Larry J. Jernas and R & R Horse Haven, Inc. v. Kevin J. Gumz

53 N.E.3d 434, 2016 WL 1359857, 2016 Ind. App. LEXIS 101
CourtIndiana Court of Appeals
DecidedApril 6, 2016
Docket75A03-1511-CC-1903
StatusPublished
Cited by32 cases

This text of 53 N.E.3d 434 (Larry J. Jernas and R & R Horse Haven, Inc. v. Kevin J. Gumz) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Larry J. Jernas and R & R Horse Haven, Inc. v. Kevin J. Gumz, 53 N.E.3d 434, 2016 WL 1359857, 2016 Ind. App. LEXIS 101 (Ind. Ct. App. 2016).

Opinion

BROWN, Judge.

[1] R & R Horse Haven, Inc., (“R & R”) and Larry J. Jernas appeal the trial court’s ruling in favor of Kevin J. Gumz and raise three issues on appeal which we consolidate and restate as whether the court’s order is clearly erroneous. We affirm.

Facts and Procedural History

[2] R & R and Gumz entered into an Agreement to Sell Real Estate (the “Agreement”) dated December 11,- 2009. The Agreement provided that it was made “between R & R Horse Haven, Seller, of 7491 S 100 W, City of North Judson, State of IN, and Starke County, Buyer, of 7491 S 100 W, City of North Judson, State of IN.” 1 Plaintiffs Exhibit 3; Defendant’s Exhibit 1. The Agreement further provided in part:

3. [R & R] agrees to pay [Gumz] the sum of $800,000, which the Seller agrees to accept as full payment. This Agreement, however, is conditional upon [R & R] being able to arrange suitable financing on the following terms at least thirty (30) days prior to the closing date for this Agreement: a mortgage in the amount of 0, payable in 0 monthly payments, with an annual interest rate of 0 percent.[ 2 ]
4. The purchase price will be paid as follows:
Earnest deposit (upon signing this Agreement) $ 25,000
Other deposit: _ $
Cash or certified check on closing $
(subject to any adjustments or prorations on closing)
Total Purchase Price $ 800,000
5. [Gumz] acknowledges receiving the Earnest , money deposit of $25,000 from [R & R], If [R & R] fails to perform this Agreement, [Gumz] shall retain this money. If [Gumz] fails to perform this Agreement, this money shall be returned to [R & R] or [R <& R] may have the right of specific performance. If [R & R] is unable to obtain suitable financing at least thirty (30) days prior to closing, then this money will be returned to [R & R] without penalty or interest. 6. This Agreement will close on Jan 5 2010, at 2 o’clock, at_, City of_, State of_

Id. The Agreement was signed by Mary H. *439 Wodrich on behalf of R & R. 3 In addition, a check dated December 10, 2009, was written by Tarry Jernas 4 made payable to Gumz in the amount of $25,000. The handwritten note in the memo line of the check stated “Down payment horse farm” and “R & R.” PlairttifPs Exhibit 2.

[3] Howevér, the sale of the property to R &_R did not occur, and Gumz later sold the property to another purchaser. Gumz did not return the $25,000 deposit to R & R or Jernas.

[4] In June 2011, Jernas and R & R filed a complaint against Kevin Gumz and Amy Gumz alleging in part that, in the fall of 2009, R & R “reached an agreement with Kevin Gumz to purchase the Horse Farm for the price of $500,000”; that'Jer-nas paid $25,000 to Kevin Gumz on behalf of R & R as an earnest money deposit for the purchase of the property; that after the down payment was made and on or about December 11, 2009, Kevin Gumz presented the Agreement to R & R “which listed the price as $800,000 and included the Trailer Home belonging to the Gumzes” and provided the Agreement was contingent on R & R “being able to arrange suitable financing”; that after signing the contract, R & R diligently pursued financing but was unable to obtain suitable financing at the .increased price; and that the Gumzes failed to return the earnest money deposit to R & R or Jernas. Defendant’s Exhibit 2 at 1-2. The complaint alleged counts of breach of contract, fraud, conversion, and unjust enrichment.

[5] Jernas and R & R filed a motion" to amend the complaint in October 2013, which the court granted in December 2013. The amended complaint eliminated Amy Gúmz as a party and alleged in part that Kevin Gumz was at all relevant times the owner of real estate located at 7491 S 100 W, North Judson, Indiana (defined in the complaint as the Horse Farm); that, in the fall of 2009, R & R “believed it had reached á parole [sic] agreement with Kevin Gumz to purchase the Horse Farm for the price of $500,000”; that Jernas paid $25,000 to Gumz on behalf of R & R as an earnest money deposit for the purchase of the property; that after the down payme^ was made and on or about December 11, 2009, Gumz presented the Agreement to R & R “which listed the price as $800,000” and provided the Agreement was contingent on R & R “being able to arrange suitable financing”; that on or about January 2010, R & R notified Gumz of its inability to obtain suitable financing and requested that Gumz return the earnest money deposit; and- that Gumz failed to return the earnest money deposit. Appellants’ Appendix at 11-12.

[6] The amended complaint, under Count I, titled Debt Due, alleged in part that the Agreement “was never an enforceable contract because it omits essential terms of an enforceable contract since the description .of the Real Estate is incomplete and the document was not properly executed by both parties”; that “[a]s a consequence of the invalidity of [the Agreement], Gumz held the $25,000 deposited as . a trustee, pending the execution of an enforceable contract which was never prepared, presented, or signed”; and that, when R & R and Jernas. requested the $25,000 deposit be returned, Gumz indicated that he had spent it. Id. at 12-13. Count II of the amended complaint, titled *440 Unjust Enrichment, alleged that Gumz would be unjustly enriched if not required to repay the earnest money deposit to Jernas and R & R. R & R and Jernas requested a judgment against Gumz in the amount of $25,000 and attorney fees, prejudgment interest, and the costs of the action.

[7] Gumz filed a counterclaim alleging that R & R entered into the Agreement, that it breached the Agreement, that he later sold the property for $400,000 and had been damaged in the amount of $400,000, that R & R previously acknowledged the validity of the Agreement by suing on it in its original complaint, and that it has waived any statute of frauds compliance, and Gumz demanded judgment in the amount of $400,000, prejudgment interest, costs, and all other proper relief.

[8] On July 15, 2015, the court held a bench trial at which it heard testimony from, among others, Jernas, Wodrich, and Gumz. Jernas testified that, when Gumz was approached about the sale of the property, “the $500,000 figure was thrown out to our group,” that Jernas asked his banker if R & R could obtain a loan for that amount, that his banker told him that R & R could be financed for up to $500,000, that he wrote a check for $25,000 and gave it to Wodrich, who planned to meet with Gumz, and that at the time he wrote the check he had no reason to believe that the sale price was different than $500,000. Transcript at 24.

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53 N.E.3d 434, 2016 WL 1359857, 2016 Ind. App. LEXIS 101, Counsel Stack Legal Research, https://law.counselstack.com/opinion/larry-j-jernas-and-r-r-horse-haven-inc-v-kevin-j-gumz-indctapp-2016.