Court Opinion

ID: 4433560
Source: CourtListenerOpinion
Date Created: 2019-08-27 15:03:58.761449+00
Date Added: 2024-06-11T13:32:59.246146
License: Public Domain

MEMORANDUM DECISION

Pursuant to Ind. Appellate Rule 65(D),                                   FILED
this Memorandum Decision shall not be
                                                                    Aug 27 2019, 9:13 am
regarded as precedent or cited before any
court except for the purpose of establishing                             CLERK
                                                                     Indiana Supreme Court
the defense of res judicata, collateral                                 Court of Appeals
                                                                          and Tax Court

estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                   ATTORNEY FOR APPELLEE
Richard E. Bryant                                        Susan R. Corwin-Cripe
The Law Office of Richard E. Bryant,                     Elkhart, Indiana
P.C.
Goshen, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA
Nancy L. Beeman,                                         August 27, 2019
Appellant-Plaintiff,                                     Court of Appeals Case No.
                                                         18A-PL-2392
        v.                                               Appeal from the Elkhart Circuit
                                                         Court
Robert E. Wyman,1                                        The Honorable Michael A.
Appellee-Defendant.                                      Christofeno, Judge
                                                         Trial Court Cause No.
                                                         20C01-1401-PL-7

Mathias, Judge.

1
 Kenneth L. Wyman was also named as a defendant in the amended complaint but did not appear or
otherwise participate in the trial court proceedings or this appeal.

Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019              Page 1 of 7
[1]   The Elkhart Circuit Court entered judgment in favor of Robert Wyman

      (“Wyman”) on September 4, 2018, finding that Nancy Beeman (“Beeman”)

      failed to establish that Wyman was liable for check deception. Beeman appeals,

      arguing that Wyman waived his affirmative defenses. We affirm.

                                 Facts and Procedural History
[2]   Wyman opened Cozy Traveler, Inc. (“Cozy Traveler”) in 2008 to manufacture

      small RVs. Beeman, who knew Wyman through her late husband, began

      loaning Cozy Traveler money in 2010. The first loan of $30,000 was issued in

      June 2010 and was to be repaid in 24 months, with monthly interest payments

      made in the interim. Ex. Vol., Plaintiff’s Ex. 1. Starting in November 2010,

      Beeman also issued several smaller loans to Cozy Traveler. The loans were

      used to finance units to be built. Ex. Vol., Plaintiff’s Ex. 2–5, 7–12. In exchange

      for a loan, Cozy Traveler issued Beeman a promissory note and check for the

      amount of the loan. Once the RV was sold, Wyman would tell Beeman that she

      could cash the check for the principal amount of the loan. Cozy Traveler would

      then issue a check for the interest on the loan. Id. Beeman issued Cozy Traveler

      ten loans for a total of $91,583 between November 15, 2010 and February 1,

      2011, which were paid in a timely manner with interest. Id.

[3]   Beginning on February 9, 2011, Beeman issued Cozy Traveler five additional

      loans for a total of $47,150. Cozy Traveler began experiencing financial

      difficulties, and Wyman never told Beeman that she could cash the checks for

      repayment. Tr. p. 51–52. Wyman sent Beeman a note in 2011 to alert her of

      Cozy Traveler’s financial difficulty and explain that her repayments would be
      Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019   Page 2 of 7
      delayed. Ex. Vol, Plaintiff’s Ex. 19. In 2013, Beeman sent Cozy Traveler a note

      giving them thirty days to repay the loans. Ex. Vol, Plaintiff’s Exhibit 21. The

      initial $30,000 loan and the last five loans were never repaid.

[4]   Beeman filed a complaint against Wyman in his individual capacity on January

      10, 2014 for (1) an unpaid promissory note for $30,000 plus 12% interest, and

      (2) check deception for five checks and promissory notes produced in exchange

      for five good checks from Beeman in violation of Indiana Code section 35-43-5-

      5.

[5]   At the close of the bench trial, both parties stipulated to filing memorandums of

      law and closing arguments. Tr. pp. 61–63. In Wyman’s written brief, he

      asserted the affirmative defense that Beeman knew that Cozy Traveler had

      insufficient funds in its checking account when the five bad checks were issued.

      Beeman filed a motion to strike Wyman’s affirmative defense, claiming that

      Wyman’s failure to assert the affirmative defense in his responsive pleadings

      waived the defense. The trial court denied Beeman’s motion to strike and

      entered judgment in favor of Wyman on September 4, 2018.2

[6]   Beeman now appeals, arguing that the affirmative defenses of check deception

      as listed in Indiana Code section 35-43-5-5(f) are affirmative defenses under

      2
        The trial court found that the facts of Beeman’s case did not “rise to the level established in Aronson v. Price,
      644 N.E.2d 864 (Ind. 1994)” and thus did not allow the court to pierce the corporate veil of Cozy Traveler.
      Neither Robert Wyman nor Kenneth Wyman, a representative of Cozy Traveler, can be held individually
      liable for the corporate debt.

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019                         Page 3 of 7
      Indiana Trial Rule 8(C), and that Wyman waived his right to these affirmative

      defenses when he failed to plead them in his responsive pleadings.

                                     Discussion and Decision
[7]   “A person does not commit a crime under subsection (a) when the payee or

      holder knows that the person has insufficient funds to ensure payment or that

      the check, draft, or order is postdated[.]” I.C. § 35-43-5-5(f)(2). This is an

      affirmative defense under Indiana Trial Rule 8(C).

[8]   Under Trial Rule 8(C), “A responsive pleading shall set forth affirmatively and

      carry the burden of proving…affirmative defense[s].” Wyman first set forth the

      affirmative defense of shared knowledge of insufficient funds in his

      memorandum at the close of trial. Beeman argues that Wyman waived his right

      to the affirmative defense when he failed to include it in his responsive

      pleadings.

[9]   Although Wyman failed to include the affirmative defense in his pleadings, the

      affirmative defense is not automatically waived.

              When issues not raised by the pleadings are tried by express or
              implied consent of the parties, they shall be treated in all respects
              as if they had been raised in the pleadings. Such amendment of
              the pleadings as may be necessary to cause them to conform to
              the evidence and to raise these issues may be made upon motion
              of any party at any time. . .but failure so to amend does not affect
              the result of the trial of these issues.

      T.R. 15(B).

      Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019   Page 4 of 7
[10]   Thus, an affirmative defense may still be properly before the trial court if it has

       been tried by implied consent of the parties, as “where the evidence presented at

       trial is such that a reasonably competent attorney would have recognized that

       the unpleaded issue was being litigated.” State Exchange Bank of Culver v. Teague,

       495 N.E.2d 262, 270 (Ind. Ct. App. 1986). This court has also previously noted

       that an affirmative defense is properly before the court when a party fails to

       object to the admission of evidence related to the affirmative defense. Whisler v.

       Bank of Henry County, 554 N.E.2d 17, 20 (Ind. Ct. App. 1990).

[11]   In this case, consent to litigate the unpleaded affirmative defense will be found

       if Beeman had overt or implied notice that evidence was being presented that

       she knew that Cozy Traveler had insufficient funds to cover the checks, and she

       failed to object to the admission of this evidence.

[12]   Our review of the record of the proceedings reveals that Wyman presented

       evidence as to Beeman’s knowledge of the funds in Cozy Traveler’s account

       such that a reasonably competent attorney would have recognized that the

       unpleaded issue was being litigated. First, Wyman sought information about

       Beeman’s knowledge of Cozy Traveler’s financial situation in his request for

       admissions. The first five requests asked Beeman to admit she “knew and

       understood when she received [each of the last five unpaid checks]. . . that [they

       were] unfunded.” Appellant’s App. Vol. II, p. 149. Beeman denied each request

       but did not object. These five requests notified Beeman that her knowledge of

       Cozy Traveler’s insufficient funds could be an issue at trial.

       Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019   Page 5 of 7
[13]   Testimony at trial also revealed that Wyman told Beeman that the money

       would be used to manufacture the RVs, and thus the checks were unfunded

       when issued. Wyman was asked:

               Q:       Was it your understanding – did you believe that Mrs.
                        Beeman understood, when you gave her each one of these
                        checks, that they were not funded checks?

               A:       That’s correct. They were – they were to be used to, um, to
                        manufacture.

               Q:       So you believed that Mrs. Beeman understood that.

               A:       Correct.

               Q:       And did you tell her that?

               A:       Correct.

       Tr. p. 50.

[14]   Beeman did not object. Wyman and Beeman both testified that Beeman only

       cashed the first ten checks after Wyman instructed her to, but Beeman would

       cash the interest checks immediately after they were issued. Id. at 50, 60.

       Wyman testified that he ran into financial difficulties and thus never told

       Beeman to cash the last five principal checks; Beeman did not cash the last five

       principal checks. Id. at 50–51. Again, Beeman did not object to this line of

       questioning that suggested Beeman waited to cash the principal checks because

       Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019   Page 6 of 7
       she knew that Wyman could not pay back the principal loans until the RVs

       were sold.

[15]   Although the affirmative defense was not pleaded, Wyman presented evidence

       of the shared knowledge of insufficient funds at trial. He submitted a request for

       admissions, testified as to his own knowledge of the plan and what he

       communicated to Beeman, and asked Beeman why she waited to cash the

       checks. Beeman failed to object to these questions and testimony.

[16]   The purpose behind Trial Rule 15(B) is to “provide parties with some flexibility

       in litigating a case, and to promote justice by permitting evidence brought in at

       trial to determine the liability of the parties.” Baker v. Midland-Ross Corp., 508
N.E.2d 32, 37 (Ind. Ct. App. 1987), trans. denied. The evidence presented clearly

       indicates an issue regarding Beeman’s knowledge of the sufficiency of the funds

       in Cozy Traveler’s accounts, and Beeman failed to object to evidence relevant

       to the affirmative defense. The issue was therefore tried by consent under Trial

       Rule 15(B), and the affirmative defense was properly before the trial court.

                                                 Conclusion
[17]   Wyman did not waive his affirmative defense by failing to assert it in his

       responsive pleadings. Affirmed.

       May, J., and Brown, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 18A-PL-2392 | August 27, 2019   Page 7 of 7