Michael R. Bixeman and Doreen Bixeman v. Hunter's Run Homeowners Association of St. John, Inc.

Jun 11 2015, 8:44 am
ATTORNEYS FOR APPELLANTS ATTORNEY FOR APPELLEE
Edward P. Grimmer Kevin E. Steele
Daniel A. Gohdes Burke Costanza & Carberry, LLP
Edward P. Grimmer, P.C. Valparaiso, Indiana
Crown Point, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Michael R. Bixeman and June 11, 2015
Doreen Bixeman, Court of Appeals Case No.
45A03-1411-PL-406
Appellants/Plaintiffs/Cross-Appellees,
Appeal from the Lake Superior
v. Court;
The Honorable Diane Kavadias
Schneider, Judge;
Hunter’s Run Homeowners 45D11-1305-PL-43
Association of St. John, Inc.,
Appellee/Defendant/Cross-Appellant.
May, Judge.
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[1] Michael R. Bixeman and Doreen Bixeman (“Bixemans”) appeal the court’s
declaration as moot their allegation of slander of title by Hunter’s Run
Homeowners Association of St. John, Inc. (“Hunter’s Run”). Hunter’s Run
cross-appeals the court’s determination the sanction Hunter’s Run imposed
against Bixemans was invalid.
[2] We affirm in part, reverse in part, and remand.
Facts and Procedural History
[3] Bixemans own a residence in the Hunter’s Run Subdivision that is encumbered
by a Declaration of Covenants, Conditions, Restrictions and Easements
(“Declaration”). Article XI, Section 8 of the Declaration requires owners who
wish to rent their residence to others to provide leases in writing and to rent the
residence for at least six months initially and for not less than thirty days
thereafter. Section 6 of the Rules and Regulations 1 states owners must provide
a copy of the lease to Hunter’s Run at least fifteen days prior to the effective
date of the lease. It also provides the lease must contain a clause that obligates
the prospective tenant to acknowledge receipt of the Declaration.
[4] In 2012, Bixemans moved to Iowa. On October 7, 2012, Bixemans rented their
residence to another party, effective October 1, 2012. Bixemans did not provide
the lease to Hunter’s Run fifteen days prior to its effective date, and the lease
1
The Rules and Regulations are a document amended and adopted by Hunter’s Run on February 28, 2012,
“in furtherance of the powers, authorities and restrictions upon use contained within the Declaration of
Covenants.” (App. at 65.)
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did not contain a clause requiring the tenants’ acknowledgement of receipt of
the Declaration.
[5] The Declaration Article XII, in pertinent part, states:
The Board of Directors shall not impose a Special Assessment as a
sanction, suspend the right to vote, or infringe upon any other rights of
an Owner or Occupant for any such violations unless and until the
following procedure is followed:
1. Demand. Written demand to cease and desist from an alleged
violation shall be served upon the alleged violator specifying: (a)
the alleged violation; (b) the action required to abate the violation;
and (c) a time period, not less than ten (10) days, during which the
violation may be abated without further action.
2. Notice. If the violation continues past the period allowed in the
demand for abatement without sanction, the Association shall
serve the violator with written notice of the hearing. The notice
shall contain: (a) the nature of the alleged violation; (b) the time
and place of the hearing, which time shall not be less than ten (10)
days from the giving of the notice; (c) and invitation to attend the
hearing and produce any statements, evidence and/or witnesses in
his/her behalf; and (d) the proposed sanction to be imposed.
3. Hearing. The hearing shall be held in executive session by the
Board of Directors pursuant to the notice affording the violator a
reasonable opportunity to be heard. Prior to the effectiveness of
any sanction hereunder, proof of notice, the invitation to be heard,
the written result and statements of the sanction shall be placed in
the minutes of the meeting. Such proof shall be deemed adequate
if a copy of notice together with a statement of the date and
manner of delivery is entered by the officer or director who
delivered such notice. The notice requirement shall be deemed
satisfied if a violator appears at the meeting.
(Appellant’s App. at 51-52.)
[6] On October 22, 2012, Hunter’s Run notified Bixemans of their violation and of
a Homeowner’s Association hearing to be held on October 29, 2012. Bixemans
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were unable to travel from Iowa for the hearing, and Hunter’s Run would not
allow them to appear by telephone. Hunter’s Run made no decision at the
hearing and requested Bixemans submit any evidence in writing. Hunter’s Run
did not receive a response it considered adequate, and on December 13, 2012, it
imposed a $250.00 sanction on Bixemans. Bixemans did not pay, and Hunter’s
Run recorded a $2,525.00 lien against the Bixemans’ property. Bixemans were
notified of the lien by a Notice of Lien tendered to them on February 18, 2013.
[7] Bixemans sued for release of the lien. Hunter’s Run counter-sued to enforce
and foreclose the lien. Bixemans filed a partial motion for summary judgment
requesting the court find invalid the lien that slandered their title and find in
their favor on all counterclaim issues. Hunter’s Run moved for declaratory
judgment and foreclosure of its lien.
[8] The trial court entered summary judgment, ordering Bixemans to pay the
$250.00 sanction and ordering Hunter’s Run to release the invalid lien; in
ordering the lien released, the court declared that “[d]ue to the invalidity of the
lien, Plaintiff’s allegation for slander of title is moot.” (App. at 14.) After
Bixemans filed a motion to correct error, the trial court declared the sanction
invalid and reversed the order Bixemans pay it, but it reaffirmed its findings as
to the slander of title.
Discussion and Decision
[9] A trial court has broad discretion in ruling on a motion to correct error.
Volunteers of Am. v. Premier Auto Acceptance Corp., 755 N.E.2d 656, 658 (Ind. Ct.
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App. 2001). We will reverse only for an abuse of that discretion. Id. An abuse
of discretion occurs if the decision was against the logic and effect of the facts
and circumstances before the court or if the court misapplied the law. Id.[10] The propriety of a decision on a motion to correct error after a summary
judgment depends on the validity of the decision to grant or deny summary
judgment. We review summary judgment de novo, applying the same standard
as the trial court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Drawing
all reasonable inferences in favor of the non-moving party, we will find
summary judgment appropriate if the designated evidence shows there is no
genuine issue as to any material fact and the moving party is entitled to
judgment as a matter of law. Id. A fact is material if its resolution would affect
the outcome of the case, and an issue is genuine if a trier of fact is required to
resolve the parties’ differing accounts of the truth, or if the undisputed material
facts support conflicting reasonable inferences. Id.[11] The initial burden is on the summary-judgment movant to demonstrate there is
no genuine issue of fact as to a determinative issue, at which point the burden
shifts to the non-movant to come forward with evidence showing there is an
issue for the trier of fact. Id. While the non-moving party has the burden on
appeal of persuading us a summary judgment was erroneous, we carefully
assess the trial court’s decision to ensure the non-movant was not improperly
denied his day in court. Id.Court of Appeals of Indiana | Opinion 45A03-1411-PL-406 | June 11, 2015 Page 5 of 9
Sanction
[12] The trial court did not err when it declared the sanction invalid, as Hunter’s
Run did not follow the procedures agreed upon in the Declaration. The
Declaration is tantamount to a contract. See Villas W. II of Willowridge
Homeowners Ass’n, Inc. v. McGlothin, 885 N.E.2d 1274, 1278 (Ind. 2008) (“A
restrictive covenant is an express contract between grantor and grantee that
restrains the grantee’s use of his land.”).
[13] Hunter’s Run concedes it did not follow the “due process” 2 specified in
Declaration Article XII, as the notice given to the Bixemans occurred only
seven days before the hearing and meeting minutes were not preserved for the
record. It, therefore, asserts its substantial compliance should absolve it of any
requirement to follow the process for sanctions outlined in the Declaration. 3 It
does not.
[14] Hunter’s Run relies on Gibson v. Neu, 867 N.E.2d 188, 195 (Ind. Ct. App. 2007),
which declared there is substantial compliance only if “performance of a
nonessential condition is lacking, so that the benefits received by a party are far
2
The court was referring not to the constitutional right, but rather to a right to the process outlined in the
Declaration.
3
Hunter’s Run also asserts it should be excused for its failure to follow the process for sanctions because it
acted “upon advice of counsel.” (Appellee’s Br. at 9.) Indiana Appellate Rule 46(A)(8)(a) requires each
contention be supported by cogent reasoning and “supported by citations to the authorities, statutes, and the
Appendix or parts of the Record on Appeal relied on.” As Hunter’s Run has not cited any authority in
support of its assertion, this argument is waived.
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greater than the injury done to him by the breach of the other party.” Id.(quoting Dove v. Rose Acre Farms, Inc., 434 N.E.2d 931 (Ind. Ct. App. 1982)).
[15] We decline to hold the requirement to wait ten days after giving notice was a
“nonessential condition.” All parties acknowledge Bixemans were unable to be
at the meeting with only seven days’ notice. Hunter’s Run willingly agreed to
the process of assessing sanctions that included ten days’ notice. If it did not
want to or was unable to follow the process, it could have declined to assess the
sanctions. However, if it wished to impose the sanctions, it was obliged to
follow the process outlined in the covenants to which it and the homeowners,
including the Bixemans, had agreed. See, e.g., Drenter v. Duitz, 883 N.E.2d 1194,
1203 (Ind. App. 2008) (If homeowner wished to build shed, it needed to first
obtain approval of plans in accordance with Subdivision’s restrictive
covenants.). As Hunter’s Run did not follow that process, the trial court did
not err when it declared the sanction invalid.
Slander of Title4
[16] To demonstrate slander of title, one must prove “false statements were made,
with malice, and that the plaintiff sustained pecuniary loss as a necessary and
4
In its conclusions of law the trial court said “[d]ue to the invalidity of the lien, [Bixemans’] allegation for
[sic] slander of title is moot.” (App. at 14.) Immediately afterward in its judgment order it ruled on the
slander of title allegation, determining “[t]he liability of Defendant Hunter’s Run for its slander of title is
DENIED.” (Id. at 15.) In its Order upon Motion to Correct Errors it stated it “reaffirms its findings,
conclusions, and order of April 9, 2014 with respect to [Bixemans’] claim for slander of title.” (Id. at 10.)
A “moot” question is one “involving no subject matter upon which the court’s judgment might operate.”
State v. Vore, 268 Ind. 340, 342, 375 N.E.2d 205, 207 (1978). Despite its statement the allegation of slander of
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proximate consequence of the slanderous statements.” Display Fixtures Co., a
Div. of Stein Indus. v. R. L. Hatcher, Inc., 438 N.E.2d 26, 30 (Ind. Ct. App. 1982).
A malicious statement is one “made with knowledge of [its] falsity or with
reckless disregard for whether [it is] false.” Holland v. Steele, 961 N.E.2d 516,
525 (Ind. Ct. App. 2012), trans. denied.
[17] Hunter’s Run was notified by Bixeman’s attorney that the lien was invalid, yet
it refused to release the lien. That demonstrated malice. See Walsh & Kelly, Inc.
v. Int’l Contractors, Inc., 943 N.E.2d 394, 399-400 (Ind. Ct. App. 2011) (refusal to
release lien after repeated notifications lien was invalid constituted malice),
trans. denied. Bixemans were unable to market their property and had to pay
their attorney in order to put this matter to rest, which resulted in pecuniary
loss. See Keilbach v. McCullough, 669 N.E.2d 1052, 1053 n.2 (Ind. Ct. App.
1996) (approval of “attorney fees as the proper measure of damages” in slander
of title actions). Having maliciously placed a lien on Bixemans’ property,
which lien Bixemans allege caused them pecuniary loss, Hunter’s Run
committed slander of title. 5 See, e.g., Walsh & Kelly, Inc., 943 N.E.2d at 400
title was moot, it appears the trial court did in fact enter judgment on that question in Hunter’s Run’s favor.
We accordingly address whether that ruling was error.
5
As explained above, we agree with the trial court that the lien was invalid, and the designated evidence
shows there is no genuine issue as to whether Hunter’s Run committed slander of title. However, the trial
court erred when it determined Bixemans’ “allegation for slander of title is moot” because the lien was
invalid. See, e.g., Huff v. Jennings, 459 S.E.2d 886, 890 (S.C. Ct. App. 1995) (discharging lien did not
“extinguish any claim for slander of title” and slander of title claim was “not rendered moot by . . . discharge
[of] lien.”), reh’g denied, appeal dismissed.
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(though court declared lien invalid, party maliciously asserting lien still liable
for slander of title).
[18] We accordingly direct the trial court to enter summary judgment for Bixemans
on their slander of title claim and remand for a determination whether
Bixemans were damaged by that slander of title and if so, to what extent.
Attorney Fees
Bixemans assert Hunter’s Run slander of title entitled them to attorney fees
pursuant to Ind. Code § 32-20-5-2. Hunter’s Run does not dispute Bixemans’
assertion except to note the court made no finding. We accordingly instruct the
court on remand to enter findings regarding attorney fees.
Conclusion
[19] As Hunter’s Run did not follow the process agreed to in the Declaration, the
sanctions were invalid. However, Bixemans demonstrated slander of title by
Hunter’s Run invalid lien. Thus, we reverse and remand for the trial court to
determine Bixemans’ damages, including attorney fees.
[20] We affirm in part, reverse in part, and remand.
Robb, J., and Mathias, J., concur.
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