Victor J. DiMaggio III v. Elias Rosario Elias Rosario v. Victor J. DiMiaggio III
52 N.E.3d 896
| Ind. Ct. App. | 2016Background
- DiMaggio and Rosario were long-time business partners who formed Galleria Realty Corp. (DiMaggio 40% / Rosario 60%) to develop mixed-use property in Indiana; they each had defined roles (DiMaggio: marketing/leasing; Rosario: tenant build-out).
- DiMaggio alleges Rosario abandoned participation in Galleria in early 2002 (including an alleged abandonment letter and nonparticipation at meetings) and later pursued a separate Liberty Lake real-estate venture with others.
- DiMaggio sued (March 26, 2008) asserting breach of an oral contract, breach of fiduciary duty, and usurpation of corporate opportunity; prior proceedings included dismissals of other defendants and multiple summary-judgment motions.
- Rosario moved for summary judgment arguing (1) no enforceable oral contract or, alternatively, the claims were derivative and (2) limitations bars applied; the trial court granted Rosario’s second motion for summary judgment in April 2015.
- The trial court found evidence supported an oral agreement to form and operate Galleria but concluded DiMaggio’s contract claim accrued by March 2002 (beyond the six-year limitation) and that the fiduciary/usurpation claims were derivative and barred as brought directly.
Issues
| Issue | Plaintiff's Argument (DiMaggio) | Defendant's Argument (Rosario) | Held |
|---|---|---|---|
| Existence and breach of an oral contract | Parties had an oral agreement creating Galleria and obligations; Rosario breached by abandoning participation | Any pre-incorporation discussions were not a binding contract; no definite terms or consideration | Court found evidence of an oral agreement supporting formation of Galleria but held breach claim accrued by early 2002 and is time-barred under 6‑year statute |
| When cause of action accrued for oral contract | Discovery rule delayed accrual until DiMaggio learned of injury | Accrual occurred by March 2002 when Rosario effectively abandoned Galleria | Court applied abandonment facts and discovery rule and concluded accrual occurred by March 2002; claim filed in 2008 was untimely |
| Breach of fiduciary duty / usurpation of corporate opportunity — direct vs derivative | DiMaggio sued directly claiming Rosario took Liberty Lake opportunity and failed to participate in Galleria | Claims are derivative (harm to corporation) and, for closely-held corps, must satisfy derivative prerequisites; alternatively, barred by 2‑year fiduciary statute of limitations | Court held claims were derivative in nature and, even assuming duty, the two-year limitation barred DiMaggio’s tort claims; summary judgment for Rosario affirmed |
| Whether trial court erred denying Rosario’s earlier statute-of-limitations partial SJ (cross-appeal) | (N/A on appeal since resolution made cross-appeal moot) | Rosario argued earlier motion should have been granted | Appellate court did not reach cross-appeal because affirmance on other grounds made it unnecessary |
Key Cases Cited
- Town of Lapel v. City of Anderson, 17 N.E.3d 330 (Ind. Ct. App. 2014) (standard and deference for appellate review of summary judgment)
- Williams v. Tharp, 914 N.E.2d 756 (Ind. 2009) (Indiana summary judgment standard and material/genuine fact definitions)
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (discussion of Indiana summary judgment burdens and Rule 56 distinctions)
- Kelly v. Levandoski, 825 N.E.2d 850 (Ind. Ct. App. 2005) (formation of contracts: offer, acceptance, and meeting of the minds)
- Melrose v. Capitol City Motor Lodge, Inc., 705 N.E.2d 985 (Ind. 1998) (closely-held corporations treated as incorporated partnerships with fiduciary duties among shareholders)
- G & N Aircraft, Inc. v. Boehm, 743 N.E.2d 227 (Ind. 2001) (distinction between direct and derivative shareholder actions)
- Barth v. Barth, 659 N.E.2d 559 (Ind. 1995) (ALl principle permitting courts to treat derivative claims as direct in closely-held corporations under limited circumstances)
- Baker v. Estate of Seat, 611 N.E.2d 149 (Ind. Ct. App. 1993) (law on abandonment of contracts: mixed question of law and fact)
- Custom Radio Corp. v. Actuaries & Benefit Consultants, Inc., 998 N.E.2d 263 (Ind. Ct. App. 2013) (application of discovery rule to accrual of contract and tort claims)