Court Opinion

ID: 4383187
Source: CourtListenerOpinion
Date Created: 2019-04-02 16:04:05.098113+00
Date Added: 2024-06-11T13:31:19.145598
License: Public Domain

FILED
      MEMORANDUM DECISION
                                                                                      Apr 02 2019, 9:46 am

      Pursuant to Ind. Appellate Rule 65(D),                                              CLERK
                                                                                      Indiana Supreme Court
      this Memorandum Decision shall not be                                              Court of Appeals
                                                                                           and Tax Court
      regarded as precedent or cited before any
      court except for the purpose of establishing
      the defense of res judicata, collateral
      estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT                                    ATTORNEY FOR APPELLEE
      Larry C. Thrush                                           Jay A. Rigdon
      Wabash, Indiana                                           Warsaw, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Larry Hoover d/b/a                                        April 2, 2019

      Quality Electric, Inc.,                                   Court of Appeals Case No.
                                                                18A-SC-2293
      Appellant-Plaintiff,
                                                                Appeal from the Wabash Superior
              v.                                                Court
                                                                The Honorable Karen A. Springer,
      John Schuler,                                             Judge Pro Tempore
                                                                Trial Court Cause No.
      Appellee-Defendant.
                                                                85D01-1806-SC-223

      Friedlander, Senior Judge.

[1]   Larry Hoover appeals the denial of his motion to correct error. This matter

      stems from a small claims action Hoover initiated against John Schuler (“J.P.”)

      to recover damages for alleged breach of contract, existence of an account

      Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019                 Page 1 of 10
                                                1
      stated, and unjust enrichment. Hoover presents three issues for review, which

      we consolidate and restate as whether the trial court erred in denying his claim.

      We affirm.

[2]   The facts of this case are as follows. Hoover is the sole owner of Quality

      Electric, Inc. (“Quality Electric”), an Indiana corporation with its principal

      office located in Wabash, Indiana. Quality Electric provides heating, air

      conditioning, electrical, and plumbing services.

[3]   J.P. and his two sons, Mike and Scott Schuler, farmed together and also

      operated Pro-Ag, LLC, a farm shop located in North Manchester, Indiana.

      The farm shop was where all of the farm equipment was repaired and readied

      for use on the farm.

[4]   Scott Schuler is married to Hoover’s daughter. Hoover and J.P. have known

      each other for at least thirty years.

[5]   One afternoon, in 2012, J.P. was at the shop when a storm developed. The

      wind blew a thirty-six-foot wide overhead door onto the shop’s roof, causing

      substantial damage. That same day, Scott contacted a local crew to remove the

      door and Quality Electric to perform electrical services. Quality Electric

      employees completed the work in September 2012. In August 2013, Quality

      Electric performed additional electrical services for the shop, specifically:

      1
          In Wabash County, small claims actions are filed in the Wabash Superior Court.

      Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019        Page 2 of 10
      “added more lighting to the shop and did some other . . . miscellaneous work[,]

      adding receptacles and [a] switch.” Tr. Vol. II, p. 10.

[6]   At some point, a conflict arose between J.P., Mike, and Scott because of “intra-

      family disputes,” and on September 11, 2014, Scott sued Mike, J.P., and the

      LLC in the Wabash Circuit Court. Appellant’s App. Vol. II, p. 5 (internal

      quotations omitted). On March 18, 2015, the trial court appointed receivers.

[7]   The parties eventually submitted to binding arbitration, which resulted in an

      arbitration award issued on July 14, 2017. The arbitration panel found, among

      other things, that the farm shop was located on J.P.’s land and was deemed

      J.P.’s asset. The parties subsequently entered into a settlement agreement that

      incorporated the arbitration award. The agreement was approved by the trial

      court and ordered implemented on February 20, 2018.

[8]   In August 2017, while the lawsuit was still pending and the matter was in

      receivership, Hoover sent to the receivers the 2012 and 2013 invoices for the

      work performed at the farm shop. The receivers declined to pay the invoices,

      finding that the work predated the receivership. In their Thirtieth Report of

      Receiver and Request for Compensation, the receivers reported the following to

      the trial court regarding the invoices:

              Both of these jobs were for work that occurred several years ago
              and prior to the establishment of the Receivership. The
              Receivers called Larry Hoover with Quality Electric to inquire
              about these invoices. Larry indicated that the invoices were
              indeed for work done on J.P.’s Farm Shop several years ago. He
              said that at the time the work was done he thought that the shop

      Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 3 of 10
              was owned by Scott, since it adjoined Scott’s property. Larry
              said he sometimes does not charge Scott for work he does for
              him, and these two projects were some of those instances.
              However, now that he is aware that J.P. owns this building, he
              thought it was necessary to bill for these jobs.

              Because this work occurred prior to the establishment of the
              Receivership, the Receivers do not intend to pay these invoices
              out of Receivership funds unless instructed to do so by the court
              or unless all parties agree to this course of action. Furthermore,
              these invoices were remitted to the Receiver after J.P.’s Shop was
              returned to J.P. and removed from Receivership control. Thus,
              without instruction from the court or agreement from the parties
              to pay with Receivership funds, the Receivers intend to pass
              these invoices along to J.P. and notify Quality Electric of this and
              their stance that the invoices should be addressed to either
              whomever ordered the work done or J.P., since he is the owner
              of the building upon which the work was completed.

      Exhibits Vol. III, p. 59.

[9]   Hoover then sent the invoices to J.P. for payment. When the invoices went

      unpaid, Hoover filed suit in small claims court in June 2018. A bench trial was

      held on Hoover’s claim on July 13, 2018, at the conclusion of which the trial

      court orally ruled in favor of J.P. On July 20, 2018, Hoover filed a motion to

      correct error. On August 22, 2018, the court heard arguments on the motion

      and entered its order denying the motion, which reads in pertinent part as

      follows:

              10. Hoover blames a former secretary for the almost five (5)
              year delay to submit Plaintiff's Exhibit 1 [(the 2012 invoice)] and
              the more than four (4) year delay to submit Plaintiff's Exhibit 2

      Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 4 of 10
        [(the 2013 invoice)]. Hoover claimed that a file had been “filed
        without being billed” and was not discovered until “they asked
        for a job to be done at one of the farms where they were going to
        split the house meter from the farm operation meters.”

        11. . . . Hoover offered no explanation as to why the
        “misfiling” was not discovered when Quality Electric was asked
        to perform the second job almost a year later. Hoover’s
        explanation of why it took more than four years after the
        completion of the second job to submit a bill for either of them
        fell short.

        12. A more plausible explanation became apparent when JP
        admitted Defendant’s Exhibit B over Plaintiff’s hearsay
        objection. Defendant’s Exhibit B is the Thirtieth Report of
        Receiver and Request for Compensation . . . (“Receiver's
        Report”). . . .

                                              *****

        22. This Court simply cannot conclude that Quality Electric is
        entitled to recover its charges for the services and supplies
        belatedly billed under the facts of this case. The Receiver’s
        Report offers the most credible evidence as to why Hoover never
        submitted the bills in question until August 31, 2017. The
        totality of the circumstances lead [sic] this Court to believe that
        the omission was an intentional act on Hoover’s part as opposed
        to a mistake created by former office staff. The credible evidence
        leads to the conclusion that Hoover never intended to bill for
        those services until he learned that his son-in-law was divested of
        any ownership interest in the Farm Shop Improvements by the
        Arbitration Award. Quality Electric’s cries of unjust enrichment
        fail to move this Court simply because it was J.P. instead of his
        son/Hoover’s son-in-law who was awarded the Farm Shop
        Improvements. This Court rejects Plaintiff’s contention that

Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 5 of 10
               [Auffenberg v. Bd. of Trs. of Columbus Reg’l Hosp., 646 N.E.2d 328
               (Ind. Ct. App. 1995),] compels a judgment in favor of Quality
               Electric. To the contrary, it compels a finding that J.P. met any
               burden that he had under Plaintiff’s theory of an account stated
               or unjust enrichment or something else.

                     Plaintiff’s Motion to Correct Errors filed July 20, 2018 is
               hereby denied. Judgment remains entered in favor of the
               Defendant and against the Plaintiff.

       Appellant’s App. Vol. II, pp. 6, 9. This appeal followed.

[10]   The issue is whether the trial court erred in denying Hoover’s claim. Hoover

       specifically maintains the trial court erred in finding that there was no contract

       between Hoover and J.P. and that J.P. “sustained his burden of proving that the

       account stated was incorrect.” Appellant’s Br. p. 4. Hoover also contends the

       trial court erred in denying his unjust enrichment claim.

[11]   Judgments in small claims actions are “subject to review as prescribed by

       relevant Indiana rules and statutes.” Trinity Homes, LLC v. Fang, 848 N.E.2d

       1065, 1067 (Ind. 2006) (quoting Ind. Small Claims Rule 11(A)). Upon review

       of claims tried by the bench without a jury, we shall not set aside the judgment

       “unless clearly erroneous, and due regard shall be given to the opportunity of

       the trial court to judge the credibility of the witnesses.” Ind. Trial Rule 52(A).

       We define the clearly erroneous standard based upon whether the party is

       appealing a negative or an adverse judgment. Garling v. Ind. Dept. of Nat.

       Res., 766 N.E.2d 409 (Ind. Ct. App. 2002), trans. denied. Hoover had the burden

       of proof at trial on his small claims action. A judgment entered against a party

       Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 6 of 10
       who bore the burden of proof at trial is a negative judgment. Id. On appeal, we

       will not reverse a negative judgment unless it is contrary to law. LTL Truck

       Serv., LLC v. Safeguard, Inc., 817 N.E.2d 664 (Ind. Ct. App. 2004). To determine

       whether a judgment is contrary to law, we consider the evidence in the light

       most favorable to the appellee, together with all the reasonable inferences to be

       drawn therefrom. Id. The judgment will be reversed only if the evidence leads

       to but one conclusion and the trial court reached the opposite conclusion. Id.

       Our deferential standard of review is particularly important in small claims

       actions, where trials are “informal, with the sole objective of dispensing speedy

       justice between the parties according to the rules of substantive law.” Ind.

       Small Claims Rule 8(A).

[12]   An account stated is an agreement between the parties that all items of an

       account and balance are correct, together with a promise, express or implied, to

       pay the balance. Jackson v. Trancik, 953 N.E.2d 1087 (Ind. Ct. App. 2011). An

       agreement that the balance is correct may be inferred from delivery of the

       statement and the account debtor’s failure to object to the amount of the

       statement within a reasonable amount of time. Auffenberg, 646 N.E.2d 328.

       Failing to object to liability on an account until a suit is filed constitutes failure

       to object to the account within a reasonable time and supports the inference of

       an agreement that the account balance is correct. Id. Still, the general rule on

       an account stated is that there must have been “prior dealings between the

       parties, and after an examination of all the items by each of the parties, they

       must have mutually agreed upon the items of the account, and that the balance

       Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 7 of 10
       struck is just and due from the party against whom it is stated.” Bottema v.

       Hendricks Cty. Farm Bureau Co-op. Ass’n, Inc., 159 Ind. App. 175, 179, 306

       N.E.2d 128, 130 (1974) (internal citations and quotations omitted). It is on this

       latter basis that we find that Hoover cannot maintain an action against J.P. for

       breach of contract or prevail on an account stated because he had no

       contractual relationship with J.P. and was not in privity with him.

[13]   The evidence simply does not support a finding that Hoover had a contractual

       relationship with J.P., and there was no agreement with J.P. that the invoices

       were correct or an express or implied promise from J.P. to pay the invoices.

       According to the receivers’ report, Hoover told the receivers that at the time the

       work was performed, he thought Scott owned the shop; sometimes Hoover

       would not charge his son-in-law for work performed; the projects in question

       were examples of work for which Hoover would not charge Scott; and Hoover

       decided “it was necessary” to bill J.P. for the work only after he discovered that

       J.P. owned the shop. Appellant’s App. Vol. II, p. 7. Hoover testified that Scott

       contacted him and asked that the work be performed at the shop, that Hoover

       “usually never . . . talked to [J.P.]” about work to be performed at the shop, and

       that Hoover did not talk to J.P. about the work in question. Tr. Vol. II, p. 14.

       Hoover did not send any invoices for the work until years later and did so only

       after he found out that Scott did not own the shop. Scott testified that he was

       “always the contact person for the day to day stuff and – and the repair work

       just as [Hoover] said.” Id. at 23.

       Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 8 of 10
[14]   Indeed, Hoover also testified that he expected to be paid for the work he

       performed at the shop; that “these [projects] would not be instances where I

       would donate the money because it was part of the farming operation;” that he

       “would never [donate his services] when . . . there was [sic] three different

       people involved in the farming operation;” and that he failed to send invoices in

       a timely manner because the paperwork was “misfiled.” Id. at 16, 17. The trial

       court, however, disbelieved the testimony. See generally, McClendon v. State, 671

       N.E.2d 486, 488 (Ind. Ct. App. 1996) (providing that the trier of fact is free

       to believe or disbelieve witnesses as it sees fit). Based upon the foregoing, we

       conclude the trial court did not err in finding no contractual relationship

       between Hoover and J.P. and no existence of an account stated.

[15]   Neither can Hoover recover damages based upon the theory of unjust

       enrichment. Also called a quasi-contract, the claim “is a legal fiction invented

       by the common-law courts in order to permit a recovery . . . where, in fact,

       there is no contract, but where the circumstances are such that under the law of

       natural and immutable justice there should be a recovery as though there had

       been a promise.” Clark v. Peoples Sav. & Loan Ass’n, 221 Ind. 168, 171, 46

       N.E.2d 681, 682 (1943). Our courts articulate three elements for these claims:

       1) a benefit conferred upon another at the express or implied request of this

       other party; 2) allowing the other party to retain the benefit without restitution

       would be unjust; and 3) the plaintiff expected payment. Kelly v. Levandoski, 825

       N.E.2d 850 (Ind. Ct. App. 2005), trans. denied. Put another way, “a plaintiff

       must establish that a measurable benefit has been conferred on the defendant

       Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019   Page 9 of 10
       under such circumstances that the defendant’s retention of the benefit

       without payment would be unjust. One who labors without an expectation of

       payment cannot recover in quasi-contract.” Bayh v. Sonnenburg, 573 N.E.2d

       398, 408 (Ind. 1991).

[16]   Here, the evidence clearly shows that J.P. did not request the electrical services,

       and Hoover did not expect payment for the work. Hoover sought payment

       only after discovering that his son-in-law did not own the shop. As such, he

       cannot recover on the theory of unjust enrichment.

[17]   We find the trial court did not err when it denied Hoover’s claim. The
                                                            2
       judgment of the trial court is affirmed.

       May, J., and Pyle, J., concur.

       2
        We decline to address J.P.’s counterclaim alleging the trial court erred in refusing to admit into evidence his
       affidavit.

       Court of Appeals of Indiana | Memorandum Decision 18A-SC-2293 | April 2, 2019                     Page 10 of 10