Court Opinion

ID: 7076229
Source: CourtListenerOpinion
Date Created: 2022-07-24 08:16:03.80824+00
Date Added: 2024-06-11T16:12:46.865806
License: Public Domain

DARDEN, Judge,
concurring in part and dissenting in part.
I respectfully dissent. I believe the trial court erred in allowing Mercantile to amend its complaint to add a third count, seeking treble damages and attorney's fees pursuant to Indiana Code section 34-24-3-1, Indiana's Property Crime Victim's Relief Act. Furthermore, I do not believe that there is evidence that Rose and Underwood's actions violated any criminal law. Accordingly, I also dissent as to the award of attorney's fees pursuant to Indiana Code section 34-24-3-1.
As articulated by the majority, the only issue presented in a proceedings supplemental is that of affording the judgment creditor relief to which it is entitled under the terms of a judgment. See Rice, 782 N.E.2d at 1004. Similarly, the sole purpose of a fraudulent conveyance action is to remove obstacles preventing the enforcement of a judgment. Id. As such, neither a proceedings supplemental nor a fraudulent conveyance action creates a new, independent civil action. See Borgman, 681. N.E.2d at 217.
In this case, however, Mercantile seeks to pursue a new judgment, namely for an alleged violation of Indiana Code section 35-48-5-4(8), within the confines of a proceedings supplemental and fraudulent conveyance action. See I.C. § 34-24-3-1 ("If a person suffers a pecuniary loss as a result of a violation of IC 85-48 ... the person may bring a civil action against the person who caused the loss ...." (emphasis added). It is my opinion that bringing a new civil action, particularly one based upon an alleged eriminal violation, within either a proceedings supplemental or fraudulent conveyance action is improper as the purpose of such actions is not to pursue an award in the form of a judgment; rather, the purpose is to recover a judgment to which a party already is entitled. Additionally, any recovery is limited to the original judgment, regardless of the amount allegedly conveyed or the manner in which it was conveyed. See IC. § 32-18-2-18 (allowing that under this chapter, "the creditor may recover judgment for the value of the asset transferred ... or the amount necessary to satisfy the creditor's claim, whichever is less"); see also 1.C. § 32-18-2-17 (providing that a ereditor may obtain "[alvoidance of the transfer or obligation to the extent mecessary to satisfy the creditor's claim") (emphasis added).
Furthermore, even if Mereantile could properly seek a remedy under Indiana Code section 34-24-3-1, I do not agree *1063that Mercantile proved by the preponderance of the evidence that either Rose or Underwood committed a criminal act. Rose and Underwood testified that they did not immediately pay the judgment because an appeal was pending, and they were attempting to negotiate a settlement with Mercantile. Admittedly, Rose and Underwood may have demonstrated questionable business judgment and may have presented an unrealistic or "low-ball" settlement offer. Nonetheless, I find no evidence demonstrating that Rose and Underwood had the requisite mens rea for a violation of the fraud statute. See Gilliana v. Paniaguas, 708 N.E.2d 895, 899 (Ind.Ct.App.1999) ("It is this mens rea requirement that differentiates criminal conversion from the more innocent breach of contract or failure to pay a debt situation that the criminal conversion statute was not intended to cover."), trans. demied. Rather, Rose and Underwood were two shareholders, attempting to make a deal with a sophisticated business entity. The fact that the proposed offer was unsatisfactory to Mercantile does not make it criminal. To find so, I believe, would have a chilling effect on business transactions and dealings, which I do not believe is the intent of Indiana Code section 34-24-8-1. Moreover, I do not believe that the evidence shows that Rose and Underwood transferred the proceeds into their individual accounts in an attempt to conceal the proceeds from Mercantile. Rather, Underwood testified that he and Rose consulted an attorney, their auditor and an accountant regarding what to do with the proceeds of the sale. Underwood also testified that he believed that all he and Rose could do was disperse the proceeds to Jasper's stockholders.18
Accordingly, I would reverse the trial court as to any award, including that of attorney's fees, under Indiana Code seetion 34-24-8-1.

. Notably, Mercantile could have discovered the whereabouts of the proceeds, and in turn, made Rose and Underwood answer as to any obligation owing to Jasper by naming Rose and Underwood as garnishees in its proceedings supplemental. See Ind. Trial Rule 69(B). Instead, Mercantile waited eight months after its proceedings supplemental to file its fraudulent conveyance action against Rose and Underwood.