Otter Creek Trading Company, Inc., and Daniel Pohle v. PCM Enviro PTY, LTD
2016 Ind. App. LEXIS 186
| Ind. Ct. App. | 2016Background
- PCM Enviro PTY LTD (Australian company) paid $15,000 for a three-ton lead smelter from Otter Creek Trading Co., owned by Daniel Pohle; Otter Creek did not ship the smelter.
- PCM also purchased a Broekema belt (a part) to be shipped with the smelter; Pohle took possession of the belt and refused to release it.
- PCM sued Otter Creek and Pohle in Jennings Superior Court for breach of contract (non-delivery/refusal to refund) and conversion (Broekema belt).
- Defendants filed brief, non-responsive letters/requests but never timely answered; counsel appeared then withdrew; PCM moved for default judgment.
- Court entered default judgment; after a damages hearing the court awarded ~$146,538 (refund $15,000; lost profits $127,256.50; belt $1,281.30; punitive $3,000). Defendants’ motions to correct error and for relief from judgment were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of default judgment | Defendants failed to admit/deny PCM’s allegations; no responsive pleading | Their letters/communications constituted an adequate answer | Default judgment affirmed: defendants’ statements were non-responsive so allegations deemed admitted |
| Breach of contract (Count I) | Contract formed and paid for; non-delivery and refusal to refund | No signed agreement existed with an Australian company | Breach found; UCC/IC provisions allow enforcement where payment was made and accepted despite lack of written signed contract |
| Conversion (Count II) | Defendants took and retained PCM’s Broekema belt without permission | Pohle denied traveling to Minnesota to collect the belt (implicating factual dispute) | Conversion established; defendants’ limited denial did not contest possession/retention, so allegations deemed admitted |
| Motions to vacate/default relief (T.R. 59 / 60(B)) | Default was properly entered; PCM obtained certificate of authority; damages proven | Relief warranted due to alleged newly discovered evidence, procedural defects, or excusable neglect/misleading | Denial affirmed: defendants failed to show newly discovered evidence, meritorious defense, or excusable neglect; equities did not favor relief |
| Damages (lost profits & punitive) | Lost profits proven by contract with third party and LME-based valuation; punitive appropriate for malice in conversion | Lost profits speculative; punitive not supported | Damages affirmed: lost-profits evidence sufficient for reasonable certainty; punitive damages supported by evidence of malice/willful conversion |
Key Cases Cited
- Taco Bell Corp. v. United Farm Bureau Mut. Ins. Co., 567 N.E.2d 163 (Ind. Ct. App. 1991) (standard of appellate review for default-judgment rulings)
- Moore v. Morris, 41 N.E. 796 (Ind. 1895) (answer must directly meet allegations or risks implied admission)
- L.H. Controls, Inc. v. Custom Conveyor, Inc., 974 N.E.2d 1031 (Ind. Ct. App. 2012) (standards for awarding lost profits as consequential damages)
- INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566 (Ind. Ct. App. 2003) (standard for awarding punitive damages: clear and convincing proof of malice, fraud, or willful/wanton misconduct)