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M Jewell, LLC v. Bainbridge

Court of Appeals of Indiana

October 26, 2018

M Jewell, LLC, Appellant-Plaintiff,
v.
Roger Bainbridge, in his capacity as Grant County Auditor; Sarah A. Melford, in her capacity as County Treasurer; John Lawson, in his capacity as a Grant County Commissioner; Mark E. Bardsley, in his capacity as a Grant County Commissioner; SRI, Incorporated, Appellees-Defendants.

          Appeal from the Grant Superior Court No. 27D01-1409-MI-141 The Honorable Marianne L. Vorhees, Special Judge.

          Attorney for Appellant Jon Orlosky Muncie, Indiana Attorneys for Appellee

          Stephen J. Peters David I. Rubin Pamela A. Paige Plunkett Cooney, P.C. Indianapolis, Indiana

          TAVITAS, JUDGE.

         Case Summary

         [¶1] M Jewell, LLC ("M Jewell") appeals the trial court's grant of summary judgment to SRI, Incorporated ("SRI"). We affirm.

         Issue

         [¶2] M Jewell raises one issue, which we restate as whether the trial court properly granted summary judgment to SRI on M Jewell's third-party beneficiary claim.

         Facts

         [¶3] This case is about whether the purchasers of real estate in a tax sale are third-party beneficiaries of contracts between SRI and Grant County. In 1994, Grant County, Indiana, entered into a Services Master Agreement ("SMA") with SRI. In 2010, Grant County and SRI entered into a Tax Sale Support Services Addendum to the SMA ("Addendum") and a 2010 Tax Sale Workplan-Grant County ("Workplan") (collectively, "Agreements"). Under the Agreements, SRI agreed to perform certain services related to tax sales in Grant County, including the preparation and mailing of notices to property owners with delinquent property taxes.

         [¶4] Farmers Mutual Insurance Company of Grant & Blackford Counties ("Farmers Mutual") owned property in Grant County. Farmers Mutual failed to update its mailing address with the Grant County auditor or treasurer, and Farmers Mutual accumulated delinquent property taxes. Farmers Mutual's real estate was placed on a list of properties to be sold at tax sale on September 23, 2010, and SRI sent the notices of tax sale. Because of the erroneous address in the records, the notices were returned unclaimed. Neither SRI nor the auditor's office made any further attempt to notify Farmers Mutual of the tax sale or to locate a more accurate address.

         [¶5] On September 23, 2010, M Jewell purchased the real estate at a tax sale in Grant County for $5, 508.98. M Jewell later filed a petition for an order directing the auditor of Grant County to issue a tax deed, which the trial court granted. A tax deed was issued to M Jewell in December 2011. On February 27, 2012, Farmers Mutual filed a petition to set aside the tax deed and a motion for leave to pay funds into the court in the sum of $6, 985.33 for the delinquent property taxes and interest. The trial court granted the motion for leave to pay funds into the court. The trial court, however, later denied Farmers Mutual's motion to set aside the tax deed.

         [¶6] Farmers Mutual appealed the trial court's order. On appeal, this court concluded that the trial court erred by denying the motion to set aside the tax deed. See Farmers Mut. Ins. Co. of Grant & Blackford Ctys. v. M Jewell, LLC, 992 N.E.2d 751 (Ind.Ct.App. 2013), trans. denied. We noted that, under the statute in effect at the time, the auditor was statutorily required to research its records to determine a more complete or accurate address if both notices are returned due to incorrect or insufficient addresses. Id. at 756 (citing Ind. Code § 6-1.1-24-4). Because the auditor and SRI failed to perform the additional research, we concluded that the statutory notices were not in substantial compliance and the tax deed was void. Id. at 759-60. We directed the trial court to grant Farmers Mutual's petition to set aside the tax deed. M Jewell was reimbursed $6, 997.50 as the statutory refund payment for the real estate.

         [¶7] In September 2014, M Jewell filed a complaint against Roger Bainbridge, in his capacity as Grant County Auditor; Sarah Melford, in her capacity as Grant County Treasurer; John Lawson, in his capacity as a Grant County Commissioner; Michael Burton, in his capacity as a Grant County Commissioner, (collectively, "Grant County"); and SRI. M Jewell alleged in Count I that Grant County was negligent in conducting the tax sale and that M Jewell had been damaged. In Count II, M Jewell alleged that it, as the purchaser of real estate in a tax sale, was a third-party beneficiary of Grant County's contracts with SRI and that M Jewell had suffered damages of $784, 000.00.[1]

         [¶8] Grant County filed a motion for summary judgment, and M Jewell filed a motion to dismiss Grant County as a defendant with prejudice. The trial court granted M Jewell's request and dismissed M Jewell's claims against Grant County with prejudice.

         [¶9] SRI also filed a motion for summary judgment regarding M Jewell's third-party beneficiary claim. SRI argued that M Jewell's claims failed as a matter of law because M Jewell was not a third-party beneficiary of the contracts. SRI also argued that, even if M Jewell was a third-party beneficiary of the contracts, the SMA's terms precluded the damages sought by M Jewell. Finally, SRI argued that M Jewell had already received the statutory refund of the purchase price at the tax sale plus interest and that M Jewell was not entitled to a "windfall." Appellant's App. Vol. II p. 120. M Jewell filed its response to SRI's motion for summary judgment. At a hearing on the motion for summary judgment, SRI and M Jewell agreed that the issue was a matter of law appropriate for summary judgment.

         [¶10] The trial court granted SRI's motion for summary judgment. Regarding the third-party beneficiary claim, the trial court found that, based on the language in the Agreements, "the intent is for SRI to provide the notices and the work necessary to hold the tax sale, to conduct the tax sale, and then to advise property owners that their property was sold in a tax sale and how to redeem it." Id. at 21-22. The trial court did not find "any language that evidences an intent to benefit tax sale purchasers, directly or indirectly." Id. at 22. The trial court noted that the "only intended beneficiaries of the SMA are Grant County and SRI" and that "[a]ny potential profit to a tax sale purchaser such as M Jewell is at best incidental to the performance of the SMA." Id. The trial court found, accordingly, that M Jewell was not a third-party beneficiary of the SMA.

         [¶11] The trial court also found that, even if M Jewell qualified as a third-party beneficiary, M Jewell's claimed damages were precluded by the "SMA's limitation of liability provision." Id. at 24. Finally, the trial court also determined that M Jewell's remedy is wholly statutory, that Indiana Code Section 6-1.1-24-4 "does not provide a private cause of action for M Jewell," and that "Grant County has made M Jewell whole by refunding to M Jewell the amount it bid for the tax sale purchase (plus interest)." Id. at 23, 25. The trial court, accordingly, granted SRI's motion for summary judgment. M Jewell now appeals.

         Analysis

         [¶12] M Jewell appeals the trial court's grant of summary judgment to SRI. Summary judgment is appropriate only when the moving party shows there are no genuine issues of material fact for trial and the moving party is entitled to judgment as a matter of law. Erie Indem. Co. for Subscribers at Erie Ins. Exch. v. Estate of Harris by Harris, 99 N.E.3d 625, 629 (Ind. 2018), reh'g denied; see also Ind. Trial Rule 56(C). Once that showing is made, the burden shifts to the non-moving party to rebut. Schoettmer v. Wright, 992 N.E.2d 702, 705-06 (Ind. 2013). When ruling on the motion, the trial court construes all evidence and resolves all doubts in favor of the non-moving party. Id. at 706. We review the trial court's ruling on a motion for summary judgment de novo, and we take "care to ensure that no party is denied his day in court." Id. "We limit our review to the materials designated at the trial level." Gunderson v. State, Indiana Dep't of Nat. Res., 90 N.E.3d 1171, 1175 (Ind. 2018).

         [¶13] M Jewell and SRI agreed below that there are no genuine issues of material fact in this case. Rather, the issue is whether SRI is entitled to judgment as a matter of law on M Jewell's third-party beneficiary claim.

         [¶14] M Jewell first argues that the trial court erred when it determined M Jewell was not a third-party beneficiary to Grant County's Agreements with SRI. "Generally, only parties to a contract or those in privity with the parties have rights under the ...


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