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Deason v. McWhorter

Court of Appeals of Indiana

September 27, 2018

Dr. Curtis K. Deason and Connie S. Deason, Appellants-Defendants,
v.
Bill R. McWhorter and Heather McWhorter Revocable Living Trust, Dated January 24, 2003, Appellee-Plaintiff.

          Appeal from the Howard Superior Court The Honorable A. Christopher Lee, Special Judge Trial Court Cause No. 34D02-1505-PL-407

          Attorneys for Appellants Justin K. Clouser Jeffrey M. Miller Noel Law Kokomo, Indiana

          Attorney for Appellee T. Andrew Perkins Peterson Waggoner & Perkins, LLP Rochester, Indiana

          KIRSCH, JUDGE

         [¶1] Dr. Curtis K. Deason and Connie S. Deason (together, "the Deasons") appeal the trial court's order awarding judgment in favor of the Bill R. McWhorter and Heather McWhorter Revocable Living Trust, Dated January 24, 2003, ("the Trust") for damages after the Deasons defaulted on a contract for sale of real estate. The Deasons raise several issues for our review that we consolidate and restate as: whether the trial court inappropriately awarded the Trust a remedy of foreclosure in contradiction to the language of the contract for sale of real estate.

         [¶2] We reverse and remand.

         Facts and Procedural History

         [¶3] On March 18, 2009, the Deasons and the Trust entered into a Conditional Contract for Sale of Real Estate ("the Contract") to facilitate the Deasons' purchase of real property including a residence located at 3473 S. 150 E. in Kokomo, Indiana ("the Property") for the amount of $490, 000.00. Over the course of several years, the Deasons made a total of thirty-seven installment payments of $2, 923.31 each, as well as a down payment and earnest money payment of $25, 500.00. Appellants' App. Vol. 2 at 81. The remaining balance on the Contract was $462, 500.00. Id. The total of all installment payments towards the value of the Contract was $108, 162.47. Id. The remaining balance on the Contract after all payments were applied equaled $445, 442.07, approximately 4% of the total purchase price. Id. at 82.

         [¶4] Pursuant to the Contract, the entire remaining balance owed was due in a single balloon payment on April 18, 2012. Id. at 58. The Deasons were unable to make the balloon payment and, instead, tendered a regular monthly payment, which breached the Contract. At trial, the parties' testimony diverged on the topic of whether Bill McWhorter ("McWhorter"), as trustee, was informed of the Deasons' intent to leave the Property. McWhorter testified that the Deasons never asked him about staying on the Property even though they could not pay the balloon payment and that the Deasons never told him that they would be leaving. Tr. Vol. 2 at 119-20. McWhorter testified that the only thing he told the Deasons was "we have to live by what's in the [C]ontract." Id. at 119. Curtis Deason testified that he informed McWhorter that the Deasons would be leaving and stated that McWhorter told them to leave the premises by May 18, 2012. Id. at 136-37. The Trust, through McWhorter, took possession of the Property shortly after the Deasons left on or around May 18, 2012. Id. at 59. After the Deasons moved from the Property, McWhorter had the locks changed, and he began living in the home. Id. at 121. Since May 2012, when McWhorter took possession of the Property, it has been titled in his name alone. Id. at 59, 130.

         [¶5] On May 27, 2015, the Trust filed a complaint against the Deasons for damages resulting from the Deasons' breach of the Contract. The Trust sought foreclosure and a judgment consisting of "the outstanding unpaid principal balance, together with interest from and after the date of the default, late charges, default-related expenses and advances, reasonable attorney fees and costs of this action, and all other expenses incurred in connection with this cause." Appellants' App. Vol. 2 at 28. A bench trial was held on October 17, 2017. At trial, the Trust presented two expert witnesses to testify regarding the value of the Property, and one of the experts testified that the Property had an appraised value of $316, 000.00. Tr. Vol. 2 at 38. To support their valuation of the Property, the Deasons submitted an order from McWhorter's dissolution case that ordered that the Property be listed for sale in the amount of $450, 000.00 and the Trust's insurance policy on the Property. Appellants' App. Vol. 2 at 45; Tr. Vol. 2 at 127.

         [¶6] The trial court also heard evidence of physical damage that the Trust discovered after it took possession of the Property from the Deasons. Much of this evidence came in over the Deasons' continuing objection. Additionally, the Trust offered evidence of the attorney fees it had incurred in bringing the breach of contract action. On January 11, 2018, the trial court issued its "Judgment, Findings of Fact and Conclusions of Law," which entered judgment for the Trust and against the Deasons in the amount of $153, 335.24 and foreclosed and extinguished the Deasons' interest in the Property. Appellants' App. Vol. 2 at 25. The trial court reached this amount by applying the balance of the Contract purchase price, unpaid taxes, repairs, and attorney and legal fees, and then subtracting the value of the Property, which it found to be $316, 000.00. Id. at 23-25. The Deasons now appeal.

         Discussion and Decision

         [¶7] When a trial court has made findings of fact, we review the sufficiency of the evidence using a two-step process. Huber v. Sering, 867 N.E.2d 698, 706 (Ind.Ct.App. 2007), trans. denied. We first determine whether the evidence supports the trial court's findings of fact, and then we determine whether those findings of fact support the trial court's conclusions of law. Id. We will set aside the findings only if they are clearly erroneous. Id. Findings are clearly erroneous only when the record contains no facts to support them either directly or by inference. Campbell v. Campbell, 993 N.E.2d 205, 209 (Ind.Ct.App. 2013), trans. denied. A judgment is clearly erroneous if it applies the wrong legal standard to properly found facts. Id. In applying this standard, we neither reweigh the evidence nor judge the credibility of the witnesses. Merrillville 2548, Inc. v. BMO Harris Bank N.A., 39 N.E.3d 382, 389 (Ind.Ct.App. 2015), trans. denied. Rather, we consider the evidence that supports the judgment and the reasonable inferences to be drawn therefrom. Id. To make a determination that a finding or conclusion is clearly erroneous, our review of the evidence must leave us with the firm conviction that a mistake has been made. Kieffer v. Trockman, 56 N.E.3d 27, 33 (Ind.Ct.App. 2016).

         [¶8] The Deasons argue that the trial court's order was clearly erroneous because it awarded the Trust both forfeiture and foreclosure remedies. They contend that the Trust, through its actions after the Deasons defaulted on the Contract, elected a remedy of forfeiture, which was the remedy warranted by the language in the Contract. They also assert that because the Trust elected a forfeiture remedy, it was barred from also seeking a remedy of ...


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