55 N.E.3d 870
Ind. Ct. App.2016Background
- In 2001 Hillcrest Estates, LLC borrowed ~$1.74M from Firstar/US Bank; several entities and individuals (including T3 and Heritage/New) executed joint-and-several commercial guaranties.
- Litigation followed: the bank sued guarantors (Guarantor Lawsuit) and foreclosed on collateral (Foreclosure Lawsuit).
- In October 2008 the bank, Hillcrest, and the guarantors executed a Settlement Agreement providing for agreed judgments and a single payment (~$2.26M) to the bank; the Agreement included a broad mutual release among parties but the payment was never made to the bank.
- Courts entered agreed judgments, foreclosure, and ultimately a deficiency; Sycamore Springs (assignee) obtained a deficiency judgment (~$865k) and T3 paid the full deficiency and obtained satisfaction of judgment.
- T3 sued the other guarantors (Heritage and New) for contribution; cross-motions for summary judgment were filed. The trial court granted summary judgment to T3 allocating an equal pro-rata share and later entered final judgment including interest. Appellants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Settlement Agreement’s mutual release bars T3’s contribution claim | Release is limited to settlement with bank; but T3 argues no release among guarantors is enforceable because no consideration passed between them | Appellants: the mutual release in the Settlement Agreement is sufficient consideration among guarantors, so it precludes later contribution claims | Court: The mutual release is not supported by consideration as to the guarantors inter se; no bargained-for exchange among guarantors—release doesn’t bar T3’s contribution claim |
| Whether T3 is entitled to contribution for paying the deficiency | T3: having paid the joint-and-several deficiency, T3 is entitled to contribution pro rata from co-guarantors | Appellants: argued they were released and also later raised voluntary payment doctrine | Court: T3 entitled to contribution; each co-guarantor liable for 1/5 share; summary judgment for T3 granted |
| Applicability of voluntary-payment doctrine to bar T3’s claim | Appellants: T3’s payment was voluntary and thus not recoverable | T3: payment was pursuant to court proceedings (garnishment/order) and not a recoverable voluntary payment | Court: Issue not properly preserved below; court declined to apply the doctrine and did not rely on it |
Key Cases Cited
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (summary-judgment standard and de novo review)
- Manley v. Sherer, 992 N.E.2d 670 (Ind. 2013) (moving party burden on summary judgment)
- Mangold ex rel. Mangold v. Ind. Dep’t of Natural Res., 756 N.E.2d 970 (Ind. 2001) (appellate review limited to materials designated to trial court)
- Beam v. Wausau Ins. Co., 765 N.E.2d 524 (Ind. 2002) (contract interpretation is a question of law; unambiguous terms given their ordinary meaning)
- Time Warner Ent. Co. v. Whiteman, 802 N.E.2d 886 (Ind. 2004) (voluntary-payment rule described and its limits)