Court Opinion

ID: 4459811
Source: CourtListenerOpinion
Date Created: 2019-11-27 17:04:34.778114+00
Date Added: 2024-06-11T14:52:01.000428
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be
                                                                            FILED
regarded as precedent or cited before any                             Nov 27 2019, 10:00 am

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.

ATTORNEYS FOR APPELLANT                                 ATTORNEY FOR APPELLEE
John E. Hughes                                          Rick C. Gikas
Andrew T. Shupp                                         Merrillville, Indiana
Hoeppner Wagner & Evans, LLP
Valparaiso, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

Bobb Auto Group, LLC,                                   November 27, 2019
Appellant-Defendant,                                    Court of Appeals Case No.
                                                        19A-PL-1511
        v.                                              Appeal from the Lake Superior
                                                        Court
John Zembillas,                                         The Honorable John R. Pera,
Appellee-Plaintiff                                      Judge
                                                        Trial Court Cause No.
                                                        45D10-1608-PL-80

Baker, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019               Page 1 of 12
[1]   In August 2015, Bobb Auto Group, LLC (Bobb Auto), offered John Zembillas

      an Employment Agreement (the Agreement) to sign, promising that Zembillas

      would not be terminated without just cause and ensuring that, if Zembillas were

      terminated without just cause, he would receive a severance package. After new

      management fired Zembillas in March 2016, Bobb Auto failed to pay Zembillas

      his severance package. During the ensuing litigation, the trial court granted

      Zembillas’s motion for summary judgment for breach of contract. Now, Bobb

      Auto appeals that order, arguing that there are genuine issues of material fact

      regarding consideration and mutuality of obligation. Finding no error, we

      affirm.

                                                    Facts
[2]   Bobb Auto operates as a Chrysler dealership in Lake County. Art Georgion,

      Bobb Auto’s president and general manager, hired Zembillas to be the

      dealership’s advertising designer on March 11, 2013. Zembillas worked for

      Bobb Auto for two years before Georgion offered several of his key employees,

      including Zembillas, the Agreement to sign in August 2015.

[3]   The pertinent sections of the Agreement are as follows:

              WHEREAS – [Zembillas] is bound by all Bobb Auto Group, LLC
              Human Resources policies and procedures.

              WHEREAS – [Zembillas] has contributed to the success, growth,
              and profitability of the Company.
              WHEREAS – Company and [Zembillas] have determined that it
              is in their respective best interest to enter into this Agreement on
              the terms and conditions as set forth herein.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 2 of 12
        WHEREAS – Company recognizes that [Zembillas] (through
        his/her past and present efforts) has added substantial worth to the
        company.

        WHEREAS – Company wishes to provide continued employment
        for [Zembillas], however, if for any reason other than those cited
        in Section 6, the Company chooses to terminate employment with
        [Zembillas], [Zembillas] shall receive compensation as outlined in
        Section 5.

                                                 ***

        1[.] EMPLOYMENT – [Bobb Auto] . . . does hereby employ
        [Zembillas] in the position of Advertising Designer. [Zembillas]
        has served in such capacity since March 11, 2013.

        2. DUTIES – [Zembillas] performs all the duties of a[n] . . .
        Advertising Designer and agrees to be subject to the general
        supervision, orders, advice and direction of the President of the
        Company.

        3. EXTENT OF SERVICES. Employee shall devote his/her
        energy and efforts to the performance of his/her duties and the
        furtherance of the interests of the Company for a minimum of 40
        hours per week.

        4. TERM – Subject to the provisions for termination . . . the initial
        term of employment of [Zembillas] under this Agreement shall be
        TWO (2) years from and after the Effective Date . . . and it shall
        then renew annually at the discretion of the COMPANY.

        5. PAYMENT – In consideration of the services rendered to the
        Company hereunder by [Zembillas] and if the Company no longer
        wishes to employ [Zembillas] for any reason other than as
        described in Section 6, the Company shall pay [Zembillas] a lump
        sum amount equal to $48,600, less statutory deductions and
        withholdings, payable in accordance with the Company’s regular
        payroll practices.
        6. TERMINATION – This Agreement (except as otherwise
        provided hereunder) shall terminate upon the occurrence of any of
        the following at the time set forth therefore . . . :

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 3 of 12
                      6.1 DEATH OR DISABILITY – Immediately upon the
                      death of [Zembillas] or a determination by the Social
                      Security Administration that Employee has become totally
                      and permanently disabled.

                      6.2 TERMINATION FOR CONDUCT – Employee is
                      charged and convicted of a criminal activity in a court of
                      law or for Willful and Wanton Gross Negligence in
                      performing his/her duties.

                      6.3 MUTUAL AGREEMENT – [Zembillas] and Company
                      mutually agree to terminate this agreement.

                      6.4 EMPLOYEE RESIGNATION. [Zembillas] voluntarily
                      resigns his/her employment with the Company.

      Appellant’s App. Vol. II p. 78-79 (some emphases omitted). Georgion and

      Zembillas signed the Agreement on September 1, 2015.

[4]   For the next six months, Zembillas worked for Bobb Auto, logging fifty to fifty-

      five hours of work per week. It is undisputed that during this time, Zembillas

      performed his duties as advertising designer at or above the level required of

      him. There is no indication that Zembillas’s performance was in any way

      deficient. Then suddenly, without authorization from Chrysler to do so, Bobb

      Auto fired Georgion. A few days later, on March 4, 2016, Bobb Auto fired

      Zembillas without explanation. Despite receiving unemployment benefits,

      Zembillas never received the severance package outlined in Section 5 of the

      Agreement.

[5]   On August 4, 2016, Zembillas filed a complaint against Bobb Auto for breach

      of contract. Bobb Auto responded to Zembillas’s complaint on October 6, 2016,

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 4 of 12
      without any affirmative defenses. On February 6, 2017, Zembillas filed his first

      discovery requests for information from Bobb Auto, to which Bobb Auto never

      responded. After repeated extensions, Zembillas filed a motion to compel

      discovery on July 20, 2017. Still, Bobb Auto did not respond. Zembillas then

      filed a second motion to compel and a separate motion for contempt and

      discovery sanctions on August 15, 2017. Following a September 25, 2017,

      hearing, the trial court granted all of Zembillas’s motions and ordered that Bobb

      Auto respond to the discovery requests by October 5, 2017. Eventually, Bobb

      Auto complied with the trial court’s order.

[6]   Starting October 26, 2017, Zembillas attempted to depose numerous individuals

      associated with Bobb Auto. The parties agreed to have the depositions take

      place sometime in January 2018. On December 27, 2017, Bobb Auto informed

      Zembillas that it could not “confirm that anybody would be available that last

      week of January that we were hoping for.” Id. at 124. Therefore, the parties

      rescheduled the depositions for May 22-23, 2018.

[7]   However, on March 12, 2018, Bobb Auto filed a counterclaim against

      Zembillas and then on May 15, 2018, filed a motion for summary judgment,

      arguing that Georgion did not have the initial authority to enter into the

      Agreement with Zembillas and that the Agreement was not supported by

      consideration and lacked mutuality of obligation. Bobb Auto did not designate

      any evidence in support of its motion for summary judgment. On May 22,

      2018, neither Bobb Auto’s counsel nor any representative from Bobb Auto

      appeared for the scheduled depositions.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 5 of 12
[8]    On June 14, 2018, Zembillas filed a motion to strike or dismiss Bobb Auto’s

       counterclaim, a motion to bar Bobb Auto’s witnesses, a response to Bobb

       Auto’s original motion for summary judgment, and a countermotion for

       summary judgment along with supporting memoranda and designated

       evidence. In his countermotion for summary judgment, Zembillas argued that

       he and Georgion had entered into a valid, enforceable contract supported by

       consideration and that he had not received his severance package, despite being

       terminated without just cause.

[9]    Bobb Auto never responded to Zembillas’s countermotion for summary

       judgment. Instead, on July 30, 2018, Bobb Auto’s counsel withdrew from

       representation and new counsel appeared. On January 7, 2019, the trial court

       held a hearing on the pending motions, during which Bobb Auto failed to raise

       any of the issues contained in its initial motion for summary judgment. Indeed,

       Bobb Auto even conceded that its arguments in that motion were not valid. See

       generally Tr. Vol. II p. 19.

[10]   The next day, January 8, 2019, the trial court issued an order denying Bobb

       Auto’s original motion for summary judgment, granting Zembillas’s motion to

       dismiss Bobb Auto’s counterclaim, ruling that Zembillas’s motion to bar Bobb

       Auto’s witnesses was moot, and granting Zembillas’s countermotion for

       summary judgment. The trial court ordered that Bobb Auto pay Zembillas

       $60,303.84—$48,600 for the severance package, $11,003.84 in pre-judgment

       interest, and $700 in discovery sanctions. On February 6, 2019, Bobb Auto filed

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 6 of 12
       a motion to correct errors and a Trial Rule 62 motion to stay judgment; the trial

       court ultimately denied both motions. Bobb Auto now appeals.

                                       Discussion and Decision
[11]   Bobb Auto’s sole argument on appeal is that the trial court erred when it

       granted summary judgment in favor of Zembillas.1 Specifically, Bobb Auto

       contends that there are genuine issues of material fact regarding whether the

       Agreement lacked consideration and mutuality of obligation, and thus, an entry

       of summary judgment was improper.

                                                 Waiver and Delay

[12]   First, there is the issue of waiver. The record shows that at the January 7, 2019,

       hearing, Bobb Auto raised none of the issues before the trial court that it raises

       now on appeal. See WorldCom Network Servs., Inc. v. Thompson, 698 N.E.2d 1233,

       1242 (Ind. Ct. App. 1998) (holding that a party “should not be permitted to

       maintain one position before the trial court and a contrary position on appeal”).

       We find it difficult to accept Bobb Auto’s argument on appeal as germane and

       genuine given that we are the first tribunal to address its substance. Dunaway v.

       Allstate Ins. Co., 813 N.E.2d 376, 387 (Ind. Ct. App. 2004) (finding that “[i]ssues

       not raised before the trial court on summary judgment cannot be argued for the

       first time on appeal and are waived”); see also Poulard v. Lauth, 793 N.E.2d 1120,

       1
        Additionally, Bobb Auto raises a separate argument that the trial court erred in denying its motion to
       correct errors, which we decline to address since the substance of that argument is virtually the same as that
       comprising our analysis for the summary judgment discussion.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019                  Page 7 of 12
       1123 (Ind. Ct. App. 2003) (holding that “[a] summary judgment is a decision on

       the merits[]” and that “[m]ore specifically, matters not designated as genuine

       issues of material fact cannot be relied upon on appeal”). Accordingly, Bobb

       Auto has waived its argument.

[13]   Moreover, we are deeply concerned with Bobb Auto’s contumacious behavior

       throughout the litigation. The prolonged discovery process was caused

       primarily by Bobb Auto’s repeated failures to respond to Zembillas’s discovery

       requests and make witnesses available for scheduled depositions. And, in fact,

       the trial court sanctioned Bobb Auto by levying a fine that it has yet to pay.

       There was no reasonable explanation for Bobb Auto’s dilatory actions, and

       Bobb Auto’s behavior raises serious questions about whether we should even

       address its argument. Waiver notwithstanding, we choose to analyze Bobb

       Auto’s argument on its merits.

                                             Standard of Review

[14]   Our standard of review for summary judgment decisions is well established:

               When reviewing a grant or denial of a motion for summary
               judgment our standard of review is the same as it is for the trial
               court. The moving party bears the initial burden of making a
               prima facie showing that there are no genuine issues of material
               fact and that it is entitled to judgment as a matter of law.
               Summary judgment is improper if the movant fails to carry its
               burden, but if it succeeds, then the nonmoving party must come
               forward with evidence establishing the existence of a genuine issue
               of material fact. In determining whether summary judgment is proper,
               the reviewing court considers only the evidentiary matter the parties have
               specifically designated to the trial court. We construe all factual
               inference sin the non-moving party’s favor and resolve all doubts
               as to the existing of a material issue against the moving party. The
       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 8 of 12
               fact that the parties have filed cross-motions for summary
               judgment does not alter our standard for review, as we consider
               each motion separately to determine whether the moving party is
               entitled to judgment as a matter of law.

       Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012) (internal citations and quotations

       omitted) (emphasis added). Here, Bobb Auto argues that there are genuine

       issues of material fact as to whether the Agreement contained adequate

       consideration or mutuality of obligation.

                                                 Consideration

[15]   “To constitute consideration, there must be a benefit accruing to the promisor

       or a detriment to the promisee.” Hamlin v. Steward, 622 N.E.2d 535, 539 (Ind.

       Ct. App. 1993). Consideration, in other words, is a bargained-for exchange. Id.

[16]   The designated evidence demonstrates that the Agreement was the only written

       expression of the contractual employer/employee relationship between Bobb

       Auto and Zembillas. And the Agreement included a clause regarding the

       disputed severance package. That clause reads as follows:

               5. PAYMENT – In consideration of the services rendered to the
               Company hereunder by [Zembillas] and if the Company no longer
               wishes to employ [Zembillas] for any reason other than as
               described in Section 6, the Company shall pay [Zembillas] a lump
               sum equal to $48,600, less statutory deductions and withholdings,
               payable in accordance with the Company’s regular payroll
               practices.

       Appellant’s App. Vol. II p. 79 (emphases added and omitted).

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 9 of 12
[17]   Thus, the only designated evidence we have of consideration as it pertains to

       the employment relationship between Bobb Auto and Zembillas is the

       aforementioned Agreement. Because Bobb Auto failed to designate evidence in

       opposition to Zembillas’s motion for summary judgment and instead raised

       unrelated claims about the Agreement’s enforceability, we can only rely on the

       Agreement in rendering a decision about whether there was adequate

       consideration. And the Agreement expressly states that it was made:

               in consideration of the foregoing and the mutual covenants and
               promises contained herein, and for other good and valuable
               consideration, the receipt and sufficiency of which are hereby
               acknowledged . . . .

       Id. at 78 (emphases added).

[18]   Accordingly, based on the language contained in the Agreement, there was

       adequate consideration. Georgion and Zembillas formalized the terms and

       conditions of Zembillas’s employment and expressly stated that there was

       consideration sufficient to create a binding contract. See City of New Albany v.

       Cotner, 919 N.E.2d 125, 131 (Ind. Ct. App. 2009) (holding that “[w]hen a trial

       court has entered summary judgment based upon the construction of a written

       contract, it has determined either that: (1) the contract is not ambiguous or

       uncertain as a matter of law and the trial court need only apply the terms of the

       contract or (2) the contract is ambiguous, but the ambiguity may be resolved

       without the aid of factual determinations”). Further, there is undisputed

       evidence that Zembillas worked as advertising designer for the next six months

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 10 of 12
       for fifty to fifty-five hours per week and that his work was nothing less than

       satisfactory. As such, when new management at Bobb Auto fired Zembillas

       without just cause, Zembillas should have received his severance package

       pursuant to the terms of the Agreement.

                                           Mutality of Obligation

[19]   Our understanding of mutuality of obligation is well established:

               Mutuality of obligation is essential to the validity of an executory
               bilateral contract which is based solely on mutual promises or
               covenants and unless both parties are legally bound, so that each
               may hold the other liable for its breach, the contract lacks
               mutuality and neither party [is] bound. Thus, mutuality is absent
               when only one of the contracting parties is bound to perform, and
               the other party remains entirely free to choose whether or not to
               perform, and the rights of the parties exist at the option of one
               only.

       Sec. Bank & Trust Co. v. Bogard, 494 N.E.2d 965, 968 (Ind. Ct. App. 1986).

       “When construing a contract, Indiana courts will not find lack of mutality or

       uncertainty where a reasonable and logical interpretation will render the

       contract valid and enforceable.” Kokomo Veterans, Inc. v. Schick, 439 N.E.2d 639,

       645 (Ind. Ct. App. 1982)

[20]   Once again, the only designated evidence we have of an employer/employee

       relationship between Bobb Auto and Zembillas is the Agreement. And in the

       Agreement, Zembillas would only receive a severance package if two events

       occurred: (1) Zembillas performed his duties for at least forty hours per week at

       a level of performance required of him; and (2) Bobb Auto terminated

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 11 of 12
       Zembillas without just cause. In other words, Zembillas was obliged to work,

       and Bobb Auto was obligated to continue employing and paying Zembillas,

       unless it decided to terminate him without just cause and subsequently pay out

       a severance package. See, e.g., Eck & Assocs., Inc. v. Alusuisse Flexible Packaging,

       Inc., 700 N.E.2d 1163, 1168-69 (Ind. Ct. App. 1998). Thus, there is clear

       mutuality of obligation for both parties, as is evidenced by the terms and

       conditions of the Agreement. See Schick, 439 N.E.2d at 645 (holding that

       mutuality is present when there are “correlative enforceable obligations

       imposed on the parties to a contract so that both are bound by the terms of the

       contract”).

[21]   Therefore, we find that the trial court did not err when it granted summary

       judgment in Zembillas’s favor. Because we may rely only on the evidence

       designated for the summary judgment motion, we conclude that there is no

       genuine issue of material fact as to whether the Agreement contained adequate

       consideration or mutality of obligation. Bobb Auto provided no evidence to

       oppose or contradict the express terms of the contract—namely, that the

       consideration was good and valuable and that mutuality of obligation was

       present. Thus, the contract is valid, there was a breach of that contract, and

       Zembillas is entitled to his severance package as a matter of law.

[22]   The judgment of the trial court is affirmed.

       Kirsch, J., and Crone, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1511 | November 27, 2019   Page 12 of 12