L2 LLC v. Steven Dollens and the Estate of Donna Dollens, Appellees-Defendants (2025)

MEMORANDUM DECISION

[1] L2 Acquisitions LLC (“L2 Acquisitions”) appeals the trial court's order dismissing its amended complaint against Steven Dollens ¹ and the trial court's subsequent order denying its motion to correct error. L2 Acquisitions raises several issues on appeal, which we consolidate, revise, and restate as whether the trial court erred in concluding that L2 Acquisitions’ complaint failed to state a claim upon which relief could be granted. We reverse and remand.

Facts and Procedural History

[2] Dollens and Robyn Landon, an authorized agent of L2 Acquisitions, signed a real estate purchase agreement ² in February 2024 whereby Dollens agreed to sell real estate located on North Randall Street (“Property”) in Ingalls, Indiana, to L2 Acquisitions for $71,350. The purchase agreement provided that L2 Acquisitions was to pay a $10,000 down payment to Dollens and then make monthly payments to Dollens for a 30-year period to cover the remaining purchase price and interest. The agreement stated that closing was to take place on or before March 31, 2024, and the monthly payments were to begin on May 1, 2024. It did not set a specific date for when the down payment was due. As a condition precedent to closing, the purchase agreement stated: “[Dollens] shall provide [L2 Acquisitions] with a title insurance commitment, issued by the title company, showing marketable title to the Property in the name of [Dollens], subject only to exceptions acceptable to [L2 Acquisitions].” (App. Vol. 2 at 49.) The purchase agreement did not require payment of earnest money, but it did include a provision regarding default:

If either Party fails to comply with this Contract, the noncomplying Party shall be in default and the other Party may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this Contract and receive a refund of any earnest money paid.

(Id. at 50.)

[3] “Prior to closing, Lenders Escrow & Title Service (‘Closing Agent’) attempted to contact [Dollens] to prepare for the closing, but [Dollens] refused to cooperate.” (Id. at 101.) L2 Acquisitions “signed the paperwork required to close the purchase” and “paid closing costs to the Closing Agent.” (Id.) Dollens “failed to close on the sale as agreed.” (Id.) L2 Acquisitions filed suit against Dollens on April 1, 2024, and later amended its complaint. The amended complaint alleged Dollens breached the purchase agreement, and it sought specific performance of the sale by Dollens, compensation for lost rental income incurred because of delay in completion of the sale, and attorney fees.

[4] Dollens filed a motion seeking dismissal of the amended complaint pursuant to Trial Rule 12(B)(6). Dollens asserted L2 Acquisitions failed to state a valid breach of contract claim because it did not allege the existence of any consideration to make the purchase agreement binding. Dollens also contended the complaint failed to state a claim upon which relief could be granted because L2 Acquisitions “has not alleged that they tendered the called for sales consideration to the agreed upon closing agent at the agreed upon closing which is a fatal defect.” (Id. at 106.)

[5] The trial court held two hearings on the motion to dismiss, and it issued an order granting the motion to dismiss on January 13, 2025. The trial court's order stated:

2. Parties entered into a written agreement entitled RESIDENTIAL REAL ESTATE PURCHASE CONTACT [sic] dated February 23, 2024.

3. Paragraph two (2) of that contract contained the term of a $10,000 down payment to be paid to the seller (Defendant).

4. Evidence discloses that Plaintiff asserts the consideration due is the purchase price of $71,350.00 as of the date of the filing of this action.

* * * * *

6. There is no evidence before the court that the Down Payment was tendered from the Buyer to the Seller and thereby no consideration.

7. Defendants’ Motion to Dismiss is granted. Plaintiff's Amended Complaint is Dismissed.

(Id. at 10-11) (emphases in original). L2 Acquisitions then filed a motion to correct error, and the trial court summarily denied that motion.

Discussion and Decision

[6] L2 Acquisitions appeals the trial court's dismissal of its amended complaint and its subsequent denial of L2 Acquisitions’ motion to correct error. When a motion to correct error raises a pure question of law, we review the trial court's order on the motion de novo. See Ind. Bureau of Motor Vehicles v. Charles, 919 N.E.2d 114, 116 (Ind. Ct. App. 2009) (“Although rulings on motions to correct error are usually reviewable under an abuse of discretion standard, we review a case de novo when the issue on appeal is purely a question of law.”) Likewise, we review a trial court's ruling on a Trial Rule 12(B)(6) motion de novo.³ Safeco Ins. Co. of Ind. v. Blue Sky Innovation Grp., Inc., 230 N.E.3d 898, 901 (Ind. 2024), reh'g denied.

[7] “[W]e view motions to dismiss for failure to state a claim with disfavor because such motions undermine the policy of deciding causes of action on their merits.” Arflack v. Town of Chandler, 27 N.E.3d 297, 305 (Ind. Ct. App. 2015). “A motion to dismiss under Rule 12(B)(6) tests the legal sufficiency of a complaint: that is, whether the allegations in the complaint establish any set of circumstances under which a plaintiff would be entitled to relief.” Trail v. Boys & Girls Clubs of Nw. Ind., 845 N.E.2d 130, 134 (Ind. 2006). “In reviewing the complaint, we take the alleged facts to be true and consider the allegations in the light most favorable to the nonmoving party, drawing every reasonable inference in that party's favor.” Bellwether Props., LLC v. Duke Energy Ind., Inc., 87 N.E.3d 462, 466 (Ind. 2017). “In 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.” Arflack, 27 N.E.3d at 302.

[8] Because a Trial Rule 12(B)(6) motion does not involve weighing the sufficiency of the evidence supporting a complaint, the trial court erred by concluding that the amended complaint should be dismissed because “[t]here is no evidence before the court” that L2 Acquisitions tendered the down payment. (App. Vol. 2 at 11.) A supposed lack of evidence is not an appropriate basis on which to grant a motion to dismiss pursuant to Trial Rule 12(B)(6). See, e.g., Chenore v. Plantz, 56 N.E.3d 123, 126 (Ind. Ct. App. 2016) (holding trial court erred in dismissing complaint pursuant to Trial Rule 12(B)(6) based on its resolution of factual dispute regarding when plaintiff should have discovered the alleged legal malpractice).

[9] L2 Acquisitions contends it adequately pled the existence of a contract to support its breach of contract claim. See BloomBank v. United Fid. Bank F.S.B., 113 N.E.3d 708, 725 (Ind. Ct. App. 2018) (“To prevail on a claim for breach of contract, a plaintiff must prove (1) the existence of a contract, (2) defendant's breach of that contract, and (3) damages from the breach.”), trans. denied. “The basic requirements for a contract are offer, acceptance, consideration, and a meeting of the minds between the contracting parties on all essential elements or terms of the transaction.” Terrault v. Scheere, 200 N.E.3d 490, 495 (Ind. Ct. App. 2022).

[10] L2 Acquisitions asserts “the sole consideration on the part of Mr. Dollens is the conveyance of good title for which L2 Acquisitions [sic] consideration was to pay Mr. Dollens a total of $71,350.00 plus interest.” (Appellant's Br. at 11.) “ ‘Consideration consists of a bargained-for exchange.’ To constitute sufficient consideration to create a contract, a benefit must accrue to the promisor, or a detriment must accrue to the promisee.” Bassett v. Scott Pet Prods., Inc., 194 N.E.3d 1185, 1192 (Ind. Ct. App. 2022) (quoting B-Dry Owners Ass'n v. B-Dry Sys., Inc., 636 N.E.2d 161, 163 (Ind. Ct. App. 1994), trans. denied), trans. denied. “To be enforced by specific performance, a contract for the sale of real estate need only be reasonably definite and binding as to its material terms. A party seeking specific performance of a real estate contract must prove that the contract obligations of that party have been substantially performed or that an offer to do so has been made.” Humphries v. Ables, 789 N.E.2d 1025, 1034 (Ind. Ct. App. 2003) (internal citation omitted).

[11] Here, according to the allegations in the amended complaint, Dollens agreed to sell the Property to L2 Acquisitions for the consideration of $71,350. L2 Acquisitions completed its obligations to the extent that it could by appearing at the closing and paying the associated closing costs. While the trial court faults L2 Acquisitions for not tendering the down payment to Dollens, the purchase agreement did not specify when the down payment was due. Thus, the due date for payment of the down payment remains a question of fact. In addition, even presuming the down payment was due on or before the closing date, Dollens failed to follow through on his obligations under the purchase agreement before the closing date. See Coates v. Heat Wagons, Inc., 942 N.E.2d 905, 917 (Ind. Ct. App. 2011) (“When one party to a contract commits the first material breach of that contract, it cannot seek to enforce the provisions of the contract against the other party if that other party breaches the contract at a later date.”). He defaulted by not presenting marketable title on or before March 31, 2024, and the purchase agreement allowed specific performance as a remedy in the event of default. These allegations adequately state a claim for breach of contract, and we reverse the trial court's order and remand for further proceedings consistent with this opinion. See, e.g., BloomBank, 113 N.E.3d at 727-28 (holding participant lender adequately alleged breach of contract claim against primary lender by alleging the primary lender breached contract by not promptly notifying the participant lender of events that materially and adversely affected the participant lender's interests).

Conclusion

[12] Because the facts alleged in L2 Acquisitions’ complaint adequately state a claim upon which relief can be granted, the trial court erred in granting Dollens’ motion to dismiss and in denying L2 Acquisitions’ motion to correct error. Accordingly, we reverse the trial court and remand for further proceedings consistent with this opinion.

[13] Reversed and remanded.

FOOTNOTES

1.   The amended complaint also named the Estate of Donna Dollens, Dollens’ late wife who died in 2015, as a defendant but alleged any interest she had in the Property automatically transferred to Dollens upon her death. We presume this to be true because we take the facts alleged in the complaint to be true for the purpose of deciding a Trial Rule 12(B)(6) motion. See NFI Interactive Logistics LLC v. Bruski, 239 N.E.3d 63, 69 (Ind. Ct. App. 2024), trans. denied. Therefore, we refer only to Dollens.

2.   Indiana Trial Rule 9.2(A) states: “When any pleading allowed by these rules is founded on a written instrument, the original, or a copy thereof, shall be included in or filed with the pleading.” However, L2 Acquisitions did not attach the purchase agreement to either its initial complaint or the amended complaint. Nonetheless, a copy of the purchase agreement appears in the record, and we may consider its terms. See, e.g., CW Farms, LLC v. Egg Innovations, LLC, 169 N.E.3d 874, 878-79 (Ind. Ct. App. 2021) (reviewing contract's language in analyzing whether complaint alleging breach of contract failed to state a claim upon which relief could be granted), trans. denied.

3.   Dollens notes the trial court heard testimony during the hearing on September 5, 2024, and he argues we should therefore review the trial court's order for clear error. See, e.g., Thomas v. Blackford Cnty. Area Bd. of Zoning Appeals, 907 N.E.2d 988, 990-91 (Ind. 2009) (reviewing for clear error the factual findings of the trial court after an evidentiary hearing on a motion to dismiss for lack of standing). However, that testimony was related to L2 Acquisitions’ request for a temporary restraining order. A motion to dismiss pursuant to Trial Rule 12(B)(6) tests the sufficiency of the complaint, and “the allegations of the complaint are required to be taken as true.” Id. at 990.Rule 12(B) states:If, on a motion, asserting the defense number (6), to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56. In such case, all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.However, Dollens did not designate or reference any materials outside the pleadings in his motion to dismiss. Likewise, the trial court did not notify the parties of its intent to treat the motion like a motion for summary judgment or give L2 Acquisitions the opportunity to designate evidence in opposition to the motion. See, e.g., Lanni v. Nat'l Collegiate Athletic Ass'n, 989 N.E.2d 791, 797 (Ind. Ct. App. 2013) (holding trial court did not give plaintiff reasonable opportunity to respond after converting a Rule 12(B)(6) motion to a Trial Rule 56 motion and reversing grant of summary judgment). Therefore, the trial court's order is properly viewed as a dismissal pursuant to Trial Rule 12(B)(6), and we apply a de novo standard of review.

May, Judge.

Mathias, J., and Bradford, J., concur.