Frame Station, Inc. d/b/a Framemakers v. The Foundry at 304, LLC

FILED Jan 25 2024, 8:56 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEES James A.L. Buddenbaum Lonnie D. Johnson Courtney L. Abshire Justin K. Schwemmer Parr Richey Frandsen Patterson Kruse, Clendening Johnson & Bohrer, LLP P.C. Indianapolis, Indiana Bloomington, Indiana

IN THE COURT OF APPEALS OF INDIANA

Frame Station, Inc. d/b/a January 25, 2024 Framemakers, Court of Appeals Case No. Appellant/Cross-Appellee-Plaintiff, 23A-CT-1426 v. Appeal from the Monroe Circuit Court The Foundry at 304, LLC, Foundry WPR The Honorable Geoffrey J. Orrego, LLC and Foundry WPR Bradley, Judge Elmore, LLC, Trial Court Cause No. 53C01-2004-CT-751 Appellees/Cross-Appellant-Defendants.

Opinion by Judge Riley Judges Crone and Mathias concur.

Riley, Judge. Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 1 of 17

STATEMENT OF THE CASE [1] Appellant/Cross-Appellee-Plaintiff, Frame Station, Inc. d/b/a Framemakers

(Framemakers), appeals the trial court’s findings of fact and conclusions

thereon with respect to Framemakers’ right of use of its express easement across

the property of Appellee/Cross-Appellant-Defendant, The Foundry at 304,

LLC, Foundry WPR Orrego, LLC, and Foundry WPR Elmore, LLC

(collectively, Foundry). [2] We reverse and remand for further proceedings.

ISSUE [3] Framemakers presents one issue on appeal, while the Foundry presents one

issue on cross-appeal. We consolidate both issues and restate these as the

following single issue: Whether the trial court erred by concluding that the

Foundry did not interfere with Framemakers’ easement during the development

and construction of the Foundry’s real estate project.

FACTS AND PROCEDURAL HISTORY [4] Framemakers, founded by Ulgis Augenbergs (Augenbergs) and a former

business partner in 1976, is a private corporation that operates a retail custom

picture frame store at 314 West Kirkwood Avenue in Bloomington, Indiana. In

addition, Framemakers also operates a wholesale business in the same location,

known as ‘Prime Chops’, that sells custom framing to other retail frame stores,

mostly in central Indiana. Framemakers’ retail store relies almost entirely on

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 2 of 17

walk-in retail customers for its business, and many customers will make several

trips to the store to custom frame their artwork. [5] The Foundry at 304, LLC is an Indiana limited liability company created to

own and develop a multi-family and commercial real estate project (Project) on

property located at 304 West Kirkwood Avenue, directly east of Framemakers’

retail business. Foundry WPR Orrego, LLC and Foundry WPR Elmore, LLC

own the commercial space on the first floor of the Project. [6] Framemakers’ current location at 314 West Kirkwood Avenue, identified as

Lot 154 of the City of Bloomington, is leased from Augenbergs and his spouse,

and provides Framemakers with a parking lot directly behind and to the north

of the building, along the alley between Kirkwood Avenue and Sixth Street.

Lot 154 is accessed from Sixth Street via an easement originally granted by the

First National Bank of Bloomington to Alma J. Henry (Framemakers’

predecessor in interest) as the grantee and recorded on April 29, 1974

(Easement). The specifically delineated Easement provides, in pertinent part:

THIS INDENTURE WITNESSETH, that the undersigned, FIRST NATIONAL BANK OF BLOOMINGTON, hereinafter called GRANTOR, for and in consideration of the sum of One Dollar ($1.00) and other good and valuable considerations, not herein expressed, the receipt of which is hereby acknowledged, does hereby quit claim, convey and grant to ALMA J. HENRY, of Monroe County, Indiana, hereinafter called GRANTEE, a non-exclusive easement and right of way for ingress and egress over and across the following described lands, to-wit:

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 3 of 17

A part of the In-Lot 198 in the City of Bloomington, Indiana, described as follows:

An easement for ingress and egress over the following described tract: Beginning at a point 16.50 feet East of the Northwest corner of the said In-Lot 198 said point being on the South line of Sixth Street, thence South for a distance of 99.52 feet, thence S35ºW for a distance of 40.69 feet, thence South for a distance of 3.78 feet, thence East for a distance of 12.0 feet to the Northwest corner of In-Lot 155, thence N 35ºE for a distance of 40.69 feet, thence North for a distance of 103.30 feet to the South line of Sixth Street, thence West over and along the said South line of Sixth Street for a distance of 12.00 feet to the place of beginning. Containing 1727 square feet, more or less.

Said easement is for the use and benefit of the lands now owned by the GRANTEE, and described as follows, to- wit:

In Lot One Hundred Fifty-Four (154) in the City of Bloomington, Indiana and shall run to and for the use and benefit of the above-described lands.

It shall be the obligation of the GRANTOR to establish, construct and maintain the easement granted herein and GRANTOR hereby agrees that at all times during any construction on the premises of GRANTOR, adjacent to the present North and South alley, ingress and egress through the alley as now established, running north and south between Fifth and Sixth Streets, a portion of which is East of the lands of the Grantee, or the easement granted herein, there shall be no unobstructed use thereof

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 4 of 17

for ingress and egress from Fifth Street to Sixth Street in the City of Bloomington, Indiana. 1

(Appellant’s App. Vol. II, pp. 28-29). [7] On February 9, 2000, Bank One, N.A. conveyed Lot 155, Lot 156, Lot 197,

and Lot 198 to Elmore Y Orrego, LLC, which, in turn, on January 13, 2016,

conveyed the Lots by special warranty deed to the Foundry. Both deeds are

“subject to any and all easements, agreements, and any other encumbrances or

restrictions of record.” (Appellant’s App. Vol. II, pp. 29-30). [8] The Easement, which the Foundry is aware of, runs across Lot 198 in favor of

Lot 154 and was created when the alley, which originally ran from Kirkwood

Avenue to Sixth Street, was partially vacated from the northeast corner of

Framemakers’ Lot 154 north to Sixth Street to make way for the Bank One

drive-through lanes. The alley from the north edge of Framemakers’ Lot 154,

which runs south to Kirkwood Avenue, remained in place. The Easement from

Sixth Street runs south (parallel to the vacated alley) where it terminates at

approximately the northeast corner of Framemakers’ Lot 154 and where the

alley begins and runs to Kirkwood Avenue, providing continuous access from

Sixth Street to Kirkwood Avenue.

1 The remainder of the Easement involved a now-extinguished right of first refusal to purchase and is not relevant to the dispute in this Cause.

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 5 of 17 [9] At some point in 2013 and 2014, the Foundry commenced the design and

development of the Project, which was to occupy Lots 155, 156, 197, and 198.

In 2016, the Foundry contracted with Onyx and East, LLC (Onyx) to construct

the new commercial building. Pursuant to the terms of the contract entered

into by the Foundry and Onyx, Onyx was responsible for supervision and

direction of the Project and was mandated to confine the work to areas

permitted by applicable laws, statutes, ordinances, codes, rules, and regulations.

Beginning in June 2017, a large crane was placed in the Easement area,

blocking access between Sixth Street and the Framemakers’ property. For the

remainder of 2017, the evidence reflected the continuous obstruction of the

Easement area by the ongoing construction on the Project. The obstructions

were as simple as leaving a fence in the Easement or as severe as leaving

construction materials and equipment unattended in the Easement, completely

blocking its access. Over the period of time running from the middle of 2017,

when the portable crane was installed in the Easement, through 2019, the

Easement was continuously occupied by construction vehicles or materials.

Tire marks on the Framemakers’ parking lot show that the Easement, alley, and

parking lot were used as part of the construction site on a frequent basis.

Despite being aware of the construction’s interference with Framemakers’

Easement, at no point did the Foundry place any signage, issue written

instructions, or take any other affirmative action to protect Framemakers’ rights

to the ingress and egress on the Easement.

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 6 of 17 [10] On April 30, 2020, Framemakers filed its Complaint against the Foundry,

which it amended on May 5, 2020, seeking to address the interference and

obstruction of the Easement by requesting an injunction to preserve and protect

easement rights, an injunction to prohibit blocking the alley, damages for

trespass to its property, and damages to the business of Framemakers.

Framemakers did not pursue the injunctive relief and, after parties waived trial

by jury, the case was tried before the bench on January 11-12, 2023, on the

issues of interference, trespass, and damages to Framemakers’ business. [11] On June 1, 2023, the trial court entered forty-three findings of fact and thirty-

two conclusions thereon, issuing a judgment in favor of the Foundry. In

interpreting the Easement, the trial court found that “neither party has alleged

that the language of the Easement is ambiguous, and the [c]ourt finds that there

is no ambiguity in the grant of the Easement.” (Appellant’s App. Vol. II, p. 38).

Looking at the plain and ordinary meaning of the language, the trial court

noted that “the intention of the Easement grant was that Framemakers would

have unobstructed access for ingress and egress even when the grantor, the

servient estate, had construction happening on its premises.” (Appellant’s App.

Vol. II, p. 38). The court concluded that, based on the evidence before it, it was

“clear that Onyx, and parties they employed, continuously and pervasively

obstructed Framemakers’ Easement rights, either partially or in whole, in

violation of the Easement grant.” (Appellant’s App. Vol. II, p. 38). On the

issue of trespass, the trial court found the Foundry not liable for the actions of

their contractors and that there was no evidence that the Foundry trespassed on

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 7 of 17

Framemakers’ property. With respect to the damages, the trial court concluded

that the Foundry’s contractor was solely responsible for obstruction and

interference with the Easement and that the Foundry was not liable for the

contractors’ actions. [12] Framemakers now appeals. Additional facts will be provided if necessary.

DISCUSSION AND DECISION I. Standard of Review

[13] Where the trial court issues findings of fact and conclusions thereon sua sponte,

“the findings control our review and the judgment only as to the issues those

specific findings cover. Where there are no specific findings, a general

judgment standard applies and we may affirm on any legal theory supported by

the evidence adduced at trial.” Estate of Henry v. Woods, 77 N.E.3d 1200, 1204

(Ind. Ct. App. 2017). We apply a two-tier standard of review to the sua sponte

findings and conclusions. Id. First, we determine whether the evidence

supports the findings and second, whether the findings support the judgment.

Id. We will set aside findings and conclusions only if they are clearly

erroneous, that is, when the record contains no facts or inferences supporting

them. Id. A judgment is clearly erroneous when a review of the record leaves

us with a firm conviction that a mistake has been made. Barkwill v. Cornelia H.

Barkwill Revocable Trust, 902 N.E.2d 836, 839 (Ind. Ct. App. 2009). In

conducting our review, we consider only the evidence favorable to the

judgment and all reasonable inferences flowing therefrom. Estate of Henry, 77

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 8 of 17

N.E.3d at 1204. We do not reweigh the evidence, nor do we assess witness

credibility. Id.

II. Interference with Easement

[14] Framemakers contends that because the Easement grants Framemakers a non-

possessory interest across the property of the Foundry and prohibits the

Foundry from interfering with Framemakers’ use of the Easement, the trial

court erred when it applied a negligence standard to a real estate easement

dispute and concluded that the Foundry defeated the interest by allowing its

contractors to interfere with Framemakers’ use of the Easement. [15] As our supreme court has stated: “An easement is the right to use another’s

land for a specified purpose. An easement appurtenant benefits adjoining land;

an easement in gross benefits a specific individual. The land benefited by an

easement is the dominant estate; the land burdened by an easement is the

servient estate.” Town of Ellettsville v. DeSpirito, 111 N.E.3d 987, 990 (Ind.

2018). And where—as here—an easement was “voluntarily created by a

written instrument to serve a specified purpose,” the easement is known as an

express easement. Easement, Black’s Law Dictionary (11th ed. 2019). When

examining the scope of easement rights in Indiana, we “hold[ ] the parties to

the agreement they—or their predecessors in interest—made when they

negotiated their easement or acquired their property concerning the easement.”

DeSpirito, 111 N.E.3d at 995; cf. Successor in Interest, Black’s Law Dictionary

(11th ed. 2019) (noting a successor in interest “retains the same rights as the

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 9 of 17

original owner, with no change in substance”). In this way, Indiana common

law “promotes certainty,” ensuring “property interests and corresponding

property values remain stable and predictable.” DeSpirito, 111 N.E.3d at 995. [16] It is well-established that easements are limited to the purpose for which they

are granted. McCauley v. Harris, 928 N.E.2d 309, 314 (Ind. Ct. App. 2010). The

owner of an easement, known as the dominant estate, possesses all rights

necessarily incident to the enjoyment of the easement. Id. The dominant estate

holder may make repairs, improvements, or alterations that are reasonably

necessary to make the grant of the easement effectual. Id. The owner of the

property over which the easement passes, known as the servient estate, may use

his property in any manner and for any purpose consistent with the enjoyment

of the easement, and the dominant estate cannot interfere with the use. Id. “All

rights necessarily incident to the enjoyment of the easement are possessed by

the owner of the dominant estate, and it is the duty of the servient owner to

permit the dominant owner to enjoy his easement without interference.” Id.

The servient owner “may not so use his land as to obstruct the easement or

interfere with the enjoyment thereof by the owner of the dominant estate.” Id.

Moreover, the owner of the dominant estate cannot subject the servient estate

to extra burdens, any more than the holder of the servient estate can materially

impair or unreasonably interfere with the use of the easement. Id. [17] The Foundry, when taking ownership of Lot 198, had actual and constructive

knowledge of the existence of the Easement and the rights granted to

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 10 of 17

Framemakers under the Easement. In interpreting the unambiguous language

of the Easement, the trial court unequivocally concluded that

the Easement unambiguously grant[s] Framemakers a ‘non- exclusive easement and right of way for ingress and egress’ over a specifically described portion of Lot 198, but it also explicitly provides that ‘there shall be no unobstructed use [of the [E]asement] for ingress and egress from Fifth Street to Sixth Street’ ‘during any construction on the premises of GRANTOR.’ The plain and ordinary language of the Easement demonstrates that the intention of the Easement grant was that Framemakers would have unobstructed access for ingress and egress even when the grantor, the servient estate, had construction happening on its premises.

(Appellant’s App. Vol. II, p. 38). Finding, based on the evidence before it, that

Framemakers’ Easement rights had been obstructed during the construction of

the Project, the trial court, instead of concluding that the Foundry had

interfered with Framemakers’ Easement rights, applied a negligence standard

and determined that “Onyx [as the Foundry’s contractor], and parties they

employed, continuously and pervasively obstructed Framemakers’ Easement

rights, either partially or in whole, in violation of the Easement grant.”

(Appellant’s App. Vol. II, p. 38.). [18] In its conclusion that Onyx was in violation of Framemakers’ Easement rights,

the trial court applied the general rule that “a principal is not bound by the acts

of his agent unless they are performed within the scope of authority actually

and ostensibly conferred upon him,” citing as authority Cincinnati H. & I.R. Co.

v. Carper, 13 N.E. 122, 124 (Ind. 1887), as well as the rule that “courts have

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 11 of 17

recognized that an independent contractor may create liability for his principal

in certain circumstances,” citing Shell Oil Co. v. Meyer, 705 N.E.2d 962, 978

(Ind. 1998). (Appellant’s App. Vol. II, p. 39). The trial court continued to

analyze this Cause pursuant to negligence principles and concluded that no

exceptions to these rules applied and that Onyx, and not the Foundry as its

principal, was responsible for the obstruction of and interference with the

Easement. [19] The trial court conflated the property law principles at play in the Easement

rights determination between Framemakers and the Foundry with the

negligence principles between the Foundry, as owner of the Project, and Onyx,

as its contractor. Onyx is not a party to the Easement, and Framemakers is not

a party to the construction contract entered into between the Foundry and

Onyx. This case involves a written easement document where Framemakers

has asserted that the servient estate owner interfered with and obstructed

Framemakers’ enjoyment of its rights under the Easement. The Easement was

entered into between Framemakers and the Foundry, and the Foundry is liable

for violating Framemakers’ rights under the Easement. [20] The only legal construction under which Framemakers could pursue Onyx for

interfering with its Easement is by being in privity with the Foundry in its

construction contract with Onyx. Generally, only parties to a contract or those

in privity with the parties have rights under the contract. OEC Diasonics, Inc. v.

Major, 674 N.E.2d 1312, 1315 (Ind. Ct. App. 1996). However, “one not a party

to an agreement may nonetheless enforce it by demonstrating that the parties

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 12 of 17

intended to protect him under the agreement by the imposition of a duty in his

favor.” Id. To be enforceable, it must clearly appear that it was the purpose or

a purpose of the contract to impose an obligation on one of the contracting

parties in favor of the third party. Id. It is not enough that performance of the

contract would be of benefit to the third party. Id. It must appear that it was

the intention of one of the parties to require performance of some part of it in

favor of such third party and for his benefit, and that the other party to the

agreement intended to assume the obligation thus imposed. Id. The intent of

the contracting parties to bestow rights upon a third party “must affirmatively

appear from the language of the instrument when properly interpreted and

construed.” Freigy v. Gargaro Co., 60 N.E.2d 288, 291 (1945). [21] The construction agreement between the Foundry and Onyx does not indicate

that the parties affirmatively placed a duty on Onyx to keep the Easement free

of any obstructions. Rather, the boilerplate contractual language merely directs

Onyx to confine the work to areas permitted by applicable laws, statutes,

ordinances, codes, rules, and regulations, and specifically mentions that the

“[a]greement is made solely and specifically between and for the benefit of the

parties hereto, [], and no other person, individual, corporation or entity,

whatsoever, shall have any rights, interests or claims hereunder or be entitled to

any benefits under or on account of this [a]greement[.]” (Exh. Vol. VII, p. 60). [22] Furthermore, every case cited by the trial court—and the Foundry—in support

of its decision involved the negligent actions of contractors in relation to

personal injury claims by third parties and not the intentional interference with

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 13 of 17

easement rights between the parties to that easement which are rooted in a

contract. See, e.g., Becker v. Kreilein, 770 N.E.2d 315, 318 (Ind. 2002) (“Indiana

recognizes five exceptions to the general rule of non-liability of a principal for

an independent contractor’s negligence[.]”); Gwinn v. Harry J. Kloeppel & Assoc.

Inc., 9 N.E.3d 687, 691 (Ind. Ct. App. 2014) (“The long standing general rule is

that a principal is not liable for the negligence of a general contractor.”) These

cases and principles have no application in determining the rights of the parties

to the Easement. While these cited cases may provide guidance on the relative

responsibilities of parties to a personal injury case, they do not provide guidance

to the determination of the relative rights of parties to an express easement. [23] The Foundry cites to Gray v. Westinghouse Electric Corp., 624 N.E.2d 49 (Ind. Ct.

App. 1993), as standing for the proposition that one who hires an independent

contractor is also not liable for the contractor’s torts, not just negligence. While

it is true that the Gray case involved a nuisance claim and not a negligence

claim, the court held that the principal could not escape liability for a nuisance

claim related to PCB contamination by hiring an independent contractor whose

work by nature would lead to a nuisance. Id. at 54. Likewise here, the

Foundry hired Onyx to construct a building, and the very nature of Onyx’s

work resulted in the interference and obstruction of the Easement. [24] In its cross-appeal, the Foundry posits that the trial court erred in its

interpretation of the unambiguous language of the Easement. See Burkett v. Am.

Family Ins. Group, 737 N.E.2d 447, 452 (Ind. Ct. App. 2000) (“An ambiguity

does not exist merely because the parties proffer differing interpretations of the

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 14 of 17 [contract] language.”). Focusing on the language in the Easement that “there shall be no unobstructed use [of the Easement] for ingress and egress from Fifth Street to Sixth Street” “during any construction on the premises of GRANTOR,” the Foundry asserts that the trial court’s interpretation that Framemakers should have unobstructed access for ingress and egress even when the Foundry had construction on its premises, would render the word “no” ineffective and meaningless. (Appellant’s App. Vol. II, p. 38). If the Easement was truly meant to give Framemakers unobstructed access during the construction on Foundry’s property, the Foundry contends that the Easement should have read, ‘there shall be unobstructed use for ingress and egress . . . during any construction.’ We disagree. “When construing an instrument granting an easement, the trial court must ascertain and give effect to the intention of the parties, which is determined by proper construction of the language of the instrument from an examination of all parts thereof.” McCauley, 928 N.E.2d at 314. In this light, “[p]articular words and phrases cannot be read alone, as the parties’ intention must be gleaned from the instruction as a whole.” Id. Here, the Easement runs across Lot 198, as the servient estate, for the benefit of Lot 154, the dominant estate, and provides for a “non-exclusive easement and right of way for ingress and egress over and across [] Lot 198.” (Appellant’s App. Vol II, p. 68). The Easement further obligates the Foundry, as the grantor, to agree “that at all times during any construction on the premises of GRANTOR, [], there shall be no unobstructed use thereof for ingress and egress [].” (Appellant’s App. Vol. II, p. 68). A

reading of all material parts of the Easement leads to the reasonable Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 15 of 17

construction that the parties intended for Framemakers, as grantee and owner

of Lot 154, to have unobstructed ingress and egress. While the placement of

the word “no” is confusing, the intent of the parties “must be gleaned from the

instrument as a whole.” McCauley, 928 N.E.2d at 314. Accepting the

Foundry’s interpretation would render all the preceding language of the

Easement meaningless in favor of the puzzlingly placed word “no.” We find

that the Easement’s unambiguous language demonstrates that Framemakers

would enjoy unobstructed access, even when the Foundry had ongoing

construction on the premises. [25] Accordingly, we conclude that the trial court erred in insulating the Foundry

from liability under the Easement by applying negligence principles. Instead,

Framemakers’ and the Foundry’s respective rights and obligations derive from

the express Easement, which, by its unambiguous language, granted

Framemakers unobstructed access for ingress and egress even when the

Foundry, as the owner of the servient estate, had construction occurring on Lot

198. Based on the evidence before it and undisputed by the parties, the trial

court concluded that Framemakers’ Easement rights had been “continuously

and pervasively obstructed [], either partially or in whole, in violation of the

Easement grant.” (Appellant’s App. Vol. II, p. 38). Therefore, we conclude

that the Foundry interfered with Framemakers’ Easement rights by obstructing

Framemakers’ access. We remand to the trial court for the determination of

damages, if any.

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 16 of 17

CONCLUSION [26] Based on the foregoing, we hold that the trial court erred by concluding that the

Foundry did not interfere with Framemakers’ Easement during the

development and construction of the Foundry’s Project. [27] Reversed and remanded for further proceedings.

Crone, J. and Mathias, J. concur

Court of Appeals of Indiana | Opinion 23A-CT-1426 | January 25, 2024 Page 17 of 17