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

• Court: Indiana Court of Appeals
• Decided: January 23, 2017
• Docket: 76A03-1603-MI-716
• Status: Published

Opinion

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.

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 1 of 10 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

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 2 of 10 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

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 3 of 10 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.

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 4 of 10 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. Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 5 of 10 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

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 6 of 10 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.

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 7 of 10 ***

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. . . .

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 8 of 10 ***

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

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 9 of 10 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.

Court of Appeals of Indiana | Memorandum Decision 76A03-1603-MI-716| January 23, 2017 Page 10 of 10