Peak of Manteno, Inc., an Illinois corporation, Appellant-Defendant v. SR45 LLC KJT LLC (2026)

MEMORANDUM DECISION

Statement of the Case

[1] Terry Smith purchased real property from Bailiwyck Properties, LLC (“Bailiwyck”) and conveyed his interests therein to SR45 Properties, LLC and KJT Properties, LLC (“Plaintiffs”). Peak of Manteno, Inc. (“Peak”) was one of the tenants at the property. Peak eventually stopped paying rent. Plaintiffs could not find a tenant to replace Peak and eventually sold the property. Plaintiffs sued Peak for breach of contract and were awarded damages and attorneys’ fees. Peak now appeals and raises several issues for our review, and Plaintiffs raise one additional issue. We restate the issues as follows:

1. Whether the trial court clearly erred by ordering reformation of the assignment document to reflect the correct lease for Peak;

2. Whether the trial court erred in awarding damages;

3. Whether the trial court abused its discretion in awarding Plaintiffs attorneys’ fees; and

4. Whether this court should award Plaintiffs appellate attorneys’ fees.

[2] We affirm and remand.

Facts and Procedural History

[3] This case concerns a single-story medical office building (the “Property”) located at 1310 South Wisconsin Street in Hobart, Indiana, near St. Mary's Hospital. The Property was constructed by Peak and was owned by Bailiwyck. Douglas Babcock and Tracey Erickson were members of Bailiwyck, and Babcock was an officer, director, and shareholder of Peak.

[4] In 2016, Bailiwyck engaged real estate broker Frank Roti of Marcus & Millichap to assist in selling the Property. Bailiwyck's attorney in the matter was Gregory Bouwer. At the time, two of the three rental spaces in the Property had healthcare facilities as tenants under lease, and the third space was vacant. In June 2016, Peak agreed to lease the third space for a term of five years (the “Five-Year Lease”) as part of Bailiwyck's “efforts to sell the property.” Tr. Vol. II at 112.¹

[5] In November 2016, the Property was listed for sale alongside an Offering Memorandum prepared by Marcus & Millichap. Although Peak's lease at the time was for five years, the Offering Memorandum indicated Peak's lease spanned ten years, expiring in 2027, “at below market rent.” Tr. Vol. III at 17.

[6] Terry Smith, Plaintiffs’ managing member, viewed the Offering Memorandum, and became interested in purchasing the Property. Peak's purported ten-year lease was important to Smith. Due to Peak's relationship with Bailiwyck, Smith believed Peak was essentially “the seller,” and Smith “felt like [Peak] had less quality” than the other two tenants. Tr. Vol. II at 11. For this reason, Smith sought and obtained personal guarantees from Babcock and Erickson regarding Peak's lease.

[7] On December 9, Babcock emailed Roti regarding Peak's lease term. Roti asked Babcock to let Smith know “we will be making an amendment to [Peak's] lease, so that it will be 10 years.” Tr. Vol. III at 119. This would make Peak's lease conform to the ten-year figure in the Offering Memorandum. Babcock acknowledged, “we are ․ guaranteeing the lease for 10 years.” Id.

[8] On December 15, Smith and Babcock signed a contract for the purchase of the Property (the “Contract”) with a closing date to be determined at a later date. The Contract did not identify any of the leases on the Property but provided for a 45-day “Review Period,” during which Bailiwyck would provide the leases to Smith for his review. Tr. Vol. III at 104. No later than five days before the closing date, Bailiwyck would provide Smith with tenant estoppel certificates for Smith's approval.

[9] At some point after the Contract was signed but before the closing date, Margaret Mermigas, an attorney who represented Plaintiffs, discussed with Bouwer a “novation” of Peak's lease “so that the term would be converted from a five-year term to a ten-year term upon the closing date.” Tr. Vol. II at 50. On December 19, Roti emailed another broker at Marcus & Millichap regarding Peak's lease, stating, “[W]e have all agreed that the Peak ․ lease needs to be modified to show a 10[-]year term ․ I'll try to get the lease ‘revised’ and executed appropriately this week.”² Tr. Vol. III at 117.

[10] On January 2, 2017, Bailiwyck and Peak signed a new lease document with a term of ten years (the “Ten-Year Lease”). The Ten-Year Lease provided for a “Base Rent” of $4084.00 plus “Additional Rent” composed of Peak's proportional share of the Property's operating and tax expenses, as well as common area maintenance expenses (“CAM Expenses”). Tr. Vol. III at 72. The Ten-Year Lease would “commenc[e] on the date that [Smith] and/or assignee close[d] purchase of [the Property] from Bailiwyck.” Tr. Vol. III at 71–72. On January 10, Erickson, on behalf of Peak, signed an “Estoppel Certificate” stating Peak's lease began upon “Sale Closing” and would expire ten years later in “2027.”³ Tr. Vol. III at 121.

[11] On February 7, Smith assigned his interests under the Contract to Plaintiffs. That same day, Bailiwyck and Plaintiffs signed a special warranty deed conveying the Property from Bailiwyck to Plaintiffs. The deed itself did not reference any leases.

[12] On February 8, the parties closed on the Property. That day, Mermigas sent an email to Bouwer seeking clarification regarding Base Rent prorations and CAM Expenses. Mermigas considered the Base Rent for the Peak lease to be $4084.00 per month “according to” the Ten-Year Lease.⁴ Tr. Vol. III at 131. In response, Bouwer did not dispute the rent amount or the operative lease and instead confirmed “the Peak lease starts on the closing date.” Id. In a subsequent email from that day, Bouwer stated, “Peak's lease has always stated that it started today,” the date of closing. Id. at 130.

[13] Despite the parties’ emails, documents executed on the closing date included discrepancies regarding Peak's lease. The Assignment and Assumption of Leases document (the “Assignment”), in which Bailiwyck assigned the leases on the Property to Plaintiffs, included a rent roll indicating Peak's lease was for “5 Years” and began in February 2016. Tr. Vol. IV at 12. Both the ALTA Loan and Extended Coverage Statement and the Vendor's Affidavit included this same rent roll indicating a five-year lease. The Subordination, Nondisturbance and Attornment Agreement, however, included an exhibit indicating Peak's lease began in June 2016. None of these documents indicated the Ten-Year Lease.

[14] In March 2017, Peak began paying rent to Plaintiffs. Peak received “invoice[s]” from Plaintiffs, Tr. Vol. II at 114, and Peak's payments matched the obligations under the Ten-Year Lease, not the Five-Year Lease.

[15] Peak paid rent at the Ten-Year Lease amount through December 2019 but discontinued paying rent thereafter. On November 13, 2020, Plaintiffs sent Peak a default letter demanding Peak's “unpaid share” of Base Rent and Additional Rent for 2017, 2018, and 2019, as well as “unpaid Base Rent” from January 2020 through October 2020. Tr. Vol. IV at 55. Peak did not make the demanded payments, and on June 11, 2021, Plaintiffs sent Peak a letter terminating the lease.

[16] After terminating the lease, Smith engaged David Lasser to list Peak's former space and find a replacement tenant. Smith, however, was unable to find a new tenant and sold the Property in the fall of 2024. Plaintiffs sued Peak for reformation of the Assignment to reflect the Ten-Year Lease and for damages due to the breach thereof. Plaintiffs also sought to recover on the personal guarantees by Babcock and Erickson to Smith; however, these claims were dismissed on summary judgment upon the trial court's finding that the guarantees were never assigned to Plaintiffs.

[17] At the ensuing bench trial, the central issue was whether the parties intended the operative lease to be the Five-Year Lease or the Ten-Year Lease. Smith argued the parties intended the Ten-Year Lease to be operative based on the negotiations before closing regarding changing Peak's lease term. Babcock and Erickson testified they believed the parties intended the Five-Year Lease to be operative because that lease was the one that “showed up” in the closing documents, specifically, in the Assignment. Tr. Vol. II at 98.

[18] The parties also presented deposition testimony regarding Plaintiffs’ attempts to relet Peak's space after Peak stopped paying rent. Lasser testified that the Property was classified as Class A because it was “new construction” and was “in excellent condition,” which merited a higher relative price. Supp. Ex. Vol. at 11. On the other hand, the Property's location was the “greatest challenge” to finding a new tenant. Id. at 15. The street was “very low traffic,” and Hobart “rank[ed] below” other communities in Northwest Indiana. Id. The space itself was in the back corner of the Property and was “unfinished,” as a concrete floor had not been poured and the walls had not been drywalled. Id.

[19] Lasser obtained only five leads, none of which materialized, some expressly due to the listed rent. Lasser, however, did not believe lowering the rent rate from $17.47 per square feet would have “necessarily” generated more interest. Supp. Ex. Vol. at 31. Lasser further testified that, although he was unable to find a comparable property in Hobart, the Property had a “current market value” of $17.00 to $20.00 per square foot based on his review of 14 similar properties in Northwest Indiana, which had an average base rent of $20.29 per square foot.

[20] Peak's expert, Nicholas Summer, testified the space “could have been rented” at $13.00 per square foot. Supp. Ex. Vol. at 73. Summer based his opinion on a review of five nearby properties also in the area of St. Mary's Hospital, which had an average rental rate of $14.69. Summer, however, noted that there “[we]ren't that many” comparable properties in the area, id. at 75, and that the properties he reviewed were “probably [Class] B or C,” id. at 89.

[21] The trial court issued an order reforming the Assignment to reflect the Ten-Year Lease and ordered Peak to pay $410,563.16 in damages for breach thereof. Peak filed a motion to correct error, which the trial court denied. Plaintiffs also requested attorneys’ fees, which the trial court awarded. This appeal ensued.

Discussion and Decision

1. The Trial Court Did Not Clearly Err by Ordering Reformation of the Assignment

[22] Peak argues that the trial court erred by ordering reformation of the Assignment to reflect the Ten-Year Lease. The trial court entered findings and conclusions pursuant to Trial Rule 52, so we review for clear error. See Roetter v. Roetter, 182 N.E.3d 221, 225 (Ind. 2022) (citing Dunson v. Dunson, 769 N.E.2d 1120, 1123 (Ind. 2002)). “A decision is clearly erroneous if the record facts do not support the findings or if [the trial court] applies the wrong legal standard to properly found facts.” In re R.L., 144 N.E.3d 686, 689 (Ind. 2020) (quoting In re D.J., 68 N.E.3d 574, 577–78 (Ind. 2017)). We will not reweigh the evidence or judge witness credibility, and we consider only the evidence and reasonable inferences that support the trial court's decision. In re Ma.H., 134 N.E.3d 41, 45 (Ind. 2019) (citing In re K.E., 39 N.E.3d 641, 646 (Ind. 2015)). For issues not covered by the findings, we apply our general judgment standard, meaning we “should affirm based on any legal theory supported by the evidence.” State ex rel. Dep't of Nat. Res. v. Leonard, 226 N.E.3d 198, 202 (Ind. 2024) (citing Steele-Giri v. Steele, 51 N.E.3d 119, 123–24 (Ind. 2016); Ind. Trial Rule 52(D)).

[23] Reformation is an “extreme equitable remedy” that permits a court to reform a written contract in order to “reflect the true intentions of the parties.” Est. of Reasor v. Putnam Cnty., 635 N.E.2d 153, 158 (Ind. 1994) (collecting cases). “The remedy of reformation is extreme because written instruments are presumed to reflect the intentions of the parties to those instruments.” Id. (citing Casa D'Angelo, Inc. v. A & R Realty Co., 553 N.E.2d 515, 521 (Ind. Ct. App. 1990), trans. denied; Ethyl Corp. v. Forcum-Lannom Assocs., Inc., 433 N.E.2d 1214, 1217 (Ind. Ct. App. 1982)). A party seeking reformation must prove its case by clear and convincing evidence. Id. at 160.

[24] Reformation is available in cases involving “mutual mistake” or “mistake of one of the parties accompanied by the fraud of the other.” Cutter v. Jurus, 177 N.E.3d 492, 496 (Ind. Ct. App. 2021) (quoting Citizens’ Nat'l Bank of Attica v. Judy, 146 Ind. 322, 43 N.E. 259, 264 (1896)), trans. not sought. Only the former is alleged to be at issue here. Thus, Plaintiffs were required to prove the following: (1) the “true intentions” of the parties to the Assignment; (2) “a mistake was made”; (3) “the mistake was mutual”; and (4) the Assignment as written did “not reflect the true intentions of the parties.” Id. (citing Est. of Reasor, 635 N.E.2d 153).

[25] In ordering reformation here, the trial court concluded that “the evidence presented is clear and convincing that Peak provided a ten-year lease, executed by Bailiwyck as landlord and Peak as tenant as an inducement to Smith not to exercise his right to terminate the Real Estate Contract.” Appellant's App. Vol. II at 17. The trial court further concluded that “references in the closing documents to the five-year lease were mistaken.” Id. at 18. The trial court based these conclusions on the following findings:

1. The Offering Memorandum prepared by Bailiwyck's realtor stated that the Peak lease was a ten-year lease and that Peak had leased the property at below market rate;

2. The Rent Roll provided by Bailiwyck/Peak during due diligence stated that the Peak lease was a ten-year lease;

3. Emails between Bailiwyck's realtor and Plaintiffs’ realtor clearly show the agreement of the parties that Peak's lease needed to have a ten-year duration;

4. Emails between Bailiwyck and Peak's owners and the realtor show they knew the lease was going to be for ten years;

5. The Tenant Estoppel Certificate that Peak executed as a part of the transaction provided that the lease lasted until 2027[,] which was ten years after the closing of the transaction;

6. On the day of closing, the attorneys for Bailiwyck/Peak and Plaintiffs exchanged emails regarding an inconsistency in the term of Peak's lease. Peak's attorney agreed that the lease rate and term were consistent with the ten-year lease, not the five-year lease;

7. All payments that Peak (or related parties) did make were at the monthly rental rate under the ten-year lease, not the five-year lease;

8. At no time during the course of Peak's tenancy did Peak raise the issue of paying the wrong rent amount based upon the ten-year lease rather than the five-year lease.

Id. at 17–18 (record citations omitted).

[26] Peak argues that the trial court's findings and conclusions are clearly erroneous for three reasons: (a) only the Five-Year Lease was operative because the Ten-Year Lease “was not a novation” of the Five-Year Lease, Appellant's Br. at 29; (b) the closing documents as well as Babcock's and Erickson's testimony indicate the parties intended to assign the Five-Year Lease; and (c) reformation was not permitted due to the doctrine of merger. We address each argument in turn.

a. Novation

[27] The trial court found the parties intended the Ten-Year Lease to control, although the trial court did not explicitly find novation. We therefore apply our general judgment standard of review and will affirm based on any legal theory supported by the evidence. Leonard, 226 N.E.3d at 202 (citing Steele-Giri, 51 N.E.3d at 123–24; T.R. 52(D)).

[28] “A novation is a new contract made with the intent to extinguish one already in existence.” Trs. of Ind. Univ. v. Spiegel, 186 N.E.3d 1151, 1162 n.13 (Ind. 2022) (quoting Rose Acre Farms, Inc. v. Cone, 492 N.E.2d 61, 68 (Ind. Ct. App. 1986), trans. denied). “To effect a novation requires (1) a valid existing contract, (2) the agreement of all parties to a new contract, (3) a valid new contract, and (4) an extinguishment of the old contract in favor of the new one.” Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1233 (Ind. 1994) (citing Morris v. Whitmore, 27 Ind. 418, 420 (1866); Boswell v. Lyon, 401 N.E.2d 735, 741 (Ind. Ct. App. 1980)). In determining whether a novation has occurred, contractual language is helpful; however, “express words need not always be present to indicate the assent to and acceptance of the terms of a novation”; the elements “may be implied from the facts and circumstances surrounding the transaction and the conduct of the parties thereafter.” Rose Acre Farms, 492 N.E.2d at 68 (citing Armour & Co. v. Anderson, 114 Ind. App. 485, 51 N.E.2d 496, 497 (1943); 22 Indiana Law Encyclopedia Novation (1959)).

[29] Peak argues that no novation occurred because “[n]o language in the ten-year Lease extinguishes the five-year Lease.” Appellant's Br. at 29. Language in the lease is one way to determine novation but is not the only way; other facts may be determinative. Rose Acre Farms, 492 N.E.2d at 68 (citing Armour & Co., 51 N.E.2d at 497; 22 I.L.E. Novation supra). Here, the Offering Memorandum for the Property indicated Peak had a Ten-Year Lease, which was important to Smith. Although Peak actually only had a five-year lease at the time, Babcock and Roti later confirmed over email that Peak's lease would be changed to reflect a ten-year term in order to complete the sale of the Property. Further, after Smith signed the Contract, Mermigas expressly discussed with Bouwer a “novation” of Peak's lease “so that the term would be converted from a five- year term to a ten-year term upon the closing date.” Tr. Vol. II at 50. In a subsequent email, Roti confirmed, “we have all agreed that the Peak Construction lease needs to be modified to show a 10[-]year term” and that Roti would work on “revis[ing]” the lease. Tr. Vol. III at 117. Lastly, after closing on the Property, Peak made rent payments in the amount provided under the Ten-Year Lease not the Five-Year Lease. The parties’ conduct clearly shows they intended the Ten-Year Lease to novate the Five-Year Lease.

[30] Moreover, Peak does not contend that the Ten-Year Lease is invalid. So, if no novation occurred, both the Ten-Year Lease and the Five-Year Lease would be in effect. The leases cover the same rental space; they cannot coexist. The only rational explanation is that the Ten-Year Lease was a novation of the Five-Year Lease, and the Five-Year Lease was attached to the Assignment by mistake.

b. Witness Testimony and Closing Documents

[31] Peak next contends that reformation was improper because Babcock and Erickson testified they “believed the 5[-]year Lease was the one transferred at the closing” and “the closing documents show that the parties’ intentions were clear in intending to include the 5-year lease.” Appellant's Br. at 27. The picture painted by the closing documents, however, was anything but clear. Although the ALTA Loan and Extended Coverage Statement and the Vender's Affidavit both include a rent roll listing Peak's lease as one for five years beginning in February 2016, the Subordination, Nondisturbance and Attornment Agreement included an attachment indicating Peak's lease began in June 2016 and did not list a term of years. The preparation of these documents was clearly plagued by confusion, miscommunication, or both. Moreover, the Tenant Estoppel Certificate executed one month before closing indicated Peak's lease began at the closing date and expired in 2027, which matches the terms of the Ten-Year Lease. It was for the trial court to weigh the evidence and determine witness credibility to assess the parties’ intent; we will not second guess those determinations. See Ma.H., 134 N.E.3d at 45 (citing K.E., 39 N.E.3d at 646).

c. Merger Doctrine

[32] Last, Peak argues that under the merger doctrine, “the Real Estate Contract and any prior negotiations or agreements were extinguished” upon execution of the deed. Appellant's Br. at 26. The merger doctrine provides that a preliminary contract generally merges into the deed at closing such that only the deed survives. Hemingway v. Scott, 66 N.E.3d 998, 1001 (Ind. Ct. App. 2016).

“Where two parties have made a simple contract for any purpose, and afterwards have entered into an identical engagement by deed, the simple contract is merged in the deed and becomes extinct. This extinction of a lesser in a higher security, like that extinction of a lesser in a greater interest in land, is called merger.”

Id. (quoting Black’s Law Dictionary 1009 (10th ed. 2014)), reh'g denied. In other words, “all prior or contemporaneous negotiations or executory agreements, written or oral, leading up to the execution of a deed are merged therein by the grantee's acceptance of the conveyance in performance thereof.” Id. (quoting Link v. Breen, 649 N.E.2d 126, 128 (Ind. Ct. App. 1995), trans. denied).

[33] The merger doctrine, however, only applies “[i]n the absence of fraud or mistake.” Hemingway, 66 N.E.3d at 1001 (quoting Link, 649 N.E.2d at 128). In Cutter v. Jurus, this court held that the owner of land could not rely on the merger doctrine to prevent reformation of a deed when the previous owner claimed the deed mistakenly omitted reservation of a life estate. 177 N.E.3d at 496. Here, the merger doctrine does not apply because it is clear the Five-Year Lease was attached to the Assignment by mistake and that the parties intended instead for the Ten-Year Lease to be assigned. The trial court did not clearly err by ordering reformation of the Assignment to reflect the Ten-Year Lease.

2. The Trial Court Did Not Err in Awarding Damages

[34] Peak argues that the trial court erred by (1) declining to find Plaintiffs failed to mitigate damages and (2) awarding damages unauthorized under the Contract. We address each argument in turn.

a. Mitigation

[35] The trial court did not enter specific findings regarding mitigation, but such a finding is implicit in the trial court's decision not to reduce damages. Because no specific findings were entered, we again employ our general judgment standard. See Leonard, 226 N.E.3d at 202 (citing Steele-Giri, 51 N.E.3d at 123–24; T.R. 52(D)).

[36] “The duty to mitigate damages is a common law duty independent of the contract terms.”⁵ Fischer v. Heymann, 12 N.E.3d 867, 871 (Ind. 2014) (alteration omitted) (quoting Geller v. Kinney, 980 N.E.2d 390, 399 (Ind. Ct. App. 2012); Salem Cmty. Sch. Corp. v. Richman, 406 N.E.2d 269, 275 (Ind. Ct. App. 1980)). The duty “requires ‘a non-breaching party to make a reasonable effort to act in such a manner as to decrease the damages caused by the breach.’ ” Id. (alteration omitted) (quoting Geller, 980 N.E.2d at 399; Richman, 406 N.E.2d at 275)). As the breaching party, Peak bore the burden of proving that Plaintiffs “failed to use reasonable diligence to mitigate damages.” Id. (quoting Hawa v. Moore, 947 N.E.2d 421, 427 (Ind. Ct. App. 2011)). Plaintiffs’ diligence in this regard “is a question of fact,” so we “defer to the trial court's discretion and reverse only if there are no facts to support its conclusion either directly or by inference.” Id. (citing Berkel & Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d 649, 658 (Ind. Ct. App. 2004)).

[37] Peak first argues that Plaintiffs were not diligent in attempting to relet the space because they “waited nineteen months to offer the property for lease to the public.” Appellant's Br. at 37. Smith, however, testified that he waited this long to “[g]ive [Peak] a chance to pay.” Tr. Vol. II at 34. Moreover, Erickson testified that, around the time Peak stopped making payments, Peak “wanted to buy out the lease.” Id. at 115.

[38] Second, as for the listed rental rate, Peak argues that Plaintiffs should have listed the Property at $13.00 per square foot, in accordance with Summer's opinion. The Offering Memorandum from 2016 indicated that Peak's lease was already “below market rent.” Tr. Vol. III at 17. Lasser testified he did not believe lowering the listing price would have necessarily attracted a new tenant and that the listed rental rate was within the Property's market value. Moreover, the absence of comparable properties complicated ascertaining a proper rental rate. Given this evidence, this is not a case where “no facts” support the trial court's implicit conclusion regarding mitigation, so we will “defer to the trial court's discretion.” Fischer, 12 N.E.3d at 871 (citing Berkel & Co. Contractors, 814 N.E.2d at 658). The trial court did not err by declining to find Plaintiffs failed to mitigate damages.⁶

b. Damages Calculation

[39] We next address Peak's argument that the trial court's damages award is inconsistent with several sections of the Ten-Year Lease. Those sections provide as follows:

ARTICLE 3 – BASE RENT

3.1. Base Rent, Pro-ration for Partial Months. ․ Estimated C.A.M[.] & Operating Expense & Tax Expense is $2.50 [per square foot] per year not to exceed $3.00 [per square foot] per year for the initial lease term ․

Tr. Vol. III at 72 (bold emphasis added).

ARTICLE 5 – ADDITIONAL RENT

* * *

5.5. Payment of Estimated Operating Expenses and Tax Expenses. On or before December 31st of each year during the Lease Term, Landlord shall provide Tenant with a statement detailing Landlord's reasonable estimate of the Operating Expenses and Tax Expenses for the upcoming calendar year (the “Estimated Statement”) and a calculation showing the Landlord's estimate of Tenant's Proportional Share of such expenses.

5.6. Annual Reconciliation of Operating Expenses and Tax Expenses. On or before April 15th of each year, Landlord shall provide Tenant with a statement showing the actual Operating Expenses and Tax Expenses for the previous calendar year (the “Actual Expenses Statement”). Landlord shall indicate on [the] Actual Expenses Statement whether there is a shortfall or overpayment by Tenant in its payment of Operating Expenses and/or Tax Expenses for the prior calendar year․

Id. at 72, 76 (bold emphases added).

5.8. Time Limitation to Bill Tenant for Operating Expenses and Tax Expenses. In no event shall Tenant be required to pay Tenant's Proportional Share of any Operating Expenses or Tax Expenses that Landlord failed to bill Tenant for and that accrued more than two (2) years prior to the date that Tenant is notified by Landlord of such expenses.

Id. at 77 (bold emphasis added).

[40] Peak argues the damages award is erroneous because (1) Plaintiffs did not provide a reasonable estimate of expenses pursuant to Section 5.5; (2) Plaintiffs did not provide Peak with a statement of actual operating and tax expenses pursuant to Section 5.6; (3) Plaintiffs did not provide Peak with timely “notices” of Peak's proportional share of operating and tax expenses pursuant to Section 5.8, Appellant's Br. at 31; and (4) Plaintiffs could not recover Section 3.1 expenses in excess of $3.00 per square foot.

[41] These arguments are in the nature of affirmative defenses. “An affirmative defense is a defense ․ which, in effect, admits the essential allegations of the complaint, but asserts additional matter barring relief.” Cnty. of Lake v. Pahl, 28 N.E.3d 1092, 1099–1100 (Ind. Ct. App. 2015) (citing GKC Ind. Theatres, Inc. v. Elk Retail Invs., LLC, 764 N.E.2d 647, 653 (Ind. Ct. App. 2002)), trans. denied. Peak's arguments fall into this category because Peak does not contest that it failed to pay the expenses owed, but rather that Plaintiffs are not entitled to damages because they failed to comply with the lease's procedures.

[42] Because Peak's arguments constitute affirmative defenses, Peak bore the “burden of proof,” not Plaintiffs. Cnty. of Lake, 28 N.E.3d at 1099 (citing GKC Ind. Theatres, 764 N.E.2d at 653); T.R.8(C). But Peak did not present evidence in support of these defenses at trial. Peak did not demonstrate that Plaintiffs failed to provide a reasonable estimate of expenses pursuant to section 5.5, a statement of actual operating and tax expenses pursuant to section 5.6, or notice of Peak's proportional share of operating and tax expenses pursuant to section 5.8. Peak relies on this court's decision in McFarlan Carriage Co. v. Commersville Wagon Co., 49 Ind. App. 318, 96 N.E. 400, 401 (1911), which held that the buyer could not recover damages from the seller because the buyer had also breached the contract. McFarlan, however, is distinguishable because the plaintiff conceded the conduct demonstrating its breach. Id. at 402. Here, in contrast, a breach by Plaintiffs was Peak's burden to prove, and Peak did not do so.

[43] We further note that Peak did not even raise these arguments until its motion to correct error. Arguments raised for the first time in a motion to correct error are waived. See Shepherd Props. Co. v. Int'l Union of Painters & Allied Trades, Dist. Council 91, 972 N.E.2d 845, 849 (Ind. 2012) (citing Troxel v. Troxel, 737 N.E.2d 745, 752 (Ind. 2000)). In light of Plaintiffs’ demand letter identifying Peak's rent arrearages, Peak had ample opportunity to contend at trial that Plaintiffs failed to follow the procedures required by the lease and were seeking damages in excess of those allowed thereunder. Peak should have made these arguments at trial—not reserved them for the motion to correct error. Moreover, Trial Rule 59(H)(1) provides that when a motion to correct error “is based upon evidence outside the record, the motion shall be supported by affidavits showing the truth of the grounds set out in the motion and the affidavits shall be served with the motion.” Peak attached no such affidavits to its motion.

[44] Lastly, though Peak did not present evidence in support of its affirmative defenses, we will address the arguments regarding Sections 5.8 and 3.1 on the merits. When a contract's language is “clear and unambiguous, it must be given its plain and ordinary meaning.” Decker v. Star Fin. Grp., Inc., 204 N.E.3d 918, 220–21 (Ind. 2023) (quoting Reuille v. E.E. Brandenberger Constr., Inc., 888 N.E.2d 770, 771 (Ind. 2008)). Here, Section 5.8 provided that Peak would not be responsible for its share of operating or tax expenses that Plaintiffs “failed to bill [Peak] for and that accrued more than two (2) years prior to the date that [Peak] [was] notified by [Plaintiffs] of such expenses.” Tr. Vol. III at 77. Erickson testified that Plaintiffs provided Peak with “invoice[s],” Tr. Vol. II at 114, which indicates Plaintiffs did “bill” Peak for expenses, Tr. Vol. III at 77. As for Peak's argument that Section 3.1 capped total Section 3.1 expenses at $3.00, the $3.00 cap only applies to “[e]stimated CAM & Operating Expense & Tax Expenses.” Tr. Vol. III at 72 (emphasis added).

[45] Based on the foregoing, Peak did not present sufficient evidence in support of its affirmative defenses or preserve the arguments for appeal. We thus cannot say the trial court erred in calculating damages.

3. The Trial Court Did Not Abuse Its Discretion in Awarding Plaintiffs Attorneys’ Fees

[46] Next, Peak argues that the trial court's attorney-fee award is erroneous. We will reverse a trial court's decision on attorneys’ fees only for an abuse of discretion. River Ridge Dev. Auth. v. Outfront Media, LLC, 146 N.E.3d 906, 912 (Ind. 2020) (citing Purcell v. Old Nat'l Bank, 972 N.E.2d 835, 843 (Ind. 2012)). “An abuse of discretion occurs when the court's decision either clearly contravenes the logic and effect of the facts and circumstances or misinterprets the law.” Id. We conclude that the trial court did not abuse its discretion in awarding attorneys’ fees here.

[47] Peak first argues that the trial court erred by awarding any attorneys’ fees because the trial court relied on the attorney-fee provision of the Contract, which merged into the deed. “Parties to litigation generally pay their own attorney fees, but may certainly agree by contract to do otherwise.” Reuille, 888 N.E.2d at 771 (citing Carter-McMahon v. McMahon, 815 N.E.2d 170 (Ind. Ct. App. 2004)). Here, the trial court awarded attorneys’ fees pursuant to section 18 of the Contract.

[48] Even if we assume for the sake of argument that the Contract merged into the deed, as Peak contends, the Ten-Year Lease separately and independently provides for attorneys’ fees. Section 29.11 of the Ten-Year Lease provides, “If either party undertakes litigation against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to recover from the other party reasonable attorney fees.” Tr. Vol. III at 94. The Ten-Year Lease was not extinguished by merger, so its attorney-fees provision authorized the award of attorneys’ fees here.

[49] Next, regarding the amount of attorneys’ fees awarded, the trial court awarded Plaintiffs $42,421.19. The trial court declined to award an additional $6,500.00 because Plaintiffs did not prevail on the two claims against Babcock and Erickson for breach of their personal guarantees, which were dismissed following Peak's motion for partial summary judgment. Peak argues that the trial court's attorney-fee award is excessive and that we should order further reduction of the award because (1) the guarantee claims were “half of [Plaintiffs’] counts” and (2) Plaintiffs did not prevail on Peak's partial summary judgment motion.⁷ Appellant's Br. at 41.

[50] When a plaintiff prevails on only a portion of the claims composing the action, the plaintiff cannot recover attorneys’ fees for “unsuccessful claims which are unrelated to those claims upon which the plaintiff ultimately prevailed,” but the plaintiff may recover “fees upon related claims.” Nardi v. King, 253 N.E.3d 1098, 1107 (Ind. 2025) (quoting Nagy v. Evansville-Vanderburgh Sch. Corp., 870 N.E.2d 12, 25 (Ind. Ct. App. 2007)). Related claims are those that “involve a ‘common core of facts or related legal theories.’ ” Id. (quoting Jaffee v. Redmond, 142 F.3d 409, 414 (7th Cir. 1998)). In cases with related claims, “counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis.” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 435 (1983)). “Where a trial court finds that successful and unsuccessful claims are ‘so related that segregation is not reasonable, then it need not segregate the attorney fees.’ ” Id. (quoting O'Neill v. City of Shoreline, 332 P.3d 1099, 1105 (2014)).

[51] Here, Plaintiffs’ claims were related because they all involved Peak's breach of the Ten-Year Lease. Plaintiffs’ litigation expenses were intertwined among the various claims both in the summary judgment motion and at trial. All claims required discovery and research regarding Babcock and Erickson because, in addition to providing personal guarantees, they were the managing officers of Bailiwyck and Peak. The fact that the guarantee claims nominally accounted for half of Plaintiffs claims does not mean the trial court's reduction of the attorney-fee award by $6,500.00 was inadequate. The trial court did not abuse its considerable discretion in awarding attorneys’ fees to Plaintiffs.

4. We Remand for a Determination of Plaintiffs’ Appellate Attorneys’ Fees

[52] Last, Plaintiffs argue that we should remand for an award of appellate attorney fees “[f]or the same reasons that the trial court awarded attorney fees ․ following the trial of the matter.” Appellee's Br. at 31. We understand this to mean Plaintiffs are seeking appellate attorney fees because Plaintiffs are entitled to attorneys’ fees under the Ten-Year Lease. “[W]hen a contract provision provides that attorney fees are recoverable, appellate attorney fees may also be awarded.” Luse Thermal Techs., LLC v. Graycor Indus. Constructors, Inc., 221 N.E.3d 701, 725 (Ind. Ct. App. 2023) (citing Humphries v. Ables, 789 N.E.2d 1025, 1036 (Ind. Ct. App. 2003)), trans. denied. We therefore remand with instructions that the trial court determine whether Plaintiffs are entitled to appellate attorney fees in this matter.

Conclusion

[53] The trial court did not err by ordering reformation of the Assignment document because it is clear the Five-Year Lease was assigned by mistake and the parties intended the Ten-Year Lease to control. The trial court also did not err in awarding Plaintiffs damages. Last, the trial court did not abuse its discretion in awarding attorneys’ fees to Plaintiffs. We affirm the trial court's rulings, and we remand with instructions that the trial court determine whether Plaintiffs are entitled to appellate attorney fees in this matter.

[54] Affirmed and remanded.

FOOTNOTES

1.   Indiana Appellate Rule 28(A) and Items 11 and 13 of Appendix A to the Appellate Rules require a court reporter to consecutively number the volumes of the Transcript; prepare only one table of contents for the entire transcript, including when multiple hearings are transcribed; and to combine multiple hearings into a single transcript, although the hearings may be split between volumes if the court reporter so chooses. Here, two hearings were transcribed, and they occurred in February and May 2025. The court reporter submitted two tables of contents and two sets of Transcript Volume II, one for each of the hearings. To avoid confusion, we use “Tr. Vol. II” to refer to the February transcript.

2.   Relevant to these discussions regarding changing Peak's lease is an affidavit submitted by Smith during the later-ensuing summary judgment proceedings, which Plaintiffs cite in their Appellees’ Brief. Smith stated in the affidavit that during the Review Period, Bailiwyck provided him with the Five-Year Lease, which Smith rejected due to the lease's duration. Smith indicated that he would not move forward with purchasing the Property unless the Five-Year Lease was replaced with a ten-year lease, which the parties thereafter accomplished. Smith, however, did not testify regarding these facts during the trial, so we cannot consider them or his affidavit as evidence.

3.   The Estoppel Certificate did not specify a month or day for the 2027 expiration date because the parties at the time were not “sure exactly what date the closing would be.” Tr. Vol. II at 18.

4.   The Base Rent under the Five-Year Lease was $3625.33 per month for the first year with annual escalations thereafter.

5.   Section 20.2 of the Ten-Year Lease also created a separate and independent duty to mitigate.

6.   Though not necessary to our holding, we further note the unique nature of Peak's tenancy. Recall Peak was the construction company that built the Property and is an entity controlled by the same persons who ran Bailiwyck—the Property's original owner. Bailiwyck and Peak entered the Five-Year Lease as a part of Bailwyck's “efforts to sell the property.” Tr. Vol. II at 112. But it appears Peak never conducted business at the Property, even after Plaintiffs took over management thereof. Indeed, in its Reply Brief, Peak concedes that it “never intended to occupy the premises,” which were “incomplete” and “uninhabitable.” Appellant's Reply Br. at 7. Peak instead contends its lease was “only ․ a stream of income” for the buyer. Id. at 8. We think these circumstances highlight the practical difficulties in finding a replacement tenant for Peak.

7.   Peak also argues that Plaintiffs’ attorney-fee award should be “offset” by the attorneys’ fees Peak was entitled to for prevailing on the guarantee claims. Appellant's Br. at 41. But Peak was not entitled to attorneys’ fees on this issue. It was Babcock and Erickson who prevailed on these claims, not Peak. Moreover, neither Babcock nor Erickson were parties to the Ten-Year Lease, which provided the basis for awarding attorneys’ fees.

Felix, Judge.

May, J., and Mathias, J., concur.