Appeal from the Montgomery Circuit Court. The Honorable Harry A. Siamas, Judge. Case No. 54C01-1309-PL-709.
ATTORNEY FOR APPELLANT: James E. Ayres, Wernle, Ristine & Ayers, Crawfordsville, Indiana.
ATTORNEY FOR APPELLEE: Gregory H. Miller, Crawfordsville, Indiana.
Vaidik, Chief Judge. Baker, J., and Riley, J., concur.
Vaidik, Chief Judge.
[¶1] Two parties executed a land contract for the sale of commercial real estate in Crawfordsville, Indiana. The Statute of Frauds requires land contracts to be in writing. The written land contract called for monthly payments, with a balloon payment to be made at the end of the term. When the buyer was not able to make the balloon payment at the end of the term, he approached the seller about extending the due date for the balloon payment. Although the parties made an oral agreement about extending the due date for the balloon payment, each side presented a different version of that agreement.
[¶2] The trial court, which could not determine the details of the parties' agreement because it found that the evidence was unpersuasive both ways, concluded that the oral agreement was unenforceable because it was not in writing. Therefore, the trial court concluded that the buyer breached the land contract when he failed to make the balloon payment when it was originally due.
[¶3] We agree with the trial court that the Statute of Frauds applies to the parties' oral agreement to modify the written land contract and, therefore, the oral agreement is unenforceable because it was not reduced to writing. Furthermore, we find that neither party has met its heavy
burden of removing the oral agreement from the Statute of Frauds based on the equitable doctrine of promissory estoppel. Finally, because the oral agreement is unenforceable, we agree with the trial court that the buyer breached the written land contract by failing to make the balloon payment when it was originally due.
Facts and Procedural History
[¶4] On November 15, 2007, Roger Hamilton sold commercial real estate located at 111, 113-115, and 127 West Market Street in Crawfordsville to Terry Huber. Huber operated Old Town Pizzeria at 127 West Market Street, and there were tenants--Moore's Jewelry and Digger's Café --in the other buildings. According to the terms of the parties' contract, the purchase price was $150,000, with a down payment of $20,000. Ex. 1. The balance of $130,000 was payable in monthly installments of $1132.44 with 6.5% interest from January 2, 2008, to November 30, 2010, at which point " the then unpaid balance shall be payable in full unless renegotiated . . . ." Id.
[¶5] The contract also provides that Huber would receive title to the properties " upon the payment of the money and interest at the time and in the manner [specified in the contract], and the prompt and full performance by [Huber] of all his covenants and agreements [specified in the contract] . . . ." Id. The contract states the following regarding breach of the contract:
In the event [Huber] shall, for any reason, fail or refuse to make any payment due under this contract, including annual payment, taxes, assessments or insurance premiums for a period of thirty (30) days after the same become due, and upon an additional thirty days' written notice, [Huber] shall then be deemed to be in default of the contract. In that event, the entire balance of principal and interest due shall become due and payable at the option of [Hamilton]. No delay on the part of [Hamilton] in exercising this option shall operate as a waiver or preclude the exercise of such option at any time during the continuance of such default or upon the occasion of any subsequent default. [Hamilton] shall be entitled to recover judgment against [Huber] for such sum without relief from valuation, appraisement laws together with Court costs, attorney's fees and any other damages which may have been caused by [Huber's] breach of this contract. [Hamilton] shall also have the right to recover the judgment in whole or in part by foreclosure of [Huber's] interest hereunder and the sale of the real estate, and shall have the right to have a receiver appointed to take charge of, rent, manage and conserve the real estate herein described during the pendency of any foreclosure action.
[¶6] As the due date for the balloon payment approached in late 2010, Huber talked to Hamilton about extending the contract. According to Huber, Hamilton told him that he could pay an additional $300 per month, in cash, in order to " keep the contract going" ; Huber said there was no discussion on the timeline or how the $300 would be applied. Tr. p. 9-10, 22.
According to Hamilton, however, he " agreed . . . [to] go another year [in order to] give [Huber] time to find the financing." Id. at 69. In addition, Hamilton said he told Huber that the additional $300 per month would not be applied to principal but rather was a penalty for not paying the balloon payment on time. Id. at 70. Hamilton submitted his tax returns showing that he reported the additional $300 per month. In any event, the agreement to extend the contract was oral and never reduced to writing.
[¶7] Huber continued to make the monthly contract payments plus the additional $300 per month. He made thirty-four additional payments of $300-for a total of $10,200-between December 2010 and September 2013. In December 2011 Hamilton asked Huber about making the balloon payment; Huber said he would but never did.
[¶8] In August 2013 Hamilton's attorney sent Huber a written notice of default and demanded payoff ...