Opinion
Court of Appeals Case No. 84A01-1607-PL-1639
05-30-2017
Estate of Ladean Kennedy ex rel. Jackie Franklin, Estate of Daraunda Gambill ex rel. Jackie Franklin, Appellants-Plaintiffs, v. SAFR, L.L.C., and Shelly Fonner, Appellees-Defendants.
ATTORNEY FOR APPELLANT Joleen V. Klotz James O. McDonald Everett, Everett & McDonald Terre Haute, Indiana ATTORNEYS FOR APPELLEE Terry R. Modesitt Jared R. Modesitt Joel K. Modesitt Modesitt Law Firm, P.C. Terre Haute, Indiana
MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case. ATTORNEY FOR APPELLANT Joleen V. Klotz
James O. McDonald
Everett, Everett & McDonald
Terre Haute, Indiana ATTORNEYS FOR APPELLEE Terry R. Modesitt
Jared R. Modesitt
Joel K. Modesitt
Modesitt Law Firm, P.C.
Terre Haute, Indiana Appeal from the Vigo Superior Court The Honorable John T. Roach, Judge Trial Court Cause No. 84D01-1302-PL-1605 Mathias, Judge. [1] Ladean Kennedy ("Kennedy") sued Shelly Fonner ("Fonner") and SAFR, L.L.C. ("Safr"), in tort, quasi-contract, and contract in connection with Kennedy's sale to Safr of certain real property in Terre Haute, Indiana. The trial court granted summary judgment in favor of the defendants on all issues. We affirm that judgment as to the tort and quasi-contract claims, but reverse as to breach of contract and remand.
Facts and Procedural History
[2] Daraunda Gambill ("Gambill") died intestate in Terre Haute in January 2010. Kennedy, her daughter, was appointed personal representative of her estate, which included two houses: one on Johnson Avenue in West Terre Haute, Indiana ("the Johnson house"), and one on Hidden Way Street in Terre Haute ("the Hidden Way house"). The Johnson house was mortgaged, but the Hidden Way house was unencumbered. Kennedy lived in the Hidden Way house and wanted to sell the Johnson house and pay off the mortgage with the proceeds. In February 2011, while Kennedy's daughter, Jackie Franklin ("Franklin"), was out shopping in Terre Haute, she saw an ad promising, "Shelly Buys Houses!" Appellant's App. p. 138. Franklin called the telephone number provided. [3] The ad had been placed by Fonner on behalf of Safr. Safr was incorporated by Fonner on February 10, 2011, and dissolved on June 4, 2014. Fonner was not a licensed realtor but had conducted a business of buying, reselling, and letting houses in and around Terre Haute since the mid-2000s. Safr was a limited liability corporation without employees whose single member was Fonner. Safr and Fonner made money by buying houses on terms very favorable to the buyer and then selling them on terms very favorable to the seller. Safr's target market was "people that do not qualify for a mortgage in today's market." Id. at 92. [4] Over the phone, Franklin and Fonner agreed to meet at the Johnson house to discuss the prospect of selling it to Safr. When they arrived, the house had been vandalized. The then-vacant house was generally in poor repair, and the vandalism damage would not be covered by insurance. Fonner decided she was not interested in buying the Johnson house. Then or sometime later, discussion turned to the Hidden Way house. Fonner expressed interest in the Hidden Way house, and the two women agreed to speak again about it. Kennedy would eventually decide that she could live there no longer and wanted to sell. [5] Soon thereafter, Fonner looked up the records for the Hidden Way house and found that title to it was not in Kennedy's or Franklin's name, but in Gambill's. When next Fonner spoke with Franklin, Fonner told her that Kennedy "[could] not sell what she [didn't] own . . . ," id. at 102, and suggested that she speak with a lawyer about getting the Hidden Way house titled in Kennedy's name. Fonner's statement was true in the abstract but false in context: Kennedy could have sold the house in her representative capacity on the estate's behalf with court approval. See Ind. Code § 29-1-15-3. However, neither Kennedy nor Franklin knew that at the time; it does not appear whether Fonner did. [6] On December 5, 2011, Kennedy successfully petitioned the probate court for a partial distribution of the Hidden Way house from her mother's estate to herself. With a lawyer's help, on December 21, 2011, Kennedy in her representative capacity deeded the Hidden Way house to herself in her personal capacity. Kennedy and Franklin then met Fonner at the Hidden Way house to allow Fonner to see it and to discuss selling it to Safr. [7] Kennedy and Franklin met with Fonner in her office on three occasions to discuss and finalize the terms of the proposed sale. On March 9, 2012, Kennedy was presented with a "Real Estate Purchase Contract" drafted by Fonner ("the contract"). Appellant's App. p. 161. It provided in relevant part as follows:
Consideration: The Buyer shall pay the purchase price of $84,824 to the Seller . . . . A down payment of $1,844 shall be paid by the Buyer to the Seller. The balance . . . , $82,980, shall be paid . . . with monthly payments in the amount of $461 continuing for 180 payments. . . . Buyer may pay off entire mortgage without . . . penalty. . . .
Taxes/Special Assessment: Buyer will take over all tax installments beginning in May 2012. . . .
Mortgage/encumbrances: The Seller agrees to keep the property mortgage and lien free during the time in which Buyer is making installment payments . . . .
Deed/Bill of Sale: Seller agrees to sign Warranty Deed directly over to Buyer. In the event of default, Buyer agrees to immediately deed property back over to Seller.
Forfeiture/foreclosure: If the Buyer fails to perform any portion of this contract, as agreed, the Seller may take appropriate action to reclaim the property including the legal action of contract
forfeiture. In the event forfeiture is necessary, the Seller shall also be entitled to attorney fees and costs. The failure of any of the following may constitute grounds for forfeiture: (a) payment of amounts due under this contract; (b) payment of taxes and/or special assessments . . . (g) complying with the provision of this contract. Additionally, the failure to comply with the provision of this agreement by the Buyer shall give the Seller the right to issue a 45 day notice to accelerate the payment of the entire balance of this contract.Id. at 161-62. Kennedy and Franklin asked Fonner whether they needed a lawyer to look over the contract; Fonner answered, "No." Id. at 151. [8] The same day, March 12, 2012, Kennedy and Franklin signed the contract. Kennedy left with a copy of the contract signed only by her and Franklin. Id. at 162. If Fonner had signed the contract that day, she later testified, she would have given a fully executed copy to Kennedy to take with her. Id. at 112. Such a fully executed copy of the contract was not produced until several months after this litigation commenced, dated "3/2012." Id. at 169. On March 12, 2012, Kennedy delivered the deed for the Hidden Way house to Fonner. Id. at 156. [9] On March 23, 2012, Fonner had the deed recorded. This was concededly unauthorized because neither party had completed the sales disclosure form required by Indiana Code section 6-1.1-5.5-3 to be completed by the parties and approved by the county assessor before a conveyance is filed with the county auditor for recordation. Asked why the sales disclosure form was never filed, why the deed was marked "exempt from disclosure," Appellant's App. p. 156, and why the auditor nevertheless recorded the deed, Fonner offered that she "certainly [wasn't] a recording expert . . . ." Id. at 114. No evidence suggests that Fonner induced the auditor improperly to record the deed. Neither party ever had or sought to have the contract recorded. [10] Kennedy and Franklin later became aware from an on-line real estate listing that the Hidden Way house was listed as having been sold by Safr. Alarmed and without an executed copy of the contract, Kennedy filed suit. Kennedy's first complaint was filed on February 14, 2013, alleging fraud and unjust enrichment. By that time, Fonner had paid only $6,454 of the $84,824 purchase price: the $1,844 down payment plus ten monthly payments of $461. In November 2013, nine months after suit was brought, discovery produced a fully executed copy of the contract. On April 24, 2014, Kennedy filed an amended complaint, seeking specific performance in addition to the previous fraud and unjust enrichment claims. [11] After Kennedy filed suit in February 2013, Fonner made one final monthly payment of $461 by check dated March 5, 2013. Appellee's App. p. 20. Thereafter, Fonner claims to have deposited each monthly payment into an "escrow" account. In November 2013, Fonner produced records of the account. The account is held in Safr's name and was opened on October 16, 2013, eight months after Kennedy filed suit. In November 2013, the account held $3,688, or eight months' worth of $461 monthly payments. In her December 2014 deposition, Fonner further admitted that at some point she "f[e]ll behind on paying [property] taxes" as required under the contract. In May 2016, Kennedy designated uncontested property tax records showing a total of fourteen late-payment penalties for the tax years 2013-2015. Id. at 230-31. [12] On June 9, 2015, Fonner and Safr moved for summary judgment in their favor. On July 25, 2015, Kennedy died testate in Eugene, Oregon. On October 6, 2015, Franklin was substituted as plaintiff in this suit as personal representative of Kennedy's estate. For simplicity's sake, we refer to the plaintiff-appellant in this case as "Kennedy." After briefing and a hearing on January 13, 2016, the trial court granted summary judgment in Fonner and Safr's favor on February 25, 2016. Kennedy moved to correct error. After further briefing and a second hearing on May 28, 2016, the trial court denied Kennedy's motion on June 17, 2016. [13] This appeal timely followed. Kennedy presents only one issue as to all three claims: whether genuine disputes of material fact precluded judgment as a matter of law in Fonner and Safr's favor.
Fonner explained the letters "[didn't] really stand for anything specifically." Appellant's App. p. 91.
This is according to designated records from the secretary of state. Appellant's App. p. 152. On December 18, 2014, however, Fonner testified that Safr was still in existence. Id. at 91.
Standard of Review
[14] The propriety of a decision on a motion to correct error after summary judgment depends on the validity of the summary judgment decision. Bixeman v. Hunter's Run Homeowners Ass'n of St. John, Inc., 36 N.E.3d 1074, 1077 (Ind. Ct. App. 2015). As a purely legal question, we review de novo the trial court's grant of judgment as a matter of law. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). We will not affirm unless the designated evidence shows there is no genuine issue as to any material fact. Id. "A fact is material if its resolution would affect the outcome of the case, and an issue is genuine if a trier of fact is required to resolve the parties' differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences." Id. (internal quotation and citation omitted). We draw all reasonable inferences in the nonmovant's favor. Id. "[A]lthough the [nonmovant] has the burden on appeal of persuading us that the grant of summary judgment was erroneous, we carefully assess the trial court's decision to ensure that she was not improperly denied her day in court." Id. (internal quotation and citation omitted).
Discussion and Decision
I. Fraud [15] Kennedy alleged three species of fraud: actual, constructive, and criminal. The material facts were undisputed save one: whether Fonner's intent was fraudulent. However, because the undisputed material facts showed both a lack of injury and a lack of actionable misrepresentation, irrespective of Fonner's intent, summary judgment was properly entered in Fonner and Safr's favor. [16] We take Kennedy's basic theory of the fraud, of any species, to be that Fonner — by having the deed to the Hidden Way house recorded when it should not have been and by not recording the contract, or even signing it until sometime after Kennedy had — concealed Kennedy's interest in the land from the world, specifically from any current or future creditors of Safr, to the detriment of Kennedy's rights against those creditors should they ever seek to execute against the Hidden Way house. Fonner accomplished this concealment, argues Kennedy, by misrepresenting to Kennedy her authority as personal representative of Gambill's estate and the need for counsel to review the terms of the contract, thereby evading judicial and lawyerly scrutiny of the proposed transaction. [17] This theory, however, turns on the misconception that, after March 12, 2012, Kennedy still had an interest in the land. She did not. Indeed, "[u]nder a typical conditional land contract, the vendor retains legal title [by not conveying a deed to the property] until the total contract price is paid by the vendee," the equitable titleholder. Skendzel v. Marshall, 261 Ind. 226, 234, 301 N.E.2d 641, 646 (1973) (emphasis added). Indiana "views a conditional land contract as a sale with a security interest in the form of legal title reserved by the vendor. . . . [T]he retention of title by the vendor is the same as reserving a lien or mortgage." Id. [18] However, Kennedy did not retain legal title in the Hidden Way house. Under the terms of the contract, she deeded the house to Safr on March 12, 2012, and thereby transferred legal title. Thus, Kennedy reserved no lien or mortgage on the Hidden Way house, and became an ordinary, unsecured, in personam contract creditor of Safr. Without further action on her part, Kennedy had no interest in the land. Assuming a valid contract, this result is not the measure of her damages in tort; it is the position she freely and validly contracted for. [19] Even if Kennedy had some protectable interest in the land, any injury to her, due to the subordination of her interest to those of Safr's potential creditors, remained purely speculative and hypothetical throughout this litigation. No actual creditors of higher priority were emptying Fonner's and Safr's pockets to Kennedy's detriment. As defense counsel argued below, "Potential greater risk of damages is not damages." Tr., Hr'g Mot. Correct Error, p. 14; In re Julie R. Waterfield Irrevocable Trust Agreement Dated October 21, 1997, 960 N.E.2d 800, 809-10 (Ind. Ct. App. 2011) (citing cases for proposition that "fraud without injury does not give rise to a cause of action"; holding that "abstract" "legal" injury to body of trust does not state actual or constructive fraud claim and cannot survive motion for summary judgment where discretionary distributions to beneficiaries not actually reduced), trans. denied. [20] To the extent that Kennedy's claims may be read as alleging fraud in the inducement of the contract itself, a "hybrid" of tort and contract claims, Lighting Litho, Inc. v. Danka Indus., Inc., 776 N.E.2d 1238, 1242 (Ind. Ct. App. 2002) (citation omitted), trans. denied, they still must fail. One who seeks to disaffirm a contract as fraudulently procured, or to affirm it and win damages, id. at 1241 (two remedies of fraudulent-inducement plaintiffs), must show a knowingly or recklessly false material misrepresentation of past or existing fact. Showalter, Inc. v. Smith, 629 N.E.2d 272, 274 (Ind. Ct. App. 1994), trans. denied, abrogated on other grounds by Mitchell v. Mitchell, 695 N.E.2d 920 (Ind. 1998). Kennedy refers to two of Fonner's statements on this point but neither rises to a basis for fraudulent inducement. [21] Fonner's statement that "[Kennedy could] not sell what she [didn't] own . . . ," Appellant's App. p. 102, to the extent that it actually was a misstatement, was one of law, not of fact. "[A] misstatement of law cannot form the basis of fraud because everyone is presumed to know the law and . . . the allegedly defrauded party [therefore] cannot justifiably have relied on the misstatements." Am. United Life Ins. Co. v. Douglas, 808 N.E.2d 690, 703 (Ind. Ct. App. 2004), trans. denied. Similarly, Fonner's statement to Kennedy that she did not need a lawyer to look over the contract amounted to Fonner's opinion as to the wisdom of seeking counsel's advice in this case, rather than a fact. Such a statement, like one that a car to be purchased is a "good" car or that a deal to be made is a "good" deal, is not actionable misrepresentation, but a judgment as to which reasonable persons could differ. See Kreighbaum v. First Nat'l Bank & Trust, 776 N.E.2d 413, 421 (Ind. Ct. App. 2002) (home appraisal nonactionable statement of opinion), trans. denied.; Restatement (Second) of Contracts § 168 cmt. b (Am. Law Inst. 1981) ("Statements of judgment as to quality, value, . . . or similar matters are common examples [of nonactionable opinion]."); Restatement (Second) of Torts § 538A (Am. Law Inst. 1977) (same). [22] Under the specific rubric of constructive fraud, Kennedy showed no grounds for finding that Fonner ever breached the duty of "good faith and fair dealing" imposed on her by her "superio[r]" position as a seller "in the unique possession of knowledge" by remaining silent when she ought not have. Mullen v. Cogdell, 643 N.E.2d 390, 401 (Ind. Ct. App. 1994) (holding constructive fraud may be predicated on relationship of buyer and seller), trans. denied. There was no showing that Kennedy expected something (for example, retention of legal title to the Hidden Way house until closing) other than what she received under the contract. [23] Kennedy failed to state a claim for fraud of any species, no matter Fonner's intent. We therefore affirm summary judgment in favor of Fonner and Safr on these claims. II. Unjust Enrichment [24] As above, the material facts were largely undisputed. Because a valid contract precludes a claim for unjust enrichment, summary judgment was properly entered in Fonner and Safr's favor. [25] A claim for unjust enrichment belongs to the class of claims sounding in "constructive" contract or quasi-contract. Zoeller v. E. Chi. Second Century, Inc., 904 N.E.2d 213, 220-21 (Ind. 2009). Where, "under the law of natural and immutable justice there should be a recovery as though there had been a promise" enforceable in contract, Bayh v. Sonnenberg, 573 N.E.2d 398, 408 (Ind. 1991) (citation omitted), the law will imply a contract were in fact none existed. [26] By their nature, quasi-contract claims presuppose no contract enforceable at law. Accordingly, "a valid contract precludes the substitution of and the implication in law of terms regarding the subject matter covered by the express terms of the contract. When the rights of parties are controlled by an express contract, recovery cannot be based on a theory implied in law." Keystone Carbon Co. v. Black, 599 N.E.2d 213, 216 (Ind. Ct. App. 1992), cited in E. Chi. Second Century, 904 N.E.2d at 221. [27] For this reason, Kennedy failed to state a claim as to unjust enrichment. Kennedy could not claim that Safr's retention of the Hidden Way house would be unjust as to her because that was precisely the result for which she validly contracted. Safr does not now propose to retain the Hidden Way house without compensation; indeed, it pronounces itself "ready, willing[,] and able" to continue the monthly payments due under the contract's terms. Appellee's Br. at 6. Judgment as a matter of law was properly entered against Kennedy as to the unjust enrichment claim. [28] It is true that Gambill's estate did not contract with Safr and they were never in privity of contract. However, Gambill's estate validly deeded the house to Kennedy in her personal capacity "for good and sufficient consideration," Appellant's App. p. 20 ("Personal Representative's Deed"), and Kennedy then validly contracted with Safr to sell the house. No party has received a benefit without paying for it or enforceably contracting to pay for it. Accordingly, there could be no unjust enrichment, and judgment as a matter of law was properly entered against Gambill's estate on this claim. III. Breach of Contract [29] As above, the material facts are largely undisputed. Here, however, the material facts precluded summary judgment in Fonner and Safr's favor. [30] The contract provides, "In the event of default, Buyer agrees to immediately deed property back to seller." Id. at 169. Kennedy sought to enforce this term by her action for specific performance. The contract does not define default nor specify a procedure for putting a breaching party in default with opportunity to cure. However, we take the provision that the land is to be conveyed "immediately" "[i]n the event of default" to waive the buyer's right to any notice of nonperformance. Id. The contract does provide that failure of "payment of amounts due" and "payment of taxes and/or special assessments" "may constitute grounds for forfeiture." Id. Such payments are required by the contract's terms. Id. ¶¶ 3 (monthly payments), 4 (payment of taxes and special assessments). [31] That Fonner and Safr breached the contract cannot be disputed. Kennedy's unrebutted designations establish that Safr failed to pay at least four taxes and assessments due in 2015 and 2016. Id. at 225-32. In December 2014, Fonner further admitted that "an installment" of property taxes had been "missed" sometime between 2012 and 2014. Id. at 122. Thus, in the five years since the contract was executed, Fonner and Safr have failed timely to pay taxes and assessments in at least three of them. [32] Fonner and Safr seek to excuse the late tax and assessment payments as not a material breach of the contract. Even if they are correct, the materiality of the breach is irrelevant to Kennedy's action for specific performance. A nonbreaching party seeking rescission of a contract must show the other party's material breach that went to the heart of the contract, Gabriel v. Windsor, Inc., 843 N.E.2d 29, 45 (Ind. Ct. App. 2006), trans. denied, but Kennedy's action is not for rescission. The same is true in an action for contract forfeiture, Ogle v. Wright, 172 Ind. App. 309, 316, 360 N.E.2d 240, 244 (1977), but neither is Kennedy's action one for forfeiture. [33] Finally, as in the cases relied on by Fonner and Safr, one party's material breach will excuse the other party's nonperformance, will preclude the materially breaching party from enforcing the contract, and will not preclude the other party from enforcing the contract. Koch Dev. Corp. v. Koch, 996 N.E.2d 358, 376 (Ind. Ct. App. 2013) ("[Appellants'] failure to timely perform was a material breach that excused any obligation on the part of [the appellee] to [perform under the contract]."), trans. denied; Frazier v. Mellowitz, 804 N.E.2d 796, 804 (Ind. Ct. App. 2004) (examining when "a party's uncured material failure to render or to offer performance discharges the other party's remaining duties to render performance") (quoting Restatement (Second) of Contracts § 242 (Am. Law Inst. 1981)). Here, Kennedy is not seeking to excuse her own nonperformance by Fonner and Safr's material breach; Kennedy seeks to enforce a contract which Kennedy has already fully performed. Whether the late tax and assessment payments were material breach is irrelevant to Kennedy's cause of action. [34] Moreover, the late tax and assessment payments were not the only breach. Fonner and Safr have not made the monthly payments due under the contract since March 2013, fully four years of missed payments. They seek to excuse this failure by arguing it was justified by this court's decision in Splittorff v. Fehn, 810 N.E.2d 385 (Ind. Ct. App. 2004). There, the vendee of a conditional land sale contract ceased payment under the contract when she discovered three of the vendor's creditors had obtained judgment liens against the vendor. We held this conduct was justified, and did not bar the vendee from enforcing the contract, because the vendee risked double payment if the lien holders subsequently acquired the vendor's rights to receive the vendee's payments in satisfaction of the liens they held. Id. at 389 (relying on Rural Acceptance Corp. v. Pierce, 157 Ind. App. 90, 298 N.E.2d 499 (1973)). However, this case presents no such situation. There was never any risk of double payment to Fonner and Safr; their debt was owed to Kennedy or not at all. [35] Fonner and Safr respond that, if payment had continued, Safr "could have forfeited every payment made after the lawsuit was filed and lost the real estate to [Kennedy] in addition to the payments . . . if the court [had concluded] that the contract was void a[b] initio" because fraudulently procured. Appellee's Br. at 8. This is not so. "[A] party bringing an action based upon fraudulent inducement in the execution of a contract has an election of remedies: [s]he may stand upon the contract and seek damages, or rescind the contract, return any benefits [s]he may have received, and seek a return to the status quo ante." A.G. Edwards and Sons, Inc. v. Hilligoss, 597 N.E.2d 1, 3 (Ind. Ct. App. 1991). The doctrine of election of remedies would have forced Kennedy to choose between rescission and damages before judgment. If she had chosen the latter, Kennedy's damages for breach would have been reduced by any benefits she had already received. Fonner and Safr could not have increased their exposure to liability by simply continuing to perform the contract. [36] Finally, Fonner and Safr's contention that the payments were "h[e]ld for the benefit" of Kennedy is incorrect. Appellee's Br. at 8. The account in which Fonner and Safr have purportedly set aside Kennedy's payments is not an "escrow" account:
The very definition of an escrow involves the holding of [an] instrument, complete in form, signed and sealed, prepared for delivery to the obligee, by a third person, who acts as the agent of the obligors and obligee, and who is to make the delivery, not upon some act done by the obligors, but upon the performance of some condition by the obligee.Deardorff v. Foresman, 24 Ind. 481, 495-96 (1865) (emphasis added). Here, payments due under the contract are being held in an ordinary bank account totally controlled by Fonner and in the name of an entity which, according to Kennedy's designations, no longer exists. Those funds are not to be disbursed on the performance of some condition by Kennedy, but as Fonner sees fit to disburse them. This not an escrow, and in any event cannot be relied on by Fonner and Safr to excuse their nonperformance when performance has long been due. [37] It remains to be decided whether specific performance was available to Kennedy as a remedy for Fonner and Safr's breach. Specific performance is an equitable remedy. Kesler v. Marshall, 792 N.E.2d 893, 896 (Ind. Ct. App. 2003), trans. denied. Such a remedy is generally unavailable if an adequate remedy exists at law. Id. at 897. Because "each piece of real estate is considered unique, without an identical counterpart anywhere else in the world," our courts usually "order specific performance of contracts for the purchase of real estate as a matter of course." Id. at 896. [38] This policy may apply to land contract vendors with somewhat less force than to vendees, as vendors generally do not "obtain property in the transaction, but rather only money." Id. at 897. Even this consideration has yielded to "[t]he equitable doctrine . . . that enforcement of contracts must be mutual, and, the vendee being entitled to specific performance, [her] vendor must likewise be permitted" to enforce the contract. Migatz v. Stieglitz, 166 Ind. 361, 364, 77 N.E. 400, 401 (1906) (awarding specific performance to land contract vendor), quoted in Metro Holdings One, LLC v. Flynn Creek Partner, LLC, 25 N.E.3d 141, 163 (Ind. Ct. App. 2014), trans. denied. Moreover, unlike the usual land contract vendor, here Kennedy stood to obtain, not money, but the return of property under the contract. [39] Finally, unlike Kesler, and like Metro Holdings One, here the remedy sought was contracted for. See Metro Holdings One, 25 N.E.3d at 164 (distinguishing Kesler on this basis). The contract provided, "If the Buyer fails to perform any portion of this contract, as agreed, the Seller may take appropriate action to reclaim the property . . . ." Appellant's App. p. 169. Given the contract term that the buyer on default will "immediately" convey the land back to the seller, id., such "appropriate" action presumably includes one for specific performance of the term giving rise to the remedy sought. "We will not invalidate a remedy for which the parties have contracted." Metro Holdings One, 25 N.E.3d at 164 (quoting Humphries v. Ables, 789 N.E.2d 1025, 1036 (Ind. Ct. App. 2003)). [40] Because Fonner and Safr breached the contract and Kennedy was entitled to the remedy she sought, summary judgment in Fonner and Safr's favor on Kennedy's contract claim was improper.
Actual common-law fraud is proved by a party's knowingly or recklessly false statement of material fact, intended to induce the other party's reliance on that statement, on which the other party does justifiably rely, proximately causing injury to the other party. Epperly v. Johnson, 734 N.E.2d 1066, 1073 (Ind. Ct. App. 2000).
Constructive common-law fraud is implied by operation of law where a defendant's conduct, if approved, would secure her an unconscionable advantage, irrespective of her intent. Demming v. Underwood, 943 N.E.2d 878, 892 (Ind. Ct. App. 2011) (citation omitted), trans. denied. In place of fraudulent intent, constructive fraud substitutes "a duty owing by the [defendant] to the [plaintiff] due to their relationship" and "the gaining of an advantage by the [defendant] at the expense of the [plaintiff]." Id. (quoting Rice v. Strunk, 670 N.E.2d 1280, 1284 (Ind. 1996)). Otherwise, the core elements of constructive fraud are similar to their actual counterparts: a deceptive material misrepresentation of fact, or remaining silent when the defendant's duty required the contrary; the plaintiff's reliance on the defendant's misrepresentation or silence; and injury proximately caused. Id.
Under the Crime Victims' Compensation Act, I.C. § 34-24-3-1, a plaintiff who has "suffer[ed] a pecuniary loss" as a result of certain property crimes, including fraud, can recover treble damages in a civil action, as well as costs and a reasonable fee. Id. §§ (1) through (3). "A person who . . . with intent to defraud the person's creditor . . . , conceals, encumbers, or transfers property" commits criminal fraud. I.C. § 35-43-5-4(8). A CVCA plaintiff need only prove the elements of the crime by a preponderance of the evidence; a criminal conviction or proof beyond a reasonable doubt is not required. Klinker v. First Merchs. Bank, N.A., 964 N.E.2d 190, 193 (Ind. 2012).
This was Fonner's usual practice when she sold houses, so that she "remain[ed] the [legal] title holder . . . until it's paid in full." Appellant's App. p. 115 (Fonner's deposition). When buying houses, however, Fonner insisted on taking legal title before fully paying the purchase price. Id.
Below the parties argued extensively about the possibility of Kennedy filing a vendor's lien vel sim., see I.C. § 32-28-4-1, thereby giving notice to the world of Safr's debt to her.
American United recognized an exception to this rule for "misstatements of law made by an attorney or someone professing knowledge in legal matters." 808 N.E.2d at 704. But Fonner was neither an attorney nor at any time "claim[ed] a special knowledge or expertise in the law." Id. The exception does not apply.
Under "Forfeiture/foreclosure," the contract further provides that "failure to comply [with the contract's terms] by the Buyer shall give the Seller the right to issue a 45 day notice to accelerate the payment of the entire balance," Appellant's App. p. 169 (emphasis added), but does not require such notice as a condition precedent to an action for forfeiture or any other remedy. --------
Conclusion
[41] We affirm summary judgment in favor of Fonner and Safr as to fraud and unjust enrichment. We reverse as to breach of contract and remand for proceedings consistent with this opinion. [42] Affirmed in part, reversed in part, and remanded. Baker, J., and Pyle, J., concur.