Shelby's Landing-II, Inc., Richard Deckard, Jr., Marilyn Deckard, and Deckard Realty & Development Co. v. PNC Multifamily Capital Institutional Fund XXVI Limited Partnership
2016 Ind. App. LEXIS 460
| Ind. Ct. App. | 2016Background
- In 2005 Shelby’s Landing (general partner), PNC Multifamily and Columbia (limited partners), and Deckard Realty formed a limited partnership to develop low-income housing; Deckard Realty was developer and Richard Deckard was president of both Shelby’s Landing and Deckard Realty.
- The Partnership Agreement required the general partner to manage partnership finances, keep separate accounts, not commingle or lend partnership funds to affiliates, and provided guaranty obligations by Richard, Marilyn, and Deckard Realty (the Guarantors).
- An Adjuster Note later documented an outstanding $950,000 (plus interest) owed to the limited partners; Shelby’s Landing and the Guarantors guaranteed it. Limited partners notified Shelby’s Landing of defaults in 2010 and 2011 and removed it as general partner in August 2011.
- Plaintiffs sued for breach of contract and guaranty; summary judgment resolved some issues and a 2015 trial addressed remaining liability and damages. Plaintiffs sought attorney fees under contract provisions.
- The trial court found breaches of the Partnership Agreement and Guaranty, identified $1,596,290.46 paid to Deckard affiliates as improper, entered judgment for the Adjuster Note (about $1,140,428.87 plus interest) and $1,596,290.46 for partnership damages, and awarded $385,125.26 in attorney fees.
- Defendants moved to correct error arguing the court erred by finding misappropriation/theft (not pled) and that the attorney fee award was unreasonable; the court amended some language but denied relief and defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether findings that Defendants committed misappropriation/theft were erroneous because Plaintiffs did not plead those claims | Plaintiffs relied on contractual breach and guaranty; some theft/misappropriation language supported damages but judgment rests on breaches | Defendants argued theft/misappropriation/fiduciary-breach findings were improper because not pled and thus judgment should be vacated | Court held even if those findings were erroneous or amended, sufficient uncontested findings of breach and guaranty supported the judgment, so judgment stands |
| Whether Defendants are liable under the Guaranty for General Partner’s improper payments to affiliates | Plaintiffs argued Guaranty makes Guarantors jointly and severally liable for general partner obligations, including improper payments | Defendants disputed scope/characterization but did not challenge ultimate damages tied to breach | Court held Guarantors jointly and severally liable under Guaranty for breaches and improper payments; damages of $1,596,290.46 awarded |
| Whether Plaintiffs were entitled to attorney fees under the Adjuster Note and Guaranty | Plaintiffs sought fees contractually authorized for enforcing the Note and Guaranty and submitted invoices/affidavits | Defendants contended fees ($385,125.26 for 1,227 hours) were unreasonable given limited trial time and early resolution of many issues; also objected to admission of fee records as hearsay | Court found fee provisions contractual and fees supported by invoices/business-record affidavits; considering time, complexity, stakes, and services, court did not abuse discretion in awarding fees |
| Whether admission of attorney-fee affidavits/invoices was improper hearsay | Plaintiffs maintained affidavits and records were admissible as certified business records under Evidence Rule 803(6) | Defendants objected on hearsay grounds on appeal but raised same trial objection; offered no developed appellate argument | Court deemed admission proper (business-record exception) and defendants waived further challenge by failing to develop argument on appeal |
Key Cases Cited
- Bayview Loan Servicing, LLC v. Golden Foods, Inc., 59 N.E.3d 1056 (Ind. Ct. App. 2016) (standard of review for findings of fact and conclusions of law)
- Curley v. Lake Cnty. Bd. of Elections & Registration, 896 N.E.2d 24 (Ind. Ct. App. 2008) (erroneous findings not fatal if remaining findings support judgment)
- Lakes & Rivers Transfer v. Rudolph Robinson Steel Co., 795 N.E.2d 1126 (Ind. Ct. App. 2003) (same principle regarding harmless erroneous findings)
- Cavallo v. Allied Physicians of Michiana, LLC, 42 N.E.3d 995 (Ind. Ct. App. 2015) (abuse-of-discretion and factors for evaluating reasonableness of attorney-fee awards)
- Kapoor v. Dybwad, 49 N.E.3d 108 (Ind. Ct. App. 2015) (appellate briefing standards; appellant obligation to develop arguments)
- Thacker v. Wentzel, 797 N.E.2d 342 (Ind. Ct. App. 2003) (courts will not act as advocate for poorly developed appellate arguments)