Joel Bowden, Ruby Bowden, Golden Companies, Inc., and Golden Purchasing and Staffing, Inc. v. E.J. Agnew and Golden-AGI, LLC
2014 Ind. App. LEXIS 3
| Ind. Ct. App. | 2014Background
- Agnew (Indiana resident) and Joel & Ruby Bowden (North Carolina residents) formed Golden-AGI, LLC (GAGI) as a 50/50 joint venture to supply parts from Indian manufacturers to International Truck; GAGI operated largely through Golden Companies/Golden Purchasing and Staffing (controlled by the Bowdens).
- International required a State Bank of India (SBI) letter of credit funded by cash; Golden funded the SBI account in part by using a "Cummins float" (payments timing difference from a separate Bosch/Cummins project).
- Cummins paid several Golden obligations (totaling ~ $5.4 million) and, without Agnew's knowledge, Joel executed an assignment transferring GAGI receivables to Cummins; some GAGI revenues were paid to Cummins under that assignment.
- Agnew sought an accounting and sued for breach of contract, conversion, civil conspiracy, and related claims; bench trial awarded Agnew $1,754,278 in compensatory damages based on CPA expert DeWitt’s calculations and trebled damages for criminal conversion; trial court also awarded fees and costs.
- On appeal the Bowdens argued lack of personal jurisdiction over them individually, improper admission of expert testimony, and that conversion trebling was improper because monies were not a separately identifiable fund.
Issues
| Issue | Plaintiff's Argument (Agnew) | Defendant's Argument (Bowdens) | Held |
|---|---|---|---|
| Personal jurisdiction over Joel & Ruby Bowden in their individual capacities | Bowdens entered the joint venture, signed the operating agreement individually, and had sufficient contacts with Indiana through GAGI activities | Bowdens invoked the corporate/ fiduciary shield, asserting actions were solely corporate and thus not basis for personal jurisdiction | Court: Shield inapplicable; individual jurisdiction proper because Bowdens acted as entrepreneurs, their companies were alter egos, and due-process contacts existed |
| Admissibility of CPA DeWitt's expert testimony on profits | DeWitt was qualified, used extensive documents and cross-checking to calculate damages; testimony helpful | DeWitt lacked adequate factual basis (didn't ask officers, excluded expense categories/year) so testimony should be excluded | Court: Bowdens waived contemporaneous objection; in any event DeWitt was qualified and testimony admissible; trial court credited his calculations |
| Conversion (treble damages) for withholding GAGI profits | Funds due Agnew were entrusted to Bowdens to distribute per 50/50 agreement; Bowdens knowingly diverted funds for Golden obligations, constituting conversion warranting treble damages | Withholding unpaid profits is failure to pay a debt; monies were not a separately identifiable chattel or segregated fund, so conversion (and trebling) inappropriate | Court: Judgment for compensatory damages affirmed but treble damages reversed — money not a specifically identifiable fund; remanded to correct judgment to $1,754,278 |
| Appellate attorney fees under conversion statute | Agnew requested fees as prevailing party under treble-damages statute | Bowdens opposed | Court: Request denied (statute-based fee request denied on appeal) |
Key Cases Cited
- Fraley v. Minger, 829 N.E.2d 476 (Ind. 2005) (standard of review for bench-trial findings and conclusions)
- Keesling v. Winstead, 858 N.E.2d 996 (Ind. Ct. App. 2006) (discussion of corporate/ fiduciary shield and individual jurisdiction)
- Intermatic, Inc. v. Taymac Corp., 815 F. Supp. 290 (S.D. Ind. 1993) (criticizing fiduciary shield where long-arm statute reaches full due-process limits)
- Plank v. Community Hospital of Indiana, Inc., 981 N.E.2d 49 (Ind. 2013) (preservation rule: appellate review limited when evidentiary objections not raised below)
- Midland-Guardian Co. v. United Consumers Club, Inc., 502 N.E.2d 1354 (Ind. Ct. App. 1987) (money can be subject to conversion when held in separately identifiable fund/trust)
- Huff v. Biomet, Inc., 654 N.E.2d 830 (Ind. Ct. App. 1995) (money subject to conversion only if identifiable as a special chattel)
- Trietsch v. Circle Design Group, Inc., 868 N.E.2d 812 (Ind. Ct. App. 2007) (defining determinable-sum/entrusted-fund requirements for conversion)