Stephen W. Marvel and Debria Marvel v. Jason Althoff, Erin Althoff and Gene O. Dorsey (mem. dec.) ( 2016 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), May 06 2016, 9:07 am
this Memorandum Decision shall not be CLERK
regarded as precedent or cited before any Indiana Supreme Court
Court of Appeals
and Tax Court
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES
Steven L. Whitehead Margaret M. Christensen
Princeton, Indiana Karl L. Mulvaney
J. Robert Kinkle Bingham Greenbaum Doll LLP
Hall, Partenheimer & Kinkle Indianapolis, Indiana
Princeton, Indiana Donald J. Fuchs
Bingham Greenbaum Doll LLP
Evansville, Indiana
Val J. Fleig
Petersburg, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Stephen W. Marvel and May 6, 2016
Debria Marvel, Court of Appeals Case No.
Appellants-Plaintiffs, 63A05-1512-PL-2167
Appeal from the Pike Circuit Court
v.
The Honorable Jeffrey L.
Biesterveld, Judge
Jason Althoff, Erin Althoff and
Trial Court Cause No.
Gene O. Dorsey, 63C01-1504-PL-83
Appellees-Defendants
Mathias, Judge.
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 1 of 9
[1] Stephen and Debria Marvel filed a complaint in Pike Circuit Court seeking an
order to compel the partition of certain real estate. Two of the named
defendants filed a motion to dismiss, which the trial court granted. The Marvels
appeal and argue that the trial court erred in dismissing their complaint because
they have a right to have the tenancy partitioned.
[2] We affirm.
Facts and Procedural History
[3] The parties in this case are Stephen and Debria Marvel (“the Marvels”), Erin
and Jason Althoff (“the Althoffs”), and Gene O. Dorsey (“Dorsey”). Erin is the
Marvels; daughter and, at the time relevant to this appeal, was married to
Jason.1
[4] Dorsey held a fee simple title to a 255.63-acre farm (“the Farm”) in Pike
County, Indiana. Included on this real estate was a house and a garage. On
February 23, 2007, Dorsey entered into a Contract for Conditional Sale of Real
Estate (“the Contract”) with the Marvels and the Althoffs (collectively “the
Buyers”) to sell the Farm for a purchase price of $561,000. Pursuant to the
Contract, the Buyers paid $100,000 of the purchase price at the time of
execution, and the remaining $461,000 was to be paid in annual installments of
$30,733.33, plus interest, on March 1 of each year until March 1, 2017. On this
1
Jason and Erin filed for divorce in January 2015, and their dissolution action was pending at the time of the
present case.
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 2 of 9
date, the Contract gives Dorsey the right to demand the unpaid balance and
interest. The Contract provides that the Buyers have the right to prepay the
purchase price without penalty and that the Buyers are responsible for all
property taxes and insurance on the Farm.
[5] The Contract also provides that Dorsey retains a life estate in the residence and
the garage and that the Buyers will not receive legal title to the Farm until full
payment of of the purchase price. Dorsey is responsible for normal maintenance
of the house and garage not to exceed $250 per occurrence, but the Buyers are
responsible for all maintenance costs in excess of $250. The Contract further
states that the Buyers may not alter or remove any improvements on the Farm,
or make any additional improvements, without Dorsey’s prior written consent.
The Contract also states that the Buyers may not sell or assign their interest in
the Contract or the property without Dorsey’s prior written consent, nor may
the Buyers lease or permit others to occupy the farm without Dorsey’s consent.
The Contract gives the Buyers the right to immediate possession of the Farm,
save the house and garage, as of February 24, 2007.2
[6] On April 4, 2014, the Marvels filed a complaint for partition of real estate. The
complaint sought “an order compelling partition of the [Farm], subject to the
2
On April 28, 2008, after the execution of the Contract, Dorsey conveyed his interest in the farm and the
agreement to the Gene O. Dorsey Trust. Because this does not affect our analysis, we refer to the trust and
Dorsey as “Dorsey.”
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 3 of 9
life estate of Gene O. Dorsey as to the residence and garage[.]” Appellant’s
App. p. 25. The complaint named as defendants the Althoffs and Dorsey.
[7] Jason Althoff and Dorsey filed a joint motion to dismiss the Marvels’ complaint
on June 1, 2015, claiming that the Marvels did not have standing to seek
partition of the farm because they did not share a common interest in the farm
with Dorsey. The joint motion to dismiss also argued that partitioning the farm
would deprive Dorsey of his rights under the Contract.3 After various
responsive filings, the trial court held a hearing on the matter on August 11,
2015. After considering the parties’ proposed findings and conclusions, the trial
court entered its own findings and conclusions dismissing the Marvel’s
complaint on September 25, 2015. The Marvels then filed a motion to correct
error on October 26, 2015. The trial court denied this motion on November 23,
2015, and the Marvels now appeal.
Standard of Review
[8] The standard of review on appeal from a trial court’s grant of a motion to
dismiss for failure to state a claim is de novo and therefore requires no deference
to the trial court’s decision. Arflack v. Town of Chandler, 27 N.E.3d 297, 302 (Ind.
Ct. App. 2015). The grant or denial of a motion to dismiss turns on the legal
sufficiency of the claim and does not require determinations of fact. Id. In
3
After the Marvels responded, Jason Althoff filed an additional motion to dismiss, noting that the Marvels
had failed to name the real party in interest in their complaint, i.e. the Gene O. Dorsey Trust. The Marvels
later amended their complaint to address this deficiency.
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 4 of 9
determining whether any facts will support the claim, we look only to the
complaint and may not resort to any other evidence in the record. Id.[9] To the extent that a trial court, in ruling on a motion to dismiss for failure to
state a claim, considers matters outside of the pleadings, the motion should be
treated as one for summary judgment. See Azhar v. Town of Fishers, 744 N.E.2d
947, 950 (Ind. Ct. App. 2001) (citing Ind. Trial Rule 12(B)). Here, the facts are
undisputed, and regardless of whether we view the trial court’s ruling as one
granting a motion to dismiss or granting summary judgment, the matter before
us is a pure issue of law which we review de novo. See Swanskin v. Town of Ogden
Dunes, 949 N.E.2d 825, 828 (Ind. 2011) (noting that issues of law are reviewed
de novo).
Discussion and Decision
[10] The Marvels claim that the trial court erred in concluding that they could not
bring a partition action. The Marvels argue that they and the Althoffs are
tenants in common and that they therefore have standing to bring an action to
partition their interests as tenants in common. The Marvels refer to Indiana
Code sections 32-17-4-1 and -2. These statutes provide:
(a) The following persons may compel partition of land held in
joint tenancy or tenancy in common as provided under this
chapter:
(1) A person that holds an interest in the land as a joint tenant or
tenant-in-common either:
(A) in the person’s own right; or
(B) as executor or trustee.
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 5 of 9
(2) If the sale of the estate of a decedent who held an interest
in the land as a joint tenant or tenant in common is
necessary, the decedent’s administrator or executor.
(b) A trustee, an administrator, or an executor may be made a
defendant in an action for the partition of real estate to answer as
to any interest the trustee, administrator, or executor has in the
real estate.
Ind. Code § 32-17-4-1 (emphasis added).
(a) A person described in section 1(a) of this chapter may file a petition
to compel partition in the circuit court or court having probate
jurisdiction of the county in which the land or any part of the land is
located.
(b) A petition filed under subsection (a) must contain the
following:
(1) A description of the premises.
(2) The rights and titles in the land of the parties interested.
(c) At the time a person files a petition under subsection (a), the
person shall cause a title search to be made regarding the land
that is the subject of the partition. The person shall file a copy of
the results of the title search with the court.
Ind. Code § 32-17-4-2 (emphasis added).
[11] The Marvels read these statutes to mean that they may petition the trial court to
partition the farm because they and the Althoffs are tenants in common.
However, this matter is not quite that simple.
[12] First, the Marvels and the Althoffs do not yet have legal title to the farm.
Indeed, they admit that, as purchasers of real estate on contract, they have only
equitable title to the farm. See Area Plan Comm’n, Evansville-Vanderburgh Cnty. v.
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 6 of 9
Hatfield, 820 N.E.2d 696, 699 (Ind. Ct. App. 2005) (noting that once a contract
for the sale of land is executed, equitable title vests with the buyer), trans. denied;
UFG, LLC v. Sw. Corp., 784 N.E.2d 536, 541 (Ind. Ct. App. 2003) (noting that
under a typical land contract, the seller retains legal title until the total contract
price is paid by the buyer but that equitable title vests in the buyer at the time
the contract is consummated), trans. denied.
[13] We recognize that it has long been held in this state that a party seeking
partition must have the right to possession of the land and hold either legal or
equitable title. Hurwich v. Zoss, 170 Ind. App. 542, 544, 353 N.E.2d 549, 550-51
(1976); Helvey v. O’Neill, 153 Ind. App. 635, 641, 288 N.E.2d 553, 557 (1972);
McClure v. Raber, 106 Ind. App. 359, 19 N.E.2d 891, 894 (1939); Schissel v.
Dickson, 129 Ind. 139, 28 N.E. 540, 543 (1891). Thus, the fact that the Marvels
and Althoffs possess only an equitable title does not by itself disqualify the
Marvels from seeking partition.
[14] However, given Dorsey’s contractual right to regain the right to possession of
the Farm in the case of default on the part of the Buyers, it would be odd to
allow the Marvels to partition real estate to which they do not yet even hold
legal title. Indeed, partition often leads to a sale of the property, yet the Marvels
do not yet hold legal title to the Farm. Thus, their position would allow them to
force the sale of land for which they do not hold legal title.
[15] More important, however, is the fact that the Marvels and Althoffs do not enjoy
the right to possess the entire farm because Dorsey, in addition to holding legal
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 7 of 9
title to the farm, still holds a life estate in the house and garage on the farm.
Accordingly, the Marvels and Althoffs are the remaindermen of the house and
garage. See Piel v. Dewitt, 170 Ind. App. 63, 70, 351 N.E.2d 48, 53 (1976) (noting
that the death of the life tenant is the customary means for ending a life estate
and conferring possessory rights upon the remainderman). It has long been the
case in Indiana that “partition can not be adjudged between remainder-men
during the existence of a life-estate.” Shaw v. Beers, 84 Ind. 528, 529 (1882)
(citing Coon v. Bean, 69 Ind. 474, 476 (1880); Schori v. Stephens, 62 Ind. 441, 448
(1878)).
[16] What the Marvels wish to do is to partition the interests of the tenants in
common of the equitable title to the farm but leave Dorsey’s life estate
unchanged. As noted, the Marvels and Althoffs hold not only the equitable title
to the farm as tenants in common, they are also the remaindermen of the life
estate reserved by Dorsey. To allow the Marvels to partition the Farm would be
to permit them to partition land for which they do not yet have a possessory
right, the house and garage. The Marvels refer us to no authority that would
permit them to “partially” partition the farm, i.e., partition the parts in which
they have a possessory interest, yet leave the house and garage untouched by
the partition. For this reason alone, we believe the trial court’s judgment was
proper.
[17] Moreover, as noted by the trial court, the Contract itself provides that the
Marvels and Althoffs (as the buyers) may not “sell or assign this Contract,
Buyer’s interest therein or Buyer’s interest in the Real Estate, without the prior written
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 8 of 9
consent of Seller.” Appellant’s App. p. 159 (emphasis added). Partitioning the
farm would be contrary to this provision. Indeed, the partition statutes
contemplate that the real property to be partitioned may ultimately have to be
sold at a judicial auction if the parties are unable to agree. See Ind. Code § 32-
17-4-2.5(d), (g) (providing that, if the parties are unable to agree in mandatory
mediation as to the method of sale, the court shall order an agreed-to auctioneer
or the sheriff to sell the land). To permit the sale of the farm without Dorsey’s
consent would be in direct violation of the terms of the Contract.
Conclusion
[18] The trial court did not err in concluding that the Marvels do not have the right
to force partition of the Farm because Dorsey possesses not only the legal title
to the Farm, but also a possessory right of a life estate in the house and garage
located on the Farm. Moreover, to partition the Farm would be contrary to the
provisions of the Contract entered into between the Marvels and the Althoffs as
Buyers and Dorsey as the seller. Accordingly, we affirm the judgment of the
trial court.
[19] Affirmed.
Vaidik, C.J., and Barnes, J., concur.
Court of Appeals of Indiana | Memorandum Decision No. 63A05-1512-PL-2167 | May 6, 2016 Page 9 of 9