113 N.E.3d 685
Ind. Ct. App.2018Background
- Grant County contracted with SRI under a Services Master Agreement (SMA), a 2010 Addendum, and a Workplan for tax-sale support services, including preparing and mailing statutory notices.
- Farmers Mutual owned Grant County property but failed to update its mailing address; SRI mailed notices that were returned unclaimed and no further address research was done.
- M Jewell purchased the property at the September 23, 2010 tax sale, later received a tax deed, then the deed was set aside on appeal because the auditor and SRI failed to perform statutorily required address research.
- After the deed was voided, M Jewell received the statutory refund of its purchase price plus interest (~$6,997.50) but sued Grant County and SRI seeking $784,000 in lost profits and alleging it was a third-party beneficiary of the County–SRI contracts.
- The trial court dismissed Grant County from the suit, granted summary judgment for SRI, holding (1) M Jewell is not an intended third-party beneficiary of the Agreements and (2) even if it were, the SMA’s limitation/indemnity language and the statutory refund remedy preclude the claimed lost-profits damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether M Jewell is an intended third-party beneficiary of County–SRI contracts | M Jewell: the contracts (esp. indemnity language) show parties anticipated third-party claims and thus intended to protect tax-sale purchasers | SRI: contract language shows only County and SRI are intended beneficiaries; any benefit to purchasers is incidental | Court: Not a third-party beneficiary; Agreements lack intent to confer direct obligation to purchasers |
| Whether M Jewell may recover lost-profits damages beyond statutory refund | M Jewell: statutory refund did not compensate for lost profits; seeks $784,000 | SRI: purchaser’s remedy for invalid tax sale is statutory refund; permitting lost-profits recovery would be a windfall; SMA also limits liability | Court: Remedy is statutory; M Jewell received required refund and cannot recover lost profits |
| Whether SMA’s limitation/indemnity provisions bar claimed damages | M Jewell: indemnity language signals third-party concern; does not preclude recovery | SRI: limitation of liability and indemnity language preclude indirect/consequential damages and allocate risk | Court: Even assuming beneficiary status, SMA’s terms and statutory scheme preclude the damages sought |
| Appropriateness of summary judgment | M Jewell: factual record ambiguous? (conceded no genuine dispute) | SRI: legal issue only; no genuine factual dispute; SRI entitled to judgment as matter of law | Court: Parties agreed no material facts in dispute; summary judgment proper for SRI |
Key Cases Cited
- Cain v. Griffin, 849 N.E.2d 507 (Ind. 2006) (third-party beneficiary can directly enforce insurer’s contractual medical-payments coverage when contract shows intent to benefit third party)
- OEC-Diasonics, Inc. v. Major, 674 N.E.2d 1312 (Ind. 1996) (doctrine and standards for third-party beneficiary enforcement of contract)
- Farmers Mut. Ins. Co. of Grant & Blackford Ctys. v. M Jewell, LLC, 992 N.E.2d 751 (Ind. Ct. App. 2013) (prior appeal: tax deed void where required address research was not performed)
- Ayres v. Indian Heights Volunteer Fire Dep’t, Inc., 493 N.E.2d 1229 (Ind. 1986) (contract for public services benefiting a community generally does not create individualized third-party beneficiary rights)
- Giles v. Brown Cty. ex rel. its Bd. of Comm’rs, 868 N.E.2d 478 (Ind. 2007) (county contract for county-wide ambulance services did not create individual resident third-party beneficiary rights)