Hart Conversions, Inc. v. Pyramid Seating Co.

Nov 29, 1995
20A04-9503-CV-110
Versions:658 N.E.2d 129
1995 Ind. App. LEXIS 1568
1995 WL 698874

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Dеfendants-Appellants Hart Conversions, Inc. (Hart) and Lorell Nihart (Nihart) appeal a denial of their summary judgment motion in an action involving Plaintiff-Appellee Pyramid Seating Co., Inc.

We reverse.

ISSUE

Hart and Nihart raise the following issues for our review:

1. Whether the trial court erred in finding that a material issue of fact existed on the issue of whether Pyramid's claim for penal sums was extinguished.
2. Whether the sale of Hart's account served to assign the claim for penal sums to the buyer.

FACTS AND PROCEDURAL HISTORY

On August 11, 1987, Pyramid filed a cоmplaint against Hart and Nihart alleging that it had delivered certain goods to Hart on open acсount. The complaint further ‍‌​​​‌‌‌​​‌‌‌​‌‌‌​​​​‌‌‌​​‌​‌‌‌​​‌​‌​‌​‌​‌​‌‌​‌​​‍alleged that Hart accepted the goods, but did not pay for them. Pyramid аsked for judgment on the account in the amount of $8,216.00, plus interest.

In the complaint, Pyramid raised a second cause of action. Pyramid alleged that Hart "paid" the account in question with five checks, signed by Nihart, which were returned because of insufficient funds. Pyramid asked for statutory penal sums under IND.CODE 34-4-30-1 1 .

In its answer, Hart admitted thаt it owed on the account. However, Hart, and its president, Nihart, denied any liability for check decеption.

On November 16, 1993, Hart and Nihart filed a motion for summary judgment and supporting materials alleging that Pyramid sold thе account as part of a sale of the business to Four-J Seating, Inc. on August 29, 1987. Their motion further alleged that the right to the penal sums was not assigned in the sale.

On February 1, 1994, Pyramid filed its "Plaintiff's Objections To And Motion For Denial Of Dеfendant's Motion For Summary Judgment." ‍‌​​​‌‌‌​​‌‌‌​‌‌‌​​​​‌‌‌​​‌​‌‌‌​​‌​‌​‌​‌​‌​‌‌​‌​​‍The motion alleged that Hart and Nibart's motion should be construed as a motiоn that the "real party in interest" be determined.

On October 12, 1994, the trial court denied Hart and Nibhart's summary judgment motiоn. In so doing, the court concluded that "there is no issue of material fact raised by any party about which there is not a genuine dispute." (R. 107). The court later granted Hart and Nihart's motion to certify the issue of its ruling for interlocutory appeal pursuant to Ind.App. Rule 4(B).

DISCUSSION AND DECISION STANDARD OF REVIEW

When reviewing the trial court's ruling on a motion for summary judgment, this court applies the same standard as the trial court. American Family Mutual Insurance Co. v. Dye (1994), Ind.App., 634 N.E.2d 844, 846, reh'g denied, trams. denied. Summary judgment is appropriate if the designated evidentiary material shows that thеre is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter оf law. Ind.Trial Rule 56(C). The burden is on the movant to establish the propriety of summary ‍‌​​​‌‌‌​​‌‌‌​‌‌‌​​​​‌‌‌​​‌​‌‌‌​​‌​‌​‌​‌​‌​‌‌​‌​​‍judgment. Babinchak v. Town of Chesterton (1992), Ind.Apр., 598 N.E.2d 1099, 1101, reh'g denied.

I. EXTINGUISHMENT OF PENAL SUMS

Hart and Nihart contend that, as a matter of law, Pyramid's right to receive penal sums was extinguished when it sold the account to Four-J. In support of their contention, Hart and Nihart point out that I.C. 34-4-30-1, authorizes an action for penalties only upon pecuniary loss occasioned by check deceptiоn and other statutory violations. They reason that Pyramid suffered no pecuniary loss since it received $9,996.47 for the account from Four-J.

As noted above, I.C. 34-4-80-1 establishes the measure of the penal sums as three times the actuаl damages. At the time that Pyramid filed its complaint, the amount Hart owed to Pyramid on the account, $8,216.00 (plus intеrest), constituted the actual damages. After Pyramid sold the account to Four-J, the amount Hart owed tо Pyramid was zero. Obviously, the basis for the penal sums was extinguished. In selling the account to Four-J, Pyramid forfeited its right to receive treble damages.

II. ASSIGNMENT OF CLAIM

Hart and Nihart further contend that the contract for the sale of the account as part of the sale of the business to Four-J did not assign the right to penal sums to Four-J. Hart ‍‌​​​‌‌‌​​‌‌‌​‌‌‌​​​​‌‌‌​​‌​‌‌‌​​‌​‌​‌​‌​‌​‌‌​‌​​‍and Nihаrt point to designated evidence, in the form of the contract and the deposition testimony of Pyramid's owner, William M. Holdeman, in support of their contention.

The general rule is that the right to collect а penalty is a personal right which is not assignable. Investors Title Insurance Co. v. Herzig (1992), 330 N.C. 681, 418 S.E.2d 268, 271 (bolding that the right to collect for deceptive practices is personal and cannot be assigned); Snodgrass v. Sisson's Mobilе Home Sales, Inc. (1978), 161 W.Va. 588, 244 8.E.2d 321, 323, reh'g denied (holding that an action to collect a statutory penalty is not assignable unless the statute contains language indicating intent to make the action assignable). In Indiana, a рersonal right cannot be assigned. Rasp v. Hidden Valley Lake, Inc. (1988), Ind.App., 519 N.E.2d 153, 158, reh'g denied.

I.C. 34-4-80-1 is a punitive statute intended to deter the wrongdoer and others from ‍‌​​​‌‌‌​​‌‌‌​‌‌‌​​​​‌‌‌​​‌​‌‌‌​​‌​‌​‌​‌​‌​‌‌​‌​​‍engaging in similar future conduct. Rakes v. Wright (1986), Ind.App., 498 N.E.2d 101, 104, amended 500 N.E.2d 284. The right is personal in nature аnd cannot be assigned. As a matter of law, Four-J, as assignee of the contract, has no right to collect the penal sums.

Furthermore, we note that the Accounts Receivable exhibit attached to thе contract between Pyramid and Four-J specifies that the Hart account was sold and assigned for $9,996.47. Thеre is no provision in the contract or the attached exhibit indicating that anything other than the account was being sold and assigned. The lack of intent to assign any right is illustrated by Holdeman's deposition testimony that his intеnt in entering the contract was merely to sell the account.

CONCLUSION

As a matter of law, Hart and Nihart are entitled to judgment. We reverse with instructions that the trial court grant Hart and Nibart's summary judgment motion.

Reversed.

DARDEN and BAKER, JJ., concur.

Notes

1

. 1C. 34-4-30-1 (1987) provides:

If a person suffers a pecuniary loss as a result of a violation of LC. 35-43, he may bring a civil action against the person who caused the loss for:
(1) an amount equal to three (3) times his actual damages;
(2) the costs of the action;
(3) a reasonable attorney's fee.