Jerel D. Lucas, Appellant-Respondent v. Claudia Lucas, Appellee-Petitioner (2026)

MEMORANDUM DECISION

Case Summary

[1] As part of their divorce proceedings in 2019, Jerel (Husband) and Claudia (Wife) Lucas entered into a mediated settlement agreement (the Agreement) that dictated numerous matters. Pursuant to the Agreement, Husband owed Wife a $200,000 equalization payment, due in monthly installments over twenty years. To secure those payments, Husband executed a deed transferring eighty-eight acres of real estate worth significantly more than the equalization payment, which Wife was to hold in trust unless and until Husband defaulted on the monthly payments. In the event of default, the entire outstanding balance would be due, and Wife could record the deed and either (1) sell the real estate pursuant to the terms of the Agreement, or (2) hold title to the real estate in her name until Husband paid the balance due in full.

[2] In 2024, after defaulting on the payments and believing Wife was not abiding by the Agreement's terms, Husband filed a motion to enforce the Agreement. Wife opposed the motion on the grounds that Husband had materially breached its terms and was barred from maintaining an action to enforce the Agreement. The trial court agreed with Wife and denied Husband's motion. He appeals, arguing the court erred in concluding he materially breached the Agreement. Finding the court erred, we reverse and remand for further proceedings consistent with this opinion.

Facts and Procedural History

[3] As relevant to this appeal, the parties’ Agreement provided:

14. The Husband will pay the Wife the sum of $200,000 for a fair and reasonable division of the parties’ marital estate. This shall be paid at the rate of $834.00 per month each month for 20 years (240 months). Payments shall begin on February 15, 2019 and be due each month on the 15th until paid in full․

15. To secure that these payments are made, the Husband agrees to transfer 88 acres [of certain real estate] ․ to the Wife by February 11, 2019. The Wife will hold this deed in trust and will only be transferred in the event of default. Once the Wife is paid in full, she will transfer the land back to the Husband within 30 days․ The Wife agrees that except as otherwise allowed in this Agreement, she will not sell or in any other way encumber the land with debt.

a. If the Husband is ever 15 days late on his payment, then the balance of the debt owed ․ shall be accelerated and shall all be due and owing. The Wife shall then have the right to sell the land for a fair market value and pay off the total remaining debt owed to her from the proceeds and return the remaining proceeds to the Husband․

․

ii. If the Husband defaults on his payments and the Wife plans to sell the land, she must first provide the Husband and the parties’ son, Jared, with the first option to purchase. When the Wife receives an offer she wishes to accept, she shall give the Husband 48 hours to purchase under the same terms. If he declines, then she must offer it to her son for the same terms with 48 hours to decide whether he wants it. If the son declines to purchase, then the Wife may sell the property to the third party.

Appellant's Appendix Vol. 2 at 21-22.

[4] Husband was also obligated to make an additional $389.85 monthly payment to Wife to pay off his one-half share of the tax liens that had been placed against the marital residence. Like the equalization payments, these were due on the fifteenth of each month. However, unlike the equalization payments, there were no specific terms governing Wife's remedies if Husband failed to make the tax liability payments on time. With this additional payment beginning in 2020, Husband owed Wife $1,223.85 each month thereafter, but Husband rounded up each obligation slightly and paid Wife $1,235 every month.

[5] From July 2019 to July 2023, Husband paid Wife each month by calling their bank and transferring money from his account into hers. Every single payment was made after the fifteenth of the month, and twenty-eight of the forty-nine payments (roughly fifty-seven percent) were made fifteen or more days late. See Exhibits Vol. 1 at 215-16. Despite their lateness, Wife continuously accepted Husband's payments. On September 7, 2023, Husband had yet to make the payment for August. Wife texted him that morning asking, “Should I go ahead and file the land deed?” Id. at 214. Wife filed the executed deed that same day, making her the record owner of the real estate. Husband eventually responded saying, “I got so involved with my work that I must have forgot[ten] the [A]ugust payment. I will move money on Monday. Sorry I missed.” Id. Ultimately, Husband made the August and September payments on October 2 and made the October payment on the 26th. Wife accepted all of them.

[6] On November 20, Wife's attorney sent Husband's attorney a letter informing him that Wife had filed the deed. The letter also informed Husband that,

[c]onsistent with the provisions of ․ paragraph[ ] #15a [of the Agreement], please know that [the parties’] son Jared will at some point in the future begin making monthly payments to [Wife] in the amount of $1,235 per month against an outstanding balance of $168,248.83.

Please know that when Jared does take over those payments and the amount is paid in full[,] [Wife] intends to transfer the acreage to Jared․

Id. at 208. Despite this letter, Husband continued to make monthly payments to Wife. However, in March 2024, she closed the account into which Husband had been depositing the payments. Husband then hand delivered cashier's checks, a few of which Wife deposited until she finally refused to accept any more. When neither Wife nor her attorney would accept Husband's checks, his attorney held them in trust on his behalf.

[7] On August 14, 2024, Wife's attorney sent Husband's attorney another letter stating, in relevant part,

According to our records ․ [Husband] still owes one hundred fifty-nine thousand six hundred three dollars and eighty-three cents ($159,603.83) towards payment for the property.

If [he] wishes to purchase the property, he has fourteen (14) days from the date of this letter to do so. Failure to purchase the property in the allotted timeframe will result in [Wife] offering the property as the first option to purchase to [their son,] Jared Lucas.

Id. at 219. Sixteen days later, on August 30, Wife's attorney sent another letter, which provided:

In my letter dated August 14, 2024, [Wife] gave [Husband] the opportunity to cure [his] default ․ and pay[ ] the accelerated debt ․, of which [Husband] had failed to cure.

[Wife] has decided she is not going to sell the property to anyone. Currently, [she] is in possession of four (4) cashier's checks which she intends to deposit and credit towards the outstanding [tax liability] due and owing by [Husband] ․

Id. at 218.

[8] On September 27, 2024, Husband filed a motion to enforce the settlement agreement and requested a temporary restraining order (TRO). He claimed he “had made all payments as ordered[,] ․was current on the contract[,]” and was continuing to make the monthly payments despite Wife's refusal to accept them. Appellant's App. Vol. 2 at 37. He also claimed Wife had “indicated that she [was] going to sell the property in a fashion that [was] contrary to the terms of the ․ Agreement.” Id. On that basis, he requested the TRO and a hearing on the grounds that “irreparable injury, loss[,] or damage ․ will be caused to [him] in the event that [Wife] ․ transfer[red] the property contrary to the Agreement.” Id. The trial court set the matter for a hearing which, after several continuances, was ultimately scheduled for June 18, 2025. The court also granted Husband's request for a TRO, setting it to expire at midnight on the date of the hearing.

[9] Wife filed a motion to dismiss the TRO in April 2025, which the trial court added to the list of motions to be addressed at the hearing. The day before the hearing, Wife filed a brief in opposition to Husband's motion and request for TRO. She argued that Husband's late payments constituted a material breach of the Agreement, and as the first party to materially breach, he was barred from enforcing the Agreement against her. She also asserted she was “the legal owner of the eighty-eight ․ acres and as the owner[,] ․ may lease the acreage to Jared Lucas and Chad Lucas[¹ ] to farm the property.” Appellee's App. Vol. 2 at 20.

[10] At the hearing, the parties testified consistently with the facts above. Husband acknowledged the late August 2023 payment. He explained that he had called the bank as usual to transfer the money, but the bank employee failed to carry out the transfer. He also testified that at the beginning of this payment arrangement, Wife agreed to let him pay at the end of the month rather than by the fifteenth as provided for in the Agreement. Husband testified to his belief that if he paid Wife the full remaining equalization balance, she was required to transfer the real estate back to him within thirty days. He estimated that the real estate was worth over $800,000. When Wife was asked about her continued rights and obligations under the Agreement, she responded, “I don't really know how to answer that. [Husband] breached the [A]greement. So, I don't know how to go back and look at [it] for my rights because the [A]greement is no longer valid because he breached it.” Transcript at 114. Husband's attorney then asked whether she believed she had to transfer the property back to Husband within thirty days if he paid her in full, to which she said, “No, we're done․ I filed the deed and I own the property. The [A]greement was breached. I feel like we're all done.” Id. at 115. Wife also explained that she believed the letters sent by her attorney in November 2023 and August 2024 fulfilled the obligation to provide Husband with the right of first refusal to purchase the real estate.

[11] Jared and Chad also testified. Both explained that until 2024, they had informally leased the property from Husband. They testified that sometime in late 2023 or early 2024, Jared and Wife discussed the possibility of him purchasing the property and making the same $1,235 monthly payments that Husband had been making. However, Wife, Jared, and the nephew never reduced any terms to writing, and Wife testified at the hearing that she had “no plans to sell the property.” Id. at 121.

[12] Pursuant to Wife's motion under Trial Rule 52(A), on September 2, 2025 the trial court entered an order with findings of fact and conclusions of law. Most relevant to this appeal, the court found it was “undisputed that [Husband] was more than fifteen (15) days late with his payment at least once, which was August 2023[,]” and that “[t]his constitute[d] a breach of the agreement.” Appellant's App. Vol. 2 at 15. The court then concluded that

[Husband]’s failure to timely pay [Wife] in August 2023 was a material breach of the ․ Agreement between the parties. [Husband] was the first to breach the ․ Agreement.

It is well established Indiana Law that a party who first breaches a contract may not claim under the contract. In Coat[e]s v. Heat Wagons, Inc., 942 N.E.2d 905, 917 (Ind. Ct. App. 2011), the court held that 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.

[Husband] cannot seek to enforce a contract that he has breached.

Id. at 16.

[13] As a result, the court denied Husband's motion to enforce the Agreement and dismissed the TRO. Husband filed a motion to correct errors challenging the court's conclusion that his late payment constituted a material breach of the Agreement, to which Wife filed a response in opposition. The court summarily denied Husband's motion. He now appeals.

Discussion and Decision

[14] Where a trial court enters findings of fact and conclusions of law pursuant to a party's Rule 52(A) motion, we first “determine whether the evidence supports the findings, and second we determine whether the findings support the judgment.” Zukerman v. Montgomery, 945 N.E.2d 813, 818 (Ind. Ct. App. 2011). We will not reweigh evidence or assess witness credibility. Id. “We review questions of law de novo and owe no deference to the trial court's legal conclusions.” Id.2

[15] “Settlement agreements are governed by the same general principles of contract law as any other agreement.” Turner v. Nationstar Mortg., LLC, 45 N.E.3d 1257, 1263 (Ind. Ct. App. 2015) (quoting Georgos v. Jackson, 790 N.E.2d 448, 453 (Ind. 2003), reh'g denied). Because contract interpretation is a pure question of law, we review it de novo. Id. When interpreting a contract, our goal “is to determine the intent of the parties when they made the agreement.” City of Plymouth v. Michael Kinder & Sons, Inc., 137 N.E.3d 312, 315 (Ind. Ct. App. 2019). We are obligated to

examine the plain language of the contract, read it in context and, whenever possible, construe it so as to render every word, phrase, and term meaningful, unambiguous, and harmonious with the whole. If contract language is unambiguous, this court may not look to extrinsic evidence to expand, vary, or explain the instrument but must determine the parties’ intent from the four corners of the instrument.

Id. (internal citations omitted).

[16] Husband argues the trial court erred by denying his motion to enforce ³ the Agreement on the grounds that his untimely August 2023 payment constituted a material breach.⁴ He applies the factors set out in the Restatement (Second) of Contracts section 241, claiming his late payment was not a material breach of the Agreement. But even if it was, he argues this breach did not discharge Wife's duty to abide by the Agreement's terms regarding her rights to the real estate in the event of default. Wife asserts the Restatement factors do not apply here, contending instead that the Agreement expressly provides that husband's late payment was a material breach. And, according to Wife, “where—as here—the contract itself expressly provides forfeiture as the remedy for a material breach, forfeiture is the appropriate remedy.” Appellee's Brief at 40. As she did at trial, Wife seems to maintain on appeal that Husband materially breached the Agreement and therefore she could record the deed, own the real estate outright, and stop performing under the Agreement. We disagree with Wife in several respects.

[17] First, Wife fails to indicate where in the Agreement the “forfeiture clause” language upon which she relies is set forth. Typically, forfeiture clauses permit the non-breaching party to terminate the contract upon the other party's breach. See, e.g., Johnson v. Larkins, No. 22A-EV-2844, 2023 WL 4190746, at *1 (Ind. Ct. App. June 27, 2023) (forfeiture clause providing that “[i]f [the party] failed to timely cure the default, the remainder of the [p]urchase [p]rice would be due within thirty days upon which date the [c]ontract would terminate”) (mem.); Bates v. Wiper Corp., No. 23A-PL-27, 2023 WL 5419666, at *2 (Ind. Ct. App. Aug. 23, 2023) (forfeiture clause providing that upon the Buyer's willful and material breach of the contract, the “Seller may, at Seller's option, cancel th[e] [c]ontract and take possession of the [r]eal [e]state”) (mem.); Henderson v. Henderson, 139 N.E.3d 227, 230 (Ind. Ct. App. 2019) (forfeiture clause provided that in the event the buyer failed to perform or make payments according to the contract, “the [c]ontract shall, at the option of the Sellers, be forfeited and terminated”). We find no such clause, or one similar, in the Agreement at issue here.

[18] Second, we disagree with Wife's argument that the Restatement is inapplicable on the grounds that “the Agreement itself provide[s] the ‘standard’ for determining what breaches are ‘material[.]’ ” Appellee's Br. at 30. To support her argument, she cites State v. International Business Machines Corp., 51 N.E.3d 150 (Ind. 2016). There, our Supreme Court concluded the Restatement factors were inapplicable in light of the fact that the “plain language” of the parties’ contract provided the “standards for evaluating the materiality of a breach[.]” Id. at 160. The contract specifically provided that “a series of breaches of [the party]’s obligations ․ collectively constitute a breach of t[he] [a]greement which is material when considering t[he] [a]greement as a whole” and permitted the injured party to terminate the contract. Id. at 155. Contrary to Wife's contention, there is no such provision in the Agreement at issue here defining what constitutes a material breach. While Husband's late payment is a “default,” there is nothing in that provision or elsewhere in the Agreement that describes that event, or any other, as a material breach.

[19] Because the Agreement does not delineate what constitutes a material breach, we must evaluate Husband's default in light of the Restatement factors to determine whether the late payment was a material breach. “A material breach is often described as one that goes to the ‘heart of the contract.’ ” Int'l Bus. Machs. Corp., 51 N.E.3d at 158-59. In determining whether a breach is material, we examine the following factors:

(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;

(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;

(c) the extent to which the party failing to perform will suffer forfeiture;

(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;

(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.

Id. at 160 (quoting Restatement (Second) of Contracts § 241 (1981)). Before applying these factors here, we note that the trial court did not discuss them or explain how it came to the conclusion that Husband's default was a material breach. And it's difficult to see how the court reached that conclusion under the present circumstances.

[20] Starting with the first factor, Husband's default did not deprive Wife of the benefit she's owed under the Agreement. In addition to the fact that Husband eventually made the August 2023 payment and subsequent monthly payments, the Agreement sets out two remedies to ensure Wife receives the benefit owed to her should Husband default. The second factor also favors a finding of no material breach, as the Agreement's acceleration clause (payment for which is secured by the real estate) not only adequately compensates her for Husband's failure to pay a single monthly payment but arguably puts her in a better position than she was in before Husband's breach. Moreover, finding Husband materially breached and permitting Wife to keep the real estate without fulfilling her obligations under the Agreement would undoubtedly cause Husband to suffer forfeiture. He would forfeit his rights to the real estate or its value, which is concerning since the Agreement provided that he was to receive either the real estate or its fair market value (minus his outstanding debt) in the event of his default. If Wife is allowed to retain ownership without any outstanding obligation to transfer it back, she will receive not only the real estate, which in and of itself is worth significantly more than what she was to receive under the Agreement, but also any and all profits from leasing the real estate or selling it in the future. We agree that finding this breach to be material would “result[ ] in a windfall to Wife that is much more than the amount owed to her” under the Agreement. Appellant's Br. at 22. Thus, the third factor favors finding no material breach.

[21] Turning to the final two factors, as we previously noted, Husband paid the August 2023 amount on October 2 which, again, Wife accepted. While he did not pay the full accelerated amount, he testified that he is willing and able to do so. See Tr. at 52. Lastly, for almost four years, over half of all the payments Wife accepted from Husband's were fifteen or more days late. See Van Bibber v. Norris, 419 N.E.2d 115, 121 (Ind. 1981) (“[T]he secured party may not ordinarily establish a pattern of accepting time payments which may be slightly late and then suddenly insist on strict compliance with time provisions and declare a forfeiture[.]” (quoting 79 C.J.S.Supp. Secured Transactions § 100 (1974))). And he continued to make payments while the proceedings were pending, many of which Wife also accepted. In light of that, we cannot say his behavior failed to comport with good faith and fair dealing given how he and Wife had operated up to that point. See Farm Bureau Mut. Ins. Co. of Ind. v. Emmons, 104 N.E.2d 413, 416 (Ind. Ct. App. 1952) (“Repeated waivers of default by accepting delayed payments may lull the vendee into making late payments, relying on the expectation that they will be accepted as compliance with his contract.”).

[22] Having considered each of the Restatement factors, we find the factors support a conclusion that Husband's untimely August 2023 payment should not be considered a material breach of the Agreement. As a result, Husband could maintain an action to enforce the terms of the Agreement, and the trial court erred in ordering otherwise. Therefore, we reverse and remand.

[23] We note for the court on remand that the Agreement contemplates the exact scenario the parties found themselves in and unambiguously sets out their rights and obligations in such circumstances. And we agree with Husband that he is entitled to tender the full accelerated amount of the equalization payment and then have Wife transfer the real estate back to him within thirty days. However, Wife is also entitled to sell the real estate in accordance with the terms of the Agreement, meaning she can agree to sell the real estate to a third party for fair market value, offer Husband and Jared their rights of first refusal, sell it to the third party should they each decline to exercise those rights, and then recover the outstanding balance owed on the Agreement from the sale proceeds before transferring any surplus funds to Husband.

Conclusion

[24] Finding the trial court erred in denying Husband's motion to enforce the Agreement, we reverse and remand for further proceedings consistent with this opinion.

[25] Reversed and remanded.

FOOTNOTES

1.   Chad Lucas is the parties’ nephew.

2.   The parties disagree as to whether Husband appeals from a negative judgment or an adverse judgment. Wife asserts that “because Husband had the burden of proof at trial and lost, he is appealing a negative judgment.” Appellee's Brief at 20 (citing Shepard Wrex Mgmt., LLC v. Est. of Scott, 272 N.E.3d 224, 229 (Ind. Ct. App. 2025), reh'g denied, trans. granted). Husband argues that because he is appealing the court's conclusion that he materially breached the contract, which was Wife's affirmative defense for which she had the burden of proof, he “is appealing an adverse judgment, not a negative judgment.” Appellant's Reply Br. at 8 (citing Richard I. Spiece Sales Co. v. Levi Strauss N. Am., 19 N.E.3d 345, 352-53 (Ind. Ct. App. 2014), trans. denied). We agree with Husband, as “an adverse judgment is one that was entered against a party defending on a given question[.]” Richard I. Spiece Sales Co., 19 N.E.3d at 352 (quoting Kotsopoulos v. Peters Broad. Eng'g, Inc., 962 N.E.2d 97, 105 (Ind. Ct. App. 2011) (alteration in original)). On the question of whether Husband materially breached the Agreement, Husband was defending and Wife bore the burden of proof. Therefore, Husband is appealing from an adverse judgment.

3.   Husband does not challenge the trial court's dismissal of the TRO.

4.   Wife asserts Husband has waived his arguments for appeal by failing to raise them below prior to the entry of judgment. See Appellee's Brief at 25. We disagree. Although “[a] party generally waives appellate review of an issue or argument unless [they] presented that issue or argument before the trial court[,]” waiver may still be avoided in certain circumstances. Nance v. Miami Sand & Gravel, LLC, 825 N.E.2d 826, 834 (Ind. Ct. App. 2005) (quoting Dedelow v. Pucalik, 801 N.E.2d 178, 183 (Ind. Ct. App. 2003)), trans. denied. Specifically, we will not find waiver where (1) “the newly-raised issue was inherent in the resolution of the case,” (2) “the other party had unequivocal notice of the issue below and had [the] opportunity to litigate it,” or (3) “if the trial court actually addressed the issue below in the absence of argument by the parties.” Id. Given that each of these circumstances applies in this case, we find that Husband has not waived his arguments on appeal.

DeBoer, Judge.

Mathias, J., and Kenworthy, J., concur.