Opinion
23A-CT-3090
06-21-2024
Nathan L. Reitenour and Jamie M. Reitenour, Appellants-Plaintiffs v. M/I Homes of Indiana, L.P., Appellee-Defendant
APPELLANTS PRO SE Jamie M. Reitenour Nathan L. Reitenour Indianapolis, Indiana ATTORNEY FOR APPELLEE Elizabeth S. Schmitt Easter & Cavosie Carmel, Indiana
Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision is not binding precedent for any court and may be cited only for persuasive value or to establish res judicata, collateral estoppel, or law of the case.
Appeal from the Marion Superior Court The Honorable Patrick J. Dietrick, Judge Trial Court Cause No. 49D12-2009-CT-32454
APPELLANTS PRO SE Jamie M. Reitenour Nathan L. Reitenour Indianapolis, Indiana
ATTORNEY FOR APPELLEE Elizabeth S. Schmitt Easter & Cavosie Carmel, Indiana
MEMORANDUM DECISION
Crone, Judge.
Case Summary
[¶1] Nathan L. Reitenour and Jamie M. Reitenour purchased a home from M/I Homes of Indiana, L.P. (M/I Homes). Shortly thereafter, sewage backed up into the home. The Reitenours sought to rescind their purchase agreement with M/I Homes based on alleged fraudulent inducement. The parties filed crossmotions for summary judgment. The trial court granted M/I Homes's motion and denied the Reitenours' motion. On appeal, the Reitenours argue that the trial court erred. We disagree and therefore affirm.
Facts and Procedural History
[¶2] In April 2017, the Reitenours entered into an agreement to purchase a home being constructed by M/I Homes in Lawrence. The home passed all relevant inspections, and a certificate of occupancy was issued on May 25, 2017. The Reitenours closed on and moved into the home the next day. On June 13, 2017, a sewage backup occurred that was caused by a broken sewer lateral at the exterior of the foundation.
[¶3] In September 2020, the Reitenours filed a complaint against M/I Homes and asserted claims of fraud and breach of contract. Pursuant to a clause in the purchase agreement, M/I Homes filed a motion to compel arbitration, which the trial court granted. The Reitenours appealed. Another panel of this Court reversed and remanded, holding that the arbitration order was premature because the Reitenours had "not yet definitively" chosen the remedy of damages, as opposed to rescission of the purchase agreement. Reitenour v. M/I Homes of Ind., L.P., 176 N.E.3d 505, 514 (Ind.Ct.App. 2021).
[¶4] On remand, the Reitenours amended their complaint to assert only a claim of fraudulent inducement, and they elected the remedy of rescinding the purchase agreement, thereby avoiding arbitration. The parties filed cross-motions for summary judgment. In September 2023, after a hearing, the trial court issued an order granting M/I Homes's motion and denying the Reitenours' motion. This appeal ensued. Additional facts will be provided below.
At the summary judgment hearing, discussion was had regarding a constructive fraud claim. And in its order, the trial court determined that M/I Homes was entitled to judgment as a matter of law on that claim. We note, however, that neither the Reitenours' amended complaint, nor their appellate briefs, nor the cases cited therein address constructive fraud, either explicitly or implicitly. Absent any argument from the Reitenours, cogent or otherwise, we do not address the issue.
Discussion and Decision
[¶5] "Summary judgment is a tool which allows a trial court to dispose of cases where only legal issues exist." Rossner v. Take Care Health Sys., LLC, 172 N.E.3d 1248, 1254 (Ind.Ct.App. 2021), trans. denied. We review a court's ruling on a summary judgment motion de novo, applying the same standard as the trial court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). "Summary judgment is appropriate only if the designated evidence shows there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Rossner, 172 N.E.3d at 1254 (citing, inter alia, Ind. Trial Rule 56(C)). We must accept as true those facts established by the designated evidence favoring the non-moving party. Brill v. Regent Commc'ns, Inc., 12 N.E.3d 299, 309 (Ind.Ct.App. 2014), trans. denied. "Any doubt as to any facts or inferences to be drawn therefrom must be resolved in favor of the non-moving party." Buddy &Pals III, Inc. v. Falaschetti, 118 N.E.3d 38, 41 (Ind.Ct.App. 2019) (quoting Goodwin v. Yeakle's Sports Bar &Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016)), trans. denied.
[¶6] "We may affirm the grant of summary judgment on any basis argued by the parties and supported by the record. However, neither the trial court nor the reviewing court may look beyond the evidence specifically designated to the trial court." Sapp v. Flagstar Bank, FSB, 956 N.E.2d 660, 663 (Ind.Ct.App. 2011) (citation omitted). "Our standard of review is not altered by the fact that the parties made cross-motions for summary judgment. Instead, we consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law." Id. (citation omitted). "A trial court's findings on summary judgment are helpful in clarifying its rationale, but they are not binding on this court on review." Brandell v. Secura Ins., 173 N.E.3d 279, 284 (Ind.Ct.App. 2021). "A trial court's grant of summary judgment is clothed with a presumption of validity, and the party who lost in the trial court has the burden of demonstrating that the grant of summary judgment was erroneous." Hussain v. Salin Bank &Tr. Co., 143 N.E.3d 322, 328 (Ind.Ct.App. 2020), trans. denied.
[¶7] The Reitenours have appealed pro se. A pro se litigant is held to the same legal standards as a licensed attorney. Zavodnik v. Harper, 17 N.E.3d 259, 266 (Ind. 2014). This means that pro se litigants are bound to follow the established rules of procedure and must be prepared to accept the consequences of their failure to do so. Basic v. Amouri, 58 N.E.3d 980, 983-84 (Ind.Ct.App. 2016). We will not become an advocate for a party, or address arguments that are inappropriate or too poorly developed or expressed to be understood. Id. at 984. In other words, this Court owes the Reitenours no inherent leniency simply by virtue of being self-represented. Zavodnik, 17 N.E.3d at 266.
[¶8] "Fraudulent inducement occurs when a party is induced through fraudulent misrepresentations to enter into a contract." America's Directories, Inc. v. Stellhorn One Hour Photo, Inc., 833 N.E.2d 1059, 1068 (Ind.Ct.App. 2005), trans. denied (2006). The essential elements of fraudulent inducement are no different from those in any fraud action. Massey v. Conseco Servs., L.L.C., 879 N.E.2d 605, 611 (Ind.Ct.App. 2008), aff'd on reh'g, 886 N.E.2d 581, trans. denied. To prevail on a fraud claim in Indiana, the plaintiff must prove the following elements:
(1) a material misrepresentation of past or existing fact which (2) was untrue, (3) was made with knowledge of or in reckless ignorance of its falsity, (4) was made with the intent to deceive, (5) was rightfully relied upon by the complaining party, and (6) which proximately caused the injury or damage complained of.Lawyers Title Ins. Corp. v. Pokraka, 595 N.E.2d 244, 249 (Ind. 1992).
[¶9] "[F]raud is not limited only to affirmative representations; the failure to disclose all material facts can also constitute actionable fraud." Kesling v. Hubler Nissan, Inc., 997 N.E.2d 327, 335 (Ind. 2013) (quoting Lawson v. Hale, 902 N.E.2d 267, 275 (Ind.Ct.App. 2009), superseded by statute on other grounds). "In particular, '[w]hen a buyer makes inquiries about the condition, qualities, or characteristics of property,' the seller must 'fully declare any and all problems associated with the subject of the inquiry,' or else risk liability for fraud." Id. (quoting Lawson, 902 N.E.2d at 275). In the absence of a duty to disclose, "mere silence is not actionable fraud." First Bank of Whiting v. Schuyler, 692 N.E.2d 1370, 1374 (Ind.Ct.App. 1998), trans. denied.
[¶10] Here, the trial court determined that "[t]he Reitenours have failed to identify a false affirmative material misrepresentation of fact made by M/I Homes prior to closing on the Home." Appealed Order at 4. On appeal, as they did below, the Reitenours point to a "Confidence Builder Program Addendum" that was part of their purchase agreement with M/I Homes and states in pertinent part, "As a further assurance of M/I's commitment to quality, a Certificate of Quality Inspection plaque is permanently mounted in the home at the time of closing. This plaque is signed by the Personal Construction Supervisor and Robert H. Schottenstein, CEO and President of M/I Homes." Appellants' App. Vol. 3 at 234. At most, this provision merely promises that a plaque would be installed in the home at closing; it does not contain an actionable misrepresentation of past or existing fact.
[¶11] The Reitenours also argue fraudulent inducement based on allegations that M/I Homes failed to disclose that the home's elevation did not meet the City of Lawrence's building code requirements, thus making the home susceptible to sewer backup. The Reitenours direct us to the following excerpt from the purchase agreement:
Home Placement. Purchaser's Home shall be situated on the Lot by M/I in its sole discretion. The location of the Home on the Lot will depend upon setbacks, easements, other restrictions of record, requirements of governmental authorities, physical conditions on or adjacent to the Lot, and other variables or conditions. Elevation heights of the yards and floor of the Home and that of adjoining lots may vary. M/I has the sole right to cause the Home to be oriented in accordance with such variables and construction practices implemented by M/I.Id. at 171. The Reitenours argue, "Importantly, the elevation [violation] already existed at the time of signing the purchase contract. M/I Homes had already made the decision regarding the elevation [violation], and chose to conceal that information from [the Reitenours], while representing the Residence was dependent upon requirements of governmental authorities." Appellants' Br. at 17. Thus, according to the Reitenours, M/I Homes "had a duty to disclose the elevation violation[.]" Id. at 14.
The Reitenours also assert that M/I Homes misrepresented that a backflow-prevention device had been installed in their home. Appellants' Br. at 18. Because this alleged misrepresentation occurred after the purchase agreement was executed, it cannot be a basis for a fraudulent inducement claim.
[¶12] In its order, the trial court made the following findings and conclusions relevant to this excerpt:
4. Prior to construction, Stoeppelwerth & Associates identified the proposed elevation of the Home as 837.10. However, given the topography of the site, the elevation had to be adjusted. After making the necessary adjustment, the final elevation of the Home ended up being 835.37. With the elevation of 835.37, the homesite still had the appropriate fall to be able to drain by
gravity flow.
5. At the time the Reitenours' home was built, the City of Lawrence (the "City") building code required, as condition of issuance of a sewer permit, that the first-floor elevation of the home be more than one foot above the top of the manhole casting elevation of both the first upstream and downstream manhole on the public sewer to which the home is connected. If the first-floor elevation is not higher than both manholes, the City would still issue a sewer permit, but only if the property owner executed a covenant indemnifying the City of liability for sewer backups (the "Covenant").
6. M/I Homes utilized a courier service, in this instance, A-1 Expeditors ("A-1"), to obtain the building permits to begin construction on a home. While M/I Homes provided A-1 with the necessary documents, A-1 was responsible for filling out the actual application for the permit. In this particular instance, the City made the decision a covenant [w]as needed. The City provided A-1 with the Covenant, which A-1 signed.
7. A-1 did not provide M/I Homes with a copy of the Covenant, so as a result, M/I Homes was unaware that the Covenant existed until the Reitenours provided M/I Homes with a copy of the partially executed Covenant on February 18, 2018.
8. Prior to closing on the Home, M/I Homes did not make any affirmative representations about the plot plan, the elevation of the Home, or the sewer lines to the Reitenours.
9. Similarly, at no time prior to signing the Purchase Agreement did the Reitenours ever ask M/I Homes any questions about the
plot plan, the elevation of the Home, or the sewer lines.
10. The Home was completed and passed all relevant inspections, and a certificate of occupancy was issued on May 25, 2017.
11. On June 13, 2017, the Reitenours suffered a sewer backup in their Home. The backup was caused by a broken sewer lateral at the exterior of the Home's foundation and was not caused in any way by the elevation of the Home.
12. Since that time, the Reitenours have not suffered a single instance of sewage backing up and coming out of any plumbing fixtures in the Home.
3. M/I Homes did not know about the Covenant before the Reitenours signed the Purchase Agreement and closed on the Home, so it could not have had the intent to deceive the Reitenours.
4. M/I Homes has affirmatively negated multiple elements of actual fraud, and therefore judgment in its favor on the Reitenours' claim of actual fraud as a matter of law is warranted.
11. Through their failure to inquire about the specific subjects, the Reitenours did not trigger a duty by M/I Homes to disclose the existence of the Covenant or any elevation issue.
12. M/I Homes did not know about the Covenant so it could not have disclosed it, even if there had been a duty to disclose.Appealed Order at 2-6.
In fact, Nathan affirmatively stated in his deposition that they "did not inquire about the elevation prior to purchasing the home." Appellants' App. Vol. 10 at 72. The Reitenours make much ado about M/I Homes's pre-purchase disclosure that it "installed a 10-foot deep basement because of the requirements of the lot[,]" id., but they offer no cogent argument as to how or why this disclosure triggered a duty to disclose about the home's elevation as it relates to the City's sewer permit requirements. To the extent the Reitenours suggest that M/I Homes's "elevation decision" violated those requirements, Appellants' Br. at 17, the designated evidence indicates that A-1's signing of the Covenant satisfied those requirements as far as the City was concerned.
The Reitenours note that an M/I Homes executive "testified it would be rare, if ever, that someone would inquire about sewer permits or the elevation of the home." Appellants' Br. at 14. We agree with M/I Homes that "[t]he law does not make any exception for an item that may be less likely to be asked about." Appellee's Br. at 36.
The Reitenours make no cogent argument regarding whether A-1's knowledge of the Covenant must be imputed to M/I Homes in this situation. Regardless, because M/I Homes made no affirmative misrepresentations about the Covenant before the purchase agreement was executed, the Reitenours are not entitled to relief.
[¶13] The trial court's findings are consistent with the designated evidence, and its conclusions are consistent with the foregoing Indiana law regarding fraud. Accordingly, we affirm the trial court's ruling in favor of M/I Homes.
[¶14] Affirmed.
Bailey, J., and Pyle, J., concur.