TOWNSEND v. GUPTA (2025)

MEMORANDUM DECISION

Statement of the Case

[1] Senta and Wendell Townsend (collectively, the Townsends) appeal from the trial court's order granting summary judgment in favor of Vinod Gupta in his action alleging breach of a land sale contract. Concluding that the trial court did not err and that summary judgment was warranted, we affirm.

Facts and Procedural History

[2] On September 15, 2012, the Townsends entered into a land sale contract with Gupta for the purchase of property in Jasonville. The purchase price for the property was $99,000.00 to be paid over a period of sixty months. The Townsends made a downpayment of $5,000.00 and agreed to pay $895.18 per month for sixty months with eleven percent per annum on the balance, after which a balloon payment would become due on September 15, 2017 for the remainder. There were provisions for the calculation of interest of late fees, and there was no pre-payment penalty. The Townsends also agreed to pay all taxes due and payable beginning November 2012, all assessments, and utilities, and to provide homeowners’ insurance. And the Townsends agreed “to purchase the real estate and improvements in an ‘as is’ condition with all its faults.” Appellants’ App. Vol. II, p. 16 (¶ 12, reformatted).

[3] The Townsends stopped making the required payments on the contract in March of 2015, paying $31,855.40 toward the purchase price of $99,000.00. And they failed to consistently pay property taxes after March of 2015, with Gupta making the payments in August of 2018, August of 2021, May of 2023, and November of 2023 to avoid a sheriff's sale of the property. The Townsends have continued to live in the house for quite some time, which at the time of the court's order was eight years, without making any payments as required under the contract since the April 2015 payment.

[4] On September 12, 2018, more than three years after the Townsends breached the land sale contract in part by failing to make the installment payments, Gupta filed a “Complaint of Default On Contract” (Gupta's Complaint). He sought a personal judgment against the Townsends for court costs, attorney's fees, payments for real estate taxes, a declaration that the Townsends “have no equity in the contract[,]” the extinguishment of any interest the Townsends might have in the real property, the foreclosure of any redemption period, and for the Townsends to vacate the property and surrender possession to Gupta. Id. at 10.

[5] The Townsends did not file a proper answer to Gupta's Complaint, instead filing a letter addressed to the court. No further action on the case occurred until June 5, 2024 when Gupta filed his motion for summary judgment. Again, the Townsends did not properly respond to the motion, but instead filed a letter addressed to the court. After retaining counsel, the Townsends filed a motion to dismiss Gupta's Complaint in January 2025. Relying on Skendzel v. Marshall, 301 N.E.2d 641 (Ind. 1973), the Townsends argued that a foreclosure action instead of a forfeiture/eviction action should have been filed, and that the case should be dismissed for failure to prosecute. Appellants’ App. Vol. II, pp. 69-70. The trial court denied the motion to dismiss and extended the deadline to file a response to the motion for summary judgment until February 7, 2025. Counsel for the Townsends filed a response to the motion for summary judgment on February 6, raising the defense that a foreclosure action was the proper procedure and should have been filed instead.¹ This defense was raised seven years after Gupta's Complaint was filed. And at the end of the response to Gupta's motion for summary judgment, the Townsends asked the court to grant summary judgment in their favor. Appellants’ App. Vol. II, p. 101.

[6] The court's order granting summary judgment stated in the opening paragraph that, “both [parties] agreed the question at this point is one of matter of law. The facts are not in dispute.” Id. at 124. However, the court entered its findings of fact and conclusions thereon that: (1) the Townsends defaulted for failing to answer Gupta's Complaint; (2) the Townsends failed to assert the affirmative defense of illegality on grounds that a foreclosure action was the proper procedure and, therefore, waived that defense; (3) Gupta was entitled to summary judgment as a matter of law for the Townsends’ failure to respond to the motion for summary judgment; (4) Gupta continued to be entitled to summary judgment even after the Townsends’ counsel entered his appearance and the court extended the deadline for a response “out of fairness”; (5) the Townsends raised for the first time, nearly seven years late, the defense that foreclosure was the proper action; (6) though the Townsends are asking for equitable relief, they must do so without fault, and do not qualify; (7) because Gupta waited more than three years after the Townsends stopped making payments before filing his Complaint, he is not entitled to an additional judgment on the balance due under the contract, interest, or attorney fees; and (8) the Townsends must vacate the premises within thirty days of the court's order. Id. at 125-26. The Townsends now appeal.

Discussion and Decision

[7] The Townsends appeal from the court's order granting summary judgment in favor of Gupta. Summary judgment is appropriate only “if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Ind. Trial Rule 56(C). But summary judgment is not a means for resolution of factual disputes and “ ‘should not be used as an abbreviated trial, even where the proof is difficult or where the court may believe that the non-moving party will not succeed at trial.’ ” Pierson ex rel. Pierson v. Serv. Am. Corp., 9 N.E.3d 712, 715 (Ind. Ct. App. 2014) (quoting Hudson v. Davis, 797 N.E.2d 277, 287 (Ind. Ct. App. 2003), trans. denied), trans. denied. We review de novo whether the trial court properly granted summary judgment. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014).

[8] When we review a grant of summary judgment, our standard of review is the same as that of the trial court. Shambaugh & Son, Inc. v. Carlisle, 763 N.E.2d 459, 461 (Ind. 2002). We consider only those facts that the parties designated to the trial court. Id. The Court must accept as true those facts alleged by the nonmoving party, construe the evidence in favor of the nonmovant, and resolve all doubts against the moving party. Id.

[9] A trial court's order on summary judgment is cloaked with a presumption of validity; the party appealing from a grant of summary judgment must bear the burden of persuading this Court that the decision was erroneous. Indianapolis Downs, LLC v. Herr, 834 N.E.2d 699, 703 (Ind. Ct. App. 2005), trans. denied. We may affirm the grant of summary judgment upon any basis argued by the parties and supported by the record. Payton v. Hadley, 819 N.E.2d 432, 438 (Ind. Ct. App. 2004).

[10] The land sale contract provided that the Townsends were purchasing the property “as is” from Gupta for a purchase price of $99,000.00. The Townsends made a $5,000.00 downpayment. The contract further provided that the $94,000.00 balance was to be paid with eleven percent per annum interest in monthly installments of $895.18 for sixty months beginning September 15, 2012. The entire remaining balance with accrued interest would become due as a balloon payment on September 15, 2017. But there was no pre-payment penalty, meaning the Townsends could pay off the balance and accrued interest in advance.

[11] The contract further provided, in pertinent part, that:

Upon the occurrence of any Event of Default, as hereinafter defined, and at any time thereafter, the entire contract Balance, and all accrued, unpaid interest thereon, shall, at the option of Seller, become immediately due and payable without any notice, presentment, demand, protest, notice of protest, or other notice of dishonor or demand of any kind, all of which are hereby expressly waived by Buyer, and Seller shall have the right to pursue immediately any and all remedies, legal or equitable, as are available under applicable law to collect such Contract Balance and accrued interest, to foreclose this Land contract, and as may be necessary or appropriate to protect Seller's interest under this Contract and in and to the Real Estate. The following shall each constitute an “Event of Default” for purposes of this Contract:

(a) Default by Buyers for a period of thirty (30) days in the payment of (i) any installment of the Purchase Price when due under the terms of this contract, (ii) any installment of real estate taxes on the Real Estate or assessment for a public improvement which by the terms of this Contract are payable by Buyer, or (iii) any premium for insurance required by the terms of this Contract to be maintained by Buyer[.]

Appellants’ App. Vol. II, p. 41.

[12] It is uncontroverted that the Townsends paid only $31,855.40 toward the purchase price and had stopped making payments on the contract in March 2015. It is also uncontroverted that the Townsends failed to pay all of the property taxes after March 2015, with Gupta paying the property taxes in August of 2018, August of 2021, May of 2023, and November of 2023 to avoid a sheriff's sale of the property. These were Events of Default as defined by the land sale contract, and, as such, entitled Gupta to pursue his legal remedies. And the trial court correctly entered summary judgment in his favor.

[13] Relying on Skendzel, the Townsends’ primary argument in their response to Gupta's motion for summary judgment was that this case should have been filed as a foreclosure action instead of a forfeiture. In Skendzel, our Supreme Court held that in all but a few specific instances, the proper relief to be granted a vendor upon the vendee's material breach of a land sale contract was not a forfeiture but a judgment of foreclosure pursuant to Indiana Trial Rule 69(C) and the mortgage foreclosure statute. 301 N.E.2d at 649. However, the Supreme Court went on to say:

This is not to suggest that a forfeiture is an inappropriate remedy for the breach of all land contracts. In the case of an abandoning, absconding vendee, forfeiture is a logical and equitable remedy. Forfeiture would also be appropriate where the vendee has paid a minimal amount on the contract at the time of default and seeks to retain possession while the vendor is paying taxes, insurance and other upkeep in order to preserve the premises.

Id. at 650 (emphasis added).

[14] Here, the record reveals that the Townsends had paid less than a third of the purchase price under the contract. And they had lived in the house for eight years without making payments and without making several property tax payments. Consequently, pursuant to Skendzel, forfeiture was appropriate in this case.

[15] In sum, we conclude that the trial court properly applied Skendzel in its determination that forfeiture was the appropriate action here. The Townsends had lived in the house for eight years without making the installment payments and without making several of the property tax payments. However, Gupta's prosecution of the action was marked by significant delays. And in fairness to the Townsends, the court denied Gupta's request for the balance due under the contract, interest, or attorney fees because of the delays in filing the Complaint and prosecuting the claims. The court did not err by granting summary judgment in Gupta's favor.

Conclusion

[16] In light of the foregoing, we affirm the trial court's judgment.

[17] Affirmed.

FOOTNOTES

1.   “Forfeiture divests property without compensation; in other words, forfeiture terminates an existing contract without restitution.” Deason v. Bill R. McWhorter & Heather McWhorter Revocable Living Tr., Dated Jan. 24, 2023, 112 N.E.3d 1082, 1086 (Ind. Ct. App. 2018). Whereas, “ ‘[u]pon foreclosure, the vendee retains a vendee's lien upon the sale, and once the balance owed under the contract has been paid to the vendor, the vendee may retain the proceeds from the sale.’ ” Id. at 1085 (quoting McLemore v. McLemore, 827 N.E.2d 1135, 1143 (Ind. Ct. App. 2005)). “ ‘If the foreclosure does not net a sufficient amount to satisfy the vendor's remaining security interest in the property, a damage judgment for waste caused by the vendee equivalent to the amount recoverable by a mortgagee as a deficiency judgment would be appropriate.’ ” Id.

Baker, Senior Judge.

Vaidik, J., and Tavitas, J., concur.