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Land Innovators Co., L.P. v. Bogan

Court of Appeals of Indiana

July 30, 2014

LAND INNOVATORS COMPANY, L.P., R.N. THOMPSON, TRINITY HOMES, INC. and TRINITY HOMES, LLC d/b/a BEAZER HOMES, Appellants-Defendants,
v.
MICHAEL L. BOGAN and MELODY A. BOGAN, Appellees-Plaintiffs

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[Copyrighted Material Omitted]

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APPEAL FROM THE HAMILTON SUPERIOR COURT. The Honorable Steven R. Nation, Judge. Cause No. 29D01-0508-PL-747.

ATTORNEY FOR APPELLANTS, Land Innovators Company, L.P. and R.N. Thompson: WILLIAM T. ROSENBAUM, Rosenbaum Law, P.C. Indianapolis, Indiana.

ATTORNEYS FOR APPELLANTS, Trinity Homes, Inc. and Trinity Homes, LLC d/b/a Beazer Homes: ANDREW J. DETHERAGE, WILLIAM A. HAHN, Barnes & Thornburg LLP Indianapolis, Indiana.

ATTORNEYS FOR APPELLEES: TERRENCE J. SORG, Brooks Koch & Sorg, Indianapolis, Indiana; NANA QUAY-SMITH, KARL L. MULVANEY, Bingham Greenebaum Doll LLP, Indianapolis, Indiana.

ROBB, Judge. RILEY, J., and BRADFORD, J., concur.

OPINION

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ROBB, Judge

Case Summary and Issues

This case centers on a newly constructed home purchased by Michael and Melody Bogan (collectively, " Bogan" ) in the Lake Stonebridge subdivision in Fishers. Since the home's construction in 1999, it has experienced two incidents of flooding in the lower level. In response to these instances of flooding, Bogan filed suit against the subdivision developer and its general partner, Land Innovators, L.P. and R.N. Thompson, respectively, (collectively, the " Developers" ) and against the homebuilder, Trinity Homes, LLC (" Trinity" ). Bogan asserted a multitude of claims against the defendants, including breach of contract, negligence, negligence per se, constructive fraud, breach of covenants, breach of implied warranty of habitability, and abuse of process. The Developers also raised a cross-claim against Trinity seeking indemnification. On April 29, 2013, the trial court issued an order that: (1) awarded partial summary judgment to Bogan against Trinity on liability as to claims of negligence, negligence per se, breach of contract, and breach of covenants; (2) awarded partial summary judgment to Bogan against Developers on liability as to the claim of breach of covenants; (3) found genuine issues of fact existed regarding Bogan's claims against Trinity of constructive fraud and breach of warranty of habitability; (4) found genuine issues of fact existed regarding Bogan's claims against the Developers of negligence, breach of warranty of habitability, and abuse of process; and (5) granted Trinity's motion for judgment on the pleadings against Developers' claim for indemnification. On May 31, 2013, the trial court issued another order granting Bogan's request that the home be demolished.

All three parties have raised issues for our consideration in this appeal. Trinity asks (1) whether the trial court erred in granting partial summary judgment on claims of negligence, negligence per se, breach of contract, and breach of covenants, and (2) whether the trial court erred in concluding Bogan was entitled to attorney fees on their breach of covenants claim. The Developers ask whether the trial court erred in granting summary judgment against them for breach of covenants. Additionally, both Trinity and the

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Developers challenge the trial court's determination that the Bogan home must be torn down. Bogan, as cross-appellant, raises two issues: (1) whether the trial court erred by denying summary judgment on Bogan's claim of constructive fraud against Trinity, and (2) whether the trial court erred by denying summary judgment on Bogan's claim of negligence against the Developers. Finding no error in the trial court's April 29, 2013 order on summary judgment and Trinity's motion for judgment on the pleadings, we affirm that order in all respects. However, we conclude the trial court's decision to enter an injunction for removal of the house without presentation of evidence or findings as to the requisite elements for an injunction was improper, and we reverse and remand on that sole issue.

Facts and Procedural History

The Lake Stonebridge subdivision is a residential subdivision located in Fishers, Indiana. The Developers purchased the land, obtained the required zoning, and prepared and recorded plats and covenants for the subdivision. The Developers also installed the streets, utilities, and water detention and drainage systems for the subdivision, and created a building pad on each lot for each new home. A majority of the lots on which homes were built in this subdivision are adjacent to Lake Stonebridge (" the lake" ).

The lake became a water detention facility that accommodated storm water from the subdivision and surrounding area. The Developers hired Evergreen Planners, Inc. to aid in designing the water detention facility and subdivision, and to assist in obtaining any necessary government approval. One critical aspect of Evergreen Planners' responsibilities included determining the base flood elevation (also known as the " 100-year flood" elevation) for sections of the subdivision and establishing proposed lower level elevations for each individual plot in the subdivision. This was critical because the proximity of homes to the lake made them potentially susceptible to an increased risk of flooding. For the purpose of determining the lake's base flood elevation, the Developers hired Christopher B. Burke Engineering, Ltd. to conduct a hydrologic study. It was determined that the lake's base flood elevation was 786.6 feet.[1]

An important aspect of the development approval process included preparation of detailed development plans for each section of the subdivision, which included lower level elevations for each house to be constructed. Such a plan was created with respect to Section 2B of the subdivision and will be referred to as the " Site Development Plan." A detailed development plan may contain various forms of information regarding the structures to be built, roads, topographical information, etc., and one must be submitted to and approved by the Town of Fishers in order to obtain an improvement permit. The Site Development Plan, which was approved by the Town of Fishers, provided for a lower level elevation of 789 feet for Section 2B--and specifically for Lot 72. This elevation was chosen, in part, pursuant to a Fishers ordinance dealing with the development of drainage facilities. Fishers Ordinance 110380 § 153.35 provided that " [a] drainage facility shall be provided to allow drainage of water run-off from all of the upstream drainage areas and from all areas within the proposed subdivision to a place adequate to receive such run-off." More specifically, the ordinance stated

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that a subdivision drainage facility must be " designed such that the low points of entry for residential . . . structures are two feet above and free from a 100-year flood." Id. at § 153.35(C)(4).

Trinity was contracted by the Developers to be the exclusive homebuilder in the subdivision and received a copy of the approved Site Development Plan. On May 1, 1998, Bogan and Trinity entered into a contract whereby Trinity agreed to build a lakefront home for Bogan on Lot 72 in Section 2B of the subdivision. Trinity was to build a one-story frame house with a walk-out lower level facing the lake. The home's standard design included steps between the home and garage, and Bogan inquired as to the possibility that those steps be removed in order to accommodate his limited mobility. In response, Trinity suggested that the home's elevation be lowered to meet Bogan's request. The plot plans for the Bogan home reflected this change, and the final plot plans for the home--prepared by Trinity--called for a basement finished floor elevation of 788.04 feet.

Trinity submitted those final plot plans to the Fishers Department of Development as part of the process required to receive a building permit. Fishers then issued a building permit for the Bogan home. Trinity constructed the Bogan home in accordance with the plot plans submitted for approval by the Town of Fishers. At no time did Trinity seek approval from the Developers for the plot plans specific to the Bogan home, and the Developers did not require Trinity to make such a submission for approval.

On May 18, 1999, the home was completed, and Bogan acquired Lot 72 and the home from Trinity. Since that time, the home has experienced two instances of flooding in its lower level. On September 1, 2003, a rainstorm caused the lake to overflow and flood the Bogan home with seven inches of water. The home flooded a second time on February 28, 2011, and incurred one inch of water on that occasion.

Bogan filed suit against both Trinity and the Developers. As to Trinity, Bogan asserted claims of negligence, negligence per se, breach of contract, breach of warranty of habitability, constructive fraud, and breach of covenants. As to the Developers, Bogan asserted claims of negligence, breach of warranty of habitability, constructive fraud, abuse of process, and breach of covenants. The Developers filed a cross-claim seeking indemnification from Trinity. Bogan and the Developers each sought summary judgment as to all relevant claims, and Trinity filed for judgment on the pleadings against the Developers' cross-claim.

On April 29, 2013, the trial court addressed the parties' motions for summary judgment and Trinity's motion for judgment on the pleadings against the Developers' indemnification claim. As to Trinity, the trial court granted summary judgment to Bogan on liability for negligence, negligence per se, breach of contract, and breach of covenants, but the trial court found genuine issues of fact precluded summary judgment on claims of constructive fraud and breach of warranty of habitability. As to the Developers, the trial court granted summary judgment to Bogan on liability for breach of the covenants, but the trial court found genuine issues of fact precluded summary judgment on claims of negligence, breach of warranty of habitability, and abuse of process. The trial court also granted Trinity's motion for judgment on the pleadings.

On April 29, 2013, Bogan filed a Motion to Enforce the Covenants, requesting that the trial court impose an equitable remedy

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provided for under the covenants and remove the Bogan home from Lot 72. The trial court heard argument on that motion on May 10, 2013, and granted the motion. The trial court stayed that order pending appeal. This appeal ...


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