Recent Developments in Indiana Taxation - I.U. School of Law ...

1150 INDIANA LAW REVIEW [Vol. 40:1103
482
March 3, 2000. The purchase agreement included a provision that read, in
part, “[Trinity Homes] agrees to pay first real estate installment due after
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settlement.” Trinity Homes paid the property tax installments due in May and
484
November 2000. Those installments were for the 1999 assessment of the
property, before Trinity subdivided the development into individual lots. 485
Fang’s lot was assessed individually in 2000, and he received a bill for the first
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installment of that assessment due in May 2001. He paid the bill and requested
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reimbursement from Trinity Homes. They refused so he filed an action in
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small claims court to recover the payment. Fang argued that the installments
that were paid in May and November 2000 were not on his property but on the
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development as a whole. Therefore, those payments could not be the
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installment referred to in the purchase agreement. Instead, because his
property was only assessed for the first time in 2000, the May 2001 payment was
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the first installment due and Trinity Homes should have paid it. Both the trial
court and the Court of Appeals held that the contract provision was ambiguous
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and should be construed in favor of Fang. The Supreme Court, however,
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disagreed that the provision was ambiguous. The only question was whether
or not the 1999 assessment (that Trinity paid in 2000) applied to Fang’s
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individual lot. The court reasoned that it did, even though the lot was not
individually assessed, because that lot (and the remainder of the entire tract of
land) was subject to the lien acquired by the state on the 1999 assessment. 495
Rather than finding that Trinity Homes should have paid the May 2001
installment, it found that Fang unexpectedly benefited from Trinity Homes’s
payment of the November 2001 installment - one more than it was required to
496 pay. The court reversed the lower court decision and ordered judgment for
Trinity Homes. 497
482. Id. at 1067.
483. Id.
484. Id.
485. Id.
486. Id.
487. Id.
488. Id.
489. Id.
490. Id.
491. Id.
492. Id.
493. Id. at 1068.
494. Id. at 1069.
495. Id.
496. Id.
497. Id. A dissenting opinion also found the term to be unambiguous - but in favor of Fang.
The dissent highlights the terms in the sales agreement that refer to property taxes on the “real
estate”—defined as the individual lot in the same agreement. According to the terms of the
agreement, Trinity Homes should have paid the May 2001 installment of property taxes.