IN THE
Court of Appeals of Indiana FILED Ira J. Gamble, Feb 28 2025, 11:02 am
CLERK Appellant-Plaintiff, Indiana Supreme Court Court of Appeals and Tax Court
v.
Tina McQueary, Appellee-Defendant.
February 28, 2025
Court of Appeals Case No. 24A-PL-1500
Appeal from the Elkhart Circuit Court
The Honorable Michael A. Christofeno, Judge
Trial Court Cause No. 20C01-2002-PL-28
Opinion by Senior Judge Najam Judges Weissmann and DeBoer concur.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 1 of 26 Najam, Senior Judge.
Statement of the Case [1] Ira J. Gamble appeals (1) the trial court’s determination that Tina McQueary
has an equitable ownership interest in a house that she was purchasing from
Gamble under a rent-to-own lease agreement and (2) the court’s calculation of
the money judgment entered against McQueary. Gamble contends the trial
court erred in its holdings. We conclude Gamble has failed to demonstrate
error, and we affirm.
Issues [2] Gamble raises the following issues, which we restate as:
I. Whether the trial court erred in determining McQueary had an equitable ownership interest in the house; and
II. Whether the trial court erred: (1) in determining that foreclosure, rather than forfeiture, was Gamble’s remedy for McQueary’s nonpayment, and (2) in calculating the amount McQueary owed Gamble.
Facts and Procedural History [3] In 2009, Tina McQueary (“McQueary”) met Ira J. Gamble (“Gamble”) while
she was looking to buy a house. She is a longtime retail and factory worker,
and he worked for the City of Elkhart, Indiana before retiring. Gamble showed
McQueary a house he owned at 315 Beardsley (the “real estate”) in Elkhart.
The house is over one hundred years old and 1,676 square feet in size.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 2 of 26 McQueary was reluctant to purchase the house because it appeared to be in bad
shape, but Gamble said she could “fix it up any way [she] want[ed.]” Tr. Vol.
II, p. 93.
[4] On April 27, 2009, Gamble and McQueary entered into a contract for the real
estate entitled “Lease with Purchase Option” (the “Agreement”). Tr. Vol. III,
p. 7. The Agreement consisted of a pre-printed, off-the-shelf form on which
Gamble had filled in only some of the blanks. As will become apparent, this
document was poorly suited to the parties’ needs.
[5] The Agreement provided for monthly payments of $600.00 “for rent” and
$100.00 “for property taxes,” for a total monthly payment of $700.00, id. at 11,
over a fourteen-year term ending in May 2023. McQueary was not required to
provide a security deposit. The Agreement also included an option to purchase
the real estate for a purchase price of $85,000, with a down payment of
$2,000.00 payable upon exercise of the option.
[6] Also in the Agreement, and notwithstanding the parties’ prior discussions about
the house’s condition, McQueary agreed “that he or she has examined the
demised premises, including the grounds and all buildings and improvements,
and that they are, at the time of this lease, in good order, repair, and a safe,
clean and rentable condition.” Id. at 8. In exchange, Gamble promised that he
would, “at his sole expense, keep and maintain the leased premises and
appurtenances in good and sanitary condition and repair during the term of this
lease and any renewal thereof.” Id. at 9. In fact, the Agreement forbade
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 3 of 26 McQueary from making any alterations to the house “without the prior written
consent of [Gamble.]” Id. at 8. And, if the Agreement was terminated and
possession of the real estate reverted to Gamble, any improvements McQueary
made to the property would remain with the real estate.
[7] Next, the Agreement also provided that Gamble “had obtained” insurance on
the real estate covering both property damage and liability. Id. at 11.
McQueary was responsible only for insurance on her personal property.
[8] Finally, the Agreement provided that if Gamble concluded McQueary had
breached its terms, including its payment provisions, Gamble was obligated to
give her written notice of default and an opportunity to cure the breach. The
parties were supposed to specify how many days would be allowed to cure the
breach, but they left that space blank.
[9] McQueary exercised the option to purchase when she paid $2,000.00 to
Gamble on the same date they signed the Agreement. But she made regular
monthly payments at first of only $600, and later of $500, rather than the
required $700, without objection from Gamble.
[10] Within a year, McQueary informed Gamble that she was planning to move out
because she could not afford to pay him $700 per month and also make needed
repairs to the house. She had obtained boxes in anticipation of moving.
Gamble orally offered to reduce her payments to $500 per month, including
property taxes, and McQueary accepted his offer.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 4 of 26 [11] Initially, Gamble would stop at the house to collect the payments in person and
gave McQueary receipts. Gamble later obtained a post office box and directed
McQueary to mail her payments there. Gamble gave McQueary signed receipts
for each payment, some of which showed that $200.00 in principal was applied
to the purchase price, and the remainder of each payment was designated for
real estate taxes. The parties agreed that on an annual basis, Gamble would
compare McQueary’s real estate tax payments with the amount Gamble
actually paid. If McQueary had overpaid taxes, any overage would be credited
against the purchase price.
[12] McQueary submitted ninety-five monthly payments of $500 from July 2010
until June 2018. Tr. Vol. IV, pp. 178-180. Gamble accepted the payments
without complaint for almost eight years, but in June 2018 his attorney sent
McQueary a letter asserting for the first time that McQueary had “not been
meeting the lease requirements” because she had not been paying $700 per
month as provided in the Agreement. Tr. Vol. III, p. 83. Gamble’s attorney
further instructed McQueary to resume paying $700 and work out a resolution
for her “back obligations.” Id. However, the attorney still characterized the
parties’ agreement as “leasing to purchase” and did not state the purchase
option was no longer operative. Id.
[13] After receiving the letter, McQueary continued to make, and Gamble continued
to accept, monthly payments of $500.00 without any further objection,
reservation, or disclaimer on his part. Gamble never performed an annual
calculation of real estate taxes owed to determine whether McQueary had
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 5 of 26 overpaid taxes and was entitled to an additional credit toward the purchase
price.
[14] Meanwhile, in the years after Gamble and McQueary negotiated their oral
modification to the Agreement, McQueary and one of her sons completed
numerous home improvement projects. Among other improvements, they: (1)
replaced the walls, cabinets, sink, and refrigerator in the kitchen; (2) replaced
the heating and air conditioning system; (3) replaced the water heater, (4)
replaced wiring throughout the house; (5) installed a new fence; (6) replaced the
front and back doors; (7) installed a new deck; (8) repaired the roof; and (9) put
in a new bathtub and two new toilets. McQueary also chipped in with a
neighbor to remove a tree that threatened to interfere with the house’s power
lines. In all, she spent over $30,000 over the span of a decade.
[15] Gamble noticed the new doors, fence, and deck, but he did not complain to
McQueary that she had failed to obtain his permission before doing the work.
He also did not forbid her from performing any further home renovations. To
the contrary, when McQueary notified Gamble the furnace and the water
heater were malfunctioning, he told her, “You’re a homeowner now, you have
to take care of that.” Tr. Vol. II, p. 116.
[16] In 2019, McQueary came into a sum of money. She offered to pay the
remaining purchase price in full and asked Gamble to calculate a payoff
amount. Instead, in September of 2019, Gamble filed a Verified Request for
Immediate Possession of Real Property in small claims court. He alleged that
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 6 of 26 he was entitled to immediate possession of the real estate and that McQueary’s
possession of the real estate was wrongful because she had “failed to live up to”
the Agreement. Tr. Vol. IV, p. 176. The court dismissed the claim, concluding
that it implicated issues involving a land contract beyond the jurisdiction of a
small claims court.
[17] In March of 2020, almost ten years after the Agreement was executed, Gamble 1 filed this civil action. McQueary continued to make monthly payments, which
Gamble accepted until May of 2022, when he closed his post office box without
notice. McQueary’s payments were then forwarded to the U.S. Postal Service’s
lost and found department for undeliverable and non-returnable mail in
Indianapolis for several months because her payment envelopes did not include
a return address. McQueary eventually discovered the box was closed,
cancelled her money orders, and recovered the missing payments.
[18] In January 2024, the trial court presided over a bench trial. Gamble repeatedly
testified that McQueary was merely “a renter.” Tr. Vol. II, p. 48. By contrast,
McQueary testified that she and Gamble had orally agreed to modify the
Agreement to reduce the installment payments to $500 but otherwise carried
out the Agreement’s rent-to-own provisions.
1 Gamble did not include his complaint in his Appellant’s Appendix, but he has provided a pre-trial brief that he had filed with the trial court. In that document, Gamble argued: (1) McQueary materially breached the lease provisions of the Agreement; (2) any agreement to sell the house is unenforceable under the Statute of Frauds; and (3) even if the Agreement could be considered a contract for the sale of land, any interest McQueary has in the home is subject to forfeiture due to her failure to pay.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 7 of 26 [19] Following a bench trial, the court sua sponte entered special findings under
Trial Rule 52(A). Among other findings, the court determined:
8. The Court finds the Parties entered into an oral modification of [the Agreement] wherein the Parties agreed that the monthly payment would be reduced from seven hundred and 00/100 dollars ($700.00) to five hundred and 00/100 dollars ($500.00). The Court further finds that the testimony of [Gamble] that there was no oral modification of [the Agreement] is not credible. The Court bases its finding on the testimony of the Parties at trial that from July 2010 through May of 2022 [McQueary] paid five hundred and 00/100 dollars ($500.00) per month to [Gamble]. [Gamble’s] Exhibit #4 and [McQueary’s] Exhibits A, B, and E largely corroborate this. [Gamble] argued that he accepted the payments as rent, and [McQueary] argued that she made the payments towards [the Agreement] to purchase the real estate. The receipts of payment often reflect a payoff balance or an amount of reduction of principal which shows the Court that [McQueary] was purchasing the real estate from [Gamble]. The Court finds the testimony of [McQueary] to be more credible than that of [Gamble] as to whether or not there was an oral modification of [the Agreement.] At trial, [Gamble] testified that he did not notify [McQueary] that she was in default under [the Agreement] and that he was not accepting her reduced monthly payments as payments to purchase the real estate until he hired [an attorney who] sent a letter to [McQueary] dated June 1, 2018, which was admitted as [Gamble’s] Exhibit #7. [McQueary] confirmed in her testimony that [Gamble] never advised her that she was in default and that he was not accepting the reduced monthly payments towards the purchase of the real estate until she received the letter from [the attorney] dated June 1, 2018.
9. The Court finds that [Gamble] accepted payments from [McQueary] each of which was less than the seven hundred and 00/100 dollar ($700.00) monthly payment required in [the
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 8 of 26 Agreement] from May of 2009 through May of 2022. Moreover, the Court finds that [Gamble] accepted monthly payments in the amount of five hundred and 00/l00 dollars ($500.00) from [McQueary] from July of 2010 through May of 2022. The Court therefore finds that [McQueary] paid to [Gamble], and [Gamble] accepted from [McQueary,] payments totaling Eighty-one thousand, eight hundred and 00/100 dollars ($81,800.00) toward the purchase of the real estate. All of this shows the Court that the Parties through their subsequent actions modified [the Agreement] by their oral agreement.
10. Indiana Code§32-21-1-1, more commonly known as the Statute of Frauds, requires any contract for the sale of real property to be in writing. Under Indiana Law, an oral contract for the sale of real estate may still be enforced under the Equitable Doctrine of Promissory Estoppel. Huber v Hamilton, 33 N.E.3d 1116, 1123 (Ind. Ct. App. 2015). Additionally, lndiana Law recognizes the application of the Doctrine of Promissory Estoppel where the actions of the Parties demonstrate partial performance on the oral promise to sell real property. Where a purchaser of real property pursuant to an oral contract has made payment of the purchase price or a substantial part thereof, is in possession of the real estate, and has made lasting and valuable improvements to the real estate, lndiana Law demands that the Court exercise equity and apply the Doctrine of Promissory Estoppel based on the Parties [sic] partial performance of the oral contract. Marathon Oil Co. v. Collins. 744 N.E.2d 474, 478 (Ind. Ct. App. 2001). The Court finds that [McQueary] has made a substantial payment of the purchase price, is in possession of the real estate, and has made lasting and valuable improvements to the real estate. Accordingly, the Court finds that the Doctrine of Promissory Estoppel under Indiana Law applies to this case and that the Parties [sic] partial performance demands that this Court enforce the oral contract of the parties modifying the [Agreement].
Appellant’s App. Vol. II, pp. 23-25 (emphases added).
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 9 of 26 [20] The trial court further found:
15. In Skendzel v. Marshall, 301 N.E.2d 641, 646 (lnd. 1973), the Indiana Supreme Court defined a sale of real estate by land contract to include the following: the seller retains legal title until the total contract price is paid by the purchaser; payments are generally made in periodic installments; legal title does not vest in the purchaser until the contract terms are satisfied, but equitable title vests in the purchaser at the time the contract is consummated; when the Parties enter into the contract, all incidents of ownership accrue to the purchaser; the purchaser assumes the risk of loss and is the recipient of all appreciation in value; the purchaser is responsible for taxes as the equitable owner; and the purchaser has a sufficient interest in land so that upon sale of that interest, the purchaser holds a vendor’s lien. The Court finds that under Indiana Law, [the Agreement] is a sale of real estate by land contract because payments were to be made by [McQueary] as purchaser to [Gamble] as seller in monthly installments, that legal title was to be conveyed to purchaser [McQueary] by seller [Gamble] upon payment in full of the purchase price, [McQueary] was to pay the real estate taxes, and [McQueary] assumed pursuant to [the Agreement] “all incidents of ownership” and “all risk of loss.” Accordingly, the Court finds [] McQueary purchased the real estate from [] Gamble on April 27, 2009, with [the Agreement] being a sale of real estate by land contract under Indiana Law.
16. Under Indiana Law, foreclosure rather than forfeiture is the proper remedy [for breach] of a land contract where the purchaser has substantial equity in the real estate at the time of default. Skendzel. 30l N.E.2d at 650.
Id. at 27-28 (emphases added).
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 10 of 26 [21] The court held that under the Agreement, McQueary owed Gamble the
contract purchase price of $85,000.00, plus $15,628.19 for real estate taxes, for a
total sum of $100,268.19, that she had paid Gamble $81,800.00, and that she
owed a principal balance of $18,468.19. In addition, the court determined that
McQueary owed Gamble $10,500.00 for her occupancy of the real estate after
she ceased making monthly payments through the date of trial. Thus, the court
entered a money judgment for Gamble in the amount of $28,968.19 and held
that he was entitled to collect the judgment through a foreclosure against the
real estate. This appeal followed.
Discussion and Decision Standard of Review [22] Indiana Trial Rule 52(A) provides that when the trial court “find[s] the facts
specially and state[s] its conclusions thereon,” on appellate review we “shall not
set aside the findings or judgment unless clearly erroneous, and due regard shall
be given to the opportunity of the trial court to judge the credibility of the
witnesses.”
[23] Our Supreme Court has explained that when reviewing sua sponte special
findings and conclusions thereon, we apply “a two-tiered standard of review—
first determining whether the evidence supports the findings and, if so, whether
the findings support the judgment.” Town of Linden v. Birge, 204 N.E.3d 229,
233 (Ind. 2023). “Without reweighing the evidence or reassessing witness
credibility, the appellate court applies a ‘clearly erroneous’ standard, deferring
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 11 of 26 to the trial court's factual findings ‘as long as they are supported by evidence
and any legitimate inferences therefrom.’” Id. at 234 (quoting Ind. Land Tr. Co.
v. XL Inv. Props., 155 N.E.3d 1177, 1182 (Ind. 2020)).
[24] “We define the clearly erroneous standard based on whether the party is
appealing a negative judgment or an adverse judgment.” Todd Heller, Inc. v. Ind.
Dep’t of Transp., 819 N.E.2d 140, 146 (Ind. Ct. App. 2004), trans. denied.
“Where, as here, the party who had the burden of proof at trial appeals, he
appeals from a negative judgment and will prevail only if he establishes that the
judgment is contrary to law.” Id. “A judgment is contrary to law when the
evidence is without conflict and all reasonable inferences to be drawn from the
evidence lead to only one conclusion, but the trial court reached a different
conclusion.” Id.
[25] When the trial court does not make specific findings on an issue, we apply a
general judgment standard, and we may affirm on any legal theory supported
by the evidence adduced at trial. Matter of Estate of Ropp, 231 N.E.3d 894, 898
(Ind. Ct. App. 2024). And we apply de novo review to the trial court’s
conclusions of law. Town of Linden, 204 N.E.3d at 234.
[26] Gamble argues the evidence does not support the trial court’s determination
that McQueary has an equitable ownership interest in the real estate. He claims
the Agreement alone established the relationship between the parties, that
McQueary breached and repudiated the Agreement, which nullified her option
to purchase and put an end to their agreement, and that she was at all times
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 12 of 26 thereafter in default because she never paid the $700.00 monthly payment
required under the Agreement.
[27] Thus, Gamble contends that the trial court erred when it entered judgment on
an oral modification of the parties’ written Agreement and that he was entitled
to sue for and recover money damages for breach of the Agreement. The trial
court appears to have relied upon two equitable doctrines, promissory estoppel
and part performance, in determining the parties’ oral agreement was valid and
enforceable. Promissory estoppel and part performance are separate doctrines
and, if applicable, either exception can support the court’s judgment. We will 2 first address the Statute of Frauds, and then promissory estoppel.
Statute of Frauds [28] The Statute of Frauds provides that “‘any contract which seeks to convey an
interest in land is required to be in writing.’” Brown v. Branch, 758 N.E.2d 48,
51 (Ind. Ct. App. 2001) (quoting Guckenberger v. Shank, 37 N.E.2d 708, 713
(Ind. 1941)); see also Ind. Code § 32-21-1-1(b) (2002). The Statute is intended
“to preclude fraudulent claims that would likely arise when the word of one
person is pitted against the word of another.” Id.
[29] Even so, the Statute of Frauds does not govern the formation of contracts, but
rather only the enforceability of contracts that have been formed. Dupont
2 Because we decide the case on the basis of promissory estoppel, we need not address part performance.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 13 of 26 Feedmill Corp. v. Standard Supply Corp., 395 N.E.2d 808, 810 (Ind. Ct. App.
1979). Oral contracts for the conveyance of land are voidable, not void.
Marathon Oil Co. v. Collins, 744 N.E.2d 474, 478 (Ind. Ct. App. 2001). There are
“equitable doctrines,” including promissory estoppel and part performance,
under which a party may seek to enforce an oral land contract despite failing to
comply with the Statute of Frauds. Spring Hill Devs., Inc. v. Arthur, 879 N.E.2d
1095, 1099 (Ind. Ct. App. 2008).
Promissory Estoppel [30] “Estoppel is a judicial doctrine sounding in equity.” Brown, 758 N.E.2d at 51.
It is based on the principle that “one who by deed or conduct has induced another
to act in a particular manner will not be permitted to adopt an inconsistent
position, attitude, or course of conduct that causes injury to such other.” Id. at
52 (emphasis added).
Coupled with the statute of frauds, the two represent alternative and sometimes competing means to achieve the same ends of avoiding injustice: ‘The statute of frauds was designed as the weapon of the written law to prevent fraud, while the doctrine of estoppel is that of the unwritten law to prevent like evil. Each is effective in its appropriate field; both are essential to prevent and redress wrongs, and neither should be allowed to dominate the other.’
Spring Hill, 879 N.E.2d at 1100 (quoting Columbus Trade Exch., Inc. v. AMCA
Intern. Corp., 763 F. Supp. 946, 952 (S.D. Ohio 1991)). The purpose of the
doctrine of equitable estoppel is to preserve rights previously acquired and not
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 14 of 26 to create new ones. First Nat’l Bank of Logansport v. Logan Mfg. Co., Inc., 577
N.E.2d 949, 954 (Ind. 1991).
[31] The elements of this species of estoppel are: “(1) a promise by the promissor;
(2) made with the expectation that the promisee will rely thereon; (3) which
induces reasonable reliance by the promisee; (4) of a definite and substantial
nature; and (5) injustice can be avoided only by enforcement of the promise.”
Brown, 758 N.E.2d at 52.
[32] Regarding the first element, whether Gamble made a promise, McQueary
testified that in July of 2010, the parties agreed to an oral modification of the
written Agreement, while Gamble testified at trial that there was no such
modification and that he never agreed to an oral modification. The trial court,
considering the parties’ testimony and other evidence submitted at trial, found
that the parties entered into an oral modification of the Agreement in which the
parties stated that McQueary’s monthly payments would be reduced from
$700.00 to $500.00. The court also found that Gamble’s testimony denying
there was an oral modification “is not credible.” Appellant’s App. Vol. 2, p. 23.
There was abundant evidence before the trial court to support this finding and
the first element.
[33] The trial court further found that “the Parties through their subsequent actions
modified [the Agreement] by their oral agreement.” Id. at 24-25. The intent
relevant in contract matters is not the parties’ subjective intent but their outward
manifestation of their intent. Gerdon Auto Sales, Inc. v. Jones Chrysler Dodge Jeep
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 15 of 26 Ram, 98 N.E.3d 73, 80 (Ind. Ct. App. 2018), trans. denied. “In order to
determine a party’s intent, a court does not examine the hidden intentions
secreted in the heart of a person but should examine the final expression of that
intent found in conduct.” Id. The trial court correctly determined that the
“subsequent actions” of the parties manifested their intent.
[34] Here, after the parties agreed to modify the Agreement, their actions
demonstrated an intent to fulfill the Agreement as modified. McQueary paid
Gamble ninety-five monthly payments of $500 per month. In turn, Gamble
accepted the payments without complaint or objection, providing her with
receipts, some of which showed a portion of the payments were applied to the
purchase price, and the remainder to property taxes. In June 2018, as we have
noted, Gamble’s attorney sent McQueary a letter stating that he had, and still,
expected her to pay $700 per month. But he continued to accept $500 monthly
payments from McQueary for over a year, without further complaint, until he
filed the small claims action. And, even after Gamble filed suit, he continued to
accept the payments until 2022, when he closed the mailbox and failed to
provide an alternative method for McQueary to pay him. There is ample
evidence to support the trial court’s finding that the parties orally agreed to
modify the Agreement, and we will not re-weigh the evidence or judge the
credibility of witnesses.
[35] Gamble asserts that his receipts “informed McQueary that he was not going
along with her oral modification.” Appellant’s Br. p. 20. Quite to the contrary,
his receipts ratified the oral modification because many receipts either stated a
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 16 of 26 balance due or gave McQueary a credit against the principal balance on the
purchase price. In so doing, the terms of the original Agreement were modified
by the parties’ course of conduct, and the conduct of the parties supports the
trial court’s determination. Further, the Agreement required that Gamble give
McQueary “written notice of any default or breach,” Tr. Vol. III, p. 10, but it
was not until Gamble’s attorney sent McQueary a letter, dated June 1, 2018,
that Gamble informed McQueary that, in his opinion, she was in default under
their agreement. This notice was given only after McQueary had made $500
monthly payments for almost eight years, which Gamble had accepted without
any objection or reservation.
[36] We next consider the second element, the expectation of reliance. The question
is whether Gamble made an oral promise to accept monthly payments of
$500.00 per month with the expectation that McQueary would reasonably rely
upon that promise. We do not consider whether Gamble subjectively expected
McQueary to rely on their oral modification but, instead, whether Gamble
should have (1) reasonably expected that McQueary would act upon his
promise and (2) whether his promise actually induced her to make monthly
payments of $500.00 instead of $700.00, including real estate taxes, and to
make substantial improvements to the real estate. See AgReliant Genetics, LLC v.
Gary Hamstra Farms, Inc., 213 N.E.3d 1087, 1095-96 (Ind. Ct. App. 2023)
(discussing expectation of reliance element). The evidence establishes both that
Gamble expected for McQueary to act on his promise and observed and
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 17 of 26 recorded her acting on his promise month-after-month for almost eight years.
The second element is well satisfied.
[37] In an attempt to justify his many years of silence, acceptance, and forbearance
while McQueary made uninterrupted monthly payments, Gamble contends
that he was not obliged to give prior notice of his decision to declare a default
and file suit. This contention must fail in that the Agreement, which Gamble
asserts is the “sole document establishing the legal relationship between the
parties,” Appellant’s Br. p. 27, requires “written notice of any default or
breach” and allows “a reasonable time” for the Lessee to take action
“reasonably likely” to cure the alleged default or breach. Tr. Vol. III, p. 10.
[38] The third element is simply whether under the circumstances McQueary’s
reliance on Gamble’s promise was reasonable. Merely to ask that question is to
answer it. McQueary never made a $700.00 payment and only made smaller
payments each month beginning with $600 in June 2009, and then $500 in July
2010. See Exhibit 18, Tr. Vol. IV, pp. 178-180. Gamble accepted and recorded
each payment on a receipt and his personal account ledger. Each payment
ratified the oral agreement, and Gamble did not object until June 1, 2018. The
only permissible inference from this course of conduct is that McQueary’s
reliance on Gamble’s promise was reasonable. Considering only the evidence
and reasonable inferences favoring the trial court’s judgment, the trial court did
not clearly err by concluding that Gamble made a promise upon which
McQueary reasonably relied.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 18 of 26 [39] Gamble describes the reduced $500.00 payments as “McQueary’s alleged oral
modification,” Appellant’s Br. p. 15, as if the modification were her unilateral
act, and ignores his own course of conduct. Gamble accepted McQueary’s
payments without any qualification or reservation and, as we have already
noted, continued to issue receipts, most of which showed either a payoff
balance or reduction in principal against the purchase price. Indeed, as of
September 2019, Gamble’s own accounting statement showed a contract
balance of $51,000, which was $34,000 less than the original $85,000 purchase
price. After accounting for all payments, the trial court concluded that
McQueary had paid, and Gamble had accepted, $81,800 in payments toward
the purchase price of the real estate.
[40] Even if Gamble considered McQueary to be a mere renter, he did not inform
McQueary that it was his position but instead allowed her to pay thousands of
dollars to build equity in the property. And she made substantial improvements
to the property with Gamble’s knowledge, again without Gamble having
informed her that insofar as he was concerned she was only renting. Gamble
testified and the trial court found that he “never advised her that she was in
default and that he was not accepting her reduced monthly payments toward
the purchase of the real estate until she received the letter [from Gamble’s
attorney] dated June 1, 2018.” Appellant’s App. Vol. 2, p. 24. In addition, the
June 1 letter acknowledged McQueary was “leasing to purchase” the real
estate, and did not inform her that Gamble had determined the purchase option
of their agreement was no longer operative. Tr. Vol. III, p. 83.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 19 of 26 [41] The fourth element, the definite and substantial nature element of promissory
estoppel, requires a showing of independent consideration given in reliance on
the oral promise, that is, consideration substantially greater than performance
of the agreement itself. The trial court found that McQueary’s monthly
payments included the payment of real estate taxes totaling $15,628.19.
McQueary would not have been obliged to pay these taxes if she were only
renting rather than purchasing the house. The trial court calculated the amount
of the payments attributed to the purchase price and calculated the real estate
taxes owed and paid, and even taking into account payments made before the
oral modification, or payments made after Gamble closed his post office box
and (without McQueary’s knowledge) rendered her delivery of payments
impossible, there is no question but that McQueary paid a substantial amount
of the original $85,000 purchase price, which included real estate taxes, after the
oral modification.
[42] Gamble disputes that McQueary’s monthly payments to him amounted to
independent consideration. He contends that McQueary merely made
payments that she would have made for rent to occupy the residence as a
tenant, in other words, that she suffered no harm or damages at all, and there is
insufficient evidence to prove the substantial and independent consideration
required to remove an oral agreement from the Statute of Frauds.
[43] Gamble’s point might be well taken if the rental value of the real estate were the
only factor to be considered, but that does not end our inquiry. We must also
consider the conduct of the parties. As shown by the receipts, the parties
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 20 of 26 attributed a part of each monthly payment for real estate taxes, which
McQueary would not have paid as a lessee. In addition, after the parties
negotiated the oral modification of the Agreement, McQueary made extensive
improvements to the real estate in reliance upon her oral agreement with
Gamble. The evidence shows, and the trial court found, that McQueary made
repairs and improvements on the real estate totaling $30,581.00, which she
itemized with receipts, contracts, and photographs supporting her testimony.
Gamble was aware of at least some of these improvements, but he did not
object to any of them. And the trial court concluded that McQueary made
“lasting, valuable, and substantial improvements to the real estate[]” that she
would not have made if she were not exercising her option to purchase the real
estate. Appellant’s App. Vol. 2, p. 27.
[44] Finally, the fifth and ultimate element and question is whether McQueary
would suffer an injustice from her reliance on the oral modification of the
Agreement if the promissory estoppel exception to the Statute of Frauds were
not applied. To establish that injustice can be avoided only through
enforcement against a promisor, the promisee must show that the reliance
injury is “(1) independent from the benefit of the bargain and the resulting
incidental expenses and inconvenience; [and] (2) so substantial as to constitute
an unjust and unconscionable injury.” Coca-Cola Co. v. Babyback’s Intern., Inc.,
841 N.E.2d 557, 569 (Ind. 2006), disapproved of in part on other grounds by
Pennington v. Mem. Hosp. of South Bend, Inc., 223 N.E.3d 1086, 1094 n.1 (Ind.
2024).
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 21 of 26 [45] The evidence shows, and the trial court found, that McQueary made repairs
and substantial improvements on the real estate totaling $30,581.00. And the
trial court found that McQueary had paid the real estate taxes on the real estate
in the amount of $15,628.19. McQueary would neither have paid the taxes
owed after the oral modification nor made the repairs and improvements but for
her reasonable reliance on Gamble’s acceptance of her continuous and monthly
payments from July 2010 until June 2018, when his attorney sent her the letter
discussed above. But, he continued to accept McQueary’s payments for several
years after sending the letter. Each payment ratified their oral agreement and
was consistent with a reasonable, good faith belief that McQueary was a
purchaser and not a renter.
[46] Further, McQueary’s reliance was not a one-off nor was it incidental or
collateral to the transaction. We agree with the Seventh Circuit, while sitting in
diversity and applying Indiana substantive law in Classic Cheesecake Company,
Inc. v. JPMorgan Chase Bank, 546 F.3d 839, 845 (7th Cir. 2008), that, “[t]he more
protracted the period during which reliance costs are being incurred, the
stronger the inference that the oral promise was as [a party] represents it to
be[.]” Here, McQueary’s reliance costs accumulated over a long period of time,
which underscores both the significance and reasonableness of her reliance.
Not to enforce the oral bargain would result in an unjust and unconscionable
injury to McQueary, because she would be left without compensation for her
tax payments and her extensive improvements to the house, which would
remain with the property.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 22 of 26 [47] As we have noted, Gamble contends that his acceptance of $500 monthly
payments over a period of fourteen years “did not cause McQueary a
substantial or independent injury” in that “she was already obligated under the
Lease to pay $100.00 more, or $600.00, for the rent alone.” Appellant’s Br. p.
14. Gamble ignores his own conduct and misdirection in accepting the reduced
$500 payments, while attributing $200.00 of each payment to principal, with
each payment confirming that the original Agreement had been modified, while
he kept to himself and did not tell McQueary of his contention that McQueary
was “renting, not buying.” Tr. Vol. II, p. 64.
[48] In sum, under the equitable doctrine of promissory estoppel, the trial court did
not err in determining that the parties’ oral agreement was enforceable despite
not complying with the Statute of Frauds.
Forfeiture v. Foreclosure and Calculation of Judgment [49] Even if the trial court properly determined that McQueary had an equitable
ownership interest in the real estate, Gamble claims the court erred in holding
that foreclosure, rather than forfeiture, was the appropriate remedy for
McQueary’s failure to pay the full amount of the purchase price, plus unpaid
rent. Specifically, he argues, “McQueary likely does not have substantial equity
in the [real estate] in which case Gamble would be entitled to forfeiture instead
of a money judgment.” Appellant’s Br. p. 27.
[50] Gamble cites to Skendzel v. Marshall, 301 N.E.2d 641 (Ind. 1974) to support his
claim. In that case, the heirs in interest to a seller of a piece of real estate filed a
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 23 of 26 complaint against the purchasers, arguing the purchasers had forfeited any
rights to the land under the parties’ land sale contract by failing to make timely
payments. The purchasers prevailed in the trial court, but the Indiana Supreme
Court reversed. The Court first noted, “Forfeitures are generally disfavored by
the law.” Id. at 644. If the purchasers were deemed to have forfeited their
rights under the contract, they would have lost possession of the real estate plus
$21,000 in previous payments, which amounted to over one-half of the agreed-
upon purchase price. Noting that under conditional land contracts, “equitable
title [to the real estate] vests in the vendee at the time the contract is
consummated[,] id. at 646, the Court concluded, “a conditional land sales
contract [is] in the nature of a secured transaction, the provisions of which are
subject to all proper and just remedies at law and in equity,” id. at 650.
Applying that principle to the facts of the case, the Court determined a
judgment of foreclosure, rather than forfeiture, was required because the
purchasers had paid more than half of the purchase price and forfeiting that
money would have been unconscionable.
[51] In this case, the holding in Skendzel supports the trial court’s decision. The
court found, with ample evidentiary support in the record, that: (1) the parties
had agreed to reduce McQueary’s payments to $500 per month; (2) McQueary
did not default on her payment obligations until June 2022, when Gamble
stopped allowing her to mail payments to him; (3) McQueary had paid over
three-fourths of the purchase price; and (4) McQueary had paid over $30,000
for improvements to the property in anticipation that she would own it free and
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 24 of 26 clear. Under these circumstances, as in Skendzel, forfeiture would be
unconscionable.
[52] Next, Gamble takes issue with the trial court’s calculation of the amount
McQueary owes him. He claims, “Gamble was entitled to every payment
shortfall over the 14 year [sic] period of the [Agreement.]” Appellant’s Br. p.
27. The premise for Gamble’s argument is that McQueary was still obligated to
pay $700 per month under the Agreement. As we have discussed above, the
trial court did not err in concluding the parties orally agreed to reduce
McQueary’s payments to $500 per month. We need not address this claim
further.
[53] Finally, Gamble argues the trial court should have ordered McQueary to pay
him prejudgment interest “on every shortfall.” Id. In support of his claim, he
cites only to Indiana Code section 24-4.6-1-102 (1974). That statute sets the
rate at which interest is calculated when parties to a transaction do not
otherwise agree, but it does not explain the circumstances under which a
litigant is entitled to prejudgment interest. We will not make Gamble’s
arguments for him, and we conclude he has waived this issue. See Nehi Beverage
Co., Inc. of Indianapolis v. Petri, 537 N.E.2d 78, 84 (Ind. Ct. App. 1989) (party’s
claim regarding prejudgment interest waived for failure to present cogent
argument; party merely cited to statutes and listed cases), trans. denied.
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 25 of 26 Conclusion [54] For the reasons stated above, we conclude that Gamble has not shown that the
trial court’s judgment is clearly erroneous and contrary to law, and we affirm
the judgment of the trial court.
[55] Affirmed.
Weissmann, J., and DeBoer, J., concur.
ATTORNEYS FOR APPELLANT James R. Byron Alex B. Bowling Thorne Grodnik, LLP Elkhart, Indiana
ATTORNEYS FOR APPELLEE David Pruitt Notre Dame Clinical Law Center
Jacob Orme Bennett Rogers Certified Legal Interns South Bend, Indiana
Court of Appeals of Indiana | Opinion 24A-PL-1500 | February 28, 2025 Page 26 of 26