MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
                                                                                 FILED
this Memorandum Decision shall not be                                        Jan 25 2018, 8:52 am

regarded as precedent or cited before any                                        CLERK
                                                                             Indiana Supreme Court
court except for the purpose of establishing                                    Court of Appeals
                                                                                  and Tax Court
the defense of res judicata, collateral
estoppel, or the law of the case.


ATTORNEY FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Michael F. Vertesch                                      Jeffrey J. Jinks
Greenwood, Indiana                                       Elizabeth R. McAleese
                                                         Carmel, Indiana



                                           IN THE
    COURT OF APPEALS OF INDIANA

Anthony L. Elrod,                                        January 25, 2018
Appellant-Defendant,                                     Court of Appeals Case No.
                                                         49A02-1703-PL-657
        v.                                               Appeal from the Marion Superior
                                                         Court
Raymond C. Bauman, et al.1,                              The Honorable Patrick J. Dietrick,
Appellee-Plaintiff.                                      Judge
                                                         Trial Court Cause No.
                                                         49D12-1604-PL-11727



Mathias, Judge.




1
 Appellee-Defendants Nancy Davis, M.A.A.C. Properties, LLC, Madison Avenue Athletic Club, Inc., and
Southeast Neighborhood Development Corp. did not file a brief on appeal. However, pursuant to Indiana
Appellate Rule 17(A), a party of record in the trial court shall be a party on appeal.

Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018               Page 1 of 15
[1]   Anthony L. Elrod (“Elrod”) and Raymond C. Bauman (“Bauman”) entered

      into court-ordered mediation to resolve a legal dispute between the two

      erstwhile business associates. After successful mediation, the parties signed a

      Mediated Settlement Agreement (the “Mediated Settlement Agreement”)

      resolving the dispute between them. Elrod, however, refused to sign or approve

      of the subsequent Agreement and Release drafted by Bauman’s counsel, which

      incorporated the terms of the Mediated Settlement Agreement but also included

      additional terms. Bauman then filed a motion to enforce the Mediated

      Settlement Agreement, which the parties treated as a motion for summary

      judgment. The trial court granted summary judgment in favor of Bauman,

      concluding that the Agreement and Release was binding on Elrod.


[2]   Elrod appeals and presents three arguments, which we consolidate and restate

      as whether the trial court erred in concluding that the Mediated Settlement

      Agreement was an enforceable contract and not merely an unenforceable

      agreement to agree. We conclude that the Mediated Settlement Agreement was

      an enforceable contract and binding on the parties, but that the subsequent

      Agreement and Release were not signed or otherwise agreed to by Elrod and

      was therefore not enforceable. Accordingly, we reverse the trial court’s order

      enforcing the Agreement and Release and remand with instructions to instead

      enforce the terms of the Mediated Settlement Agreement.


                                  Facts and Procedural History
[3]   For over thirty years, Bauman and Elrod were engaged in an ongoing business

      venture of buying, developing, and selling real estate in Indianapolis. Bauman
      Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 2 of 15
      and Elrod were also the owners of Madison Avenue Athletic Club, Inc. and

      M.A.A.C. Properties, LLC. Bauman contributed capital to the venture, and

      Elrod managed the real estate. When the business venture sustained a loss,

      Bauman contributed additional capital. Bauman eventually decided to end the

      venture with Elrod due to ongoing losses and Elrod’s failure to provide Bauman

      with an accounting of how he managed the venture.


[4]   Accordingly, on April 4, 2016, Bauman filed a complaint seeking to appoint a

      receiver and for declaratory judgment to determine the rights and interests of

      the parties to the property and assets of the venture. On June 13, 2016, the

      parties began court-ordered mediation. After a full day of mediation, the parties

      signed the Mediated Settlement Agreement, which provides in relevant part:


              Raymond Bauman (Ray) and Anthony Elrod (Tony) hereby
              stipulate and agree as follows:

              1. [Elrod] will receive all right, title and interest to lots 1033 -
              1035, 1037, 1039, 1041, 1045, 1047, 1049, and 1055 which are all
              lots bordered by High Street on the west and Prospect Street on
              the south. [Elrod] will also receive all right, title and interest to
              the vacated alley due north of parcel 1033-35. [Elrod] will assume
              and be responsible for all debts, mortgages and other expenses of
              those parcels. The mortgage on lot 1045 was executed by
              [Bauman]. [Elrod] will assume and pay that mortgage and
              indemnify and hold [Bauman] harmless from any nonpayment.

              2. [Bauman] will receive all right, title, and interest to lots 330,
              332, 336, and 340 as well as the four-plex and garage which are
              1046-1048 and 1042. Such properties are titled either in the name
              of [Bauman] and/or [Elrod] and MAAC[] Properties, Inc.
              [Bauman] will assume and be responsible for debts, mortgages
              and other expenses owing with respect to these parcels.
      Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 3 of 15
        [Bauman] will indemnify and hold [Elrod] harmless for any
        nonpayment. [Bauman] will receive all shares equaling 100% of
        MAAC Properties, Inc.

        3. The vacated alley that is due west of lot 330 shall remain in
        [Elrod]’s name unless it is purchased by the purchaser of the gym
        in which case [Elrod] will transfer his interest at no additional
        cost to Madison Avenue Athletic Club, Inc. If the gym purchaser
        does not purchase the vacated alley, upon closing of that sale,
        [Elrod] will deed the vacated alley to [Bauman] so long as
        [Bauman] remains the owner of the parcels 336 and 340 Prospect
        set over to him in paragraph 2 above.

        4. Madison Avenue Athletic Club, Inc. owns all right, title, and
        interest to the gym property located at 306 E. Prospect. Such
        property is currently listed for sale with Ray Stuck. Each party
        agrees to cooperate with Ray Stuck in an effort to sell the
        property. Upon a sale of the gym, [Bauman] will receive the fixed
        sum of $175,000. Madison Avenue Athletic Club, Inc. shall
        execute a mortgage against the gym to memorialize this
        obligation, and the remaining proceeds shall be split on an equal
        basis. It is anticipated that payments will be made to Madison
        Avenue Athletic Club, Inc. and the parties will receive their share
        as distributions pursuant to the terms of this paragraph. Both
        parties agree that their respective ownership interest is 50/50.

                                                ***

        6. The parties agree that there [are] only 2 mortgages against
        the gym. Copies of each are attached hereto. Both mortgages
        shall be released of record by [Bauman].

        7. The liquor license associated with the gym is held in the
        name Madison Avenue Athletic Club, Inc. In the event it is not
        required as part of the sale the gym, [Bauman] and [Elrod] will
        market the liquor license and split any net proceeds on an equal
        basis.



Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 4 of 15
        8. The gym and the apartments operate on a long-term lease for
        parking spaces on the south side of Prospect Street. That area
        referred to as the parking lot is to be retained by the parties,
        MAAC Properties, Inc. and/or Madison Avenue Athletic Club,
        Inc. In order to be fully marketable, the parking lot requires the
        installation of an additional parking lot directly east of the
        existing parking spaces. If either party invests that sum of money
        to install the parking lot in order to make the entire parcel
        marketable, the party who incurred such expense shall be
        refunded that amount of their investment from any sale proceeds.
        Remaining sale proceeds will be split on an equal basis.

        9. [Elrod] has building materials, tools and supplies located in
        the basement of both of the apartment buildings and the second
        and third floor of 336 Prospect set over to [Bauman] by this
        agreement. He shall have all materials and personal property
        removed from the apartment buildings no later than October 15,
        2016. He shall remove any and all personal property building
        materials or tools from the four-plex located at 1046-1048 no
        later than August 15, 2016. All coin operated laundry machines
        in the laundry rooms and appliances in use in the individual
        apartments shall remain and are not property of [Elrod]. If not
        removed by the due date, such property shall become [Bauman]’s
        property.

        10. [Bauman] shall receive, as his sole property and free of any
        claims by [Elrod], the real estate located at 6427 Canna Court in
        Indianapolis. There is currently a judgment lien in Cause No.
        49D07-1208-MF-031117 against [Elrod] which is lodged as a lien
        against this parcel. Upon a sale of the gym, an amount of money
        equal to the unpaid balance of that judgment shall be deducted
        from [Elrod]’s proceeds and placed into escrow. [Elrod] shall
        have 10 months from the date hereof to obtain a release of the
        lien and if he does so, there will be no deduction from his gym
        proceeds and any escrow will be released. If he is unable to
        obtain a release within such time, [Bauman] shall satisfy the
        judgment from such escrowed funds. [Bauman] shall assume and

Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 5 of 15
        agree to pay the mortgage that is in [Elrod]’s name and
        indemnify and hold [Elrod] harmless. [Bauman] shall satisfy the
        mortgage upon the sale of this property or any interest therein.

        11. [Bauman] will also receive all right title and interest to 1027
        East Raymond St. in Indianapolis, 2191 Wakeland Road in
        Paragon, 3711 Farrington Dr. in Bloomington and 2236 - 2238
        Shelby St. in Indianapolis.

        12. [Elrod] should receive all right title and interest to 3272
        Clover Dr. in Plainfield. Such parcel is subject to a mortgage for
        which [Elrod] is solely obligated. [Elrod] will be responsible and
        assume the obligation to pay such mortgage and to indemnify
        and hold [Bauman] harmless with respect to such mortgage.

        13. [Elrod] shall manage and operate the gym until it is sold and
        properly account for all income and expense. In the event either
        party contributes to such expenses, that party shall be given a
        note by Madison Avenue Athletic Club, Inc. for such loan plus
        interest at 4%.

        14. The parties, either directly or through their various entities,
        shall ensure the proper transfer deeds are prepared transferring
        title to properties as set forth herein and to execute any and all
        documents deemed reasonably necessary to effectuate the terms
        of this mediated agreement

        15. Both parties agree to share the expenses of mediation on an
        equal basis[.]

        16. [Bauman]’s attorney shall prepare the definitive settlement
        agreement encompassing and incorporating the terms of this
        agreement to be reviewed and executed by the parties. Upon its
        execution, the parties agree to dismiss this litigation as to all
        parties.


Appellant’s App., Vol. 3, pp. 13–17 (emphases added).


Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 6 of 15
[5]   On June 23, 2016, the mediator filed a report with the trial court indicating that

      mediation had been successful and that the parties had reached an agreement

      on the disputed issues. Bauman and Elrod subsequently took steps to

      implement the Mediated Settlement Agreement. For example: Elrod

      surrendered the keys of the apartment complex to Bauman; Elrod surrendered

      control and management of the apartments to Bauman; Elrod worked with

      Bauman to transfer all utilities at the apartments to Bauman; Elrod surrendered

      the rents received from tenants of the apartments to Bauman, which had

      previously been tendered to Elrod; Elrod filed the necessary documents with the

      Indiana Secretary of State to reinstate the status of the Madison Avenue

      Athletic Club, in order to facilitate the sale of the gym as called for in the

      Mediated Settlement Agreement; Elrod began removing building materials,

      tools, and supplies from both the Apartments and the four-plex; Elrod listed for

      sale the property located at 1045 High Street; Nancy Davis (“Davis”), the

      owner of record of the property at 1041 High Street, listed this property for sale;

      Elrod paid at least one month’s mortgage on the Clover property; and Elrod

      obtained satisfaction of the judgment lien


[6]   Pursuant to the terms of the Mediated Settlement Agreement, Bauman’s

      counsel prepared a document titled “Confidential Settlement Agreement and

      Mutual Release (“Agreement and Release”) along with the related deeds and

      other documents necessary to complete the distribution of the assets as agreed

      to under the Mediated Settlement Agreement. Bauman’s counsel sent the




      Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 7 of 15
      documents, including the definitive settlement agreement draft to be signed.

      Elrod refused to sign the drafted agreement.


[7]   As a result, Bauman filed on July 5, 2016, an emergency motion to enforce the

      settlement agreement. The court held a hearing on this motion and ordered the

      parties to participate in a second mediation in an attempt to resolve these issues.

      This second mediation was unsuccessful. On September 27, 2016, Bauman filed

      a brief in support of his motion to enforce, which he now termed a motion to

      enforce and a motion for summary judgment. On that same date, Bauman filed

      designated evidence in support of his motion to enforce and for summary

      judgment. Elrod did not respond to this motion.


[8]   On November 1, 2016, counsel for Davis entered an appearance and requested

      an enlargement of time to respond to Bauman’s motion, claiming that she was

      the record owner of one of the properties in dispute and should have been a

      party to the mediation. Bauman filed an objection to Davis’s motion, claiming

      that both he and Elrod agreed that Davis was the legal title holder of record to

      1041 High Street and that the mediation was only intended to quiet the claims

      between him and Elrod regarding any interest or rights that they might have in

      the property, not to assign ownership of the property.


[9]   On January 6, 2017, the trial court held a hearing on Bauman’s motion to

      enforce. Prior thereto, the parties submitted briefs and affidavits in support of

      their positions. Bauman argued that the Mediated Settlement Agreement was

      enforceable, and Elrod claimed that the Mediated Settlement Agreement was


      Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 8 of 15
       an unenforceable agreement to agree. After taking the matter under

       advisement, the trial court entered findings of fact and conclusions of law on

       February 28, 2017, granting Bauman’s motion to enforce. The trial court’s

       order required Elrod to execute the Agreement and Release and to abide by the

       terms contained in the Agreement and Release. Elrod now appeals.


                                          Standard of Review
[10]   The parties agree that the trial court’s order is one granting summary judgment

       in favor of Bauman. On appeal from a trial court’s ruling on a motion for

       summary judgment, we apply the same standard as the trial court. M.S.D. of

       Martinsville v. Jackson, 9 N.E.3d 230, 235 (Ind. Ct. App. 2014), trans. denied.

       That is, we consider only those facts that the parties designated to the trial court

       to determine whether there is a genuine issue as to any material fact and

       whether the moving party is entitled to judgment as a matter of law. Id. We

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

       doubts as to the existence of a material issue against the moving party. Id. The

       moving party bears the burden of making a prima facie showing that there are

       no genuine issues of material fact and that the moving party is entitled to

       judgment as a matter of law. Id. Once the movant makes this prima facie

       showing, the burden shifts to the non-moving party to designate and produce

       evidence of facts showing the existence of a genuine issue of material fact. Id.

       Still, the party appealing a summary judgment decision bears the burden of

       persuading this court that the grant or denial of summary judgment was



       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 9 of 15
       erroneous. Id. Where the facts are undisputed and the issue presented is a pure

       question of law, we review the matter de novo. Id.


                                      Discussion and Decision
[11]   “The law is well established that a mere agreement to agree at some future time

       is not enforceable.” Wolvos v. Meyer, 668 N.E.2d 671, 674 (Ind. 1996) (citing

       Wallace v. Mertz, 86 Ind. App. 185, 156 N.E. 562 (1927)). However, parties may

       enter into an enforceable contract that requires them to execute a subsequent

       final written agreement. Id. In Wolvos, our supreme court quoted with approval

       the following language from a well-known contracts hornbook:


               It is quite possible for parties to make an enforceable contract
               binding them to prepare and execute a subsequent final
               agreement. In order that such may be the effect, it is necessary
               that agreement shall have been expressed on all essential terms
               that are to be incorporated in the document. That document is
               understood to be a mere memorial of the agreement already
               reached. If the document or contract that the parties agree to
               make is to contain any material term that is not already agreed
               on, no contract has yet been made; the so-called “contract to
               make a contract” is not a contract at all.


       Id. at 674–75 (quoting 1 Arthur Linton Corbin and Joseph M. Perillo, Corbin on

       Contracts § 2.8 at 133–34 (rev. ed. 1993)). Indeed, this court has long held that

       the “‘mere reference to a more formalized contract does not void the presently

       existing agreement.’” Id. at 675 (quoting McMahan Construction Co. v. Wegehoft

       Bros., Inc., 170 Ind. App. 558, 562, 354 N.E.2d 278, 281 (1976)).




       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 10 of 15
[12]   The question of whether an agreement is an enforceable option contract or

       merely an unenforceable agreement to agree involves two interrelated areas: (a)

       the intent to be bound and (b) definiteness of terms. Id. (citing Corbin on

       Contracts § 2.8 at 131). “Promises may be indefinite . . . . The more important

       the uncertainty, the stronger the indication is that the parties do not intend to be

       bound; minor items are more likely to be left to the option of one of the parties

       or to what is customary or reasonable.” Id. (quoting Restatement (Second) of

       Contracts § 33, cmt. f (1979)).


[13]   A court faced with this issue should examine whether the parties intended to be

       bound by the agreement or whether they intended that they would be bound

       only after executing a subsequent writing document. Id. “When one enters into

       an agreement with the understanding that neither party is bound until a

       subsequent formal written document is executed, no enforceable contract exists

       until the subsequent document is executed.” Id. (citing Foster v. United Home

       Improvement Co., 428 N.E.2d 1351, 1355 (Ind. Ct. App. 1981)). The court

       should also determine whether the option agreement lacks such essential terms

       as to render the contract unenforceable. Id.


[14]   Moreover, we note that it is the public policy of this state to encourage

       mediation and mediated settlement agreements. See Fuchs v. Martin, 845 N.E.2d

       1038, 1041 (Ind. 2006) (noting Indiana judicial policy favors mediation);

       Georgos v. Jackson, 790 N.E.2d 448, 453 (Ind. 2003) (noting that Indiana strongly

       favors settlement agreements).



       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 11 of 15
[15]   In support of his argument that the Mediated Settlement Agreement was not an

       enforceable contract, Elrod cites Equimart Ltd. v. Epperly, 545 N.E.2d 595 (Ind.

       Ct. App. 1989). In that case, the parties entered into a letter of intent that stated

       that they would “attempt, in good faith, to negotiate a definitive purchase

       agreement” for the sale of stock. Id. at 598. The letter of intent further provided

       that the “consummation of the transaction here contemplated . . . will be

       subject to the execution of delivery of a Final Agreement in a form reasonably

       satisfactory to the parties and their respective counsel.” Id. On appeal, we held

       that this language indicated the parties had merely agreed to agree after a period

       of exclusive negotiation, and that the letter of intent was not a binding purchase

       contract. Id.


[16]   In the present case however, the Mediated Settlement Agreement did not call

       for the parties merely to continue to negotiate. Instead, it set forth an agreement

       as to all the material issues in dispute between the parties. In fact, it specifically

       states that Elrod and Bauman “stipulate and agree” as to all of the provisions of

       the Mediated Settlement Agreement. Appellant’s App., Vol. 3, p. 13. And the

       signatures of the parties were executed immediately below language stating that

       “[t]he above is agreed to this June 13, 2016.” Id. at 17.


[17]   Elrod focuses on paragraph sixteen of the Mediated Settlement Agreement,

       which provides that “[Bauman]’s attorney shall prepare the definitive settlement

       agreement encompassing and incorporating the terms of this agreement to be

       reviewed and executed by the parties. Upon its execution, the parties agree to

       dismiss this litigation as to all parties.” Appellant’s App., Vol. 3, pp. 16–17.

       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 12 of 15
       This, he claims, indicates that the parties did not intend to be bound unless and

       until the Agreement and Release was executed. We disagree.


[18]   Nothing in the language of the Mediated Settlement Agreement would indicate

       that the preparation and approval of the Agreement and Release was a

       condition precedent to the enforceability of the Mediated Settlement

       Agreement. To the contrary, the language of the Mediated Settlement

       Agreement specifically states that the parties had agreed to the provisions of

       that agreement.


[19]   We find the present case more akin to Block v. Magura, 949 N.E.2d 1261 (Ind.

       Ct. App. 2011). There, the parties entered into a letter of intent. But this letter,

       unlike the letter of intent in Epperly, did not refer to future negotiations or use

       conditional or contingent language. Block, 949 N.E.2d at 1267. Nor did the

       letter of intent indicate that new material terms could be included in the

       subsequent, formal agreement. Instead, it stated that the subsequent formal

       agreement would “incorporate ‘the terms of this Letter of Intent,” not other

       terms. Id. The letter of intent also stated that it “confirm[ed]” the terms of the

       agreement to purchase. Id. It also stated that the parties were “willing to

       complete” the purchase and used the terms “[o]ffer made” and “accepted” to

       denote the consequence of the parties’ signatures. Id. Therefore, we concluded

       that the letter of intent, as a whole, “indicate[d] the parties’ intent to be bound,

       such that the requirement to execute a formal memorandum of their agreement

       within five days was not a condition precedent to enforceability of the

       agreement.” Id.

       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 13 of 15
[20]   The same is true here. The Mediated Settlement Agreement does not refer to

       future negotiation or use conditional language. Nor does the Mediated

       Settlement Agreement call for new material terms to be included in the

       subsequent Agreement and Release. To the contrary, the provision referring to

       the preparation of the Agreement and Release states that the subsequent, more

       formal agreement will “encompass[] and incorporate[] the terms of this

       agreement[.]” Appellant’s App., Vol. 3, pp. 16–17. And the signatures indicated

       that the parties had “agreed” to the terms set forth in the Mediated Settlement

       Agreement. Thus, as in Block, the language of the Mediated Settlement

       Agreement as a whole indicates the parties’ intent to be bound by the terms of

       that agreement.


[21]   Elrod also argues that the Mediated Settlement Agreement is unenforceable

       because the subsequent Agreement and Release, prepared by Bauman’s

       counsel, contains “numerous and significant additional terms[.]” Appellant’s

       Br. at 27. The existence of these additional terms in the Agreement and Release,

       he argues, indicates that the Mediated Settlement Agreement is non-binding.

       Again, we disagree. Assuming that the Agreement and Release contain

       significant additional terms that were not in the Mediated Agreement, this does

       not mean that the Mediated Settlement Agreement is unenforceable. Instead, it

       simply means that Elrod is bound by the terms of the Mediated Settlement

       Agreement instead of the Agreement and Release. See Reno v. Haler, 734 N.E.2d

       1095, 1099 (Ind. Ct. App. 2000) (holding that wife was bound by terms of

       unsigned, typewritten agreement to the extent that it conformed to the terms


       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018   Page 14 of 15
       contained in handwritten notes of the mediator that both parties signed),

       adhered to on reh’g, 743 N.E.2d 1139 (Ind. Ct. App. 2001), trans. denied.


[22]   We therefore conclude that the trial court erred to the extent that it ordered

       Elrod to comply with the terms of the Agreement and Release, as that

       document was not agreed to by the parties. However, Elrod is bound by the

       terms of the Mediated Settlement Agreement, which was the result of an hours-

       long mediation at which he was represented by counsel and which was signed

       by both parties. Accordingly, we reverse the order of the trial court enforcing

       the terms of the Agreement and Release and remand with instructions that the

       trial court enforce the terms of the Mediated Settlement Agreement.2


       Vaidik, C.J., and Crone, J., concur.




       2
         One could also view our conclusion as enforcing the terms of the Agreement and Release only to the extent
       that it merely incorporates the terms of the Mediated Settlement Agreement. See Reno, 734 N.E.2d at 1099.
       We think it better to simply state that the parties are bound by the terms of the Mediated Settlement
       Agreement they executed.

       Court of Appeals of Indiana | Memorandum Decision 49A02-1703-PL-657 | January 25, 2018        Page 15 of 15
