Keith Krzeminski v. James Carr and Renee Carr (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be Jan 23 2017, 7:01 am
regarded as precedent or cited before any
CLERK
court except for the purpose of establishing Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES
Scott T. McClelland Chad L. Rayle
Butcher, Ball, Lowry, McMahan & Thompson Smith
McClelland Smith, Smith & Rayle, P.C.
Kokomo, Indiana Auburn, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Keith Krzeminski, January 23, 2017
Appellant-Defendant, Court of Appeals Case No.
76A03-1603-MI-716
v. Appeal from the Steuben Superior
Court
James Carr and Renee Carr, The Honorable William C. Fee,
Appellees-Plaintiffs. Judge
Trial Court Cause No.
76D01-1411-MI-383
Robb, Judge.
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Case Summary and Issue
[1] James and Renee Carr owned property on part of which they operated a
campground. In 2014, they sold the property in two parcels at public auction.
Keith Krzeminski made the highest bid for the larger parcel that included the
campground. Closing was to occur on or before June 27, 2014. Closing did not
take place by that date, and the Carrs sued Krzeminski for breach of contract.
The trial court entered summary judgment for the Carrs in the amount of
$75,000. Krzeminski now appeals, raising one issue for our review: whether
the trial court erred in granting summary judgment to the Carrs because
genuine issues of material fact remain. Concluding there is a genuine issue of
material fact to be resolved at trial, we reverse and remand.
Facts and Procedural History
[2] In 1998, the Carrs purchased approximately 100 acres of land in Steuben
County, Indiana, and operated a campground on part of the land thereafter. In
early 2014, they decided to sell the campground via public auction and offered
the property as an on-going business with the buyer to receive prorated rental
income from the 2014 season. The auction company offered alternatives for the
bidders in an effort to maximize the amount of money the Carrs would receive
from the sale: the property was offered as a whole, or as two separate tracts
with Tract 1 being approximately fifty-nine acres including the campground,
and Tract 2 being approximately forty-four acres of wooded ground. At the
auction on May 29, 2014, the bids on Tracts 1 and 2 separately totaled more
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than the bids on the property as a whole, so the Carrs accepted the two separate
bids. Krzeminski was the top bidder for Tract 1, offering $325,000. Doug
Hawkins was the top bidder for Tract 2, bidding $80,000. Krzeminski and
Hawkins each deposited ten percent of their purchase price as earnest money
with Lakeview Title, LLC. This sales arrangement required an easement across
Tract 1 for the benefit of Tract 2 to be settled upon prior to closing.
[3] The Purchase Agreement between the Carrs and Krzeminski specified that
closing would occur on or before June 27, 2014. That date came and went
without closing on the transaction, however. At some point thereafter, both
Krzeminski and Hawkins backed out of the transaction. Lakeview Title
returned Hawkins’ earnest money to him, but retained Krzeminski’s. In early
2015, the Carrs sold both tracts for $330,000 to Liberty Land Holdings, LLC.
[4] In late 2014, Lakeview Title filed a complaint for interpleader against the Carrs,
Krzeminski, and several other entities, seeking a determination regarding the
disposition of Krzeminski’s earnest money. Lakeview Title also deposited the
earnest money with the clerk’s office. On December 11, 2014, the Carrs filed a
cross-claim against Krzeminski, alleging breach of contract. By the time
Krzeminski filed a motion for summary judgment in September 2015, and the
Carrs filed their own motion for summary judgment in October 2015, all other
parties had been dismissed from the litigation. The trial court ultimately
granted summary judgment to the Carrs, issuing a lengthy order that was taken
verbatim from the Carrs’ motion for summary judgment and cites only to the
Carrs’ designated evidence. Compare Appellant’s Appendix 10-19 (trial court’s
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summary judgment order) with Appellees’ Appendix at 5-12 (the Carrs’ motion
for summary judgment).1 The order concludes:
It is clear that there are no genuine issues of material fact, and
that Mr. and Mrs. Carr are entitled to judgment as a matter of
law.
***
. . . For whatever reason, Mr. Krzeminski decided that he no
longer wanted to purchase the campground when his attorney
sent a letter to Lakeview Title on August 28, 2014, indicating that
Mr. Krzeminski had “decided to terminate” the Purchase
Agreement. He can do this but he cannot do this without
consequence. The law requires what is also fair and just and that
is that Mr. Krzeminski forfeit his earnest money and make Mr.
and Mrs. Carr whole again by paying them the difference in what
they had from Mr. Krzeminski and Mr. Hawkins versus what
they were able to get from Liberty Land Holdings, LLC. That
difference is $75,000 and should be paid by the $32,500 earnest
money being set over to Mr. and Mrs. Carr and a judgment in
favor of Mr. and Mrs. Carr and against [Mr.] Krzeminski in the
amount of $42,500.
1
Krzeminski does not raise the issue, but we must note that although it is not error for the trial court to adopt
one parties’ proposed order verbatim, this practice is not encouraged and weakens our confidence that the
findings are the result of the considered judgment of the trial court. Chubb Custom Ins. Co. v. Standard Fusee
Corp., 2 N.E.3d 752, 758 n.2 (Ind. Ct. App. 2014). As noted below, however, findings are neither required
nor binding in a summary judgment order and we have considered the trial court’s order accordingly.
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Appellant’s App. at 16-19 (citation omitted). The court clerk was ordered to
release the earnest money to the Carrs’ attorney in partial satisfaction of the
judgment. Krzeminski now appeals the entry of summary judgment.
Discussion and Decision
I. Standard of Review
[5] “Summary judgment is a desirable tool to allow the trial court to dispose of
cases where only legal issues exist.” Hughley v. State, 15 N.E.3d 1000, 1003 (Ind.
2014) (emphasis added) (quotation omitted). On review of a motion for
summary judgment, our standard is the same as that of the trial court: relying
only on the evidence designated by the parties and construing all facts and
reasonable inferences in favor of the non-moving party, we will affirm the grant
of summary judgment only “if the designated evidentiary matter shows that
there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” Ind. Trial Rule 56(C); City of Beech
Grove v. Beloat, 50 N.E.3d 135, 137 (Ind. 2016). “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.”
Celebration Worship Ctr., Inc. v. Tucker, 35 N.E.3d 251, 253 (Ind. 2015) (citation
omitted).
[6] The party moving for summary judgment has the initial burden to show the
absence of any genuine issue of material fact as to a determinative issue.
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Hughley, 15 N.E.3d at 1003. If the movant does so, the burden shifts to the non-
moving party to come forward with contrary evidence showing an issue to be
determined by the trier of fact. Id. Summary judgment may be precluded by as
little as a non-movant’s designation of a self-serving affidavit. Id. However,
summary judgment may not be defeated by an affidavit which creates only an
issue of law – the non-movant must establish that material facts are in dispute.
AM Gen. LLC v. Armour, 46 N.E.3d 436, 441-42 (Ind. 2015). On appeal from
the grant of summary judgment, the non-moving party has the burden of
persuading us that the trial court’s ruling was erroneous, but we carefully assess
the trial court’s decision because Indiana’s onerous and distinctive summary
judgment burden is aimed at protecting a party’s day in court. Hughley, 15
N.E.3d at 1003.
[7] We make two final observations about the standard of review: first, the fact
that both parties filed a motion for summary judgment does not alter our
standard of review. Fishburn v. Ind. Pub. Ret. Sys., 2 N.E.3d 814, 822 (Ind. Ct.
App. 2014), trans denied. And second, although findings may in some cases
offer valuable insight into the trial court’s rationale, they are not required in
summary judgment proceedings and are not binding on appeal. Smith v. Dunn
Hosp. Grp. Manager, Inc., 61 N.E.3d 1271, 1273 (Ind. Ct. App. 2016).
II. Summary Judgment
[8] Krzeminski argues the trial court erred in granting summary judgment to the
Carrs on their breach of contract claim. The essential elements of a breach of
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contract claim are the existence of a contract, the defendant’s breach of the
contract, and damages. Murat Temple Ass’n, Inc. v. Live Nation Worldwide, Inc.,
953 N.E.2d 1125, 1128-29 (Ind. Ct. App. 2011), trans. denied. It is undisputed
the parties signed a purchase agreement for the sale of Tract 1 and that
agreement required closing on the sale by June 27, 2014. The purchase
agreement also required the Carrs to execute and deliver a warranty deed
conveying marketable title to the premises at the closing. Outstanding issues
regarding an easement for the benefit of Tract 2 and the proration of rent from
the campground were also left to be resolved after the auction. It is also
undisputed the transaction did not close by the date stated in the purchase
agreement.
[9] The Carrs contend there is no genuine issue of material fact as to Krzeminski’s
breach of the contract, because “[a]t all times relevant after the sale of real
estate . . ., [they] were ready, willing and able to close as agreed[,]” but
Krzeminski failed and refused to close “without reason or justification.”
Appellant’s App. at 22. Krzeminski, on the other hand, designated his own
affidavit in which he avers:
7. That at the time of the auction, there was no listed or legally
described easement for Tract 2 over Tract 1.
***
15. That the Carrs did not have a warranty deed ready for the
real estate in Tract 1 and were not ready for closing on or before
June 27, 2014.
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***
17. That by June 27, 2014, the Carrs did not have a final legal
description with proposed easement ready for the Closing.
***
22. That the Carrs did not provide me with proposed easement
language until the Closing date had passed.
23. I decided not to close due to the breach of the Real Estate
Purchase and Sale Agreement. The Carrs breached the
agreement by not being ready to close on or before June 27,
2014, deadline for closing.
Id. at 35-36. He also designated a second affidavit in which he elaborated:
7. That at no time before the date of June 27, 2015, was a
properly worded set of closing documents with a proper
easement language given to me or provided to my attorney. . . .
***
9. That the fact that the Carrs and/or Doug Hawkins included
language involving utilities in the easement [provided after the
closing date had passed] changed the nature and extent and scope
of the easement for me. . . .
10. In addition to the easement language being different than
originally stated at the auction, the Carrs began to change the
amount of money from the rents and lease money coming in
from the campground for my share of the pro-rated amounts. . . .
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***
14. That the amount of rents from the campground that the
Carrs were to pay me was material to this transaction.
Id. at 39-41.
[10] For the Carrs to prevail on summary judgment, there must be no genuine issue
of material fact with respect to any elements of their claim. As for Krzeminski’s
alleged breach of the contract, the Carrs’ materials may have made a prima
facie showing that Krzeminski breached the contract by failing to close on the
transaction on June 27, 2014. However, Krzeminski’s designated evidence,
viewed in the light most favorable to him as non-movant, raises a genuine issue
of material fact as to whether the Carrs first breached the contract. In general,
“[a] party first guilty of a material breach of contract may not maintain an
action against the other party or seek to enforce the contract against the other
party should that party subsequently breach the contract.” Williamson v. U.S.
Bank Nat’l Ass’n, 55 N.E.3d 906, 914 (Ind. Ct. App. 2016) (quotation omitted),
trans. denied. Whether Krzeminski breached the contract without justification
or whether the Carrs first breached the contract and gave him a valid reason to
back out of the transaction is a question of material fact to be decided at trial.
[11] “[C]ases hinging on disputed material facts are by definition inappropriate for
summary judgment, because weighing evidence is a matter for trial . . . .” Siner
v. Kindred Hosp. Ltd. P’ship, 51 N.E.3d 1184, 1188 (Ind. 2016) (quotation
omitted). In entering summary judgment for the Carrs, however, it appears the
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trial court weighed and accepted the Carrs’ version of events over Krzeminski’s
competing version. Entry of judgment for the Carrs was therefore inappropriate
at this stage of the proceedings.
Conclusion
[12] Because Krzeminski’s designated evidence raised a genuine issue of material
fact with respect to the Carrs’ claim that should be determined at trial, the trial
court erred in granting summary judgment to the Carrs. We therefore reverse
and remand for further proceedings.
[13] Reversed and remanded.
Kirsch, J., and Barnes, J., concur.
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