Court Opinion

ID: 9742617
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:16:56.066509+00
Date Added: 2024-06-11T07:24:34.095262
License: Public Domain

SULLIVAN, Judge,
dissenting.
I respectfully dissent and would hold that the trial court erred in granting judgment on the pleadings with regard to plaintiffs' claims for breach of contract and breach of fiduciary duty.1
The provision in the Contracts for Purchase of Real Estate that purchaser, at purchaser's option, "may acquire Adaline M. Cornett's interest in the real estate by separate documents without such acquisition being a violation of [the joint venture agreements]" (Record at 17) is held by the majority to have entitled Adaline not only to convey to the RNTA her interests in the various parcels separately from the conveyance of the interests of the other joint venturers, but in addition, to receive a sum over and above the amounts specified in the real estate contracts for "FINANCIALLY COVER[ING] THE AGGREGATE INTEREST OF ALL INTEREST HOLDERS IN THE REAL ESTATE WITH ALL TERMS, CONDITIONS AND REPRESENTATIONS TO BE APPLICABLE TO ALL THE JOINT VEN-TURERS UNDER THE [JOINT VENTURE AGREEMENTS]." Record at 17-18.
*959The majority concludes that the provision for separate acquisition was without limitation as to the amount which Adaline might demand and receive for sale of her separate interests. Op. at 977. The majority then makes what I deem to be an unwarranted leap to the conclusion that the absence of limitation confers upon RNTA and Adaline, respectively, the right to pay and receive an additional and secret purchase price over and above that contemplated and specified in the contracts of sale, i.e., the "Base Agreements."
I am unable to read the Base Agreement provision for separate acquisition of Adaline's interests in the real estate to permit payment to her of a sum in contravention of the amount per acre set forth in the Base Agreements for acquisition of the "aggregate interest of all interest holders.2
While it may be true, as stated by the majority, that "Eskew received the portion due him under the purchase agreement" (Op. at 977), ie., the proportionate percentage called for by the joint venture agreements of the per acre purchase price specified in the Base Agreement, the fact remains that the amount set forth as the purchase price in the Base Agreements applies to all interest holders. Therefore, to clandestinely and under a binding obligation of non-disclosure, enter into a contract to pay one of the interest holders more than the amount specified in the Base Agreements is at odds with the Base Agreements themselves.3
With regard to the claim that Adaline breached the fiduciary duty owed to her other co-venturers, I would first note that such duty exists. A joint venture is akin to a partnership. Mantooth v. Federal Land Bank of Louisville (1988) Ind.App., 528 N.E.2d 1132, 1141, trans. denied; Lafayette Bank & Trust Co. v. Price (1982) Ind.App., 440 N.E.2d 759, 762. In such fiduciary relationships, each party owes to the others the duty of good faith and fair dealing. Rice v. Strunk (1996) Ind., 670 N.E.2d 1280, 1285 n. 3; Lawlis v. Kightlinger & Gray (1990) Ind.App., 562 N.E.2d 435, 442, trans. denied.
Apropos of the circumstances before us is the following description of the duty as set forth in 48A C.J.S., Joint Ventures § 24 (1981):
"Since every member of a joint venture is regarded as the trustee or fiduciary of his coventurers, a joint venturer is strictly accountable to his coventurers for the subject matter of the common enterprise, and if he is recreant to his trust, a constructive trust in favor of the other parties will be created, and any rights which they may have been denied are recoverable. It is his duty to guard the rights of his coventurers equally with his own, and he is forbidden to deal with the subject matter of the enterprise for his own advantage. So, he may not, in promoting and carrying on the common enterprise, lawfully obtain for himself any secret or unfair advantage therefrom, especially where he is in control or possession of the joint property.
So, too, a joint venturer may not enter into any secret agreements, and, if he does, his coventurers are entitled to relief, whether or not they are injured, and whether or not he in fact profited from the secret agreement. Without the consent of his associates, no member of a *960joint venture may engage in any individual operations harmful to the business in which he and his associates are engaged, or so act that his personal interest is hostile to the interest of another member of the joint venture." (Footnotes omitted).
To the same effect is the discussion in 46 AnmJur. 2d Joint Ventures, § 86 (1994).
Although it involved actual fraud by way of affirmative misrepresentations by one joint venturer to all the others substantially overstating the price at which the real estate owner was willing to sell, Grover v. Marott (1922) 192 Ind. 552, 559, 136 N.E. 81, 83 is worthy of note with regard to the duty of fair dealing. The court there stated:
"Hence, we may say that all of the parties to the land venture were more or less engaged in a common enterprise, and each was bound to act in the utmost good faith toward the other. Consequently, speaking of appellant, in the light of the alleged facts, good faith required that he acquaint his associates or those he represented with all the facts known to him and connected with the entire transaction. It appears that he failed in this particular and that he knew the members of the syndicate were ignorant of facts by reason of which he would secretly acquire as his own a substantial profit out of the syndicate fund."
Although in the case before us, Eskew was aware and had consented to RNTA's acquisition of Adaline's interest by separate documents, that eventuality did not occur. Rather, Adaline somehow by secret negotiation extracted a greater purchase price for her interests than called for in the Base Agreements. In any event, most assuredly, Eskew did not know and did not agree that Adaline should unfairly and secretly receive what in reality equates to a greater percentage of the net sales price for the "aggregate interest of all interest holders."
I would reverse the judgment upon the pleadings entered in favor of Adaline as to the claims for breach of contract and breach of fiduciary duty, and would remand for further proceedings.

. I agree with the conclusion of the majority that Adaline is not liable for criminal conversion.

. Even if we were to read into the separate acquisition provision a right to receive an amount in excess of the contracted-for purchase price, such construction does not benefit Adaline because her interests in the real estate were not acquired by "separate documents." Her interests were acquired by the Contracts for Purchase of Real Estate, the Base Agreements. Accordingly, no right to additional consideration inures to her by virtue of the "separate documents" provision.

. Adaline may not find refuge in paragraph (1A) of the Modification Agreement which purports to incorporate the secret agreement as to the additional purchase price, into the Base Agreements themselves. Clearly such incorporation without the consent and approval of the other parties to the Base Agreements is wholly invalid and ineffective. Schnewind v. Hacket (1876) 54 Ind. 248; 17A Am.Jur. 2d Contracts § 520 (1991).