*1 rеasons, foregoing we affirm the was not entitled to For where the defendant Chicago’s denied, trial court’s denial of East mo- denied. immunity), reh’g trans. summary judgment, tion motion for III. evidence, and motion to correct error. The final issue is whether the by denying its discretion trial court abused Affirmed. error. Chicago’s motion correct East decision to the trial court’s review FRIEDLANDER, JJ„ BAKER and to correct error for grant deny a motion concur. Paragon Family Res abusе of discretion. Bartolini, 1048, v. taurant (Ind.2003). An abuse of discretion the trial court’s action found when logic and effect facts it infer circumstances before be drawn therefrom. ences CONSTRUCTION, LLC, & B f/k/a 363, Wright Wright, 782 N.E.2d v. Skinner & Broadbent Construction LLC, Greystone Architects, Company, jury a verdict for After the returned Ltd., Inc., Enterprises, T-G d/b/a Chicago ten
Bynum, per- to be found East Concrete, LLP, Gloyd Realty, and J-D fault, Bynum’s cent at determined Appellants-Befendants, $1,500,000, damages totaled v. Chicago in judgment against East entered $150,000. Chicago East the amount FORT, LLC, Harding, F. OLD Neal to correct error and then filed motion Shapin, John, Lawrence A. Maurice E. argued court had erred MD., Knox, M.D., Jr., D. Robert Chicago’s judg- motion for denying East Banking Co., Branch & Trust f/k/a ment on the The trial court held evidence. Louisville, Appellees-Plain Bank of Chicago’s and denied East mo- hearing tiffs. tion to correct error. No. 02A05-0401-CV-55. Chicago argues appeal, On East Appeals Court of оf Indiana. by denying trial court discretion abused its its motion to correct error because was April 2005. § immunity entitled to under Ind.Code 34- Rehearing Denied June 2005. 13-3-3(8). already held We have to law Chicago East was not entitled en- immunity under the ITCA un-
forcement circumstances in this case.
der the See Therefore,
supra I. the trial court did Part by denying East abuse discretion See,
Chicago’s motion to correct error. Cobb,
e.g., Dughaish v. Dughaish ex rel. (Ind.Ct.App.2000) 168-170 properly that the trial court de-
(holding error), party’s
nied the correct denied,
reh’g trans. denied. *2 (the “Bank”). Trust Co. Banking
Branch the fol- Specifically, the lienholders raise dispositive and restated issue: lowing *3 concluding erred in whether the trial court judicial estoppel did to this case. reverse and remand.
FACTS AND PROCEDURAL HISTORY Brewing August Oldenberg In acquired right Company (“Oldenberg”) ni Wayne, estate Fort purchase to real later, Oldenberg Indiana. Three months assigned right purchase the real Fort, turn, estate to Old Fort. Old real and to agreed purchase estate contemporaneously lease back to Olden- fifteen-year commercial berg agreement. lease Undеr terms Oldenberg agreement, agreed to lease Richmond, III, Barnard R.C. Sommer on the real brewpub/restaurant build Ackerson, PC, IN, Attorney Indianapolis, pay estate and to rent Old Fort. Olden- LLC, Construction, B Appellants for S & agreed also to finance Fort’s berg Old & Broadbent Construc- Skinner by f/k/a loaning estate Old purchase the real LLC, Archi- Company, Greystone tion and $233,630 by guaranteeing Fort an ad tects, Inc. from the Bank. The ditional loan promis loan evidenced Office, Wray, Wray R. Fort' John Law (the “Nоte”) sory note executed IN, Wayne, Attorney Appellants T-G with Fort as the maker and Old Fort’s Ltd., Concrete, Enterprises, Gloyd d/b/a guarantors. members as The Note was LLP. Realty, and J-D mortgage against also secured a first Ouelette, IN, Wayne, Steven J. (the “Oldenberg the real estate Mort Shapin, Attorney Appellees Harding, gage”), which was recorded on November & John Knox. 16,1998. Oldenberg initially took to have steps OPINION required the restaurant constructed as KIRSCH, Judgе. Chief lease, Greystone hiring the terms Construction, LLC, Greystone B Architects as prepare S & the architect Architects, Inc., Concrete, Gloyd specifications project. and J-D for the plans B as Realty, (collectively, Oldenberg general LLP “lienhold- also hired Sv& ers”) B, bring brewpub. from contractor to S <& interlocutory appeal build turn, entry Gloyd in favor of hired and O’Neal Excavat- partial Grey- Harding* Shapin, ing, Neal Lawrence Maurice Inc. as After subcontractors. Jr., stone, B, J-D, Jоhn, had (collectively, Gloyd, Knox “Old S O’Neal Robert services, members”), Fort, LLC, labor, begun and mate- providing rials, Oldenberg Appel- through became insolvent. obtained enforcement of the Ol- project denberg Mortgage.' lants’ 8. The aban- Old Fort further Brief doned, ultimately Oldenberg agreed filed for to subordinate the bankruptcy bankruptcy. any against claim it have sold, if the real estate could be B, Gloyd, J-D, Greystone, S & any proceeds sale exceeding .the cost timely O’Neal all filed mechanic’s liens sale, and filed mortgages, mechanic’s liens Then, the real estate. after ob- evenly split would be with the Trustee. taining relief stay from the automatic 9, 2001, On February bankruptcy court & and *4 granted the sale motion. Old Fort’s mem- Greystone filed this action to foreclose paid $50,000, bers therefore the Trustee 31, mechanic’s 2000. May their liens on assigned and the Trustee both the Note subsequently B paid O’Neal and took an Oldenberg Mortgage to Old Fort’s assignment of O’Neal’s lien mechanic’s 29, members on March 2001. initially and claims. rights Oldenberg filed reorganization court, 11 Chapter B, for under In the trial S & Greystone, Bankruptcy However, Code. the case Gloyd, was all filed and J-D motions for sum- to a Chapter liquidation pro- mary converted judgment, alleging that the Olden- ceeding, and the court appointed berg only bank- Mortgage entitled to priori- time, ruptcy trustee. At that ty over mechanic’s their liens in an amount rights $50,000. under the Oldenberg Mortgage exceeding The trial court trustee, passed to the bankruptcy Charles Old ordered that Fort’s members be sub- (the “Trustee”). J. Freihofer Oldenberg Counsel for stituted purchasers as Old Fort sent a Mortgage letter to the Trustee’s Oldenberg from the Trustee. asserting counsel that Old Fort had setoffs Old Fort’s members then filed to recover claims it owed to amounts from Old Fort the entire principal Oldenberg on Oldеnberg’s based breach of Oldenberg balance of the Mortgage plus the lease and proposing that the default Trustee interest late fees. Additional- accept ly, from Old members in sought Old recovery Fort’.s Fort’s exchange for assignment to them of attorney incurred to fees foreclose the Ol- Oldenberg Mortgage. Mortgage. In reliance on denberg Greystone S & and letter, representations in the the Trus- response, asserting filed a an as affirma- agreed tee to sell the Oldenberg Mortgage tive that the defense claims of Old Fort’s $50,000. Fort’s Old members for barred by equitable members were Thereafter, judicial estoppel. doctrine of agreement, Pursuant to their the Trus- the trial held the summary judgment court bankruptcy tee and Old Fort filed with the hearing and denied motions with a one- a Joint court Motion for Sale Assets that did its explain sentence order (the to 11 § Pursuant U.S.C. “sale reasoning. motion”) requesting approving an order and assignment the sale Note and Following mediation, an unsuccessful Oldenberg Mortgage 9, September to Old Fort’s mem- case trial on on went to $50,000. motion, only bers the sale Old two issues: the defense of again signifi- Fort stated that there the amount owing were due and Oldenberg Mortgage, cant meritorious setoffs and claims including wheth- against the Oldenberg by amounts owed to er concerning the Note’s terms default Fort agreеd price rendered the late fees interest and were unenforceable significantly higher than could penalties. provided what Terms of the Note Weiss, clearly per- are erroneous. eighteen imposition
for both clearly rate and of fact erro- Findings annum default interest at 205. per cent fee, any reason- month late when the record lacks percent per neous five mil- sup- together approximately totaled able inference from evidence $3.57 clearly A lion. them. Id. port record when a review of the erroneous the trial On December that a us with a firm conviction leaves of fact and conclusions findings entered will mistake has made. Id. We been thereon, finding that sale judge the reweigh evidence nor neither court, granted witnesses, credibility but consider Mort- to which Note judg- only the evidence favorable t.o assigned to Old gage sold to bе and all reasonable inferences ment members, the claims “compromised therefrom. drawn Ap- against Oldenberg.” [had] Appendix at 58. The trial pellants’ argue first lienholders inap- concluded that *5 judicial concluding trial erred and to this case that Old plicable Spe to case. to interest members were entitled default cifically, the that be lienholders contend of the pursuant and late fees the terms successfully had cause Old Fort’s members partial The trial court entered Note. Oldenberg Mortgage as the Note and judgment Old Fort’s favor $50,000 by alleging signed them $233,630 principal amount for the entire bankruptcy proceed in the various setoffs totaling accrued plus interest late fees they judicially estopped from ings, are now $3,809,123.09 ordered that the real recovering judgment a excess $3.8 the trial court deter- estate be sold once those set- acknowledging million withоut parties’ the the reason- mined amount of offs. costs, attorney fees. expenses, able appeal. The lienholders now protects es Judicial the by integrity process sential AND DECISION DISCUSSION from preventing party a its counsel here, When, the trial fast loose” with the courts. “playing of fact conclusions findings enters Rowell, 476, Ins. v. 705 N.E.2d GEICO Co. Rule thereon to Indiana Trial A (Ind.Ct.App.1999). party 481 52(A), we utilize two-tiered standard in legal in a proceeding assert 201, Harpеr, review. Weiss v. previously one asserted. consistent with First, de 204-05 we (Ind.Ct.App.2003). Ginther, Family 803 Am. Mut. Ins. Co. v. the supports termine whether the evidence (Ind.Ct.App.2004). N.E.2d 234 findings, and then whether court’s general allegations It is the rule or at 205. findings support judgment. ac- in a former pleadings admissions adequate support are Special findings ordinarily estop will proceeding tion or judgment only they if a valid disclose making denying them party from legal for the result basis reached subsequent in a action or their truth Family trial court. Servs. Indiana & Soc. party he is a to the proceeding which (Evansville), Inc., 790 Admin. v. Amhealth opponent the usu- prejudice of his where 162, 165 (Ind.Ct.App.2003). N.E.2d are estoppel by al conduct elements of Also, there have been a present. not disturb the must action, or, they prior court’s or unless determination of findings
37 constituting claims least, admission must meritorious setoffs allegations or ” any sought by the court in which amount the Trusteе.... acted on have been par- pleadings were filed Id. at 256. estoppel. claiming ties Identity parties is not neces McClellan, v. (quoting Tobin Id. at 234-35 sary application estoppel. for the 335, 346-47, 73 N.E.2d 684 225 Ind. Grain, Smith, Inc. v. See Wabash (1947)). Al N.E.2d L. by a letter from Peter As indicated Fort, and not its mem though was Old (the Paul Trustee’s Quebbeman Vesper bers, representa which made the above counsel), firm Quebbeman and his law court, identity tions PLLC) Jones, “co-counsel” (Berg & werе the two is such that of interests between Fort, for both Old LLC with Mark Sandlin Old, Fort, LLC and Old Fort’s members Ex- Fort’s members. and Old Plaintiffs essentially and the same. In Bar one hibits, Ill, Exhibit 31. Within Vol. VII, Quest Realty tle v. Health descriptions letter were setoffs (Ind.Ct.App.2002), we held the amounts owed claims obligation rent guarantor of lessee’s Note, significantly, Fort under the most collaterally estopped relitigating from of their damages from breach determination of the bankruptcy court’s agreement. In reliance on this let- lease be amount due for breach lease ter, joint Trustee filed a sale motion guarantor cause the and the lessee seeking an order with counsel for Old *6 entity.” Id. at 921. Al “essentially one of the Note and approving the transfer in the context though Bartle was decided mem- Oldenberg Mortgage to Old Fort’s 'collateral, judicial, estoppel, the not $50,000. Appellants’ in return for bers which it was decided are prinсiples upon that at 225. The motion stated Appendix In that here! lessor instructive the ... Trustee and Fort believe that “the Old entered into four leases with Delmar. and Mort- agreed price the the Note Bartle, limited ninety-nine percent the gage possible price is the best to be ob- majority of Delmar and sharehold partner significantly higher and is than that tained partner percent er of Delmar’s one limited an through which be obtained eithеr would Burlington, personal general partner, by Mortgage enforcement of the Note and the leases. Delmar default ly guaranteed at Trustee or other Id. liquidation.” the bankruptcy. filed for ed on’the leases and specifically The motion then men- 228-29. against Bartle as the The lessor filed suit meritorious set- “significant tioned the for the full guarantor, seeking judgment against offs and claims the amounts owed ‘ Bartle was by amount owed Delmar. by Debtor Old Fort” as [Oldenberg] entirety for the of and testified present approving proposed the reason for the bankruptcy proceeding. The bank the sale. Id. at 229. The information included obligations the ruptcy court determined quite clearly upon in motion was relied the lessor and entered owed Delmar the ap- in its order bankruptcy the court stipulation regarding an order on Delmar’s Note and Olden- proving the sale the attorney liability Delmаr’s for the lessor’s berg Mortgage to Old Fort’s members sought expenses. The lessor then fees significant that is a when stated “There judgment against in its action summary obtaining price not the risk estate Bartle, had alleging that all factual issues property called for herein if the bankruptcy in court. resolved the in been liquidated by prop- the Trustee granted the lessor’s erty subject large potentially The Fort’s mem- that Fort Old summary appeal- and Bartle sumеd Old judgment in coincided the matters for holding the lessor was entitled bers’ interests that ed. pre- Quebbeman undertook estoppel offensive collateral and Sandlin to use his obli- relitigating Bartle from representation. clude The dissent notes no leases, we not- guarantor of gations pre- “to applied case has in Delmar privity Bartle with ed that party asserting particular from clude one litigate issue of an and had incentive pаrty because a different had liability bankruptcy court be- before argument assertion conflicting made a or liability. liability was his Delmar’s cause proceeding.” at 39. How- prior Op. in a Bartle’s specifically noted Id. at 921. We ever, cir- do these we not believe under in- company ownership near-sole cumstances that Old and Old Fort’s proceedings in the bankruptcy volved fact, are, parties. in different during bankruptcy proceedings, uрon court relied Because kept only present but “was Bartle was in allegations making its deci- made counsel and up-to-date Delmar’s assets, to sell Old Fort’s members sion on behalf strategic all of the decisions deny or claim allegations cannot now those entity.” Therefore, proceeding. otherwise awarding the trial court erred following lan- quoted Bartle also principal entire Fort’s members from guage (Second) Restatement $233,630, plus interest and late Judgments: amount fees. action judgment The [closely corporation is conclu- held] find erred in if ownership holder of its upon sive ap- finding actively the action participated he of the trial ply this case. in- corporation, unless his behalf further court is reversed and remanded for corporation
terests those of opinion. consistent with this proceedings opportu- so different that he should havе *7 Reversed remanded. nity to the issue. relitigate (quoting at 919 Id. (Second) Restatement ROBB, J., concurs. 59(3)). Judgments § to that Comment of BAKER, J., part in concurs and dissents provides: section separate opinion. in with part purpose affording opportunity For the of day in in for a court on issues contested BAKER, Judge, concurring part in however, there rea-
litigation, good is no dissenting in part. why closely corporation a held son ordinarily regarded owners should be that Although agree I this cause should contrary, it legally On distinct. court, I be remanded to the reach this presumed that their interests than very result for different reasons those opportunity to liti- coincide that one majority respectfully offers. I dissent that concern in com- gate issues them I majority opinion from the because be- sufficiently protect both. mon should judicial apply lieve that § 59 Judgments, (Second) of Restatement in this and that S B has waivеd its cmt e. for sale argument regarding
Here, assets, Quebbeman co- but that the award of interest a and Sandlin were unacceptable proportions, thus representing eounsel both Old Fort windfall pre- requiring It a trial court. Fort’s members. can thus be remand Grain, Smith, Estoppel I. Inc. v. 700 N.E.2d Judicial (Ind.Ct.App.1998), my reveals research no from estoppel prevents party a Judicial authority in estop- Indiana in asserting position legal proceeding a a pel party has been used one preclude previously one asserted. inconsistent with asserting particular a from be- Ginther, Family Mut. Ins. v. Am. Co. party cause a different made a. con- had flicting argument prior assertion or in a rule or general allegations It proceeding. Inasmuch as the members in a former ac- pleadings admissions liability a limited “not company per- ordinarily estop proceeding or tion debts, sonally obligаtions, liable for the or making denying party them from liability company,” liabilities of the limited in a action or subsequent their truth 23-18-3-3(a), § I.C. I would hold that the party which he is a proceeding judicially members Old Fort are not opponent his the usu- where prejudice allegedly from an con- estopped asserting conduct are al elements trary position. Also, there have been present. must action, or, prior' determination Moreover, I note рositions least, allegations must or admission complains 5 & of are not inconsistent. acted the court which have been alleged Old Fort before the par- pleadings filed or that it had damaged been Olden- claiming estoppel. ties they had to berg’s pay behavior because McClellan, (quoting at 234-35 Tobin v. Oldenberg’s the real estate stead. 346-47, 679, 684 225 Ind. This is inconsistent with the assertion (1947)). I also note that: they of Old Fort’s had been member, manager, agent, оr an A damaged by behavior to liability company of a employee limited they sum of because were forced debts, personally is not liable'for buy mortgage bring either to out or or the limited obligations, liabilities of elaim who useless a defendant liability company, arising whether Thus, I find that liquidating. would contract, tort, otherwise, or for correctly trial court found es- member, of any acts or omissions other toppel did not in this case. lim- managеr, agent, or employee II. Amount Principal Award of liability company. ited 23-18-3~3(a). § Ind.Code judicial estoppel Having concluded that *8 here, address S apply does not I would & that undisputed & B asserts is S “[i]t arguments. other & B also contends B’s S the that Old Fort and members took awarding trial court in erred in case bankruptcy original judgment Fort a for the entire Mortgage that the Note and $233,630 the Olden- principal amount of subject ‘significant to and meritori- Specifically, berg Mortgage. Note and S Appellant’s ous setoffs claims....’” addеd). However, that Fort’s mem- (emphasis argues the because Old p.Br. LLC, in Fort, judicially deny to estopped reveals that Old not its bers are this record members, they made representations representations made action the 33; 31; to obtain Pl.Ex. Pl.Ex. the court in order the bankruptcy court. 34; for p. Although identity Oldenberg Mortgage Tr. Note and the Pl.Ex. 47-48. $50,000, they of cannot necessarily required agreed price is not for now parties of $50,000. judgment of a of more thаn application estoppel, the Wabash receive However, a oil judi- W.D.Ky.1985), five-year that involved because I would find under which the total rent estoppel- equipment in this S lease cial does $495,000. fail. argument must due The defendant default & B’s of ed on lease when remained Award Million in Interest III. $3.8 of The principal liquidated balance. dam Finally, & B avers that the trial court S that ages provision provided in the lease to Old Fort’s members awаrding erred “payment have received lessor.would in million interest and late fees default $8.8 27 months unearned rent and over for of $233,630. only Spe- of principal on a debt $186,000 in charges calculated at 24% late trial cifically, S <&B contends that annum.” at 822. per Because any specific findings failed to make court $8,250, monthly this payment rental and that regarding award of interest therefore entitled the provision would have impermissible penalty. the award was liquidated plaintiff recover in its appellate Old Fort concedes brief damages.1 bankruptcy court called improperly that awarded unacceptable propor this “a of windfall principal amount addition to the $3.8 If tions.” Id. at an award of 822-23. million, figure princi- which was a total equals that liquidated damages 83% Nonetheless, pal interest. principal unacceptable is an total balance proрerly that trial court asserts could windfall, surely liquidated an award of plus amount principal award damages eight approximately is However, $3,575,493.09 in interest. principal half than the greater one times findings trial court this case made no penalty.2 amount is an impermissible this despite fact on issue whatsoever view, my computing the amount request special findings of fact B’s the award trial court should have con- 52(A). prop- to Trial Rule When Kentuсky sidered Revised Statute section erly requested, required trial court a 360.040, “judgment provides complete special findings make sufficient (12%) percent bear shall twelve interest basis under the issues disclose valid annually from This compounded its date.” legal judg- reached in the result interest, rate of calculated from the date Co., Inc., Speed Fort Supply ment. v. Old default, in liquidated damages would result that are far reflective of the actual more I would therefore remand to the trial court penalty harm suffered than the con- fact special findings and order that be Thus, I yielded. tract would hold that the issue, on order entered further should recalculate the award portion that this of the award reconsid- the extent ered. of such an outra- imposition reflect said, I That also note an award of geous penalty. principal million amount $3!5
$233,630 appears penalty to be a of outra
geous proportions.- Note Mortgage provides it is to be
governed the law of the Commonwealth Kentucky. By way comparison, (Bankr. Yost, In re B.R.
case of = = $422,870.30 $3,594,397.55 ($8,250 27) x x 1. + 2. 8.5