them either directly or by inference.” Quillen v. Quillen, 671
N.E.2d 98, 102 (Ind. 1996). A judgment is clearly erroneous if it relies on an
incorrect legal standard. Menard, 726 N.E.2d at 1210. We give due regard to
the trial court’s ability to assess the credibility of witnesses. Id. While we defer
substantially to findings of fact, we do not do so to conclusions of law. Id. 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.
Yoon v. Yoon, 711 N.E.2d 1265, 1268 (Ind. 1999). We evaluate questions of law
de novo and owe no deference to a trial court’s determination of such questions.
Kwolek v. Swickard, 944 N.E.2d 564, 570 (Ind. Ct. App. 2011) (citing McCauley v.
Harris, 928 N.E.2d 309, 313 (Ind. Ct. App. 2010), reh’g denied, trans. denied),
trans. denied.
[18] The essential elements of fraudulent inducement are the same as those for any
action on fraud: “The elements of actual fraud are: (1) a material
misrepresentation of past or existing facts; (2) made with knowledge or reckless
ignorance of falsity; (3) which caused the claimant to rely upon the
misrepresentation to the claimant’s detriment. Massey v. Conseco Servs., L.L.C.,
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879 N.E.2d 605, 611 (Ind. Ct. App. 2008) (citing Siegel v. Williams, 818 N.E.2d
510, 515 (Ind. Ct. App. 2004)), aff’d on reh’g, 886 N.E.2d 581 (Ind. Ct. App.
2008), trans. denied. “One cannot be allowed, under the law, to partially
disclose the facts as he knows them to be, yet create a false impression in the
mind of the hearer by failing to fully reveal the true state of affairs.” Thompson v.
Best, 478 N.E.2d 79, 84 (Ind. Ct. App. 1985), reh’g denied, trans. denied. Fraud
need not be proven by direct or positive evidence; it may be proven by
circumstantial evidence, provided there are facts from which the existence of all
the elements can be reasonably inferred. Plymale v. Upright, 419 N.E.2d 756,
760 (Ind. Ct. App. 1981).
[19] The Eenigenburgs argue that the trial court’s findings are not supported by the
evidence and do not provide a basis for the judgment against either Keith or
Sandra. They maintain that the findings fail to specify which statements
induced Andreotti to accept $300,000, including when the statements were
made, whether they were false when made, whether they were material to
Andreotti’s decision to accept $300,000, and whether Andreotti “reasonably
relied” on the statements to her detriment. Appellant’s Brief at 16. The
Eenigenburgs state that the court clearly erred in concluding that Keith induced
Andreotti to accept the $300,000 and down payment terms because Andreotti
did not “‘reasonably rely’ on any misrepresentations either concerning the
Lanes’ contract price, or the amount of their down payment.” Id. at 25. They
contend that Andreotti is “a sophisticated real estate investor, with 32 years
experience in the industry,” that she had previously participated in real estate
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closings but did not examine the closing papers associated with the transaction
at issue which would have disclosed to her the full purchase price and down
payment, and failed to “independently investigate” the purchase price and
down payment, and that no one had pressured her to sign the deed. Id. at 26-
27.
[20] Andreotti asserts that the Eenigenburgs, despite her inquiries, intentionally
omitted the purchase price and deposit in their contract with the Lanes which
were the material misrepresentations that induced her to accept less than the
full amount owed to her under the Contract. She further argues that, despite
her requests for information about the purchase price in the Eenigenburgs’
contract with the Lanes, the Eenigenburgs “repeatedly gave waffling answers,”
“never disclos[ed] the actual sales price, deposit, or sales contract,” and
“requested that the title company staff place [Andreotti] in a separate
conference room without the closing documents during the closing” which
supports the trial court’s order in her favor. Appellee’s Brief at 15-16.
[21] In reply, the Eenigenburgs assert that Andreotti’s own financial circumstances,
rather than any of Keith’s alleged misrepresentations, led her to sign the deed.
They also contend that no evidence was presented that she asked to be in the
same room as the Eenigenburgs and Lanes, that she asked to review the closing
documents, that she did not refuse to accept the settlement check on grounds
that she should have received more money, and that she acknowledged that no
one forced or pressured her to sign the deed.
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[22] The trial court entered findings consistent with the evidence. With respect to
whether the findings support the judgment, in Finding 12 the court found that,
around Memorial Day 2011, the Lanes offered $300,000 as the down payment,
and in Finding 27 the court found that, in addition to the initial down payment
offer of $300,000, “the [Eenigenburgs] received an additional Fifty Thousand
($50,000.00) Dollars in cash from the [Lanes] in July, 2011.” Appellant’s
Appendix at 15. Findings 25, 26, and 27 all reference evidence which reveals
that the parties had conversations in which Keith failed to specify the full
amount of the purchase price to Andreotti prior to the closing. The evidence at
trial shows that, in the context of the parties’ dealings, the amount of the
purchase price was material to Andreotti’s decision to accept $300,000 instead
of the full $372,265.98 remaining balance under the Contract. In 2010,
Andreotti had stated to Keith that she would be willing to accept $300,000 if the
purchase price on the sale was $650,000. At the time of their initial
conversation over Memorial Day of 2011, Andreotti instructed the
Eenigenburgs to proceed with the sale to the Lanes and that she would accept
$300,000 in satisfaction of the full balance remaining under the Contract, Keith
was aware that the full purchase price was going to be between $800,000-
$900,000, and he represented to her that he was receiving only what he had
paid for the Property.7 Finding 21 also reflects this evidence and states that the
7
Keith stated that he took receiving what he had paid Andreotti for the Property under the Contract to
include accrued interest, which was a sum he presented to the trial court in a handwritten exhibit, titled
Defendant’s Exhibit A, containing his computation of the total amount he had paid Andreotti which showed
that he had paid $896,763.26.
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Eenigenburgs “did not disclose to [Andreotti] the actual purchase price or the
terms of the real estate offer and contract that they had agreed to with [the
Lanes].” Id. at 14. Three days prior to the August 1, 2011 closing, Andreotti
testified that she met with Keith two or three times in the time after he had
received the additional $50,000 from the Lanes, that he stated to her that if “she
did not accept the 300,000 we would lose the buyer,” but that he did not reveal
he had received an additional $50,000 from the Lanes in July. Transcript at 97.
Finding 27 reflects Andreotti’s testimony that even prior to closing Keith did
not reveal to her that the Lanes paid an additional $50,000 down payment.
[23] Based upon the evidence before it, the trial court could have reasonably
concluded that Keith materially misrepresented past or existing facts, that he
made the statements knowingly or recklessly, and that Andreotti relied upon
the statements to her detriment. See Fimbel v. DeClark, 695 N.E.2d 125, 127-129
(Ind. Ct. App. 1998) (stating that where a buyer and a seller had conversations
which imposed a duty to disclose the unsuitability of home lots for
construction, an action for fraud can be supported where a party does not make
full disclosure of the facts known to him which were relevant to the decision of
another party to enter the transaction, and noting that if there is “any behavior
of the seller which points affirmatively to a suppression of the truth or to a
withdrawal or distraction of the other parties’ attention to the facts, the
concealment becomes fraudulent” (quoting Ind. Bank & Trust Co. of Martinsville,
Ind. v. Perry, 467 N.E.2d 428, 431 (Ind. Ct. App. 1984))), trans. denied.
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[24] With respect to whether Andreotti’s reliance was reasonable, the complaining
party must have had a reasonable right to rely on the representations. Westfield
Ins. Co. v. Yaste, Zent & Rye Agency, 806 N.E.2d 25, 31 (Ind. Ct. App. 2004),
trans. denied.
The legal obligation that a person exercise the common sense and
judgment of which he is possessed is a practical limitation on the
actionability of various representations. Where persons stand
mentally on equal footing, and in no fiduciary relation, the law
will not protect one who fails to exercise common sense and
judgment.
Ruff v. Charter Behavioral Health Sys. of Nw. Ind., Inc., 699 N.E.2d 1171, 1175
(Ind. Ct. App. 1998) (citations omitted), reh’g denied, trans. denied. Whether
reliance was reasonable is usually a question for the trier of fact, but when “the
evidence is so clear as to be susceptible of only one reasonable inference, it is for
the court to determine as a matter of law whether [the party asserting fraud]
was justified in relying on the representation and whether he was negligent in
doing so.” Plymale, 419 N.E.2d at 763 (quoting 37 C.J.S. Fraud § 129 (1943)).
Whether reliance was justified is, on conflicting evidence, a matter for the trier
of fact to determine. Biberstine v. New York Blower Co., 625 N.E.2d 1308, 1316
(Ind. Ct. App. 1993), reh’g denied, trans. denied.
[25] Andreotti testified that at the closing she was in a separate conference room and
that “there was a written document whereby [Keith] had written, requesting
that I not be in the closing and that they not disclose the purchase price in his
own writing.” Id. at 91. The Eenigenburgs did not object to this testimony.
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She further testified that the title company representatives presented her with a
warranty deed conveying the Property to Sandra, a check for $290,000, and a
$5,000 promissory note in her favor by the Eenigenburgs. Andreotti indicated
that she was not presented with any closing documents, such as a HUD
statement, the contract between the Eenigenburgs or other documents that
would have revealed the full price of the Eenigenburg-Lane contract and the full
amount of the down payment. Based upon the record, we cannot say that
Andreotti’s reliance was unreasonable.
Conclusion
[26] We cannot say that the trial court’s order concluding that Andreotti was
fraudulently induced to accept less than the full amount owed to her under the
Contract is clearly erroneous.
[27] For the foregoing reasons, we affirm the court’s order in favor of Andreotti.
[28] Affirmed.
Baker, J., and May, J., concur.
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