Court of Appeals of Indiana | Opinion 19A-PL-2263 | May 5, 2020 Page 1 of 17

ATTORNEY FOR APPELLANT

Mark J. Crandley

Barnes & Thornburg, LLP

Indianapolis, Indiana

ATTORNEYS FOR APPELLEE

Louis F. Britton

Scott Craig

Cox Zwerner Gambill & Sullivan

Terre Haute, Indiana

IN THE

COURT OF APPEALS OF INDIANA

Blake B. Hartman, 

Appellant-Plaintiff, 

v. 

BigInch Fabricators & 

Construction Holding Company, 

Inc., 

Appellee-Defendant. 

May 5, 2020

Court of Appeals Case No. 19APL-2263 

Appeal from the Parke Circuit 

Court

The Honorable Hunter J. Reece, 

Special Judge

Trial Court Cause No.

61C01-1809-PL-394 

Riley, Judge. 
Court of Appeals of Indiana | Opinion 19A-PL-2263 | May 5, 2020 Page 2 of 17

STATEMENT OF THE CASE

[1] Appellant-Plaintiff, Blake B. Hartman (Hartman), appeals the trial court’s 

summary judgment in favor of Appellee-Defendant, BigInch Fabricators & 

Construction Holding Company (Company), concluding that, pursuant to the 

Shareholder Agreement, the value of the shares held by a minority shareholder 

can be discounted by lack of control and lack of marketability.

[2] We reverse.

ISSUE

[3] Hartman presents one issue on appeal, which we restate as: Whether, as a 

matter of law, the value of shares under a buyback provision in a Shareholder 

Agreement can be discounted for lack of marketability and control when the 

Company is required to purchase the shares.

FACTS AND PROCEDURAL HISTORY

[4] The Company is a closely-held Indiana corporation, located in Montezuma, 

Indiana, and is in the business of fabricating and installing natural gas and 

pipeline compressor/pumping stations and related apparatus. Hartman was 

one of the founders and former president of the Company, serving as president 

from 1998 to 2014. At all times relevant to these proceedings, there were ten 

shareholders in the corporation, with no single shareholder holding a majority 

position.
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[5] On March 1, 2006, the shareholders of the corporate predecessor to the 

Company entered into a Shareholder Agreement that included the obligations 

of the shareholders to each other and to the Company. The Company’s 

shareholders and directors executed a Consent to Corporate Action that bound 

the Company to the terms of the Shareholder Agreement. The Shareholder 

Agreement required the Company to purchase the shares of any shareholder 

who is involuntarily terminated as an officer or director of the Company. 

Pursuant to the provisions of the Shareholder Agreement, this purchase must be 

made at “appraised market value on the last day of the year preceding the 

valuation, determined in accordance with generally accepted accounting 

principles by a third-party valuation company.” (Appellant’s App. Vol. II, pp. 

57-58). 

[6] In March 2018, Hartman was involuntarily terminated from his position as a 

director and officer at the Company, triggering the required purchase provisions 

in the Shareholder Agreement. To comply with the terms of the Shareholder 

Agreement, the Company retained Wonch Valuation Advisors (Wonch) to 

appraise the value of Hartman’s shares. Wonch’s report valued Hartman’s 

8,884—or 17.77%--shares at $3,526,060. The report discounted this amount 

due to Hartman’s lack of controlling interest in the Company and lack of 

marketability as he did not have a market in which to sell his shares. As such, 

the report determined the fair market value of the shares to be $2,398,000. The 

Shareholder Agreement afforded Hartman the right to dispute Wonch’s 
Court of Appeals of Indiana | Opinion 19A-PL-2263 | May 5, 2020 Page 4 of 17

valuation by obtaining a second professional appraisal. Hartman declined to 

avail himself of that option.

[7] On September 10, 2018, Hartman filed a petition for declaratory judgment, 

seeking a declaration as to the value of the shares and alleging that the 

Company improperly applied discounts for lack of control and marketability to 

the mandatory sale of the shares. On December 26, 2018, the Company filed 

an Answer and Counterclaim for declaratory judgment. On March 12, 2019, 

Hartman moved for summary judgment, and on May 13, 2019, the Company 

filed a cross-motion for summary judgment. On August 22, 2019, the trial 

court conducted argument on the parties’ respective motion for summary 

judgment. One month later, on September 19, 2019, the trial court issued 

summary judgment, concluding that the Company could discount the value of 

the shares for lack of control and marketability.

[8] Hartman now appeals. Additional facts will be provided as necessary.

DISCUSSION AND DECISION

I. Standard of Review

[9] In reviewing a trial court’s ruling on summary judgment, this court stands in the 

shoes of the trial court, applying the same standards in deciding whether to 

affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley, 

891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we 

must determine whether there is a genuine issue of material fact and whether 

the trial court has correctly applied the law. Id. at 607-08. In doing so, we 
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consider all of the designated evidence in the light most favorable to the nonmoving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if 

it helps to prove or disprove an essential element of the plaintiff’s cause of 

action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an 

opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins. 

Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant 

of summary judgment has the burden of persuading this court that the trial 

court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607. 

[10] We observe that, in the present case, the trial court entered findings of fact and 

conclusions of law thereon in support of its judgment. Generally, special 

findings are not required in summary judgment proceedings and are not binding 

on appeal. AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48 

(Ind. Ct. App. 2004). However, such findings offer a court valuable insight into 

the trial court’s rationale and facilitate appellate review. Id.

II. Buyback Provision

[11] Hartman contends that the trial court inappropriately allowed the Company to 

reduce the value of his shares with a lack of marketability and control discount 

even though these discounts are not applicable to a compulsory sale. He 

maintains that the language of the Shareholder Agreement, determining the 

valuation method of the Company’s shares, should not be equated with fair 

market value as the sale of the shares cannot be completed in the open market 

place and the purchaser already controls the Company. 
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[12] Construction of the terms of a written contract is a pure question of law for the 

court, and we conduct a de novo review of the trial court’s conclusions in that 

regard. Grandview Lot Owners Ass’n, Inc. v. Harmon, 754 N.E.2d 554, 557 (Ind. 

Ct. App. 2001). If a contract is ambiguous because of the language used in the 

contract, rather than because of extrinsic facts, its construction is a pure 

question of law to be determined by the court. Id. A contract is not ambiguous 

merely because a controversy exists where each party favors a different 

interpretation; rather, a contract is ambiguous where it is susceptible to more 

than one interpretation and reasonably intelligent persons would honestly differ 

as to its meaning. Ind. Dep’t of Transp. v. Shelly & Sands, Inc., 756 N.E.2d 1063, 

1069-70 (Ind. Ct. App. 2001), trans. denied. Absent ambiguity, this court will 

give the terms of a contract their plain and ordinary meaning. Id. at 1070. 

[13] Indiana courts have long recognized that shareholders in closely-held

corporations may enter into agreements to buy or sell shares which include a 

valuation method to determine the value of those shares. See Shriner v. Sheehan, 

773 N.E.2d 833, 843 (Ind. Ct. App. 2002) (“It is for the parties, not the court, to 

stipulate a valuation method in a purchase agreement, and we will not rewrite 

an explicit agreement even if that method does not produce a price for the 

shares of stock that reflects a business’s true value.”). Close corporations 

generally find no market for their shares and the only people interested in the 

business are the “incorporated partners” who are intimately involved with the 

entity. Krukemeier v. Krukemeier Mach. & Tool Co., 551 N.E.2d 885, 890 (Ind. Ct. 

App. 1990). Because there is often no market, it is difficult and speculative to 
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value a close corporation’s shares; therefore, repurchase agreements frequently

include specific valuation methods. See Shriner, 773 N.E.2d at 842. 

[14] Article V of the Shareholder Agreement provides for the “Valuation and 

Payment for the Shares” in Section 5.1 as follows:

The price per Share for the Shares of the Corporation to be sold 

pursuant to Article III or Article IV of this Agreement shall be 

the appraised market value on the last day of the year preceding 

the valuation, determined in accordance with generally accepted 

accounting principles by a third party valuation company within 

the twenty-four months preceding the transfer of shares, with 

adjustments for changes in the number of outstanding Shares 

since such year end, and in the case of sales under Article IV, if 

the value is less than the price paid to acquire the Shares paid by 

the Involuntary Transferee.

(Appellant’s App. Vol. II, pp. 57-58) (emphasis added). In determining the 

appraised value of Hartman’s shares, the Wonch report applied the fair market 

value, which included a discount for the marketability of the stocks and the lack 

of control represented by Hartman’s minority interest. 

[15] In support of his argument that the Wonch report applied an incorrect valuation 

method as appraised market value cannot be equated to fair market value, 

Hartman relies on Wenzel v. Hopper & Galliher, P.C., 779 N.E.2d 30 (Ind. Ct. 

App. 2002). In Wenzel, this court rejected marketability and control discounts 

in a dispute about the value of a departing partner’s interest in a law firm. Id. at 

37. The firm brought an action to value the partner’s interest under the Indiana 

Professional Corporations Act and asserted that the valuation must consider 
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both marketability and control. Id. We rejected the argument and adopted the 

general proposition that ‘fair value’ is not the same as ‘fair market value.’ Id. 

We found that ‘fair value’ carried with it the statutory purpose that shareholders 

be fairly compensated, which may or may not equate with the market’s 

judgment about the stock’s value. Id. ‘Fair market value,’ on the other hand, 

represented “the amount for which property will sell upon negotiations in the 

open market between an owner willing to sell and a buyer willing but not 

obligated to buy.” Id. The Wenzel court explained that 

Minority and marketability discounts are open market concepts. 

A minority discount allows an appraiser to adjust for lack of 

control over the corporation on the theory that minority shares of 

stock are not worth the same amount to a third party as the 

majority holdings due to lack of voting power. A marketability 

discount allows an appraiser to adjust for a lack of liquidity in the 

stock itself on the theory that there is a limited supply of 

purchasers of the stock. 

Id. at 37 (citations omitted). Wenzel recognized that a “substantial majority” of 

courts in other jurisdictions had reached the same result and “rejected the 

application of minority and marketability discounts when determining the fair 

value of stock in cases where a majority shareholder or corporation purchases 

the stock.” Id. at 38. Acknowledging that the discounts would create a 

“windfall” if applied to a sale outside the open market, the Wenzel court 

clarified that a sale of the minority shareholders’ shares to majority 

shareholders consolidates or increases the power of those already in control, so 

applying a minority discount to such a case would result in a windfall to the 
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purchasing majority shareholder, particularly because the shares would have 

the same value in the minority shareholder’s hands as in the majority 

shareholders. Id. at 39. 

[16] Cases applying Indiana law since Wenzel have affirmed that minority and 

control discounts have no application in compelled transactions to a controlling 

party. In Stone v. Peoples Tr. & Sav. Bank, 363 F. Supp. 2d 1036, 1039 (S.D. Ind. 

2005), the Southern District of Indiana rejected a marketability discount where 

there is “a ready-made market.” Relying on Wentzel, the court concluded that 

“[i]t would be incongruous to discount the shares of the minority shareholder 

for lack of liquidity when valuation is being done in connection with a 

proceeding that creates liquidity.” Id. (quoting Wenzel, 779 N.E.2d at 

40)(quoting Charles W. Murdock, The Evolution of Effective Remedies For and 

Valuation of Minority Shareholders and Its Impact Upon Valuation of Minority Shares, 

65 NOTRE DAME L. REV. 425, 486 (1990)). When there is a “ready-made 

market” for shares through a mandatory purchase agreement, “[a]llowing a 

minority or non-marketability discount to be deducted from their value would 

indeed amount to a windfall to the [buyer] and its majority shareholders, which 

is precisely what the Wenzel court sought to avoid.” Stone, 363 F. Supp. 2d at 

1039. 

[17] In the years since Wenzel was decided, a wide majority of courts in sister states 

have regularly rejected the application of control and marketability discounts to 

situations where a shareholder is compelled to sell to the majority. See, e.g., In 

re Stebnitz, 586 B.R. 289 (E.D. Wisc. 2018) (finding no need for a lack of control 
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discount when the controlling interests bought the stock and holding that a 

“discount for lack of marketability is likewise inappropriate when the 

agreement obligates the remaining membership groups to purchase the existing 

member’s interest.”); Shawnee Telecom Resources, Inc. v. Brown, 354 S.W.3d 542, 

555 (Ky. 2011); HMO-W Inc. v. SSM Health Care Sys., 611 N.W.2d 250, 257 

(Wis. 2000) (marketability and control discounts “inflict a double penalty upon 

the minority shareholder [because] the shareholder not only lacks control over 

corporate decision making, but also upon the application of a minority discount 

receives less than proportional value for loss of that control.”).

[18] In response, the Company distinguishes Wenzel and its progeny on the ground 

that the dispute in Wenzel revolved around the determination of fair value of 

minority shareholder’s interest, as required by statutory language, and not the 

shares’ market value, as included in the Shareholder Agreement.1

 Instead, the 

Company relies on the Wonch report and contends that the fair market value 

standard used in the report is consistent with the Shareholder Agreement’s 

1 In a footnote, the Company directs us to Alexander v. Alexander, 927 N.E.2d 926, 938 (Ind. Ct. App. 2010) in 

support of its argument that “Indiana courts have approved the application of marketability and control 

discounts for valuations of shares in closely-held corporations when they were not bound by a statutory 

requirement of ‘fair value.’” Appellee’s Br. p. 12 n.1. However, we distinguished Alexander from Wenzel

based on two considerations, none of which are present here. First, we noted the trial court’s broad 

discretion when determining the value of property in dissolution proceedings which differentiated the 

circumstances in Alexander from those in Wenzel. “This broad discretion leads to a more direct and simple 

valuation of how the trial court has valued property than was presented in Wenzel.” Id. Furthermore, unlike 

the facts in Wenzel, the party in Alexander was not selling her interest in the property—rather the trial court 

was attempting to valuate the property in light of the divorce proceedings. Id. at 939. Therefore, the trial 

court was not acting to prevent a windfall to the majority, but rather was trying to place a value on the 

interest. Id. 
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requirement to use appraised market value. Reiterating the trial court’s 

conclusion, the Company focuses on dictionary definitions which indicate that 

market value and fair market value are remarkably similar. Black’s Law 

Dictionary defines ‘fair market value’ as “[t]he amount at which property 

would change hands between a willing buyer and a willing seller, neither being 

under a compulsion to sell and both having reasonable knowledge of the 

relevant facts.” BLACK’S LAW DICTIONARY, (6th Edition). ‘Market value’ is 

defined as “[t]he price property would command in the open market. The 

highest price a willing buyer would pay and a willing seller accept, both being 

fully informed, and the property being exposed for a reasonable period of time.” 

BLACK’S LAW DICTIONARY, (6th Edition). Likewise, Indiana Code section 23-

1-43-11 of the Indiana Business Corporation Act, defined the term market value 

as meaning fair market value. While this statute deals with the open-market 

concepts of share valuations in the context of mergers and other business 

combinations, the Company relies on it for its instructive value in this context. 

As such, the Company contends that Wonch properly applied a fair market 

value in performing his appraisal and the application of the discounts should 

stand. 

[19] We find Wenzel to be persuasive to the situation at hand where a Shareholder 

Agreement includes the valuation method of the members’ shares. Unlike 

Hartman’s argument, we cannot conclude that Wenzel is limited to cases arising 

under the statutory application of the fair value standard; Wenzel and its 

progeny rejected the application of open-market discounts to any sale occurring 
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in a closed market, regardless of the used valuation standard. The Shareholder 

Agreement itself recognizes that the mandated buyback of shares to the 

Company differs from a sale to a third party on the open market and thus, 

different interests must be recognized by implementing an appraised market 

value rather than the open-market valuation method of fair value or fair market 

value. Indiana law does not allow parties “to read into the contract terms to 

which the parties did not agree.” Zawistoski v. Gene B. Glick Co., 727 N.E.2d 

790, 794 (Ind. Ct. App. 2000). Courts therefore will not add provisions not 

agreed upon by the parties. Kaghann’s Korner, Inc. v. Brown & Sons Fuel Co., Inc.,

706 N.E.2d 556, 565 (Ind. Ct. App. 1999). 

[20] Wonch’s appraisal report narrated that “[Wonch] ha[d] been engaged by the 

Company to estimate the fair market value of the property described herein as 

of December 31, 2017. This valuation was performed solely to assist with a 

valuation requirement in a shareholder agreement due to a triggering event 

involving [Hartman].” (Appellant’s App. Vol. II, p. 72). After determining the 

market value of the shares, the report then applied the open market concepts of 

minority and marketability discounts, as required by the concept of fair market 

value. See Wenzel, 779 N.E.2d at 39. Thus, instead of using the “appraised 

market value” of the Shareholder Agreement, the Wonch report applied the 

open-market valuation method of fair market value, without acknowledging 

that there is a built-in market or that Hartman’s shares must be sold to those 

already controlling the Company. As such, the Wonch report’s application of 

the valuation method would allow the Company to purchase Hartman’s shares 
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at a discount and then immediately retain control over the Company and resell 

the shares without the discount, thereby allowing the Company to reap a 

windfall.

[21] The Shareholder Agreement ensured a market for the shares of departing 

shareholders by compelling the Company to buy the shares at appraised market 

value. The Wonch report appraised the market value of the Company and 

calculated the per share value of this total market value figure by dividing the 

Company’s value by the number of shares, resulting in a per share price of 

$396.90. Based on the 8,884 shares owned by Hartman, his share of the 

appraised market value of the Company amounted to $3,526,060. This reflects 

the appraised value of the shares based on the market value of the Company 

and corresponds with the requirement of the Shareholder Agreement to utilize 

the appraised market value. As there is no sale of the shares in the open 

market, the discounts for lack of control and marketability cannot be taken into 

account in the calculation of the shares’ value in this compelled transaction. 

Consequently, as the trial court erred, as a matter of law, by applying these

discounts, we reverse the trial court’s summary judgment. 

CONCLUSION

[22] Based on the foregoing, we hold that, as a matter of law, the value of shares 

under the buyback provision in the Shareholder Agreement, which required to 

apply the appraised market valuation, cannot be discounted for lack of 

marketability and control when the Company is required to purchase the 

shares.
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[23] Reversed. 

Mathias, J. concurs

Tavitas, J. concurs in part and dissents in part with separate opinion
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IN THE

COURT OF APPEALS OF INDIANA

Blake B. Hartman,

Appellant-Plaintiff,

v.

BigInch Fabrication & 

Construction Holding Company, 

Inc.,

Appellee-Defendant.

Court of Appeals Case No.

19A-PL-2263

Tavitas, Judge concurring in part and dissenting in part

[24] I respectfully concur in part and dissent in part.

[25] I fully concur that the trial court erred by granting the Company’s motion for 

summary judgment. I write separately to also emphasize and note that, in 

calculating the “fair market value,” the Wonch report relied upon an Internal 

Revenue Service (“IRS”) Revenue Ruling, which defines “fair market value” as 

“the price at which the property would change hands between a willing buyer 

and a willing seller when the former is not under any compulsion to buy and 

the latter is not under any compulsion to sell, both parties having reasonable 

knowledge of relevant facts.” Appellant’s App. Vol. II p. 69. Hartman, 

however, was involuntarily removed from his position, and the Company is 

required to purchase Hartman’s shares at the “appraised market value.” Under 
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these circumstances, the Company was under a compulsion to buy, and 

Hartman was under a compulsion to sell. Accordingly, the IRS definition of 

fair market value is not applicable here.

[26] I dissent only to the extent that the majority opinion fails to address Hartman’s 

motion for summary judgment in its conclusion. See Appellant’s Br. p. 23 

(“Mr. Hartman respectfully requests that the Court reverse the summary 

judgment in favor of the Company and enter summary judgment in his favor 

declaring that he is entitled to the $3,526,000 his shares are worth without the 

inapplicable discounts.”). I would reverse both the trial court’s grant of the 

Company’s motion for summary judgment and the trial court’s implied denial 

of Hartman’s motion for summary judgment.
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