Say What You Mean, and Mean What you Say

Say What You Mean, and Mean What You Say          The Indiana Court of Appeals has again weighed in on the issue of contract interpretation.  In a recent case involving a “right of first refusal”, the Court was again asked to try to determine the intent of the parties from the plain language of the contract.  Interestingly, although all three judges on the Court of Appeals agreed that the “plain meaning” of the contract was “unambiguous”, the judges disagreed on what was that plain meaning.             In the case, individuals had leased several parcels of real estate from an oil company to operate gas stations.  As part of those leases, they negotiated a “right of first refusal” to purchase the parcels of real estate on which they operated their gas stations.             Years later, the oil company entered into a proposed agreement to sell all of its assets, including the real estate, for a combined price of $80,000,000.  The oil company did notify the individuals of the proposed sale and offered them the right to exercise their right of first refusal to purchase those properties.  Of course, the “offer” that they needed to match was for $80,000,000.             The individuals filed the lawsuit saying that it was never the intent of the parties that their right of first refusal would be tied to an offer that also involved all of the other assets of the oil company.  While the plain language of the contract simply says that the individuals had the right to match any offer to purchase their leased real estate, the individuals believed that it was...

Not So Fast, My Friend

Not So Fast, My Friend   On a television show I particularly enjoy on a certain well-known sports network on Saturday mornings between August – December, one of the long-time stars of the show (who also happens to be a former head football coach at Indiana University), has a line he frequently uses when he disagrees with the opinions of one of the other hosts of the show.  That line, “Not so fast, my friend” actually can help us understand what can happen when a legal dispute goes to court and the parties rely on a judge (or jury) to decide who wins and losses.  Clients typically come to us quite confident in their position in a dispute or legal situation in which they find themselves.  They see absolutely no way they can lose, and want us as their attorneys to affirm this belief.  “You agree with me, right?” is something that is often asked of us.  Of course, 25 years of experience, and of winning of cases I should have lost and losing cases I should have won, tells me otherwise.  I often need to counsel clients that when it comes to litigation, you never know what can happen. A recent Indiana Supreme Court case provides yet another illustration and cautionary tale that demonstrates why we are always so cautious about making predictions about litigation.  The detailed facts of the particular case are not terribly important for this article.  What is important is to understand the relatively straight forward nature of the applicable law and what happened as that case found its way to the Indiana Supreme Court. ...

No Cheating Clause

No Cheating Clause     As anyone who has read this blog before knows, we have often written about the fact that Indiana courts will enforce contracts between parties when those contracts were freely negotiated.  One of the most recent decisions from the Indiana Court of Appeals affirmed this longstanding and well settled principle, but the facts of this case were just too good to pass up.             Rather than rehash all of those facts, I will leave those to the readers, but it is safe to say that not every day in legal opinions do we have to read what the legal term for “cheating” is in the context of a relationship or a court’s rather poignant statements that in this contract which included a “no cheating” clause, the woman “wasted little time in breaching the contract.”             There is no doubt that the Court likely was also swayed by the fact that the real estate at issue formerly was owned by the man’s parents.   In any event, this case shows that not all the things that lawyers have to read are that boring and the lengths people will go to fight after a relationship falls apart.   Name(required) Email(required) Website Comment(required)      ...

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...

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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