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COA affirms summary judgment to parents in family land dispute

May 4, 2017

After a yearslong dispute between northern Indiana parents and their daughter and son-in-law, the Indiana Court of Appeals has affirmed the grant of partial summary judgment to the parents, finding that a real estate contract between the two couples was unenforceable.

In 1993, Carl, who is now deceased, and Joan Wright allowed their daughter and son-in-law, Rosalea and William Knapp, to move into a residential dwelling located on a portion of their property in Bristol at no cost to the Knapps. Six years later, both couples entered into a five-year lease agreement and option to purchase, though a description of the property was not attached to the lease.

The Knapps did not exercise the purchase option in the lease by paying the full price within the allotted time, so the lease expired on Dec. 31, 2003. The following November, the Wrights and Knapps entered into a contract for the sale of the real estate and the Knapps began making monthly payments to the Wrights, though they never paid real estate taxes on any portion of the property. Like the lease, no description of the land was attached to the contract.

Then, believing they had “paid off the land contract” in 2013, the Knapps sought a warranty deed from the Wrights as to a three-acre portion of the property that included a residential dwelling, a pony barn, a shop building and water rights to a private lake. The Wrights, however, thought that through the real estate contract they were selling only one acre of land that included the residential dwelling, but no water rights to the private lake. The family relationship between the couples deteriorated and the Knapps began living on a one-acre portion of the property and using the private lake without making further payment.

The Knapps then filed a complaint, alleging that the real estate contract entitled them to three specific areas of the property, as well as a legal right to use the lake adjacent to the three acres. In response, the Wrights filed counterclaims for foreclosure, injunctive relief, assault and battery and trespass.

As part of a series of amended claims and counterclaims that subsequently ensued, the Wrights filed an amended counterclaim requesting a judgment declaring the real estate contract unenforceable. The Wrights also moved for partial summary judgment on their amended counterclaim, alleging that the real estate contract lacked “a sufficient description of the property being sold, such that the contract is unenforceable pursuant to the Statute of Frauds.”

In response, the Knapps filed cross-motions for summary judgment on the Wrights’ foreclosure claims. The trial court granted partial summary judgment to the Wrights and denied the Knapps’ cross-motion, specifically determining that the real estate contract was unenforceable as a matter of law and that the Knapps did not have an ownership interest in the property.

After the trial court entered an immediate order of possession of the real property in favor of the Wrights, the Knapps then filed a notice of lis pendens claiming an ownership interest in the property arising out of the real estate contract. But the trial court granted the Wrights’ motion for release of the notice, authorizing them to sell the property free from any claim listed in the notice.

Additionally, the court awarded $24,000 in damages to the Wrights based on the fair market rental value of the property from the time the Knapps occupied it without making payment.  The subject property was subsequently sold to a third party, and the Knapps appealed in William J. Knapp and Rosalea M. Knapp v. The Estate of Carl R. Wright and Joan M. Wright, 20A05-1610-PL-2344.

The Indiana Court of Appeals affirmed the trial court’s decision in a Thursday opinion, with Judge Terry Crone first writing that the real estate contract did not satisfy the Statute of Frauds because it lacked “a reasonably certain description of the land being conveyed.” Thus, the contract was unenforceable.

Further, Crone wrote the award of damages to the Wrights was within the scope of evidence, so there was no abuse of discretion in awarding the damages. Finally, the appellate panel held that the release of the Knapps’ lis pendens notice was not erroneous because the trial court’s final judgment in favor of the Wrights disposed of all the issues related to title to the subject property and constituted a “final determination.” Thus, the judgment mandated “the trial court order the clerk…to enter in the lis pendens record a satisfaction of the Knapps’ lien, right, or interest sought to be enforced against the subject property.”
 

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