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Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

FILED
Jun 18 2012, 10:20 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEYS FOR APPELLANT: DONALD WRAY GLENN BOWMAN NICHOLAS GAHL Stewart & Irwin, P.C. Indianapolis, Indiana

ATTORNEYS FOR APPELLEE: GEORGE PLEWS KAREN SCHEIDLER Plews Shadley Racher & Braun LLP Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA
FILMCRAFT LABORATORIES, INC. Appellant, vs. 5200 KEYSTONE LIMITED REALTY, LLC, Appellee. ) ) ) ) ) ) ) ) )

No. 49A02-1107-CT-676

APPEAL FROM THE MARION SUPERIOR COURT The Honorable Michael Keele, Judge Cause No. 49D07-0310-CT-003394

June 18, 2012 MEMORANDUM DECISION - NOT FOR PUBLICATION DARDEN, Judge

STATEMENT OF THE CASE Appellant (defendant below) Filmcraft Laboratories, Inc. ("Filmcraft") files this interlocutory appeal from the trial court's order granting summary judgment to Appellee (plaintiff below) 5200 Keystone Limited Realty, LLC ("KLR") on its claim against Filmcraft and denying a cross-motion for summary judgment motion filed by Filmcraft against KLR. We affirm in part, reverse in part, and remand. ISSUE Whether the trial court erred by granting KLR's motion for summary judgment against Filmcraft. FACTS This interlocutory appeal stems from continuing litigation involving real property--located at 5216 North Keystone Avenue in Marion County ("the Site")--that was tested in 2003 and determined to contain environmental contaminants but apparently has not had any remediation conducted. There are multiple parties that remain in this litigation; however, this interlocutory appeal involves only two parties: Filmcraft and KLR. The designated evidence contained in the most recent summary judgment motions filed by KLR and Filmcraft reveals the following.1 The Site contains a 10,000 square foot building. From 1956 to 1973, the Site was owned by A.C. Demaree, which operated a dry cleaning facility. From 1973 to 1981, Robert Dellen owned the Site. From 1974 to
1

This is the second time KLR and Filmcraft have filed summary judgment motions against each other. The order from the first summary judgment motions between the parties was not appealed, but the facts relating to it will be discussed in the procedural history below.

2

1981, Filmcraft leased space at the Site from Dellen. Filmcraft's business included photography and photographic film development. Eric J. Spicklemire ("Spicklemire") and his father, John Spicklemire, operated and were shareholders and officers in Filmcraft. Later, upon his father's death in 1994, Spicklemire became president of Filmcraft. In 1981, Spicklemire and his father purchased the Site from Dellen.2 From 1981 to 2001, Filmcraft leased space at the Site from Spicklemire. While Spicklemire owned the Site, he also leased space at the Site to various tenants, including Clean Car, Inc. and The Wax Museum & Auto Sales, Inc., which operated car detailing businesses. On May 26, 2000, Spicklemire obtained a loan from Apex Mortgage Corp. ("Apex"), a subsidiary of Firstrust Bank. Spicklemire and Apex entered into a

promissory note, apparently giving Apex a mortgage or security interest in the Site.3 That same day, Filmcraft signed a "Continuing Guaranty" on behalf of Spicklemire. (App. 11).4 In the Continuing Guaranty, Filmcraft--as guarantor--"unconditionally

guarantee[d] and promise[d] to pay" Apex--as lender--"the monies due under the Promissory Note of Borrower [Spicklemire]" and "any and all indebtedness" of Spicklemire to Apex.5 (App. 11).

2

At that time, Dellen held the property under the name Dellen Realty, Inc. Neither KLR nor Filmcraft included the promissory note in its designated evidence.

3

Both Appellant Filmcraft and Appellee KLR filed an Appendix. We will refer to Filmcraft's Appendix as "App." and KLR's Appendix as "KLR's App."
4 5

Spicklemire, in his capacity as President of Filmcraft, signed the Continuing Guaranty on behalf of Filmcraft. Joanna H. Spicklemire, who was secretary of Filmcraft, also signed the Continuing Guaranty as a guarantor. She is not a party in the underlying lawsuit.

3

In July 2001, Filmcraft closed its operations and vacated its space at the Site. Thereafter, Spicklemire defaulted on his loan with Apex, and in September 2001, Apex filed a foreclosure action on the Site.6 The trial court issued a foreclosure judgment decree in April 2002. Following a sheriff's sale in September 2002, Apex obtained title, via the sheriff's deed, to the Site. In 2003, Apex hired an agency to conduct environmental testing of the soil and groundwater at the Site and discovered that the Site contained environmental contaminants, including chlorinated solvents and petroleum hydrocarbons. In October 2003, Apex filed suit against Filmcraft, seeking contribution from Filmcraft for future environmental cleanup costs and alleging that Filmcraft was responsible for these cleanup costs under: (1) Indiana's Environmental Legal Action ("ELA") statute, Indiana Code section 13-30-9-2,7 because Filmcraft had contributed to the release of hazardous substances at the Site; and (2) Indiana Code section 13-30-3-13(d)8 ("the illegal dumping

6

The record on appeal contains very limited information regarding the foreclosure action filed by Apex against Spicklemire because the parties did not include the foreclosure complaint or any documents relating to the foreclosure action in their designated evidence on summary judgment.
7

Indiana Code section 13-30-9-2 provides: A person may, regardless of whether the person caused or contributed to the release of a hazardous substance or petroleum into the surface or subsurface soil or groundwater that poses a risk to human health and the environment, bring an environmental legal action against a person that caused or contributed to the release to recover reasonable costs of a removal or remedial action involving the hazardous substances or petroleum.

8

Indiana Code section 13-30-3-13(d) provides: A landowner on whose land garbage or other solid waste has been illegally dumped without the landowner's consent may, in addition to any other legal or equitable remedy available to the landowner, recover from the person responsible for the illegal dumping:

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statute")9 because Filmcraft had illegally dumped garbage and solid waste at the Site. In August 2004, Filmcraft filed a motion for summary judgment against Apex, arguing that it was not liable under either the ELA statute or the illegal dumping statute. Around that same time in August 2004, the Marion County Auditor gave Apex a notice of delinquent taxes. On October 7, 2004, the Site was sold at a tax sale.10 On December 7, 2004, Apex quitclaimed by deed and sold the Site to KLR.11 Thereafter, KLR was substituted as the plaintiff in the lawsuit against Filmcraft. In January 2005, KLR filed a cross-motion for summary judgment against Filmcraft, arguing that Filmcraft was liable for environmental cleanup costs under the ELA statute and the illegal dumping statute.

(1) reasonable expenses incurred by the landowner in disposing of the garbage or other so lid waste; and (2) reasonable attorney's fees.
9

Indiana Code section 13-30-3-13(d) has also been referred to as the landowner recovery statute. The record on appeal does not reflect who purchased the Site at the tax sale.

10

11

On December 12, 2004, five days after Apex quitclaimed by deed the Site to KLR, Apex and KLR executed a Real Estate Purchase Agreement. This Purchase Agreement provides that: Buyer [KLR] shall be responsible for all real estate taxes . . . due and payable prior to, as of and after the Effective Date [December 12, 2004], including without limitation any and all taxes, special or other assessments, county costs, statutory redemption amounts, administrative fees, and expenses for, relating to or associated with the [Site], including without limitation any amounts related to or arising from the October 7, 2004 tax sale or subsequent rights of redemption and any monies required in connection therewith . . . . (App. 328). The Purchase Agreement also indicates that Seller Apex provided Buyer KLR with various documents, including: the 2003 chemical investigation report for the Site; the complaint Apex filed against Filmcraft; a "Notice of Violation, dated September 24, 2004, from the City of Indianapolis to Apex Mortgage Corporation, related to the [Site];" and a "Notice of delinquent taxes, dated August 24, 2004, from the Auditor of Marion County to Apex Mortgage Corporation, together with all documents and other information associated therewith[.]" While referred to in the Purchase Agreement, neither the September 2004 notice of violation nor the August 2004 notice of delinquent taxes were included in the designated evidence.

5

In March 2005 and May 2005, KLR amended its complaint to add various other defendants who previously owned the Site, including Spicklemire, Russ Dellen, Inc., and A.C. Demaree, as well as defendants who had previously leased space at the Site, including Clean Car, Inc., The Wax Museum & Auto Sales, Inc., and Portrait America, Inc.12 In its last amended complaint, KLR sought contribution from all defendants for future environmental testing and subsequent remediation costs, and KLR also asserted a claim in which it sought to recover unpaid back property taxes from Spicklemire pursuant to Indiana Code section 6-1.1-22-13.13 No counterclaims or cross-claims were filed by any of the defendants. At some point in 2005, KLR alleged that it had paid $25,000 to $30,000 in back property taxes on the Site. The designated evidence does not indicate which tax years were paid by KLR.14 On May 10, 2005, Apex assigned KLR its rights to the Continuing Guaranty signed by Filmcraft on behalf of Spicklemire. On May 24, 2005, KLR filed a second motion for summary judgment, this time against both Filmcraft and Spicklemire. In regard to defendant Spicklemire, KLR argued that Spicklemire was responsible for future cleanup costs under the ELA statute, Indiana Code section 13-30-9-2, because as the former landowner and landlord of tenants, his

12

Portrait America, Inc. was owned and operated by Spicklemire.

KLR's complaint indicates that it sought "the 2002 taxes payable in 2003" owed by Spicklemire, which "were not due when Apex took title in December of 2002" but "remain a lien on the property." (App. 203).
13

The only designated evidence regarding the payment of back taxes was an affidavit from a "member" of KLR, who swore under oath that "[KLR has] paid back real estate taxes on [the Site] in the amount of $25,000 to $30,000[;]" that "[KLR] paid these back taxes in 2005[;]" and that "[t]hese were rea l estate taxes owed by Eric J. Spicklemire." (App. 515).
14

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acts or omissions caused or contributed to the release of hazardous materials at the Site.15 In regard to Filmcraft, KLR argued that Filmcraft was responsible for payment of Spicklemire's environmental liability to KLR pursuant to the Continuing Guaranty that Filmcraft signed when Spicklemire mortgaged the property to Apex in 2000.16 On June 16, 2005, the trial court issued its order on the first motion for summary judgment that was pending between Filmcraft and KLR. In that order, the trial court granted summary judgment to Filmcraft on KLR's claim of illegal dumping but determined that there were genuine issues of material fact regarding KLR's claim that Filmcraft was liable under the ELA statute, and it denied the parties' cross-motions for summary judgment on that claim. Neither party appealed the trial court's summary judgment order. In August 2005, the parties filed a joint motion to stay briefing on KLR's second motion for summary judgment, which the trial court granted. Thereafter, for

approximately the next five years, little to no action occurred between the parties in this case, until the parties filed a joint motion to lift the stay previously granted by the trial court.17

15

KLR also argued that it was entitled to summary judgment against Spicklemire under the illegal dumping statute but later dropped this argument from it summary judgment claims.
16

KLR did not make any argument in its summary judgment motion regarding its claim for back property taxes. The only action that occurred during the pending five years was the trial court's grant of KLR's motions to enter default judgment against A.C. Demaree; Clean Car, Inc.; and The Wax Museum and Auto Sales, Inc. in August 2008.
17

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Thereafter, in August 2010, both Filmcraft and Spicklemire filed individual crossmotions for summary judgment against KLR. Filmcraft argued that it was entitled to summary judgment against KLR, arguing that the Continuing Guaranty encompassed only financial liability, not environmental liability. In Spicklemire's cross-motion for summary judgment against KLR, he argued that he was not liable under the ELA statute, nor was he liable to KLR for unpaid property taxes under Indiana Code section 6-1.1-2213 because KLR was not a taxing unit. In September 2010, KLR filed a reply in support of its summary judgment motion against Filmcraft and Spicklemire. In its reply, KLR argued that, pursuant to either unjust enrichment or pursuant to the rights it acquired when it purchased the Site from Apex, it was entitled to summary judgment against Spicklemire for the payment of back property taxes that were owed by Spicklemire but paid by KLR. KLR also argued it was entitled to summary judgment against Filmcraft because, under the Continuing Guaranty, Filmcraft would be responsible for KLR's payment of Spicklemire's unpaid property taxes. On April 13, 2011, the trial court held a summary judgment hearing.18 On May 31, 2011, the trial court issued an order in which it granted KLR's summary judgment motion against Filmcraft; denied Filmcraft's cross-motion for summary judgment against
18

The summary judgment proceedings were stayed one additional time prior to the summary judgment hearing. In September 2010, the trial court granted KLR's motion to vacate the scheduled summary judgment hearing and KLR's request to stay any decision on the pending summary judgment motions until the Court of Appeals issued an opinion in an appeal that involved the interpretation of the ELA statute and whether a landlord could be liable under the ELA statute. The appeal that was before the Court of Appeals was Neal v. Cure, 49A04-0908-CV-468, and this court issued an opinion in that case on November 24, 2010. See Neal v. Cure, 937 N.E.2d 1227 (Ind. Ct. App. 2010), trans. denied.

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KLR; granted KLR's summary judgment motion against Spicklemire; and denied Spicklemire's cross-motion for summary judgment against KLR. Specifically, the trial court determined that: (1) Spicklemire is liable to KLR for environmental cleanup costs pursuant to the ELA statute; (2) Spicklemire is liable to KLR for back property taxes; and (3) Filmcraft is responsible for Spicklemire's environmental and tax liabilities, "if any," under the terms of the Continuing Guaranty. (App. 9).19 Thereafter, Filmcraft sought to have the trial court certify the summary judgment order for an interlocutory appeal, which the trial court granted. Filmcraft then filed a motion to accept jurisdiction of an interlocutory appeal with this court. This court granted Filmcraft's motion for interlocutory appeal, and Filmcraft timely filed a notice of appeal. Filmcraft now appeals the trial court's grant of KLR's motion for summary judgment against Filmcraft.20

We note that the trial court's order is limited only to a determination that Spicklemire and Filmcraft have potential environmental and tax liability. According to the record before us on appeal, there appear to be many issues yet to be determined by trial court, including, but not limited to, the cost of environmental cleanup, the exact amount of property tax liability, the nature and amount of the hazardous substances released at the Site, and the extent of each party's potential contribution to the release of hazardous substances.
19

Following Filmcraft's filing of its Appellant's Brief, co-defendant Spicklemire filed an appellate brief, titled "Brief of Appellee/Cross-Appellant," in which he argued--as an Appellee--that the trial court properly granted KLR's motion for summary judgment against Filmcraft and argued--as a CrossAppellant--that the trial court erred by granting Appellee KLR's motion for summary judgment against him. Spicklemire also filed a Cross-Appellant Reply Brief. Filmcraft and KLR filed individual motions to strike Spicklemire's Brief and Appendix, and KLR has filed a motion to strike Spicklemire 's Reply Brief. By separate order, we grant Filmcraft's and KLR's motions to strike Spicklemire's brief and appendix and grant KLR's motion to strike Spicklemire's reply brief. Thus, this interlocutory appeal involves review of the trial court's order only as it pertains to KLR's motion for summary judgment against Filmcraft. We will not address issues that relate to KLR's motion for summary judgment against Spicklemire that he may later raise on appeal.
20

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DECISION Filmcraft argues that the trial court erred by granting summary judgment in favor of KLR on its claim that Filmcraft was responsible, under the terms of the Continuing Guaranty, for Spicklemire's environmental and back property tax liabilities. Filmcraft contends that it is entitled to summary judgment on this claim. Resolution of this

interlocutory appeal requires us to interpret the Continuing Guaranty signed by Filmcraft on behalf of Spicklemire when he obtained a loan from Apex Mortgage.21 The standard of review of a summary judgment is the same as that used in the trial court. Kopczynski v. Barger, 887 N.E.2d 928, 930 (Ind. 2008). Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Id.; Ind. Trial Rule 56(C). We consider only the evidence designated to the trial court, and all facts and reasonable inferences drawn from those facts are construed in favor of the nonmovant. Mangold ex rel. Mangold v. Ind. Dep't of Natural Res., 756 N.E.2d 970, 973 (Ind. 2001). The fact that the parties filed

21

KLR argues that Filmcraft has waived its appellate arguments relating to the Continuing Guaranty because Filmcraft has cited cases not cited in its summary judgment motions and has made arguments on appeal that are more specific than it made on summary judgment. We cannot agree that this issue is waived. Indeed, our supreme court has noted: The rule that parties will be held to trial court theories by the appellate tribunal does not mean that no new position may be taken, or that new arguments may not be adduced; all it means is that substantive questions independent in character and not within the issues or not presented to the trial court shall not be first made on appeal. Questions within the issues and before the trial court are before the appellate court, and new arguments and authorities may with strict propriety be brought forward. Wagner v. Yates, 912 N.E.2d 805, 811 n.1 (Ind. 2009) (quoting Dedelow v. Pucalik, 801 N.E.2d 178, 183

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