BAILEY, Judge.
In 2007, The Branham Corporation (Branham) obtained a judgment against Newland Resources, LLC (Newland) and related entities for breach of contract. The judgment was uncollectible in light of 2004-2005 distributions by Newland that had depleted corporate assets available for creditors. In 2011, Branham filed proceedings supplemental and new claims for relief under the Indiana Crime Victims Relief Act, Indiana Code section 34-24-3-1 (Victims Relief Act)
The appeal of the grant of summary judgment has been consolidated with an appeal by Thomas Eckerle, a past provider of legal services to Newland, and the Thomas Eckerle Professional Corporation (collectively, Eckerle). Eckerle appeals the denial of a motion to correct error which challenged the February 4, 2013 dismissal, without prejudice, of Eckerle as a defendant. We affirm the trial court's summary judgment order but remand for inclusion of Eckerle as a prevailing defendant. We reverse the order dismissing Eckerle.
Branham presents three issues for review, which we consolidate and restate as the following issue: whether summary judgment was improvidently granted.
Eckerle presents a single, consolidated issue: whether he, like the other defendants, was entitled to a grant of summary judgment as opposed to a dismissal that deprived him of the opportunity to protect his professional reputation and seek attorney's fees from Branham for frivolous litigation.
To date, Branham has not been paid a 2007 judgment obtained against Newland. Branham has alleged that funds that would have been available to pay the judgment were wrongfully depleted by Newland's 2004-2005 distributions of proceeds Newland received upon the 2004 sale of its wholly-owned subsidiary, Boone County Utilities, LLC (BCU). The distributions to shareholders and members, which took place during BCU's bankruptcy proceedings, left Newland and BCU with joint assets of less than $10,000.
The facts surrounding the September 15, 2004 commencement of litigation
Newland Resources, LLC v. Branham Corp., 918 N.E.2d 763, 767-69 (Ind.Ct.App. 2009) ("Newland I"). The Newland I Court determined that the trial court did not err in its interpretation of the contractual provisions triggering the entitlement to and calculation of the success fee, and that there was sufficient evidence before the jury on the issue of the purchase price to support the jury's calculation of the success fee. Id. at 771. The matter was remanded for the calculation of post-judgment interest owed to Branham. Id. at 773.
On cross-appeal, Branham argued that the trial court erred by dismissing counts alleging a civil conversion by Newland and a civil conspiracy by Sutphin, White River, Alig, Greenleaf, Harmon, EcoHoldings, Kensill, and Ecosource. Id. at 774. The Newland I Court observed, citing Indiana Code section 35-43-4-3, that criminal conversion requires proof that a person knowingly or intentionally exerted unauthorized control over property of another person. Id. at 775. The Court agreed with Newland's contention that the claim for civil conversion was subject to dismissal for failure to state a claim because "Branham had not identified a specific fund of money which Newland had refused to deliver to Branham." Id. at 776. The Court acknowledged that, "while money may be the subject of an action for conversion, the money must be capable of being identified as a special chattel." Id. (citing Huff v. Biomet, Inc., 654 N.E.2d 830 (Ind.Ct.App. 1995), abrogated on other grounds by St. Vincent Hosp. & Health Care Ctr., Inc. v. Steele, 766 N.E.2d 699 (Ind.2002), and Kopis v. Savage, 498 N.E.2d 1266 (Ind.Ct. App. 1986)). Reiterating that "`[t]he refusal to pay a debt will generally not support a conversion action,'" the Court concluded that the trial court did not err by dismissing the civil conversion claim. Id. (quoting Huff, 654 N.E.2d at 836).
In addressing the allegation of error based upon the dismissal of the civil conspiracy claim, the Newland I Court described a civil conspiracy as "a combination
On June 22, 2010, the trial court entered an order, consistent with the Newland I opinion, that Newland pay post-judgment interest. Newland was ordered to pay the $397,853.92 judgment and post-judgment interest on or before July 7, 2010. However, Newland did not pay the judgment.
On December 29 and 30, 2011, Branham filed a Verified Motion for Proceedings Supplemental to Execution and Garnishment (Cause No. 06C01-0409-PL-517) and a Complaint for Damages (Cause No. 06C01-1201-CT-0001) (Complaint), respectively. In the Complaint, Branham alleged Victims Relief Act and RICO claims (based upon alleged predicate offenses of fraud/fraudulent transfer, deception, and conversion/theft/receiving stolen property). The essence of the allegations is that the 2004-2005 distributions by Newland of the BCU sale proceeds depleted Newland's assets and rendered Newland unable to pay Branham's contractual claim.
Proceedings in the Bankruptcy Court for the Southern District of Indiana were reopened on April 12, 2012, and hearing was held on August 22, 2012. The Bankruptcy Court, which had exercised jurisdiction over the distribution of BCU proceeds to Newland, made the following entry: "Any issues regarding Newland, after distribution was make [sic] to it by the U.S. Bankruptcy Court pursuant to the plan, remained with [the Boone Circuit Court]." (App. 937.)
On August 24, 2012, Branham filed a motion to dismiss, without prejudice, the attorney-defendants, including Eckerle. The attorney-defendants objected to the grant of the motion, on the basis that they were entitled to dismissal with prejudice and a statutory award of attorney fees because Branham had pursued a frivolous claim. After a hearing, the dismissal without prejudice was granted, and Eckerle's summary judgment motion was dismissed.
On October 22, 2012, hearing was held on motions for summary judgment based on res judicata contentions of several defendants. On November 18, 2012, the trial court granted summary judgment against Branham, concluding that the applicable two-year statute of limitations had expired.
Eckerle filed a motion to correct error, asserting that his participation in the summary judgment hearings precluded voluntary dismissal, and that he possessed a right to clear his professional reputation and seek attorney's fees. The trial court conducted a hearing on October 23, 2013. The motion to correct error was denied on November 21, 2013. Branham and Eckerle independently pursued appeals. The appeals were consolidated upon Eckerle's motion.
A trial court's grant of summary judgment on appeal to this Court is "`clothed with a presumption of validity,'" and an appellant has the burden of demonstrating that the grant of summary judgment was erroneous. Williams v. Tharp, 914 N.E.2d 756, 762 (Ind.2009) (quoting Rosi v. Bus. Furniture Corp., 615 N.E.2d 431, 434 (Ind.1993)). Our standard of review is well established:
Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind.2009) (internal citations omitted).
When the defendant is the moving party, the defendant must show that the undisputed facts negate at least one element of the plaintiff's cause of action or that the defendant has a factually unchallenged affirmative defense that bars the plaintiff's claim. First Farmers Bank & Trust Co. v. Whorley, 891 N.E.2d 604, 608 (Ind.Ct.App. 2008), trans. denied. Here, Newland has argued that it has affirmative defenses based upon the applicable statute of limitations and the doctrine of res judicata.
The trial court entered findings of facts and conclusions thereon. While a trial court's enunciation of findings of fact and conclusions on such matters may aid our review and reveal the reasoning of the trial court, they are not required and are not binding upon appeal. New Albany Historic Pres. Comm'n v. Bradford Realty, Inc., 965 N.E.2d 79, 84 (Ind.Ct.App.2012). The role of the trial court at summary judgment is not to act as a trier of fact, but rather to determine whether the movant established, prima facie, either that there is insufficient evidence to proceed to trial, or that the movant is otherwise entitled to judgment as a matter of law. Kader v. State Dept. of Correction, 1 N.E.3d 717, 727 (Ind.Ct.App.2013). Witness credibility and the relative apparent weight of evidence are not relevant considerations at summary judgment. Id.
The parties agree that the two-year statute of limitation of Indiana Code section 34-11-2-4, for injury to personal property, is applicable.
"Statutes of limitation seek to provide security against stale claims, which in turn promotes judicial efficiency and advances the peace and welfare of society." Cooper Indus., LLC v. City of South Bend, 899 N.E.2d 1274, 1279 (Ind.2009). The party pleading the statute of limitation bears the burden of proving the suit was commenced beyond the allowable statutory period. Id.
Under Indiana's discovery rule, a cause of action accrues, and the limitation period begins to run, when a claimant knows or in the exercise of ordinary diligence should have known that an injury had been sustained as a result of the tortious act of another. Wehling v. Citizens Nat'l Bank, 586 N.E.2d 840, 843 (Ind.
At the summary judgment hearing, Branham's counsel acknowledged that "Branham had knowledge that money was being passed out by Newland" but questioned "what could Branham do about it" prior to June 22, 2010, when, according to Branham, a final appealable judgment "supplanted" the November 26, 2007 "judgment entry," from which "it differed... in important ways." (Tr. 86.) Branham argues on appeal that it could not have known of its injury until Newland failed to pay the 2007 judgment by its July 13, 2010 deadline. Branham considers the 2007 judgment to be a "non-final" judgment because Newland pursued an appeal. Appellant's Brief at 21. Branham asserts: "Newland, by appealing the judgment, prevented it from becoming final until 2010." Appellant's Brief at 33. Although Newland did not move to stay the judgment, Branham claims a stay was effectively granted when the trial court imposed a payment deadline.
In light of these arguments, we will initially address the notion that the 2007 judgment was not final during the appeal. Indiana Appellate Rule 2(H) defines "final judgment" to include a judgment that "disposes of all claims as to all parties." The jury entered a verdict in favor of Branham on November 2, 2007 and the trial court entered final judgment pursuant to Indiana Trial Rules 54 and 58 on November 26, 2007. Indiana Appellate Rule 39(A) provides:
Newland did not obtain a stay of the 2007 judgment. Accordingly, it was enforceable immediately, notwithstanding the appeal. As previously stated, the judgment was affirmed on appeal. It was not subject to being "supplanted" by a later order of the trial court for post-judgment interest. Although it is true, as Branham argued to the trial court, that the 2010 judgment "is the only one that controls ordered payment by a date certain," Branham provides no authority for the proposition that a judgment without a specified payment deadline is interlocutory or unenforceable.
Several years passed before Branham sought to enforce the 2007 final judgment. In 2011, Branham filed proceedings supplemental. Contemporaneously, in its 2011 Complaint, Branham alleged causes of action under the Victims Relief Act and (civil) RICO. These are derivative claims in the sense that they require predicate offenses. See Larson v. Karagan, 979 N.E.2d 655, 661 (Ind.Ct.App.2012) (observing that "the [Crime Victims Relief Act] claimant must prove all the elements of
Newland argued that Branham had waited for years, decided that no payment was forthcoming, and then simply alleged a new injury. The trial court agreed.
Alleging fraud as a predicate offense, Branham described certain distributions occurring in 2005 and before, and claimed:
(App. 162.)
With regard to deception as a predicate offense, Branham alleged that Newland and its members made false and misleading statements in order to obtain distributions and in order to obtain a Certificate of Public Convenience and Necessity from the Indiana Utility Regulatory Commission for BCU. Branham also alleged that false statements were made to the Bankruptcy Court:
(App. 164-65.)
With regard to Conversion/Theft/Receiving Stolen Property, Branham alleged in part:
(App. 168-69.)
Branham points out that its 2011 Complaint allegations are concerned with Newland-to-member transfers while the allegations of the First Amended Complaint focus upon BCU's conduct (ultimately, a matter of concern for the Bankruptcy Court). Nevertheless, the pertinent inquiry for statute of limitations purposes is when Branham knew, or should have known, of its injury — dissipation of funds such that Branham would not be paid sums rightfully due to it. The trial court concluded that, by the time Branham formed the allegations of its October 2005 amended complaint, Branham knew of the Newland distribution to its members. Clearly, Branham knew in October of 2005 that a member/shareholder distribution had been made, as Branham alleged:
(App. 63.) However, Branham did not necessarily know at that time whether assets remained for satisfaction of Branham's claims, despite the distributions.
On August 13, 2007, Branham deposed Jim Harmon (Harmon), acting as the corporate designee of Newland (noticed for deposition pursuant to Indiana Trial Rule 30(b)(6)). Harmon testified that, after the distribution, Newland and BCU jointly had less than $10,000 in assets, consisting of cash in bank accounts.
Branham also claims that the "injury inflicted that Branham complains of is Newland's disobedience of the 6/11/10 Order when it failed to pay the Branham Judgment on or before July 13, 2010. The failure of Newland to pay the Branham Judgment is the sine qua non for Branham's damages not the unlawful Newland-to-member transfers." Appellant's Brief at 30. This novel argument — not developed with citation to relevant authority — is not helpful to Branham. The "failure to pay" does not match the allegations of Branham's Complaint, and with good reason: recovery under the Crime Victims Act and RICO may not be predicated upon a mere failure to pay a judgment.
Branham also argues that Newland — while claiming minimal assets — actually had additional worth because Newland had "a chose in action" or claim that could be asserted against its members to "get back improperly transferred assets." Appellant's Brief at 27. It appears that Branham held out hope that Newland would independently exercise some right of recoupment. Also, according to Branham, it had no obligation to anticipate that the members would, following judgment, fail to disgorge the sums given to them in order to satisfy the judgment against Newland. Nonetheless, even if we assume Newland had some right to recover distributions in whole or part, Branham does not explain how this would have tolled the two-year statute of limitations. Newland, by its designee, had advised Branham that it held minimal assets. Branham knew at this point that its interests as a creditor were not being protected, and Branham was not precluded from timely pursuing its claims for payment although Newland might have some potential avenue for increasing its coffers.
Branham knew, or in the exercise of ordinary diligence, should have known it had suffered an injury from Newland's conduct more than two years prior to the filing of the claims under the Victims Relief Act and RICO. To the extent that Branham believed the conduct was criminal or tortious, and not merely imprudent, such claims could have been timely pursued. They were not. Accordingly, the trial court properly granted summary judgment to the defendants on statute of limitations grounds. Because summary judgment was properly granted on this basis on November 18, 2012, we need not
Generally, we review a trial court's ruling on a motion to correct error for an abuse of discretion. City of Indianapolis v. Hicks, 932 N.E.2d 227, 230 (Ind.Ct.App. 2010), trans. denied. However, to the extent the issues raised on appeal are purely questions of law, our review is de novo. Id.
The Indianapolis law firm of Henderson Daily Withrow & Devoe (Henderson Daily) represented one of Newland's members. White River Venture Partners, L.P., and its manager, Samuel Sutphin, from September 22, 2003 to September 28, 2004, with regard to liquidation of BCU assets. Eckerle was one of the attorneys engaged in this representation. During Eckerle's representation, the Town of Whitestown purchased BCU's assets. The Bankruptcy Court approved the sale, and the closing took place on July 20, 2004.
From September 28, 2004 through December 31, 2004, Henderson Daily represented Newland and its members in the BCU bankruptcy case. Henderson Daily ceased operations on December 31, 2004, and Eckerle continued his representation. On May 18, 2005, the date on which Branham's claims were denied by the Bankruptcy Court, Eckerle ceased his representation of Newland. Other attorneys entered notices of appearance and represented Newland at the jury trial. Eckerle was sued by Branham several years later, on December 30, 2011.
Eckerle, as did several other defendants, filed motions for summary judgment. However, the trial court declined to enter summary judgment in favor of Eckerle, instead granting Branham's motion to dismiss without prejudice. Eckerle argues that he was "identically situated" to the other defendants who obtained summary judgment in their favor and that the dismissal as opposed to judgment on the merits defied "basic notions of justice and fairness." Appellant's Brief at 19. He argues that he was wrongfully deprived of his statutory claim for attorney's fees for frivolous litigation.
The trial court also observed that, in some instances, dismissal has been considered improper if a defendant would suffer "plain legal prejudice." (quoting Camilli v. Grimes, 436 F.3d 120, 123 (2nd Cir.2006)). (App. 953.)
Typically, when a trial court has examined these factors and rendered a decision, our review is for an abuse of discretion. Needler, 816 N.E.2d at 503. Here, however, the issue presented is one of law, that is, entitlement to summary judgment. Before the hearing on the motion to dismiss without prejudice, the trial court had already conducted summary judgment hearings and determined — correctly — that the statute of limitations had expired when Branham filed its Complaint. "The judgment sought shall be rendered forthwith if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Ind. Trial Rule 56(C). This is no less true for Eckerle than other defendants. See AutoXchange.com, Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 46 (Ind.Ct.App.2004) ("Once evidence has been designated to the trial court by one party, that evidence is deemed designated and the opposing party need not designate the same evidence.")
The gravamen of Branham's Complaint was that funds were wrongfully diverted by Newland and its members so as to deprive Branham of payment. Branham alleged: "Each of the Defendants concealed, encumbered and/or transferred `property'" and "Newland was stripped of all property available for execution of the Branham Judgment upon completion of those concealments, encumbrances and/or transfers." (App. 100, 102-03.) As to Eckerle's role in particular, Branham alleged that, at a January 2005 hearing,
Finally, the parties presented argument on whether a summary judgment ruling for Eckerle would be precluded because the Bankruptcy Court might exercise concurrent jurisdiction. In its order of dismissal, the trial court indicated that it had given great weight to this consideration. However, on motion to correct error, the trial court clarified that its dismissal order was not rendered strictly on this basis; rather, Branham had "presented an adequate reason for dismissal, at the time the motion to dismiss was made." (App. 971.) (emphasis in original.) Although the Eckerle allegations concern statements purportedly made in the Bankruptcy Court and, as we have already acknowledged, we have limited jurisdiction when bankruptcy proceedings are pending, the Bankruptcy Court plainly stated its non-involvement with distribution of funds by Newland (who was not a Debtor in Bankruptcy Court). Newland's distribution is the focus of the Complaint. There remains no risk of concurrent jurisdiction or conflicting decisions in this regard.
Summary judgment should be granted if the moving party deserves judgment as a matter of law. T.R. 56; Lightle v. Harcourt Mgmt. Co. Inc., 634 N.E.2d 858, 860 (Ind.Ct.App.1994), trans. denied. Eckerle, almost identically situated to the other defendants requesting summary judgment, should not be deprived of a ruling on the summary judgment motion because of a tactical request for dismissal.
We affirm the November 18, 2012 grant of summary judgment. The November 19, 2012 grant of summary judgment is superfluous. We reverse the order dismissing Eckerle, without prejudice, and remand for entry of summary judgment in favor of Eckerle.
Affirmed in part, reversed in part, and remanded.
BROWN, J., and PYLE, J., concur.
Hammes v. Brumley, 659 N.E.2d 1021, 1027 (Ind.1995).
A claim or defense is "frivolous" if it is taken primarily for the purpose of harassment, if the attorney is unable to make a good faith and rational argument on the merits of the action, or if the lawyer is unable to support the action taken by a good faith and rational argument for an extension, modification, or reversal of existing law. Kahn v. Cundiff, 533 N.E.2d 164, 167 (Ind.Ct.App. 1989), aff'd, 543 N.E.2d 627 (Ind.1989). A claim or defense is "unreasonable" if, based on the totality of the circumstances, including the law and the facts known at the time of filing, no reasonable attorney would consider that the claim or defense was worthy of litigation. A claim or defense is "groundless" if no facts exist which support the legal claim presented by the losing party. Id. at 170-71.