Court Opinion

ID: 4341297
Source: CourtListenerOpinion
Date Created: 2018-11-14 16:08:38.681477+00
Date Added: 2024-06-11T14:21:17.257392
License: Public Domain

FILED
                                                                        Nov 14 2018, 5:54 am

                                                                            CLERK
                                                                        Indiana Supreme Court
                                                                           Court of Appeals
                                                                             and Tax Court

ATTORNEY FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
John K. McDavid                                           Eric D. Somheil
Hostetter & Associates                                    Katherine S. Brown
Brownsburg, Indiana                                       Brown & Somheil
                                                          Brazil, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

John DeWeese, Sr. and John                                November 14, 2018
DeWeese, Jr., Individually and                            Court of Appeals Case No.
d/b/a John & John Associates,                             18A-PL-1505
Inc.,                                                     Appeal from the Clay Circuit
Appellants/Cross-Appellees-                               Court
Defendants/Counter-Plaintiffs,                            The Honorable Joseph D. Trout,
                                                          Judge
        v.                                                Trial Court Cause No.
                                                          11C01-1410-PL-620
Karen J. Pribyla,
Appellee/Cross-Appellant-
Plaintiff/Counter-Defendant.

Najam, Judge.

Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018                           Page 1 of 10
                                           Statement of the Case
[1]   John & John Associates, Inc. (“John & John”), a real property improvement

      supplier under Indiana Code Section 24-5-11-6 (2018),1 agreed to improve the

      residential property of Karen J. Pribyla, a senior consumer under Indiana Code

      Section 24-5-0.5-2(a)(9). However, John & John never provided Pribyla with a

      written real property improvement contract, which failure was contrary to

      Indiana Code Sections 24-5-11-10, -11, and -12. As a matter of law, John &

      John’s failure to provide Pribyla with a written contract in conformity with

      Sections 24-5-11-10, -11, and -12 was a deceptive act, see I.C. § 24-5-11-14,

      subject to the remedies and penalties of Indiana’s Deceptive Consumer Sales

      Act, I.C. §§ 24-5-0.5-0.1 to -12 (“the DCSA”). And the DCSA authorizes the

      award of treble damages for uncured deceptive acts against senior consumers.

      I.C. § 24-5-0.5-4(i). For those and other reasons, the trial court entered an

      award of treble damages for Pribyla based on John & John’s uncured deceptive

      acts.

[2]   John & John raises several issues on appeal, but we need only address the

      following dispositive issue:

               1.       Whether the trial court erred when it ordered John & John
                        to pay treble damages under the DCSA for John & John’s
                        failure to provide a senior consumer with a written

      1
        Although technical changes have been made to all of the relevant statutes between November of 2013 and
      this appeal, there is no dispute that those technical changes are irrelevant to our consideration of the merits of
      this appeal.

      Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018                                Page 2 of 10
                        contract in conformity with Indiana Code Sections 24-5-
                        11-10, -11, and -12.

      On cross-appeal,2 Pribyla raises the following issue3 for our review:

               2.       Whether the trial court erred when it concluded that John
                        DeWeese, Sr. (“DeWeese, Sr.”) and John DeWeese, Jr.
                        (“DeWeese, Jr.”), the only shareholders of John & John,
                        were not personally liable to Pribyla.

[3]   We affirm.

                                   Facts and Procedural History
[4]   In November of 2013, Pribyla, who was sixty-nine years old at the time, hired

      John & John to remodel the kitchen at her residence in Brazil. John & John

      never provided Pribyla with a written contract for the work to be done. Pribyla

      later directed John & John to do additional work around her home, for which,

      again, John & John did not provide a written contract.

[5]   Pribyla believed that the home improvement work would be done by the end of

      2013 and paid invoices as John & John sent them to her. However, in January

      of 2014, Pribyla approached John & John about the rising costs of the still-

      2
        Pribyla has not denominated her assertions of trial court error as cross-appeals under Indiana Appellate
      Rule 46(D). But John & John does not suggest that Pribyla’s failure to strictly comply with our Appellate
      Rules prohibits our recognition or consideration of the merits of her cross-appeal, and, indeed, John & John
      has responded to Pribyla’s cross-appeal arguments in its Reply Brief. See Ind. Appellate Rule 46(D)(3); cf.
      N.R. v. K.G. (In re Adoption of O.R.), 16 N.E.3d 965, 970-72 (Ind. 2012).
      3
       In her brief on appeal, Pribyla also requests that we order John & John to pay her appellate attorneys’ fees.
      We decline her request.

      Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018                             Page 3 of 10
      uncompleted work, and John & John, for the first time, gave Pribyla a written

      estimate for the work. The estimate was hand-written and stated that more

      than $38,000 would be required to complete the remainder of the work. Pribyla

      and John & John reached an impasse shortly thereafter, and, in May, Pribyla

      asked John & John to finish the work within thirty days and within 5% of the

      January estimate. Instead, John & John filed for a mechanic’s lien.

[6]   In September, Pribyla, through counsel, informed John & John that it had

      engaged in numerous deceptive acts under Indiana law and requested John &

      John to cure those acts. John & John declined to accept Pribyla’s certified letter

      and did not take any steps to cure the alleged deceptive acts. Pribyla thereafter

      filed a complaint against John & John as well as against DeWeese, Sr. and

      DeWeese, Jr., the only two shareholders of John & John.

[7]   On September 1, 2016, and March 17, 2017, the court held a bench trial on

      Pribyla’s complaint. In February of 2018, the court entered judgment for

      Pribyla on her claim against John & John but found against her on her claim

      that DeWeese, Sr. and DeWeese, Jr. were personally liable. The court

      supported its judgment with extensive findings of fact and conclusions thereon.

      In particular, aside from finding that DeWeese, Sr. and DeWeese, Jr. were

      shielded from personal liability, the court also found that John & John had

      engaged in numerous deceptive acts under the DCSA, which acts the court also

      found to demonstrate home improvement fraud under Indiana Code Chapter

      Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018    Page 4 of 10
      35-43-6. The court then ordered John & John to pay Pribyla treble damages

      under the DCSA “and/or” the home improvement fraud statutes.4 Appellant’s

      App. Vol. II at 22. The court’s judgment for Pribyla and against John & John

      totaled $56,647.73. This appeal ensued.

                                      Discussion and Decision
                                              Standard of Review

[8]   The parties appeal the trial court’s findings of fact and conclusions thereon,

      which the court entered following a bench trial. As our Supreme Court has

      made clear, in such cases

              [w]e may not set aside the findings or judgment unless they are
              clearly erroneous. In our review, we first consider whether the
              evidence supports the factual findings. Second, we consider
              whether the findings support the judgment. Findings are clearly
              erroneous only when the record contains no facts to support
              them either directly or by inference. A judgment is clearly
              erroneous if it relies on an incorrect legal standard. We give due
              regard to the trial court’s ability to assess the credibility of
              witnesses. While we defer substantially to findings of fact, we do
              not defer to conclusions of law. 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.

      State v. Int’l Bus. Machs. Corp., 51 N.E.3d 150, 158 (Ind. 2016) (citations and

      quotation marks omitted).

      4
        As we affirm the trial court’s award of treble damages under the DCSA, we need not consider the court’s
      alternative basis for treble damages under the home improvement fraud statutes.

      Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018                          Page 5 of 10
                                  Issue One: Award of Treble Damages

[9]    On appeal, John & John first asserts that the trial court’s award of treble

       damages under the DCSA is clearly erroneous. In particular, John & John

       asserts that the evidence does not show that it possessed the requisite intent to

       defraud necessary to prove an “incurable” deceptive act, and, thus, its “mere

       violation” of the DCSA does not support an award of treble damages.

       Appellant’s Br. at 15. Under the DCSA, an “[i]ncurable deceptive act” requires

       an “intent to defraud or mislead.” I.C. § 24-5-0.5-2(a)(8).

[10]   However, the trial court did not support its judgment on treble damages under

       the DCSA on the basis that John & John had engaged in an “incurable”

       deceptive act. Instead, the court found that John & John had left a curable act

       “uncured.” See Appellant’s App. Vol. II at 18. The DCSA permits treble

       damages in some circumstances when the deceptive act is not incurable but,

       rather, simply uncured. See, e.g., I.C. 24-5-0.5-4(i). An “[u]ncured deceptive

       act” is an act “with respect to which a consumer who has been damaged by

       such act has given notice to the supplier” under the DCSA and either “(i) no

       offer to cure has been made to such consumer within thirty (30) days after such

       notice; or (ii) the act has not been cured as to such consumer within a

       reasonable time after the consumer’s acceptance of the offer to cure.” I.C. § 24-

       5-0.5-2(a)(7). Thus, while “a consumer must show intent to defraud on the part

       of the supplier of services” in order to show an incurable deceptive act, “[t]he

       same showing is not required to establish the existence of an uncured act.”

       Mullis v. Brennan, 716 N.E.2d 58, 65 n.3 (Ind. Ct. App. 1999).

       Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018     Page 6 of 10
[11]   As relevant here, the trial court awarded Pribyla treble damages because John

       & John did not cure its deceptive acts and because she was a senior consumer.

       There is no dispute in this appeal that John & John failed to provide Pribyla

       with a written contract in conformity with the Indiana Code Sections 24-5-11-

       10, -11, and -12, which, as a matter of law, was a deceptive act subject to the

       remedies and penalties of the DCSA. I.C. §§ 24-5-11-14, -0.5-3(b)(24); see also

       Mullis, 716 N.E.2d at 65 (“Through the [Home Improvement Contracts Act,

       I.C. §§ 24-5-11-1 to -14], the legislature sought to protect consumers by placing

       specific minimum requirements on the contents of home improvement

       contracts. Accordingly, we will hold the contractor to a strict standard.”). And

       there is no dispute that at all times relevant to this matter Pribyla was a senior

       consumer. I.C. § 24-5-0.5-2(a)(9). The DCSA expressly provides that “[a]

       senior consumer relying upon an uncured or incurable deceptive act . . . may

       bring an action to recover treble damages . . . .” I.C. § 24-5-0.5-4(i) (emphasis

       added).

[12]   The trial court expressly found, and the evidence supports the court’s findings,

       that Pribyla, through counsel, informed John & John in September of 2014 of

       its deceptive acts and offered John & John the opportunity to cure those acts.

       Instead of curing its deceptive acts, John & John refused Pribyla’s certified

       letter. John & John does not challenge the trial court’s findings in this regard

       other than to baldly state that John & John had quit the job, which somehow

       converted curable deceptive acts into “incurable” deceptive acts and, as such,

       would deprive Pribyla of her claim for treble damages. We reject John &

       Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018      Page 7 of 10
       John’s argument, which is not supported with either cogent reasoning or

       citations to authority. See Ind. Appellate Rule 46(A)(8)(a).

[13]   John & John additionally asserts that the trial court erred when it awarded

       Pribyla treble damages because all of the legal theories underlying the court’s

       award of treble damages required Pribyla to demonstrate that the structure at

       issue was Pribyla’s “dwelling.” See, e.g., I.C. § 24-5-11-7.5(a). But the evidence

       most favorable to the trial court’s judgment, which evidence John & John

       simply disregards on appeal, readily demonstrates that the structure at issue was

       Pribyla’s dwelling. In her testimony, Pribyla stated that she “reside[s]” at that

       residence, that it is her “home,” that it is her “primary residence,” and that she

       has a homestead exemption on the property. Tr. Vol. II at 5-7. The trial court’s

       judgment is not clearly erroneous on this issue. Thus, we affirm the trial court’s

       decision to award treble damages to Pribyla under the DCSA.

                              Issue Two: DeWeese, Sr. and DeWeese, Jr.

[14]   On cross-appeal, Pribyla asserts that the trial court erred when it concluded that

       DeWeese, Sr. and DeWeese, Jr. were shielded from personal liability by the

       corporate nature of John & John. On this issue, Pribyla appeals from a

       negative judgment. See Branham Corp. v. Newland Res., LLC, 44 N.E.3d 1263,

       1278 (Ind. Ct. App. 2015). “A negative judgment will be reversed on appeal

       only where it is contrary to law.” Id.

[15]   In particular, Pribyla asserts that DeWeese, Sr. and DeWeese, Jr. were the

       principal actors for John & John, which the trial court found to have engaged in

       Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018     Page 8 of 10
       criminal and deceptive acts. However, on this issue of personal liability, the

       trial court found, as a matter of fact, that “[c]learly the evidence . . . shows that

       [Pribyla’s] business dealings were with John & John Associates, Inc.” and that

       DeWeese, Sr. and DeWeese, Jr. “personally had very little, if anything, in

       regard to the personal responsibility for the actual work done or not done.”

       Appellant’s App. Vol. II at 11-12.

[16]   We cannot say that the trial court’s judgment on this issue is clearly erroneous.

       “As a general rule, shareholders are not personally liable for the acts of a

       corporation . . . .” Reed v. Reed, 980 N.E.2d 277, 301 (Ind. 2012). However:

               courts may invoke the equitable doctrine of piercing the
               corporate veil in order to protect innocent third parties from
               fraud or injustice. When a corporation is functioning as an alter
               ego or a mere instrumentality of an individual or another
               corporation, it may be appropriate to disregard the corporate
               form and pierce the veil. The propriety of piercing the corporate
               veil is highly dependent of the equities of the situation, and the
               inquiry tends to be highly fact-driven. The burden is on the party
               seeking to pierce the corporate veil to prove that the corporate
               form was so ignored, controlled or manipulated that it was
               merely the instrumentality of another and that the misuse of the
               corporate form would constitute a fraud or promote injustice.

       Id. (citations, alteration, and quotation marks omitted). The trial court found

       that the facts did not support Pribyla’s claim to pierce the corporate veil, and we

       cannot say as a matter of law that the court’s findings are erroneous. At best,

       Pribyla’s argument on appeal is simply a request for this Court to reweigh the

       Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018       Page 9 of 10
       evidence, which we will not do. The trial court’s findings are supported by the

       evidence, and the findings support the judgment. We affirm on this issue.

                                                  Conclusion
[17]   In sum, we affirm the trial court’s decision to award Pribyla treble damages.

       We also affirm the court’s conclusion that DeWeese, Sr. and DeWeese, Jr. are

       not personally liable for the acts of John & John. Thus, we affirm the trial

       court’s judgment.

[18]   Affirmed.

       Crone, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Opinion 18A-PL-1505 | November 14, 2018   Page 10 of 10