71 N.E.3d 871
Ind. Ct. App.2017Background
- In 2006–2007 Don Morris and Randy Coakes claim they agreed with Brad Crain and Richard Redpath to form BioSafe with shared ownership; corporate filings later listed Crain and Redpath as 50/50 members and new investors replaced Morris.
- Morris drafted a spreadsheet allocating ownership percentages and participated in meetings and renovation/preparation to acquire Waste Recovery assets; he was later terminated from BioSafe.
- Morris and Coakes sued asserting breach of contract, unjust enrichment, equitable estoppel, and later added conversion, breach of fiduciary duty, and tortious interference; they also sought derivative relief and accounting.
- This is a subsequent appeal: the court previously reversed summary judgment for Crain (Morris 1) and affirmed summary judgment for BioSafe after Morris was held to have abandoned derivative claims (Morris 2).
- Crain moved for summary judgment again, conceding plaintiffs could prove liability elements but arguing plaintiffs cannot prove damages; plaintiffs opposed with Morris affidavits including a transcript of a 2007 conversation in which Crain allegedly said the company was worth about $6 million.
- The trial court struck portions of the affidavit and granted summary judgment for Crain; the appellate court reviewed admissibility of the statement and whether genuine issues of material fact exist on damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the trial court’s striking of portions of Morris’s affidavit proper? | The affidavit and its transcript are admissible; the recording was previously produced and the transcript is not challenged for accuracy. | The transcript is hearsay and violates the best evidence rule and is irrelevant. | Court held the trial court abused its discretion; the statement was admissible as an opposing-party admission and best-evidence objection was insufficient. |
| Did Crain meet his summary-judgment burden by negating damages? | Plaintiffs argued Crain failed to prove absence of damages and designated Crain’s own statement valuing the company (≈$6M) to create a fact issue. | Crain argued BioSafe’s financials show net losses and plaintiffs suffered no harm; thus damages element negated. | Court held Crain did not establish a prima facie negation of damages; summary judgment improper. |
| If Crain had met burden, did plaintiffs present sufficient evidence to create a genuine issue on damages? | Morris’s affidavit (Crain’s 2007 valuation) creates a triable factual dispute as to company value and consequential damages. | Crain contended the valuation is speculative and irrelevant to actual damages given sustained losses. | Court held the valuation statement — while minimal — was enough to raise a factual dispute; credibility and weight are for trial. |
| Should summary judgment be affirmed on any other basis? | Plaintiffs relied on preserved claims and evidence; prior appellate rulings limited some theories against BioSafe but not Crain on damages. | Crain urged final resolution based on financial records and prior rulings. | Court reversed and remanded; summary judgment for Crain vacated so issues (including damages) proceed to trial. |
Key Cases Cited
- Morris v. Crain, 969 N.E.2d 119 (Ind. Ct. App. 2012) (reversed trial court’s improvident summary judgment procedure)
- Morris v. BioSafe Eng’g, Inc., 9 N.E.3d 195 (Ind. Ct. App. 2014) (affirmed summary judgment for BioSafe where plaintiff abandoned derivative claim)
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (placing burden on movant to negate opponent’s claim in Indiana summary-judgment practice)
- Jarboe v. Landmark Cmty. Newspapers of Ind., Inc., 644 N.E.2d 118 (Ind. 1994) (movant’s mere allegation of no damages is insufficient on summary judgment)
- Lopez v. State, 527 N.E.2d 1119 (Ind. 1988) (best-evidence objection must identify an actual dispute over accuracy of secondary evidence)