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FOR PUBLICATION

ATTORNEY FOR APPELLANT: IAN A.T. McLEAN Crawfordsville, Indiana

ATTORNEY FOR APPELLEE: LIBERTY L. ROBERTS Collier-Magar & Roberts, P.C. Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA
JERRY WOLFE, D/B/A WOLFE CONSTRUCTION, Appellant-Plaintiff and Cross Appellee, vs. EAGLE RIDGE HOLDING COMPANY, LLC., Appellee-Defendant and Cross Appellant. ) ) ) ) ) ) ) ) ) ) ) )

No. 61A01-0610-CV-453

APPEAL FROM THE PARKE CIRCUIT COURT The Honorable Sam Swaim, Judge Cause No. 61C01-0510-CT-357

July 13, 2007 OPINION - FOR PUBLICATION BARNES, Judge

Case Summary Jerry Wolfe d/b/a Wolfe Construction Company ("Wolfe") appeals the trial court's refusal to foreclose a mechanic's lien on property owned by Eagle Ridge Holding Company, LLC ("Eagle Ridge") and awarding of a judgment in favor of Eagle Ridge in the amount of $13,917.14. Eagle Ridge cross-appeals the trial court's refusal to require Wolfe to pay Eagle Ridge's attorney fees. 1 We affirm in part, reverse in part, and remand. Issues The issues before us are: I. whether an accord and satisfaction occurred that fulfilled Eagle Ridge's debt to Wolfe that formed the basis of the mechanic's lien; whether the trial court properly calculated the damages to which Eagle Ridge is entitled based on Wolfe's failure to release the mechanic's lien; and whether the trial court properly concluded that Wolfe was not required to pay Eagle Ridge's attorney fees. Facts In June 2004, Eagle Ridge contracted with Wolfe to construct a building on Eagle Ridge's property, also known as Cox Ford Recreation Park. On October 27, 2004, after completion of the work, Wolfe sent Eagle Ridge a final invoice for $27,031.75. On October 30, 2004, Eagle Ridge sent Wolfe a check for $12,000.00 as partial payment on

II.

III.

1

There were other named parties in this action but the trial court's judgment only affected Wolfe and Eagle Ridge.

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the final invoice, thus leaving slightly over $15,000.00 unpaid under the invoice. On November 15, 2004, Eagle Ridge sent a check, number 1031, to Wolfe in the amount of $10,461.94. Written on both the front and back of the check were the words, "Full & Final Payment." App. p. 372. The check was accompanied by a "Debit Memorandum" labeled, "Corrections to Final Cox Ford Recreation Park Invoice, dated October 27, 2004." Id. at 381. This document listed several areas in which Eagle Ridge believed the final invoice was inaccurate and overcharged Eagle Ridge in the amount of $4,569.81. Wolfe did not immediately cash check 1031. Instead, on December 10, 2004, Wolfe filed with the Parke County recorder a notice of intention to hold a mechanic's lien against Eagle Ridge's property. On June 8, 2005, Wolfe attempted to cash check 1031. Above Wolfe's endorsement of the check was a stamp stating, "Deposited without prejudice & with full reservation of all rights to balance per IC 26-1-1-207. It is not an accord or [sic] satisfaction. . . ." Id. at 372. Eagle Ridge's bank, Fifth Third, refused to cash the check because it was more than six months old. On June 15, 2005, Eagle Ridge sent Wolfe a second check, number 1071, in the amount of $10,461.94. Like check 1031, this check was also marked on the front and back, "Full & Final Payment." Id. at 377. This check was accompanied by a letter from Glen Pyle of Eagle Ridge, explaining that it was intended to replace check 1031 and also stating, "I am sending this via certified mail, with return receipt requested, so that I will know that you have received the replacement check, which you can cash and have your complete payment." Ex. 17. Like check 1031, check 1071 also was accompanied by an itemized list reflecting Eagle Ridge's position on how much Wolfe had overcharged Eagle Ridge, though it was slightly different from 3

the earlier list. On June 28, 2005, Wolfe endorsed and cashed check 1071. Wolfe's endorsement this time was not accompanied by any language purporting to reserve the right to collect additional amounts. Also during June 2005, Eagle Ridge began attempts to obtain a mortgage on the property with Fifth Third, after its earlier construction loan matured. Fifth Third locked in an interest rate of 6.99% for Eagle Ridge while the loan was being negotiated and processed. However, because of the mechanic's lien encumbrance on the property, which resulted in difficulties obtaining title insurance, Fifth Third refused to close on the mortgage. On September 23, 2005, counsel for Eagle Ridge sent a letter to Wolfe, demanding that the mechanic's lien be released. No earlier demand for release of the lien appears in the record. Wolfe refused to release the lien. However, in October 2005, Eagle Ridge, Fifth Third, and the title insurance company worked out an agreement whereby Eagle Ridge deposited $6,200.00 in an escrow account and the title insurance policy was issued. The mortgage was closed in November 2005, but since June 2005 the interest rate had increased to 7.5%, adjustable every five years. On October 24, 2005, Wolfe filed a complaint to foreclose the mechanic's lien. On November 9, 2005, Eagle Ridge filed an answer to the complaint and also filed a counterclaim, alleging that it suffered damages because of Wolfe's refusal to release the lien and because of Wolfe's poor workmanship on the construction project. On

September 18, 2006, the trial court entered judgment of $13,917.14 in favor of Eagle Ridge, and against Wolfe on his foreclosure complaint. 4 The $13,917.14 included

$1,415.00 on Eagle Ridge's poor workmanship claim 2 and $12,502.14 for Wolfe's refusal to release the mechanic's lien. That amount included $11,622.30 representing the additional interest Eagle Ridge must pay for five years on the Fifth Third mortgage by reason of the interest rate being 7.5% instead of 6.99%, $750.00 in attorney fees Fifth Third charged Eagle Ridge because of being named a defendant in Wolfe's foreclosure suit, and $129.84 representing interest on the $6,200.00 Eagle Ridge had to deposit in escrow in order to close the mortgage. The trial court refused Eagle Ridge's request, made at trial, to require Wolfe to pay its attorney fees because Wolfe's lawsuit allegedly was frivolous. Wolfe now appeals, and Eagle Ridge cross-appeals. Analysis Because no request for findings and conclusions from either party appears in the record, the trial court's entry of such was sua sponte. Under such circumstances, we will not set aside the findings and judgment unless clearly erroneous. Piles v. Gosman, 851 N.E.2d 1009, 1012 (Ind. Ct. App. 2006). A judgment is clearly erroneous if there is no evidence supporting the findings, or the findings fail to support the judgment, or if the trial court applies the wrong legal standard to properly found facts. Id. Although we review findings of fact under the clearly erroneous standard, we do not defer to conclusions of law, which are reviewed de novo. Id. Because the findings and

conclusions here were issued sua sponte, they control only the issues they cover, and we

2

Wolfe does not challenge this award on appeal.

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will apply a general judgment standard to any issues about which the court did not make findings. Id. I. Accord and Satisfaction Wolfe's first argument is that the trial court erred in concluding that "an accord and satisfaction was made" when he cashed check 1071 from Eagle Ridge in the amount of $10,461.94, thus extinguishing the debt that had formed the basis for the mechanic's lien. App. p. 16. "The term `accord' denotes an express contract between two parties by means of which the parties agree to settle some dispute on terms other than those originally contemplated, and the term `satisfaction' denotes performance of the contract." Mominee v. King, 629 N.E.2d 1280, 1282 (Ind. Ct. App. 1994). The question of whether the party claiming accord and satisfaction has met its burden is ordinarily a question of fact but becomes a question of law if the requisite controlling facts are undisputed and clear. Id. We begin by noting that Wolfe's endorsement of check 1031, which Fifth Third refused to cash because it was over six months old, was accompanied by a stamp claiming that Wolfe was reserving his right to collect the remainder of any debt still owing from Eagle Ridge after cashing of the check, pursuant to Indiana Code Section 261-1-207. That statute, however, does not govern claims of accord and satisfaction. See Ind. Code

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