118 N.E.3d 1
Ind. Ct. App.2018Background
- Diamond sold heavy equipment to Ingram Enterprises in 2005; the buyer defaulted and the debt later passed to Ingram Quarry, which was sued by Diamond in Marion County to collect the unpaid balance.
- In January–February 2011, Benjamin Ingram formed Ben’s Quarry and purchased certain assets from Ingram Quarry; the asset sale closed shortly before hearings on cross-motions for summary judgment in Diamond’s suit against Ingram Quarry.
- Diamond recovered and sold some equipment from the former quarry site; in Sept. 2011 the Marion County court entered summary judgment for Diamond against Ingram Quarry for ~$907,890.
- Diamond amended its Marion County complaint in 2012 to assert fraudulent-transfer and successor-liability theories against Ingram and Ben’s Quarry; after a bench trial the Marion court found for Ingram and Ben’s Quarry, concluding there was no fraudulent conveyance or de facto merger.
- Ingram and Ben’s Quarry then sued Diamond in Vanderburgh County for malicious prosecution, alleging Diamond lacked probable cause and acted with malice in bringing the Marion suit against them.
- The Vanderburgh trial court granted summary judgment for Diamond, finding Diamond had probable cause and lacked malice; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper on malicious-prosecution claim | Ingram/Ben’s: probable cause and malice are fact-sensitive and cannot be decided on summary judgment; collateral estoppel bars relitigation of issues resolved in Marion County | Diamond: designated evidence negates at least one malicious-prosecution element (probable cause) and also negates malice, so summary judgment is appropriate | Affirmed: summary judgment for Diamond; record shows probable cause and lack of malice as a matter of law |
| Whether Marion County findings preclude re-litigation of probable cause (collateral estoppel) | Ingram/Ben’s: Marion County conclusions that transfer was not fraudulent establishes lack of probable cause for Diamond to sue them | Diamond: fraudulent-transfer adjudication and malicious-prosecution elements are different; Marion findings do not resolve malice/probable-cause questions here | Held: collateral estoppel inapplicable; prior finding on fraudulent transfer/duty not identical to malicious-prosecution elements |
| Whether Diamond had probable cause to sue Ingram and Ben’s Quarry | Ingram/Ben’s: sale excluded disputed assets; Diamond should have known no fraudulent transfer; thus no probable cause | Diamond: facts (timing of sale, same location/phone/fax, continued permits, lack of representation, suspicious timing days before hearing) justified a reasonable belief of fraudulent transfer | Held: Probable cause existed—reasonable person could believe a fraudulent transfer occurred based on the designated evidence |
| Whether malice was shown | Ingram/Ben’s: Diamond acted spitefully or with insufficient investigation; failure to investigate supports inference of malice | Diamond: counsel investigated (interrogatories, discovery, depositions, communications); evidence shows honest belief and good faith; dismissal of a count pretrial shows candor | Held: No malice as a matter of law; designated materials affirmatively negate required culpable intent |
Key Cases Cited
- Sheehan Const. Co., Inc. v. Continental Cas. Co., 938 N.E.2d 685 (Ind. 2010) (summary-judgment standard and purpose)
- City of New Haven v. Reichhart, 748 N.E.2d 374 (Ind. 2001) (elements and substance of malicious-prosecution claim)
- Cooper Indus., LLC v. City of S. Bend, 899 N.E.2d 1274 (Ind. 2009) (factors for treating an asset transfer as a de facto merger)
- Mirka v. Fairfield of Am., Inc., 627 N.E.2d 449 (Ind. Ct. App. 1994) (failure to investigate does not alone establish malice; culpable conduct required)