                                                                                FILED
                                                                           Jul 27 2020, 8:49 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court




      ATTORNEYS FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
      Peter J. Rusthoven                                          Brian C. Hewitt
      John R. Maley                                               Christopher J. Mueller
      Leah L. Seigel                                              Hewitt Law & Mediation, LLC
      Barnes & Thornburg LLP                                      Indianapolis, Indiana
      Indianapolis, Indiana



                                                   IN THE
           COURT OF APPEALS OF INDIANA

      ShermansTravel Media, LLC,                                  July 27, 2020
      Appellant-Defendant,                                        Court of Appeals Case No.
                                                                  19A-PL-3024
              v.                                                  Appeal from the
                                                                  Marion Superior Court
      Gen3Ventures, LLC,                                          The Honorable
      Appellee-Plaintiff.                                         John M.T. Chavis, II, Judge
                                                                  Trial Court Cause No.
                                                                  49D05-1701-PL-2105



      Kirsch, Judge.


[1]   ShermansTravel Media, LLC (“Shermans”) appeals the trial court’s entry of

      summary judgment in favor of Gen3Ventures, LLC (“Gen3”). Following the

      breakdown of the parties’ business relationship, in which Gen3 provided

      subscriber lists to Shermans for Shermans’s use in its travel advertising business,

      the parties entered into a settlement agreement. Shermans agreed to make

      Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020                             Page 1 of 28
      periodic payments to Gen3 and to delete Gen3’s subscriber data, and each party

      would dismiss its claims. Gen3 refused to dismiss its claims against Shermans

      on the basis that Shermans had not completely performed its obligation to

      delete Gen3’s subscriber data. The parties filed cross-motions for summary

      judgment, and the trial court determined that Shermans breached the settlement

      agreement and entered summary judgment in favor of Gen3. Finding the

      question of whether Shermans substantially performed its obligations under the

      parties’ settlement agreement is a disputed issue of material fact, we reverse and

      remand.


                                   Facts and Procedural History
[2]   Shermans is an online travel media company whose business consists of selling

      advertising placements to travel suppliers. Appellant’s App. Vol. II at 39. The

      advertising placements appear in Shermans’s email products, which are

      distributed to a list of millions of email subscribers. Id. Gen3 is a marketing

      technology company, and its business includes the ownership and operation of

      websites that focus on the travel industry from which it collects subscriber email

      addresses. Id. at 13. In April of 2014, Shermans bought subscriber names from

      Gen3 to add to its list of subscribers. Id. at 39.


[3]   Based on the performance of the subscriber names Shermans had previously

      bought from Gen3, in April of 2015 the parties entered into an Email Delivery

      Agreement (“the Agreement”). Id. at 39-40; Appellant’s App. Vol. III at 3. On

      December 17, 2015, the parties modified the Agreement and entered into an


      Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020        Page 2 of 28
Amended Email Delivery Agreement along with an Insertion Order,

collectively (“the Contract”). Appellant’s App. Vol. II at 22. The Contract

provided that the parties would share revenue generated from email

advertisements sent to subscribers collected and identified by Gen3 and its

affiliates and that Shermans would send emails both to its subscribers and to

Gen3’s subscribers. Id. at 158. Shermans used an email management vendor,

Sailthru, Inc. (“Sailthru”) to maintain its database of email addresses, send

emails, and track user data, including the information for Gen3 subscribers.

Appellee’s App. Vol. II at 23. The Sailthru database housed a category of lists

referred to as “All Primary Lists[,]” which added a new subset, called “Gen3

Lists[,]” that was kept separate from the ShermansTravel National List and the

approximately 2,000 targeted, special interest lists were built off both of these

separately maintained subsets of “All Primary Lists[,]” as illustrated below:




Appellant’s App. Vol. II at 105, 119. In the latter part of 2016, a dispute arose

between Shermans and Gen3, in which Gen3 alleged that Shermans failed to

provide activity reports to Gen3 and pay outstanding invoices as required by the


Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020           Page 3 of 28
      Contract while Shermans contended that Gen3’s quality of contract

      performance and the subscriber list data it provided to Shermans was poor. Id.

      at 26.


[4]   On January 17, 2017, Gen3 filed a Verified Complaint for Breach of Contract

      (“the Complaint”) against Shermans. Id. at 3. The Complaint alleged that

      Shermans committed multiple breaches of the Contract, including that

      Shermans had failed to deliver data that Gen3 owned and that Shermans had

      stopped sending emails to Gen3 subscribers on January 1, 2017. Appellee’s App.

      Vol. II at 2-9. On January 19, 2017 and February 20, 2017, Gen3 owner

      Matthew Erdos monitored a Gen3 email account that was on Gen3’s subscriber

      list, seed@gen3ventures.com (“the seed email address”), learned the seed email

      address had received emails from Shermans on those dates, and forwarded the

      Shermans emails to Gen3 co-owner Mason Hewitt. Appellant’s App. Vol. III at

      54-55.


[5]   On March 13, 2017, Shermans filed its Answer to Plaintiff’s Verified Complaint

      and Counterclaims Against Plaintiff, which included claims for breach of

      express warranty, breach of implied warranty of fitness for a particular purpose,

      breach of implied warranty of merchantability, promissory estoppel, unjust

      enrichment, and fraudulent inducement. Appellant’s App. Vol. II at 3, 21-50.

      The parties engaged in mediation and entered into a Settlement Agreement,

      Mutual Release, and Covenant Not To Sue (“the Settlement Agreement”) on

      April 3, 2017 to “compromise and settle completely the disputes between them”

      and to “avoid the uncertainty and expense of continued litigation” and without

      Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020       Page 4 of 28
any admission of liability. Appellant’s App. Vol. III at 18-22. The Settlement

Agreement, which included a payment schedule for Shermans to make

payments on the $290,080.39 it owed to Gen3, also provided as follows:


        4. The following pleadings shall be prepared and filed:


        a. In accordance with paragraph 7 below, on or before April 4,
        2017, Shermans shall prepare and file a notice of dismissal of the
        Counterclaims with prejudice.


        b. Within five business days of receipt of all Payments, and in
        accordance with paragraph 8 below, Gen3 shall prepare and file
        a stipulation of dismissal with prejudice.


        ....


        8. Upon timely receipt of Payments under paragraph 3 and
        complete performance under paragraph 9, Gen3 hereby forever
        releases and discharges Shermans, its parent companies, owners,
        members, subsidiaries, shareholders, predecessors, successors,
        affiliates, assigns, insurers, agents, heirs, personal representatives,
        and attorneys, and all other persons or entities who might be
        liable, none of whom admit any liability to Gen3, but who all
        dispute any liability to Gen3, of and from any and all manner of
        actions, causes of action, suits, accounts, contracts, debts, claims,
        and demands whatsoever, at law or in equity, and however
        arising, on or before the date of this release, including but not
        limited to, all matters asserted, or which could have been
        asserted, by Gen3 against Shermans in that certain action
        pending in the Marion Superior Court, State of Indiana, as above
        entitled under Cause No. 49D05-1701-PL-002105. However, if
        Shermans fails to timely deliver all Payments under paragraph 3
        and completely perform it[s] obligations under paragraph 9, the
        previous sentence shall be deemed ineffective, and Gen3 shall

Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020             Page 5 of 28
              retain all rights to pursue all claims under the Amended Email
              Delivery Agreement including [those] asserted in the Lawsuit,
              less set off for payment made by Shermans.


              9. Effective upon execution of this Settlement Agreement,
              Shermans shall cease to utilize any data relating to All Gen3
              Subscribers in any form. Within 20 days from the date of this
              Agreement, Shermans shall deliver to Gen3 any data relating to
              All Gen3 Subscribers in any form, including without limitation
              clicks, opens, subscriber’s subscription status, and Shermans’
              data describing the segment or segments applicable to each
              subscriber. Upon returning all data described in this paragraph
              and after Gen3 instructs Shermans to do so, Shermans shall
              remove any data related to All Gen3 Subscribers from Shermans’
              database(s) and shall destroy any other form of records applicable
              to All Gen3 Subscribers. Shermans shall execute an affidavit in
              confirmation that Shermans has complied with the data deletion
              requirements of this paragraph.


[6]   Id. at 18-20 (emphasis in original). Paragraph 11 of the Settlement Agreement

      also provided, in part, that performance of the Settlement Agreement’s terms

      “is made and accepted in full accord and satisfaction of, compromise of, any

      and all disputes, that do, or may exist, between the Parties and for the purpose

      of terminating all such disputes and associated litigation.” Id. at 21. The

      following day, Shermans filed its notice of dismissal of its counterclaims, with

      prejudice, against Gen3, and Gen3 filed an agreed motion to stay the

      proceedings and to dismiss the matter with prejudice. Appellee’s App. Vol. II at

      10, 12.


[7]   On April 5, 2017, Shermans sent Gen3 data concerning all Gen3 Subscribers

      via Dropbox, which was contained in two files named “ingestion_gen3_rs
      Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020        Page 6 of 28
(2).csv” and “ingestion_gen3_vg (2).csv” (“the April 5 Files”). Id. at 24, 80.

On that same day, the trial court stayed the proceedings, pending “complete

performance” of the Settlement Agreement. Id. at 14. On April 15, 2017, the

seed email address received a Shermans email. Appellant’s App. Vol. III at 55.

On April 18, 2017, Shermans sent Gen3 fifty-six spreadsheets via Dropbox

(“the April 18 Files”), which included data for Gen3 Subscribers who were on

the Shermans special interest groups. Appellee’s App. Vol. II. at 15, 80-81. Gen3

compared the April 5 Files and the April 18 files, and its comparison revealed

that 68,521 emails were sent to 10,094 distinct Gen3 Subscribers in the thirteen-

day period after the effective date of the Settlement Agreement. Id. at 82. On

May 25, 2017, Gen3 confirmed to Shermans that Gen3 downloaded the April 5

Files and the April 18 Files it received from Shermans and directed Shermans to

delete the Gen3 subscriber data. Id. at 26. The seed email address received

another Shermans email on June 8, 2017. Appellant’s App. Vol. III at 55. On

June 15, 2017, Shermans requested that Sailthru permanently delete all Gen3

subscribers from the Shermans database, which Sailthru manages. Appellee’s

App. Vol. II at 26. On July 13, 2017, the seed email address received another

Shermans email. Appellant’s App. Vol. III at 55. Shermans engaged Sailthru to

delete all the Gen3 subscriber data from the Shermans database, which was

executed on July 19, 2017, and on July 27, 2017, Sailthru reported to Shermans

that it completed the deletion of all Gen3 subscribers from the Shermans

database. Appellee’s App. Vol. II at 26, 47. On August 28, 2017, Shermans

provided Gen3 with an affidavit stating it had deleted all Gen3 subscriber data

from its database, as required by the Settlement Agreement. Id. at 34.
Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020        Page 7 of 28
[8]   Shermans made each payment required by the Settlement Agreement, and on

      November 24, 2017, six days before the Settlement Agreement’s payment

      deadline, made its final payment to Gen3. Appellant’s App. Vol. II at 106.

      Although Gen3 had not previously raised an issue to Shermans concerning data

      deletion, payments, and other matters covered by the Settlement Agreement, on

      November 30, 2017 Gen3 sent a letter to counsel for Shermans setting forth

      what Gen3 considered as breach on the part of Shermans and that it would not

      be dismissing the Complaint as required by the Settlement Agreement.

      Appellant’s App. Vol. III at 23-40. Gen3’s letter indicated that it considered the

      retention of Gen3 data on folders contained in GoogleDocs, GoogleDrive and

      Dropbox, which the parties used when they worked together, to be a breach of

      the Settlement Agreement’s data deletion requirements. Id. at 42-43; Appellee’s

      App. Vol. II at 39. On December 5 and 6, 2017, Shermans engaged an e-

      discovery vendor, Qdiscovery, to delete the Gen3 data on the GoogleDrive,

      GoogleDocs, and Dropbox folders, and Qdiscovery retained a copy. Appellee’s

      App. Vol. II at 27, 53-68.


[9]   On December 13, 2017, Gen3 filed a Motion for Pre-Trial Conference in which

      it sought to lift the stay and proceed with the litigation on the Contract, which

      the trial court granted on December 19, 2017. Id. at 15, 18. Shermans

      responded on January 17, 2018 with a Motion to Enforce Settlement and a

      Brief in Support of Motion to Enforce Settlement Agreement and Dismiss

      Claims. Appellant’s App. Vol. II at 51-79. On March 16, 2018, Gen3 filed its

      Response to [Shermans’] Motion to Enforce Settlement Agreement. Id. at 82-

      Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020         Page 8 of 28
       104. On August 7, 2018, Shermans filed a reply in support of its motion to

       enforce the Settlement Agreement. Id. at 112-29.


[10]   On June 13, 2019, Sailthru, in response to non-party discovery requests it had

       received from Gen3, provided data to Gen3 concerning Gen3 Subscribers (“the

       June 13 Files”). Appellee’s App. Vol. II at 90. Based on Gen3’s analysis of the

       June 13 Files, it identified several data points, which included: (1) the user’s

       email address; (2) the user’s unique Profile ID assigned when the user is

       uploaded to the Sailthru database; (3) the date each email was sent to the user;

       (4) the source of the user’s signup (whether Gen3 or another vendor); (5)

       whether the user resubscribed to the list at any time; (6) information used to

       target users for special interest group emails; (7) the user’s original signup date;

       (8) the lifetime messages to such user; and (9) the date of the last email sent to

       such user. Id. at 82-83. Gen3’s analysis of the June 13 Files indicated that

       11,630 users matched the email address and Profile ID of a subscriber on the list

       of Gen3 Subscribers and identified the signup source for such user as either of

       the Gen3 subscriber lists provided to Shermans, which also showed that those

       users received at least 3,575,536 emails from the date of the Settlement

       Agreement through June 13, 2019 with some users receiving an email in

       January of 2019. Id. at 84, 86. In its analysis of the June 13 Files, Gen3 also

       concluded that 10,341 user profile data did not include a resubscribe date, from

       which it concluded that 10,341 Gen3 Subscribers were still on Shermans’

       current subscriber list and that the particular subset of Gen3 Subscribers




       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020          Page 9 of 28
       received at least 3,202,262 emails from the date of the Settlement Agreement

       through June 13, 2019. Id. at 86.


[11]   On September 3, 2019, the parties filed cross-motions for summary judgment,

       briefs in support of the respective summary judgment motions, and designations

       of evidence. Appellant’s App. Vol. II at 10-11. On October 3, 2019, each party

       filed a response to the other’s motion for summary judgment.1 Id. at 11. The

       trial court held a hearing on the parties’ respective motions for summary

       judgment on October 29, 2019. At the hearing, counsel for Shermans argued

       that Shermans had complied with the data deletion requirement of Paragraph 9

       of the Settlement Agreement because it ceased to utilize the Gen3 subscriber

       data, stating that “under the plain language of that obligation Shermans has

       ceased to utilize the Gen3 data, stopped selling against the Gen3 list, stopped

       initiating sends to the Gen3 list – so [Shermans] has ceased to utilize Gen3’s

       data . . . .” Tr. Vol. I at 15. Counsel for Shermans further asserted that

       “inadvertent sends that Shermans wasn’t aware of and didn’t benefit from is not

       practical or effective use of data that’s contemplated by the settlement

       agreement’s use of the phrase ‘cease to utilize.’” Id. at 22. Gen3’s counsel

       maintained that, although Shermans indicated it had deleted Gen3 subscriber

       data based on Shermans’s August affidavit stating it had done so, when Gen3




       1
         We note that Shermans argued as part of its response to Gen3’s motion for summary judgment briefing that
       Gen3’s “new argument [concerning the June 13 Files] should not even be considered by the [trial court], and
       Shermans moves to exclude it, as well as Exhibits E, I, J, and K, as irrelevant, unreliable and ultimately
       inadmissible.” Appellant’s App. Vol. II at 230-32. There is nothing in the record to indicate that the trial court
       entered a ruling on this request.

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020                                   Page 10 of 28
       discovered in late November of 2017 it “knew Shermans had its data and

       became extremely concerned it was using the Gen3 subscriber list. That is what

       compelled Gen3’s demand in November of 2017, not the three seed e-mails.

       And that is why the litigation ensued that we’re here for today.” Id. at 34.

       Gen3’s counsel argued that the Settlement Agreement did not provide for

       substantial performance based on its use of “unqualified, unconditional words

       like ‘complete performance,’ ‘all,’ ‘in any form,’ ‘destroy any other form of

       records,’ and ‘without limitation[,]’” which rendered the doctrine of substantial

       performance inapplicable. Id. at 57. Shermans’s counsel also addressed the

       deletion of the Gen3 subscriber data on Dropbox, GoogleDocs, and

       GoogleDrive, indicating that it retained QDiscovery to complete the deletion in

       a “defensible way” to prevent a “spoliation concern” and that Shermans does

       not access those documents. Id. at 59.


[12]   On November 27, 2019, the trial court issued an order granting Gen3’s motion

       for summary judgment and denying Shermans’ motion for summary judgment.

       In the order, the trial court reasoned:


               Gen3’s release of Shermans and its obligation to dismiss were
               contingent upon Sherman’s “complete performance” under
               paragraph 9. Shermans was required to cease to use Gen3
               subscriber data, return any data relating to Gen3 subscribers to
               Gen3, and upon returning the data and Gen3 instructions for
               Shermans to do so, Shermans was required to remove any Gen3
               data in Shermans’ databases and destroy any other form of
               records applicable to All Gen 3 subscribers. Shermans sent
               millions of emails to thousands of Gen3 subscriber[s] after the
               date of the Settlement Agreement.

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020       Page 11 of 28
               Not all data related to Gen 3 subscribers did Shermans return or
               destroy. If Shermans inadvertently continued to send emails to
               Gen3 subscribers, they are essentially still utilizing the data
               related to Gen3 Subscribers. Assuming Gen3 failed to advise
               Shermans that Gen3 subscribers were still receiving emails from
               Shermans, that does not absolve Shermans of this contractual
               responsibility. Shermans argues that a strict liability or absolute
               guarantee that its efforts to halt all sends to Gen3 subscribers was
               not what Gen3 bargained for in the Settlement Agreement.
               There has been no evidence presented regarding what Gen3
               bargained for other than the terms and conditions contained
               within the Settlement Agreement nor can the Court entertain
               such when its terms and conditions are unequivocal.
               Nevertheless, paragraph 8 of the Settlement Agreement calls for,
               inter alia, complete performance under paragraph 9. [Paragraph
               9] required Shermans to cease to utilize any data relating to All
               Gen3 subscribers in any form and that, unfortunately, did not
               take place. Even disregarding the opinions of the Gen3 owners
               because Gen3 failed to lay the foundation for their opinions, both
               parties recognized that there were breaches by Shermans of the
               Settlement Agreement, i.e. DropBox, Google Drive, QDiscovery
               and GoogleDocs. The Court is relegated to applying the
               agreement as written and cannot impose its [own] views or
               disregard certain provisions of the agreement.


       Appellant’s App. Vol. II at 17-18. Shermans now appeals.


                                        Discussion and Decision
[13]   Shermans argues that summary judgment should not have been granted to

       Gen3. Shermans contends that the Settlement Agreement is subject to the

       substantial performance doctrine, and that there are material issues of fact as to

       whether it substantially performed, which would preclude summary judgment

       in favor of Gen3.
       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020         Page 12 of 28
[14]   On appeal from a grant of summary judgment, we stand in the shoes of the trial

       court and apply a de novo standard of review. Poiry v. City of New Haven, 113

       N.E.3d 1236, 1239 (Ind. Ct. App. 2018). Summary judgment is appropriate

       where the designated evidence establishes that there are no genuine issues of

       material fact and the moving party is entitled to judgment as a matter of law.

       Row v. Holt, 864 N.E.2d 1011, 1013 (Ind. 2007). “A fact is ‘material’ if its

       resolution would affect the outcome of the case, and an issue is ‘genuine’ if a

       trier of fact is required to resolve the parties’ differing accounts of the truth, or if

       the undisputed material facts support conflicting reasonable inferences.”

       Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). We consider only those

       materials properly designated pursuant to Indiana Trial Rule 56 and construe

       all factual inferences and resolve all doubts in favor of the non-moving party.

       Young v. Hood’s Gardens, Inc., 24 N.E.3d 421, 424 (Ind. 2015). We may affirm

       an entry of summary judgment “if it can be sustained on any theory or basis in

       the record.” DiMaggio v. Rosario, 52 N.E.3d 896, 904 (Ind. Ct. App. 2016),

       trans. denied. The fact that the parties have filed cross-motions for summary

       judgment does not alter this standard of review or change our analysis: the

       party that lost in the trial court has the burden of persuading us that the trial

       court erred. Denson v. Estate of Dillard, 116 N.E.3d 535, 539 (Ind. Ct. App.

       2018).


[15]   Shermans argues that the Settlement Agreement is subject to the doctrine of

       substantial performance and cites Gen. Disc. Corp. v. Weiss Mach. Corp., 437

       N.E.2d 145 (Ind. Ct. App. 1982) in support of its position. It also argues that

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020            Page 13 of 28
       the trial court’s interpretation of the Settlement Agreement contravened other

       rules applicable to the construction of contracts, and that Gen3 relies on an

       overly literal reading of the term “complete” which effectively relieved Gen3 of

       showing material breach. Gen3 maintains that “complete performance” of the

       Settlement Agreement was a “condition precedent” to Gen3’s obligation to

       dismiss the action and release Shermans. Appellee’s Br. at 24. Gen3 contends

       that because Shermans did not completely perform the data deletion

       requirement substantial performance does not apply, and it cites Gibson v.

       Neu, 867 N.E.2d 188 (Ind. Ct. App. 2007) and Dove v. Rose Acre Farms, Inc., 434

       N.E.2d 931 (Ind. Ct. App. 1982) in support of its position that the doctrine of

       substantial performance is inapplicable to the Settlement Agreement.


[16]   Interpretation of a settlement agreement presents a question of law and is

       reviewed de novo. Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind. 2008).

       Construction of settlement agreements is governed by contract law. Ind. State

       Highway Comm’n v. Curtis, 704 N.E.2d 1015, 1018 (Ind. 1998). If a contract’s

       terms are clear and unambiguous, courts must give those terms their clear and

       ordinary meaning. Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 251 (Ind.

       2005). Courts should interpret a contract so as to harmonize its provisions,

       rather than place them in conflict. Id. at 252.


[17]   Contract law has long recognized substantial performance rather than strict

       performance as being sufficient in many situations. General Discount, 437

       N.E.2d at 151. The doctrine of substantial performance “applies where

       performance of a nonessential condition is lacking, so that the benefits received

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020       Page 14 of 28
       by a party are far greater than the injury done to him by the breach of the other

       party.” Dove, 434 N.E.2d at 933. Indiana courts have applied the substantial

       performance doctrine in a variety of scenarios. See Johnson v. Taylor Bldg. Corp.,

       171 Ind. App. 674, 676, 371 N.E.2d 404, 405 (1978) (holding that a contractor’s

       failure to secure a septic permit before construction did not bar his recovery

       under a mechanic’s lien where the contractor substantially fulfilled all

       requirements of the contract except for the final act of installing the septic

       system); McConnell v. Fulmer, 230 Ind. 576, 588, 105 N.E.2d 817, 819 (1952)

       (explaining, in the context of a challenge to rescind a deed requiring the

       appellant to provide living quarters to the appellee, that “the performance of

       [such a contract to provide living quarters] does not require perfection, but a

       reasonably strict and substantial compliance is sufficient.”); Sanderson v. Trump

       Mfg. Co., 180 Ind. 197, 102 N.E. 2, 11 (1913) (applying the doctrine of

       substantial performance in favor of an engineering company in the context of a

       dispute concerning the specifications, delivery, and installation, of turbine

       engines.)


[18]   However, Indiana courts have also addressed cases in which substantial

       performance was held not to apply. See Gibson, 867 N.E.2d at 195 (holding, in

       the context of payments under a mortgage, that substantial performance did not

       apply where the “timely payment of the debt was an essential condition of the

       promissory note, mortgage, and release provision of the mortgage.”);

       Greenhaven Corp. v. Hutchcraft & Assocs., Inc., 463 N.E.2d 283, 286 (Ind. Ct. App.

       1984) (stating that “the doctrine of substantial performance does not apply in an


       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020          Page 15 of 28
       action on account.”); Dove, 434 N.E.2d at 935 (holding that the doctrine

       of substantial performance did not apply to an employee bonus agreement

       where the employee violated the bonus agreement’s tardiness and absenteeism

       rules which was an essential condition of the bonus agreement.).


[19]   Shermans directs us to General Discount, which we find instructive. In General

       Discount, an agreed judgment required defendants to pay $21,844.83 to the

       plaintiff and return certain collateral by a specified date. 437 N.E.2d at 146.

       The agreed judgment also provided that failure “to perform any part of this

       agreed judgment will constitute a default,” making the agreement “null and

       void” and obligating defendants to pay $55,589.21 plus interest and other fees

       and costs. Id. at 147. As a result of “a good faith mistake,” the defendants

       failed to deliver timely one item of collateral but delivered the collateral when

       they learned of the mistake. Id. at 148. The trial court rejected the plaintiff’s

       effort to void the settlement based on the defendant’s failure to return the

       specified collateral, noting that “the extent of nonperformance . . . is minor

       when weighed in light of the full value of performance tendered” by defendants,

       that the “defendants substantially performed[,]” and that the defendants

       “substantially complied with their duties and obligations as required by the

       Agreed Judgment.” Id. at 148-49. On appeal, plaintiff argued that the agreed

       judgment “required complete compliance with the terms thereof,” and that it was

       erroneous “to measure the compliance of the parties by a standard of

       ‘substantial compliance.’” Id. at 150 (emphasis added). This court disagreed,

       noting that “[c]ontract law has long recognized substantial performance rather

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020         Page 16 of 28
       than strict performance as being sufficient in many contractual situations.” Id.

       at 151. We further explained that we saw “no reason why the standard should

       not be applied to the contractual situation of a consent judgment,” when “the

       nonperformance by [defendants] was minor, was not willful, and did not defeat

       the purpose of the judgment.” Id.


[20]   Here, Paragraph 8 of the Settlement Agreement required Shermans to make the

       payments described in Paragraph 3 of the Settlement Agreement and to

       completely perform its obligation to delete Gen3’s subscriber data as set forth in

       Paragraph 9 of the Settlement Agreement. Appellant’s App. Vol. III at 19.

       Paragraph 9 of the Settlement Agreement required Shermans to “cease to

       utilize2 any data relating to All Gen3 Subscribers in any form” and to “remove

       any data related to All Gen3 Subscribers from Shermans’[s] database(s) and

       shall destroy any other form of records applicable to All Gen3 Subscribers.” Id.

       at 20. Regarding the Settlement Agreement as a whole, we agree with Gen3

       that the Settlement Agreement required Shermans to satisfy the conditions

       established in both Paragraph 3 and Paragraph 9 before Gen3 was required to

       dismiss the Complaint. Gen3 correctly cites authority concerning the effect of a

       condition precedent contained within a contract; however, we disagree with

       Gen3 that substantial performance does not apply to the conditions in this

       particular situation and, unlike in Gibson and Dove, we conclude that substantial



       2
        The Settlement Agreement does not define “utilize.” Merriam-Webster’s dictionary defines utilize as “to
       make use of: turn to practical use or account.” See utilize, available at https://www.merriam-
       webster.com/dictionary/utilize (last visited June 30, 2020.)

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020                            Page 17 of 28
       performance is applicable to the parties’ obligations under the Settlement

       Agreement. As discussed more fully below, whether Shermans substantially

       performed is a disputed issue of material fact. We note that there is no express

       provision in the Settlement Agreement stating that substantial performance

       does not apply, and as in General Discount, where complete compliance with the

       agreed judgment was not required, we see no reason why substantial

       performance does not apply to the Settlement Agreement. 437 N.E.2d at 151;

       see also Gen. Motors Corp. v. Northrop Corp., 685 N.E.2d 127, 135 (Ind. Ct. App.

       1997), (noting that “[c]ourts do not have the power to create for the parties a

       contract which they did not make, nor to insert language into a contract which

       was not inserted by the parties . . . and we will not undertake to rewrite the

       parties’ contract to include such a clause.) (citation omitted), trans. denied.


[21]   We turn next to whether there are material issues of fact as to whether

       Shermans substantially performed under the Settlement Agreement. Shermans

       argues that it did not send “millions of emails to thousands of subscribers” as

       the trial court stated in its order, that it deleted Gen3’s subscriber data after

       Gen3 directed it to do so, and was unaware emails were “slipping through . . .

       .” Appellant’s Br. at 22, 24. It also argues that it inflicted no “business harm on

       Gen3” and was not “‘utilizing’ Gen3 data” to further its commercial interests.

       Id. at 25. Shermans also maintains that it substantially performed its obligations

       under the Settlement Agreement and did not materially breach the Settlement

       Agreement, asserting that it had stopped “emailing Gen3 subscribers because

       poor performance from such emails harmed Shermans’[s] business” and that


       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020           Page 18 of 28
       summary judgment should not have been granted. Appellant’s Br. at 26. Gen3

       maintains that summary judgment was properly granted, and that the trial

       court’s order should be affirmed.


[22]   This court has long held that whether a party has committed a material breach

       is a question of fact, the resolution of which is dependent on several factors.

       Collins v. McKinney, 871 N.E.2d 363, 375 (Ind. Ct. App. 2007). When

       determining whether a breach is material, Indiana courts generally apply the

       factors articulated in the Restatement (Second) of Contracts § 241 (1981):


               (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 or to offer 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.


[23]   Collins, 871 N.E.2d at 375 (citing Frazier v. Mellowitz, 804 N.E.2d 796, 803 (Ind.

       Ct. App. 2004)). Related to the inquiry of whether a breach is material is

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020             Page 19 of 28
       whether a party has substantially performed an obligation. See Restatement

       (Second) of Contracts § 241 (1981) (stating that “[t]he considerations in

       determining whether performance is substantial are those listed in § 241 for

       determining whether a failure is material.”)


[24]   Here, the trial court premised its ruling that Shermans breached the Settlement

       Agreement on the basis of emails sent in the April 5 Files and April 18 Files,

       the subscribers identified in the June 13 Files, and the shared documents on

       GoogleDrive, GoogleDocs, and Dropbox. There is no dispute that emails were

       sent after the date of the Settlement Agreement, that Shermans executed an

       affidavit indicating that it deleted the Gen3 subscriber lists and did not initiate

       sends to Gen3 subscribers after July 27, 2017, and that Gen3 subscriber

       information was still available on the shared documents on GoogleDrive,

       GoogleDocs, and Dropbox after the date of the Settlement Agreement.

       Nevertheless, the trial court failed to recognize that there are material, factual

       disputes with respect to whether there was substantial performance of the

       Settlement Agreement, or, stated differently, whether Shermans materially

       breached the Settlement Agreement.


[25]   First, regarding the 68,521 emails that were found to have been sent to Gen3

       subscribers based on the April 5 Files and April 18 Files, the designated

       evidence shows that after Shermans learned that emails were being sent to

       Gen3 subscribers, it contacted Sailthru and began the process to delete the

       Gen3 subscriber lists from the database. Appellant’s App. Vol. II at 108-109;

       Appellant’s App. Vol. III at 74-75. The designated evidence also shows that over

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020          Page 20 of 28
       the thirteen-day period relevant to the April 5 Files and the April 18 Files,

       Shermans sent “over 22 million emails” to its subscribers and that the 68,521

       emails sent to Gen3 subscribers “made up less than a third of one percent,

       0.3%, of the volume of emails sent by Shermans during that time.” Appellant’s

       App. Vol. III at 75. Gen3 disputes whether the 0.3% of emails sent during that

       thirteen-day period matters and contends that each email sent is a breach of the

       Settlement Agreement. These divergent views on the effect of the emails on the

       data deletion requirement of Paragraph 9 requires the trier of fact to resolve

       material issues of fact about whether Shermans substantially performed.


[26]   Second, the results of Gen3’s analysis of the data contained in the June 13 Files

       raises a factual question about the status of the subscribers; that is, whether the

       subscribers are independently acquired Shermans subscribers who overlap with

       Gen3 subscribers or whether they are Gen3 subscribers. Appellant’s App. Vol. III

       at 63-71; Pltf.’s Exs. I-K. Shermans designated the affidavit of its digital

       marketing consultant, Zhengda Guo, which indicated that the subscribers

       highlighted by Gen3 were independently acquired by Shermans. Appellant’s

       App. Vol. III at 76-99. In contrast, Gen3 points to its designated evidence

       indicating that the subscribers were Gen3 subscribers and were not

       independently acquired by Shermans. Id. at 63-71; Pltf.’s Exs. I-K.3 Thus, the




       3
         The trial court said that it was disregarding the “opinions of the Gen3 owners because Gen3 failed to lay
       the foundation for their opinions” with respect to Gen3’s view of the June 13 files; however, the trial court
       appears to have relied on that information for the view that “Shermans sent millions of emails to thousands
       of Gen3 subscriber[s] after the date of the Settlement Agreement.” Appellant’s App. Vol. II at 17.

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020                                Page 21 of 28
       designated evidence shows there is a dispute with respect to the status of the

       subscribers in the June 13 Files.


[27]   Third, Gen3 also points to the information from Gen3’s subscriber data that is

       contained on GoogleDrive, GoogleDocs, and Dropbox as a breach of the

       Settlement Agreement. The designated evidence shows that Shermans

       immediately took steps to address the disclosure of that information on those

       platforms following Gen3’s letter that it intended to enforce the Settlement

       Agreement. Appellant’s App. Vol. II at 86. With respect to the information on

       Dropbox, Gen3 had requested that Shermans use Dropbox to accomplish the

       transfer of subscriber data to it. Id. at 106. On May 25, 2017, when Gen3

       instructed Shermans to delete its subscriber lists, it indicated that the data “had

       been downloaded, so [Shermans] can delete.” Appellant’s App. Vol. III at 29. It

       is not entirely clear from the designated evidence whether that instruction was

       an instruction to delete only the April 5 Files and the April 18 Files, or if

       additional information needed to be deleted as the designated evidence shows

       Gen3 did not specifically refer to the data remaining on Dropbox,

       GoogleDrive, and GoogleDocs as problematic under the Settlement Agreement

       until its November 30, 2017 demand letter to Shermans. Appellant’s App. Vol. III

       at 42-43; Appellee’s App. Vol. II at 37-39. As noted above, Shermans worked

       with Sailthru, who managed Shermans’s database, to take steps to delete the

       Gen3 subscriber data, and Shermans deleted the Gen3 subscriber data on

       Dropbox, GoogleDocs, and GoogleDrive when Gen3 brought that to its

       attention. Appellant’s App. Vol. II at 108-09. The Settlement Agreement does


       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020         Page 22 of 28
       not include a specific date to delete the data, and although it includes broad

       language requiring Shermans to “destroy any other form of records applicable

       to All Gen3 Subscribers” there is a question as to whether the information

       contained on those platforms was in fact a material breach of the Settlement

       Agreement. Appellant’s App. Vol. III at 20. Thus, there is a disputed factual

       question as to whether Shermans’s efforts to delete the data was substantial

       performance of that obligation.


[28]   In light of the foregoing, the designated evidence leads to the conclusion that

       there was a factual dispute as to whether Shermans substantially performed

       under the Settlement Agreement. See Collins, 871 N.E.2d at 375 (explaining

       that whether a party has committed a material breach is a question of fact);

       Restatement (Second) of Contracts § 241 (1981) (describing the related nature of

       material breach and substantial performance and setting forth the factors

       relevant to both.) Thus, the resolution of “the parties’ differing accounts of the

       truth” is for the trier of fact to determine. See Hughley, 15 N.E.3d at 1003; Smith

       v. State Lottery Comm’n of Ind., 812 N.E.2d 1066, 1073 (Ind. Ct. App. 2004)

       (noting that “[m]aterial questions of fact are not appropriate for resolution by

       summary judgment.”), trans. denied. Because we conclude there are genuine

       issues of material fact precluding summary judgment, we reverse the trial

       court’s entry of summary judgment in favor of Gen3 and remand for further

       proceedings.


[29]   Reversed and remanded.



       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020        Page 23 of 28
Brown, J., concurs with separate opinion.


Crone, J., dissents with separate opinion.




Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020   Page 24 of 28
                                                    IN THE
            COURT OF APPEALS OF INDIANA

       ShermansTravel Media, LLC,                                  Court of Appeals Case No.
                                                                   19A-PL-3024
       Appellant-Defendant,

               v.

       Gen3Ventures, LLC,
       Appellee-Plaintiff.



       Brown, Judge, concurring.


[30]   I agree that the entry of summary judgment in favor of Gen3 was improper.

       According to Gen3, 68,521 emails were sent to its subscribers between April 5

       and April 18, 2017, by Shermans. According to Shermans, these were sent

       inadvertently. In my view the number of improperly-sent emails or the ratio of

       improperly-sent emails to the total number of sent emails is not dispositive as to

       whether there was a breach of the Settlement Agreement’s “cease to utilize” or

       other language proscription. See Appellant’s Appendix Volume III at 20.

       “Utilize” connotes a benefit and there is no evidence of a benefit received by

       Shermans. Other factual determinations include the extent to which Shermans

       independently acquired the subscribers to which Gen3 points, the extent to

       which the presence of information on shared platforms constituted a breach,

       and the extent to which Shermans’ actions comported with standards of good

       faith and fair dealing under the circumstances.

       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020                       Page 25 of 28
[31]   Further, on August 28, 2017, Shermans provided Gen3 with an affidavit stating

       it had deleted all Gen3 subscribers data from its database per the terms of the

       Settlement Agreement. Almost three months later and ahead of its deadline,

       Shermans made its final payment to Gen3 under the terms of the Settlement

       Agreement. Only after that, and in “gotcha” litigation style did Gen3 send a

       letter to Shermans’ counsel complaining about the data deletion, and six days

       later Shermans engaged QDiscovery to delete Gen3 data on the GoogleDrive,

       Google Docs, and Dropbox folders.


[32]   Under the circumstances, the designated materials do not establish, as a matter

       of law, that there are no genuine issues of material fact or that Shermans

       breached its obligations under the Settlement Agreement, and thus the entry of

       summary judgment was improper.




       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020       Page 26 of 28
                                                    IN THE
            COURT OF APPEALS OF INDIANA

       ShermansTravel Media, LLC,                                  Court of Appeals Case No.
                                                                   19A-PL-3024
       Appellant-Defendant,

               v.

       Gen3Ventures, LLC,
       Appellee-Plaintiff.



       Crone, Judge, dissenting.


[33]   I respectfully dissent. Assuming for argument’s sake that the substantial

       performance doctrine applies here – a highly dubious assumption given that

       paragraph 8 of the Settlement Agreement specifically requires “complete

       performance” under paragraph 9 – I would hold that Shermans failed to

       substantially perform under the agreement as a matter of law.


[34]   Shermans overpromised regarding its ability to delete and cease utilizing

       Gen3’s subscriber data, and it woefully underdelivered. The concurring

       opinion posits that “‘[u]tilize’ connotes a benefit[,]” slip op. at 25, but the only

       thing that one “utilizes” an email address for is to send an email. To say that

       Shermans did not “utilize” Gen3’s subscriber data by sending emails is like

       saying that I did not “utilize” my phone by making a phone call with it. The

       lead opinion adopts Shermans’ sleight-of-hand focus on percentages, noting

       that the 68,521 emails sent to Gen3 subscribers in April 2017 “‘made up less
       Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020                       Page 27 of 28
than a third of one percent, 0.3%, of the volume of emails sent by Shermans

during that time.’” Id. at 20 (quoting Appellant’s App. Vol. 3 at 75). The total

number of emails that Shermans sent to its subscribers is irrelevant; the critical

fact is that Shermans breached its Settlement Agreement with Gen3 68,521

times. In no rational universe would this constitute substantial performance.

Cf. Gen’l Discount Corp., 437 N.E.2d at 151 (affirming trial court’s finding of

substantial performance where agreed judgment did not specifically require

complete performance and defendant corrected sole instance of

nonperformance by replacing two tractor buckets with original specified

bucket). Based on these breaches alone, I would affirm the trial court’s entry of

summary judgment for Gen3.




Court of Appeals of Indiana | Opinion 19A-PL-3024 | July 27, 2020        Page 28 of 28
