CBR Event Decorators, Inc., Gregory Rankin, Robert Cochrane and John Bales v. Todd M. Gates
2014 Ind. App. LEXIS 89
Ind. Ct. App.2014Background
- CBR Event Decorators, Inc. and individual shareholders Rankin, Cochrane, and Bales appeal from a judgment involving Gates' claims.
- A prior appellate decision (CBR I) held the court erred in piercing the corporate veil; the matter remanded for determination of attorney fees tied to wrongful stop payment.
- Shareholders posted a $1,000,000 irrevocable letter of credit as inducement for a stay; Gates sought attorney fees and ultimate payment for wrongful stop payment.
- Gates obtained a final judgment against CBR for breach of contract and wrongful stop payment; the verdict included attorney fee liability for those claims, but the veil piercing was not affirmed against Shareholders.
- On remand, Gates moved for attorney fees; the trial court awarded Gates $290,093 in fees and 18% interest, and later ordered $1,000,000 from the letter of credit to be deposited with the clerk.
- Shareholders challenged (i) personal liability for attorney fees, (ii) lack of a hearing on fees, and (iii) the ex parte order depositing funds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Shareholders personally liable for attorney fees on wrongful stop payment? | Gates asserts veil piercing supports liability. | Shareholders rely on CBR I holding that veil piercing was improper. | No personal liability for attorney fees; abuse of discretion reversed on this point. |
| Was there a required hearing on amount and reasonableness of fees? | Gates seeks full fee award supported by prevailing claims. | Shareholders contend no hearing was needed after remand. | Court did not need further hearing to uphold the fee award; ruling as to preclusion doctrine remains. |
| Is the $290,093 fee award unreasonable? | Gates argues fees are reasonable given the claims and results. | Shareholders assert the amount is excessive given the limited remaining issues. | Award reversed in part; however the central holding is about liability, not remand of fee amount. |
| Was the ex parte order depositing $1,000,000 from the letter of credit reversible error? | Gates sought immediate deposit to secure potential fees. | Shareholders claim lack of notice and ex parte nature was improper. | Ex parte order not reversible error; funds deposited per letter of credit terms. |
Key Cases Cited
- CBR Event Decorators, Inc. v. Gates, 962 N.E.2d 1276 (Ind. Ct. App. 2012) (held veil piercing improper; remand for fees disposition)
- Escobedo v. BHM Health Assocs., Inc., 818 N.E.2d 930 (Ind. 2004) (limited liability principle for corporate shareholders)
- Aronson v. Price, 644 N.E.2d 864 (Ind. 1994) (piercing corporate veil standards)
- Sullivan v. American Cas. Co. of Reading, Pa., 605 N.E.2d 134 (Ind. 1992) (preclusion doctrines overview)
- Cutter v. State, 725 N.E.2d 401 (Ind. 2000) (law of the case principles in same case)
- Dean V. Kruse Found., Inc. v. Gates, 973 N.E.2d 583 (Ind. Ct. App. 2012) (law of the case binding in same action)
- Adams v. State, 967 N.E.2d 568 (Ind. Ct. App. 2012) (harmless error and notice considerations)
- Becker v. State, 992 N.E.2d 697 (Ind. 2013) (reasonableness standards in appellate review)