Court Opinion

ID: 4096062
Source: CourtListenerOpinion
Date Created: 2016-11-07 16:07:07.667231+00
Date Added: 2024-06-11T14:46:11.948171
License: Public Domain

MEMORANDUM DECISION
                                                                                FILED
      Pursuant to Ind. Appellate Rule 65(D),
      this Memorandum Decision shall not be                                Nov 07 2016, 8:59 am

      regarded as precedent or cited before any                                 CLERK
                                                                            Indiana Supreme Court
      court except for the purpose of establishing                             Court of Appeals
                                                                                 and Tax Court
      the defense of res judicata, collateral
      estoppel, or the law of the case.

      APPELLANT PRO SE                                         ATTORNEY FOR APPELLEES
      Kenneth A. Stocker                                       James P. Fenton
      Fort Wayne, Indiana                                      Fort Wayne, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Kenneth A. Stocker,                                      November 7, 2016
      Appellant-Petitioner,                                    Court of Appeals Case No.
                                                               02A03-1603-PL-615
              v.                                               Appeal from the Allen Superior
                                                               Court
      Russel D. Sundholm, Ann M.                               The Honorable David J. Avery,
      Clark, David A. Vaughn, Travis                           Judge
      M. Sims, and John C. Houston,                            Trial Court Cause No.
      Appellees-Respondents.                                   02D09-1508-PL-414

      Altice, Judge.

                                               Case Summary

[1]   Kenneth Stocker, pro se, appeals from the trial court’s grant of summary

      judgment in favor of Russel D. Sundholm, Ann M. Clark, David A. Vaughn,

      Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016       Page 1 of 8
      Travis M. Sims, and John C. Houston (collectively, the Defendants) on his

      complaint for breach of contract, breach of fiduciary duty, and fraud in the

      inducement. Stocker presents four issues for our review which we consolidate

      and restate as: did the trial court err in granting summary judgment in favor of

      the Defendants?

[2]   We affirm.

                                       Facts & Procedural History

[3]   On February 22, 2005, Stocker and the Defendants, among others, executed an

      Operating Agreement that established an Indiana limited liability company

      known as Attero Tech LLC (Attero), whose principal business was to provide

      electronic and software engineering services. Stocker, the Defendants, and

      others, as members of Attero, provided an initial capital contribution and

      signed the Operating Agreement. On or about January 1, 2011, the Defendants

      were elected to the Operating Committee to serve as the managing officers of

      Attero.

[4]   In addition to being a member of Attero, Stocker also provided services to

      Attero as an employee. On June 23, 2011, Stocker was presented with a notice

      of employment termination that was effective immediately. The stated reason

      for termination was that the business model for Attero had changed and that his

      services were no longer required. Even after his employment was terminated,

      Stocker remained a member of Attero.

      Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016   Page 2 of 8
[5]   On or about September 1, 2011, a notice was issued to Stocker and the other

      members of Attero calling for a meeting on September 15, 2011. The purpose

      of the meeting was “to discuss the purchase (AKA buyout) of the member

      shares owned by [Stocker].” Appellant’s Appendix at 121. During the meeting,

      which Stocker did not attend, the members of Attero discussed various options

      and voted to offer Stocker a voluntary buyout of his member shares in Attero.

      The members present at the meeting did not vote on whether to involuntarily

      remove Stocker as a member of Attero.

[6]   On October 7, 2011, Stocker received a document titled Withdrawal and

      Redemption Agreement (the Release) from the Defendants. The Release

      provided that Stocker would redeem his rights, title, and interest in and to his

      member shares in Attero and Attero would pay Stocker $49,992.15,1 plus

      interest, in forty quarterly payments. Section 8 of the Release included a

      mutual release provision, which provides as follows:

                 a. Departing Member [Stocker] hereby releases and forever
                 discharges [Attero,] respective directors, officers, employees,
                 agents, shareholders, subsidiaries, affiliates, successors and
                 assigns from any and all claims, demands, proceedings, causes of
                 action, orders, obligations, contracts, agreements, debts and
                 liabilities whatsoever, whether known or unknown, suspected or
                 unsuspected, both at law and in equity, which [Stocker] now has
                 or has ever had against [Attero] arising prior to the Effective
                 Date; provided, however, that nothing contained herein shall

      1
          The purchase price valuation date was set as September 30, 2011.

      Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016   Page 3 of 8
              operate to release obligations of [Attero] arising under this
              Agreement.

              b. [Attero] hereby releases and forever discharges Departing
              Member [Stocker] from any and all claims, demands,
              proceedings, causes of action, orders, obligations, contracts,
              agreements, debts and liabilities whatsoever, whether known or
              unknown, suspected or unsuspected, both at law and in equity,
              which [Attero] now has or has ever had against [Stocker] arising
              prior to the Effective Date; provided, however, that nothing
              contained herein shall operate to release [Stocker] from their
              respective obligations under this Agreement or the noncompete
              provisions . . ., the confidentiality provisions . . ., and the
              injunction provisions of each of the Employment Agreements
              which shall survive pursuant to the terms thereof.

      Id. at 126. Stocker signed the Release on or about October 28, 2011. Attero has

      made quarterly payments to Stocker pursuant to the terms of the Release, and

      Stocker has accepted such payments without objection.

[7]   On August 28, 2015, Stocker, pro se, filed his complaint for damages, alleging

      breach of contract, breach of fiduciary duty, and fraud in the inducement.

      Contemporaneous with their answer, the Defendants filed a motion for

      judgment on the pleadings or in the alternative, for summary judgment along

      with designated evidence. After Stocker filed a response to the Defendants’

      motion, the Defendants filed a reply and supplemental designation of evidence.

      The trial court held a hearing on the Defendants’ motion on December 15,

      2015. On January 20, 2016, the trial court issued an order granting summary

      judgment in favor of the Defendants. Stocker filed a motion to correct error on

      Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016   Page 4 of 8
      February 18, 2016, which the trial court denied three days later. Stocker now

      appeals. Additional facts will be provided as necessary.

                                          Discussion & Decision

[8]   Stocker argues that the trial court erred in granting summary judgment in favor

      of the Defendants on each of his claims. An appellate court reviewing

      summary judgment analyzes the issues in the same way as would a trial court.

      Pfenning v. Lineman, 947 N.E.2d 392, 396 (Ind. 2011). A party seeking

      summary judgment must establish that “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). The

      party moving for summary judgment bears the initial burden of establishing its

      entitlement to summary judgment. Pfenning, 947 N.E.2d at 396-97. “Only then

      does the burden fall upon the non-moving party to set forth specific facts

      demonstrating a genuine issue for trial.” Id. at 397. The reviewing court must

      construe the evidence in favor of the non-movant, and resolve all doubts against

      the moving party. Id.

[9]   The trial court granted summary judgment in favor of the Defendants,

      concluding that Stocker’s execution of the Release barred his breach of contract

      and breach of fiduciary duty claims. The trial court also concluded that the

      misrepresentations Stocker alleges the Defendants included in the language of

      the Release, were such that Stocker was aware or should have been aware of

      prior to signing the Release. We agree with the trial court.

      Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016   Page 5 of 8
[10]   Stocker’s breach of contract claim alleges that the Defendants forced an

       involuntary removal of Stocker’s status as a member of Attero and that they

       failed to comply with the provisions of the Operating Agreement by failing to

       provide him with notice of specific instances or tasks he failed to perform. We

       agree with the trial court’s finding that “[i]f Stocker was of the opinion that

       there was a breach of the Operating Agreement, Stocker would have had

       knowledge of the breach prior to signing the Release and Stocker should have

       pursued his claim prior to signing the Release.” Appellant’s Appendix at 12.

       Thus, by signing the Release, Stocker chose to forgo any breach of contract

       claims against the Defendants, including the one asserted herein.2

[11]   The same result follows with regard to Stocker’s breach of fiduciary duty claim.

       In support of this claim, Stocker alleged that Attero terminated his employment

       in order to prevent him from substantially performing his promised services and

       thereby made him susceptible to being removed as a member of the LLC.

       Again, if Stocker was of the opinion that the Defendants breached a fiduciary

       duty owed him, he had knowledge of the facts underlying such claim prior to

       executing the Release. Rather than pursue a claim for breach of fiduciary duty,

       Stocker signed the Release. With regard to execution of the Release, the

       circumstances of Stocker’s termination are wholly irrelevant. Thus, like his

       2
         Stocker also makes several arguments challenging the validity of the Release on grounds of lack of
       consideration. Because Stocker did not make these arguments to the trial court, he has waived them for
       review. See Dunaway v. Allstate Ins. Co., 813 N.E.2d 376, 387 (Ind. Ct. App. 2004) (“Issues not raised before
       the trial court on summary judgment cannot be argued for the first time on appeal and are waived.”). It
       suffices to say that the Release was supported by consideration.

       Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016             Page 6 of 8
       breach of contract claim, Stocker’s claim in this regard is barred because

       Stocker executed the Release of all claims against the Defendants, including his

       claim of breach of fiduciary duty.

[12]   Finally, in support of his fraud in the inducement claim, Stocker argues that the

       Defendants misstated the valuation date in the Release and that the language in

       the Release led him to believe that payment of the redemption price for his units

       in Attero amounted to sufficient consideration and that his “rights were

       surrenderable [sic] without additional consideration.” Id. at 32. Stocker’s

       arguments in this regard do not undercut the validity of the Release. As aptly

       noted by the trial court, “Stocker had a duty to conduct due diligence to review

       any representations made by Attero and the Defendants in the Release” before

       signing the Release. Id. at 13. Stocker has designated no evidence that he did

       not voluntarily sign the Release.

[13]   In short, the undisputed evidence shows that Stocker was presented with the

       Release, which provided for redemption of his units in Attero and included

       mutual release provisions covering the Defendants. Stocker voluntarily signed

       the Release and thereafter accepted payments made by Attero in accordance

       therewith without objections. Having duly executed the Release, Stocker is

       barred from bringing his claims of breach of contract and breach of fiduciary

       duty. Stocker’s claim for fraud in the inducement also fails because the alleged

       misstatements concern matters that would have been known or should have

       been known by Stocker at the time he signed the Release, and yet he voluntarily

       Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016   Page 7 of 8
       signed the Release. The trial court did not err in granting summary judgment in

       favor of the Defendants.

[14]   Judgment affirmed.

[15]   Bailey, J. and Bradford, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 02A03-1603-PL-615 | November, 7, 2016   Page 8 of 8