BLISSFULLY IGNORANT? NOT GOOD ENOUGH IN A REAL ESTATE DEAL

BLISSFULLY IGNORANT?  NOT GOOD ENOUGH IN A REAL ESTATE DEAL We have often discussed in this blog how the Indiana courts will look at contracts and typically enforce the exact terms that were agreed to by the parties.   The courts will also look at those contracts and hold the parties to the terms that were negotiated.   However, in a recent case, the Court of Appeals went even further, most likely to get to what was in the court’s opinion the best result. The two parties to the dispute had entered into a “property contract” whereby the seller was offering to sell certain real estate “property” to the buyer.   However, the seller did not actually own the property, but in fact had rights under a lease, and another person actually owned the real estate.   Therefore, the contract was not with the actual owner of the property; it was between the buyer and the person who was leasing the property from another person who actually was leasing from the owner. After the buyer defaulted on the contract due to not paying the monthly payments, the seller filed a lawsuit to evict the buyer and to collect the amounts that had not been paid.   At that point, the buyer, for the first time, conducted a title search and realized that the seller did not own the property, but rather only had been leasing it. The buyer then filed a counterclaim against the seller because the buyer claimed to have been defrauded by the seller given that the seller did not own the property and therefore could not sell it to the buyer....

Just When You Think You Know the Law…

Just When You Think You Know the Law . . . Regular readers of this blog know that we have spent a fair amount of time giving examples of how courts in Indiana regularly state that there is a strong public policy to enforce contracts.  In doing so, the court’s goal is to determine the intent of the parties at the time they made the contract, beginning with the plain language of the contract, reading it in context, and then determining if any part of the contract is ambiguous.  If it is ambiguous, then the court will construe the terms in the contract to determine and give effect to the intent of the parties at the time of the contract.  Otherwise, the court will enforce the plain language of the contract.  In a recent case that is pending in the United States District (Federal) Court for the Southern District of Indiana, the Court acknowledged this basis principle of Indiana law, but ultimately determined that despite the plain language of a settlement agreement from a previous case, the settlement agreement and release could not be enforced against a plaintiff. In other words, it would not enforce the contract despite the fact that the Court admitted the contract was not ambiguous and the intent of the parties was clear. The case involved the second of two class actions in which the plaintiffs had alleged violation of certain constitutional rights.  The plaintiffs were involved in both cases, the first of which had been settled through the terms of a settlement agreement.  The court noted, and it is important for the readers to...

How Much is this Going to Cost?

How Much is this Going to Cost? That question is one that attorneys often hear from existing and new clients who are involved in matters for which they are seeing the attorney.  While some projects are capable of being estimated in terms of the cost, in litigation, where at least two parties are arguing over something that is important to each of them, because no one party has control over what the other one will do, it is often nearly impossible to estimate “How much it is going to cost.” A perfect example of this was recently reported here.  While the particulars of the case are not necessarily important for today’s purposes, the significance is that there was a legal fight that lasted approximately 38 years concerning some property in Madison County, Indiana.  Imagine in 1978 trying to answer the client’s question of “How much is this going to cost?”  Thirty eight years later, the real estate is going to be sold at an auction. In another relatively recent case, two landowners fought over a strip of land 35’ X 100’, which had been valued at $890.  That litigation lasted 3 years and involved 2 separate appeals.  It is fair to say that each party incurred far more than $890 in fees, not to mention the value of their own time invested in the fight. We have written extensively before about how slow litigation can proceed; the true cost of that litigation; and the toll it can take on the parties involved.  These cases are yet further examples of how unpredictable, time consuming, and undoubtedly expensive litigation can be. ...

When March Madness Goes to the “Courts”

When March Madness Goes to the “Courts” On February 7, 2015, an ugly fight broke out between two Indiana high school basketball teams.  As a result of the fight, the officials ended the game and the schools suspended the students who were involved the following Monday.  The Indiana State High School Athletic Association (“IHSAA”), of which both schools are members, then issued additional penalties, including suspending both schools from participating in the state tournament and cancelling each school’s remaining regular season games. Both schools and the individual players on those teams filed a lawsuit seeking an injunction against the IHSAA hoping to be able to participate in the state tournament.  The trial court granted that injunction, and both teams were allowed to participate in the tournament, with one of those teams actually reaching the state championship game. Despite the fact that season has long been over, the IHSAA appealed the trial court decision, and the Indiana Court of Appeals recently ruled in favor of the IHSAA and found that the trial court should not have issued the injunction that it did. So why keep fighting?  The IHSAA likely wanted to get a judicial ruling that the IHSAA had the authority to issue rulings similar to what it did in this instance, because the longstanding rule in Indiana is that courts will exercise very limited interference with the rules and internal affairs of voluntary membership associations such as the IHSAA. As has been discussed extensively through this blog in other contexts, Indiana courts are very reluctant to interfere with contractual relationships, particularly between sophisticated parties.  This same principle of non-interference...

Say What You Mean; Mean What You Say

When a person files bankruptcy, the law allows for certain “exemptions” so that the person can keep certain things that the legislature has determined are the bare necessities of life in order to make a fresh start.  Any property that is not “exempt”, and assuming it is of sufficient value, is to be gathered and then sold for the benefit of the creditors of the person filing bankruptcy. Different States have different laws about what exemptions are allowed.  While there are many similarities, each State is allowed to make its own laws concerning what is exempt and what is not or it can utilize the exemptions created by Congress.  In Illinois, one of those things that a person is allowed to keep is a bible.  In a recent case, we were again reminded that courts, when faced with unambiguous language in a law (similar to what courts will do with a contract) will enforce the exact terms of the law and not attempt to infer any intent from those words or give those words any different meaning other than their plain and ordinary meaning. In the recent case, the person who filed bankruptcy (“debtor”) had a bible.  But it was no ordinary bible.  It was a first edition Book of Mormon from 1830.  Everyone agreed that the bible was worth $10,000.  The bankruptcy trustee, and the bankruptcy court, said that the debtor should not be allowed to keep this very rare bible, but instead it should be sold for the benefit of her creditors.  It was also noted that she had several additional copies of the Book of Mormon...
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