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Tuesday, February 20, 2007

Ind. Decisions - Court of Appeals issues one today

In Robert E. Armstrong v. Kenneth W. Keene, a 7-page opinion, Judge Vaidik writes:

Robert E. Armstrong appeals the trial court’s grant of summary judgment in favor of Kenneth W. Keene. Specifically, Armstrong argues that the court erred by concluding that he was not entitled to foreclosure for his default on a contract to buy real estate pursuant to the seminal case of Skendzel v. Marshall, 261 Ind. 226, 301 N.E.2d 641 (1973). Concluding that Skendzel does not apply to this case because Armstrong relinquished his interest in the real estate by executing a Bill of Sale upon default, we affirm the trial court’s grant of summary judgment in favor of Keene. * * *

Buyer argues that the trial court erred in concluding that he was not entitled to foreclosure of the real estate pursuant to Skendzel. More than thirty years ago, the Indiana Supreme Court addressed the equity of forfeiture as a remedy in land contracts in Skendzel. Our Supreme Court initially observed that forfeitures are generally disfavored by law because a significant injustice results where the vendee (buyer) has a substantial interest in the property. Skendzel, 301 N.E.2d at 645-46. The court determined that a land sales contract is akin to a mortgage and, therefore, the remedy of foreclosure is more consonant with notions of fairness and justice: [quotation omitted]

Here, the trial court concluded, and the Seller argues, that Skendzel does not apply because Buyer relinquished his interest in Squirt’s Bar by executing the Bill of Sale and Consent to Transfer. They are correct. The issue in Skendzel was whether the forfeiture provision in the land contract applied or whether the vendee (buyer) was entitled to foreclosure. That is not the issue in this case. There was no forfeiture pursuant to the Real Estate Contract because upon defaulting, Buyer executed the Bill of Sale, whereby he “grant[ed], s[o]l[d], transfer[red], and deliver[ed]” his interest in the real estate to Seller. This fact is missing from Skendzel and readily distinguishes the two cases.

Posted by Marcia Oddi on February 20, 2007 11:57 AM
Posted to Ind. App.Ct. Decisions