Court Opinion

ID: 4299950
Source: CourtListenerOpinion
Date Created: 2018-08-01 15:06:33.828475+00
Date Added: 2024-06-11T14:42:03.241059
License: Public Domain

MEMORANDUM DECISION                                                       FILED
      Pursuant to Ind. Appellate Rule 65(D), this                          Aug 01 2018, 6:45 am

      Memorandum Decision shall not be regarded as                              CLERK
      precedent or cited before any court except for the                    Indiana Supreme Court
                                                                               Court of Appeals
      purpose of establishing the defense of res judicata,                       and Tax Court

      collateral estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT                                    ATTORNEY FOR APPELLEE
      R. Patrick Magrath                                        Mary Jean Stotts
      Alcorn Sage Schwartz & Magrath, LLP                       Joas & Stotts
      Madison, Indiana                                          Madison, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      Ed McCarthy,                                             August 1, 2018

      Appellant-Plaintiff,                                     Court of Appeals Case No.
                                                               39A01-1711-PL-2717
              v.                                               Appeal from the Jefferson Superior
                                                               Court

      Tim (John) Ralston,                                      The Honorable Michael J. Hensley,
      Appellee-Defendant.                                      Judge

                                                               Trial Court Cause No.
                                                               39D01-1604-PL-311

      Shepard, Senior Judge.

[1]   The trial court divided equally between Appellant Ed McCarthy and Appellee

      Tim Ralston all the equipment related to their business venture. Concluding

      the trial court’s judgment is not in error, we affirm.

      Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018         Page 1 of 6
                               Facts and Procedural History
[2]   At the time of the events relevant to this lawsuit, McCarthy lived in Hoboken,

      New Jersey. In 1990, he began making and selling a variety of food sauces and

      incorporated his business under the name of “Hoboken Eddie’s.” In 1996,

      McCarthy met Ralston, who is from Madison, Indiana, at a food fair in

      Hoboken.

[3]   In an effort to expand his sauce production and distribution business, McCarthy

      set up a sauce making operation the following year at “Venture Out Business

      Center,” a small business incubator in Madison. Up to this point, McCarthy

      had been growing peppers for his sauces at his farm in New York, but Ralston

      agreed to grow peppers in Indiana as well.

[4]   For the next several years, both men contributed to the business venture of

      growing peppers and making sauce. Ralston even purchased a building in

      Hanover which he began to renovate so that it could be used to make the

      sauces.

[5]   However, the relationship deteriorated, and in September of 2015, McCarthy

      filed a series of three small claims actions against Ralston claiming the seizure

      of business and personal property, misappropriation of funds, breach of

      contract, and destruction of property. In response, Ralston filed three

      counterclaims. In March and April of 2016, the claims were consolidated and

      transferred to the court’s plenary docket.

      Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018   Page 2 of 6
[6]   In September 2016, McCarthy filed a complaint under the plenary cause

      number requesting return of all his property as well as reimbursement for lost

      revenue and for the value of destroyed pepper plants. Ralston counterclaimed

      for reimbursement for the purchase of pepper plants, for the cost of the labor

      force, for the cost of production items and for the cost of the building

      renovation, payment of sales earnings, and payment for his labor. The court

      conducted a bench trial on the parties’ claims and entered judgment of $0 for

      both parties, stating that their claims “cancel each other out.” Appellant’s

      Appendix Vol. 2, p. 126. The trial court further ordered McCarthy to retrieve

      the mobile restaurant from Ralston’s property and for the parties to divide

      evenly the remaining equipment, with Ralston retaining the building in
                                                      1
      Hanover. McCarthy now appeals.

                                                          Issue
[7]   McCarthy presents two issues, which we consolidate and restate as: whether

      the trial court erred in failing to award monetary damages to McCarthy and by

      awarding the parties an equal division of the equipment.

                                     Discussion and Decision
[8]   McCarthy had the burden of proof at trial and now appeals from a negative

      judgment; therefore, he may prevail on appeal only upon establishing that the

      1
       In his reply brief, McCarthy requests the Court to strike certain material from the record in this case. We
      grant this request.

      Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018              Page 3 of 6
       judgment is contrary to law. See Estate of Kappel v. Kappel, 979 N.E.2d 642 (Ind.

       Ct. App. 2012). A judgment is contrary to law when the evidence is without

       conflict and leads to but one conclusion, which the trial court did not reach. Id.

       In evaluating McCarthy’s appeal, we neither reweigh the evidence nor judge the

       credibility of the witnesses, and we consider only the evidence most favorable to

       the judgment together with all reasonable inferences to be drawn therefrom. Id.

[9]    The trial court determined the parties’ monetary claims canceled each other out

       and awarded nothing to either party. With regard to the equipment, the court

       ordered the parties to divide it evenly.

[10]   The evidence here is murky at best. Neither party provided the court with an

       accounting, legitimate spreadsheets, income statements, or balance sheets

       indicating what was paid by whom to whom for what. In support of his claim

       for reimbursement for lost revenue as a result of being unable to use the

       equipment stored on Ralston’s property, McCarthy testified that he/Hoboken

       Eddie’s bought much of the equipment in reliance on Ralston’s purchase and

       renovation of the building in Hanover. Tr. pp. 107-08. However, no evidence

       was presented as to the amount of lost revenue. Further, to support his claim of

       reimbursement for the value of the demolished 2015 pepper crop, McCarthy

       testified that Hoboken Eddie’s paid $3,012 for the pepper plants in 2015. Id. at

       99; see also Plaintiff’s Ex. 8. But again, no evidence was presented to

       substantiate his claim for lost profits from sauce due to the destroyed pepper

       crop. Finally, McCarthy requested that all equipment be turned over to him

       and testified that he paid for all of it. Tr. pp. 92, 104, 105, 135.

       Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018   Page 4 of 6
[11]   In response to McCarthy’s claims, Ralston testified that there was never a time

       that Hoboken Eddie’s was not able to produce sauce because they always used

       the space in the Venture Out Business Center. Id. at 166. As borne out by the

       parties’ testimony, the sole issue McCarthy and Ralston agree on is that

       Hoboken Eddie’s purchased pepper plants in 2015 for $3,000, and Ralston

       destroyed them. Id. at pp. 32-33.

[12]   Although in his counterclaim Ralston sought reimbursement for eleven years of

       pepper purchases in the amount of $20,000, his testimony at trial evidenced

       only seven or eight years of purchases at $1,000 per year. Id. at 7, 168. In

       addition, in support of his counterclaim for sales earnings, Ralston testified that

       he made a sale of sauces to a client for which he was owed commission of

       $4,500. Id. at 27-28. He also testified vaguely and, like McCarthy, without

       documentary evidence, to amounts he claims he is owed for labor costs he paid

       as well as labor he performed himself. Further, Ralston explained that, as a

       direct result of him providing all of his labor free of charge and receiving only

       partial reimbursement for payments to the labor force over the years, McCarthy

       had money available to purchase equipment; therefore, Ralston believes he is

       entitled to the value of certain equipment as reimbursement. Id. at 22, 23-24,

       26-27, 152. Finally, in support of his claim for $30,000 for the purchase and

       renovation of the building in Hanover, Ralston testified that he would not have

       purchased the building if not for McCarthy’s promise to rent it out for sauce

       production. Id. at 19, 20, 193.

       Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018   Page 5 of 6
[13]   To refute Ralston’s counterclaims, McCarthy testified that Ralston was paid for

       the peppers and for his work. Id. at 84, 85, 101, 102, 119, 120. In addition,

       McCarthy testified that he never received money from the sale of sauces on

       which Ralston claims he is owed commission; rather, McCarthy claims that

       Ralston sold $25,000 worth of sauces and kept the money. Id. at 102, 103, 146.

                                                Conclusion
[14]   In light of the confusing and at times limited evidence presented in this case, we

       cannot say the trial court clearly erred in concluding that the parties owed one

       another nothing and should split the equipment 50/50. In other words,

       McCarthy has not shown that the evidence points unerringly to a conclusion

       opposite that reached by the trial court.

[15]   Judgment affirmed.

       Bailey, J., and Mathias, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018   Page 6 of 6