Stephen W. Marvel and Debria Marvel v. Jason Althoff, Erin Althoff and Gene O. Dorsey (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: May 6, 2016
• Docket: 63A05-1512-PL-2167
• Status: Published

Opinion

MEMORANDUM DECISION FILED Pursuant to Ind. Appellate Rule 65(D), May 06 2016, 9:07 am

this Memorandum Decision shall not be CLERK regarded as precedent or cited before any Indiana Supreme Court Court of Appeals and Tax Court court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES Steven L. Whitehead Margaret M. Christensen Princeton, Indiana Karl L. Mulvaney J. Robert Kinkle Bingham Greenbaum Doll LLP Hall, Partenheimer & Kinkle Indianapolis, Indiana Princeton, Indiana Donald J. Fuchs Bingham Greenbaum Doll LLP Evansville, Indiana Val J. Fleig Petersburg, Indiana

IN THE COURT OF APPEALS OF INDIANA

Stephen W. Marvel and May 6, 2016 Debria Marvel, Court of Appeals Case No. Appellants-Plaintiffs, 63A05-1512-PL-2167 Appeal from the Pike Circuit Court v. The Honorable Jeffrey L. Biesterveld, Judge Jason Althoff, Erin Althoff and Trial Court Cause No. Gene O. Dorsey, 63C01-1504-PL-83 Appellees-Defendants

Mathias, Judge.

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 1 of 9 [1] Stephen and Debria Marvel filed a complaint in Pike Circuit Court seeking an

order to compel the partition of certain real estate. Two of the named

defendants filed a motion to dismiss, which the trial court granted. The Marvels

appeal and argue that the trial court erred in dismissing their complaint because

they have a right to have the tenancy partitioned.

[2] We affirm.

Facts and Procedural History

[3] The parties in this case are Stephen and Debria Marvel (“the Marvels”), Erin

and Jason Althoff (“the Althoffs”), and Gene O. Dorsey (“Dorsey”). Erin is the

Marvels; daughter and, at the time relevant to this appeal, was married to

Jason.1

[4] Dorsey held a fee simple title to a 255.63-acre farm (“the Farm”) in Pike

County, Indiana. Included on this real estate was a house and a garage. On

February 23, 2007, Dorsey entered into a Contract for Conditional Sale of Real

Estate (“the Contract”) with the Marvels and the Althoffs (collectively “the

Buyers”) to sell the Farm for a purchase price of $561,000. Pursuant to the

Contract, the Buyers paid $100,000 of the purchase price at the time of

execution, and the remaining $461,000 was to be paid in annual installments of

$30,733.33, plus interest, on March 1 of each year until March 1, 2017. On this

1 Jason and Erin filed for divorce in January 2015, and their dissolution action was pending at the time of the present case.

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 2 of 9 date, the Contract gives Dorsey the right to demand the unpaid balance and

interest. The Contract provides that the Buyers have the right to prepay the

purchase price without penalty and that the Buyers are responsible for all

property taxes and insurance on the Farm.

[5] The Contract also provides that Dorsey retains a life estate in the residence and

the garage and that the Buyers will not receive legal title to the Farm until full

payment of of the purchase price. Dorsey is responsible for normal maintenance

of the house and garage not to exceed $250 per occurrence, but the Buyers are

responsible for all maintenance costs in excess of $250. The Contract further

states that the Buyers may not alter or remove any improvements on the Farm,

or make any additional improvements, without Dorsey’s prior written consent.

The Contract also states that the Buyers may not sell or assign their interest in

the Contract or the property without Dorsey’s prior written consent, nor may

the Buyers lease or permit others to occupy the farm without Dorsey’s consent.

The Contract gives the Buyers the right to immediate possession of the Farm,

save the house and garage, as of February 24, 2007.2

[6] On April 4, 2014, the Marvels filed a complaint for partition of real estate. The

complaint sought “an order compelling partition of the [Farm], subject to the

2 On April 28, 2008, after the execution of the Contract, Dorsey conveyed his interest in the farm and the agreement to the Gene O. Dorsey Trust. Because this does not affect our analysis, we refer to the trust and Dorsey as “Dorsey.”

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 3 of 9 life estate of Gene O. Dorsey as to the residence and garage[.]” Appellant’s

App. p. 25. The complaint named as defendants the Althoffs and Dorsey.

[7] Jason Althoff and Dorsey filed a joint motion to dismiss the Marvels’ complaint

on June 1, 2015, claiming that the Marvels did not have standing to seek

partition of the farm because they did not share a common interest in the farm

with Dorsey. The joint motion to dismiss also argued that partitioning the farm

would deprive Dorsey of his rights under the Contract.3 After various

responsive filings, the trial court held a hearing on the matter on August 11,

2015. After considering the parties’ proposed findings and conclusions, the trial

court entered its own findings and conclusions dismissing the Marvel’s

complaint on September 25, 2015. The Marvels then filed a motion to correct

error on October 26, 2015. The trial court denied this motion on November 23,

2015, and the Marvels now appeal.

Standard of Review

[8] The standard of review on appeal from a trial court’s grant of a motion to

dismiss for failure to state a claim is de novo and therefore requires no deference

to the trial court’s decision. Arflack v. Town of Chandler, 27 N.E.3d 297, 302 (Ind.

Ct. App. 2015). The grant or denial of a motion to dismiss turns on the legal

sufficiency of the claim and does not require determinations of fact. Id. In

3 After the Marvels responded, Jason Althoff filed an additional motion to dismiss, noting that the Marvels had failed to name the real party in interest in their complaint, i.e. the Gene O. Dorsey Trust. The Marvels later amended their complaint to address this deficiency.

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 4 of 9 determining whether any facts will support the claim, we look only to the

complaint and may not resort to any other evidence in the record. Id.

[9] To the extent that a trial court, in ruling on a motion to dismiss for failure to

state a claim, considers matters outside of the pleadings, the motion should be

treated as one for summary judgment. See Azhar v. Town of Fishers, 744 N.E.2d

947, 950 (Ind. Ct. App. 2001) (citing Ind. Trial Rule 12(B)). Here, the facts are

undisputed, and regardless of whether we view the trial court’s ruling as one

granting a motion to dismiss or granting summary judgment, the matter before

us is a pure issue of law which we review de novo. See Swanskin v. Town of Ogden

Dunes, 949 N.E.2d 825, 828 (Ind. 2011) (noting that issues of law are reviewed

de novo).

Discussion and Decision

[10] The Marvels claim that the trial court erred in concluding that they could not

bring a partition action. The Marvels argue that they and the Althoffs are

tenants in common and that they therefore have standing to bring an action to

partition their interests as tenants in common. The Marvels refer to Indiana

Code sections 32-17-4-1 and -2. These statutes provide:

(a) The following persons may compel partition of land held in joint tenancy or tenancy in common as provided under this chapter: (1) A person that holds an interest in the land as a joint tenant or tenant-in-common either: (A) in the person’s own right; or (B) as executor or trustee. Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 5 of 9 (2) If the sale of the estate of a decedent who held an interest in the land as a joint tenant or tenant in common is necessary, the decedent’s administrator or executor. (b) A trustee, an administrator, or an executor may be made a defendant in an action for the partition of real estate to answer as to any interest the trustee, administrator, or executor has in the real estate.

Ind. Code § 32-17-4-1 (emphasis added).

(a) A person described in section 1(a) of this chapter may file a petition to compel partition in the circuit court or court having probate jurisdiction of the county in which the land or any part of the land is located. (b) A petition filed under subsection (a) must contain the following: (1) A description of the premises. (2) The rights and titles in the land of the parties interested. (c) At the time a person files a petition under subsection (a), the person shall cause a title search to be made regarding the land that is the subject of the partition. The person shall file a copy of the results of the title search with the court.

Ind. Code § 32-17-4-2 (emphasis added).

[11] The Marvels read these statutes to mean that they may petition the trial court to

partition the farm because they and the Althoffs are tenants in common.

However, this matter is not quite that simple.

[12] First, the Marvels and the Althoffs do not yet have legal title to the farm.

Indeed, they admit that, as purchasers of real estate on contract, they have only

equitable title to the farm. See Area Plan Comm’n, Evansville-Vanderburgh Cnty. v.

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 6 of 9 Hatfield, 820 N.E.2d 696, 699 (Ind. Ct. App. 2005) (noting that once a contract

for the sale of land is executed, equitable title vests with the buyer), trans. denied;

UFG, LLC v. Sw. Corp., 784 N.E.2d 536, 541 (Ind. Ct. App. 2003) (noting that

under a typical land contract, the seller retains legal title until the total contract

price is paid by the buyer but that equitable title vests in the buyer at the time

the contract is consummated), trans. denied.

[13] We recognize that it has long been held in this state that a party seeking

partition must have the right to possession of the land and hold either legal or

equitable title. Hurwich v. Zoss, 170 Ind. App. 542, 544, 353 N.E.2d 549, 550-51

(1976); Helvey v. O’Neill, 153 Ind. App. 635, 641, 288 N.E.2d 553, 557 (1972);

McClure v. Raber, 106 Ind. App. 359, 19 N.E.2d 891, 894 (1939); Schissel v.

Dickson, 129 Ind. 139, 28 N.E. 540, 543 (1891). Thus, the fact that the Marvels

and Althoffs possess only an equitable title does not by itself disqualify the

Marvels from seeking partition.

[14] However, given Dorsey’s contractual right to regain the right to possession of

the Farm in the case of default on the part of the Buyers, it would be odd to

allow the Marvels to partition real estate to which they do not yet even hold

legal title. Indeed, partition often leads to a sale of the property, yet the Marvels

do not yet hold legal title to the Farm. Thus, their position would allow them to

force the sale of land for which they do not hold legal title.

[15] More important, however, is the fact that the Marvels and Althoffs do not enjoy

the right to possess the entire farm because Dorsey, in addition to holding legal

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 7 of 9 title to the farm, still holds a life estate in the house and garage on the farm.

Accordingly, the Marvels and Althoffs are the remaindermen of the house and

garage. See Piel v. Dewitt, 170 Ind. App. 63, 70, 351 N.E.2d 48, 53 (1976) (noting

that the death of the life tenant is the customary means for ending a life estate

and conferring possessory rights upon the remainderman). It has long been the

case in Indiana that “partition can not be adjudged between remainder-men

during the existence of a life-estate.” Shaw v. Beers, 84 Ind. 528, 529 (1882)

(citing Coon v. Bean, 69 Ind. 474, 476 (1880); Schori v. Stephens, 62 Ind. 441, 448

(1878)).

[16] What the Marvels wish to do is to partition the interests of the tenants in

common of the equitable title to the farm but leave Dorsey’s life estate

unchanged. As noted, the Marvels and Althoffs hold not only the equitable title

to the farm as tenants in common, they are also the remaindermen of the life

estate reserved by Dorsey. To allow the Marvels to partition the Farm would be

to permit them to partition land for which they do not yet have a possessory

right, the house and garage. The Marvels refer us to no authority that would

permit them to “partially” partition the farm, i.e., partition the parts in which

they have a possessory interest, yet leave the house and garage untouched by

the partition. For this reason alone, we believe the trial court’s judgment was

proper.

[17] Moreover, as noted by the trial court, the Contract itself provides that the

Marvels and Althoffs (as the buyers) may not “sell or assign this Contract,

Buyer’s interest therein or Buyer’s interest in the Real Estate, without the prior written

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 8 of 9 consent of Seller.” Appellant’s App. p. 159 (emphasis added). Partitioning the

farm would be contrary to this provision. Indeed, the partition statutes

contemplate that the real property to be partitioned may ultimately have to be

sold at a judicial auction if the parties are unable to agree. See Ind. Code § 32-

17-4-2.5(d), (g) (providing that, if the parties are unable to agree in mandatory

mediation as to the method of sale, the court shall order an agreed-to auctioneer

or the sheriff to sell the land). To permit the sale of the farm without Dorsey’s

consent would be in direct violation of the terms of the Contract.

Conclusion

[18] The trial court did not err in concluding that the Marvels do not have the right

to force partition of the Farm because Dorsey possesses not only the legal title

to the Farm, but also a possessory right of a life estate in the house and garage

located on the Farm. Moreover, to partition the Farm would be contrary to the

provisions of the Contract entered into between the Marvels and the Althoffs as

Buyers and Dorsey as the seller. Accordingly, we affirm the judgment of the

trial court.

[19] Affirmed.

Vaidik, C.J., and Barnes, J., concur.

Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 9 of 9