COA rules for buyers in Zionsville real estate dispute

The Indiana Court of Appeals has affirmed that a settlement agreement between the buyers and sellers of Zionsville real estate was valid and enforceable, rejecting the seller’s arguments that a trial court erred by excluding emails between the parties’ attorneys.

After agreeing to purchase a Zionsville property for $1.2 million, buyers Stephen Radentz and Magdalena Czader ran into trouble with sellers Thomas and Laura Downs after disagreements about inspections and appraisals for the real estate. After the parties agreed on a purchase price and executed a purchase agreement, the buyers filed a complaint for specific performance.

Months later, a settlement agreement was negotiated that included references to the purchase agreement. However, more disputes arose with threats of backing out of the settlement agreement to pursue litigation. Despite not having received a current survey of the property, the buyers proceeded to execute the settlement agreement, but the sellers refused to permit them access to the property to perform inspections or appraisals.

A trial court ultimately granted the buyers’ motion to enforce the settlement agreement and ordered the sellers to pay the buyers’ attorney fees and additional damages. In an interlocutory appeal in Thomas K. Downs and Laura H. Downs v. Stephen S. Radentz and Magdalena B. Czader, 19A-PL-382, the sellers argued that the trial court erred by excluding evidence of an email the sellers’ attorney sent to the buyers’ attorney, which stated that the sellers would not accept the buyers’ modifications to the settlement agreement.

First, the sellers contended the email was admissible as an exception to the parol evidence rule because it showed that no contract was ever formed. Additionally, they argued the email was admissible because it was relevant to the issue of whether the settlement agreement was only partially or completely integrated.

Rejecting the seller’s citation of Sho-Pro of Ind., Inc. v. Brown, 585 N.E.2d 1357, 1360 (Ind. Ct. App. 1992), the Indiana Court of Appeals found that unlike Sho-Pro, the proffered evidence of the sellers’ case purported to vary a specific term of the settlement agreement.

“The August 9 email attempted to establish an abbreviated deadline for Buyers to execute the settlement agreement, which directly contradicted the provision in the agreement that gave Buyers ‘a reasonable period of time (as long as they deemed necessary) to consider this agreement before signing,’” Judge Edward Najam wrote. “Thus, while Sellers contend that the August 9 email was offered to show that no contract was formed, the email was a clear attempt to vary an express provision of the settlement agreement and, as such, it was inadmissible under the parol evidence rule.”

The appellate court therefore concluded that the settlement agreement had been formed and that the sellers could not “foist a different deadline term upon Buyers when the agreement provided that it ‘shall not be modified in any respect except by a writing executed by both Parties.’”

The panel likewise disagreed with the sellers’ argument that all parol evidence was admissible to show whether the parties intended the settlement agreement to be only partially or completely integrated. Instead, the appellate court found the contested email to be irrelevant in that regard and that any error in its exclusion was harmless.

Lastly, the appellate court concluded the buyers did not reject the settlement agreement when they requested a survey that was consistent with the terms of the parties’ purchase agreement, and that the sellers did not demonstrate that the settlement agreement violated the statute of frauds.

An award of attorney fees was granted to the buyers after the appellate court concluded they were entitled as such. It therefore affirmed and remanded for appellate attorney fees to be determined by the trial court.