                                                                          FILED
                                                                     Apr 18 2019, 8:11 am

                                                                          CLERK
                                                                      Indiana Supreme Court
                                                                         Court of Appeals
                                                                           and Tax Court




ATTORNEY FOR APPELLANT                                      ATTORNEY FOR APPELLEE
Jeffrey C. Gerish                                           R.C. Richmond, III
Plunkett Cooney                                             Taft Stettinius & Hollister LLP
Bloomfield Hills, Michigan                                  Indianapolis, Indiana



                                             IN THE
     COURT OF APPEALS OF INDIANA

Indiana Hotel Equities, LLC,                                April 18, 2019
Appellant-Plaintiff,                                        Court of Appeals Case No.
                                                            18A-PL-769
        v.                                                  Appeal from the Marion Superior
                                                            Court
Indianapolis Airport Authority,                             The Honorable Heather A. Welch,
Appellee-Defendant/Counterclaimant                          Judge
                                                            Trial Court Cause No.
                                                            49D01-1707-PL-27076



Baker, Judge.




Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019                             Page 1 of 20
[1]   Indianapolis Airport Authority (the Authority) and Indiana Hotel Equities,

      LLC (the Hotel), had a lease agreement (the Lease) for property on which the

      Hotel operated a hotel. The parties sued each other, each alleging that the other

      had breached the Lease and each filing a motion for summary judgment. The

      trial court, finding that the Hotel breached the Lease and that the Authority did

      not waive its ability to terminate the Lease, ruled in favor of the Authority. The

      Hotel appeals, arguing that the trial court erred by not directly addressing the

      materiality of its breach and by finding that the Authority did not waive its

      ability to terminate the Lease. Finding no error, we affirm.


                                                       Facts     1




[2]   The Lease originated in 1960 for a hotel located in Indianapolis near the

      airport. A hotel was constructed and over the years, was managed and

      modified by various operators. At some point, it fell into disrepair and financial

      trouble.


[3]   On January 6, 2016, the Lease was assigned to the Hotel. The assignment

      obligated the Hotel to make certain improvements and renovations to the

      property and to rebrand and operate it under a national chain brand name and

      of a certain level of quality as recognized by the hotel industry. The Hotel had

      until December 31, 2016, to complete the work. The renovations required by




      1
        We heard oral argument on Thursday, March 14, 2019, at Indiana State University in Terre Haute. We
      thank the Indiana State Bar Association for organizing the oral argument. We also thank counsel for their
      informative briefs and engaging oral advocacy.

      Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019                               Page 2 of 20
      the assignment included “well-appointed rooms, decorated lobby area, sit-down

      restaurant offering breakfast and dinner . . . , a full-service bar or lounge area

      serving beer, wine and distilled liquor, fitness center and swimming pool.”

      Appellant’s App. Vol. II p. 81-82. The Lease required the Hotel to pay the

      Authority rent equal to the greater of $2,000/month or a certain percentage of

      gross receipts from room rentals and a certain percentage of the monthly gross

      receipts derived from the sale of alcoholic beverages.


[4]   In addition, a Product Improvement Plan (PIP), which was a document

      between a national hotel brand and the Hotel, contained a varied list of smaller

      tasks to be completed, including cleaning and repairing ceiling tiles, walls, and

      carpet; cleaning and repairing sidewalks and parking areas; installing new

      artwork and decorative lighting; ensuring a certain level of internet access;

      implementing employee uniforms; updating the brand signage; removing an

      ATM; and replacing mattresses and installing new bedding.


[5]   On December 31, 2016, the Hotel had neither a full-service bar or lounge area

      serving beer, wine, and distilled liquor, nor a swimming pool. On May 11,

      2017, the Authority sent the Hotel a letter terminating the Lease, stating as

      follows:


              . . . As you know, Indiana Hotel Equities, LLC, failed to
              complete by December 31, 2016, the renovations and rebranding
              it was required to perform pursuant to the Lease Amendment,
              which failure constitutes an event of default under the Lease. As
              a result of said default, the Authority has the right, pursuant to
              Section 15 of the Lease, to cancel the Lease in its entirety, and

      Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019           Page 3 of 20
              notice is hereby given on behalf of the Authority that the
              Authority is cancelling the Lease in its entirety . . . .


              In the meantime, Indiana Hotel Equities, LLC, remains
              obligated to perform its obligations under the Lease, and the
              Authority hereby requests that Indiana Hotel Equities, LLC,
              provide the Authority with adequate assurance that it will do so.
              Please provide same, in writing, setting forth Indiana Hotel
              Equities, LLC’s intentions and the actions it will take during the
              next sixty (60) days, so that the Authority can make appropriate
              plans for retaking possession of the Premises . . . .


      Appellant’s App. Vol. IV p. 74. Pursuant to the Lease, the Hotel had until

      midnight on July 11, 2017, to cure its defaults.


[6]   Following this notification, the Hotel continued to make monthly rent

      payments at least through September 2017. The Authority uses a remittance

      processing service, also called a lockbox, pursuant to which rent checks from its

      tenants, including the Hotel, are sent to a post office box maintained by Chase

      Bank (Chase). Chase receives and processes the checks.


[7]   On July 12, 2017, the Authority’s counsel emailed Dena Marietta, its Tenant

      Relations & Contract Specialist, advising Marietta to “confirm that you will tell

      whoever receives the rent payments NOT to cash or deposit any further checks

      received from [the Hotel]. This is CRITICAL.” Appellant’s App. Vol. V p.

      215 (emphasis original). Marietta then asked Elias Maqueda, the Authority’s

      Director of Accounting, to instruct Chase not to accept any future checks sent

      to the lockbox from the Hotel and to return any checks to the Hotel. Maqueda

      called Chase and told Arina Foster, a Client Services Associate, that the
      Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019            Page 4 of 20
      Authority wanted Chase to refuse to accept any future checks sent to the

      lockbox by one of the Authority’s tenants and to return the checks to the tenant.

      Foster advised Maqueda that Chase was unable to refuse to accept a check or to

      return a check. The Authority has not refunded the Hotel the rent that the

      Hotel has paid following the termination of the Lease.


[8]   The Authority based its notice to the Hotel on the following Lease provisions:2


                 Section 15. Remedies: Cancellation by Board. The Board shall
                 have the right subject to the conditions herein set forth, upon
                 written notice to the Company and to the owner and holder of a
                 mortgage upon the leasehold estate herein created, as long as the
                 mortgage shall remain in full force and effect, to cancel this
                 Agreement in its entirety, upon or after the happening of any of
                 the events set forth in this Section, subsections (a) through (f) and
                 the lapse of time as herein set forth, such notice to be given
                 within one year after the Board first has knowledge of the
                 happening of the event, and to be given not less than sixty (60)
                 days and not more than one hundred twenty (120) days in
                 advance of the date of cancellation specified in such notice:


                                                          ***


                         (e) If the Company shall default in the performance or
                         fulfillment of any of the terms, covenants or conditions to
                         be performed by it hereunder.


                                                          ***




      2
          In the Lease, “Board” refers to the Authority and “Company” to the Hotel.


      Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019                Page 5 of 20
        The Company, at any time before the rights of the Company
        shall have been forfeited, may pay any of the rents or other
        amounts due hereunder, or effect any insurance, or pay any taxes
        and assessments, or make any repairs or improvements, or make
        any deposits, or do any other act or thing required of the
        Company by the terms of this Lease or do any act or thing which
        may be necessary and proper to be done in the observance of the
        covenants and conditions of this Lease, or to prevent the
        forfeiture of this Lease.


                                                   ***


        Section 19. Surrender and Holding Over. The Company
        covenants that at the expiration of the period for which this
        Lease or any option period thereof is leased or at any earlier
        termination under the terms hereof, it will surrender the premises
        and all structures and improvements thereon which by and under
        the terms of this Agreement are to remain on the premises as the
        property of the Board . . . ; and the Board shall have the right on
        such termination to enter upon and take possession of the
        premises.


                                                   ***


        Should the Company hold over and continue in possession of the
        property after the termination of the Lease herein granted, such
        holding over shall be deemed merely a holding over from month
        to month and at the rental herein provided for, payable monthly
        in advance, and otherwise on the same terms and conditions as
        herein set forth, provided, however, that the Board saves and
        reserves all legal rights or recourse to remove Company from the
        premises upon such holding over.


                                                   ***


Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019         Page 6 of 20
              Section 21. Miscellaneous. . . . Neither this Lease nor any term
              or provision hereof may be changed, waived, discharged or
              terminated orally, but only by an instrument in writing signed by
              the party against which the enforcement of the change, waiver,
              discharge or termination is sought. . . .


      Appellant’s App. Vol. II 67-69, 72-73.


[9]   The Authority also based its notice on the following provision from the Lease

      assignment:


              2. Renovations and Rebranding.


                       (a) [The Hotel] agrees and covenants that within thirty
                       (30) days after the Effective Date, . . . [The Hotel] will
                       commence with improvements and renovations, including
                       all rooms, as specified in the Product Improvement Plan
                       attached hereto and incorporated herein as Exhibit A.
                       [The Hotel] shall complete all items contained in Exhibit
                       A, including but not limited to, all individual rooms being
                       available for occupancy on or before December 31, 2016.
                       [The Hotel’s] failure to complete all items in Exhibit A by
                       December 31, 2016 shall constitute a default of this Lease.


                       (b) . . . [The Hotel] on or before December 31, 2016 shall
                       cause the hotel to be rebranded and operated under a
                       national chain brand name, per the terms of the Lease
                       Agreement, . . . that meets a “three star” minimum level of
                       quality as recognized by the hotel industry to include but
                       not limited to well-appointed rooms, decorated lobby area,
                       sit-down restaurant offering breakfast and dinner . . . , a
                       full-service bar or lounge area serving beer, wine and
                       distilled liquor, fitness center and swimming pool. . . .



      Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019          Page 7 of 20
       Id. at 81-82.


[10]   On July 12, 2017, the Hotel filed a complaint for damages, alleging that the

       Authority had breached the Lease and requesting a permanent injunction to

       enjoin the Authority from terminating it. On July 24, 2017, the Authority filed

       an answer and counterclaim, alleging that the Hotel had breached the Lease

       and seeking an order requiring the Hotel to vacate the premises.3 That same

       day, the Authority also filed an affidavit for immediate possession, arguing that

       because the Hotel had defaulted on the Lease and the Authority had canceled

       the Lease, the Hotel no longer had a right to continue occupying the Hotel.

       The Authority also asked the trial court to set a hearing on that matter; the trial

       court scheduled a hearing for October 4, 2017.


[11]   On August 23, 2017, the Hotel filed an amended answer to the Authority’s

       counterclaim. On September 8, 2017, the Hotel filed a motion to vacate the

       hearing scheduled for October 4, arguing that the Authority waived any right to

       declare a forfeiture of the Lease by continuing to accept the Hotel’s rent

       payments and that there was a question of fact as to whether the Hotel’s alleged

       defaults materially breached the Lease. On September 11, 2017, the Authority

       filed a motion to treat the Hotel’s motion to vacate as one for summary

       judgment; on September 21, 2017, the trial court granted that motion.




       3
        The Authority also filed a third-party complaint against Indiana Hotel Ventures, LLC (“IHV”), which
       managed the Hotel. IHV is not relevant to this appeal.

       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019                             Page 8 of 20
[12]   On October 6, 2017, the Hotel filed an amended motion to vacate hearing to be

       considered as a motion for summary judgment. On November 16 and 22,

       2017, the Authority filed a motion opposing the Hotel’s motion for summary

       judgment and a cross-motion for summary judgment, respectively.


[13]   On January 26, 2018, a hearing took place on the two summary judgment

       motions. On March 28, 2018, the trial court denied the Hotel’s motion for

       summary judgment and granted the Authority’s cross-motion for summary

       judgment. The trial court found in relevant part that:


               8. [The Authority] maintains it is entitled to summary judgment
               on its Counterclaim against . . . [the Hotel] . . . because there is
               no genuine issue of material fact that [the Hotel] defaulted on the
               terms of the Lease by failing to complete renovations and
               rebranding that was required, under the Lease Amendment, to be
               completed by December 31, 2016. Therefore, [the Authority]
               argues [the Authority] was entitled to terminate the Lease, did
               terminate the Lease, and that [the Hotel] wrongfully remains in
               possession of the leased premises.


                                                          ***


               10. The Court concludes the Lease agreement clearly outlines
               what constitutes a default of the Lease. [The Hotel] does not
               argue the terms of the Lease or Lease Amendment are
               ambiguous with regard to default. . . . [The Hotel] does not
               counter the designated evidence set forth by the [Authority] with
               designated evidence of its own to create “differing accounts of
               the truth” regarding its default. Instead, [the Hotel] argues the
               [Authority] waived its right to declare a forfeiture of the Lease
               and proceed to judgment for possession because the [Authority]


       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019          Page 9 of 20
        has continued to collect rent payments. Thus, the Court will
        proceed to address [the Hotel]’s waiver argument.


        11. [The Hotel] argues the “[Authority] has waived any right to
        declare a forfeiture of the Lease” because the [Authority] has
        continued to accept and cash rent payments from [the Hotel].
        Specifically, [the Hotel] maintains “[the Authority] accepted and
        cashed rent payments from [the Hotel]” from January 2017
        through September 2017. [The Authority] argues it has “never
        received any checks. . . [sic] endorsed, cashed, deposited, or
        taken any other action whatsoever with respect to such checks
        that is inconsistent with its termination of the Lease.”


                                                   ***


        20. Like the lease in [HK New Plan Marwood Sunshine Cheyenne,
        LLC v. Onofrey Food Servs., Inc., 846 N.E.2d 318 (Ind. Ct. App.
        2006)], the Lease at issue in this case contains a nonwaiver
        provision. . . . Thus, under the holding of HK New Plan, this
        Court must conclude as a matter of law that waiver did not occur
        here, where the Lease contained an explicit nonwaiver provision.


        21. Notwithstanding the nonwaiver provision, the Court also
        concludes the [Authority]’s conduct after [the Hotel]’s default did
        not constitute waiver. . . . The undisputed evidence
        demonstrates the [Authority] uses a remittance processing
        service, commonly referred to as a lockbox, pursuant to which
        rent checks from all of the [Authority]’s tenants, including [the
        Hotel], are sent to a post office box maintained by Chase Bank.
        Maqueda attested that the checks [the Hotel] sent for the rent due
        under the Lease Amendment went to this lockbox at Chase. On
        the morning of July 12, 2017, [the Authority]’s counsel told
        Marietta that the [Authority] should not accept any future checks
        from [the Hotel] and should return rent checks to [the Hotel].
        Marietta then asked Maqueda to instruct Chase not to accept any

Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019        Page 10 of 20
        future checks. However, Maqueda was told by Chase that Chase
        could not refuse to accept any checks unless a check comes in
        made payable to an unacceptable payee.


        22. . . . Thus, the Court concludes, based on the designated
        evidence, there is no genuine issue as to [the Authority]’s
        conduct regarding its acceptance of rent payments after it sent
        [the Hotel] the May 11, 2017 notice of termination.


        23. The question remains then, whether [the Authority]’s
        conduct amounted to an “intentional relinquishment of its
        known right” to terminate the Lease. The Court concludes it did
        not. . . . [the Authority] did send [the Hotel], on May 11, 2017,
        the Termination Letter, which gave notice that [the Hotel] was in
        default and that [the Authority] was cancelling the Lease.
        Furthermore, the [Authority]’s counsel instructed the [Authority]
        to not accept rent payments, and the [Authority] made efforts to
        comply with counsel’s advice. However, independent of [the
        Authority]’s conduct, Chase advised the [Authority] that it was
        unable to “refuse’ [sic] [the Hotel]’s payments. The Court cannot
        conclude, as a matter of law, that this circumstance evidences
        [the Authority]’s intent to forego, rather than preserve its right to
        terminate the lease. . . . Thus, the Court concludes no waiver
        occurred here.


        24. In light of the Court’s conclusion that the [Authority] did not
        waive its right to declare default and forfeiture of the Lease, there
        remains no genuine issue of material fact that [the Hotel]
        defaulted on the Lease. [The Hotel] does not argue the Lease is
        ambiguous with regard to what constitutes default. Nor does
        [the Hotel] designate evidence to counter [the Authority]’s
        evidence that [the Hotel] failed to complete the items in the PIP
        per Section 2(a) of the Lease Amendment and failed to have a
        full-service bar or lounge area serving beer, wine and distilled
        liquor, or a swimming pool per Section 2(b). As a result, the
        Court concludes there is no genuine issue of material fact and
Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019          Page 11 of 20
               [the Authority] is entitled to judgment as a matter of law on the
               issue of [the Hotel]’s default. Because the Court concludes [the
               Hotel] defaulted on the Lease and did not cure its default within
               the required timeframe, [the Authority] is entitled to possession
               of the leased premises.


       Appealed Order p. 15-16, 19-22 (some internal citations omitted). The Hotel

       now appeals.


                                      Discussion and Decision
                                        I. Standard of Review
[14]   Our standard of review for summary judgment is well settled:


               When reviewing a grant or denial of a motion for summary
               judgment our well-settled standard of review is the same as it is
               for the trial court: whether there is a genuine issue of material
               fact, and whether the moving party is entitled to judgment as a
               matter of law. Wagner v. Yates, 912 N.E.2d 805, 808 (Ind. 2009).
               The party moving for summary judgment has the burden of
               making a prima facie showing that there is no genuine issue of
               material fact and that the moving party is entitled to judgment as
               a matter of law. Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012).
               Once these two requirements are met by the moving party, the
               burden then shifts to the non-moving party to show the existence
               of a genuine issue by setting forth specifically designated facts.
               Id. Any doubt as to any facts or inferences to be drawn
               therefrom must be resolved in favor of the non-moving party. Id.
               Summary judgment should be granted only if the evidence
               sanctioned by Indiana Trial Rule 56(C) shows there is no genuine
               issue of material fact and that the moving party deserves
               judgment as a matter of law. Freidline v. Shelby Ins. Co., 774
               N.E.2d 37, 39 (Ind. 2002).


       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019       Page 12 of 20
       Goodwin v. Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016)


                                      II. Default on the Lease
[15]   The Hotel first argues that the trial court erred by allowing the Authority to

       declare a forfeiture based on the Hotel’s defaults without first determining

       whether the Hotel’s defaults were material.


[16]   Generally, “‘an express provision in a lease that allows the breach of a covenant

       to work a forfeiture of the agreement, is enforced if the breach is material.’”

       King v. Conley, 87 N.E.3d 1146, 1154 (Ind. Ct. App. 2017) (quoting Page Two,

       Inc. v. P.C. Mgmt., Inc., 517 N.E.2d 103, 107 (Ind. Ct. App. 1987)) reh’g denied,

       trans. denied. “While forfeitures are never favored in law, yet when by a

       reasonable construction, it appears that the contracting parties agreed that a

       forfeiture should take place, upon the failure of one of the parties to the contract

       to comply with a material part thereof, courts will decree a forfeiture.” Goff v.

       Graham, 159 Ind. App. 324, 334, 306 N.E.2d 758, 765 (1974) (internal

       quotation marks and citation omitted). Our determination “depends upon

       whether the breach is a material one, going to the heart of the contract.” Id.

       The facts of the case determine whether a total breach exists, and whether the

       breach is material is a question of fact for the factfinder. Id. We will not

       reweigh the evidence in reviewing the trial court’s findings of fact. Id. at 335.


[17]   In determining whether a breach is material, the following factors may be

       considered:



       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019        Page 13 of 20
               (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.


       King, 87 N.E.3d at 1154 (citing the Restatement (Second) of Contracts § 241

       (1981)).


[18]   Many cases say that the materiality of a breach of contract is a question of fact.

       See, e.g., Page Two, 517 N.E.2d at 108 (finding that breach of insurance

       covenant was not material because sublessor was not harmed by the breach nor

       had it concerned itself with the matter); see also Goff, 159 Ind. App. at 336-37,

       306 N.E.2d at 766 (finding that trial court could reasonably have found buyer’s

       failure to insure properties was willful and therefore constituted a material

       breach).




       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019             Page 14 of 20
[19]   There is no dispute as to the material facts in this case. The Hotel did not fulfill

       its contractual obligation to have a full-service bar or lounge area serving beer,

       wine, and distilled liquor or a swimming pool by December 31, 2016. As a

       result, the Hotel breached the Lease. Because the Hotel breached the Lease, the

       Authority was entitled to give, and did give, the Hotel written notice that it was

       terminating the Lease effective at midnight on July 11, 2017, unless the Hotel

       cured its defaults by then. The Hotel did not cure its defaults within the given

       time period.


[20]   The Hotel insists that the trial court erred by not addressing whether the Hotel’s

       breaches were material. While we acknowledge that the trial court could have

       explicitly discussed the issue of materiality, the evidence supports the trial

       court’s implicit finding that the Hotel’s breaches of the Lease were sufficiently

       material such that there was no genuine issue of material fact. Indeed, we find

       that the Hotel’s breaches go to the heart of the Lease. The Lease was assigned

       to the Hotel at least in part to establish the property as a national chain; indeed,

       the Lease explicitly stated that the Hotel’s failure to brand the property as a

       national chain by December 31, 2016, would constitute a default of the Lease.


[21]   To have the property rebranded and operated as a national chain of a specific

       quality, the Hotel was required to offer the following: well-appointed rooms; a

       decorated lobby area; a sit-down restaurant offering breakfast and dinner; a full-

       service bar or lounge area serving beer, wine, and distilled liquor; a fitness

       center; and a swimming pool. In other words, the Hotel had six large-scale

       improvements and developments to complete to ensure the property would

       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019         Page 15 of 20
       become a national chain brand. The Hotel did not accomplish two of these

       improvements that went to the heart of what the assignment of the Lease

       intended to achieve. And although the Hotel has continued to pay rent, as of

       July 12, 2017, the Hotel had not cured its defaults.


[22]   The Lease required the Hotel to pay the Authority rent equal to the greater of

       $2,000/month or the percentages of gross receipts from room rentals and a

       percentage of its sales of alcoholic beverages. It is unknown how much more

       profit the Hotel and, in turn, the Authority, could have generated had the Hotel

       completed the improvements. It is possible that a swimming pool would have

       increased occupancy rates and that occupants would have purchased alcoholic

       beverages. Accordingly, it would be difficult to calculate how the Authority

       could be adequately compensated for the part of the benefit of the Lease of

       which it was deprived. This consideration further weighs toward finding the

       Hotel’s breaches to be material.


[23]   The Hotel argues that its breaches were not material because these two

       improvements—the full-service bar or lounge area and the swimming pool—

       were just a “few items” on the PIP that were not completed. Appellant’s Br. p.

       23. But the incomplete improvements were contained in the Lease, not in the

       PIP. And we see the requirements contained in the Lease—the six large-scale

       improvements and developments—as separate and distinct from the varied and

       smaller-scale tasks listed in the PIP. The Lease was a contract between the

       Authority and the Hotel; the PIP was a document between the Hotel and a

       national hotel brand that makes no mention of the improvements at issue in this

       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019     Page 16 of 20
       appeal between the Authority and the Hotel. We find the Hotel’s argument in

       this respect unpersuasive.4


[24]   In sum, the trial court did not err by finding as a matter of law that the Hotel

       defaulted on the Lease.


                      III. Waiver of Right to Declare Forfeiture
[25]   The Hotel next argues that, because the Authority continued to accept the

       Hotel’s rent payments, the trial court erred by finding that the Authority did not

       waive its right to declare a forfeiture of the Lease, thereby entitling the

       Authority to take possession of the leased premises. The Hotel contends that

       the trial court should have at least found there was a question of fact on the

       issue.


[26]   The performance of a condition precedent may be waived in many ways.

       Randy Faulkner & Assocs., Inc. v. Restoration Church, Inc., 60 N.E.3d 274, 280 (Ind.

       Ct. App. 2016), aff’d on reh’g, 62 N.E.3d 1204 (Ind. Ct. App. 2016). Waiver is

       the intentional relinquishment of a known right and is ordinarily a question of

       fact. HK New Plan Marwood Sunshine Cheyenne, LLC v. Onofrey Food Servs., Inc.,

       846 N.E.2d 318, 324 (Ind. Ct. App. 2006). Generally, if a party to a contract

       performs acts that recognize the contract as still subsisting, such as accepting




       4
         We note that during oral argument, the Hotel’s counsel stated that “the pool never made sense.” Counsel
       further stated that, “there is a pool, but it’s covered by a banquet room, and the banquet room is used and is
       functional.”

       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019                                 Page 17 of 20
       rent payments, specific performance of the terms of the contract is waived and

       there can be no forfeiture. Page Two, 517 N.E.2d at 106 n.1. This rule is

       founded on principles of common honesty: a landlord cannot take the position

       a lease is valid for one purpose, e.g., collection of rent, and yet declare it invalid

       for other purposes. Id.


[27]   In HK New Plan, the parties’ lease contained the following nonwaiver provision:


               No waiver by Landlord or Tenant of any breach of any term,
               covenant or condition hereof shall be deemed a waiver of the
               same or any subsequent breach of the same or any other term,
               covenant or condition. The acceptance of rent by Landlord shall
               not be deemed a waiver of any earlier breach by Tenant of any
               term, covenant or condition hereof, regardless of Landlord’s
               knowledge of such breach when such rent is accepted. No
               covenant, term or condition of this Lease shall be deemed waived
               by Landlord or Tenant unless waived in writing.


       HK New Plan, 846 N.E.2d at 320. After the tenant failed to make required

       payments, the landlord filed a complaint against the tenant for defaulting on the

       lease; the tenant argued that the landlord waived the default by accepting the

       late rent payments and by allowing the tenant to remain as a tenant. This Court

       found that under the language of the lease, the landlord did not waive the

       tenant’s default by accepting the late payments. Id. at 325.


[28]   Similarly, here, the Lease contains an explicit nonwaiver provision. Section 21

       in the Lease provides that


               Neither this Lease nor any term or provision hereof may be
               changed, waived, discharged or terminated orally, but only by an
       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019           Page 18 of 20
                instrument in writing signed by the party against which the
                enforcement of the change, waiver, discharge or termination is
                sought. . . .


       Appellant’s App. Vol. II p. 73. The parties could waive a term or provision of

       the Lease only in writing; neither of the parties did so. The Hotel contends

       that, because its rent checks were written instruments, the Authority waived its

       right to terminate the Lease by accepting these checks. Not only do we disagree

       that the checks constituted “instruments in writing” as contemplated by the

       Lease, but the record is devoid of evidence that the Authority signed the checks.

       The record shows instead that the Authority acted to avoid receiving the

       Hotel’s checks. The Authority’s actions show that it wanted to preserve, rather

       than forego, its right to terminate the Lease. See Page Two, 517 N.E.2d at 107

       (finding that sublessor intentionally relinquished its right to terminate the

       sublease when it continued accepting sublessee’s rental payments despite

       knowing that sublessee was not going to make utility payments required by the

       sublease and when it stonewalled sublessee’s protests regarding utility

       payments).


[29]   Moreover, the Authority was not obligated to return the payments that the

       Hotel continued to make after the Authority’s May 11, 2017, notice of

       termination. The Authority had no reason to return the payments because it

       still had a claim of damages against the Hotel for the Hotel’s defaults under the

       Lease.




       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019         Page 19 of 20
[30]   Accordingly, the trial court did not err by finding that the Authority did not

       waive its right to declare a forfeiture and terminate the Lease.


[31]   The judgment of the trial court is affirmed.


       Najam, J., and Tavitas, J., concur.




       Court of Appeals of Indiana | Opinion 18A-PL-769 | April 18, 2019       Page 20 of 20
