NAJAM, Judge.
Norris Avenue Professional Building Partnership ("Norris") appeals the trial court's judgment for Coordinated Health, LLC ("Coordinated Health") on Norris' complaint for breach of a lease agreement. Norris raises a single issue for our review, namely, whether the trial court erred when it concluded that Coordinated Health did not breach the lease agreement. We reverse and remand with instructions.
On April 29, 2002, Norris and Coordinated Health entered into a lease agreement whereby Coordinated Health agreed to lease certain real property from Norris.
Id. at 13-15, 21-22.
Coordinated Health did not provide Norris with notice that it intended to exercise the first option term within sixty days of the expiration of the initial term. Nonetheless, Coordinated Health did not surrender the premises upon the end of the initial term, and it paid rent to Norris for the entirety of the first option term in amounts equivalent to those delineated in the lease for the first option term.
As the end of the first option term approached, Coordinated Health did not provide Norris with notice that it intended to exercise the second option term within sixty days of the expiration of the first option term. Nonetheless, Coordinated Health did not surrender the premises upon the end of the first option term, and, for a time, it paid rent to Norris in amounts equivalent to those delineated in the lease for the second option term. The second option term was scheduled to end on April 30, 2014.
In October of 2010, Coordinated Health informed Norris that it would terminate its tenancy as of April 30, 2011. The parties were unable to successfully negotiate a termination agreement, and, by April 30, 2011, Coordinated Health had surrendered the premises and paid all rents due up to that time.
On June 7, 2011, Norris filed suit against Coordinated Health. Norris alleged that Coordinated Health had breached the parties' lease agreement and that Coordinated Health owed Norris a sum equivalent to the balance of rent from May 1, 2011, through April 30, 2014, or the remainder of the second option term. After the trial court denied the parties' respective motions for summary judgment, the parties entered a joint stipulation of facts and moved for judgment without an evidentiary hearing. On June 2, 2014, the trial court entered a general judgment for Coordinated Health. Thereafter, the court denied Norris' motion to correct error. This appeal ensued.
Norris appeals the trial court's judgment for Coordinated Health. But the parties initially dispute our standard of review. Norris asserts that our standard of review is de novo, while Coordinated Health asserts that we must review the trial court's judgment under the clearly erroneous standard. Norris is correct.
This appeal involves only a written contract and a written, joint stipulation of facts. It is well established that, where "only a paper record has been presented to the trial court, we are in as good a position as the trial court ... and will employ de novo review...." Munster v. Groce, 829 N.E.2d 52, 57 (Ind.Ct.App. 2005); see also Houser v. State, 678 N.E.2d 95, 98 (Ind.1997) (holding that, where "both the appellate and trial courts are reviewing the paper record ..., there is no reason for the appellate courts to defer to the trial court's finding...."). The clearly erroneous standard, on the
Those basic principles aside, Coordinated Health asserts that the clearly erroneous standard applies "when facts are stipulated to by the parties and entered into evidence by the trial court." Appellee's Br. at 8. In support, Coordinated Health cites England v. Alicea, 827 N.E.2d 555, 558 (Ind.Ct.App.2005). In England, this court reviewed whether the trial court erred in its partition of certain real property, and we stated:
Id. (emphasis added).
England does not control here for two significant reasons. First, England does not hold that the clearly erroneous standard of review applies when only a paper record is at issue on appeal. Rather, as relevant here England merely noted that factual stipulations may not later be challenged on appeal. Id.; see also Wayne Township, 590 N.E.2d at 1133 ("stipulated facts are conclusive upon both the parties and the tribunal, and ... a party cannot properly challenge facts on appeal which it has stipulated to below"). Thus, we do not agree with Coordinated Health's reading of England. Neither England nor Wayne Township, the case England relied on, state that we are obliged to apply the clearly erroneous standard of review to a paper record.
Second, no party to the instant appeal challenges the stipulated facts, and, unlike in England, the trial court here did not enter findings of fact and conclusions thereon following a bench trial. Indeed, nothing about the court's judgment in the instant matter indicates that the court acted as a fact finder or in any way applied its unique position to determine any facts. See Anderson, 4 N.E.3d at 1206 n. 6. In other words, nothing about this appeal suggests that the trial court was in a better position than this court to address the facts and the law. As such, we owe the trial court no deference in our review. See, e.g., Houser, 678 N.E.2d at 98; Munster, 829 N.E.2d at 57.
Turning to the arguments on appeal, we first briefly reject Coordinated Health's argument that we must affirm the trial court's judgment because Norris did not file a brief in the trial court in support
We thus turn to the merits of Norris' claim, namely, whether at the time Coordinated Health surrendered the premises it was responsible to pay rent for the entirety of the second option term. In support of its position, Norris asserts that Coordinated Health had taken affirmative steps to demonstrate its exercise of both options notwithstanding Coordinated Health's failure to provide notice to Norris sixty days before the exercise of each option. Coordinated Health, on the other hand, asserts that the sixty-day notice was a material condition precedent to the exercise of each option, and Coordinated Health's failure to give written notice made it a holdover tenant following the end of the initial term.
Norris first discusses whether the options provided for in the parties' lease were options to extend or options to renew the lease. But we have previously rejected this distinction on similar facts, namely, where a lease required sixty-days notice from the lessee to the lessor to exercise an optional term for the lease. As we explained:
Carsten v. Eickhoff, 163 Ind.App. 294, 299-300, 323 N.E.2d 664, 667-68 (1975) (emphases added; footnotes omitted). But we made it a point in Carsten to note that that case was "not within the line of cases in which the lease calls for a higher rent during the second term and the lessee holds over paying the higher rent." Id. at 669 n. 3 (citing Kramer v. Cook, 73 Mass. 550, 550 (1856)); see also Pearman v. Jackson, 25 N.E.3d 772, 780 (Ind.Ct.App. 2015) (holding that, where the rent payments during the original and extended terms were the same, the lessees' "payment of rent and continued occupation of the leased premises standing along was insufficient ... to establish that they had exercised their option to renew the lease for an additional term ...."), not yet certified.
In another case, we considered whether a lessee had tendered effective notice to the lessor when the notice was untimely under the lease but the lessor treated the notice as if it were timely. We stated:
Powers v. City of Lafayette, 622 N.E.2d 1311, 1314-15 (Ind.Ct.App.1993) (emphases added; citations and footnotes omitted), trans. denied. Moreover, "[i]t has long been the law in this state that the performance of a condition precedent may be waived in many ways. One such way is by the conduct of one of the parties to the contract." Harrison v. Thomas, 761 N.E.2d 816, 820 (Ind.2002) (citations, quotations, and alterations omitted).
Applying that case law here, the notice provision in the instant lease was a condition precedent to Coordinated Health's exercise of either option term. Carsten, 323 N.E.2d at 667-68. However, that condition precedent existed for the benefit of Norris and, therefore, Norris had the right to waive Coordinated Health's compliance with the condition precedent. Powers, 622 N.E.2d at 1314-15. In lieu of the condition precedent, Norris had the right to accept another affirmative act by Coordinated Health, beyond Coordinated Health's merely holding over and paying the same rent it had been paying, as evidence of Coordinated Health's intent to exercise the option terms. See, e.g., Fragomeni, 96 N.E.2d at 278 ("where the lease gives the privilege of renewal[,] the lessee, by some affirmative act, must indicate his election to exercise the option prior to the expiration of the lease"); see also C. Callahan Co., 90 N.E. at 643 ("an option of a renewal would seem to imply that the parties contemplated some affirmative act by way of the creation of an additional term.").
Norris' right to waive the condition precedent is also supported by the waiver provision of the parties' lease agreement, which contemplates, but also limits, the operation and effect of a party's failure to insist on strict performance of a condition by the other party. That provision states that the failure to insist on strict performance of any term, covenant, or condition shall not constitute the waiver of "any subsequent breach of the same or other term, covenant, or condition." Here, this means that Norris' failure to insist upon Coordinated Health's performance of the written notice requirement for the first and second option terms is limited and does not operate as a waiver of Coordinated Health's obligation to pay rent and otherwise perform under the second option term at issue.
Still, to hold Coordinated Health to the option terms absent Coordinated Health's exercise of the conditions precedent, as a matter of law Norris had to accept an affirmative act by Coordinated Health beyond Coordinated Health's merely holding over and paying the same rent it had paid during the initial term. See, e.g., Fragomeni, 96 N.E.2d at 278; see also C. Callahan Co., 90 N.E. at 643. With that in mind, the stipulated facts sufficiently demonstrate that Norris failed to insist upon Coordinated Health's strict performance with the notice requirements, but, in lieu of those notices, Norris instead accepted Coordinated Health's increased rent payments.
Thus, we agree with Norris that Coordinated Health took an affirmative act to demonstrate its intent to exercise each of the two options. In Carsten, we acknowledged that "the mere holding
But that is not what happened here. Instead of paying rent in accordance with "the same terms ... as the original lease," id., Coordinated Health instead paid rent payments to Norris in accordance with the rent-payment provisions of each of the option terms. And the rent-payment provisions for the option terms required an annual increase in Coordinated Health's monthly rent obligation; that is, each year of the option terms required an increase in the rent payment relative to the prior year. This created a substantial financial difference from what a holdover would have paid: at the end of the first option term alone, Coordinated Health had paid $9,000 more to Norris than a holdover would have paid under the terms of the initial rental period. This affirmative conduct by Coordinated Health in making increased rent payments demonstrated its intent to be held to the option terms.
Further, Norris had a right to rely on Coordinated Health's apparent exercise of the option terms. Not only did Coordinated Health act in a manner consistent with the exercise of each option term, it also acted in a manner inconsistent with that of a holdover. Had it acted in a manner consistent with a holdover — namely, by paying the rent a holdover would have paid — Norris would have been immediately aware of Coordinated Health's intent and could have responded as it deemed appropriate. Coordinated Health may not now, well after the fact, claim to be a holdover during the same time in which it deprived Norris of the opportunity to treat it like a holdover.
In sum, we agree with Norris that Coordinated Health demonstrated its intent to exercise the lease agreement's option terms and, as such, Coordinated Health is bound by those terms. Although Coordinated Health did not satisfy the condition precedent of providing the contractual notice to exercise the option terms, it manifested its intent by its affirmative act of paying the option terms' rent payments, which were materially different than the initial term's rent payments. And Norris waived the condition precedent when it accepted those payments in lieu of the notices. Accordingly, we reverse the trial court's judgment for Coordinated Health and remand with instructions that the court enter judgment for Norris and hold any further proceedings as appropriate.
Reversed and remanded with instructions.
MATHIAS, J., and BRADFORD, J., concur.