City of East Chicago v. East Chicago Second Century, Inc.

OPINION

The City of East Chicago (“East Chicago”) appeals the denial of its motion for summary judgment and the dismissal of most of its counterclaims and cross-claims against the East Chicago Community Development Foundation and the Twin City Education Foundation (collectively “the Foundations”) and East Chicago Second Century, Inc. (“Second Century”). It also asserts the trial court should not have *365consolidated the contract action with the review, in another branch of the same court, of an administrative action involving the same parties.1

We affirm in part, reverse in part and remand.

FACTS AND PROCEDURAL HISTORY2

In 1994 and 1995, East Chicago and the Showboat Marina Partnership entered into two agreements providing for Showboat’s distribution of some of its gam*366ing revenue if it were awarded the license to operate the East Chicago riverboat casino. To secure a riverboat license, an applicant must show a commitment to local economic development, Ind.Code § 4-33-6 — 7(b),3 so East Chicago negotiated with Showboat, the original licensee, that if East Chicago supported the Showboat application, Showboat would fund economic development with 3.75% of its future adjusted gross receipts. The agreement was dated April 8, 1994 and supplemented with a second agreement dated April 18, 1995. The agreements (hereinafter “the letter agreements”) were subject to ratification by the East Chicago Common Council. The Council passed an ordinance in September 1995 endorsing the Showboat commitments.

Pursuant to the agreement Showboat would pay 1% to each of the Foundations, 1% to East Chicago, and .75% to Second Century. The Foundations are both not-for-profit entities. Second Century is a for-profit corporation Showboat formed. Showboat was awarded the license in April 1997, and the Indiana Gaming Commission incorporated the terms of the letter agreements as conditions for Showboat’s receipt of the license. Showboat made the pay*367ments accordingly. In 1999 the license was transferred to Harrah’s, with Gaming Commission approval, and Harrah’s continued to make the payments called for in the letter agreements.

In the fall of 2004, RIH Acquisitions, doing business as Resorts East Chicago (“Resorts”), applied to the Gaming Commission for transfer of the Harrah’s license to Resorts. Resorts indicated it was willing to continue making the payments. The Gaming Commission granted the license transfer without addressing the letter agreements.

In 2004, our Supreme Court ordered a special mayoral election in East Chicago because of election fraud on the part of Mayor Robert Pastrick’s supporters. George Pabey was elected mayor. In January 2005 the new city administration took office and the Common Council passed an ordinance that purported to redirect to East Chicago all the money that was being paid to Second Century and the Foundations pursuant to the letter agreements.

In April 2005, Second Century brought an action against Resorts, seeking a declaration that it was a third-party beneficiary of the agreement Resorts had with East Chicago, so if the license were transferred Second Century would continue to be paid .75% of the riverboat’s adjusted gross revenues.

Resorts answered and brought a third-party complaint against the Foundations and East Chicago asking the court to declare to whom it has to pay the money for East Chicago economic development. In response East Chicago asked that the letter agreements be found void and unenforceable, and contended it should receive the entire 3.75%. The Foundations answered and asked the court to declare the letter agreements valid and to declare them entitled to their 1% each. The Foundations and Second Century moved to dismiss the East Chicago claims and East Chicago moved for summary judgment. The court granted a stay of discovery pending resolution of the motion to dismiss.

The Attorney General filed an amicus brief supporting East Chicago.4 The Attorney General determined there were financial irregularities in the internal operations of Second Century. It determined the letter agreements “may violate the integrity of the riverboat gambling industry,” (App. at 2192), as they direct the economic benefit money to a private, for-profit corporation that has “resisted] any public oversight,” (id.), and the principals of Second Century and the previous East Chicago administration may have made material omissions and/or misrepresentations to the Indiana Gaming Commission in obtaining and maintaining the agreement made. It also determined the letter agreements may be “inconsistent with the stated purpose of the Act to assist economic development” as East Chicago may not have received economic development from Second Century “commensurate” with the amount of money Second Century received under the letter agreements. (Id.) The Attorney General suggested the letter agreements may be void as against public policy.

After the Attorney General’s findings, and about a year after Second Century brought its declaratory judgment action, the Gaming Commission issued a resolution disapproving continued payments by Resorts to Second Century. Many of the irregularities alleged in the Gaming Com*368mission’s resolution mirror the issues raised in the civil contract action. In addition, East Chicago argues in the civil action, as the Attorney General suggested in the Commission proceeding, the letter agreements are void as against public policy. Due to these similarities, the Foundations moved to consolidate the contract action with the appeal of the Gaming Commission’s administrative decision.

After consolidating the actions, the trial court denied East Chicago’s motion for summary judgment and found the letter agreements created an enforceable contract. Second Century and the Foundations moved to dismiss East Chicago’s counterclaims alleging fraud and breach of fiduciary duty. Because East Chicago’s counterclaims were dismissed on limitations grounds,5 the trial court did not consider the other grounds for dismissal asserted by Second Century and the Foundations.

East Chicago initiated this interlocutory appeal. It argues the trial court was without authority to consolidate the actions, the trial court erred in dismissing East Chicago’s claims on limitations grounds, dismissal on other grounds was improper because a number of factual inferences in East Chicago’s favor were ignored, and the letter agreements are unenforceable for a number of reasons.

CONSOLIDATION

East Chicago argues consolidation was improper because the Marion County Rules do not permit Judge Bradford’s “unilateral action,” (Appellant’s Br. at 8), the two actions are “fundamentally dissimilar,” (id), consolidation is inconsistent with the purposes of the Administrative Orders and Procedures Act, consolidation will result in delay, and the administrative review proceeding should have been ven-ued6 in Lake County. Because East Chicago has not demonstrated it was prejudiced by the consolidation, we affirm.

1. The Manon County Rules

East Chicago asserts Judge Bradford could not “transfer a case to himself,” (Appellant’s Br. at 13), because under the Marion County Rules authority to assign judges rests with the executive committee of the Superior Court. It is apparent the cases had been “assigned” to Judges Bradford and Moberly of the Marion Superior Court well before they were consolidated, and East Chicago offers no explanation why the “assignment” rule would override, or even be relevant to, the trial rule that governs consolidation of cases.

We accordingly decline to reverse on that ground. See App. R. 46(A)(8) (“The argument must contain the conten*369tions of the appellant on the issues presented supported by cogent reasoning. Each contention must be supported by citations to the authorities, statutes, and the Appendix or parts of the Record on Appeal relied on.”) A party waives an issue where he fails to develop a cogent argument or provide adequate citation to authority and portions of the record. Lyles v. State, 834 N.E.2d 1035, 1050 (Ind.Ct.App.2005), reh’g denied, trans. denied 841 N.E.2d 191 (Ind.2005).

2. Consolidation of Administrative Review Action with Civil Lawsuit

East Chicago asserts Ind. Trial Rule 42 does not permit consolidation of an administrative review proceeding with a civil lawsuit. Nothing in that rule explicitly distinguishes administrative review actions from the other “civil actions involving a common question of law or fact” the rule addresses. T.R. 42.

East Chicago asserts “an agency review proceeding is not a ‘civil action’ in the traditional sense.” (East Chicago Consolidation Br. at 16.) It offers decisions it characterizes as holding “special statutory proceedings have not generally been considered ‘civil actions,’ ” (id.), and the trial rules “are not applicable to proceedings before administrative agencies.... ” (Id. at 17.) However, the question before us is not whether the trial rules apply to the proceedings before the administrative agency. Rather, it is whether they govern the review, in civil court, of such proceedings. They do.

In City of Mishawaka v. Stewart, 261 Ind. 670, 674, 310 N.E.2d 65, 67 (Ind.1974), our Indiana Supreme Court said, “Numerous cases have held that proceedings for judicial review of decisions of Board of Public Works and Safety concerning dismissals of policemen or firemen are ‘in the nature of civil proceedings.’ ” It noted the trial rules “govern the procedure and practice in all courts of the state of Indiana in all suits of a civil nature whether cognizable as cases at law, in equity, or of statutory origin.” Id. While the trial rules apply to “all suits of a civil nature,” and the administrative review proceeding before the Court was “in the nature of a civil proceeding,” the Court determined “the meaning is synonymous.” Id.

Therefore, this administrative review proceeding is a civil action, and whether consolidation is permitted is therefore governed by T.R. 42, which provides in pertinent part:

When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

⅝ ⅜ * ⅜: ⅝

When civil actions involving a common question of law or fact are pending in different courts, a party to any of the actions may, by motion, request consolidation of those actions for the purpose of discovery and any pre-trial proceedings.

Such motion may only be filed in the court having jurisdiction of the action with the earliest filing date and the court shall enter an order of consolidation for the purpose of discovery and any pre-trial proceedings unless good cause to the contrary is shown and found by the court to exist.

The rule permits a trial court to consolidate actions that involve a common question of law or fact, if the common questions of law or fact are determinative. Bodem v. Bancroft, 825 N.E.2d 380, 382 *370(Ind.Ct.App.2005). The decision to consolidate actions is purely discretionary and will be overturned only when a manifest abuse of discretion is established. Id. A showing of prejudice is a prerequisite to a finding the discretion of the trial court was abused in the grant or denial of a motion to consolidate. Jessop v. Werner Transp. Co., 147 Ind.App. 408, 412, 261 N.E.2d 598, 601 (1970).

East Chicago argues at length that the consolidation order “arbitrarily interfered with the case assignment process thereby disrupting the orderly administration of justice,” (East Chicago Consolidation Br. at 8), and it implicated “the concern over judge or forum shopping.” (Id. at 9.) However, East Chicago does not explicitly argue it is prejudiced by the consolidation of the two cases except to note “[cjonsolidation was not sought until weeks after Judge Bradford issued substantive rulings in favor of the City’s opponents.”7 (Id. at 10.) East Chicago does not explain what those “substantive rulings” were or how the rulings demonstrated East Chicago would be prejudiced by the consolidation.8

For an error to be prejudicial, it must affect the substantial rights of the appellant and the appellant must affirmatively show an erroneous, prejudicial ruling. Foster v. Review Bd. of Ind. Employment Sec. Div., 413 N.E.2d 618, 621 (Ind.Ct.App.1980). We will not “indulge contrary presumptions to sustain appellant’s alleged error.” Id. We decline East Chicago’s invitation to indulge such a presumption, and hold East Chicago has not affirmatively shown prejudice to its substantial rights just because the judge under which the cases were consolidated had made rulings in favor of East Chicago’s opponents.9 Consolidation of the two actions was not prejudicial error.

VALIDITY AND ENFORCEABILITY OF THE AGREEMENTS

The trial court properly denied East Chicago’s motion for summary judgment. *371It correctly determined East Chicago's request for injunctive relief was, in effect, a request to reform the agreements to redirect the payments from Second Century and the Foundations to East Chicago. It declined to reform the agreements, as East Chicago had not alleged mutual mistake or fraud. It denied the request for a declaratory judgment the agreements were terminated, unenforceable, or void as against public policy. It found the agreements specific enough to be enforceable because they included an implied durational term, and found Second Century and the Foundations were intended to be third-party beneficiaries. It acknowledged East Chicago’s concern the agreements did not provide sufficient oversight of Second Century and the Foundations, but found those concerns did not overcome the preference for freedom to contract. The denial of summary judgment was not error.

Our summary judgment standard of review is well-settled. The party appealing the denial of summary judgment, here East Chicago, has the burden of persuading us the trial court’s ruling was improper. Ind. Dept. of Transp. v. Shelly & Sands, Inc., 756 N.E.2d 1063, 1069 (Ind.Ct.App.2001), trans. denied 774 N.E.2d 512 (Ind.2002). When we review the denial of a motion for summary judgment, we apply the same standard as the trial court. Id. We will resolve any doubt as to a fact or an inference to be drawn from the evidence in favor of the party opposing the motion, here Second Century and the Foundations. Id. Summary judgment should be granted only when the designated evidence shows there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Id.; Ind. Trial Rule 56(C). Therefore, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. 756 N.E.2d at 1069.

1. Duration of the agreement

East Chicago argues the contract represented by the letter agreements is terminable at will, either because it is of infinite duration or it has an “implied du-rational term of the length of the original license which has long since expired.” (Appellant’s Br. at 10.) The trial court found the letter agreements had “no explicit durational term. However, by linking funding to gross gaming receipts, which only exist as a result of a valid gaming license, the letter agreements contain an implied durational term coterminous with the duration of the gaming license.” (App. at 58.) Denial of East Chicago’s motion for summary judgment on that ground was not error.

A contract that provides for continuing performance and has no ending date, or that provides it will last indefinitely, is terminable at will by either party. House of Crane Inc. v. H. Fendrich, Inc., 146 Ind.App. 478, 481, 256 N.E.2d 578, 579 (1970). As there is no explicit end point, East Chicago asserts, it could terminate the agreement anytime. Further, East Chicago asserts, the only term that could properly be implied is the original five-year term of the license,10 after which it could terminate the agreement at any *372time.11 The original license was issued to Showboat on April 15, 1997, and its initial term expired April 15, 2002. At.that time its license would no longer exist unless, the Commission renewed it. The only time period referred to in the letter agreements was the first five years of licensure, over which Showboat projected the value of the incentives it would give East Chicago.

Second Century asserts the contract is not of “indefinite duration,” and therefore not terminable at East Chicago’s will, because it includes a condition that would cause it to end, i.e., the revocation, cancellation, or non-renewal of the gambling license. It relies on Marksill Specialties, Inc. v. Barger, 428 N.E.2d 65 (Ind.Ct.App.1981), where Marksill contended an agreement was terminable at will by either party because there was no specific end date. The agreement provided that in return for R.B.I. Sales’ efforts in securing new accounts, Marksill would pay R B.I. a commission based on the amount of sales to Dexter Axle Company. The agreement was to continue as long as the R.B.I. agent “sells any product to any company listed.” Id. at 67.

There, as in the case before us, no ending date was specified. Still, we found the Marksill agreement was not of indefinite duration: “The representative agreement provided that the commission would be paid so long as Marksill continued to sell certain products to Dexter Axle. The contract is therefore neither a lifetime, nor a perpetual contract, but rather, a contract terminable upon the happening of a certain condition.” Id. at 68. The agreement, “containing a provision for termination, is terminable in accordance with its terms *373and not at the will of either party.” Id. at 69.

The East Chicago agreement is explicit that the money distributed pursuant to the contract is from gross gaming revenues, and the Gaming Commission must require a license applicant to provide assurances economic development will occur in the city where the facility is located. Ind. Code § 4-33-6-7. Revocation of a gaming license is therefore one condition that might terminate the licensee’s contractual obligation. Because that condition might amount to an “implied durational term” that would prevent the agreement from being terminable at will by East Chicago, the trial court properly denied summary judgment.12

2. Termination or Reformation of the Contract

Even if the contract was terminable at will, Second Century asserts, East Chicago could not accomplish that purpose by means of the 2005 ordinance that purported to terminate it. We agree. If the ordinance terminated the contract, then “all rights to payment from the licensee’s adjusted gross receipts would be terminated, even the City’s.” (Br. of Appel-lees, East Chicago Second Century, Inc., Michael A Pannos, and Thomas S. Cappas (hereinafter “Second Century Br.”) at 11.) Instead, “the ordinance attempts to change the terms of the Agreement to redirect all of the payments to the City,” (id.), and one party cannot unilaterally make changes to a contract. See Stelko Elec., Inc. v. Taylor Cmty. Schools Bldg. Corp., 826 N.E.2d 152, 159 (Ind.Ct.App.2005) (one party to a contract may not make unilateral changes to it; parties may voluntarily modify contracts, but such modifications are also contracts and require all the elements of a contract). We agree with the trial court that East Chicago is, in effect, seeking reformation and is therefore is not entitled to summary judgment unless it has made the showings necessary to permit that “extreme remedy.” Strong v. Jackson, 777 N.E.2d 1141, 1150 (Ind.Ct.App.2002), trans. denied 792 N.E.2d 44 (Ind.2003).

A trial court may reform a written document only where one party mistakenly executed a document that did not express the true terms of the agreement, and the other party has acted under the same mistake, or has acted fraudulently or inequitably while having knowledge of the other party’s mistake. Harlan Bakeries, Inc. v. Muncy, 835 N.E.2d 1018, 1030 (Ind.Ct.App.2005). A mutual mistake has occurred if there has been a meeting of the minds and an agreement actually entered into, but the document in its written form does not express what the parties intended. Id. Reformation for mistake is available only if the mistake is one of fact, not of law. Id.

East Chicago does not explicitly allege fraud as a basis for reformation. Nor does it explicitly argue there was mutual mistake or that Second Century and the Foundations acted fraudulently or inequitably while knowing of East Chicago’s “mistake.” Instead, it argues for the first time in its reply brief that we may apply the “blue pencil” doctrine to delete from the agreements any reference to Second Century and the Foundations.

*374Under that doctrine, if a covenant is clearly separated into parts and some parts are reasonable and others are not, the contract may be held divisible and the reasonable restrictions may be enforced. Smart Corp. v. Grider, 650 N.E.2d 80, 83 (Ind.Ct.App.1995), reh’g denied, trans. denied. But even if the covenant as written is not reasonable, the courts may not create a reasonable restriction under the guise of interpretation; to do so would subject the parties to an agreement they had not made. Id. Blue-penciling must be restricted to applying terms that already clearly exist in the contract; a court’s redaction of a contract may not result in the addition of terms that were not originally part of the contract. Id. “Simply put, if practicable, unreasonable restraints are rendered reasonable by scratching out any offensive clauses to give effect to the parties’ intentions.” Id. (emphasis supplied). East Chicago has not directed us to any ambiguity as to the parties’ intentions in the letter agreements, and we decline its invitation to reform, by “blue-penciling” or otherwise, this unambiguous contract.

3. Third Party Beneficiaries

East Chicago asserts it should have been granted summary judgment because the Foundations and Second Century are not third-party beneficiaries and therefore may not enforce this contract. Both are third-party beneficiaries.

One who is not a party to a contract may enforce the contract by demonstrating it is a third-party beneficiary. Nat’l Bd. of Exam’rs for Osteopathic Physicians & Surgeons, Inc. v. American Osteopathic Ass’n, 645 N.E.2d 608, 618 (Ind.Ct.App.1994). A third-party beneficiary contract exists when (1) the parties intend to benefit a third party; (2) the contract imposes a duty on one of the parties in favor of the third party; and (3) the performance of the terms of the contract renders a direct benefit to the third party intended by the parties to the contract. Id.

Among these three factors, the intent of the contracting parties to benefit the third party is the controlling factor. Id. Such intention may be demonstrated by naming the third party, or by other evidence. Id. The necessary intent is not a desire or purpose to confer a particular benefit upon the third party nor a desire to advance his interest or promote his welfare, but an intent that the promising party or parties shall assume a direct obligation to him. Id.

East Chicago argues the letter agreements do not show an intent to benefit Second Century and the Foundations because the funds the agreements oblige the riverboat to pay are to be used for economic development of East Chicago; Second Century and the Foundations, it asserts, were “merely conduits for the citizens of East Chicago, the true intended beneficiaries.... ” (Appellant’s Br. at 14.) Because the Foundations and Second Century are mere “conduits,” (Id.), for money to be used for economic development of East Chicago, East Chicago argues, the Foundations and Second Century were not “the focus of benefits,” (id.), and “the letters do not evidence an intent to benefit them.” (Id. at 13) (emphasis in original).

This argument does not acknowledge the relevant intent as stated in the Osteopathic Physicians decision, i.e., an intent that the promising party or parties shall assume a direct obligation to the third party, and not a desire or purpose to confer a particular benefit on the third party. We decline to hold Second Century and the Foundations cannot be third-party *375beneficiaries on the ground they are “conduits.”

As the Foundations note, “[b]ecause non-profit entities by definition exist to benefit others (rather than earn profit for themselves) the City’s ‘conduit’ thesis would effectively preclude charities and other non-profit groups from ever being third-party beneficiaries.” (Foundations’ Br. at 22.) We agree, and find summary judgment was properly denied because Second Century and the Foundations are third-party beneficiaries.

East Chicago also argues third-party beneficiaries should not be recognized in a “public contract”13 such as this one because “[n]on-parties should not be permitted to control a government contract in opposition to the will of the government.” (Appellant’s Br. at 15.) It relies on Jenne v. Church & Tower, Inc., 814 So.2d 522 (Fla.Dist.Ct.App.2002), where Jenne, the sheriff, claimed he was a third-party beneficiary of a contract between the county and Church & Tower for construction of a jail.

The Jenne court applied a test similar to ours:

[T]he test is ... that the parties to the contract intended that a third person should be benefited by the contract. It is the undertaking on the part of the promisor, as a consideration to the promisee, to benefit the third person, that gives rise to a cause of action by the beneficiary against the promisor, resting upon the contract itself.

Id. at 524.

That contract did not name or otherwise mention the sheriff, but he argued the parties intended he be a beneficiary because the contractor’s proposal noted the sheriffs approval for certain actions would be needed, and the contractor acknowledged it would be working together with the sheriff.

The court found this did not indicate intent that the sheriff would be a third-party beneficiary: “Negotiations and dealings between the parties cannot modify a written contract to create the parties’ ‘intent’ when the lack of such intent is evident from the contract.” Id. at 525.

The court also addressed the “public” nature of the contract:

The very nature of this contract precludes the Sheriff from assuming third-party beneficiary status. The Broward County/Church & Tower contract involved the construction of a public facility funded by the County. The contract was intended to directly and primarily benefit the citizens of Broward County, not the Sheriff, the public servant charged with operating the detention center. The Sheriff received only “incidental or consequential benefit from its enforcement,” so he was precluded from suing for a breach of it.

Id. at 525.

East Chicago characterizes this statement as the court’s recognition that “third *376party beneficiaries should not generally be recognized in public contracts because citizens are the intended beneficiaries.” (Appellant’s Br. at 15.) There is no such explicit or implicit holding in Jenne, and Jenne was not decided on that ground.

• Moreover, Jenne is distinguishable. Sheriff Jenne was not mentioned in the contract, while the East Chicago letter agreements explicitly name Second Century and the Foundations, and specify the percentage of the riverboat receipts that will be directed to each. As the Jenne court noted, “the language used in a contract is the best evidence of the intent and meaning of the parties.” 814 So.2d at 524. We decline East Chicago’s invitation to hold an entity that is explicitly mentioned in a contract can never be a third-party beneficiary just because there might be a “public” aspect to the contract.

4. Public Funds

The trial court found the agreements were not void as against public policy because East Chicago’s argument, “allocating large amounts of economic development funding without stringent oversight is unwise,” (App. at 59), did not overcome the strong preference for freedom to contract.

East Chicago’s argument the letter agreements violate public policy is premised in large part on its assertion the funds paid to Second Century and the Foundations pursuant to the agreement are “public funds.” Similarly, in its ami-cus brief the Attorney General characterizes the money as “local government public funds,” (Br. of the Attorney General as Amicus Curiae in Support of Appellant City of East Chicago at 8), and asserts “a contract to channel gambling revenues intended for local economic development to a private corporation contravenes the public interest.”14 (Id. at 7.)

We cannot reverse the denial of summary judgment on that basis. East Chicago relies on the “public funds” definition in Ind.Code § 36-1-8-9.5 and asserts its opponents ignored that “most obviously relevant statute.” (East Chicago Reply Br. at 14.) A “development agreement” is an agreement between a licensed riverboat owner and a unit setting forth the licensed owner’s financial commitments to support economic development in the unit. Ind. Code § 36-l-8-9.5(a). A “unit” is a county, municipality, or township. Ind.Code § 36-1-2-23. “Funds received by a unit under a development agreement are public funds[.]” Ind.Code § 36 — 1—8—9.5(b) (emphasis supplied).

East Chicago offers no explanation why those funds channeled directly to the Foundations and Second Century by a riverboat operator represent money “received by a unit” and we therefore cannot say the trial court erred in denying summary judgment to the extent it determined the funds at issue were not “public.” We accordingly do not further address East Chicago’s public policy arguments to the extent they depend on characterizing as “public” funds that were never “received” by East Chicago.15

As East Chicago was not entitled to summary judgment on the premise the *377funds were “public,” we also decline to address its argument we should impose a constructive trust over the riverboat funds because the letter agreements violate public policy.

In addition to the arguments premised on its “public funds” characterization, East Chicago argues the agreement violates public policy because it does not follow Ind.Code § 36-1-14-1. East Chicago characterizes that statute as establishing the process “for a local unit of government to direct contributions from a riverboat or other entity to a community foundation.” (Appellant’s Br. at 26.) The trial court properly declined to enter summary judgment on that basis, as it does not appear that statute applies to the agreement before us.

That section establishes conditions under which a local government unit may “donate the proceeds from ... a grant, a gift, a donation ... or riverboat gaming *378revenue to a foundation....” Ind.Code § 36-1-14-1. It defines “riverboat gaming revenue” as “tax revenue received by a unit ... or an agreement to share a city’s or county’s part of the tax revenue.” Id. (emphases supplied). East Chicago offers no explanation why the contractual agreement by the riverboat licensee to contribute a portion of its revenues to Second Century and the Foundations converts those funds into “tax revenues”16 or why those funds amount to a “donation,” gift, or grant by East Chicago.17 The agreement did not violate public policy on that basis.

DISMISSAL ON LIMITATIONS GROUNDS

In the same order denying summary judgment, the trial court dismissed all but one of the East Chicago counterclaims, cross-claims and third party claims. It declined to dismiss an East Chicago claim that Second Century breached a contractual term in its agreement with East Chicago. We affirm the dismissals but hold the remaining claim should also have been dismissed.18

We note initially that the limitations period for a claim of breach of fiduciary duty is two years. Del Vecchio v. Conseco, Inc., 788 N.E.2d 446, 451 (Ind.Ct.App.2003) (breach of fiduciary duty is a tort claim for injury to personal property and therefore the statute of limitation is two years), trans. denied 804 N.E.2d 749 (Ind.2003). East Chicago offers argument on what it characterizes as “[bjreach of contract claims,”19 (Appellant’s Br. at 37), *379and “Breach of trust claims,” (id. at 38), for which it asserts the limitations periods are ten and six years, respectively. But nowhere in its brief or reply brief does East Chicago acknowledge the two-year limitations period for breach of fiduciary duty or explain why its claims were not brought within that period. We therefore are unable to address East Chicago’s arguments with regard to Counts I, II, IV, V, VI, and VII20 which are premised on allegations of breach of fiduciary duty. We are left, then, to address only Count III, “Constructive Fraud/Unjust Enrichment.” (App. at 388).

When a motion to dismiss is reviewed under T.R. 12(B)(6), we test the legal sufficiency of a claim, not the facts supporting it. ServiceMaster Diversified Health Servs., L.P. v. Wiley, 790 N.E.2d 1056, 1058-59 (Ind.Ct.App.2003), reh’g denied, trans. denied 812 N.E.2d 794 (Ind.2004). Accordingly, we view the complaint in a light most favorable to the nonmoving party, here East Chicago, and draw every reasonable inference in favor of that party. Id. at 1059. The grant of a motion to dismiss is proper if it is clear the facts alleged in the complaint are incapable of supporting relief under any set of circumstances. Id. Generally, in making this determination we consider only the complaint and ignore other evidence in the record. Id. However, where allegations of a pleading are inconsistent with terms of a written contract attached as an exhibit, the terms of the contract, fairly construed, must prevail over an averment differing therefrom. Eskew v. Cornett, 744 N.E.2d 954, 957 (Ind.Ct.App.2001), reh’g denied, trans. denied 761 N.E.2d 418 (Ind.2001).

The cause of action on a tort claim accrues and the statute of limitations begins to run when the plaintiff knew or, in the exercise of ordinary diligence, could have discovered that an injury had been sustained as a result of the tortious act of another. Keep v. Noble County Dept. of Pub. Welfare, 696 N.E.2d 422, 425 (Ind.Ct.App.1998), trans. denied 706 N.E.2d 179 (Ind.1998).

1. The Constructive Fraud Count

In Count III, “Constructive Fraud/Unjust Enrichment,” East Chicago alleged Second Century, its principals Michael Pannos and Thomas Cappas, and the Foundations “received funds from the East Chicago riverboat under circum*380stances that would make the retention of the benefit unjust.” (App. at 388.) East Chicago does not indicate what limitations period it believes governs its claims in Count III, nor does it argue the actions that gave rise to the claims happened during the limitations period. We therefore do not address the limitations issue as to Count III.

Notwithstanding the City’s waiver, we note the six-year statute of limitations for actions seeking relief against frauds applies to constructive, as well as actual, frauds. Wells v. Stone City Bank, 691 N.E.2d 1246, 1250 (Ind.Ct.App.1998), trans. denied 706 N.E.2d 166 (Ind.1998). East Chicago states in its reply brief the conduct that gave rise to the constructive fraud claim was “the activity of entering into” various agreements, (East Chicago Reply Br. at 36), none of which appear to have been entered into during the six years before the City brought its cross-claims and counterclaims. Count III was properly dismissed.

2. Waiver

East Chicago argues Second Century and the Foundations waived their statute of limitations defense by bringing their declaratory judgment actions. They did not.

In Kuehl v. Hoyle, 746 N.E.2d 104 (Ind.Ct.App.2001), Kuehl alleged Hoyle’s principal waived any defense to the expiration of the statute of limitation in Kuehl’s tort case. Hoyle and the principal filed a motion for leave to file a third-party complaint against Hoyle’s insurer, which motion was granted. That complaint alleged breach of contract, fraud, and failure to act in the interest of the insured, alleging the insurer failed to perform according to the terms of the policy. It “related to the benefits he believed were owed pursuant to the insurance policy he carried on his vehicle and was in no way based on the actual facts of the accident.” Id. at 109.

When the third-party complaint was filed, the two-year statute of limitation for the tort action had expired, so the principal was no longer subject to personal liability for the accident. We recognized that a party may, under certain circumstances, waive a statute of limitation defense by not raising it, but we found no waiver of a limitation defense to Kuehl’s tort action by virtue of the third-party complaint for breach of contract, fraud, and failure to act in the interest of the insured. Id.

East Chicago’s cross-claims and counterclaims did not concern the interpretation and effect of the contract, which was the subject of the declaratory judgment action brought by Second Century and the Foundations. Instead, East Chicago asserted breach of fiduciary duty (Count I and IV), inducement and/or participation in such breach (Count II), constructive fraud/unjust enrichment (Count III), and entitlement to an accounting (Count V). It also sought declaratory judgments that East Chicago may “change the designee,” (App. at 392), of the funds due to breaches of fiduciary duty (Counts VI and VII) and that the contract could be reformed to provide all the funds would go to East Chicago (Count VII).

We decline to hold Second Century and the Foundations waived their limitations defense to the East Chicago cross-claims and counterclaims by bringing a declaratory judgment action to determine whether the agreements would be binding on a new riverboat licensee.

3. Tolling of the Statute21

East Chicago first argues the running of the statute of limitations was *381tolled by virtue of the doctrine of adverse domination. That doctrine is “[t]he equitable principle that the statute of limitations on a breach-of-fiduciary-duty claim against officers and directors is tolled.as long as a corporate plaintiff is controlled by the alleged wrongdoers.” Black’s Law Dictionary 54 (7th ed.1999) (emphasis supplied). The adverse domination doctrine is based on the premise that a corporation may be so controlled by directors or officers engaged in wrongdoing that discovery of the misconduct is impossible. Therefore, the period for discovery of losses should be equitably tolled until the wrongdoers no longer control the entity.22 Mut. Sec. Life Ins. Co. by Bennett v. Fid. & Deposit Co. of Md., 659 N.E.2d 1096, 1102 (Ind.Ct.App.1995), trans. denied.

The adverse domination doctrine “operates either to delay the accrual of a cause of action or to toll limitations in situations involving claims by a corporation against its officers and directors for injuries to the corporation.” Martin Marietta Corp. v. Gould, Inc., 70 F.3d 768, 772 (4th Cir.1995) (emphasis supplied). That is not the situation before us. While East Chicago does make allegations its former mayor breached his fiduciary duties in various ways, Mayor Pastrick is not a party to this action and this is not in any other respect a claim “by a corporation against its officers and directors for injuries to the corporation.” Assuming arguendo the doctrine applies in Indiana, it would not apply to toll the statute of limitations in this action by East Chicago against outside entities.23

Finally, East Chicago appears to argue the statute was tolled by fraudulent concealment of the Foundations’ and Second Century’s financial records. This argument appears to be premised on the Foundations’ and Second Century’s failure *382to disclose financial information in breach of what East Chicago asserts was their fiduciary duty to do so.24 As we explained above, East Chicago does not acknowledge the two-year limitations period for breach of fiduciary duty or explain why its claims were brought within that period. Nor, despite its numerous characterizations of the Foundations as fiduciaries, does it explain how their fiduciary duty toward East Chicago might have arisen.

We cannot say the limitations period was tolled by fraudulent concealment based on a fiduciary duty because East Chicago does not direct us to any allegations of dominance on the part of any of the alleged fiduciaries. A fiduciary relationship does not exist unless there is a relationship of trust and confidence between the parties. Paulson v. Centier Bank, 704 N.E.2d 482, 490 (Ind.Ct.App.1998) (addressing the relationship between a lender and a borrower), reh’g denied, trans. denied 714 N.E.2d 174 (Ind.1999). A confidential relationship exists when confidence is reposed by one party in another with resulting superiority and influence exercised by the other. Id. Not only must there be confidence by one party in the other, but the party reposing the confidence must also be in a position of inequality, dependence, weakness, or lack of knowledge. Id. Furthermore, it must be shown that the dominant party wrongfully abused this confidence by improperly influencing the weaker so as to obtain an un-conseionable advantage. No such behavior or relationship was alleged in the case before us.

4. The Second Century Cross-Appeal

On cross-appeal, Second Century argues East Chicago’s breach of contract claim should have been dismissed. We agree. Count IX, the only one the trial court did not dismiss, asserts Pannos, Cap-pas, and Second Century “breached the Confirmation Agreement by failing to open its books and records to the City in order to permit the City to exercise the agreed-upon oversight,” (App. at 397), and assure Second Century performed the duties described in the letter agreements.

The portions of the letter agreements that define Second Century’s obligations require Second Century’s projects be approved by East Chicago, conform with the comprehensive plan, and be directed to sites within East Chicago. East Chicago directs us to nothing in either agreement that requires Second Century to open its books and records to East Chicago,25 and we decline to read such a provision into either agreement. East Chicago’s Count IX accordingly should have been dismissed.

CONCLUSION

East Chicago was not prejudiced by the consolidation of the civil court review of the administrative action and the summary *383judgment and dismissal action. East Chicago’s summary judgment motion was properly denied, and Counts I through VIII of its cross-claims and counterclaims were properly dismissed. However, the trial court should also have dismissed Count IX. We accordingly affirm in part, reverse in part, and remand.

Affirmed in part, reversed in part, and remanded.