*1 a trial court's factual insufficient reverse
finding. af- the trial court is judgment of
firmed. BARNES, J., J.,
VAIDIK, concur. WILLIAMS, David Karan L. M.
Warren Servs., Inc.,
dos, Mor Financial UBS Stanley Co., Inc., Robert
gan & Assocs., Inc.,
Frankel, Huttelston GRP., Maggart Consulting
McInnes LLP, Horwath, Ap
L.L.C., and Crowe
pellants-Defendants, ORENTLICHER, Spring F.
David John Suman, Kelly,
er, J. J. Sue Frederick Pike, Gookins, Ed Brenda
Steve Sullivan,
ward P. as Trustees Trust, Appellees-
Insurance
Plaintiffs.
No. 49A02-1003-PL-249. Indiana. Appeals
Court of
Dec. 2010.
Rehearing April Denied
LLP, IN, Indianapolis, Christopher J. Ril- lo, Ketcham, Carey-Davis, Paula M. Lisa LLP, IL, Chicago, Schiff Hardin Attor- neys for Appellants. Hull, Morical, M.
Andrew W. Alice Hoo- LLP, IN, Indianapolis, Gary ver Hull W. Kohlman, Collins, Jeremiah A. John M. West, Greenfield, Douglas Abigail L. V. Carter, Zibel, Daniel A. Bredhoff & Kai- ser, P.LL.C., DC, Washington, Attorneys Appellees. OPINION NAJAM, Judge.
STATEMENT OF THE CASE Warren L. Williams and Robert Frankel are former employees of Indiana State ("ISTA"). Teacher's Association em As ployees also acted as fiduciaries with the ISTA Insurance Trust ("the Trust"), entity an legally separate and distinct from the ISTA. Their em ployment agreements with the ISTA con tained arbitration clauses. In July of ("the Trust, by its trustees Trus tees"), filed suit turn, Frankel. Williams and Frankel filed a motion to arbitration of the claims, Trust's which the trial court de They interlocutory nied. bring now appeal deny from the trial court's order ing motion to arbitration. Williams and Frankel raise three issues review, for our one of which we find dis- positive: whether the Trust is bound Cantrell, provisions the arbitration of Williams' and Stapleton Dennis F. Tara with employment agreements Lutes, Cantrell, Mehringer, Strenski & interlocutory appeal part appeal. This is authorized take in this Because this is an 34-57-2-19(a)(1); appeal pretrial ruling, from a the facts dis- § statute. See Ind.Code 14(D) (authoriz- Appellate see also Ind. Rule complaint cussed herein are as in the stated ing interlocutory appeals provided by as stat- appeal. and assumed as true on ute). None of the other named defendants resignation May until his From 1984 Trust is not bound hold the the ISTA. We 14, 2009, Frankel's contracts was the Executive Di- by Williams' posi- rector of the ISTA. Because his Accordingly, we affirm the ISTA.2 *3 ISTA, was a trustee tion with the Williams the motion to denial of trial court's Further, in 2002 the ISTA's of the Trust. arbitration. Directors elected the Board of Williams such, of the Trust. As was CEO "hle AND PROCEDURAL FACTS day-to-day responsible specifically HISTORY3 assets, oversight of the Trust's and [he] organization is a labor The ISTA the primary the contact between was public Indiana's employees of represents Id. at and its investment advisors." Trust Board of governed by a schools. It trustee, 204A. As and Williams had CEO Di- Directors, an Executive employs which relationship with the Trust. fiduciary 1985, the with other staff. In along rector resignation April From 2002 until his on Trust, a the common-law ISTA established 2, 2009, Deputy Frankel was the Executive pro- provide to insurance trust intended Director of the FSP.5 FSP is "the trade to corporations Indiana school grams for products financial name for the and ser employees. for their plans as benefit adopt provided through several entities af vices entity from legally separate is a The Trust And, ISTA." Id. at 205A. filiated with managed by a nine-mem- the ISTA and is position because of his with the again, Trustees. Board of ber ISTA, Frankel was the Director of the Trust. doc According governing to the Trust's
uments, Director of the the Executive July In of Williams and Frankel the Trust. a trustee of ISTA is ex employment agreements renewed their officio is, a trustee the Executive Director That agreement pro- with the ISTA. Williams' with the ISTA. position virtue of his "accepts employment vided that he as the Executive Director Similarly, Deputy the ... Director of the and [ISTA] Executive Program Financial Services of the ISTA's carry efficiently to out and [covenants] ("FSP") ex as Director of serves responsibilities the duties and of properly officio "the The Director of the Trust is Trust.4 position, the Executive Director as defined the Board of Di- from time to time and re fiduciary [is] of the Trust named agree- rectors." Id. at 361A. Frankel's for the administration sponsible "accepts employment that he ment stated Appellants' App. Trust." 206A. bound 2. Because we hold that the Trust is not appointed by the ISTA President trustees are approval and contracts with the the ISTA of Di- Williams' Frankel's with the of Board need not consider Williams and appointment we of rectors. In addition to argument trustees, that the Trus- Frankel's additional governing the Trust's documents scope the arbi- are within the tees' claims grant power up to the ISTAthe to remove two clauses. per year, appoint approve and tration trustees to trustees, appoint to a CEO of the successor argument October 3. We held oral Trust, approve amendments to the Trust's Judge assigned to Paul D. Mathias was 2010. documents, governing and to terminate following argument oral this case but recused Trust. participation in the and has had no further case. erroneously, parties occasionally, but 5. The position refer at the ISTA as total, three of the Trust's nine trustees six ''Director" of the FSP. positions ex held officio. other 666§ Executive Director of Deputy [the 24, 2009,
as Trustees, July On on behalf Trust, complaint against filed their carry ... and out [covenants]. FSP] Frankel, efficiently properly among re- Ac- others. Deputy Executive Di- sponsibilities cording complaint, to the Trustees Williams, his role as CEO and trustee of position, as defined [the FSP] rector time the Board Di- from time to breached his duties to Trust; agreement at 370A. Neither ... "conspired place rectors." Id. Trust. mentions the bulk of the Trust's assets in alternative private placements investments and with- employment agreements Each of the *4 informing out the Trust's Board of Trus- following the arbitration contained clause: tees of the risks associated with [either] Dispute any Resolution. Should issue such investments" or that other named regarding performance any the arise gain thereby," defendants "would id. at obligation under the terms this 236A; and aided and abetted other named Agreement, including the invocation of respective defendants their breaches of provi- the termination ["Jwith causef"] Likewise, fiduciary duties. the Trustees herein, sion contained the parties agree Frankel, alleged that in his role as Di- prior initiating filing any that to or law- rector of the breached his regarding suit such issue[] the Trust on numerous occasions. will make reasonable efforts to resolve Trustees, According to the because of the any such issue reasonable time [sic] alleged Williams, Frankel, malfeasance of written par- of such notification to either others, and the Trust ty. Should the be unable to serving ceased as a funding vehicle for issue, parties agree resolve the the the insurance programs] [medical and the issue arbitration before submit an [long-term disability insurance pro- arbiter parties through selected the the 31, grams]. As of July [June 30 and striking procedure the alternative from 2009, liquid the was without re- Trust] panel of seven provided by arbiters pay sources to future benefits-with an the American Arbitration Association. present estimated value of at least $34 Any requests for arbitration of a ["Iwith million-to some [long-term disabili- cause[") termination shall be made claimants, ty] satisfy or to the claims of Employee writing thirty within participating school corporations with (30) days receipt of the notice of respect to the Trust's "claims stabiliza- arbitration, any In each termination. reserves," tion totaling an additional es- party shall bear their own [sic] costs and timated amount of several million dol- attorney's fees and the cost of the arbi- lars, satisfy or to obligations. other ter's time shall be split equally. If an arbiter Id. should determine that the termi- at 208A. The ISTA is not a named cause, nation is without the Trustees' lawsuit. may arbiter only the Employee salary award and 27, 2009, July On Williams filed a de- provided by benefits Agreement this ISTA, mand for against arbitration cause, a termination without subject to $300,000 alleging in unpaid compen- almost mitigation of damages by Employee. sation and benefits. On October added). 362A, ISTA filed an answer counterclaim and Id. at (emphasis 371A On against 2, 2009, In particular, 14, 2009, Williams. the ISTA April May and Frankel Williams, respectively, resigned from following forth the "set[] counterclaims employment with the against ISTA. Mr. Williams: tortious malfea- contract, alleged perform. are to have failed to sance, negligent performance enrichment, con- Trustee[sg] breach of unjust against claims ISTA also at 395A. The stated in this lawsuit demonstra- tract." Id. agree- of all dam- "repayment bly employment seek arise from their it would Williams' acts resulting unequivocally from Mr. ments and therefore ages counterclaims, in- underlying all subject to arbitration. omissions to[,] liabilities limited eluding, but addition, 117A. Id. at That arbi- Id. caused Mr. Williams." were Trustees asserted stayed currently proceeding tration contesting from equitably estopped not a The Trust is pending appeal. arbitration both because motion to proceeding. party Williams' were the Trustees' claims "no differen{t]" filed a Frankel also On November counterclaims in the arbitra- ISTA's demand for tion actions and also because Trustees refused improperly that the ISTA alleging seeking obligations were to enforce certain benefits. On De- payment agreements "while at *5 the ISTA answered cember the avoiding agree- same time arbitration following coun- alleged complaint set forth in those contracts." Id. at ments terclaims: 119A. recklessness,
malfeasance, negligence, hearing The trial court held a on contract, each of which and breach of joint Williams and Frankel's motion to damage to ISTA. As pecuniary caused 26, 2010, February compel arbitration. On [FSP], Deputy Executive Director of Thereafter, the court denied the motion. to maintain a state- Mr. Frankel failed the court denied Williams and Frankel's necessary license for issued securities stay proceedings motion to the trial court party, be made a third payments to and this court denied a pending appeal, Metlife, the ISTA Financial Services July appeal motion on similar This ("FSC"), wholly-owned a Corporation ensued. These actions and subsidiary of ISTA. caused harm to ISTA and
omissions AND DECISION DISCUSSION approximately in the amount of FSC appeal Williams $300,000 also in lost commissions. ISTA trial of their motion to com court's denial that this behavior constituted asserts arbitration. Our standard of review is pel employment breach of Mr. Frankel's well established: contract with ISTA. denial of a motion to The trial court's pro- Frankel's arbitration Id. 398A. arbitration reviewed de novo. compel stayed appeal, ceeding pending is also party seeking arbitration pro- not a to that and the Trust is an the existence of must demonstrate ceeding. agreement enforceable arbitration 9, 2009, disputed type that the matter is the of November On Superi- filed in the Marion jointly claim that is intended be arbitrated a motion to arbitration or Court par agreement. under Whether them. the Trustees' claims any disputes to arbitrate is a agreed ties that, argued Williams and Frankel interpretation, and matter of contract importantly, par a matter of the employees for their status as most [blut long intent. in Indiana have ties' Courts Frankel would have they parties to en- responsibilities recognized of the the freedom had none 668% have Trust is presumed estopped disclaiming ap- contracts and
ter into
freely
plicability
bar-
of the arbitration clauses
represent
that contracts
be-
Thus,
cause,
im-
"if a
claims a
agreement
parties.
breach of an
gained
policy favoring
agreement
arbi-
that contains an arbitration
posing
parties
clause,
determining
they
whether
he is
to arbitrate that
required
tration before
regardless
claim
he signed
to arbitrate could frustrate
of whether
agreed
will
Br.
agreement." Appellants'
and freedom to contract. We
at 17. Sec-
intent
(but
face,
dispute,
analogous
argu-
whether the
on its
ond
to their first
decide
language
covered
arbi-
ment),
they
claim that
Trust was a
so,
doing
will
provision.
party beneficiary
tration
we
third
principles gov-
agreements
apply ordinary
suing
contract
and is
breach of
law.
If we
such,
erned
state
determine
agreements;
those
as
the Trust must
And,
agreed
have
be bound
the arbitration
parties
to arbi-
clauses.
third,
trate,
the "close rela-
policy
Indiana
favors arbitration.
contend
tionship" between the ISTA and the Trust
Assocs.,
Dodd,
Realty
LLC v. D.A.
Med.
requires arbitration to avoid "evisceration
Inc.,
871, 874 (Ind.Ct.App.
928 N.E.2d
of the underlying
agreement
omitted).
2010)
(quotations
and citations
signatories."
between the
Id. at 17-18
Further,
construing
when
omitted).
(quotation
We address each ar-
"every
agreements,
doubt is to be resolved
gument in turn.
arbitration,
favor of
and the
Estoppel
matters,
all
explicit,
bound
arbitrate
*6
excluded,
ly
reasonably
fit within the Williams and Frankel
first contend
Nims,
language used."
v.
805
Bielfeldt
the Trust must arbitrate its claims because
415, 418 (Ind.Ct.App.2004) (quota
N.E.2d
they
"premised
are
on the duties and obli
omitted),
tions
trams. denied.
contract,
gations set forth in the
irrespec
tive of
party signed
whether or not that
dispositive
appeal
issue on-
is
support,
contract."
Id. at 18.
In
whether the
which is
party
not a
to
rely Hughes
Williams and Frankel
Ma
either
or Frankel's
Williams'
sonry
v.Co. Greater Clark
School
County
agreement, may
subject
be
to the arbitra
(7th
Building Corp.,
however, Hughes
attempting
to hold
of)
obligations
set
forth in the
Hughes-Clark
JA.
to the terms
...
Hughes-Clark agreement.
agreement. Hughes' complaint is thus
*7
Hughes
merely attempted
has thus
to
in
fundamentally grounded
J.A.'s alleged
alleged
perform
characterize
failures to
obligations assigned
breach of the
to it
management
various construction
duties
Hughes-Clark
agreement.
(or
improper performance)
as tor-
Therefore, we believe it would be mani-
tious interferences with its contractual
festly inequitable
permit
to
to
Hughes
Although
ques-
relations with
we
Clark.
Hughes
both claim that J.A. is liable to
tion the
charac-
appropriateness
this
failure to
perform
for its
contractual
terization,
alleged
facts
constitute
Hughes-Clark
duties described in the
obligations spelled
breaches of
out in the
deny
and at the same time
agreement
Hughes-Clark agreement. Ultimately,
a
to that
agreement
that J.A. is
therefore, Hughes
rely
must
on the
order
avoid arbitration
claims
Hughes-Clark agreement
terms
clearly within the ambit of the arbitra-
Hence,
against
in its claims
J.A.
short,
"In
(plaintiff)
tion clause.
cannot
Hughes is estopped
repudiating
from
(It)
ways.
rely
have it
cannot
on
both
agreement,
clause
this
arbitration
the contract when it works to its advan-
wpon which it relies.
tage,
repudiate
and
it when it works to
(its)
disadvantage."
Realty
added;
Tepper
Co.
(emphasis
Id. at
Even Agreements, they in- would have un- action for tortious never a cause of states dertaken the duties that contract, we believe terference with alleged are to have breached cireumstances Hughes, peculiar in the Thus, though lawsuit. even the Trus- us, denying J.A. estopped before have a alleged with tees the tort of breach clause the benefit arbitration intimately fiduciary duty, that are as their claims are funda- to claims regard mentally grounded in the employment intertwined with the un- in and founded relationships by the obligations Hughes' Employ- as created derlying contract Agreements. here. ment The Trustees "can- to be The outcome appear claims rely the contract when it would have the tail works to by Hughes urged advantage, repudiate it a and it when dog, since would allow wagging [their] an otherwise valid arbi- to defeat disadvantage." it works to Be- [their] simply by alleging that an cause Trust's claims arise from tration clause party seeking Employment Agreements ISTA's agent of the performed certain improperly Frankel, has Williams this Court should find that thereby required the contract and commit- Trustees under arbitrate their claims. integrally ted a tort that is so related to subject of between the (citations omitted; Id. at 19-20 alterations to constitute a bar to principal as original). We cannot agree with Williams arbitration. such Frankel. 9;
Id. at 841 n. see also MS Dealer Serv. First, the case law relied on Williams (11th Franklin, 177 F.3d Corp. clearly and Frankel is distinguishable. Cir.1999) (holding "equitable estoppel cases, signatory brought those a suit on a nonsignatory arbitra allows nonsignatory, contract and the tion," equitable but to determine whether nonsignatory moved arbitration. estoppel applies the court must serutinize Thus, when the nonsignatory concedes ar- the nature of claims "to determine issue, bitrability on a contract have courts scope whether claims fall within the those routinely signatory held the to be bound clause"); of the arbitration Sunkist E.g., arbitration clause. MS Dealer Soft its Inc., Growers, Drinks v. Sunkist 10 F.3d 947; Corp., 177 Serv. F.3d Sunkist at Soft Cir.1993) (same). (11th 753, 756-57 Drinks, 756-57, Hughes 10 F.3d at Ma Co., Or, sonry F.2d 833-41. as the Again, con *8 States Court of for the Appeals United tend that the Trust must be held to the stated, Second Cireuit has "because arbi employ arbitration clauses of their ISTA by guided prineiples[,] tration is contract ment because the agreements Trustees' may . a a signatory estop nonsigna- not against "fundamentally claims them are tory avoiding regardless grounded" agreements. on those Appel closely that nonsignatory how affiliated Specifically, they lants' Br. at 19. contend signing party." is with another MAG as follows: Consultant, v. Merlin Portfolio allege The Trustees themselves in their GMBH (2nd LLC, Group, 268 F.3d Biomed complaint that Williams and Frankel Cir.2001) . served the Trust ex is to officio-that Here, however, say, Williams solely by employ virtue their and Frankel signatories parties ment If Williams and are both the and the with ISTA. accepted seeking against Frankel had never the ISTA Thus, Trust, the Trust on which the Trustees' nonsignatory. equity does claims a them are against to arbitrate. It is based-"but for" their the Trust not employment by a But that not, suggest, ISTA]. as Williams [the Trust, law fact far short of binding that the cited case falls mere coincidence nonsignatory pursuing against a in claims Williams and only estoppel when invokes nonsignatory par- The is the relief. seeks fiduciar[y] Frankel of the breach Trust, request, make the because it duties owed to the to what- ty that must provisions ever in the em- by not bound the contract. contained that ployment contracts Williams and allegations the Trustees Neither are negotiated with the Frankel [ISTA]. Frankel based on the against Williams and it is not unusual in the fact, Dealer employment contracts. See MS that performing course of a a Rather, at 947. 177 F.3d Corp., Serv. contract may statutory assume common law or Williams, in role allege Trustees his duties toward third do Trust, trustee of the breached as CEO and arise from the contract-and such duties Trust; to the fiduciary his duties "con- certainly can be enforced the third ... the bulk of the spired place Trust's party independent of whatever limita- pri- investments and alternative assets places upon signa- tions the contract its informing vate without blacementsv respect remedying tories con- with Board of Trustees of the [either] Trust's tractual violations. risks with such investments" or associated gain "would that other named defendants Br. at 11. Appellees 286A; thereby," App. at Appellants' legal allegedly The breached aided and abetted other named defendants Williams and Frankel flowed to the Trust fiduciary respective their breaches of as a matter of Indiana law and not Likewise, alleged the Trustees duties. express employment terms of their con- Frankel, in his role of Director of the Seq, with the ISTA. eg., tracts Ind.Code breached his duties to 30-4-1-1, is, §§ 30-4-3.5-1 to ~18. That - Trust on numerous occasions. brought against Trustees suit correctly Frankel on grounds independent As Trustees summarize: employment agreements brought against the claims Williams and ISTA. And the outcome of the Trustees' Frankel Trustees are based on dependent upon suit is not Williams' or common-law duties owed [the Trust] an employee Frankel's status as of the by Williams and Frankel as fiduciaries ISTA. claims Trust. Trust's do not turn In R.J. & Co. v. Beach II Club Griffin contracts, anything Association, Inc., Homeowners 384 F.3d and indeed the Trustees' claims would (4th Cir.2004), associa- homeowners be unaffected even if Williams' and company tion sued construction for con- employment contracts did not struction defects in a condominium build- *9 exist. ing, alleging negligence and breach of the
implied warranty good workmanship. may company sought It well be correct as a factual The construction arbitra- matter that Williams and Frankel tion on the basis of its contract with the would to which the fiduciary posi- developer, have assumed their homeowners asso- not party, grounds ciation was not tions as officers of thus [the Trust]-and subject seeking to the duties to that "the Association is a direct become 672 obligation from an "under the terms" contract, general which] from
benefit duty agreements. Appellants' App. of both See was ... the source company] 362A, And, again, construction 371A. the Trust did not warranty that [the F.3d at 162 384 allegedly agree breached...." to arbitrate does not seek relief (first original). omission un- agreements. Accordingly, under those law, the is not prevailing der case Trust the con- rejected The Fourth Circuit estopped to decline arbitration. request for arbitra- company's struction so, reasoned as the court doing tion. In is a Third Whether Trust Party Beneficiary follows: common law the South Carolina Under Second, and Frankel con Williams Griffin construction legal [the duties Employment Agreements tend that "the allegedly violated arise company] conferred benefits on the which the of the Beach the builder Club its role as and, therefore, accepted," Trust condominium; are not de these duties Trust should be bound the arbitration general on the terms of the pendent Appellants' Br. at 22. It un clauses. is that the formation contract. It is true one-paragraph argument clear how this is contract meant that Griffin would of the substantively different from Williams and condominium, thereby as construct the Indeed, argument. Frankel's first in their suming the common law duties South subissue, response to this the Trustees places on a builder. Griffin's Carolina simply incorporate responsive argu earlier these benefited the assumption of ments. Association, but the benefit flowed from Nonetheless, dissent would find law, from the con South Carolina not dispositive opin issue based on this court's general specifications struction TWH, Binford, ion in Inc. v. 898 N.E.2d v. contract. See MAG Consult Portfolio 451, Binford, 454 In (Ind.Ct.App.2008).6 Group, 268 F.3d Merlin Biomed brought third beneficiaries suit on (24 Cir.2001) (equitable estoppel does benefit, the contract from which had a benefit results from apply not when authorities, we ted. In line most held to an "the contractual relation of that, affir sought because the beneficiaries ... not ... agreement [and] [from] contract, they mative relief were under the itself"); agreement Coots Wachovia provi bound contract's (D.Md. Sec., Inc., F.Supp.2d sions. 2003) (benefit is if it "flows as a indirect formation").
result of contract But, above, as discussed in detail (alterations original; Id. some citations Trust what occurred here. The omitted). asserting neither a contract claim nor disa- vowing Again, a contract. the Trust as- reasoning applies
That here. Williams' serts law common claims to the Trust responsibilities independent and Frankel that are of their resulted relation- from their contractual with the ISTA. depen- employment contracts ship with the ISTA but were not expand The dissent would the rule fol- upon dent the terms of their words, nonpar- that a responsi- require lowed contracts. other Binford ty regardless arbitrate of whether bilities vis-a-vis the Trust did not arise Indeed, panel appeals opinion 6. The was also in both is identical. author of the instant opinion the author of this court's in Binford. *10 the close emphasizes also con- dissent under the contract relief seeks party and the between the ISTA such, relationship As provision. taining the arbitration argument at oral Trust. But when asked by is resolved argument that this we hold ego the Trust is an alter whether and that Williams discussion prior our and Frankel counsel for Williams Trust, even as compel the may not Frankel they making argu- are not that stated that arbitrate on beneficiary, to party a third Rather, that the two ment. contend facts. these "closely are too re- distinct entities legally Theory Relationship" "Close the Trust to arbi- require not to lated" as and Frankel Finally, Williams trate. to arbi required that the Trustees sert in the dissent or Williams and Nothing or related ageney "under trate their claims that, us as a argument convinces (quota Br. at 20 Appellants' principles." compelled can be nonsignatory, Trust omitted). Specifically, Williams tion in by signatory participate arbitration. that suggest employment agreement neither Again, interconnect- and ISTA are so the Trust or work to be for the Trust done mentions promise to arbitrate ed that ISTA's The Trust is not a the Trust. be employees its would claims with or Frankel's arbitration either Williams' were not also if the Trust meaningless not a named proceeding. And the ISTA is ISTA's it. The Trust shares bound To hold for the Trustees' lawsuit. the em- purpose-to benefit name and Frankel here would extin- corpo- public of Indiana's school ployees guish legal distinction between The Trust and ISTA share offi- rations. ISTA and Trust. top Three of ISTA's cers and directors. relationship" Even if the "close between The remain- are also trustees. officers contemplated and the ISTA was the Trust by ISTA's ing appointed trustees are time the at the approved ISTA's president executed, sig- agreements again, were "a the Trust's of Directors. And Board may nonsignatory natory estop ISTA's office is located principal of how avoiding regardless headquarters. nonsignatory is with closely affiliated also party." Id. at 21.7 and Frankel as signing another MAG Portfolio contentions GMBH, sert the ISTA's Consultant, F.3d at 62. And are, at all proceedings nothing per se "unusual or pending arbitration there substance, relationship in a between to the Trustees' alle close equivalent improper" Appellees' Br. the trial a trust and its settlor. See against them before gations court.8 at 18. general against judicial complaint. "The rule and Frankel also note
7. Williams Commissioner, designed proceedings Nay- notice of other Chris Indiana Securities lor, fact, complaint the ISTA stated in a alleged truly are indeed ensure that facts directors, "shared State, that the ISTA and the Trust allegations." Bane v. not mere See officers, offices, and funds to such employees, (Ind.Ct.App.1991), N.E.2d 1341-42 interlocking that it overlapping and extent an trans. denied. impossible to determine what is difficult or which and on behalf of actions were taken also raise this last 8. Williams App. (quota- entity." Appellants' at 21. ISTA argument wholly separate in their point aas omitted). We and citation to the record tion We consolidate their assertions briefs. invitation to decline Williams and Frankel's purposes of our review. Naylor's judicial notice of Commissioner take *11 Further, KIRSCH, disallowing Judge, dissenting. arbitration here contend, not, will as Williams respectfully I dissent. clause, arbitration "eviscerate" as evi employment The contract between ongoing proceed denced requires Williams and ISTA Williams to the ISTA and ings between Williams and "devote his full time to the affairs of the Frankel.9 The Trust is not the ISTA. And Indiana State Teachers Association and to judicially compel it is not more efficient to carry efficiently out properly together to arbitrate its claims Trust duties of the Executive position, Director with the ISTA because the Trust has as defined from time to time the Board numerous other defendants in its named Appellant's Directors." at 361. App. complaint. allegations Those the civil employment contract between Frank- proceed action will with or without el and ISTA contains the provision, same Frankel, just as Williams' substituting "Deputy Executive Director of will proceedings and Frankel's ISTA Program Financial Services posi- continue with or without the Trust. Final tion" for "Executive Director." Id. at 370. ly, with the agree response we Trustees' Pursuant an integral part and as requiring Williams and Frankel "to employment agreements, the duties litigate separate disputes two with two dif imposed by the ISTA Board of Directors ferent entities two different fora ... on Williams and Frankel per- included the contrary equitable principles." See formance significant managerial services id. at 26. for the In Trust. addition to serving ex Conclusion Trust, aas Trustee of the officio was directed ISTA Board of Di- sum, we hold that the trial court rectors to serve as Executive Director of properly denied Williams and Frankel's the Trust. position Because of his motion to arbitration. The Trust ISTA, Frankel served ex as Di- officio contracts, is not a to the employment rector of the Trust. Williams ap- devoted party opposed and it is the to the motion proximately twenty percent of his total such, compel. As the Trust is not es- work with ISTA on the work of the topped disclaiming the arbitration forty percent and Frankel devoted of his clauses, even if the Trust third time to the work of the Trust. beneficiary to the contracts And the Neither Williams nor Frankel a sep- had relationship" "close between the Trust and arate agreement with the not, facts, the ISTA is legally these Trust; and neither was compensated sepa- sufficient to Trust to arbitrate rately by the Trust for the work that its claims Williams and Frankel. either did on its behalf. Williams and Affirmed. Frankel were not outside directors or trus-
tees; contrary, they day-to- to the had day managerial responsibility for the Trust BAKER, C.J., concurs.
operations. Nothing the record before KIRSCH, J., separate dissents with us indicates that Williams or Frankel ren- opinion. any dered services to or on behalf of the complaint should be dismissed on basis of Williams and Frankel did not raise Trial 12(B)(8) Rule motion to dismiss the Trustees' comity. complaint argue or to the trial court
675 obligations Frankel their in the overall and breached as were not included Trust that Director, Director pursuant respec- rendered to Executive and that services to agreements. tively, of the Trust oversee Trust invest- employment the with compliance policy ments Trust and the benefits of Trust received The keep to the Board of Trustees of the Trust The services. and Williams's regarding advised such investments. and Frankel carried that Williams duties were not These duties duties im- Trust, fiduciary the and out on behalf of law, by managerial but im- posed duties (1) otherwise, by the duties defined were Executive Di- posed by upon ISTA its (2) Directors, carried ISTA Board of the Deputy rector and its Executive Director of their overall integral part out an as Program. ISTA Financial Services employees of and duties as full-time the directly These duties arose (8) pursuant employment to rendered imposed by employment agreements. the the ser- with ISTA. Because agreements by and Frankel vices rendered Williams Complaint alleges The Trust's employ- pursuant to their were rendered obligated "Williams and Frankel were ISTA, the Trust agreements ment care, skill, ordinary prudence act with and beneficiary of such was a third the affairs of the managing alleg- Trust agreements. es," "Williams failed skill, prudence act with such agreements contain employment
The
of the
managing
affairs
Trust." Com-
any issue
for arbitration "should
provisions
169-170,
paragraphs
Appellants'
plaint,
performance
any
regarding
arise
squarely
at 35.
App.
allegations
These
fall
Agree
under the terms ofthis
obligation
provision
employment
within the
362,
TWH,
Inc.
ment...."
Id. at
371.
(Ind.Ct.App.
Binford,
agreements
require
employee
contained therein. agree- provisions such
the arbitration *13 extent that ISTA itself to the same
ments
is bound.
I reverse the decision of the trial would 'remand with instructions
court motion to ar-
grant appellants'
bitration. WOODS, Appellant-Defendant,
Brian J. Indiana, Appellee-Plaintiff.
STATE
No. 79A02-1004-CR-418. Appeals
Court of of Indiana.
Dec. Knecht, IN, Indianapolis,
Steven Attor- ney for Appellant. Zoeller,
Gregory Attorney F. General of Indiana, Worden, Michael Deputy Gene