Court Opinion

ID: 4433561
Source: CourtListenerOpinion
Date Created: 2019-08-27 15:03:59.423385+00
Date Added: 2024-06-11T14:27:36.485074
License: Public Domain

MEMORANDUM DECISION

Pursuant to Ind. Appellate Rule 65(D),                                            FILED
this Memorandum Decision shall not be
regarded as precedent or cited before any                                    Aug 27 2019, 9:05 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 APPELLEES
Joseph R. Delehanty                                      Joseph L. Mulvey
Gutwein Law                                              Mulvey Law, LLC
Lafayette, Indiana                                       Indianapolis, Indiana
Carina M. de la Torre
The de la Torre Law Office, LLC
Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA
Nanak Holdings, Inc.,                                    August 27, 2019
Appellant-Plaintiff,                                     Court of Appeals Case No.
                                                         18A-CC-2602
        v.                                               Appeal from the Marion Superior
                                                         Court
4M of Indianapolis, Inc.,                                The Honorable Cynthia J. Ayers,
Tak Management, Inc., and                                Judge
Tahir Khan,                                              The Honorable Anne Flannelly,
Appellees-Defendants.                                    Magistrate
                                                         Trial Court Cause No.
                                                         49D04-1611-CC-41891

Mathias, Judge.

Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019                  Page 1 of 11
[1]   Nanak Holdings, Inc. (“Nanak”) appeals the Marion Superior Court’s order

      granting partial summary judgment to 4M of Indianapolis, Inc., Tak

      Management, Inc., and Tahir Khan (collectively “the Defendants”) and

      removing Khan as a defendant from the proceedings. Nanak appeals and argues

      that a genuine issue of material fact, i.e. whether Khan executed a personal

      guaranty, precludes the entry of summary judgment in this case.

[2]   We affirm.

                                 Facts and Procedural History
[3]   On March 6, 2015, lessor Nanak, by its principal and sole owner, Varinder

      Sahi, and lessee 4M, by its principal Tahir Khan, entered into a lease agreement

      with respect to a gas station located on West Washington Street in Indianapolis,

      Indiana. In pertinent part, the lease agreement provides:

              Lessor is entering into this Lease Agreement upon the express
              condition that the obligations of the Lessee hereunder be
              personally guaranteed by Tahir Khan, Lessee’s principal
              shareholder. If Tahir Khan fails or refuses to execute a written
              personal guaranty of Lessee’s obligations hereunder, this Lease
              shall be null and void.

      Appellant’s App. Vol. II, p. 168.

[4]   Nanak provided a blank guaranty to Khan when the lease was executed

      between the parties. Nanak claims that Khan agreed to execute the guaranty but

      wanted his business partner to sign it as well. It is undisputed that Khan never

      retuned a signed guaranty to Nanak. Nanak allowed 4M to take possession of

      Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 2 of 11
      the West Washington Street gas station even though he had not received a copy

      of Khan’s signed guaranty.

[5]   Khan is also the principal of Tak Management. Shortly thereafter, on April 1,

      2015, Nanak leased a gas station on Post Road in Indianapolis to Tak

      Management. The Post Road lease did not contain the above-quoted guaranty

      provision. But Sahi claims that Khan stated that he would also personally

      guarantee Tak’s obligations under the Post Road lease.

[6]   In November 2016, Nanak filed a complaint for eviction and damages against

      4M and Khan relating to the West Washington Street gas station. Nanak also

      requested immediate possession of the gas station.1 Approximately nine days

      later, Nanak filed an amended complaint reiterating its claims with regard to

      the West Washington Street gas station but also alleging that Tak and Khan

      had breached the Post Road gas station lease. Specifically, Nanak alleged that

      4M and Tak breached the lease agreements by failing to pay rent and taxes on

      the leased premises and that Khan breached his guaranties because he failed

      and/or refused to cure 4M’s and Tak’s defaults under the lease agreements. In

      Counts Five and Six of the amended complaint, Nanak alleged that, as

      conditions of the West Washington Street and Post Road leases, Khan

      promised to be personally responsible for 4M’s obligations and to sign personal

      1
          On February 8, 2017, the parties agreed to transfer possession of the West Washington Street gas station to

      Nanak.

      Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019                          Page 3 of 11
      guaranties, and Nanak reasonably relied on Khan’s promises. In Count Seven,

      Nanak argued that as a result of their wrongful conduct, the Defendants have

      been unjustly enriched at Nanak’s expense. And finally, in Count Eight, Nanak

      alleged that it was induced to enter into the West Washington Street and Post

      Road leases based on Kahn’s false representations that he had executed the

      guaranties.

[7]   In the Defendants’ answer and counterclaim, Khan denied executing a

      guaranty for either the West Washington Street or Post Road leases. The

      Defendants also alleged that the West Washington Street lease was void

      because Kahn never executed a guaranty. With regard to the Post Road gas

      station, the Defendants claimed that Tak Management and Kahn only agreed

      to monitor the gas station to prevent it from being vandalized or otherwise

      damaged. However, the parties entered into the lease so that Tak Management

      could contract with suppliers for goods and services for the Post Road gas

      station. Therefore, the Defendants alleged that the parties agreed that rental

      payments would not be enforced. The Defendants also alleged that Nanak

      breached the West Washington Street lease agreement in several respects,

      including failing to repair and maintain the facilities and to secure a branded

      convenience store. The Defendants also raised counterclaims on the theories of

      promissory estoppel, unjust enrichment, and fraud based on promises Nanak

      made to the Defendants with regard to the two gas stations. Finally, the

      Defendants alleged that Nanak had committed check fraud, deception, and

      Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 4 of 11
      conversion by initiating an unauthorized and fraudulent electronic transfer from

      4M’s checking account.

[8]   On August 18, 2017, the Defendants filed a motion for partial summary

      judgment requesting judgment on all claims that Nanak alleged against Kahn

      personally, on breach of contract for the West Washington Street gas station

      lease (Count I), and the Defendants’ counterclaims for deception, conversion,

      and theft against Nanak. On January 12, 2018, Nanak filed a cross-motion for

      partial summary judgment on Count I, breach of the Washington Street lease,

      Count II, breach of the Post Road lease, and Count VII unjust enrichment of its

      complaint.

[9]   In support of their respective motions, Khan and Sahi designated affidavits to

      the trial court. In his affidavits, Khan stated that he did not execute “any

      personal guaranty in favor of Nanak or Sahi with respect to either of the Leases,

      either of the Stations, any liability of 4M or Tak, or otherwise.” Appellant’s

      App. Vol. II, p. 174; see also Appellant’s App. Vol. III, p. 152. In response, in

      his affidavit Sahi stated that he provided Khan with a personal guaranty when

      they signed the West Washington gas station lease and that Khan agreed to sign

      the guaranty and would return a signed copy once Khan’s business partner had

      also signed it. Appellant’s App. Vol. II, p. 214–15. Sahi also stated that when

      4M took possession of the gas station, Khan said that he and his business

      partner had signed the guaranty and Khan would send a copy to Sahi. Id. at

      215.

      Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 5 of 11
[10]   After a hearing was held on the parties’ motions, the trial court determined that

       Khan, in his individual capacity, was entitled to summary judgment on all

       claims and removed Khan as a defendant in the proceeding. The court also

       determined that Defendant 4M was entitled to summary judgment on Count I

       of Nanak’s complaint (breach of West Washington lease). The trial court

       entered a final judgment as to all counts against Khan and Count I of Nanak’s

       complaint pursuant to Indiana Trial Rule 54.

[11]   However, the court determined that the existence of genuine issues of material

       fact precluded the entry of summary judgment on Counts II (breach of the Post

       Road lease) and VII (unjust enrichment) of Nanak’s complaint. The court also

       denied 4M’s motion for partial summary judgment on Counts IV and VII of the

       Third-Party Complaint and Counterclaim against Nanak and Sahi for

       deception, conversion, theft and treble damages pursuant to the Crime Victims

       Relief Act.

[12]   Nanak now appeals. Specifically, Nanak appeals the trial court’s award of

       summary judgment to Khan and award of summary judgment to 4M on Count

       One of Nanak’s complaint.

                                          Standard of Review
[13]   When we review the entry of summary judgment, we apply the same standard

       as the trial court. City of Lawrence Util. Serv. Bd. v. Curry, 68 N.E.3d 581, 585

       (Ind. 2017). Summary judgment is appropriate only when “the designated

       evidentiary matter shows that there is no genuine issue as to any material fact

       Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 6 of 11
       and that the moving party is entitled to a judgment as a matter of law.” Ind.

       Trial Rule 56(C). An issue is “genuine” if a trier of fact is required to resolve the

       truth of the matter; a fact is “material” if its resolution affects the outcome of

       the case. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). “Just as the trial

       court does, we resolve all questions and view all evidence in the light most

       favorable to the non-moving party, so as to not improperly deny him his day in

       court.” Alldredge v. Good Samaritan Home, Inc., 9 N.E.3d 1257, 1259 (Ind. 2014)

       (citation omitted). When the challenge to summary judgment raises questions

       of law, we review them de novo. Rogers v. Martin, 63 N.E.3d 316, 320 (Ind.

       2016). The party opposing the grant of summary judgment has the burden of

       persuading this court that the trial court's ruling was improper. City of

       Lawrenceburg v. Milestone Contractors, 809 N.E.2d 879, 882–83 (Ind. Ct. App.

       2004), trans. denied. Finally, the fact that the parties have filed cross motions for

       summary judgment does not alter our standard of review, as we consider each

       motion independently to determine whether the moving party is entitled to

       judgment as a matter of law. Berkshire Hathaway Homestate Ins. Co. v. Basham,

       113 N.E.3d 630, 633 (Ind. Ct. App. 2018), trans. denied.

                                      Discussion and Decision
[14]   Nanak argues that the trial court erred when it entered summary judgment in

       Khan’s favor and on Count I of its complaint because whether Khan signed the

       guaranty for the West Washington Street lease is a genuine issue of material

       fact that must be resolved by a fact-finder. In response, the Defendants argue

       that the trial court properly determined that Khan was entitled to judgment as a

       Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 7 of 11
       matter of law because Nanak did not designate a guaranty signed by Khan to

       the trial court, and therefore, Khan was not personally obligated under the

       West Washington Street lease, and the lease is void.

[15]   “A guaranty is defined as ‘a promise to answer for the debt, default, or

       miscarriage of another person.’” S-Mart, Inc. v. Sweetwater Coffee Co., 744 N.E.2d
580, 585 (Ind. Ct. App. 2001) (citation omitted), trans. denied. “It ‘is an

       agreement collateral to the debt itself’ and represents a ‘conditional promise’

       whereby the guarantor promises to pay only if the principal debtor fails to pay.”

       Id. (citation omitted).

[16]   Indiana’s Statute of Frauds provides in part as follows:

               A person may not bring any of the following actions unless the
               promise, contract, or agreement on which the action is based, or
               a memorandum or note describing the promise, contract, or
               agreement on which the action is based, is in writing and signed
               by the party against whom the action is brought or by the party’s
               authorized agent:

                                                        ....

               (2) An action charging any person, upon any special promise, to
               answer for the debt, default, or miscarriage of another.

       Ind. Code § 32-21-1-1(b).

[17]   Statute of Frauds has existed in substantially the same form, at least as it

       pertains to guaranties, for well over a century. See, e.g., Drake v. Markle, 21 Ind.
433, 436 (1863) (“The statute of frauds provides, that ‘no action shall be

       brought * * to charge any person, upon any special promise, to answer for the

       Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 8 of 11
       debt, default or miscarriage of another, * * * unless the promise, contract, or

       agreement, upon which such action shall be brought, or some memorandum or

       note thereof, shall be in writing, and signed by the person to be charged

       therewith[.]’”); see also Grabill Cabinet Co., Inc. v. Sullivan, 919 N.E.2d 1162, 1167

       (Ind. Ct. App. 2010) (explaining that the Statute of Frauds requires a guaranty

       to be in writing and signed by the guarantor in order to be valid).

[18]   The West Washington Street lease that was executed between Nanak and 4M

       provides in pertinent part:

               Lessor is entering into this Lease Agreement upon the express
               condition that the obligations of the Lessee hereunder be
               personally guaranteed by Tahir Khan, Lessee’s principal
               shareholder. If Tahir Khan fails or refuses to execute a written
               personal guaranty of Lessee’s obligations hereunder, this Lease
               shall be null and void.

       Appellant’s App. Vol. II, p. 168.

[19]   Nanak provided a blank guaranty to Khan when the lease was executed

       between the parties. The parties dispute whether Khan stated that he had signed

       the guaranty and would provide a copy to Nanak. But it is undisputed that no

       executed guaranty for either the West Washington Street gas station lease or the

       Post Road gas station lease was ever provided to Nanak and Nanak did not

       witness Khan signing any guaranty. Neither party designated a signed copy of

       the guaranty to the trial court. Therefore, the Statute of Frauds prevents

       enforcement of Khan’s promise to guaranty the payments and obligations

       Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 9 of 11
       provided for in the West Washington Street and/or Post Road lease(s).2 And,

       under the unambiguous and plain terms of the West Washington Street lease,

       because there is no executed, written guaranty, the lease is null and void.

       Appellant’s App. Vol. II, p. 168

[20]   In its Reply brief, Nanak briefly mentions other “bases under Indiana law why

       the Statute of Frauds is unavailable to allow Khan to escape personal liability or

       for 4M to reduce liability under the circumstances[.]” Reply Br. at 20. In its

       complaint and other pleadings, Nanak raised claims of promissory estoppel,

       unjust enrichment, and fraud. However, Nanak does not cite to any authority

       or specifically argue that the trial court erred when it granted summary

       judgment to Khan on those claims raised in Nanak’s complaint. Therefore,

       Nanak has waived these issues on appeal.

[21]   Finally, Nanak argues that the trial court’s order concerning Count VII of its

       amended complaint is inconsistent and requires reversal. The trial court granted

       summary judgment to Khan on Count VII of Nanak’s complaint claiming

       unjust enrichment. The trial court also denied Nanak’s motion for summary

       judgment on Count VII of its complaint, which Nanak argues is inconsistent

       with its grant of summary judgment to Khan on that count. However, when

       read in its entirety, it is clear that while the court granted summary judgment to

       2
        Nanak attempts to analogize this case to one involving a lost or missing written instrument. But Nanak
       never witnessed or had possession of a guaranty signed by Khan. For this reason, we are not persuaded by
       Nanak’s reliance on Marksill Specialties, Inc. v. Barger, 428 N.E.2d 65, 68 (Ind. Ct. App. 1981) and Davis v.
       Schneider, 395 N.E.2d 283, 285 (Ind. Ct. App. 1979). See Appellant’s Reply Br. at 14–17.

       Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019                   Page 10 of 11
       Khan, it left for trial Nanak’s claim of unjust enrichment against 4M and Tak

       Management.

                                                 Conclusion
[22]   Because Nanak did not designate an executed guaranty to the trial court, the

       trial court properly granted summary judgment to Khan, in his individual

       capacity, and to all Defendants on Count I (breach of the West Washington

       Street lease) Nanak’s complaint. We therefore affirm the judgment of the trial

       court.

[23]   Affirmed.

       Vaidik, C.J., and Crone, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 18A-CC-2602 | August 27, 2019   Page 11 of 11