Sprit Food Mart, Inc., Keystone Marathon, Inc., and Fours Investment Group, Inc. v. RS Petroleum, Inc. ( 2014 )

Pursuant to Ind.Appellate Rule
65(D), this Memorandum Decision
shall not be regarded as precedent
Dec 22 2014, 9:24 am
or cited before any court except for
the purpose of establishing the
defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
MICHAEL RILEY SCOTT C. QUICK
Rensselaer, Indiana Quick Law Office
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
SPRIT FOOD MART, INC., )
KEYSTONE MARATHON, INC., and )
FOUR S INVESTMENT GROUP, INC., )
)
Appellant-Plaintiffs/Counterclaim )
Defendants Below, )
)
vs. ) No. 49A02-1308-PL-732
)
RS PETROLEUM, INC., )
)
Appellee-Defendant/Counterclaim )
Plaintiff Below. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Thomas J. Carroll, Judge
Cause No. 49D06-1306-PL-24674
December 22, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
BROWN, Judge
In this interlocutory appeal as of right, Sprit Food Mart, Inc. (“Sprit”) appeals the
trial court’s Findings of Fact, Conclusions of Law, and Final Partial Judgment in favor of
RS Petroleum, Inc. (“RS Petroleum”).1 Sprit raises three issues which we revise and
restate as:
I. Whether the court erred in concluding that Sprit did not comply with
the renewal provision contained in a lease; and
II. Whether the court erred in determining that there was no year to year
or month to month tenancy between Sprit and RS Petroleum.
We affirm.
FACTS AND PROCEDURAL HISTORY
The facts most favorable to the trial court’s judgment reveal that on June 19, 2008,
an asset purchase agreement (the “Purchase Agreement”) was entered into between Four
S Investment Group, Inc. (“Four S”), which includes the business partners Salim
Siddiqui, Shahid Hussain, Shamin Hadi, and Sohail Khan, and Keystone Marathon, Inc.
(“Keystone”) as purchasers and RS Petroleum as the seller. Siddiqui signed the Purchase
Agreement as the President of both Four S and Keystone, and Sohail Shakir signed as
President of RS Petroleum. The Purchase Agreement stated that Four S agreed to
purchase certain real estate and improvements thereon located at 3402 North Keystone
Avenue, Indianapolis, Indiana, including a gas station and convenience store (the “Gas
1
Keystone Marathon, Inc. and Four S Investment Group, Inc. are also listed in the action as
appealing parties in the notice of appeal and are plaintiffs / counterclaim defendants below. However, the
motion for temporary restraining order from which the appealed order stems was filed solely by Sprit and
directly concerns only Sprit.
2
Station”), which would take place “within twenty one (21) days after satisfaction or
waiver of the conditions precedent set forth in Section 4 hereof or as such date as may be
mutually agreed by the parties . . . .” Appellant’s Appendix at 29. Keystone agreed to
purchase certain business assets, including business equipment and inventory, within
thirty days of the execution of the Purchase Agreement. The Purchase Agreement also
stated that Keystone would take possession of the Gas Station and operate the business as
of the business asset closing date and lease the Gas Station from RS Petroleum pursuant
to a separate lease agreement (the “Lease”).2 The Lease, signed the same day by Shakir
as President of RS Petroleum as Lessor and Siddiqui as President of Keystone as Lessee,
contained the following provisions:
(a) TERM OF LEASE: Beginning July 1, 2008, and continuing
thereafter for a period of Sixty (60) months, expiring on June 30, 2013.
Regardless of the actual date of execution of this document, the Effective
Date of the Lease shall be July 1, 2008. Provided Lessee is not in default,
Lessor shall have three (3) options to renew this Lease, each for a period of
five (5) years. To exercise a renewal option Lessee shall give written
notice to Lessor at least 90 days prior to the expiration of the term. If
Lessee fails to exercise any renewal option on or before such date, such
option and all succeeding options shall no longer exist. All of the terms
and conditions of this Lease shall apply during the renewal periods.
(b) RENT: Rental per month for the leased premises shall be the
sum of Six Thousand Five Hundred Four Dollars ($6,504.00) payable
monthly in advance on the first (1st) day of the month. Five percent (5%)
of the amount due as rent shall be paid if the monthly rent payment is not
received by Lessor or its designee on or before the fifth day of each month
for which it is due thereunder. The monthly rent shall be paid either
2
Counsel for Sprit at a hearing on July 9, 2013, stated that “there were environmental issues with
the property, and while the environmental issues were to be resolved the parties entered in to a lease . . . .
So the idea was is [sic] that the lease would be in place until they got to the point to where they could
close the purchase agreement.” Supplemental Transcript at 14.
3
directly to Lessor at 14098 Marilyn Road, Noblesville, Indiana 46060, or to
such other address as Lessor shall notify Lessee in writing.
*****
(x) NOTICES: All notices to be given hereunder by either party
shall be in writing and given by personal delivery to the Lessor or the
Lessee, or shall be sent by first class, registered or certified mail addressed
to the party intended to be notified at the post office address for such party
last known to the party giving such notice, and notice given as aforesaid
shall be a sufficient service thereof and shall be deemed given as of the date
when deposited in any post office, or in any post office box regularly
maintained by the Federal Government.
Id. at 12, 17. Both the Purchase Agreement and the Lease were drafted by Attorney
Andrew Sheff, who represented Four S and Keystone in the transaction, along with
Attorney Herb Jensen representing RS Petroleum, who “participated in putting the final
agreement together for the parties.”3 Transcript at 174.
Although the Lease stated that rent should be sent to 14098 Marilyn Road,
Noblesville, Indiana 46060 (the “Marilyn Address”), Keystone by Siddiqui paid rent by
direct deposit into an account of RS Petroleum or Shakir. In 2009, Siddiqui sold his
shares of Keystone to a friend named Saadali. In June 2011, Saadali, on behalf of
Keystone, executed an Assignment and Assumption of Lease (the “Assignment”)
assigning the lease to Sprit, with Siddiqui signing as the President of Sprit.
Also, in June of 2010 Shakir sold the property located at the Marilyn Address to
the City of Noblesville, the City turned the property into a road, and the Marilyn Address
ceased to exist as a legal address.
3
Attorney Sheff has also represented Shakir and assisted Shakir in selling his office property, as
discussed below, to the City of Noblesville.
4
In April of 2013, following the expiration of the Lease’s renewal provision, Shakir
called Akhtar Hassan, who was a mutual friend and business associate of both Shakir and
the Four S partners, and stated that “the lease is over now do they want to purchase, if
they want to extend the lease the lease is going to be much more expensive and Akhtar
became a mediator” at a meeting between Shakir and Siddiqui, Shahid Hussain, and
Sohail Khan at a restaurant (the “April Meeting”).4 Id. at 74. The purpose of the April
Meeting was “to figure out what [the] new lease payment will be and if they buy the store
what would be the value of that store” but there were no resolutions at the meeting, and at
the meeting “[t]here were several threats issued to” Shakir, who walked out of it. Id. at
78. Neither Siddiqui nor the other Four S partners in attendance at the meeting stated that
they had sent notification to RS Petroleum or Shakir expressing their intent to renew the
Lease and instead “they were asking how much more rent . . . .”5 Id. at 76.
On May 2, 2013, Attorney Matthew King sent a letter to Shakir on behalf of Four
S and specifically Siddiqui regarding their “[e]xercise of option to renew Lease for” the
Gas Station, directing the letter to the Marilyn Address and to Attorney Carina de la
Torre, from whom Attorney King had “previously received correspondence on RS
Petroleum’s behalf regarding [the] Lease . . . .” Appellant’s Appendix at 48. The letter
stated that Siddiqui had sent a letter to RS Petroleum on March 2, 2013, “expressing his
intention to exercise the option to renew the Lease . . . . However, I have been informed
4
Four S partner Shamin Hadi was not in attendance at the meeting.
5
As noted below, Siddiqui disputes the fact that the issue of whether he sent a renewal notice to
RS Petroleum or Shakir was raised at the meeting.
5
that you may believe my clients have somehow been deficient in giving notice of their
intentions to renew the Lease.” Id. Attorney King enclosed a copy of the letter allegedly
sent by Siddiqui on March 2, 2013 (the “Alleged Renewal”), which was addressed to the
Marilyn Address and which stated: “Please accept the following notice concerning the
renewal option for the lease at the [Gas Station].” Id. at 50.
On May 7, 2013, Attorney King wrote another letter to Shakir and RS Petroleum
to the address of 8005 E 42nd Street, Indianapolis, IN 46224, and Attorney Herb Jensen as
Registered Agent for RS Petroleum to his office address, on behalf of Four S and
Siddiqui, wherein he stated:
Please see the enclosed letter, and enclosures, which I mailed on
May 2, 2013, to the address for RS Petroleum given in the Lease
Agreement: 14098 Marilyn Road, Noblesville, IN 46060. These items
were returned to me today with a “RETURN TO SENDER, NO SUCH
NUMBER” label. My clients and I have not received notice from you of a
change in address for RS Petroleum, Inc. Nonetheless, after conducting our
own search, we identified your addresses listed above, and are re-sending
this letter to those addresses.
Id. at 46. After receiving the May 7, 2013 letter, RS Petroleum “steadfastly maintained
that the [L]ease had expired . . . .” Transcript at 75.
On June 14, 2013, Four S, Keystone, and Sprit (the “Plaintiffs”) filed a complaint
against RS Petroleum alleging Count I, breach of contract asking for specific
performance that RS Petroleum be required to sell the Gas Station pursuant to the
Purchase Agreement; Count II, breach of lease due to RS Petroleum’s refusal “to
recognize Sprit’s” Alleged Renewal; and Count III, request for declaratory judgment that
6
the Plaintiffs “properly exercised their option to extend the term of the Lease . . . .”
Appellee’s Appendix at 13-14. On June 25, 2013, Sprit filed a motion for temporary
restraining order stating that the “Lease, if not renewed, will terminate under its terms on
June 30, 2013” and asking that the court enter a temporary restraining order “requiring
[RS Petroleum] to recognize and accept [Sprit’s] renewal of the Lease, enjoining
Landlord from evicting [Sprit] from the Premises after June 30, 2013 and until this matter
is resolved, and permitting [Sprit] to continue to Lease the Premises after that date”
pursuant to the Lease’s terms. Id. at 63, 65. On July 8, 2013, RS Petroleum filed its
answer, affirmative defenses, and counterclaim for declaratory judgment, eviction, and
damages. In its counterclaim, RS Petroleum raised Count I asking for declaratory
judgment that the Plaintiffs are in trespass; Count II, breach of lease;6 and Count III,
breach of agreement alleging that the Plaintiffs were the first to breach the Purchase
Agreement.
On July 9, 2013, the court held a hearing on the motion for temporary restraining
order in which Sprit appeared by counsel and RS Petroleum appeared by counsel and in
person by Shakir. At the hearing, Shakir told the court that he did not want to be
involved with the Plaintiffs anymore because “[t]hey’re doing illegal stuff in there,
they’re selling – they sold almost half-million dollars a month on EBT, you can check
those records.” Supplemental Transcript at 22. The court asked Shakir if he had received
6
Count II specifically alleged that A) Keystone “used the EBT Account [at the Gas Station] in
violation of the USDA SNAP regulations, in contravention of Sections E, G, and Q of the Lease,” and B)
the Assignment to Sprit was unauthorized by Shakir and RS Petroleum. Appellee’s Appendix at 88-90.
7
a rent payment for the month of July, Shakir replied affirmatively, and the court decided
“to let things ride,” noting that it wanted to dispense with the case “this month, which
means we’ve got 21 days, three weeks.” Id. at 33-34. The court set a hearing date of
July 25, 2013.
On July 25, 2013, the court held a hearing in which Siddiqui testified that he sent
the Alleged Renewal on March 4, 2013, to the Marilyn Address by dropping the letter in
the blue U.S. Mailbox located in front of the Gas Station. Siddiqui indicated that he sent
the letter to the Marilyn Address because “[i]t’s in my lease” and he did not know of any
other address for RS Petroleum and had not received written notice that the address for
RS Petroleum had changed. Transcript at 19. Siddiqui testified that he listed the Gas
Station on the letter’s envelope as a return address, that he never received the letter back
marked “return to sender,” and that he believed Shakir had received it. Id. at 21. He also
testified that at the April Meeting, Shakir told Siddiqui that the Lease had expired, and
Siddiqui told Shakir that this was incorrect and that he had sent the Alleged Renewal on
March 4, 2013.
On cross-examination, counsel for RS Petroleum asked Siddiqui about other
addresses for RS Petroleum he had access to, including the address for Attorney Herb
Jensen, which was contained on the Purchase Agreement, as well as the address for
Attorney Carina de la Torre, noting that she had represented RS Petroleum in 2012 in an
action for eviction and damages alleging that the Plaintiffs had breached the Purchase
Agreement and Lease. He was also presented with the Affidavit of Nadeem Muhammad,
8
whom Siddiqui testified he had known for about three or four years and who was a
manager of a restaurant owned by Siddiqui. Siddiqui denied the veracity of
Muhammad’s affidavit. Siddiqui was then asked if he or his associates had in the past
twenty-four hours “bombarded [Muhammad] with phone calls and texts and threats,” to
which counsel for Sprit objected. Id. at 31. The court stated that “if any of this is true
it’s a very serious thing for everyone,” stated that it would issue a bench warrant for
Muhammad if he did not voluntarily come to court, and took the admissibility of the
affidavit under advisement. Id. at 31-32.
Sprit called Moin Akhtar, who manages the Gas Station and testified that he
witnessed Siddiqui place the Alleged Renewal in the mail on March 4, 2013, noting
specifically that when Akhtar offered to mail the letter Siddiqui replied: “[N]o it’s very
important letter, and this is the letter Extension of Lease which I want to send it, so I will
send, okay, I gave him envelope and a postage stamp. And I saw that letter, because, um,
we went together outside . . . .” Id. at 52-53. Akhtar acknowledged on cross-examination
that he is the brother of two of the Four S business partners, Shahid Hussain and Shamin
Hadi.
Shakir testified that he did not see the Alleged Renewal until his counsel showed
him between May 7th and May 9th of 2013. When asked about Muhammad, Shakir
testified that Muhammad called him the night before the hearing and stated that he was
receiving threats from Kahn, Hussain, Siddiqui, Hadi, and Moin Akhtar, and that
Muhammad was worried about his family. On cross-examination, Shakir acknowledged
9
that he continued to receive rent payments after finding out about the Assignment, which
he claimed contained a forged signature of his, and that he did so rather than reject the
payments because Attorney de la Torre “advised [him] to stay quiet until the lease gets
over.” Id. at 93. He also admitted that he did not send written notice that his address had
changed and explained that “[t]hey’ve been to my home a couple of times, they had
dinner at my home they know very well where I live.” Id. at 94-95.
Following Shakir’s testimony, the court heard the testimony of Akhtar Hassan,
Sohail Khan, Shahid Hussain, Shamin Hadi, and Attorney Andrew Sheff. After a recess,
Nadeem Muhammad appeared in court and apologized for being tardy, explaining that he
had overslept and that his cell phone battery died. At the outset of his testimony,
Muhammad indicated that the statements in his affidavit were not completely accurate
and that when the affidavit was being drafted he was upset with the Four S partners
because he believed that they owed him $65,000. Muhammad testified that the affidavit
was “not a hundred percent” true, but that “part of it” was true. Id. at 193. He testified
that he did have a phone conversation with Siddiqui the week of June 2, 2013, in which
Siddiqui stated that Sohail Khan “may have forgotten about sending” the Alleged
Renewal.7 Id. at 194. Muhammad also indicated that he heard from members of Four S
7
Muhammad’s affidavit, which was taken under advisement during Siddiqui’s testimony but
never entered into evidence, stated the following as Paragraph 4:
I am in in regular phone contact with [] Siddiqui . . . for both personal and business
reasons. The week of June 2, 2013 through June 8, 2013 . . . I spoke on the phone with
Siddiqui for an extended period regarding a number of topics. In that phone
conversation, as he discussed the litigation with RS Petroleum and Mr. Shakir, he
10
the day before the hearing who assured Muhammad that they were “interested in settling”
his claim that he is owed $65,000. Id. at 195. Muhammad testified that he did not
“really” feel intimidated by Four S but that he “may have said that to [RS Petroleum’s
counsel], but really not.” Id. at 198. He further testified that Shakir loaned him $5,000
the day after he signed the affidavit.
At the end of the hearing, the court stated the following:
Okay, very interesting case. . . . I am going to find that there is no
lease. The issue of notification, although interesting, and if pressed to
make a decision on that issue I would find that the letter was not sent, I
don’t believe Mr. Siddiqui, but I don’t even have to get to that point. I
think under the terms of the lease, which I find was poorly drafted, and
maybe that’s a result of both sides using the same lawyer and all of that. . . .
Had the lease been drafted properly there would have been a provision in
there on the renewal expressly stating where the option to renew was to
[be] mailed, instead we’ve got a lease that’s got some reference to where
the rent checks were to go and as it turns out that was ignored almost from
the start because they went directly into the bank. That has nothing to do
with where the renewal should have been sent. The renewal should have
been sent so that he got notice of it, which is the reason for the renewal 90
days prior to the expiration of the lease, and you had a number of addresses
where that could have been sent and you knew them all and you didn’t do
it. Therefore, the lease was not timely renewed, the lease is no longer in
existence, you’ve paid your rent through this month and come next
Wednesday you’re no longer in possession.
Id. at 219-220. The court ordered RS Petroleum’s counsel to prepare proposed findings
and conclusions. After the court made its ruling, Sprit’s counsel argued to the court that
the Lease contained a provision “stating that if the tenant remains in the premisses [sic]
admitted that they (he and his business associates in Four S . . . Keystone . . . and/or
Spirit [sic] Mart, Inc.) had forgotten to send the renewal notice for the Lease for the
business property until it was too late.
Defendant’s Exhibit B.
11
after the expiration of the lease they become a tenancy for month to month and Indiana
Code is very explicit about 30 day notice to terminate a month to month lease,” and the
court responded that “well that might apply except in the case where you’ve filed a
lawsuit and you ask for a TRO . . . . I am not going to extend somebody’s lease
judicially.” Id. at 221.
On July 31, 2013, the court issued its Findings of Fact, Conclusions of Law, and
Final Partial Judgment (the “July 31 Order”) which made findings consistent with the
foregoing, ruled in favor of RS Petroleum, and stated in relevant part:
FINDINGS OF FACT
*****
13. The Lease required Keystone to give its notice of its intent to
renew the Lease to RS Petroleum by or before April 4, 2013.
*****
17. After the [Marilyn Address] was sold and ceased to exist,
Siddique [sic] and others of the Four S Owners met with Shakir at his new
office location (9940 Expedition Place, Noblesville. IN 46060) on at least
one (1) occasion to discuss the purchase of another gas station, located at
79th and Michigan Road, Indianapolis, IN, among other business.
18. Herb Jensen remained listed as the Registered Agent for [RS
Petroleum] for purposes of service, on the Indiana Secretary of State
website, until at least May 9 2013.
19. Attorney Carina De la Torre of the De lat [sic] Torre Law
Office (“De la Torre”) represented RS Petroleum with respect to the
Purchase Agreement and Lease starting in late 2011, which was known to
the Plaintiffs, via their counsel Andy Sheff, who was notified by De la
Torre on or about January 10, 2012, of RS Petroleum’s intent to file a
Complaint for Eviction and Damages.
12
20. De la Torre communicated directly with Siddique [sic] and
other Four S Owners regarding the Purchase Agreement and Lease
regarding [RS Petroleum’s] allegations of the Plaintiffs various breaches of
both agreements on or about May 28, 2012.
21. Attorneys Donald J. Smith and Matthew R. King began
representing Plaintiffs in May of 2012, and began communicating directly
with De la Torre regarding the Purchase Agreement and Lease in their May
31, 2012 letter in response to her May 28, 2012 letter to Plaintiffs.
22. Attorneys Smith and King continued to communicate with De
la Torre up through May 9, 2013, when attorney Scott C. Quick of the
Quick Law Office began to communicate with them regarding the Purchase
Agreement and Lease.
23. While Siddique [sic] allegedly mailed a notice of intent to
renew the lease on March 4 (allegedly placing the notice letter dated March
2 in a regular white envelope addressed to the [Marilyn Address] stamped
and with a return address of 3402 N. Keystone Ave., Indianapolis, IN, in
the US Mail box in front of the Gas Station (the “Alleged Renewal”) RS
Petroleum never received any such notice.
24. On May 2, 2013, Attorney King issued, by certified mail, a
letter to RS Petroleum, enclosing the Alleged Renewal, stating his client
had renewed the Lease by virtue of the Alleged Renewal. (the “May 2,
2013 King Letter”). The May 2, 2013 King Letter was mailed to RS
Petroleum at the then non-existent [Marilyn Address], and copied to De la
Torre because King had “previously received correspondence on RS
Petroleum’s behalf regarding this Lease” from her.
25. On May 7, 2013, Attorney King issued, by certified mail, a
letter to Sohail Shakir and RS Petroleum, Inc. at the 8005 E 42nd St.,
Indianapolis, IN address indicated on the Indiana Secretary of State website
as that belonging to the “Incorporator”, as well as to Herbert A. Jensen as
Registered Agent at his office address as listed on both the Indiana
Secretary of State website (until at least May 9, 2013) and on the Purchase
Agreement. (the “May 7, 2013 King Letter”). The May 7, 2013 King
Letter enclosed both the May 2, 2013 King Letter and the Alleged Renewal,
and stated that the May 2, 2013 King Letter had been “returned to me today
with a “RETURN TO SENDER, NO SUCH NUMBER” label.”
13
26. Shakir and the Four S Owners all live in the Greater Chicago,
Illinois metropolitan area and have met at Shakir’s home . . . (which is
listed in Section G of the RS Petroleum’s Indiana Business Entity Report
filed May 24, 2012 (and available on the Indiana Secretary of State
website)), and also met at other Chicago area restaurants to discuss business
and social matters.
CONCLUSIONS OF LAW
1. This Court does not need to address the issue of whether
Siddique ever actually sent Alleged Renewal letter on or about March 4,
2013, just one (1) month short of the deadline . . . . The Alleged Renewal
letter was never given to RS Petroleum or Shakir, as the [Marilyn Address]
to which it was directed did not exist, and had not existed for more than one
(1) year.
2. The Lease agreement, drafted by Plaintiff’s counsel, did not
contain a clear notice provision.
3. The Plaintiff(s) should have sent any letter indicating
his(their) intent to renew the Lease so that RS Petroleum, via Shakir, would
have received notice of that intent. The Plaintiff(s) had knowledge of
multiple addresses at which they could contact Shakir and serve notice to
RS Petroleum, but failed to do so. Clayton v. Fletcher Sav. & Trust Co.,
155 [N.E. 539 (Ind. Ct. App. 1927).]
4. Plaintiff(s) failed to provide RS Petroleum with timely notice
to renew the Lease, and the Lease is hereby terminated.
5. There is no month-to-month tenancy between the Parties.
The Court hereby Orders Plaintiff(s) to vacate the [Gas Station] by or
before 11:59:59 p.m. on July 31, 2013, and to hand over full possession and
control of the same to RS Petroleum.
Appellant’s Appendix at 7-11. The court’s order that Sprit vacate the Gas Station was
ultimately stayed by this court pending the appeal.
14
DISCUSSION
Before discussing the issues raised by Sprit, we observe that the trial court entered
findings of fact and conclusions thereon pursuant to Ind. Trial Rule 52(A). We may not
set aside the findings or judgment unless they are clearly erroneous. Menard, Inc. v.
Dage-MTI, Inc., 726 N.E.2d 1206, 1210 (Ind. 2000), reh’g denied. In our review, we
first consider whether the evidence supports the factual findings. Id. Second, we
consider whether the findings support the judgment. Id. “Findings are clearly erroneous
only when the record contains no facts to support them either directly or by inference.”
Quillen v. Quillen, 671 N.E.2d 98, 102 (Ind. 1996). A judgment is clearly erroneous if it
relies on an incorrect legal standard. Menard, 726 N.E.2d at 1210. We give due regard
to the trial court’s ability to assess the credibility of witnesses. Id. While we defer
substantially to findings of fact, we do not do so to conclusions of law. Id. We do not
reweigh the evidence; rather we consider the evidence most favorable to the judgment
with all reasonable inferences drawn in favor of the judgment. Yoon v. Yoon, 711
N.E.2d 1265, 1268 (Ind. 1999). We evaluate questions of law de novo and owe no
deference to a trial court’s determination of such questions. Kwolek v. Swickard, 944
N.E.2d 564, 570 (Ind. Ct. App. 2011) (citing McCauley v. Harris, 928 N.E.2d 309, 313
(Ind. Ct. App. 2010), reh’g denied, trans. denied), trans. denied.
To the extent that the issue requires us to interpret the Lease, we observe that
“[i]nterpretation of a contract is a pure question of law and is reviewed de novo.” Dunn
v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 252 (Ind. 2005); see also Fresh Cut Inc. v.
15
Fazli, 650 N.E.2d 1126, 1129 (Ind. 1995) (noting that a real estate lease is subject to
principles of contract law). If a contract’s terms are clear and unambiguous, courts must
give those terms their clear and ordinary meaning. Id. Courts should interpret a contract
so as to harmonize its provisions, rather than place them in conflict. Id. “We will make
all attempts to construe the language of a contract so as not to render any words, phrases,
or terms ineffective or meaningless.” Rogers v. Lockard, 767 N.E.2d 982, 992 (Ind. Ct.
App. 2002). “When a contract’s terms are ambiguous or uncertain and its interpretation
requires extrinsic evidence, its construction is a matter for the fact-finder.” Johnson v.
Johnson, 920 N.E.2d 253, 256 (Ind. 2010). “Rules of contract construction and extrinsic
evidence may be employed in giving effect to the parties’ reasonable expectations.” Id.
I.
The first issue is whether the court erred in concluding that Sprit did not comply
with the renewal provision contained in the Lease. Sprit argues that the relevant
provisions in the Lease “are clearly unambiguous,” that the Lease “states that as long as
the notice is sent by first class at the post office address for such party last known to the
party giving such notice, should be deemed given as the date when deposited,” and that
“[t]he evidence of the hearing clearly shows that Siddiqui deposited the letter extending
the original lease for a like period of time.” Appellant’s Brief at 23. Sprit asserts that
“Siddiqui did what he should have given the terms of the lease. He sent notice to the
only address contained in the lease . . . .” Id. at 24.
16
RS Petroleum begins by asserting that Sprit’s arguments are erroneous because the
court “did not interpret the Lease, and if [it] did interpret the Lease, its interpretation
thereof was immaterial to its findings of fact and conclusions of law that Sprit’s alleged
notice of renewal was not given to Shakir and/or RS Petroleum and therefore the Lease
was not renewed.” Appellee’s Brief at 13. RS Petroleum argues that the conclusion of
law that the Lease “‘did not contain a clear notice provision’ is not a conclusion that
required any interpretation by the trial court,” arguing that the court did not have to
interpret the lease to determine that the Marilyn Address once belonged to RS Petroleum
and that it no longer existed, that “mail directed there would be returned to sender, as was
Attorney King’s May 2, 2013 letter,” that the Alleged Renewal never reached RS
Petroleum if it had been sent, and that “[t]he only two logical conclusions regarding
Siddiqi’s [sic] claim that he sent the Alleged Renewal . . . are a) that the Plaintiffs
fabricated their story about sending the Alleged Renewal . . . or b) that the Alleged
Renewal was returned by the US Postal Service” much like Attorney King’s May 2, 2013
letter. Id. at 13-15. RS Petroleum also argues that the court heard evidence of the long
history of personal relationships and business relationships between the parties involved
which “provided Sprit / the Plaintiffs numerous addresses for RS Petroleum and /or [sic]
its principle [sic], Sohail Shakir, to which Sprit could have directed its Alleged Renewal
Notice, pursuant to the poorly drafted but unambiguous language of Lease par. ‘x’” and
that again, no interpretation was necessary to make such a determination. Id. at 15. RS
Petroleum argues that there was only one “logical ramification of the two possible logical
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conclusions, that being that whether Sprit sent it or not, Shakir / RS Petroleum did not
receive the Alleged Renewal Notice.” Id.
We begin by noting that both Sprit and RS Petroleum agree that the relevant
language of the Lease is not ambiguous – they disagree, however, with what the relevant
“unambiguous” language requires. Indeed, “a contract is not ambiguous simply because
a controversy exists where each party favors a different interpretation.” N. Ind.
Commuter Transp. Dist. v. Chicago SouthShore & S. Bend R.R., 744 N.E.2d 490, 496
(Ind. Ct. App. 2001), trans. denied. Contracts are ambiguous only “when reasonable
persons would find the contract susceptible to multiple interpretations that cannot be
resolved within the four corners of the contract,” and in such cases “the trier of fact must
ascertain extrinsic facts necessary to interpret” it. Id. at 495-496. Conversely, “[w]hen
the language of a contract is unambiguous, the intent of the parties is determined from the
four corners of the instrument.” Id. at 496.
Here, we agree that the relevant language of the Lease, while poorly drafted, is not
susceptible to multiple interpretations unable to be resolved within the four corners of the
contract. First, Paragraph (b) governs the payment of rent and provides that rent
payments be made to the Marilyn Address “or to such other address as [RS Petroleum]
shall notify Lessee in writing.” Appellant’s Appendix at 12. The parties do not disagree
that, early on, alternative arrangements were made for the payment of rent and that rent
payments were made via direct deposit into a bank account of RS Petroleum. Paragraph
(a), which precedes the paragraph governing the payment of rent, does not specify where
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to direct a letter notifying RS Petroleum of Lessee Sprit’s intent to renew the Lease and
merely states that “[t]o exercise a renewal option Lessee shall give written notice to
Lessor at least 90 days prior to the expiration of the term.” Id. Paragraph (x) governs
how the parties are to provide notice to each other and specifies that such notice “shall be
in writing” and shall be either delivered personally or “sent by first class, registered or
certified mail addressed to the party intended to be notified at the post office address for
such party last known to the party giving such notice . . . .” Id. at 17 (emphasis added).
Thus, the Lease unambiguously provides that notice was required to be sent to the
address last known by Sprit. The fact that Paragraph (b) governing the payment of rent
listed the Marilyn Address as where to direct such payments and that Sprit and/or the
Plaintiffs had not received written notice of a different address to send rent payments
pursuant to that paragraph does not necessarily render the Marilyn Address to be the “last
known” address for RS Petroleum. The Lease, drafted by counsel for the Plaintiffs,
placed the onus on Sprit to address a letter notifying RS Petroleum of their intent to
renew the Lease to the last address for RS Petroleum known to Sprit.
Having so determined, we observe that the record reveals multiple addresses of
which Sprit had knowledge in providing RS Petroleum with such notice. Sprit had
dealings with multiple attorneys who they knew had recently represented RS Petroleum,
including Herb Jensen, whose address was listed on the Purchase Agreement and on the
Secretary of State’s website as RS Petroleum’s registered agent, and Carina de la Torre,
who represented RS Petroleum in an action for eviction and damages against the
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Plaintiffs. Indeed, Attorney King copied de la Torre in sending the May 2, 2013 letter
because he had “previously received correspondence on RS Petroleum’s behalf regarding
this Lease” from her. Defendant’s Exhibit C. Sprit also knew that Andrew Sheff, who
represented the Plaintiffs in drafting the Purchase Agreement and Lease, had represented
RS Petroleum on other matters. Further, evidence was presented that Sprit and the
Plaintiffs had visited Shakir’s home in Chicago, where all of the parties reside, on
multiple occasions, and they “met with Shakir at his new office location (9940
Expedition Place, Noblesville. IN 46060) on at least one (1) occasion to discuss the
purchase of another gas station . . . .” Appellant’s Appendix at 8. Also, although perhaps
not actually known to Sprit in March of 2013, the Indiana Secretary of State website lists
the address for RS Petroleum as 8005 East 42nd Street, Indianapolis, Indiana, and
Attorney King addressed his May 7, 2013 letter to that address to communicate with RS
Petroleum.
Regardless whether Sprit sent the Alleged Renewal to the Marilyn Address, we
conclude that Sprit did not comply with the Lease’s renewal provision because it did not
send notice to RS Petroleum’s last known address. Accordingly, the court’s conclusions
to that effect are not clearly erroneous. Finally, to the extent that Paragraph (x) states that
“notice given as aforesaid shall be a sufficient service thereof and shall be deemed given
as of the date when deposited in any post office, or in any post office box regularly
maintained by the Federal Government,” we find that this language determines the date in
which such notice takes effect but does not contemplate that notice would be “deemed
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given” where notice was not sent to the address last known by Sprit. Thus, to the extent
Sprit suggests that “the lease states that as long as the notice is sent by first class at the
post office address for such party last known to the party giving such notice, [it] should
be deemed given as the date when deposited,” and that “[t]he evidence of the hearing
clearly shows that Siddiqui deposited the letter extending the original lease for a like
period of time,” we find that even assuming it sent the Alleged Renewal, such argument
does not require a different result than the one reached by the trial court.8 Appellant’s
Brief at 23.
II.
The next issue is whether the court erred in determining that there was no year to
year or month to month tenancy between Sprit and RS Petroleum. Sprit argues that “RS
Petroleum accepted rent from Sprit for the month of July, 2013, and by accepting that
rent created either a year to year tenancy or a month to month tenancy.” Appellant’s
Brief at 28-29. Sprit maintains that “the lease unambiguously called for more than one
8
We need not address the issue raised by Sprit of whether it provided timely notice based on the
Alleged Renewal because, as discussed, regardless of whether the Alleged Renewal was sent it was not
effective to give RS Petroleum notice of Sprit’s intent to renew the Lease.
However, even if we were to have found the relevant contractual provisions were ambiguous and
addressed this issue, we note that the court made a credibility determination at the hearing and stated that
“if pressed to make a decision on” the notification issue it “would find that the [Alleged Renewal] was not
sent” and that it did not “believe Mr. Siddiqui . . . .” Transcript at 219. Although the court did not
expressly make a written conclusion of law to this effect, it did not find in its July 31 Order that the
Alleged Renewal was sent, instead merely stating in Finding 23 that “[w]hile Siddique [sic] allegedly
mailed a notice of intent to renew the lease on March 4 . . . RS Petroleum never received any such
notice.” Appellant’s Appendix at 9 (emphasis added). After reviewing the record, we cannot say that the
court’s reluctance to find that the Alleged Renewal was sent in its July 31 Order, coupled with its
statement from the bench that it did not believe that Siddiqui sent the Alleged Renewal, was clearly
erroneous.
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year” and that accordingly a one-year tenancy was created when RS Petroleum accepted
payment in July. Id. at 29 (citing Ind. Code § 32-31-1-3). Sprit argues alternatively that if
a one-year tenancy was not created by the acceptance of rent in July, “the evidence . . .
clearly show[s] that the trial court erred by not at least allowing a month to month
tenancy,” and cites to Ind. Code § 32-31-1-2. Id. at 30. RS Petroleum argues that the
court did not err when it denied Sprit’s oral request following its narrative ruling that the
lease was not renewed, and that “[i]t would be an incredible disservice against public
policy for the Court to grant any of these wishes for Sprit, as one could anticipate a rash
of end-of[-]lease litigation being filed in order to justify a holdover post-lease
termination, and then argue for the judicial creation of a one year lease.” Appellee’s
Brief at 26.
First, to the extent that Sprit cites to Ind. Code § 32-31-1-3 and argues that the
court erred in not finding that a one-year tenancy was created when RS Petroleum
accepted payment in July 2013, we note that it is advancing this argument for the first
time on appeal, and therefore it has waived the issue for purposes of appellate review.
See Grathwohl v. Garrity, 871 N.E.2d 297, 302 (Ind. Ct. App. 2007) (“If a party does not
present an issue or argument to the trial court, appellate review of the issue or argument
is waived.”).
Second, as noted above, after the court stated from the bench that Sprit did not
renew the Lease in accordance with its terms, Sprit’s counsel argued that the Lease
contained a provision “stating that if the tenant remains in the premisses [sic] after the
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expiration of the lease they become a tenancy for month to month and Indiana Code is
very explicit about 30 day notice to terminate a month to month lease.” Transcript at
221. The court responded that “well that might apply except in the case where you’ve
filed a lawsuit and you ask for a TRO . . . . I am not going to extend somebody’s lease
judicially.” Id. The provision in the Lease Sprit’s counsel referenced appears to be
Paragraph (r), titled “HOLDOVER,” which states that “[i]t is agreed that a holding over
beyond the expiration of the term herein specified shall operate as an extension of this
Lease from month to month only.” Appellant’s Appendix at 17. Also, Ind. Code § 32-
31-1-2 provides in relevant part that “[a] general tenancy in which the premises are
occupied by the express or constructive consent of the landlord is considered to be a
tenancy from month to month. . . .”
The record reveals that in April of 2013, soon after the expiration of the time to
renew the Lease, Shakir met with Siddiqui, Shahid Hussain, and Sohail Khan at a
restaurant, and prior to the meeting, Shakir contacted Akhtar Hassan to mediate the
meeting. The purpose of the April Meeting was “to figure out what new lease payment
will be and if they buy the store what would be the value of that store.” Transcript at 78.
Neither Siddiqui nor the other Four S partners in attendance at the meeting stated that
they had sent notification to RS Petroleum or Shakir expressing their intent to renew the
Lease and instead “they were asking how much more rent . . . .” Id. at 76. No resolutions
resulted from the April Meeting, and indeed Shakir was threatened and walked out of the
meeting. Thereafter, the Plaintiffs filed their complaint against RS Petroleum on June 14,
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2013, sixteen days prior to the end of the Lease term. Then on June 25, 2013, Sprit filed
a motion for temporary restraining order asking that the court enter a temporary
restraining order “requiring [RS Petroleum] to recognize and accept [Sprit’s] renewal of
the Lease, enjoining Landlord from evicting [them] from the Premises after June 30,
2013 and until this matter is resolved, and permitting [them] to continue to Lease the
Premises after that date” pursuant to the Lease’s terms. Id. at 65. Prior to RS Petroleum
filing its answer, affirmative defenses, and counterclaim for declaratory judgment,
eviction, and damages on July 8, 2013, the Plaintiffs timely deposited a sum of money for
July rent in RS Petroleum’s account, and at the first hearing on Sprit’s motion for
temporary restraining order the court decided “to let things ride” and set a hearing date in
the same month in order to dispense with it during July 2013. Supplemental Transcript at
33.
Ind. Code § 32-31-1-2 requires that the landlord provide its “express or
constructive consent” in order to create a month-to-month tenancy. RS Petroleum
informed Sprit that the Lease was ended and Sprit resisted RS Petroleum’s attempt to end
the lessor/lessee relationship without involving the court system. Payment for July was
made via direct deposit into an account of RS Petroleum, and only days after the payment
was made the court set a hearing schedule to deal swiftly with Sprit’s motion for a
temporary restraining order. Under these circumstances, in which the Plaintiffs filed a
complaint and Sprit requested a temporary restraining order two weeks prior to the
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expiration of the lease term, we cannot say that Sprit has established a month to month
tenancy based upon Ind. Code § 32-31-1-2 and Paragraph (r).
CONCLUSION
For the foregoing reasons, we affirm the trial court’s July 31 Order.
Affirmed.
BARNES, J., and BRADFORD, J., concur.
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