Cross-Road Farms, LLC v. Peggy Whitlock

• Court: Indiana Court of Appeals
• Decided: September 30, 2020
• Docket: 20A-CT-106
• Status: Published

Opinion

FILED Sep 30 2020, 10:00 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE John J. Schwarz Eric M. Wilkins Schwarz Law Office, P.C. Hunt Suedhoff Kalamaros, LLP Royal Center, Indiana Fort Wayne, Indiana

IN THE COURT OF APPEALS OF INDIANA

Cross-Road Farms, LLC, September 30, 2020 Appellant-Petitioner, Court of Appeals Case No. 20A-CT-106 v. Appeal from the LaGrange Superior Court Peggy Whitlock, The Honorable Lisa Bowen- Appellee-Respondent. Slaven, Judge Trial Court Cause No. 44D01-1804-CT-9

Pyle, Judge.

Statement of the Case [1] Cross-Road Farms, LLC (“Cross-Road Farms”) appeals the trial court’s order

denying its motion to correct error, which Cross-Road Farms filed after the trial

court had denied Cross-Road Farms’: (1) Trial Rule 60(B) motion for relief

from judgment; and (2) motion to amend its complaint against Peggy Whitlock

(“Whitlock”). Cross-Road Farms argues that the trial court abused its Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 1 of 13 discretion by denying these motions. Concluding that there was no abuse of

discretion, we affirm the trial court’s judgment.

[2] We affirm.

Issue Whether the trial court abused its discretion by denying Cross- Road Farms’ motion to correct error after denying Cross-Road Farms’ Trial Rule 60(B) motion and motion to amend the complaint.

Facts1 [3] Cross-Road Farms operates a farm in Greenfield Township, LaGrange County,

Indiana. This farm is adjacent to Anderson Cemetery (“the Cemetery”), which,

pursuant to statute, is overseen by Greenfield Township.2 Whitlock is the

acting township trustee for Greenfield Township. In August 2017, Whitlock

had a fence erected around the Cemetery.

[4] On April 2, 2018, Cross-Road Farms filed a complaint against Whitlock,

personally and in her capacity as the Greenfield Township Trustee. Cross-

Road Farms’ complaint alleged the following counts: (1) breach of contract; (2)

promissory estoppel/detrimental reliance; (3) easement by

1 We direct Cross-Road Farms’ attention to Indiana Appellate Rule 46(A)(6)(c), which provides that an appellant’s Statement of Facts “shall be in narrative form” and Appellate Rule 50 regarding the required contents of an Appellant’s Appendix. 2 INDIANA CODE § 36-6-4-3(9) provides that a township executive shall “[p]rovide and maintain cemeteries under IC 23-14.” INDIANA CODE § 23-14-33-1 through 23-14-76-2 is “referred to as the Indiana general cemetery law.” I.C. § 23-14-31-1.

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 2 of 13 necessity/prescriptive easement; (4) unjust enrichment; and (5) damages. The

complaint’s main assertion was that Whitlock’s erection of the fence around the

Cemetery had prevented Cross-Road Farms from using its “center pivot

irrigation system” (“irrigation system”) that “traverses [Whitlock’s] real estate

[i.e., the Cemetery] in a circular motion.” (App. Vol. 2 at 9). Cross-Road

Farms alleged that it and the former township trustee had entered into an oral

agreement that had given Cross-Road Farms a “perpetual right” to have the

outer wheels of its irrigation system “traverse over” the Cemetery property.

(App. Vol. 2 at 9). Cross-Road Farms also alleged that it had designed its

irrigation system based on the former trustee’s “assurances” that the irrigation

system’s wheels could traverse over the Cemetery. (App. Vol. 2 at 9).

Additionally, Cross-Road Farms alleged that it had used its irrigation system

for more than ten years in an “open” and “continuous” manner. (App. Vol. 2

at 11).

[5] Whitlock then filed an answer and a joint motion for judgment on the pleadings

pursuant to Trial Rule 12(C) and motion to dismiss pursuant to Trial Rule

12(B)(6). In this joint motion, Whitlock sought to have Counts 1, 3, and 4

dismissed with prejudice. Whitlock argued that the breach of contract claim in

Count 1—alleging that Whitlock had breached an oral contract that Cross-Road

Farms had made with a former township trustee for a right to have Cross-Road

Farms’ irrigation system’s wheels traverse the Cemetery property—should be

dismissed because the claim failed as a matter of law. Whitlock argued, that

even if an oral contract had existed, Cross-Road Farms had failed to indicate

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 3 of 13 whether it was claiming that a license or an easement had been created under

the oral agreement and that, under either theory, Cross-Road Farms’ claim

would fail as a matter of law. Specifically, Whitlock argued that a license was

revocable and that Cross-Road Farms could not satisfy the statute of frauds,

which required for any contract granting an easement to be in writing.

[6] In regard to the easement by necessity/prescriptive easement claims in Count 3,

Whitlock first argued that Cross-Road Farms had failed to plead any facts that

would support its easement by necessity claim because it had made no

allegations that there had ever been a unity of title between the Cemetery and

Cross-Road Farms’ property or that its property was inaccessible to a public

roadway. Whitlock also argued that Cross-Road Farms could not raise the

prescriptive easement claim in Count 3 against Whitlock in regard to the

township property of the Cemetery because “Indiana law does not allow a

person to claim a prescriptive easement over property owned by the Township.”

(Appellee’s App. Vol. 2 at 10) (citing INDIANA CODE § 32-21-7-2).

[7] Thereafter, on August 28, 2018, Cross-Road Farms filed a response to

Whitlock’s joint motion to dismiss and motion for judgment on the pleadings

and a brief in support thereof. In Cross-Road Farms’ response and brief, it

challenged the dismissal of Count 4 but agreed to the dismissal “with prejudice”

of Counts 1 and 3 (“Agreement to Dismissal with Prejudice”). (Appellee’s

App. Vol. 2 at 13, 15, 17). Specifically, Cross-Road Farms’ response provided:

1. [Cross-Road Farms] hereby agrees to dismiss Count I of its Complaint, with prejudice.

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 4 of 13 2. [Cross-Road Farms] hereby agrees to dismiss Count III of its Complaint, with prejudice.

(Appellee’s App. Vol. 2 at 13). In Cross-Road Farms’ introduction to its brief,

it stated “[Cross-Road Farms], in its . . . response, agreed to dismissal of Counts

I and III of its Complaint, with prejudice. Therefore, this Brief will not address

[Whitlock’s] Brief as such relates to Counts I and III.” (Appellee’s App. Vol. 2

at 15). Additionally, in the conclusion section of its brief, Cross-Road Farms’

again acknowledged its agreement to dismiss with prejudice the two counts,

stating, “For the reasons stated herein, Counts I and III of [Cross-Road Farms’]

Complaint should be dismissed, with prejudice[.]” (Appellee’s App. Vol. 2 at

17).

[8] On September 19, 2018, the trial court entered an order dismissing Counts 1

and 3 with prejudice. Thereafter, the trial court held a hearing on Whitlock’s

joint motion to dismiss and motion for judgment on the pleadings regarding

Count 4. On November 14, 2018, the trial court denied Whitlock’s motions

challenging Count 4. Accordingly, Cross-Road Farms’ Counts 2, 4, and 5

against Whitlock remain.

[9] Nine months later, on August 1, 2019, Cross-Road Farms filed a Motion to

Revive Dismissed Counts Pursuant to Trial Rule 60(B) (“Trial Rule 60(B)

Motion”) and a Motion for Leave to Amend Complaint to Conform to the

Evidence (“Motion to Amend”). In its Trial Rule 60(B) Motion, Cross-Road

Farms’ attorney stated that he had dismissed Counts 1 and 3 because he had

“felt that [the two counts] could not be sustained.” (App. Vol. 2 at 29). Cross- Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 5 of 13 Road Farms argued, however, that Counts 1 and 3 should be “revive[d]”

pursuant to Trial Rule 60(B)(1) as a “mistake” or “excusable neglect” because

Cross-Road Farms’ attorney had made a “scrivener error” when he had

dismissed Counts 1 and 3 with prejudice. (App. Vol. 2 at 30, 31).

Alternatively, Cross-Road Farms asked the trial court to reinstate the two

counts pursuant to Trial Rule 60(B)(8). Specifically, Cross-Road Farms

requested the trial court to consider its’ attorney’s prior “serious health issues”

as “any reason justifying relief” from the trial court’s judgment. (App. Vol. 2 at

30, 31). In regard to counsel’s health issues, Cross-Road Farms’ counsel stated

that he had returned to work in mid-August 2018 after “feel[ing] very ill” and

following a two-week hospitalization. Two weeks after returning to work, he

had filed the Agreement to Dismissal with Prejudice. (App. Vol. 2 at 29).

Although Cross-Road Farms relied on Trial Rule 60(B)(1) and (8), it did not

allege that it had meritorious claims as required under Trial Rule 60(B).

[10] In Cross-Road Farms’ Motion to Amend, it stated that “in addition to a

prescriptive easement existing, [Cross-Road Farms] believes there is a claim to

be made for a prescriptive right of way[.]” (App. Vol. 2 at 20). Cross-Road

Farms alleged that previous owners of Cross-Road Farms’ real estate had used

an irrigation system that crossed onto the Cemetery property “in the

approximate same path[.]” (App. Vol. 2 at 20). Cross-Road Farms asserted

that Whitlock would not be prejudiced by the amended complaint because she

“ha[d] already taken the position that a prescriptive property right cannot be

made against a governmental entity” and that “[a]ll [Whitlock] ha[d] to do is

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 6 of 13 apply [her] prior argument to the claim asserting a prescriptive right of way.”

(App. Vol. 2 at 21). Along with its Motion to Amend, Cross-Road Farms

submitted a proposed amended complaint that included its previously dismissed

Counts 1 and 3 and included an additional count for prescriptive right of way.

[11] Whitlock filed a brief in opposition to Cross-Road Farms’ Trial Rule 60(B)

Motion and Motion to Amend. Whitlock argued, in relevant part, that the trial

court should deny the Trial Rule 60(B) Motion because Cross-Road Farms had

failed to show that there was a scrivener’s error that would amount to excusable

neglect and because Cross-Road Farms had “failed to show any meritorious

claim as required by Trial Rule 60(B).” (Appellee’s App. Vol. 2 at 28).

Additionally, Whitlock argued that the trial court should deny the Motion to

Amend because the proposed count for prescriptive right of way was

“cumulative of the already-dismissed claim for ‘prescriptive easement’” and

because the proposed amendment was “futile as Indiana statutes specifically

forbid [a party from] obtaining rights to governmental property via

prescription.” (Appellee’s App. Vol. 2 at 29).

[12] On October 22, 2019, the trial court issued an order denying Cross-Road

Farms’ two motions. In regard to Cross-Road Farms’ Trial Rule 60(B) Motion,

the trial court stated: “Even if [Cross-Road Farms’] mistake in dismissing

Counts I and III was ‘excusable neglect’ under Trial Rule 60(B), [Cross-Road

Farms] has failed to allege that Counts I and III of its original Complaint are

meritorious claims.” (App. Vol. 2 at 7). When denying Cross-Road Farms’

Motion to Amend, the trial court found that “no prescriptive right can be

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 7 of 13 obtained against the government and therefore [Cross-Road Farms’] proposed

amendment is futile.” (App. Vol. 2 at 7).

[13] Thereafter, Cross-Road Farms filed a motion to correct error, which the trial

court also denied. Cross-Road Farms now appeals.

Decision [14] Cross-Road Farms argues that the trial court erred by denying its motion to

correct error, which Cross-Road Farms filed after the trial court had denied its

Trial Rule 60(B) Motion and Motion to Amend.

[15] We review a trial court’s denial of all these motions for abuse of discretion, and

will reverse only where the trial court’s judgment is clearly against the logic and

effect of the facts and circumstances before it or where the trial court has

misinterpreted the law. Perkinson v. Perkinson, 989 N.E.2d 758, 761 (Ind. 2013)

(discussing standard of review for trial court’s ruling on a motion to correct

error); Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 812 (Ind. 2012) (discussing

standard of review for a trial court’s Trial Rule 60(B) ruling), reh’g denied;

Williams v. Inglis, 142 N.E.3d 467, 475 (Ind. Ct. App. 2020) (discussing standard

of review for a trial court’s ruling on a motion to amend a complaint under

Trial Rule 15), reh’g denied, trans. denied.3

3 We are somewhat perplexed by Cross-Road Farms’ citations to the standard of review for a trial court’s decision on a Trial Rule 12(C) motion for judgment on the pleadings and a Trial Rule 12(B)(6) motion to dismiss. This appeal is not from the trial court’s rulings on those two motions, which had been filed by

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 8 of 13 [16] We first turn to Cross-Road Farms’ challenge to the trial court’s denial of its

Trial Rule 60(B) Motion. Here, Whitlock filed a joint motion for judgment on

the pleadings and motion to dismiss, seeking to have Counts 1, 3, and 4 of

Cross-Road Farms’ complaint dismissed with prejudice. Thereafter, in late

August 2018, Cross-Road Farms filed a response and specifically agreed to

dismiss Counts 1 and 3 with prejudice. On September 19, 2018, the trial court

entered an order dismissing Counts 1 and 3 with prejudice. Almost eleven

months later, on August 1, 2019, Cross-Road Farms filed its Trial Rule 60(B)

Motion, seeking to set aside the trial court’s September 2018 order and reinstate

Counts 1 and 3 that had been dismissed with prejudice.

[17] “[A] dismissal with prejudice constitutes a dismissal on the merits and is

therefore conclusive of the rights of the parties and res judicata as to the

questions that might have been litigated.” Staff Source, LLC v. Wallace, 143

N.E.3d 996, 1010 (Ind. Ct. App. 2020) (internal quotation marks and citations

omitted). See also Ilagan v. McAbee, 634 N.E.2d 827, 829 (Ind. Ct. App. 1994).

Indiana Trial Rule 41(F) provides, in relevant part, that “[a] dismissal with

prejudice may be set aside by the court for the grounds and in accordance with

the provisions of Rule 60(B).”

[18] Trial Rule 60(B) provides in relevant part:

Whitlock. Instead, this appeal is from the trial court’s denial of Cross-Road Farms’ Trial Rule 60(B) Motion and its Motion to Amend. Accordingly, we will focus our appellate review on those two trial court rulings.

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 9 of 13 On motion and upon such terms as are just the court may relieve a party or his legal representative from a judgment . . . for the following reasons:

(1) mistake, surprise, or excusable neglect;

*****

(8) any reason justifying relief from the operation of the judgment, other than those reasons set forth in sub- paragraphs (1), (2), (3), and (4).

The motion shall be filed within a reasonable time for reasons (5), (6), (7), and (8), and not more than one year after the judgment, order or proceeding was entered or taken for reasons (1), (2), (3), and (4). A movant filing a motion for reasons (1), (2), (3), (4), and (8) must allege a meritorious claim or defense.

(Emphasis added). “The burden is on the movant to establish ground for Trial

Rule 60(B) relief.” In re Paternity of P.S.S., 934 N.E.2d 737, 740 (Ind. 2010).

[19] In its Trial Rule 60(B) Motion, Cross-Road Farms sought to have Counts 1 and

3 “revive[d]” under either Trial Rule 60(B)(1) or (8). (App. Vol. 2 at 29, 31).

Trial Rule 60(B) requires that allegations of mistake or excusable neglect under

Trial Rule 60(B)(1) or any reason justifying relief under Trial Rule 60(B)(8), as

Cross-Road Farms alleged, must be supported by a showing of a meritorious

claim. See Munster Cmty. Hosp. v. Bernacke, 874 N.E.2d 611, 614 (Ind. Ct. App.

2007). “That requires a showing ‘that vacating the judgment will not be an

empty exercise.’” Id. (quoting Outback Steakhouse of Florida v. Markley, 856

N.E.2d 65, 73 (Ind. 2006)) (internal quotation marks and other citation

omitted). “The movant must make a prima facie showing of a meritorious

claim, that is, a showing that will prevail until contradicted and overcome by Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 10 of 13 other evidence.” Munster Cmty. Hosp., 874 N.E.2d at 614 (internal quotation

marks and citations omitted).

[20] Here, however, Cross-Road Farms did not allege, nor even mention, that it had

meritorious claims as required under Trial Rule 60(B). Based on this failure,

the trial court denied Cross-Road Farms’ Trial Rule 60(B) Motion. We

conclude that the trial court did not abuse its discretion and affirm its denial of

Cross-Road Farms’ Trial Rule 60(B) Motion. See, e.g., Munster Cmty. Hosp., 874

N.E.2d at 614 (holding that a movant’s “bald assertion that he ‘ha[d] a

meritorious claim’” was insufficient under Trial Rule 60(B)).

[21] Next, we turn to Cross-Road Farms’ argument that the trial court abused its

discretion by denying its Motion to Amend.

Indiana Trial Rule 15(A) provides that a party may amend his pleading once as a matter of course if within a certain time frame. Otherwise a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be given when justice so requires. Although amendments to pleadings are to be liberally allowed, the trial court retains broad discretion in granting or denying amendments to pleadings. We will reverse a trial court’s ruling on a motion to amend only upon a showing of an abuse of that discretion, which occurs if the trial court’s decision is clearly against the logic and effect of the facts and circumstances before the court, or if the court has misinterpreted the law. Our Court reviews whether a trial court’s ruling on a motion to amend is an abuse of discretion by evaluating a number of factors, including undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiency by amendment previously allowed, undue

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 11 of 13 prejudice to the opposing party by virtue of the amendment, and futility of the amendment.

Williams, 142 N.E.3d at 475 (internal quotation marks, bracket, and citations

omitted).

[22] Here, the trial court denied Cross-Road Farms’ Motion to Amend, finding that

“no prescriptive right can be obtained against the government and therefore

[Cross-Road Farms’] proposed amendment is futile.” (App. Vol. 2 at 7). We

agree with the trial court. INDIANA CODE § 32-21-7-2(a) provides that “[t]itle to

real property owned by the state or a political subdivision . . . may not be

alienated by adverse possession.” See also Verrill v. Sch. City of Hobart, Lake

Cnty., 222 Ind. 214, 216, 52 N.E.2d 619, 620 (1944) (“In the absence of a

statute, . . . an easement cannot be acquired by prescription against the

government.”); Sims v. Town of New Chicago, 842 N.E.2d 830, 834 (Ind. Ct. App.

2006) (explaining that “Verrill continues to be good law” and applying the

holding in Verrill to a party’s prescriptive claim against a political subdivision).

Accordingly, Cross-Road Farms’ proposed amendment to add a prescriptive

claim would have been futile. Additionally, Cross-Road Farms’ proposed

amendment was futile because Cross-Road Farms had already dismissed its

prescriptive claim with prejudice. See Ilagan, 634 N.E.2d at 829 (explaining that

a dismissal with prejudice, which constitutes a dismissal on the merits, is

conclusive of the rights of the parties and res judicata as to the questions that

might have been litigated). Because Cross-Road Farms’ proposed amendment

to add a prescriptive claim would have been futile, we conclude that the trial

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 12 of 13 court did not abuse its discretion by denying Cross-Road Farms’ motion to

amend it complaint. See, e.g., Williams, 142 N.E.3d at 476 (affirming the denial

of a party’s motion to amend a complaint where the amendment would have

been futile).

[23] Affirmed.

Bradford, C.J., and Weissmann, J., concur.

Court of Appeals of Indiana | Opinion 20A-CT-106 | September 30, 2020 Page 13 of 13