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RCM Phoenix Partners, LLC v. 2007 East Meadows, LP

Court of Appeals of Indiana

January 11, 2019

RCM Phoenix Partners, LLC, Appellant-Plaintiff,
2007 East Meadows, LP, Appellee-Defendant.

          Appeal from the Marion Superior Court The Honorable James B. Osborn, Judge Trial Court Cause No. 49D14-0807-PL-34494

          Attorneys for Appellant F. Anthony Paganelli Thomas D. Perkins Stephanie L. Grass Paganelli Law Group Indianapolis, Indiana

          Attorneys for Appellee Stephen J. Peters David I. Rubin Plunkett Cooney, P.C. Indianapolis, Indiana

          BAILEY, JUDGE.

         Case Summary

         [¶1] This case involves a ten-year-old lawsuit arising from a real estate transaction that did not close. The seller was appellant, RCM Phoenix Partners, LLC ("Phoenix"), and the potential buyer was appellee, 2007 East Meadows, LP ("Meadows"). Phoenix sued Meadows for, among other things, [1] slander of title based on the filing of a lis pendens notice and resulting damages. Phoenix appeals from the trial court decision denying its slander of title claim.

         [¶2] We affirm.


         [¶3] Phoenix raises two issues on appeal which we restate as follows:

1. Whether Meadows waived its claim of absolute privilege regarding its lis pendens notice by raising it for the first time on appeal.
2. Whether the trial court erred in denying Phoenix's slander of title claim.

         Facts and Procedural History

         [¶4] In July of 2007, Phoenix entered into a written Purchase and Sale Agreement ("Purchase Agreement") with Eureka Holdings Acquisitions, LLP ("Eureka"), under which Eureka would purchase an apartment community in Indianapolis ("the Property") from the owner/seller, Phoenix, for $9.05 million. In September of 2007, Eureka assigned the Purchase Agreement to Meadows. As Eureka's assignee, Meadows was required to pay the purchase price through a combination of cash at closing and assumption of Phoenix's existing mortgage on the Property with Wachovia Bank ("Wachovia").

         [¶5] Because Meadows experienced delays in obtaining approval from Wachovia for Meadows to assume the mortgage on the Property, the parties agreed to several extensions on the closing date specified in the Purchase Agreement. Meanwhile, in December of 2007, the Indiana Housing Authority ("IHA") began an enforcement proceeding against Phoenix regarding the condition of the apartments located on the Property. In early-to-mid December of 2007, Paul Morris ("Morris"), a co-owner of the Property, informed Harris Block ("Block"), an employee of Meadows, about the IHA civil enforcement action.

         [¶6] By January of 2008, Wachovia still had not approved Meadows to assume the mortgage on the Property. Meadows requested from Phoenix another extension of time on the closing date, but Phoenix denied that request. On January 22, 2008, Meadows filed a lawsuit in Texas, [2] alleging Phoenix breached the Purchase Agreement and committed fraud, based on the pending enforcement action on the Property. On January 25, 2008, Meadows filed in Texas its first lis pendens notice in which it gave notice of the pending Texas lawsuit related to the Property.

         [¶7] On July 31, 2008, Phoenix filed a lawsuit in Indiana in which it claimed Meadows breached the Purchase Agreement and, therefore, Phoenix was entitled to keep the earnest money deposit made by Meadows. That lawsuit was subsequently stayed pending the outcome of the lawsuit in Texas. On August 15, 2008, Meadows filed in the Indiana court an amended lis pendens notice of both the pending Texas and Indiana lawsuits.

         [¶8] On April 14, 2010, the Court of Appeals of Texas affirmed the Texas trial court's dismissal of Meadows' lawsuit for lack of personal jurisdiction over Phoenix. 2007 East Meadows, 310 S.W.3d at 208-09. In July 2011, Meadows moved to lift the stay in the Indiana case and that motion was granted. On August 15, 2011, Meadows filed its answer and counter-claims against Phoenix for breach of contract and fraud but did not raise any affirmative defenses. On September 17, 2012, Phoenix filed a supplemental complaint adding a claim against Meadows for slander of title and the resulting damages. On October 17, 2012, Meadows filed its answer to the supplemental complaint and also raised its counter-claims for breach of contract and fraud and raised seven affirmative defenses-none of which alleged its lis pendens notice was privileged as a matter of law. Appellant's App., Vol. II, at 238-39.

         [¶9] On December 6, 2013, after learning that Phoenix was in negotiations to sell the Property to a third party, Meadows filed its third amended lis pendens notice regarding the pending Indiana case. On March 31, 2014, both parties moved for summary judgment as to Meadows' counter-claims for breach of contract and fraud. In an order dated June 26, 2014, the trial court granted summary judgment in favor of Phoenix and dissolved Meadows' pending lis pendens notice. Appealed Order at 7, Finding of Fact 32; Tr. Vol. III at 70. Meadows appealed.

         [¶10] In 2007 East Meadows, LP v. RCM Phoenix Partners, LLC, No. 49A05-1407-PL- 300 (Ind.Ct.App. Jan. 20, 2016), trans. denied, a panel of this court affirmed the June 26, 2014, order granting Phoenix summary judgment on Meadows' counter-claims for breach of contract and fraud. On July 28, 2016, our Supreme Court denied transfer on that decision. 2007 East Meadows, LP v. RCM Phoenix Partners, LLC, 57 N.E.3d 816 (Ind. 2016). On remand, the trial court issued an order noting that the only remaining claims were Phoenix's claims for retainer of the earnest money and slander of title. Following a two-day bench trial, on May 14, 2018, the trial court entered an order in favor of Phoenix regarding its claim for retention of the earnest money but found in favor of Meadows regarding Phoenix's slander of title and damages claim. In doing so, the trial court issued findings of fact and conclusions of law. Regarding the slander of title claim, the trial court concluded that "[a]lthough Meadows made what eventually were found to ...

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