Merrill C. Roberts v. Unlimited, LLC d/b/a Remax Unlimited and Matthew A. Gunning

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before Jul 25 2014, 9:31 am
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES:
ROBERT W. WRIGHT JOHN J. MOORE
Dean Webster Wright LLP JEFFREY C. CONNER
Indianapolis, Indiana Doninger Tuohy & Bailey LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
MERRILL C. ROBERTS, )
)
Appellant-Defendant, )
)
vs. ) No. 49A05-1306-PL-294
)
UNLIMITED, LLC d/b/a REMAX UNLIMITED )
and MATTHEW A. GUNNING, )
)
Appellees-Plaintiffs. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable James B. Osborn, Judge
Cause No. 49D14-0805-PL-22780
July 25, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
MAY, Judge
Merrill C. Roberts (“Seller”) appeals the denial of an award of attorney’s fees. He
asserts the trial court abused its discretion in denying him attorney’s fees he incurred when
defending against what he alleges was a frivolous lawsuit filed by Unlimited, LLC and
Matthew A. Gunning (collectively, “Brokers”). We affirm.
FACTS AND PROCEDURAL HISTORY
Prior to June 26, 2006, Seller and Gunning, a real estate agent for Unlimited, LLC,
met to discuss listing Seller’s property, located on West Washington Street in Indianapolis
(“West Washington Property”). Seller’s property consisted of two adjacent lots connected by
a dirt track and the lots held a strip club and a commercial building. Gunning believed Seller
was interested in selling the entire property, which Gunning believed was one parcel known
as 8013 W. Washington. There was no indication the property consisted of two lots, each to
be sold separately.
Gunning created a Listing Contract that indicated the property at “8013 W.
Washington,” (App. at 40), would be listed for $10,000,000.00. (Id.) The Listing Contract
stated Brokers were to be paid a 5.5% commission when the property was sold or when
Brokers procured “a written offer from a Buyer who is ready, willing, and financially able to
consummate the proposed transaction concerning the Property . . . and Seller refuses to
accept the offer.” (Id. at 40.) The Listing Contract indicated the legal description of the
property would be “attached as Exhibit ‘A,’” (id.), but when the contract was signed, Exhibit
A was not attached.
After creating the Listing Contract, Gunning obtained the records required to verify
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the title of the West Washington Property. The title work revealed the West Washington
Property consisted of two addresses: 8013 and 8009 W. Washington. (Def.’s Ex. 108.)
Gunning amended the Listing Contract to show “the Property” was both “8009 and 8013 W.
Washington.” (App. at 44.) Seller never accepted or rejected the amendment.
On May 24, 2007, Gunning gave Seller a written letter of intent from Charles
Weisblat, a potential buyer, indicating intent to purchase “8009 & 8013 West Washington
Street” for $8,100,000.00. (Pl.’s Ex. A.) Seller responded: “it is a very good offer but at this
time I can’t accept any thing [sic] less that [sic] what I put my sale price at.” (Id.) Gunning
submitted a second letter of intent from Weisblat to Seller which offered $10,000,000.00 for
“8009 & 8013 West Washington Street.” (Id.) Seller did not respond.
After two and a half months, Brokers contacted Seller requesting their commission for
procuring a full list price offer. Seller responded that the letter of intent was not a purchase
offer because it had a disclaimer that stated, “[t]he parties will not be bound in any manner or
under any theory until the Purchase and Sales Contract is fully negotiated and executed by
both parties.” (Pl.’s Ex. B.)
On November 20, 2007, Brokers sent another letter to Seller containing Weisblat’s
ten-million-dollar offer for both properties. The letter was titled “Letter of Purchase Offer,”
it stated it was a “formal proposal,” and it was signed by Weisblat. (Pl.’s Ex. C.) Seller
responded by asserting the letter was not a Purchase Offer and telling the Brokers they had
until December 5, 2007, to produce a proper Purchase Offer. On December 5, 2007, Brokers
sent another letter to Seller and attached thereto was a “Real Estate Purchase Agreement”
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from Weisblat that included the same details. Seller rejected the offer and indicated the
intent to withdraw the property listing.
On May 21, 2008, Brokers filed suit against Seller alleging they produced a ready,
willing, and financially able buyer pursuant to the terms of the listing agreement and thus
they were entitled to the commission. In this lawsuit, Brokers made two claims: a breach of
contract claim for Sellers breaking the contract to pay commission, and a promissory estoppel
claim to account for the ongoing promise to pay commission after the contract expired but
during negotiations between the parties. There was no activity on the case, so on August 2,
2010, the trial court scheduled a Trial Rule 41(E) hearing.1 In response, Brokers filed a
Praecipe for Jury Trial, which the court denied because the parties had not filed a joint case
management order.
On September 29, 2010, the trial court held the Trial Rule 41(E) show cause hearing.
Brokers did not attend the hearing because he was under the impression the notice
requirement of Rule 41(E) had already been satisfied. At the hearing, Seller moved to
dismiss the complaint, which the trial court granted with prejudice. Seller then asked for
attorney’s fees.
Brokers filed a Motion to Set Aside the Rule 41(E) dismissal. Following a hearing,
the trial court denied the Motion to Set Aside the Rule 41(E) dismissal. On March 26, 2013,
the trial court held a hearing on Seller’s Petition for Fees and Costs and concluded that
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Trial Rule 41(E) states: “when no action has been taken in a civil case for a period of sixty [60] days, the
court, on motion of a party or on its own motion shall order a hearing for the purpose of dismissing such
case.”
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“[Seller] is not entitled to recover his fees and costs pursuant to [Ind. Code] § 34-52-1-1”
because Brokers’ lawsuit was not frivolous. (App. at 18.)
DISCUSSION AND DECISION
The trial court sua sponte entered findings of fact and conclusions of law regarding
whether Seller was entitled to attorney’s fees. In this situation,
the specific findings control our review and the judgment only as to the issues
those specific findings cover. Where there are no specific findings, a general
judgment standard applies and we may affirm on any legal theory supported by
the evidence adduced at trial.
We apply the following two-tier standard of review to sua sponte
findings and conclusions: whether the evidence supports the findings, and
whether the findings support the judgment. Findings and conclusions will be
set aside only if they are clearly erroneous, that is, when the record contains no
facts or inferences supporting them. A judgment is clearly erroneous when a
review of the record leaves us with a firm conviction that a mistake has been
made. We consider only the evidence favorable to the judgment and all
reasonable inferences flowing therefrom, and we will neither reweigh the
evidence nor assess witness credibility.
Trust No. 6011, Lake County Trust Co. v. Heil’s Haven Condos. Homeowners Ass’n, 967
N.E.2d 6, 14 (Ind. Ct. App. 2012), trans. denied.
A court may award attorney’s fees to the prevailing party if the party that filed the
lawsuit:
(1) brought the action or defense on a claim or defense that is frivolous,
unreasonable, or groundless;
(2) continued to litigate the action or defense after the party’s claim or
defense clearly became frivolous, unreasonable, or groundless; or
(3) litigated the action in bad faith.
Ind. Code § 34-52-1-1(b).
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Seller asserts the breach of contract claim was frivolous because the Listing Contract
specifically stated Seller was selling only “8013 W. Washington” for $10,000,000.00, (App
at 40), while the offer submitted was for the sale of both 8009 and 8013 W. Washington for
$10,000,000.00. In addition, Seller states the promissory estoppel claim is frivolous because
Ind. Code § 32-21-1-10 requires a contract for the payment of a real estate sales commission
to be in writing. Neither claim was frivolous.
We deal first with the contract claim. The trial court found that 8009 and 8013 W.
Washington were adjacent to one another and were sometimes referred to as the West
Washington Property as a whole, (App. at 8), which finding is supported by evidence. Seller
signed a Confidentiality Agreement that stated he was “contemplating the sale . . . [of] 8013
West Washington Street” and that he intended in the initial negotiations to sell “10 acres + or
– [,] Plus Business” for $12,000,000.00. (Id. at 48-49.) After this, a detailed Listing
Contract was created and approved by both parties. (Id. at 40-45.) This Listing Contract
indicated the address of the property was 8013 W. Washington, which was to be explained in
Exhibit A, and it was listed for $10,000,000.00. (Id.) The title work indicated both 8009 and
8013 W. Washington were included in the ten acres, and Gunning created Exhibit A of the
Listing Contract to reflect the property consisted of both 8009 and 8013 W. Washington.
Seller neither accepted nor objected to that change. The evidence suggests there was
confusion as to what “8013 W. Washington” included and, based on this evidence, the trial
court concluded Brokers were led to believe the entire property was being listed for
$10,000,000.00.
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The trial court also found that throughout the offers and rejections, Seller did not
mention that 8009 was not to be sold or that $10,000,000.00 was not the listing price for the
entire property consisting of both addresses. (App. at 12-14.) This is supported by Plaintiff’s
Exhibits A through F showing the communication of offers and rejections between Gunning
and Seller.
In addition, the promissory estoppel claim is not frivolous. Promissory estoppel
permits recovery where there is no contract. Ind. Bureau of Motor Vehicles v. Ash, Inc., 895
N.E.2d 359, 367 (Ind. Ct. App. 2008). Brokers assert “[Seller] made promises (express
and/or implied) to continue to be bound by the Listing Contract after June 27, 2007 and to
pay Gunning his earned commission per the Listing Contract.” (App. at 23.)
Although these sales negotiations occurred after the Listing Contract expired on June
27, 2007, they were in writing and therefore are not invalid under Ind. Code § 32-21-1-10.
See (Pl.’s Ex. A-F) (showing all communications of offers and rejections after June 27, 2007,
are in writing). Although there was confusion as to what “8013 W. Washington”
encompassed, there was no confusion as to when the contract expired; the agreement is
explicit that it is enforceable until June 27, 2007. Brokers listed the elements of a promissory
estoppel claim and designated evidence the promises were in writing as part of their
complaint. See e.g., First Nat. Bank of Logansport v. Logan Mfg. Co., Inc., 577 N.E.2d 949,
954 (Ind. 1991) (establishing the elements of promissory estoppel).
These findings support the trial court’s decision to deny Seller’s attorney’s fees on the
grounds Brokers’ claim was:
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(1) not “frivolous” because it was not made for the purpose of harassing or
maliciously injuring [Seller], and counsel for [Brokers] was able to
make a good faith and rational argument on the merits of the action;
(2) not “unreasonable” because, based on the totality of the circumstances .
. . a reasonable attorney would consider [Brokers’] claim for a
commission worthy of litigation and justified; and
(3) not “groundless” because the evidence supports the claim for
commission owed, relied on and presented by [Brokers].
(Br. of Appellee at 7, citing App. at 17-18.) Therefore, the trial court did not err in denying
attorney’s fees to Seller because Brokers’ lawsuit was not frivolous, unreasonable, or
groundless. Accordingly, we affirm.
Affirmed.
VAIDIK, C.J. and RILEY J., concur.
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