Jason Wooldridge v. Sellersburg Properties, LLC (mem. dec.)
72A01-1608-MF-2018
| Ind. Ct. App. | May 16, 2017Background
- WAG Development, LLC (WAG) executed a promissory note to MainSource Bank for $360,931.38 in May 2011, secured by WAG real estate and personal guarantees from five guarantors including Jason Wooldridge.
- WAG defaulted on the note; Sellersburg Properties, LLC purchased the note, mortgage, guarantees, and debt from MainSource Bank on October 12, 2012.
- The note matured, remained unpaid, and Sellersburg filed suit on January 25, 2016 against WAG and Wooldridge to collect and foreclose.
- The trial court granted Sellersburg summary judgment, foreclosed the mortgage, and entered a monetary judgment against WAG and Wooldridge jointly and severally for $553,927.79 plus interest.
- Wooldridge appealed, conceding he was a guarantor and the debt amount, but arguing Sellersburg (through its owners) could not enforce the debt because Sellersburg was a co‑guarantor and owed fiduciary duties to him as a WAG member.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/Right to enforce the note | Sellersburg: as the purchaser of the note, it is the valid holder and may enforce it | Wooldridge: Sellersburg (via its owners) is a co‑guarantor and thus cannot pursue the debt against him | Court: Sellersburg is a separate corporate entity and valid holder entitled to enforce the note |
| Existence of Wooldridge's liability | Sellersburg: Wooldridge executed a personal, joint-and-several guaranty | Wooldridge: does not dispute guaranty existence but contests enforcement by Sellersburg | Court: Wooldridge is a personal guarantor and liable; amount undisputed |
| Breach of fiduciary duty | Wooldridge: as co‑members of WAG, Sellersburg owed fiduciary duties and breached them by buying the debt | Sellersburg: Wooldridge assigned his membership to Wooldridge Homes, Inc.; any fiduciary duties are to the corporation, not him | Court: Wooldridge assigned his membership to an entity, so Sellersburg owed fiduciary duties to that entity, not to him personally; fiduciary claim fails |
| Harm from debt purchase | Wooldridge: purchase of the note harmed him by making Sellersburg the creditor | Sellersburg: purchase did not increase Wooldridge’s liability; he remained secondarily liable | Court: No cognizable harm — if Sellersburg had not purchased the note, Wooldridge still would owe MainSource; thus no breach‑of‑fiduciary‑duty damages |
Key Cases Cited
- Williams v. Tharp, 914 N.E.2d 756 (Ind. 2009) (summary judgment standard explained)
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (discussion of material and genuine issues of fact for summary judgment)
- Rapkin Group, Inc. v. Cardinal Ventures, Inc., 29 N.E.3d 752 (Ind. Ct. App. 2015) (LLC members may owe fiduciary duties; breach requires reckless or willful misconduct)