Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 1 of 26

ATTORNEYS FOR APPELLANTS

Attorneys for Cheryl Underwood

Arend J. Abel

Michael W. McBride

Cohen & Malad, LLP

Indianapolis, Indiana

Attorney for Thomas Bunger as Personal 

Representative of the Estate of Kenneth 

K. Kinney

Scott D. Pankow

Indianapolis, Indiana

ATTORNEYS FOR APPELLEE

E. Paige Freitag

Jones, McGlasson & Freitag, P.C.

Bloomington, Indiana

Thomas E. Densford

Bauer & Densford

Bloomington, Indiana

IN THE

COURT OF APPEALS OF INDIANA

Thomas Bunger as Personal 

Representative of the Estate of 

Kenneth K. Kinney, and

Cheryl Underwood,

Appellants-Defendants,

v.

Sheree Demming,

Appellee-Plaintiff.

July 22, 2015

Court of Appeals Case No.

53A01-1409-PL-395

Appeal from the Monroe County 

Circuit Court; the Honorable Erik 

Allen, Special Judge;

53C06-0704-PL-873

53C01-0704-PL-873

May, Judge.
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 2 of 26

[1] Cheryl Underwood, a real estate broker, and the estate of her business partner 

Kenneth Kinney appeal a judgment for Sheree Demming. We affirm in part, 

reverse in part, and remand. 

Facts and Procedural History

[2] We summarized the facts1 of this case in Demming v. Underwood, where we 

reversed summary judgment for Underwood and Kinney and remanded for 

further proceedings: 

[3] Demming is a real estate investor in the business of acquiring 

properties in the Bloomington, Indiana area for remodeling, 

renovation, leasing, and sale. Demming, who has never held a 

realtor’s license, engaged Underwood’s professional services as a 

realtor to buy and sell properties on multiple occasions between July 

2002 and April 2007. During this time, Demming routinely discussed 

her real estate investment strategy with Underwood, including her 

plans to acquire multiple properties within a “target zone” near the 

Indiana University campus. 

[4] In 2002, Demming became particularly interested in purchasing two 

properties located within her target zone at 424 and 426 East Sixth 

Street (“the Properties”). The Properties were owned by Marion and 

Frances Morris (“the Morrises”), who lived out of state. Realtor Julie 

Costley (“Costley”) managed the Properties, which were not listed for 

sale. After discussing Demming’s interest in acquiring the Properties, 

Demming and Underwood agreed that the best strategy would be for 

Underwood to approach Costley with an offer on behalf of Demming, 

 

1

 As that was an appeal from a summary judgment, we presented the facts as those “most favorable to the 

non-moving party,” which was Demming. Demming v. Underwood, 943 N.E.2d 878, 882 (Ind. Ct. App. 

2011). As Demming later prevailed at trial, our standard of review again calls for a statement of facts in 

Demming’s favor. See, e.g., Jay Myoung Yoon v. Sunsook Yoon, 711 N.E.2d 1265, 1268 (Ind. 1999) (when trial 

court’s order includes findings of fact and conclusions of law pursuant to Trial Rule 52, we do not reweigh 

the evidence; rather we consider the evidence most favorable to the judgment with all reasonable inferences 

drawn in favor of the judgment). 
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because as a realtor, Costley would be obligated to relay an offer 

presented by another realtor to the Morrises.

[5] Underwood first presented an offer to Costley on Demming’s behalf in

the fall of 2002. After the offer was declined, Demming and 

Underwood “strategized” together on how Demming could acquire 

the Properties, and Underwood offered to contact Costley every few 

months to inquire about the Properties’ availability. Over the next few 

years, up until early 2007, Underwood contacted Costley on 

Demming’s behalf regarding the Properties “every four of [sic] five 

months.” Additionally, in May, August, and October 2006, 

Underwood contacted Costley to inquire into the availability of the 

Properties after Demming specifically instructed her to do so. While 

Underwood was not compensated for these services, “it was discussed 

and understood that . . . Underwood would be paid a real estate 

commission, at closing, in the customary amount of seven percent 

(7%) of the sales price.” However, unbeknownst to Demming, 

Underwood became interested in purchasing the Properties for herself 

after she acquired a neighboring property in May 2006.

[6] In February 2007, Demming again instructed Underwood to call 

Costley and inquire into the availability of the Properties for purchase. 

Underwood responded, “Sheree, she’s just not going to sell.”

Demming nevertheless insisted that Underwood contact Costley, and 

said that if Underwood refused, she would contact Costley herself. 

Underwood then agreed to call Costley, and when she did so, she 

asked Costley to contact Mrs. Morris, whose husband had recently 

passed away, to find out if she would be interested in selling. Costley 

responded that she would contact Mrs. Morris, but she expressed 

doubt as to whether Mrs. Morris would be willing to sell. The next 

day, Underwood told Demming that the Properties were not for sale. 

Demming instructed Underwood to “stay on it” because she believed 

that Mrs. Morris would be willing to sell in the near future.

[7] A few days later, Costley contacted Mrs. Morris, who instructed her to 

request that anyone interested in purchasing the Properties tender a 

written offer. When Costley informed Underwood that Mrs. Morris 

was willing to entertain an offer, Underwood did not relay this 

information to Demming. Instead, on March 9, 2007, Underwood 

and Kinney, acting as partners, tendered their own written offer to 

purchase the Properties. A counteroffer was tendered and accepted, 

pursuant to which Underwood and Kinney agreed to purchase the 
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Properties for $650,000. Underwood and Kinney closed on the 

transaction on March 30, 2007.

On April 14, 2007, Demming contacted Underwood after noticing one 

of Underwood’s “For Rent” signs in front of the Properties. 

Underwood and Demming met the next day, and Underwood informed 

Demming that she and Kinney had purchased the Properties.

On April 19, 2007, Demming filed suit against Underwood asserting 

claims for breach of fiduciary duty and constructive fraud. Demming 

also requested the imposition of a constructive trust compelling 

Underwood and Kinney to convey title of the Properties to her. 

943 N.E.2d 878, 882-83 (Ind. Ct. App. 2011) (citations omitted), reh’g denied, 

trans. denied.

[8] The trial court in Demming granted summary judgment for Underwood and 

Kinney on all claims. It determined, among other things, that there was no 

agency relationship between Demming and Underwood as a matter of law. 

Demming appealed, and we reversed on various grounds, including that there 

were genuine issues of material fact as to whether there was an agency 

relationship. Id. at 888. 

[9] On remand a trial was conducted and judgment was entered for Demming. 

The trial court imposed a constructive trust in Demming’s favor on the property 

based on the “existence and breach of an agency relationship between 

[Demming] and [Underwood], Underwood’s breach of common law, statutory 

and fiduciary duties that Underwood owed to Demming and Underwood’s 

fraudulent and deceptive conduct as well as the vicarious partnership liability 

imposed upon [Kinney].” (Appendix of Appellant Cheryl Underwood 
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(hereinafter “Underwood App.”) at 42). It awarded Demming damages, 

prejudgment interest, and attorney fees. 

Discussion and Decision

[10] After the trial on remand, the trial court entered findings of fact and conclusions 

thereon. When a trial court does so pursuant to Indiana Trial Rule 52, we 

apply the following two-tier standard of review: whether the evidence supports 

the findings of fact, and whether the findings support the conclusions. Crider v. 

Crider, 15 N.E.3d 1042, 1052 (Ind. Ct. App. 2014), trans. denied. We will set 

aside findings of fact only if they are clearly erroneous, which occurs if the 

record contains no facts to support a finding either directly or by inference. Id.

We defer to the trial court’s ability to assess the credibility of witnesses and will 

not reweigh the evidence, and we must consider only the evidence most 

favorable to the judgment along with all reasonable inferences drawn in favor of 

the judgment. Id. It is not enough that the evidence might support some other 

conclusion; it must positively require the conclusion contended for by appellant 

before there is a basis for reversal. Id. A judgment also is clearly erroneous if it 

relies on an incorrect legal standard, and we do not defer to a trial court’s legal 

conclusions. Id. 

Common-Law Agency Relationship

[11] The trial court’s determination that Underwood and Demming had an agency 

relationship is not clearly erroneous. An agency relationship is one that results 

from a “manifestation of consent by one person to another that the other shall 
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act on his behalf and subject to his control, and consent by the other so to act.” 

Turner v. Bd. of Aviation Comm’rs, 743 N.E.2d 1153, 1163 (Ind. Ct. App. 2001)

(quoting Dep’t of Treasury v. Ice Serv. Inc., 220 Ind. 64, 67–68, 41 N.E.2d 201, 203 

(1942)), trans. denied. It arises from the consent of the parties in the form of a 

contractual agreement, but it is not necessary that the contract or the authority 

of the agent to act be in writing. Id. It is necessary that the agent be subject to 

the control of the principal with respect to the details of the work. Id.

[12] To establish an agency relationship, three elements must be shown: (1) 

manifestation of consent by the principal, (2) acceptance of authority by the 

agent, and (3) control exerted by the principal over the agent.2 Demming, 943 

N.E.2d at 883. These elements may be proven by circumstantial evidence. Id.

Whether an agency relationship exists is generally a question of fact. Id.

[13] In Demming, we determined the evidence that Underwood made multiple 

inquiries into the availability of the Properties on Demming’s behalf over a 

period of more than four years supported an inference that Underwood agreed

 

2

 Underwood does not address the elements of an agency relationship we articulated in Demming. Instead, 

relying on decisions addressing real estate broker employment contracts, she argues she was not Demming’s 

agent because “there was no consideration and no meeting of the minds on the essential terms of the 

agreement.” (Br. of Appellant Cheryl Underwood (hereinafter “Underwood Br.”) at 15.) We decline 

Underwood’s invitation to engraft onto the elements of an agency relationship as articulated in Demming the 

additional contract elements of consideration and meeting of the minds. See Restatement (Third) Of Agency § 

1.01 (2006) (“the consensual aspect of agency does not mean that an enforceable contract underlies or 

accompanies each relation of agency”). 
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to act as her agent and created a genuine issue of material fact precluding 

summary judgment:

After first becoming interested in purchasing the Properties in 2002, 

Demming asked Underwood to approach Costley with an offer to 

purchase, and Underwood complied. After that offer was rejected, 

Demming and Underwood devised a plan for Demming to acquire the 

Properties. In accordance with this plan, Underwood approached 

Costley every few months to inquire into the Properties’ availability for 

purchase. In May, August, and October 2006, and again in February 

2007, Underwood contacted Costley to inquire into the availability of 

the Properties after Demming specifically instructed her to do so. This 

evidence, when taken together, supports an inference that Underwood 

agreed to act as Demming’s agent for the purpose of acquiring the 

Properties.

Id. at 884.

[14] We also determined there was an issue of fact as to whether Demming exerted 

sufficient control over Underwood. Id. at 885. To satisfy the control element, 

“[i]t is necessary that the agent be subject to the control of the principal with 

respect to the details of the work.” Id. (quoting Turner, 743 N.E.2d at 1163).

However, the principal need not exercise complete control over every aspect of 

the agent’s activities within the scope of the agency. Id. 

[15] We noted Demming instructed Underwood to make contact with Costley and 

Underwood complied: 

Moreover, Demming did more than just dictate the desired result of 

the agency, i.e. Demming’s purchase of the Properties. She also 

dictated the strategy by which Underwood was to accomplish this 

result, namely, by continually contacting Costley, who would in turn 

contact the owners. 
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[16] While it is true that Demming did not give Underwood the authority 

to negotiate the purchase of the Properties without further 

consultation, this fact does not establish a lack of control on 

Demming’s part. Indeed, when this evidence is properly construed in 

favor of Demming in accordance with our standard of review, it gives 

rise to the inverse inference that Demming had the right to exercise 

extensive control over the details of Underwood’s performance, 

including when and how to make an offer to purchase. We therefore 

conclude that the designated evidentiary materials create a genuine 

issue of material fact regarding whether Demming exercised sufficient 

control over Underwood’s activities to support the existence of an 

agency relationship. 

Id. at 884-85. 

[17] On remand, the evidence before the trial court permitted its determination 

Underwood was Demming’s agent. Since 2002, Demming had, on several 

occasions, engaged Underwood’s services as a real estate broker. Because of 

that prior relationship, Demming testified “it was logical for me to then reach 

out to her and say, hey, I’d like to talk with you about these properties on Sixth 

Street that I’d like to purchase.” (Tr. at 80.) Demming explained in her 

testimony why she believed the only way to have her offer presented to the 

owners of the properties “was by having a realtor represent me and present an 

offer . . . [a]nd that’s what I respectfully did.” (Id. at 78-79.) Underwood 

suggested to Demming that Underwood should contact Costley, who managed 

the Properties for the owner, “every four or five months on [Demming’s] behalf 

from Two Thousand Two on.” (Id. at 121.) Deming testified Underwood “sat 

in my living room with me and strategized about the best way I could get those 

properties.” (Id.) Underwood would have been paid a commission had 

Demming acquired the properties. Demming presented sufficient evidence to
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permit the trial court’s determination Demming manifested her consent to the 

agency relationship, Underwood accepted the authority, and Demming exerted 

control over Underwood as her agent. 

Statutory Agency Relationship

[18] An agency relationship between Demming and Underwood was not precluded 

by an Indiana Code provision addressing whether a real estate licensee has an 

agency relationship with an individual: 

A licensee has an agency relationship with, and is representing, the

individual with whom the licensee is working unless:

(1) there is a written agreement to the contrary; or

(2) the licensee is merely assisting the individual as a customer without 

compensation. 

Ind. Code § 25-34.1-10-9.5(a). The trial court determined the services 

Underwood provided “exceed the casual services which may be provided by a 

real estate broker to merely assist an individual as a customer without 

compensation.” (Underwood App. at 38.) 

[19] We analyzed this “nearly opaque” statute in Demming, 943 N.E.2d at 888-90. 

There, the trial court concluded as a matter of law that no statutory agency 

relationship was formed between Demming and Underwood. On appeal, we 

determined there was an issue of fact as to that question: 

[20] The interpretation of a statute is a pure question of law and is reviewed 

under a de novo standard. Herron v. State, 729 N.E.2d 1008, 1010 (Ind.

Ct. App. 2000), trans. denied. In statutory construction, our primary 

goal is to ascertain and give effect to the intent of the legislature. Gray 

v. D & G, Inc., 938 N.E.2d 256, 259 (Ind. Ct. App. 2010). The 
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language of the statute itself is the best evidence of legislative intent, 

and we must give all words their plain and ordinary meaning unless 

otherwise indicated by statute. Id.

[21] Moreover, statutes in derogation of common law will be strictly 

construed, particularly when the statute affects a common-law right or 

duty. Bartrom v. Adjustment Bureau, Inc., 618 N.E.2d 1, 10 (Ind.1993). 

We presume that when the legislature enacts a statute, it is aware of 

the common law and does not intend to make any change in it beyond 

what it declares either in express terms or by unmistakable implication. 

Id. Thus, in cases of doubt, we will construe a statute as not changing 

the common law. Id. 

[22] Turning to the task before us, we first note that the pertinent Indiana 

Code chapter is entitled Real Estate Agency Relationships (“the 

Agency Chapter”). Ind. Code ch. 25-34.1-10. Section 9.5(a) of the 

Agency Chapter provides that a real estate licensee has an agency 

relationship with the individual with whom the licensee is working, 

unless: “(1) there is a written agreement to the contrary; or (2) the

licensee is merely assisting the individual as a customer without 

compensation.” Neither party contends that Demming and 

Underwood had entered into any sort of written agreement. Thus, in 

order to determine that Underwood was not Demming’s agent, we 

must conclude that Underwood was assisting Demming as a customer 

without compensation. 

[23] The definition of “customer” within the Agency Chapter provides us 

with little guidance. “Customer” is defined in the negative, as “a 

person who is provided services in the ordinary course of business by a 

licensee but who is not a client.” Ind. Code § 25-34.1-10-6 (2010). 

Thus, to classify Demming as a customer, we must exclude her as 

Underwood’s client. A “client” is defined as “a person who has 

entered into an agency relationship with a licensee.” Ind. Code § 25-

34.1-10-5 (2010).

[24] These definitions highlight the perplexities inherent in the Agency 

Chapter. Section 25-34.1-10-9.5(a)(2) provides that a real estate 

licensee has an agency relationship with and is representing the person 

with whom the licensee is working unless the licensee is assisting that 

person as a customer without compensation. But a customer is 

someone who is not a client, and client is defined as someone who has 

entered into an agency relationship with a licensee. Thus, under 
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section 25-34.1-10-9.5(a)(2), a person with whom a licensee is working 

is a client unless he or she is not a client and is not paying for the 

licensee’s services.

[25] Adding another layer of difficulty is Indiana Code section 25-34.1-10-

0.5 (2010), which separately defines “agency relationship” as “a 

relationship in which a licensee represents a client in a real estate 

transaction.” “Real estate transaction” is defined as “the sale or lease 

of any legal or equitable interest in real estate.” Ind. Code § 25-34.1-

10-8 (2010). 

[26] In concluding that Demming was merely a customer, the trial court 

rested on the statutory definition of real estate transaction set forth in 

section 25-34.1-10-8. Specifically, the trial court found that “a ‘cold 

call’ to inquire whether certain real estate, not otherwise on the 

market, could be purchased is not ‘the sale or lease any legal or 

equitable interest in real estate’; therefore, there was no ‘real estate 

transaction.’” Appellant’s App. p. 15. Likewise, the Defendants argue 

that Demming could not be Underwood’s client because the Properties 

were not for sale when Underwood contacted Costley and, in their 

view, this precludes a conclusion that Underwood was representing 

Demming in a real estate transaction. Demming, however, argues that 

this conclusion constitutes an unduly restrictive interpretation of the 

statutory definitions of real estate transaction and agency relationship. 

We agree.

[27] In order to dispose of the issues before us on review of a granted 

motion for summary judgment, we need not fully explore the interplay 

between the presumption in favor of the existence of an agency 

relationship set forth in section 25-34.1-10-9.5 and the definition of 

agency relationship set forth in section 25-34.1-10-0.5, along with its 

requirement that the purported agent be representing the client in a 

real estate transaction. It is enough for us to note that the statutory 

definition of real estate transaction contains no requirement that the 

real estate at issue be listed for sale, and it is not our prerogative to 

engraft such a requirement into the statute. Thus, the fact that the 

Properties were not listed for sale at the time Underwood contacted 

Costley does not necessarily preclude a conclusion that Underwood 

was Demming’s agent under the Agency Chapter.

[28] Furthermore, we disagree with the trial court’s characterization of 

Demming and Underwood’s relationship as one in which Underwood 
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merely made “a ‘cold call’” to determine whether the Properties were 

available. Our evidence most favorable to Demming as the nonmovant establishes that the two strategized together and formulated a 

plan for Demming to acquire the Properties. Pursuant to this plan, 

Underwood made multiple contacts with Costley to determine 

whether the Properties were available over a period of more than four 

years, all in furtherance of Demming’s stated desire to purchase the 

Properties.

[29] This evidence easily supports an inference that Underwood was 

actively representing Demming in the pursuit of a real estate 

transaction that had not yet come to fruition. We conclude that this 

showing is sufficient to establish a genuine issue of material fact as to 

whether Underwood was representing Demming in a real estate 

transaction for the purposes of sections 25-34.1-10-0.5 and -8. To hold 

that no real estate transaction occurs and that, consequently, no 

agency relationship is established until a sale or lease of real estate is 

actually consummated would be to completely sever the statutory real 

estate agency relationship from its common law roots, a step we will 

not take in the absence of a clear contrary pronouncement from the 

legislature. 

[30] The Defendants also make much of the fact that Underwood received 

no compensation from Demming for her repeated contacts with 

Costley. According to the Defendants, no agency can be formed under 

the Agency Chapter where a licensee merely performs gratuitous 

services. However, the plain language of the statute does not support 

this assertion. Although section 25-34.1-10-9.5(a)(2) provides that a 

real estate licensee has an agency relationship with the person with 

whom the licensee is working unless the licensee is assisting that 

person as a customer without compensation, there is no requirement 

that an individual compensate a licensee for his or her services in order 

to qualify as a client. See I.C. § 25-34.1-10-5. And in any event, 

review of the facts most favorable to Demming as the non-movant 

establishes that Underwood was to be paid in the customary manner 

for realtors; that is, she would receive a commission of seven percent 

of the purchase price at closing. Thus, Underwood’s own action in 

purchasing the Properties for herself prevented her from being 

compensated. For all of these reasons, we conclude that the trial court 

erred when it concluded as a matter of law that no statutory agency 

relationship existed between Demming and Underwood. 
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Demming, 943 N.E.2d at 890 (footnote omitted). 

[31] We cannot find erroneous the trial court’s determination Underwood provided 

services beyond merely “assisting [Demming] as a customer without 

compensation.” As explained above, Demming engaged Underwood to help 

her pursue the purchase of the Properties because she believed she needed a real 

estate broker to present an offer the sellers would consider. Underwood made a 

number of inquiries on Demming’s behalf over a period of several years. There 

was evidence Demming would have paid Underwood a standard commission 

had Underwood negotiated a purchase for Demming. Ind. Code § 25-34.1-10-

9.5(a) does not preclude the trial court’s determination Underwood was 

Demming’s agent. 

Broker’s Duty

[32] Ind. Code § 25-34.1-10-11 provides: 

A licensee representing a buyer or tenant may: (1) show properties in 

which the buyer or tenant is interested to other prospective buyers or 

tenants and may show competing buyers or tenants the same property 

or assist other buyers or tenants in purchasing or leasing a particular 

property without breaching any duty or obligation to the buyer or 

tenant. 

[33] Underwood argues the term “other prospective buyers” is general enough to 

include herself as the licensee, so she could buy the properties without 

breaching any duty to Demming. Underwood relies on Turner v. Kent, 15 

N.E.3d 67, 71 (Ind. Ct. App. 2014) (in construing statutes, “[w]ords are to be 

given their plain, ordinary, and usual meaning,” and “[i]t is just as important to 
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recognize what the statute does not say as it is to recognize what it does say”),

trans. denied. 

[34] We rejected Underwood’s argument in Demming. There, as here, Underwood 

argued that because the plain meaning of the statute does not prohibit the 

practice, it must necessarily permit it. We “strongly disagree[d].” 943 N.E.2d 

at 891.

[35] Under our common law of agency, it is axiomatic that an agent has a 

duty to act solely for the principal’s benefit and may not place herself 

in a position where her own interests are potentially antagonistic to 

those of the principal. In enacting section 25-34.1-10-11(e), the 

legislature made no clear declaration or unmistakable implication that 

it intended to abandon this fundamental principle and allow real estate 

licensees representing buyers to purchase properties “out from under” 

their clients. Rather, the statute takes the smaller step of allowing real 

estate licensees to represent multiple buyers who are interested in the 

same parcel. And there is a good reason for this distinction; a licensee 

representing multiple buyers presumably has no personal stake in 

which buyer ultimately purchases the parcel, and therefore has no 

incentive to treat any of them unfairly. But if the licensee herself 

wishes to purchase the parcel, this desire introduces an element of 

competition between the licensee and client, and such a conflict of 

interest may lead to abuses by the licensee. We therefore conclude 

that Indiana Code section 25-34.1-10-11(e) does not allow a licensee 

representing a buyer to purchase properties during the course of the 

agency with respect to which he or she has acted as the buyer’s agent 

and in which the client has expressed interest.

Id. at 891-92 (citations omitted). We decline to revisit our Demming analysis. 

Calculation of Damages

[36] Underwood argues the trial court erred in its calculation of damages because it 

included “partnership draws” as revenue and excluded “reasonable expenses” 
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in the form of Underwood’s legal fees. (Underwood Br. at 22.) Generally, the 

computation of damages is a matter within the sound discretion of the trial 

court. Marathon Oil Co. v. Collins, 744 N.E.2d 474, 481 (Ind. Ct. App. 2001). A 

damage award will not be reversed upon appeal unless it is based on insufficient 

evidence or is contrary to law. Id. In determining whether the award is within 

the scope of the evidence, we may not reweigh the evidence or judge the 

credibility of witnesses. Id. 

[37] Evidence of profits is not “open to the objection of uncertainty where there is 

testimony which, while not sufficient to put the amount beyond doubt, is 

sufficient to enable the [factfinder] to make a fair and reasonable finding with 

respect thereto.” Lees Inns of Am., Inc. v. William R. Lee Irrevocable Trust, 924 

N.E.2d 143, 160 (Ind. Ct. App. 2010) (quoting Jerry Alderman Ford Sales, Inc. v. 

Bailey, 154 Ind. App. 632, 652, 291 N.E.2d 92, 106 (1972), clarified on other 

grounds on reh’g), trans. denied. Doubts and uncertainties as to the proof of the 

exact measure of damages must be resolved against the defendant because 

justice and public policy require that the wrongdoer bear the risk of uncertainty 

that his own wrong has created. Id. The rationale for leniency in proving 

damages where a breach of duty has occurred is that the breaching party must 

be required to bear all the consequences of his conduct. Id. 

[38] We cannot find an abuse of discretion. We note Underwood offers no legal 

authority in support of her argument other than citation to two decisions for the 

premise “net profits are defined as revenue less expenses.” (Underwood Br. at 

23) (citing Indiana & Michigan Elec. Co. v. Terre Haute Indus., Inc., 507 N.E.2d 588 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 16 of 26

(Ind. Ct. App. 1987) reh’g denied, trans. denied, and Arthur Jordan Co. v. Caylor, 36 

Ind. App. 640, 76 N.E. 419 (1905)). But that standard does not control in the 

case before us, where damages were awarded not for breach of contract, but for 

Underwood’s breach of fiduciary obligations. In the latter situation, “when the 

basis of liability is a failure to conform to a fiduciary duty, the measure of 

damages is the entire loss sustained.” W & W Equip. Co. v. Mink, 568 N.E.2d 

564, 576 (Ind. Ct. App. 1991) reh’g denied, trans. denied. When a fiduciary 

misappropriates property, the victim is entitled to the property and “all the 

fruits of such property.” Winstandley v. Second Nat. Bank of Louisville, Ky., 13 

Ind. App. 544, 41 N.E. 956, 957 (1895). 

[39] While the trial court might have mischaracterized the basis for its calculation of 

damages as “net profits,” (Underwood App. at 52), we cannot find the trial 

court erred to the extent it determined the “partnership draws” should be 

included as the “fruits” of the property Underwood and Kinney

misappropriated. “Partnership draw is nothing more than a form of 

compensation whereby partners, pursuant to an agreement, take money from a 

partnership drawing account on a periodic basis as salary or as a share of profits 

from the enterprise.” Gerst v. Gerst, 135 Misc. 2d 112, 113, 514 N.Y.S.2d 587, 

587 (Sup. Ct. 1987).

3

 

 

3

 Underwood asserts partnership draws have “no relationship to the income or expenses of a partnership. 

They can reflect returns of capital, the proceeds of refinancings, or repayment of loans the partners have 

made to a partnership. Nor are they any reliable evidence of what [Demming] supposedly lost by not owning 

the properties from 2007-2012.” (Underwood Br. at 23.) Underwood offers no citation to the record or to 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 17 of 26

Attorney’s Fees

[40] The trial court determined Demming was entitled to attorney fees because of 

“fraudulent and deceptive conduct by Underwood and Kinney and a breach of 

fiduciary duties, in the context of a constructive trust.” (Underwood App. at 

56.) Kinney and Underwood argue that was error because the parties had no 

agreement regarding attorney fees and no statute provides for such an award in 

a situation like this. 

[41] We review a decision to grant attorney fees for an abuse of discretion. R.L. 

Turner Corp. v. Town of Brownsburg, 963 N.E.2d 453, 457 (Ind. 2012). Indiana 

generally adheres to the American rule that a party must pay his own attorney 

fees absent an agreement between the parties, a statute, or other rule to the 

contrary. Id. at 458. “The right to recover attorneys’ fees from one’s opponent 

does not exist in the absence of a statute or some agreement, though a court of 

equity may, under some circumstances, allow attorneys’ fees to be paid out of a 

fund brought under its control.” State Bd. of Tax Comm’rs v. Town of St. John, 751 

N.E.2d 657, 659 (Ind. 2001) (quoting Gavin v. Miller, 222 Ind. 459, 465, 54 

N.E.2d 277, 280 (1944)). Equity permits an award of attorney fees under the 

 

legal authority to support her assertion the partnership draws in the case before us were unrelated to the 

income from the Properties or should otherwise be excluded as the fruits of the misappropriation of the 

Properties. We therefore decline to reverse on that ground. See Indiana Appellate Rule 46(A)(8) (“The 

argument must contain the contentions of the appellant on the issues presented supported by cogent 

reasoning. Each contention must be supported by citations to the authorities, statutes, and the Appendix or 

parts of the Record on Appeal relied on.”). A party waives an issue where the party does not develop a 

cogent argument or provide adequate citation to authority and portions of the record. Smith v. State, 822 

N.E.2d 193, 202-03 (Ind. Ct. App. 2005), trans. denied.
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 18 of 26

circumstances before us, and we cannot say the award was an abuse of 

discretion. 

[42] In In re Bender, 844 N.E.2d 170, 185 (Ind. Ct. App. 2006), trans. denied, we 

affirmed an award of attorney fees where a personal representative breached his 

fiduciary duty to an estate and the court had imposed a constructive trust to 

recover property the personal representative had improperly transferred from 

the estate. There, the probate court imposed a constructive trust to pull back 

into the estate property that had been improperly transferred from the estate. 

[43] We noted a constructive trust is an equitable remedy: 

To fully compensate [the beneficiary] for the loss caused by [the 

personal representative’s] breach of fiduciary duty in administering the 

Estate, equity demands that [the personal representative] should pay 

for the attorney fees incurred to prevent [the personal representative] 

from acting outside his fiduciary powers. Otherwise, the only 

deterrent to [the personal representative] acting outside the bounds of 

his powers is the chance that any improper transfer, and the profits 

derived therefrom, will be placed in a constructive trust. The probate 

court did not err in citing to the Trust Code4 to support an award of 

attorney fees. A personal representative, like a trustee, is a fiduciary 

who acts on behalf of the beneficiary. It was proper for the probate 

court to conclude that attorney fees available for a fiduciary’s 

 

4

 We upheld the award of attorney fees in Bender even though there was nothing in the probate code that 

authorized the recovery of attorney fees in a case such as that one. But the trial court there noted “[w]hen a 

trustee commits a breach of trust, the trustee is liable to the beneficiary for reasonable attorney fees incurred 

by the beneficiary in bringing an action on the breach.” 844 N.E.2d at 184 (citing Ind. Code § 30-4-3-11(b)). 

We went on to say that section of the trust code “applies to the fiduciary obligations of a personal 

representative to an estate, its creditors, and beneficiaries.” Id. at 185 (citing Fall v. Miller, 462 N.E.2d 1059, 

1062 (Ind. Ct. App. 1984)). As the trial court imposed a constructive trust as part of Demming’s remedy,

Underwood and Kinney were trustees too. 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 19 of 26

wrongdoing in a trust are equally available for a fiduciary’s 

wrongdoing in an estate, and that these fees should be paid by the 

fiduciary personally. The trial court did not err in granting attorney 

fees to be paid by [the personal representative] to [the beneficiary].

Id. (footnote added).

[44] Similarly, the trial court in the case before us imposed a constructive trust as a 

remedy for the breach of Underwood’s and Kinney’s fiduciary duties. An 

agency relationship is confidential and fiduciary, and the agent is obliged to 

exercise the utmost good faith. Bopp v. Brames, 713 N.E.2d 866, 871 (Ind. Ct. 

App. 1999), trans. denied. Unless otherwise agreed, an agent owes a duty to his 

principal to act solely for the principal’s benefit. Id. We decline to find an 

abuse of discretion in the award of attorney fees to Demming. 

Prejudgment Interest

[45] The trial court awarded Demming prejudgment interest of $10,503.26. 

Underwood argues that was error because Demming did not make a qualified 

settlement offer. For the prejudgment interest statute to apply, a plaintiff must 

make a written offer of settlement to a party against whom the claim is filed 

within one year of filing the claim in court. Ind. Code § 34-51-4-6; Wisner v. 

Laney, 984 N.E.2d 1201, 1209 (Ind. 2012). 

[46] Underwood asserts there was no such offer. Demming concedes prejudgment 

interest was not warranted, and asks us to “reduce the total judgment to 

$144,357.38, which equals the damages awarded less the prejudgment interest 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 20 of 26

portion.” (Appellee’s Br. at 32 n.2.) We accordingly remand so the trial court 

may recalculate the damages to exclude prejudgment interest. 

Kinney’s Notice of a Claim for Money Damages

[47] After we remanded for trial, Kinney moved for judgment on the pleadings on 

the ground he did not have adequate notice there was a claim against him for 

money damages.5

 The denial of his motion was not error. 

[48] The bench trial in this litigation was bifurcated. After the liability phase was 

completed, Kinney filed a “Motion for Judgment on the Pleadings as to any

purported claim for money damages,” (Appendix of Appellant Thomas Bunger 

as Personal Representative of the estate of Kenneth K. Kinney (hereinafter 

“Kinney App.”) at 44), on the first day of the damages phase.6

 He alleged in his

motion that Demming’s only demand for relief against Kinney was an order 

transferring his interest in the Properties to Demming, and Demming sought 

money damages only from Underwood. 

 

5

 Kinney died after the trial court entered its judgment and his estate was substituted as a party in this appeal. 

6

 Demming filed her complaint on April 19, 2007. It appears Kinney filed his motion for judgment on the 

pleadings over six years later, on June 21, 2013, but the copy Kinney provided in his appendix does not have 

a file stamp. (Kinney App. at 44.) 

 Ordinarily, a motion for judgment on the pleadings should be made “promptly after the close of the 

pleadings” or the court may refuse to hear the motion on the ground that its consideration will delay or 

interfere with the commencement of the trial. Cain v. Bd. of Comm’rs of Cass Cnty., 491 N.E.2d 544, 546 (Ind. 

Ct. App. 1986). The determination whether the motion amounts to a delay of trial is within the discretion of 

the trial judge. Id. But if it seems clear the motion may effectively dispose of the case, the court should 

permit it regardless of any possible delay its consideration may cause. Id. 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 21 of 26

[49] Ind. Trial Rule 8 defines the general rules of pleading. It states that “a pleading 

must contain . . . a short and plain statement of the claim showing that the 

pleader is entitled to relief, and . . . a demand for relief to which the pleader 

deems entitled. Relief in the alternative or of several different types may be 

demanded.” T.R. 8(A). A plaintiff is not rigidly limited to argue only the 

theory of recovery she sets out in her complaint. See, e.g., Buell v. Budget Rent-ACar of Ind., Inc., 151 Ind. App. 21, 24, 277 N.E.2d 798, 800 (1972) (rejecting 

argument a judgment did not conform to the pleadings because the complaint 

was solely for declaratory relief but the judgment entered was a money 

judgment). 

[50] Notice pleading merely requires pleading the operative facts in order to place 

the defendant on notice as to the evidence to be presented at trial. Noblesville 

Redevelopment Comm’n v. Noblesville Assocs. Ltd. P’ship, 674 N.E.2d 558, 563 (Ind. 

1996). Therefore, whether a complaint sufficiently pleads a certain claim turns 

on whether the opposing party has been sufficiently notified concerning the 

claim so as to be able to prepare to meet it. Id. at 563-64. A complaint’s 

allegations are sufficient if they put a reasonable person on notice as to why the 

plaintiff sues. Id. at 564. For the defendant to make efficient and educated 

legal decisions regarding its case, the complaint must put the defendant on 

notice concerning why it is potentially liable and what it stands to lose. Id. 

[51] Kinney had such notice, even though in her original complaint dated April 19, 

2007, Demming stated she “prays for judgment against Underwood for 

damages [and] for an order compelling Underwood and Kinney to convey the 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 22 of 26

Real Estate to Demming.” (Kinney App. at 31.) In November 2011, Kinney, 

Underwood, and Demming stipulated the proceedings would be bifurcated into 

a liability trial and a damages trial. Kinney did not assert at that time that the 

damages trial would be limited to Underwood only or that any judgment 

against him would be in rem only. In May 2012, over a year before Kinney’s 

motion for judgment on the pleadings, the trial court issued its judgment on 

liability, where it determined Kinney was vicariously liable for Underwood’s 

fraudulent acts. It ordered there would be additional proceedings to “determine

an appropriate measure of damages to be awarded in favor of [Demming] and 

against the defendants, Cheryl Underwood and Kenneth Kinney.” (Underwood App. 

at 42) (emphasis added). 

[52] In June 2012, Kinney sought discovery from Demming and in her response to 

Kinney’s interrogatories Demming said her claim for damages included “net 

profits retained by the Defendants during the time they owned and managed 

[the Properties].” (Appellee’s App. at 28.) Demming said in her response she 

expected to call Kinney as a witness at the damages trial. Demming submitted 

documents in response to Kinney’s request for “[t]rue, complete, and authentic 

copies of any and all documents in support of Your request for damages,”7

 (Id. at 

33) (emphasis added), and for “[a]ny and all exhibits to be used at any future 

damages trial in this cause.” (Id. at 34.) Kinney had adequate notice Demming

 

7

 That language is from Demming’s response to Kinney’s request. Each party submitted an Appendix, but 

none appears to include Kinney’s request for production of documents. 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 23 of 26

was claiming damages from him and he had an opportunity to prepare a 

defense to such claim. 

Kinney’s Vicarious Liability

[53] The trial court determined Kinney was vicariously liable for Underwood’s 

actions. The doctrine of vicarious liability as it applies to general partnerships is 

an effect of the rule that each partner is the agent of the others. Demming, 943 

N.E.2d at 895. Under the doctrine, a partnership is liable for the actions of any 

one of its members in conducting the partnership business. Id; and see Ind.

Code § 23-4-1-13 (partnership is liable for wrongful acts or omissions of any 

partner acting in the ordinary course of the business of the partnership or with 

the authority of his copartners); Ind. Code § 23-4-1-15 (partners are jointly and 

severally liable for everything chargeable to the partnership under Indiana Code 

section 23-4-1-13).

[54] A partnership is an association of two or more persons to carry on as co-owners 

of a business for profit. Life v. F.C. Tucker Co., 948 N.E.2d 346, 351 (Ind. Ct. 

App. 2011). A “person” may be an individual, partnership, limited liability 

company, corporation, or other association. Id. at 351-52. The two 

requirements of a partnership are: (1) a voluntary contract of association for the 

purpose of sharing profits and losses which may arise from the use of capital, 

labor, or skill in a common enterprise; and (2) an intention on the part of the 

parties to form a partnership. Id. at 352. 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 24 of 26

[55] Kinney argues he should not be vicariously liable for Underwood’s acts because 

they had not yet become partners in a business to own and lease the Sixth Street 

properties. We rejected that argument in Demming: 

[T]he Defendants argue that although Kinney and Underwood are 

now partners in a business to own and lease the Properties, Kinney is 

not vicariously liable for Underwood’s alleged breach of fiduciary duty 

and constructive fraud because the partnership had not yet been 

formed at the time that Underwood first made an offer to purchase the 

Properties. However, Underwood testified in her deposition that the 

partnership existed at the time she tendered the first offer to purchase 

on March 9, 2007. 

* * * * * 

The Defendants’ argument that the partnership had not yet been 

formed when Underwood first made an offer to purchase the 

Properties is simply an invitation for this court to consider the 

evidence and inferences least favorable to Demming, which we will 

not do. 

943 N.E.2d at 895-96. 

[56] In the case before us, there was evidence to support the trial court’s 

determination Kinney and Underwood were partners when the Properties were 

purchased and Kinney was therefore vicariously liable for Underwood’s 

actions. Underwood and Kinney had owned and managed rental properties 

together before they bought the Sixth Street properties. On March 9, 2007, 

Underwood told Kinney she was going to buy the Properties and “she needed a 

partner and wondered if I was interested.” (Appellee’s App. at 40.) That same 

day, Kinney went to a bank and completed a personal financial statement to 

determine “whether we could raise the funds or what, what we could do.” (Id. 

at 44.) 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 25 of 26

[57] The existence of a partnership is generally a question of fact. Curves for Women 

Angola v. Flying Cat, LLC, 983 N.E.2d 629, 632 (Ind. Ct. App. 2013). Because 

the present action was tried before the judge without a jury, the trial court was

the finder of fact. We will disturb the findings of fact only when they are clearly 

erroneous – that is, if the record reveals no facts or inferences on which the trial 

court could have based its findings. Id. Underwood and Kinney had been 

partners in real estate purchases in the past. Underwood told Kinney she 

needed a partner to purchase the Properties and she asked if Kinney was 

interested. Kinney took steps that day to obtain financing. When Demming

learned Underwood had bought the Properties, she asked Underwood “who did 

you take on as a partner,” (Tr. at 126), and Underwood said “I chose [Kinney] 

and, and I knew [Kinney] had money, so I knew that that was probably well 

funded.” (Id. at 127.) That evidence permitted the trial court to infer Kinney

was Underwood’s partner when she purchased the Properties. We cannot find 

clear error. 

Conclusion

[58] The trial court’s determinations Underwood was Demming’s agent, that 

Kinney and Underwood were partners in the purchase of the Properties, and 

Underwood breached her duty to Demming were not clearly erroneous. The 

trial court did not abuse its discretion in calculating damages, awarding 

attorney fees, or denying Kinney’s motion for judgment on the pleadings. 

However, it should not have awarded prejudgment interest. We accordingly 
Court of Appeals of Indiana | Opinion 53A01-1409-PL-395 | July 22, 2015 Page 26 of 26

affirm in part, reverse in part, and remand for recalculation of the damage 

award to reflect the removal of prejudgment interest. 

[59] Affirmed in part, reversed in part, and remanded. 

Robb, J., and Mathias, J., concur.