Court of Appeals of Indiana | Opinion 23A-PL-1383 | April 17, 2024 Page 1 of 20

I N T H E

Court of Appeals of Indiana

Andrew Nemeth Properties, LLC, and Andrew J. Nemeth,

Appellants-Plaintiffs

v.

William A. Panzica, Thomas C. Panzica, Philip E. Panzica,

& NP3, LLC,

Appellees-Defendants

April 17, 2024

Court of Appeals Case No.

23A-PL-1383

Appeal from the Marshall Circuit Court

The Honorable Curtis D. Palmer, Judge

Trial Court Cause No.

50C01-2202-PL-2

Opinion by Judge Weissmann

Chief Judge Altice and Judge Kenworthy concur.
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Weissmann, Judge.

[1] Andrew Nemeth and three brothers—William, Thomas, and Phillip Panzica 

(the Panzica Brothers)—allegedly agreed to form a limited liability company 

(LLC) for the purpose of developing and leasing out a piece of commercial real 

estate. Nemeth filed articles of organization for the company, dubbed NP3, 

LLC after himself and the three Panzica Brothers. But nearly six months later, 

the Panzica Brothers seemingly sought to exclude Nemeth from the project by 

executing a backdated operating agreement for NP3 that listed the Panzica 

Brothers’ separately owned company, Panzica Investments, LLC, as NP3’s sole 

member. Nemeth therefore sued NP3 and the Panzica Brothers (collectively, 

Defendants) for breach of oral contract and unjust enrichment. 

[2] The trial court entered summary judgment in favor of Defendants on Nemeth’s 

breach of contract claim, essentially concluding a written operating agreement 

is required to establish LLC membership. Nemeth’s unjust enrichment claim 

was then tried to the bench, despite his request for a jury trial, and the court 

entered judgment in Defendants’ favor. On appeal, Nemeth argues that an 

LLC’s initial membership can be established by oral contract and that there 

exist genuine issues of material fact as to whether Nemeth and the Panzica 

Brothers orally agreed to form NP3 as equal members. Nemeth also argues that 

he was entitled to a jury trial on his unjust enrichment claim. We agree on all 

counts and therefore reverse.
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Facts

[3] Nemeth is a real estate consultant, broker, and developer in South Bend, 

Indiana.1 The Panzica Brothers are principals in a South Bend architecture and 

construction corporation. They are also the sole members of Panzica 

Investments, LLC, a South Bend real estate holding company. Between 2012 

and 2016, Nemeth and the Panzica Brothers were involved in a real estate 

development project initiated by NELLO Corporation, a fabricator of steel 

cellphone towers and utility poles. That project lies at the heart of this litigation.

[4] In 2012, Nemeth began working with NELLO to relocate its manufacturing 

operations to South Bend (the Nello Project). Among other things, Nemeth 

helped NELLO obtain approximately $13 million in economic incentives for 

the project. He also agreed to purchase a piece of South Bend real estate on 

which NELLO could construct a new manufacturing facility. NELLO initially 

planned to finance the construction portion of the project and to purchase the 

developed land from Nemeth upon the facility’s completion. But in July 2014, 

after Nemeth had entered into a purchase agreement for the land, NELLO 

asked Nemeth if he would finance the construction, own the facility, and lease 

it to NELLO instead. 

1 Nemeth is also the sole member of Andrew Nemeth Properties, LLC, through which he provides his real 

estate services. Though Nemeth and his company are both plaintiffs/appellants in this lawsuit, we refer only 

to Nemeth for simplicity.
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[5] Nemeth was amenable to the leasing arrangement and soon invited the Panzica 

Brothers to partner with him on the Nello project. According to Nemeth, he 

and the Panzica Brothers orally agreed to form and be equal members of a new 

LLC, which would build, own, and lease to NELLO the manufacturing facility. 

The four members’ capital contributions to the new LLC would be their 

respective services on the Nello Project, and they would “split” everything 

“equally,” including distributions. App. Vol. IV, pp. 153-54, 180.2

[6] In August 2014, Nemeth emailed the Panzica Brothers a proposed name for the 

new company, “NP3, LLC,” derived from the names “Nemeth” and “Panzica” 

(there being three of the latter). Id. at 180. A month later, Nemeth officially 

formed NP3, LLC by filing articles of organization with the Indiana Secretary 

of State. These articles did not identify NP3’s membership but indicated that 

the company would be managed by its “Members.” App. Vol. III, p. 25. 

[7] In October 2014, NELLO entered into a 15-year lease with NP3 for the 

forthcoming manufacturing facility. William Panzica signed the lease on NP3’s 

behalf, and his signature block identified him as a “Member” of the company. 

Id. at 185. The lease also contained a Real Estate Broker’s Disclosure, which 

provided: “It is hereby disclosed and accepted that Landlord [NP3] includes 

among its members licensed Indiana Real Estate Brokers including Thomas C. 

Panzica, William A. Panzica[,] and Andrew J. Nemeth.” Id. at 184.

2 All citations to the Appendix in this opinion refer to Appellants’ Appendix.
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[8] To expedite financing for the Nello Project, Nemeth and the Panzica Brothers 

decided that Panzica Investments would purchase the land for which Nemeth 

already had a purchase agreement and then transfer the land to NP3. In an 

October 2014 email to a title company representative involved in the land 

purchase, William Panzica advised that “NP3, LLC (Nemeth and the 3 

Panzica Brothers)” would ultimately be buying the land. App. Vol. IV, p. 226. 

[9] In November 2014, Nemeth assigned his purchase agreement for the land to 

Panzica Investments. But according to Defendants, Nemeth had for months 

concealed the fact that the purchase agreement entitled him to a $256,000 

broker’s fee. When the Panzica Brothers allegedly learned about the fee in 

December 2014, they believed it was too late to withdraw from the Nello 

Project without subjecting themselves to certain liabilities. Therefore, Panzica 

Investments proceeded to close on the land two weeks later and eventually 

transferred the land to NP3, as intended. 

[10] At some point, the Panzica Brothers decided to proceed with the Nello Project 

without Nemeth. And on or after February 20, 2015, William Panzica prepared 

a written operating agreement for NP3 that identified Panzica Investments as 

NP3’s sole “initial member.” Id. at 133. The agreement was backdated to 

January 1, 2015, and it listed a retroactive effective date of September 12, 

2014—the day NP3 was organized. William executed the agreement on behalf 

of Panzica Investments, and all three Panzica Brothers signed it as NP3’s 

managers. 
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[11] Fast forward to 2020. Nemeth filed a complaint against Defendants, seeking a 

declaratory judgment that he was a member of NP3 and asserting claims for 

breach of oral contract and unjust enrichment, among other things.3 Defendants 

moved for summary judgment on Nemeth’s declaratory judgment and breach 

of contract claims, designating the written operating agreement that identified 

Panzica Investments as NP3’s sole member. The trial court granted Defendants’ 

motion, finding: “There is no written operating agreement naming [Nemeth] as 

a member and there is no written consent from all of the members of [NP3] for 

him to become a member as is required by [Indiana Code §] 23-18-6-1(a)(1).” 

App. Vol. II, p. 23.4

[12] The case then proceeded to trial on Nemeth’s unjust enrichment claim. Though 

Nemeth timely requested a jury trial on this claim, the trial court sua sponte 

ordered a bench trial. At that trial, Defendants denied being unjustly enriched 

and also argued that Nemeth’s alleged concealment of his broker’s commission 

barred any recovery under the doctrine of unclean hands. The trial court 

ultimately entered judgment in Defendants’ favor, concluding Nemeth failed to 

prove his unjust enrichment claim and, alternatively, that Defendants 

successfully proved Nemeth had unclean hands.

3 Nemeth’s complaint asserted three other claims, which sought: (1) an injunction compelling distributions 

from NP3; (2) compensation for his efforts in procuring the NELLO lease; and (3) damages for conversion. 

Nemeth voluntarily dismissed his conversion claim, and the trial court entered summary judgment in favor of 

Defendants on the other two.

4 None of the parties appear to have asked the trial court to certify its partial summary judgment as a final 

judgment under Indiana Trial Rules 54(B) or 56(C).
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Discussion and Decision

[13] Nemeth appeals the trial court’s summary judgment on his breach of contract 

claim as well as the court’s bench trial judgment on his unjust enrichment 

claim. We find reversible error in both.

I. Breach of Contract Claim

[14] Our analysis begins with the trial court’s entry of summary judgment in favor of 

Defendants on Nemeth’s breach of contract claim. “We review a summary 

judgment ruling de novo, applying the same standard as the trial court.” Arnette 

v. Estate of Beavins, 184 N.E.3d 679, 687 (Ind. Ct. App. 2022). Summary 

judgment is appropriate only if “the designated evidentiary matter shows that 

there is no genuine issue as to any material fact and that the moving party is 

entitled to a judgment as a matter of law.” Ind. Trial Rule 56(C). In conducting 

our review, “[w]e construe all factual inferences in the nonmoving party’s favor, 

and all doubts as to the existence of a material issue against the moving party.” 

Fox v. Barker, 170 N.E.3d 662, 665-66 (Ind. Ct. App. 2021).

[15] Nemeth argues that summary judgment on his breach of contract claim was 

inappropriate because: (1) a pre-formation oral contract may establish an LLC’s 

initial membership under Indiana’s Business Flexibility Act; and (2) the 

evidence designated on summary judgment established a genuine issue of 

material fact as to whether Nemeth and the Panzica Brothers orally agreed to 

form NP3 as equal members. We agree as to both issues.
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A. A Pre-formation Oral Contract May Establish a Limited 

Liability Company’s Initial Membership

[16] Codified as Article 18 of Title 23 of the Indiana Code, the Business Flexibility 

Act controls the creation, operation, and dissolution of LLCs in Indiana. Brant 

v. Krilich, 835 N.E.2d 582, 592 (Ind. Ct. App. 2005). The Act’s stated policy is 

“to give the maximum effect to the principle of freedom of contract and to the 

enforceability of operating agreements of limited liability companies.” Ind. 

Code § 23-18-4-13. Case law applying its provisions is sparse, but the Act 

reveals the following principles regarding LLC formation.

[17] First, nothing more than the filing of articles of organization is required to form 

an LLC. Ind. Code § 23-18-2-4(a) (“At least one (1) person may form a limited 

liability company by causing articles of organization to be executed and filed for 

record with the office of the secretary of state.”); Ind. Code § 23-18-2-7 (“The 

fact that articles of organization of a limited liability company are on file in the 

office of the secretary of state is notice that the limited liability company has 

been organized.”).

[18] Second, an LLC must have at least one member at the time of formation. See

Ind. Code § 23-18-6-0.5 (“A limited liability company formed under this article 

. . . may have at least one (1) member.”); Ind. Code § 23-18-9-1.1(c) (“A limited 

liability company is dissolved and the limited liability company’s affairs must 

be wound up if there are no members.”).
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[19] Third, the person who executes and files an LLC’s articles of organization need 

not be a member of the company. Ind. Code § 23-18-2-4(a) (“A person does not 

need to be a member of the limited liability company at the time of formation 

or after formation has occurred.”).

[20] Fourth, an LLC’s articles of organization need not identify the company’s 

initial membership. See Ind. Code § 23-18-2-4(b) (requiring articles of 

organization to include only the LLC’s name, the address of its registered 

office, the name of its registered agent, its dissolution date or a statement of its 

perpetual duration, and a statement of whether it will have a manager or

managers).

[21] These principles collectively beg the question: How is an LLC’s initial 

membership established? Nemeth argues that a pre-formation oral contract is 

sufficient. Defendants contend, as the trial court concluded, that the Act 

requires a written instrument.

[22] Defendants point to Indiana Code § 23-18-1-15, which defines “member” as “a 

person admitted to membership in a limited liability company under IC 23-18-

6-1 . . . .” Defendants in turn rely on Indiana Code § 23-18-6-1, which provides, 

in pertinent part:

[A] person may become a member in a limited liability company 

. . . in the case of a person acquiring an interest directly from the 

limited liability company, upon compliance with the operating 

agreement or if the operating agreement does not provide in 

writing, upon the written consent of all members.
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Ind. Code § 23-18-6-1(a)(1) (Membership Acquisition Statute).

[23] The problem with Defendants’ argument is that the Membership Acquisition 

Statute presupposes the existence of LLC members. Without existing members 

to either execute a written operating agreement or provide their written consent, 

a membership interest cannot be acquired directly from the LLC under the 

statute. Indeed, Indiana Code § 23-18-4-6(a) provides, “The initial operating 

agreement must be agreed to by all persons who are members at the time the 

initial agreement is accepted.” See generally Ind. Code § 23-18-1-16 (defining 

“operating agreement” as “any written or oral agreement of the members as to 

the affairs of a limited liability company and the conduct of its business that is 

binding upon all the members”).

[24] We therefore conclude the Membership Acquisition Statute does not control 

the establishment of an LLC’s initial membership. Moreover, we find no 

provision in the Act that specifically addresses the initial membership issue. 

This apparent omission seems to have originated in the American Bar 

Association’s Prototype Limited Liability Company Act (Prototype Act), on 

which Indiana’s Business Flexibility Act was later based, in part. David C. 

Worrell & Marci A. Reddick, The Indiana Business Flexibility Act (Limited Liability 

Companies), 27 Ind. L. Rev. 919, 925-26 (1994). 

[25] The Membership Acquisition Statute is identical to Prototype Act § 801.

Prototype Ltd. Liab. Co. Act § 801 (1992), reprinted in 3 Ribstein and Keatinge 

on Limited Liability Companies app. C (2d ed. 2014). And Prototype Act § 801 
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was based on a provision in Georgia’s Revised Uniform Limited Partnership 

Act (GRULPA). Id. § 801 cmt. Specifically, GRULPA § 301 provides:

[A] person may become a limited partner in a limited partnership 

. . . [i]n the case of a person acquiring a partnership interest 

directly from the limited partnership, upon compliance with the 

partnership agreement or, if the partnership agreement does not 

so provide in writing, upon the written consent of all partners. 

Ga. Code § 14-9-301 (1988).

[26] Like the Membership Acquisition Statute, GRULPA § 301 presupposes the 

existence of partners to either execute a written partnership agreement or 

provide their written consent to a person’s acquisition of a limited partnership 

interest directly from the limited partnership. But unlike the Membership 

Acquisition Statute, GRULPA expressly provides for the establishment of 

initial partners at the time of a limited partnership’s formation. See Ga. Code § 

14-9-101(9) (defining “partner” to include a “general partner”); id. § 101(5)(A) 

(defining “general partner” as a person who “[b]ecomes a general partner upon 

the formation of a limited partnership . . . .”); id. § 201(a) (requiring nothing 

more than the filing of a “certificate of limited partnership” to form a limited 

partnership); id. § 201(a)(3) (requiring the certificate of limited partnership to
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identify “[t]he name and the business address of each general partner.”).5

[27] Without a provision in the Business Flexibility Act that specifically addresses 

the initial membership issue, we have only the formation principles set forth 

above to guide us. Most notable among them is that an LLC must have at least 

one member at the time of its formation. See Ind. Code § 23-18-6-0.5; Ind. Code 

§ 23-18-9-1.1(c). From this, we conclude an LLC’s initial membership must be 

established before the company’s formation. And considering that the Act’s 

stated policy is, in part, “to give the maximum effect to the principle of freedom 

of contract,” Ind. Code § 23-18-4-13, we see no reason why a pre-formation oral 

contract cannot be the means of establishing that membership.

B. Genuine Issues of Fact Remain as to the Existence of a 

Pre-formation Oral Contract

[28] As for the existence of a pre-formation oral contract in this case, the designated 

evidence included Nemeth’s deposition testimony that he and the Panzica 

Brothers orally agreed to form NP3 as equal members. According to Nemeth, 

the four members’ capital contributions to the new LLC would be their 

respective services on the Nello Project, and they would “split” everything 

5 Notably, the American Bar Association’s Revised Prototype Limited Liability Company Act includes 

separate provisions for admitting a person as an LLC member “[i]n connection with the formation” of the 

company and “after formation” of the company. Revised Prototype Ltd. Liab. Co. Act § 401 (2011), reprinted 

in 3 Ribstein and Keatinge on Limited Liability Companies app. G.
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“equally,” including distributions. App. Vol. IV, pp. 153-54, 180. The evidence 

also included:

• NP3’s articles of organization, indicating that the LLC would be 

managed by its “Members,” plural, App. Vol. III, p. 25; 

• William Panzica’s email to the title company representative advising that 

“NP3, LLC (Nemeth and the 3 Panzica Brothers)” would ultimately be 

buying the land, App. Vol. IV, p. 226; and 

• The NELLO lease, which was signed by William as a “Member” of NP3 

and contained a Real Estate Broker’s Disclosure that also identified 

Nemeth and Thomas Panzica as NP3 members, App. Vol. III, 184-85. 

This evidence establishes a genuine issue of fact as to the existence of Nemeth’s 

alleged oral contract with the Panzica Brothers to form NP3 as equal members.

[29] Defendants claim Nemeth was required to designate evidence that he and the 

Panzica Brothers orally agreed to terms regarding the agreed value of their 

respective capital contributions and the allocation of NP3’s profits and losses. 

See generally Kelly v. Levandoski, 825 N.E.2d 850, 857 (Ind. Ct. App. 2005) (“If a 

party cannot demonstrate agreement on one essential term of the contract, then 

there is no mutual assent and no contract is formed.”).

[30] But such things are not essential to an LLC’s formation. Ind. Code § 23-18-2-

4(a); see Ind. Code § 23-18-4-8(a), (e) (generally requiring LLC to document 

agreed value of members’ capital contributions while also indicating that failure 

to comply has no effect on LLC formation or membership status); Ind. Code § 

23-18-4-5(2) (stating “[m]embers may enter into an operating agreement to . . . 
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establish . . . [t]he manner in which the members will share in distributions of 

the assets and the profits or losses of the limited liability company” (emphasis 

added)). Thus, we conclude the agreed value of each member’s capital 

contributions and the allocation of profits and losses were not terms essential to 

Nemeth’s alleged oral contract with the Panzica Brothers to form NP3.

[31] Because there exists a genuine issue of a material fact as to Nemeth’s breach of 

oral contract claim, the trial court erred by granting Defendants’ motion for 

summary judgment thereon.

II. Unjust Enrichment Claim

[32] Turning to the trial court’s bench trial judgment on Nemeth’s unjust enrichment 

claim, Nemeth argues that the court violated his right to a jury trial under the 

Indiana Constitution. Article 1, Section 20 provides that, “[i]n all civil cases, 

the right of trial by jury shall remain inviolate.” Ind. Const. art. 1, § 20. As our 

Supreme Court recently observed, “[t]his fundamental guarantee secures the 

right to a jury trial as it existed at common law at the time Indiana adopted its 

current constitution.” $2,435 in U.S. Currency, 220 N.E.3d 542, 545 (Ind. 2023)

(internal quotation omitted). For cases or claims tried in equity at that time, “it 

is a well-settled tenet that a party is not entitled to a jury trial.” Id.

[33] Indiana Trial Rule 38(A) embodies this principle, stating in pertinent part: 

“Issues of law and issues of fact in causes that prior to the eighteenth day of 

June, 1852, were of exclusive equitable jurisdiction shall be tried by the 
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court[.]” Thus, to determine whether Article 1, Section 20’s jury-trial right 

applies in a particular case, 

we first ask whether the cause of action existed in 1851. If so, 

then history settles the matter. But if the cause of action did not 

exist in 1851, we must decide whether the claim is analogous to 

one at law or one in equity, as those terms were then understood. 

$2,435 in U.S. Currency, 220 N.E.3d at 545 (internal citations omitted). 

“Whether certain claims are entitled to a trial by jury presents a pure question 

of law to which we apply a de novo standard of review.” Id. (internal quotation 

omitted).

[34] Nemeth argues that he was entitled to a jury trial on his unjust enrichment 

claim because it sought legal relief, in the form of damages, based on a theory 

of contract implied-at-law. Nemeth also claims the trial court’s finding of 

unclean hands did not render harmless the court’s failure to conduct a jury trial 

because the equitable doctrine of unclean hands is not available as a defense to 

a legal claim in Indiana. Again, we agree with Nemeth on both issues.

A. Nemeth Was Entitled to a Jury Trial on His Unjust 

Enrichment Claim

[35] Nemeth’s unjust enrichment claim incorporated the operative factual 

allegations of his complaint, including the following: 

In addition to originating the deal over the course of multiple 

years and then inviting the Panzicas to participate, Andrew 

Nemeth and Nemeth Properties contributed the value of their 

brokerage, financial, and development services in procuring the 
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lease with Nello Corporation and in overall development with 

Nello Corporation.

App. Vol. II, p. 51. Nemeth’s claim further alleged: “A measurable benefit has 

been conferred on the defendants by Andrew J. Nemeth” and “[u]nder the 

circumstances, the defendants’ retention of the benefit without payment would 

be unjust.” Id. at 55. 

[36] As Nemeth contends, the theory underlying his unjust enrichment claim is that 

of contract implied-at-law, also known as quasi-contract and quantum meruit. 

See Woodruff v. Ind. Fam. & Soc. Servs. Admin., 964 N.E.2d 784, 791 (Ind. 2012)

(stating that, to prevail on such a theory, “a plaintiff must establish that a 

measurable benefit has been conferred on the defendant under such 

circumstances that the defendant’s retention of the benefit without payment 

would be unjust”).

[37] This Court long ago recognized that contract implied-at-law, quasi-contract, 

and quantum meruit were “triable at law and not in equity” in 1851; therefore, 

a claimant was “entitled to jury trial upon them.” Nehi Beverage Co. v. Petri, 537 

N.E.2d 78, 85 (Ind. Ct. App. 1989). Indeed, our own research reveals that a 

court of law, not a court of chancery, was the “proper tribunal” to resolve a 

claim in the “nature of a quantum meruit” before Indiana adopted its current 

constitution in 1852. McKinney v. Springer, 6 Blackf. 511, 515 (1843).

[38] Defendants cite several cases for the proposition that unjust enrichment is an 

“equitable doctrine.” See, e.g., Galanis v. Lyons & Truitt, 715 N.E.2d 858, 861 
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(Ind. 1999) (“Quantum meruit is an equitable doctrine that prevents unjust 

enrichment . . . .”). But none concerned whether the claimant was entitled to a 

jury trial on the issue. Moreover, our Supreme Court has more recently 

explained that quantum meruit “is a legal fiction invented by the common-law 

courts in order to permit a recovery where, in fact, there is no contract, but 

where the circumstances are such that under the law of natural and immutable 

justice there should be a recovery as though there had been a promise.” 

Woodruff, 964 N.E.2d at 791 (cleaned up) (quoting Clark v. Peoples Sav. & Loan 

Ass’n, 221 Ind. 168, 171, 46 N.E.2d 681, 682 (1943)). 

[39] As similarly explained in Nehi, contract implied-at-law, quasi-contract, and 

quantum meruit are “legal fictions.” 537 N.E.2d at 85 (emphasis in original).

The theories were created by courts of law “to prevent unjust enrichment, 

thereby promoting justice and equity.” Id. But they provide a distinctly legal

remedy—money damages. Id. “Unjust enrichment . . . is but the equitable 

reason for requiring payment for value of goods and services received.” Id.

(emphasis in original).6

6

“The confusion with equity emanates from the decision of the King’s Bench in 1760 in the case of Moses v. 

Macferlan, 2 Burr. 1005, 97 Eng. Rep. 676, where Lord Mansfield stated that the defendant’s [quasi-contract]

obligation came ‘from the ties of natural justice’ founded in ‘the equity of the plaintiff’s case.’” Partipilo v. 

Hallman, 510 N.E.2d 8, 11 (Ill. Ct. App. 1987) (citing George E. Palmer, 1 Law of Restitution at 7-8 (1978)). 

“[T]he statement concerning the action of quasi-contract being equitable has been repeated many times, but 

merely refers to the way in which a claim should be approached ‘since it is clear that the action is at law and 

the relief given is a simple money judgment.’” Id. (quoting Palmer, supra at 9).
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[40] Accordingly, we conclude Nemeth was entitled to a jury trial on his unjust 

enrichment claim under Article 1, Section 20 of the Indiana Constitution.

B. The Denial of Nemeth’s Right to a Jury Trial Was Not 

Harmless Error

[41] Defendants argue that the failure to hold a jury trial on Nemeth’s unjust 

enrichment claim was harmless error. To evaluate harmlessness in this context, 

we consider “whether the trial court would have been required to enter a 

directed verdict had a jury trial been held, or whether a jury verdict in favor of 

the losing party could have been sustainable.” Corrigan v. Al-Trim Corp., 700 

N.E.2d 481, 484 (Ind. Ct. App. 1998); accord Midwest Fertilizer Co. v. Ag-Chem 

Equip. Co., 510 N.E.2d 232, 235 (Ind. Ct. App. 1987).

[42] Defendants do not contest that a jury could have found in Nemeth’s favor on 

his unjust enrichment claim. Rather, they claim the trial court would have been 

required to enter judgment in their favor based on its finding that Nemeth’s 

unclean hands precluded his recovery. According to Defendants, “unclean 

hands is an equitable doctrine decided by the court and may defeat both 

equitable and legal claims.” Appellees’ Br. p. 41. We disagree with the latter 

proposition.

[43] “[The unclean hands] doctrine is one of a number of maxims applied when 

deciding if a party who seeks equitable relief has behaved in a manner justifying 

that relief.” Woodruff v. Ind. Fam. & Soc. Servs. Admin., 964 N.E.2d 784, 792 n.5 

(Ind. 2012) (emphasis added). It requires that “he who seeks equity come into 
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court with clean hands and closes the door of a court of equity to one tainted 

with inequitableness or bad faith relative to the matter in which he seeks relief, 

however improper may have been the behavior of the defendant.” Id. (internal 

quotations and ellipses omitted).

[44] Of course, Indiana has long since abolished courts of equity and, with them, the 

distinction between actions at law and suits in equity. See generally Denny v. 

State, 203 Ind. 682, 182 N.E. 313, 316 (1932); see also Ind. Trial Rule 2(A)

(“There shall be one [1] form of action to be known as ‘civil action.’”). But the 

equitable doctrine of unclean hands has not crossed over to be available as a 

defense to a legal claim in Indiana. In both Elwood v. Parker, 77 N.E.3d 835, 838 

(Ind. Ct. App. 2017), and Bayview Loan Servicing, LLC v. Golden Foods, Inc., 59 

N.E.3d 1056, 1070 (Ind. Ct. App. 2016), this Court held that the unclean hands 

doctrine did not apply to a claimant seeking legal relief. See generally Am. 

Healthcare Admin. Servs., Inc. v. Aizen, 285 A.3d 461, 485-93 (Del. Ch. 2022)

(exploring the historical evolution of the unclean hands doctrine and evaluating 

its “moderate but not universal success in crossing the equity-law divide”).

[45] Our Supreme Court also hinted at the unavailability of uncleans hands as a 

defense to a legal claim in Woodruff, a quantum meruit case in which an 

intermediate care facility sought to recover Medicaid funds for care the facility 

gave its residents after losing its Medicaid certification due to “deplorable 

health conditions.” 964 N.E.2d at 787. Though recognizing the facility’s claim 

as a “common-law remedy,” the Court stated: “At the outset, the doctrine of 

‘unclean hands’ certainly gives us pause.” Id. at 792. The Court then noted that 
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the record “probably reflects enough wrongdoing on [the facility’s] part to deny 

it recovery on an equitable claim flowing from that wrongful conduct.” Id.

(emphasis added). But the Court ultimately held that the facility’s quantum 

meruit claim failed as a matter of law because the facility could not show that it 

expected Medicaid payments for any services it provided post decertification. 

Id. at 794.

[46] For the foregoing reasons, the trial court committed reversible error by sua 

sponte ordering a bench trial on Nemeth’s unjust enrichment claim.

Conclusion

[47] We reverse both the trial court’s entry of summary judgment in favor of 

Defendants on Nemeth’s breach of contract claim and its bench judgment in 

favor of Defendants on Nemeth’s unjust enrichment claim.

Altice, C.J., and Kenworthy, J., concur.

ATTORNEYS FOR APPELLANT

Carol Nemeth Joven

Ronald J. Waicukauski

Williams Law Group, LLC

Indianapolis, Indiana

ATTORNEYS FOR APPELLEE

John D. LaDue

Jonathan S. Lawson

SouthBank Legal LLC

South Bend, Indiana