15 N.E.3d 23
Ind. Ct. App.2014Background
- Bogan purchased a lakefront house in the Lake Stonebridge subdivision built by Trinity on Lot 72; Developers (Land Innovators and R.N. Thompson) created the subdivision, Site Development Plan, and recorded covenants.
- Site Development Plan set a lower-level elevation of 789.0 feet for Section 2B/Lot 72; Trinity’s final plot plan and the built home had a lower-level finished-floor elevation of 788.04 feet.
- The house experienced two lower-level flood events (2003 and 2011). Bogan sued Trinity and the Developers asserting negligence, negligence per se, breach of contract, breach of covenants, breach of implied warranty of habitability, constructive fraud, and abuse of process.
- The trial court granted partial summary judgment for Bogan: against Trinity on negligence, negligence per se, breach of contract, and breach of covenants; against Developers on breach of covenants; it denied summary judgment on certain claims (constructive fraud vs. Trinity; negligence vs. Developers) and granted Trinity judgment on the pleadings on Developers’ indemnification claim.
- The trial court later ordered demolition of the house under the covenants; this injunction was stayed pending appeal. The Court of Appeals affirmed most summary-judgment rulings but reversed the demolition order for lack of evidentiary findings and remanded on the injunction issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Trinity violated Fishers Ordinance by building below Site Development Plan elevation | Bogan: Trinity’s lower-level elevation (788.04) violated Ordinance requiring conformity with the approved Site Development Plan (789), supporting negligence, negligence per se, and breach of contract | Trinity: Fishers Dept. approved the individualized plot plan and issued a permit (deference to agency); Site Plan elevation was only a recommendation, not a required minimum | Court: Ordinance unambiguous; Trinity violated the ordinance. Summary judgment for Bogan on negligence, negligence per se, and breach of contract affirmed |
| Whether Trinity and Developers breached subdivision covenants by failing to obtain Committee approval of plot plans | Bogan: Covenants required Committee approval of plans/pad elevations; neither Trinity (builder/previous owner) nor Developers enforced/submitted approval, so breach caused damages | Trinity/Developers: Oral agreement limited required submissions to general plans; Developers had no duty to approve individual plot plans; causation speculative | Court: Covenants require approval; oral waiver ineffective; evidence supports causation; summary judgment for Bogan on breach of covenants against both affirmed |
| Standing to enforce covenants | Bogan: Executed contract to purchase pre-closing, so bound by and may enforce covenants | Trinity/Developers: Bogan lacked standing because violations occurred before he owned the property | Court: Declaration binds purchasers who execute a contract; Bogan had standing |
| Constructive fraud claim against Trinity | Bogan: Trinity knew the home was in a flood-prone area and concealed/failed to disclose material facts; deceptive plot documents | Trinity: Disputed factual issues exist about whether the home was in special flood hazard area, Trinity’s knowledge, and intent; evidence (affidavits) raises triable issues | Court: Genuine issues of material fact exist; denial of summary judgment on constructive fraud affirmed |
| Negligence claim against Developers (base flood elevation) | Bogan: Developers miscalculated base flood elevation (used High Ditch instead of Mud Creek), so Site Plan minimum should be 791 ft; their negligence caused flooding | Developers: Genuine factual disputes on proper base flood elevation and causation; DNR/others approved elevation | Court: Summary judgment inappropriate; genuine issues of fact on negligence remain, denial of Bogan’s summary judgment on this claim affirmed |
| Developers’ cross-claim for indemnification from Trinity | Developers: Covenants or contract imply Trinity must indemnify Developers for enforcement costs/liability | Trinity: No clear contractual or common-law right to indemnity; Developers were not without fault; covenant clauses cited allow recovery of attorney fees but do not clearly create indemnity | Court: Indemnity must be clear and unequivocal; covenant provisions cited do not provide contractual indemnity; judgment on pleadings for Trinity affirmed |
| Trial court order to demolish the house (injunctive remedy) | Bogan: Covenants authorize removal of structures violating covenants; demolition is appropriate equitable relief | Trinity/Developers: Trial court ordered demolition without evidentiary hearing or findings; alternative, less destructive remedies exist; legal remedies may suffice | Court: Removal clause exists in covenants, but injunctive relief requires evidence and findings and consideration of alternatives; order to remove without those procedures reversed and remanded |
Key Cases Cited
- Manley v. Sherer, 992 N.E.2d 670 (Ind. 2013) (summary judgment standard)
- Siwinski v. Town of Ogden Dunes, 949 N.E.2d 825 (Ind. 2011) (clear, unambiguous ordinance requires no construction)
- Story Bed & Breakfast, LLP v. Brown Cnty. Area Plan Comm’n, 819 N.E.2d 55 (Ind. 2004) (agency interpretations entitled to deference when construction is needed)
- Rice v. Strunk, 670 N.E.2d 1280 (Ind. 1996) (elements of constructive fraud)
- Crossmann Communities, Inc. v. Dean, 767 N.E.2d 1035 (Ind. Ct. App. 2002) (restrictive covenants are compensable property interests; economic assessment relevant to relief)
- Ozinga Transp. Sys., Inc. v. Michigan Ash Sales, Inc., 676 N.E.2d 379 (Ind. Ct. App. 1997) (example of a clear contractual indemnity clause upheld)