Edward T. Campbell, Appellant-Defendant v. John Dobbins, Appellee-Plaintiff (2025)

MEMORANDUM DECISION

Case Summary

[1] John Dobbins and Edward T. Campbell entered into a settlement agreement concerning a mold-related illness Dobbins experienced while he was a tenant in one of Campbell's properties. Dobbins later obtained a judgment against Campbell for breaching their agreement. We affirm.

Facts and Procedural History

[2] From 2015 to 2016, Dobbins rented a house on Eagle Creek Road in Valparaiso that was owned by one of Campbell's companies. In 2018, Dobbins sued Campbell and his companies for a mold-related illness he experienced while he was a tenant. In June 2022, Dobbins and Campbell entered into a settlement agreement, which provides, “Commencing on or before July 10, 2022, Campbell shall pay to Dobbins, care of his attorney, the sum of Fifty Thousand and 00/100 Dollars ($50,000.00)” with $1,000 per month “payable on or before the 10th day of each month, with a balloon payment not later than December 10, 2026.” Appellant's App. Vol. 2 pp. 39-40. In addition, Paragraph 1(c), which is the subject of this appeal, provides:

From and after October 2022, Campbell shall not be in default of his payment obligation until after the 10th day of the third month without payment[.]

Id. at 40. Campbell's payment obligation was secured by an “unrecorded Mortgage lien” on a house on North 70 East in Valparaiso. Id. Campbell's attorney drafted “the bulk” of the settlement agreement. Tr. Vol. 2 p. 6.

[3] On October 24, 2024, about two weeks after that month's $1,000 payment was due, Dobbins filed a Verified Motion to Convert Settlement to Judgment, alleging that Campbell didn't make his payment that month and had “breach[ed]” the settlement agreement. Appellant's App. Vol. 2 p. 28. Campbell filed a response in which he argued that he didn't breach the agreement because he had missed only one payment and that under Paragraph 1(c), he was only in default if he missed three “consecutive” payments. Id. at 52 Dobbins filed a reply highlighting that Paragraph 1(c) didn't require the three missed payments to be consecutive and that Campbell had missed payments in November and December 2022, meaning that his October 2024 missed payment “triggered” the default. Id. at 55.¹

[4] A hearing was held in February 2025. Dobbins’ attorney argued that Campbell breached the settlement agreement because he had missed three payments (November 2022, December 2022, and October 2024). Dobbins’ attorney acknowledged that if the word “consecutive” was in Paragraph 1(c), then Campbell wouldn't be in default because his three missed payments were not consecutive:

And like I said, Judge, if it was a consecutive payment provision, we wouldn't even be filing this. We wouldn't be here. But essentially what the argument is and what they want you to believe is, is as long as they make a payment every three and a half months, they can stretch out the payment term․ That's not really what the agreement states. And that's not what we understood it to be.

Tr. Vol. 2 p. 6.

[5] Campbell's attorney didn't dispute that the word “consecutive” was not in Paragraph 1(c). However, he claimed that he and Dobbins’ attorney had negotiated “a 90-day grace period” “in an e-mail.” Id. at 10. The trial court agreed with Dobbins:

Well, what I can tell the parties is when I reviewed the pleadings and I reviewed the agreement, when I read Paragraph C, I didn't know what it meant. But I didn't necessarily have the history and the conversations that the two of you had. And so as I looked at this, I tend to agree with [Dobbins’ attorney] that it indicates it's the third month without payment. And if he's -- if he's had three months without payments, then he's in default thereafter. I am stuck with the four corners of the agreement. And the four corners of the agreement in Paragraph C does not say until after the tenth day of the third consecutive month without payment. And so I can't -- while I can't, you know, take things out of the four corners, I can't put things into it, either.

Id. at 10-11 (emphasis added). Accordingly, the court granted Dobbins’ motion and entered judgment against Campbell for $27,550 plus interest.

[6] Thereafter, Campbell moved to correct error, arguing that the trial court should have considered extrinsic evidence and that if it had done so, it would have ruled in his favor. Campbell attached a series of emails between the attorneys discussing the proposed terms of the settlement agreement. In the first email, Campbell's attorney, who was the main drafter of the settlement agreement, stated that a $50,000 settlement “comes with the following terms.” Appellee's App. Vol. 2 p. 65. The email proposed nine terms, one of which provided: “h) Default will be defined to occur only after three (3) consecutive missed payments.” Id. Dobbins’ attorney replied to the email with comments for each proposed term. As to h), Dobbins’ attorney said, “We need to discuss this. My client would like for $3,000 to be held in escrow with your office to provide a buffer[.]” Id. at 66. Campbell's attorney responded that Campbell said “no to h (escrow),” to which Dobbins’ attorney asked, “Is [Campbell] good with the rest? I assume yes?” Id. at 71, 72. There were no other emails.

[7] At the hearing on the motion to correct error, the trial court asked Campbell's attorney why the word “consecutive” didn't make it into Paragraph 1(c), and Campbell's attorney responded:

[I]n the course of negotiations everybody knew that the default period was three consecutive months. So ․ the tenth day of the third month is consistent with the three consecutive months. And, yes, I did -- apparently after 32 years -- 31 years at the time -- write a bad contract. But I believe the extrinsic evidence explains the ambiguity, and therefore, there is no default.

Tr. Vol. 2 p. 18 (emphasis added).

[8] Dobbins’ attorney explained that they didn't agree with Campbell's proposed term h) and that he emailed Campbell's attorney that they “need[ed] to discuss” it. Id. at 20. Dobbins’ attorney said they proposed an escrow account, which Campbell “rejected,” and that the settlement agreement they “ultimately” got back to sign was “what [they] wanted.” Id. He explained that he didn't “see anything in any of the e-mails or any of the evidence to accuse [him] of lying or misrepresenting what was happening.” Id. He reiterated that they didn't want the term “consecutive” in Paragraph 1(c) because they had a “concern” that Campbell would make a payment, skip three months, and then make another payment, which was “not what the settlement contemplated or was intended.” Id.

[9] When the trial court did not rule on Campbell's motion to correct error within 30 days of the hearing, it was deemed denied under Indiana Trial Rule 53.3(A).

[10] Campbell now appeals.

Discussion and Decision

[11] Campbell contends that Paragraph 1(c) of the settlement agreement is ambiguous as to whether the three missed payments must be consecutive and therefore the trial court should have considered extrinsic evidence. Settlement agreements are governed by the same rules of construction as other contracts. The task is to determine and implement the parties’ intent when they entered the contract. Wohlt v. Wohlt, 245 N.E.3d 611, 616 (Ind. 2024). “And to do that, courts start with the language of the parties’ agreement.” Id. If the contract's terms are unambiguous, then they are conclusive of the parties’ intent, and courts give the contract its plain meaning. Id. “Thus, when reviewing an unambiguous written contract, courts look only to that document, staying within its four corners.” Id. The interpretation of a settlement agreement is generally a question of law. See id.

[12] “On the other hand, if a contract's terms are ambiguous, inconsistent, or uncertain, its interpretation is no longer a question of law but one of fact.” Id. “In that case, the trier-of-fact must determine the facts required to construe the contract.” Id. “And to do that, the factfinder must look outside the contract's four corners to parol (or extrinsic) evidence.” Id. A contract is not ambiguous simply because the parties disagree about the proper interpretation of its terms. Id. “Instead, for an ambiguity to exist, the contract must be subject to more than one reasonable interpretation.” Id.

[13] Again, Paragraph 1(c) provides that “Campbell shall not be in default of his payment obligation until after the 10th day of the third month without payment[.]” Campbell claims that the trial court found that this language was ambiguous as to whether the three missed payments must be consecutive and therefore it erred by not considering extrinsic evidence, i.e., the series of emails between the attorneys. We disagree with Campbell's characterization of the trial court's ruling. Although the court at first expressed uncertainty, it ultimately concluded that the language was unambiguous: “I am stuck with the four corners of the agreement. And the four corners of the agreement in Paragraph C does not say until after the tenth day of the third consecutive month without payment.” (Emphasis added). We agree with the trial court that this language is unambiguous and doesn't require the three missed payments to be consecutive.

[14] Still, Campbell claims that we should look outside the four corners of the settlement agreement because Dobbins’ attorney “intentionally misrepresented the course of the parties’ negotiation of the 90-day grace period” to the trial court in violation of the Indiana Rules of Professional Conduct when he said the settlement agreement didn't require the three missed payments to be consecutive. Appellant's Reply Br. p. 4. But Dobbins’ attorney's statement was not a misrepresentation of what the settlement agreement provides. It is undisputed that Paragraph 1(c) doesn't contain the word “consecutive.” Moreover, the court knew that the parties had discussed the proposed terms over email, including h), and that they disputed what their discussions meant as to that term. The issue, however, was whether the language of the signed settlement agreement was ambiguous. Because it was not, the court properly stayed within the four corners. We therefore affirm the trial court's denial of Campbell's motion to correct error.

[15] Affirmed.

FOOTNOTES

1.   On appeal, Campbell notes that Dobbins raised new issues in his reply. This issue was discussed below, and the trial court pointed out that Campbell had the opportunity to respond to any new issues at the February 2025 hearing. See Tr. Vol. 2 pp. 17-18.

Vaidik, Judge.

Mathias, J., and Pyle, J., concur.