Court Opinion

ID: 9897273
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:09:32.177789+00
Date Added: 2024-06-11T09:13:59.974708
License: Public Domain

FILED
                                                                                              Sep 28 2023, 8:48 am

                                                                                                   CLERK
                                                                                               Indiana Supreme Court
                                                                                                  Court of Appeals
                                                                                                    and Tax Court

ATTORNEYS FOR APPELLANT TRICOR                       ATTORNEYS FOR APPELLEES
AUTOMOTIVE GROUP
                                                     Douglas D. Church
F. Anthony Paganelli                                 Alexander P. Pinegar
Joshua R. Lowry                                      Church Church Hittle & Antrim
Paganelli Law Group                                  Noblesville, Indiana
Indianapolis, Indiana
                                                     Stuart G. Parsell
                                                     Zieger, Tigges & Little LLP
ATTORNEYS FOR APPELLANT
                                                     Columbus, Ohio
ALLEGIANCE ADMINISTRATORS LLC
John R. Maley
Peter J. Rusthoven
Kian J. Hudson
Barnes & Thornburg LLP
Indianapolis, Indiana

                                            IN THE
     COURT OF APPEALS OF INDIANA

Tricor Automotive Group,                                   September 28, 2023

Appellant-Plaintiff,                                       Court of Appeals Case No.
and Allegiance Administrators                              22A-PL-1137
LLC,
                                                           Appeal from the
Appellant-Defendant,                                       Hamilton Circuit Court
        v.
                                                           The Honorable
Dealer VSC Ltd., and Haytham                               Paul A. Felix, Judge
Elzayn,
                                                           Trial Court Cause No.
Appellees-Defendants.                                      29C01-2005-PL-3324

                                      1
                          Opinion by Senior Judge Shepard
                          Judges Riley and Kenworthy concur.

1
 We held oral argument in this appeal on April 5, 2023, in the Court of Appeals Courtroom in Indianapolis.
We commend counsel on their oral and written advocacy.

Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                        Page 1 of 31
      Shepard, Senior Judge.

[1]   In 2018, Dealer VSC, Ltd. (“Dealer”) and its sole owner Haytham ElZayn

      (“ElZayn”) entered into a series of interrelated contracts with Tricor

      Automotive Group (“Tricor”) pertaining to a business venture operated
                                                                                       2
      through Allegiance Administrators LLC (“Allegiance”). Eventually, questions

      arose as to whether a default event occurred under a binding Memorandum of

      Understanding (“MOU”) that incorporated by reference several of these

      interrelated contracts. Tricor took contractual steps—individually and on

      behalf of Allegiance—as though a default occurred. However, Dealer and

      ElZayn maintained there was no default.

[2]   Eventually, litigation arose between all four parties, culminating in the entry of

      summary judgment for Dealer and ElZayn on a series of claims and

      counterclaims. Tricor now appeals, asserting the trial court erred in granting

      2
          For ease of reference, we provide the following record citations to interrelated contracts discussed herein:

      •          Formation and Contribution Agreement between Dealer and Tricor. See Appellant’s App. Vol. II,
                 pp. 206–220.
      •          Agreement for Purchase and Sale of Goodwill between Allegiance and ElZayn. See Appellant’s
                 App. Vol. III, pp. 122–37 (including amendment).
      •          Binding Memorandum of Understanding between Dealer, ElZayn, and Tricor. See id.at 138–41.
      •          Convertible Secured Promissory Note executed by Dealer in favor of Tricor. See id. at 142–45.
      •          Unit Pledge Agreement between Dealer and Tricor. See id. at 146–151.
      •          Initial Operating Agreement for Allegiance (owned by Dealer and Tricor). See id. at 5–81.
      •          Amended Operating Agreement for Allegiance. See id. at 82–121.

      Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                                Page 2 of 31
      summary judgment to Dealer and ElZayn because—among other things—the

      designated evidence indicates that a default event occurred.

[3]   Although the parties generally focus on whether there was a financial default,

      we ultimately conclude that a genuine issue of material fact exists as to whether

      an operational default occurred. In light of this potential default, Dealer and

      ElZayn are not entitled to summary judgment. We therefore reverse the grant

      of summary judgment and remand for further proceedings on the merits.

      Facts and Procedural History
[4]   ElZayn is an Ohio resident with experience administering vehicle service

      contracts through entities he has formed, acquired, or controlled. One such

      company is Dimension Service Corporation (“Dimension”), an entity
                                                3
      headquartered in Ohio. Tricor is an Indiana Corporation that ElZayn does not

      control. Tricor’s CEO is Joseph Campbell and its CFO is Brian Leslie.

[5]   At some point, ElZayn and Campbell discussed a business venture involving

      the formation of Allegiance, an Ohio entity. The plan—as eventually outlined

      in several interrelated agreements—was for Allegiance to take over a line of

      business ElZayn currently ran through Dimension (“Assurant Line of

      Business”), with ElZayn overseeing the day-to-day business affairs by serving as

      3
          At times, documents in this case refer to Tricor as “TAGUS” (Tricor Automotive Group US).

      Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                          Page 3 of 31
      the CEO of Allegiance. In preparation, ElZayn formed Dealer—an Ohio entity

      he wholly owned—to hold equity in Allegiance. ElZayn then transferred to

      Dealer all of Dimension’s contractual interest in the Assurant Business while

      reserving the personal goodwill associated with the Assurant Business.

[6]   As a contribution to the business venture with Tricor, Dealer would transfer to

      Allegiance all contractual interest in the Assurant Business. Separately,

      Allegiance would purchase the personal goodwill from ElZayn. To fund

      Allegiance’s purchase of the goodwill from ElZayn, Tricor would make a

      substantial capital contribution to Allegiance earmarked for the purchase.

      Tricor would ultimately have some protection in the business arrangement in

      that, if the Assurant Business fell short of targeted earnings, ElZayn would

      personally reimburse Allegiance up to $2 million, and Allegiance would

      distribute any reimbursement to Tricor as an excess capital contribution.

      The Agreements
[7]   To carry out the agreement in principle, on April 1, 2018 (“Closing Date”),

      Dealer and Tricor executed a Formation and Contribution Agreement

      regarding the establishment and operation of Allegiance. See Appellants’ App.

      Vol. II, pp. 205-220. The agreement contemplated the contemporaneous

      execution of several interrelated transactions, which was a condition to closing.

      Upon closing, Dealer would hold 51% of the interest in Allegiance and Tricor

      would hold the remaining 49% (each unit of interest, an “Allegiance Unit”),

      Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 4 of 31
      with each party making an initial pro rata capital contribution. Allegiance

      would employ ElZayn as its CEO, with ElZayn performing the job duties

      outlined in Allegiance’s Operating Agreement. Pursuant to the Operating

      Agreement, Allegiance would be managed by a Board of Managers.

[8]   The Formation and Contribution Agreement addressed the plan for Allegiance

      to purchase the personal goodwill from ElZayn. That is, Recital (H) states:

              Allegiance . . . desires to acquire Mr. ElZayn’s personal goodwill
              associated with the Assurant Business so that it can ensure the
              continued benefit derived from that goodwill. Thus, in addition
              to its cash contribution towards the initial capitalization of
              Allegiance [], [Tricor] also intends to contribute $7,000,000.00 in
              cash to Allegiance. . . . Pursuant to a personal goodwill purchase
              agreement (the “Goodwill Purchase Agreement”) to be entered
              into between Allegiance . . . and Mr. ElZayn—as set forth in this
              Agreement—Allegiance . . . will use the contributed funds to
              purchase Mr. ElZayn’s personal goodwill related to the Assurant
              Business.

      Appellants’ App. Vol. II, p. 207. Section 3(c) contains an acknowledgement

      that $7 million contribution would “be used by Allegiance . . . to purchase Mr.

      ElZayn’s personal goodwill associated with the Assurant Business” through a

      separate agreement between Allegiance and ElZayn. Id. at 209.

[9]   On the Closing Date, Allegiance and ElZayn executed that separate agreement,

      the Agreement for Purchase and Sale of Goodwill (“Goodwill Agreement”),

      with Allegiance paying ElZayn the $7 million in earmarked funds from Tricor.

      Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 5 of 31
[10]   The First Amendment to the Goodwill Agreement contains an earning

       contingency that protects Tricor in the event the Assurant Business did not

       reach an earning milestone. That is, the Goodwill Agreement provides that, if

       Allegiance’s independently calculated net earnings (“EBITDA”) from the

       Assurant Business were less than $3 million for the 12-month period ending

       June 30, 2019, ElZayn was obligated to reimburse Allegiance for the shortfall

       up to a maximum reimbursement of $2 million (“Goodwill Adjustment”). This

       conditional obligation is reflected in Section 4(b) of the Goodwill Agreement:

                  4.       Consideration.
                  ***
                  (b)    Contingency: Adjustment to Purchase Price. The
                  Purchase Price is expressly contingent upon Allegiance . . .
                  producing, within the period beginning [July 1, 2018 and ending
                                   4
                  June 30, 2019] on the Effective Date and ending 12 months from
                  the Effective Date, at least $3,000,000.00 in EBITDA from the
                  Assurant Business (the “Earnings Contingency”). In the event
                  [Allegiance] does not satisfy the Earnings Contingency, then the
                  Purchase Price will be reduced dollar for dollar with the shortfall
                  under $3,000,000.00 in EBITDA, up to a maximum reduction of
                  $2,000,000.00. Within 90 days after failing to satisfy the
                  Earnings Contingency, Mr. ElZayn will reimburse Allegiance . . .
                  the difference between the Purchase Price that he received on the
                  Closing Date, and the reduced Purchase Price as determined
                  under the preceding sentence. Immediately upon being
                  reimbursed any amount under this section 4(b), Allegiance . . .
                  will distribute that same amount to [Tricor] as a return of capital,

       4
           The parties amended the Goodwill Agreement to reflect this period. See Appellants’ App. Vol. III, p. 135.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                            Page 6 of 31
                  and will adjust the capital account maintained for [Tricor]
                  accordingly.

       Appellants’ App. Vol. III, p. 124. The Goodwill Agreement does not define the

       term EBITDA or set forth a method for calculating EBITDA.

[11]   On the Closing Date, Dealer and Tricor also executed an Operating Agreement

       adopting provisions for the operation of the entity that were consistent with the

       provisions in the Formation and Contribution Agreement.

[12]   About one year later, Dealer sought a line of credit from Tricor. Dealer,
                                                                     5
       ElZayn, and Tricor later executed the MOU, under which Tricor agreed to

       provide a line of credit (“Loan Facility”) in exchange for 6% of Dealer’s interest

       in Allegiance, i.e., 6 Allegiance Units. Under the terms of the MOU, Dealer

       would separately execute a convertible promissory note in favor of Tricor

       (“Note”), and ultimately pledge its 45 Allegiance Units as collateral for Dealer’s

       draws on the Loan Facility. As a party to the MOU, ElZayn had certain rights

       and obligations. Although Allegiance was not a party, the MOU refers at times

       to Allegiance and the terms of its Operating Agreement.

[13]   As a result of the transaction between Dealer and Tricor, Tricor’s interest in

       Allegiance would increase from 49% to 55%, with Dealer holding 45%. If there

       5
           Although we refer to this document as the MOU, it is undisputed that the MOU is a binding contract.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                           Page 7 of 31
       was an uncured event of default—as defined in Section 5 of the MOU—the

       pledged Allegiance Units would automatically convert to equity for Tricor,

       offsetting Dealer’s then-existing debt. The MOU was designed so that Dealer’s

       credit limit would correspond to the value of Dealer’s equity, with regular resets

       to the credit limit (“Reset Limit”) based on Allegiance’s earnings. However,

       the Loan Facility was initially restricted by $2 million—the maximum-possible

       Goodwill Adjustment—awaiting a determination of whether ElZayn owed a

       Goodwill Adjustment because the Assurant Business had an earnings shortfall.

[14]   Section 5 of the MOU addresses potential default events, providing as follows:

               A default under the . . . Note (“Default”) shall be defined as (a)
               the failure to timely pay any interest due within 5 calendar days
               of notice from [Tricor] of failure to pay; (b) the failure to timely
               pay any amount due as the result of a principal reduction due to
               application of the Reset Limit; (c) any material non-compliance by
               Mr. ElZayn, Dealer VSC or any related entities with the Operating
               Agreement, or the Contribution agreement, or any other agreements
               attached to or incorporated by reference in either the Operating
               Agreement or the Contribution Agreement (collectively, the
               “Organizational Agreements”); (d) any actions of Dimension or
               related entities materially detrimental to [Allegiance]; or (e) the
               non-payment of all [Allegiance] receivables owed by Dealer VSC
               or any Affiliate Entity or other related entity within 30 days of
               the Effective Date, or thereafter with respect to new receivables
               as they become due. Written notice of non-payment of the Sec.
               5(e) receivables shall be provided and 30 calendar days
               opportunity to cure. Except for the Sec. 5(a) interest payments
               and the Sec. 5(e) receivables, there shall be no right to notice or
               opportunity to cure with respect to any payment default. [Tricor]
               shall provide written notice and 30 days opportunity to cure any other

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023       Page 8 of 31
               material non-compliance with the Organizational Agreements or actions
               materially detrimental to [Allegiance]. In the event of any Default, Mr.
               ElZayn shall be deemed to have immediately resigned as President and
               CEO of [Allegiance].

       Id. at 139 (emphases added). Under Section 7, ElZayn’s service as President

       and CEO was “subject to the terms of th[e] MOU[.]” Id. This Section specified

       that the parties—i.e., Dealer, Tricor, and ElZayn—“will amend [Allegiance’s]

       Operating Agreement to reflect these and all other changes required to

       implement the terms and conditions of this MOU.” Id. Section 8 prospectively

       addresses the issue of consent to changes, providing: “To the extent the written

       consent of the Members is required to enter into these transactions, or any of

       the matters covered by th[e] MOU, the Members’ execution of this MOU shall

       meet that requirement and waive any other requirements in that regard.” Id.

[15]   Dealer executed the Note and Tricor provided the Loan Facility. Under the

       Note, Dealer was obligated to make monthly interest payments. However,

       Dealer’s obligation to repay the principal was limited to certain scenarios. One

       scenario involved an uncured event of default. Upon an uncured event of

       default, Tricor had the authority under an acceleration clause to require

       repayment “without demand, notice or legal process of any kind[.]” Id. at 143.

[16]   Dealer and Tricor separately executed a Unit Pledge Agreement. Thereunder,

       Dealer pledged its remaining Allegiance Units as collateral for its performance

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023         Page 9 of 31
       under the Note and the MOU. The agreement specified that “[u]pon the

       occurrence of any [d]efault (as defined in the note and the MOU), [Tricor] shall

       have the right, on further notice to [Dealer] to transfer title to that number of

       [Allegiance] Units as required under the terms of the MOU[.] Id. at 146-47.

       Performance Disputes Under the Agreements

[17]   By September 30, 2019, Dealer had drawn $5.6 million on the Loan Facility,

       while remaining current with interest payments under the Note. Around this

       time, disputes arose as to the financial performance aspects of the interrelated

       agreements, including the proper way to calculate EBITDA to determine

       whether the Assurant Business fell short of the earnings target (thereby

       triggering ElZayn’s obligation to reimburse Allegiance up to $2 million, a sum

       Allegiance would distribute to Tricor).

[18]   An independent accounting firm (“Accounting Firm”) began calculating

       EBITDA for the Assurant Business. During that process, Tricor told the firm

       that Tricor “expected . . . the[] EBITDA calculation . . . would result in a . .

       .[G]oodwill [A]djustment” and anticipated the adjustment would be the

       maximum of $2 million. Appellees’ App. Conf. Vol. VII, p. 76.

[19]   On September 30, 2019, Tricor sent a letter and an e-mail to ElZayn, who is

       listed as the notice recipient for Dealer in the Unit Pledge Agreement. In these

       communications, Tricor told ElZayn that he owed the maximum Goodwill

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 10 of 31
       Adjustment of $2 million. ElZayn objected to the demand because the

       Accounting Firm had not yet completed its report and because he disputed

       there was an EBITDA shortfall resulting in any Goodwill Adjustment.

[20]   On October 22, 2019, the Accounting Firm issued a compilation report, setting

       forth three different ways to calculate EBITDA. Each method resulted in a

       Goodwill Adjustment. The report reached no conclusion about which method

       of calculation was the contractually agreed method. An affidavit was prepared

       regarding the scope of the report. In pertinent part, the affidavit states:

               10. The [Accounting Firm’s] Compilation is the deliverable
               for the compilation performed by [the Accounting Firm] and
               purports to include the Assurant Business’s EBITDA compiled
               under three scenarios described as follows:
                              Since Earnings Contingency was not fully defined in
                       the agreement, management provided three scenarios for
                       the computation[:] 1) all expenses except those directly
                       associated with “Tricor” business were expenses
                       associated with [the] Assurant [Business], these included
                       certain legal and management fees, referred to as “Tricor”;
                       2) Expenses were allocated largely based on wage
                       allocations provide [sic] by employees and the CEO,
                       referred to as “Dealer VSC”; and 3) Expenses were
                       allocated based on the Dealer VSC methodology, with
                       some modifications to normalize them based on
                       management’s (CFO’s) comments, referred to as
                       “Normalized.”
               11. The three scenarios represent different assumptions
               regarding how Allegiance’s expenses were allocated to the
               Assurant Business. [The Accounting Firm] testified that the
               information included in the . . . Compilation was provided by

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 11 of 31
               Allegiance, including Brian Leslie (“Mr. Leslie”), Allegiance’s
               CFO and other Allegiance employees. For each of the three
               scenarios, [the Accounting Firm] compiled the purported
               Assurant Business’s EBITDA and the related Goodwill
               Adjustments as summarized in the following table.
                                         Table 1

       Appellees’ App. Vol. VI, pp. 5-6 (footnotes omitted).

[21]   On October 24, 2019, Tricor sent another letter to ElZayn, a few days after the

       Accounting Firm had issued its final report. In the letter, Tricor asserted that,

       unless Tricor received the $2 million Goodwill Adjustment by November 4,

       2019, it would “designate this amount as a draw against the Loan Facility[.]”

       Appellants’ App. Vol. III, p. 176. ElZayn responded on October 28, 2019,

       disputing that he owed any Goodwill Adjustment, and objecting to Tricor’s

       proposed treatment of the Goodwill Adjustment as a draw by Dealer.

[22]   Tricor added the disputed $2 million Goodwill Adjustment to Dealer’s Loan

       Facility, increasing the loan balance from $5.6 million to $7.6 million. On

       March 31, 2020, Tricor sent a letter to Dealer asserting that the Reset Limit of

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 12 of 31
       the Loan Facility had been reduced to $3,362,093, and the “current amount

       drawn by Dealer . . . under the Loan Facility totals $7,600,000, exceeding the

       Reset Limit by $4,237,907.” Id. at 179. Tricor demanded that Dealer bring the

       balance below the Reset Limit by paying the $4,237,907 by April 30, 2020.

[23]   On April 30, 2020, Dealer paid Tricor $2,240,000. If the disputed Goodwill

       Adjustment was not treated as a draw on the Loan Facility, this payment would

       bring Dealer’s balance below the Reset Limit. That is, assuming Dealer had a

       balance of only $5.6 million rather than $7.6 million, the payment would bring

       Dealer’s balance to $3,360,000, which was below the Reset Limit of $3,362,903.

[24]   On May 5, 2020, Tricor sent a letter to Dealer asserting that, based on Tricor’s

       calculation, Dealer’s payment was deficient by $1,997,907. Tricor further

       asserted that Dealer was in default under Section 5(b) of the MOU. Tricor told

       Dealer that, pursuant “to the Note, MOU and Unit Pledge Agreement, the

       balance in default automatically converts into that number of Units of

       [Allegiance] owned by Dealer . . . which have been pledged to secure the Loan

       Facility and satisfy [Dealer’s] obligation.” Id. at 182. Tricor asserted that,

       “[b]ased upon the balance due upon [d]efault and because conversion must

       occur in whole shares, 14 Pledged Units have been automatically converted and

       transferred to the ownership of [Tricor] in the records of Allegiance.” Id. Tricor

       noted that “[t]his conversion results in a reduction of the outstanding loan by

       $2,091,969,” an amount that would bring the balance under the Reset Limit.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 13 of 31
       Id. Tricor also informed Dealer that, based on the default, Tricor was invoking

       the acceleration clause and seeking immediate repayment of the alleged

       outstanding balance of $3,268,031. Tricor asserted that it had “automatically

       converted” an additional 22 Allegiance Units, resulting “in a reduction of the

       outstanding loan by $3,287,380 and a balance of $19,348” that was due to

       Tricor. Id. at 182. Nonetheless, Tricor offered Dealer “30 days to pay the

       outstanding balance and reclaim ownership of the 22 converted [Allegiance]

       Units . . . in the spirit of cooperation[.]” Id. At bottom, Tricor’s position was

       that it now owned 91 Allegiance Units while Dealer held 9.

[25]   Around the time Tricor sent the letter to Dealer asserting default, Tricor took

       steps to terminate ElZayn’s salary and benefits as Allegiance’s CEO. Tricor

       also told Allegiance’s employees that ElZayn had “resigned” as of May 1, 2020.

       A few months later—ahead of a July 2020 meeting of Allegiance’s Board of

       Managers—Campbell sought to add an agenda item concerning a proposed

       First Amended and Restated Operating Agreement for Allegiance (“Amended

       Operating Agreement”) that was prepared by Tricor’s outside counsel.

[26]   As for pertinent provisions set forth in the initial Operating Agreement, Article

       7.2 installed ElZayn as the initial CEO of Allegiance. Article 7.3 set forth the

       tenure of the CEO and provided limited grounds for removal, stating that the

       CEO would serve until the CEO’s written resignation, permanent disability, or

       death. Article 7.7(a) stated that the Operating Agreement would be amended

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 14 of 31
       with the unanimous consent of Allegiance’s members—i.e., Tricor and Dealer.

       However, at the same time, Section 5 of the MOU stated that, “[i]n the event of

       any [d]efault, Mr. ElZayn shall be deemed to have immediately resigned as

       President and CEO” of Allegiance. Id. at 139. Furthermore, Section 7 of the

       MOU stated that ElZayn would serve as CEO “subject to the terms of this

       MOU,” specifying that “[t]he Parties” to the MOU—i.e., Tricor, Dealer, And

       ElZayn—“will amend [Allegiance’s] Operating Agreement to reflect these and

       all other changes required to implement the terms and conditions of this

       MOU.” Id. Moreover, Section 8 of the MOU stated: “To the extent the

       written consent of the Members is required to enter into these transactions, or

       any of the matters covered by th[e] MOU, the Members’ execution of th[e]

       MOU shall meet that requirement and waive any other requirements in that

       regard.” Id.

[27]   The proposed First Amended and Restated Operating Agreement contained

       suggested revisions concerning, among other things, which actions would

       require the unanimous consent of the members, and who would have authority

       to oversee Allegiance’s day-to-day affairs. As to daily affairs, the proposed

       revisions would shift power away from the CEO—at that point identified as

       ElZayn in the Operating Agreement—and instead vest that power in the Board.

[28]   ElZayn, a member of the Board of Managers, objected to the Board’s

       consideration of the proposed First Amended and Restated Operating

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 15 of 31
       Agreement, arguing that (1) considering the document was outside the

       authority of the Board and (2) amending the Operating Agreement required the

       unanimous approval of the members, not a vote by the Board. The Board

       ultimately took a vote, with a majority of the Board voting to adopt the

       Amended Operating Agreement. The meeting minutes reflect a discussion

       about whether, despite ElZayn’s insistence that the initial Operating Agreement

       called for unanimous member consent to an amendment, “the MOU language

       required amendment of the [O]perating [A]greement and . . . this was not

       done.” Appellees’ App. Vol. III, p. 54.

       Procedural History 6
[29]   On May 8, 2020, Tricor filed its complaint in Hamilton County against Dealer,

       ElZayn, and Allegiance. In Count I, Tricor sought a declaratory judgment that,

       among other things, Dealer and ElZayn had committed “acts or omissions

       required by the loan documents . . .constitut[ing] a default under the loan

       documents.” Appellees’ App Vol. II, p. 228. In Count II, Tricor asserted that

       ElZayn and Dealer breached the MOU, the Note, and the Unit Pledge

       Agreement, and that there had been an event of default. See id. at 228-29.

[30]   On February 3, 2021, Dealer and ElZayn filed several counterclaims and

       crossclaims revolving around Tricor’s declaration of default, the treatment of

       6
        There are other pending actions between the parties, and the present case involved several rulings ahead of
       summary judgment. In reciting the procedural history, we focus on events germane to resolving this appeal.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                          Page 16 of 31
       the Goodwill Adjustment as a draw on the Loan Facility, Tricor’s control of

       certain pledged units, and the validity of the amendment to the Operating

       Agreement. Specifically, Count 1 alleges Tricor is liable for breach of the MOU

       for (1) designating the alleged Goodwill Adjustment as a draw on the Loan

       Facility and (2) “[f]alsely claiming and declaring a default” by Dealer and/or

       ElZayn because Dealer and ElZayn “have fully performed their respective

       obligations under the MOU and other agreements with Tricor and Allegiance.”

       Appellant’s App. Vol. II p. 182. Count 2 contains similar allegations, asserting

       that Tricor’s actions amounted to a breach of the Note. Count 3 focuses on

       whether Tricor breached the Unit Pledge Agreement by, among other things,

       “wrongfully exercis[ing] dominion and control” over the pledged Allegiance

       Units. Id. at 183-84. Count 4 similarly alleges that Tricor converted the

       pledged Allegiance Units in exercising control over certain units. As for Count

       5—which seeks a declaratory judgment—Paragraph 120(G) challenges the

       adoption of the First Amended and Restated Operating Agreement. Id. at 187.

[31]   On May 18, 2021, Dealer and ElZayn moved for summary judgment on

       Tricor’s two claims as well as certain counts in their pleading: Counts 1 through

       4 and Paragraph 120(G) of Count 5. On October 7, 2021, Tricor filed a

       competing motion, seeking summary judgment on its two claims for relief.

[32]   The trial court granted Dealer and ElZayn’s motion for summary judgment and

       denied Tricor’s motion. Appellants’ App. Vol. II, pp. 47-81 (Appealed Order).

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 17 of 31
       Its order includes several declarations, among them: (1) “Neither Dealer VSC

       nor Mr. ElZayn committed a Default as defined in Section 5 of the MOU”; (2)

       “Tricor lacked any authority, right[,] or basis to convert Dealer VSC’s

       membership Units in Allegiance”; (3) “Dealer VSC is the rightful owner of 45

       membership Units of Allegiance” (i.e., all pledged units); and (4) amendments

       to the Operating Agreement were improper, rendering the First Amended and

       Restated Operating Agreement “invalid and null and void.” Id. at 80.

[33]   Tricor now appeals. In this interlocutory appeal, Tricor does not challenge the

       denial of its motion for summary judgment. Instead, Tricor focuses on

       whether the trial court erred by granting summary judgment to Dealer and

       ElZayn.

       Issues
[34]   Although several issues were presented for our review, the following question is

       dispositive in this appeal.

               Did the trial court err by granting Dealer’s and ElZayn’s motion
               for summary judgment as to the first and second claims of
               Tricor’s complaint and on several of Dealer’s and ElZayn’s
               counterclaims and cross-claims when there is a genuine issue of
               material fact as to whether an operational default occurred?

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 18 of 31
       Discussion and Decision

       Standard of Review 7
[35]   “We review summary judgment de novo, applying the same standard as the

       trial court.” Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). “Drawing all

       reasonable inferences in favor of . . . the non-moving parties, summary

       judgment is appropriate ‘if the designated evidentiary matter shows that there is

       no genuine issue as to any material fact and that the moving party is entitled to

       judgment as a matter of law.” Williams v. Tharp, 914 N.E.2d 756, 761 (Ind.

       2009) (quoting Ind. Trial Rule 56(C)). “A fact is ‘material’ if its resolution

       would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is

       required to resolve the parties’ differing accounts of the truth, or if the

       undisputed material facts support conflicting reasonable inferences.” Williams,

       914 N.E.2d at 761 (internal citations omitted).

[36]   “The initial burden is on the summary-judgment movant to ‘demonstrate [ ] the

       absence of any genuine issue of fact as to a determinative issue,’ at which point

       the burden shifts to the non-movant to ‘come forward with contrary evidence’

       7
         At this stage, the parties do not actively dispute that Indiana is a proper forum and Indiana law governs this
       appeal. In any case, we note that the interrelated documents at times refer to Indiana and at other times refer
       to Ohio. Under the substantive law of both Indiana and Ohio, “[w]here no conflict of laws exists, the law of
       the forum controls.” ISCO Indus., Inc. v. Great Am. Ins. Co., 148 N.E.3d 1279, 1283 (Ohio Ct. App. 2019);
       Rodriguez v. Rodriguez, 818 N.E.2d 993, 996 (Ind. Ct. App. 2004) (“Where Indiana and Illinois law is the
       same, the trial court should apply the law of the forum.”), trans. denied. And, here, we discern no germane
       conflict of laws. Thus, we apply Indiana law in reviewing the ruling on summary judgment.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                            Page 19 of 31
       showing an issue for the trier of fact.’” B & R Oil Co., Inc. v. Stoler, 77 N.E.3d

       823, 827 (Ind. Ct. App. 2017) (quoting Williams, 914 N.E.2d at 761-62), trans.

       denied. “And, ‘[a]lthough the non-moving party has the burden on appeal of

       persuading us that the grant of summary judgment was erroneous, we carefully

       assess the trial court’s decision to ensure that he was not improperly denied his

       day in court.’” Id. (quoting McSwane v. Bloomington Hosp. & Healthcare Sys., 916

       N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks omitted)).

[37]   In this appeal, we are asked to interpret several contracts. “Interpretation and

       construction of contract provisions are questions of law.” B & R, 77 N.E.3d at

       827. “As such, cases involving contract interpretation are particularly

       appropriate for summary judgment.” Id. “And because the interpretation of a

       contract presents a question of law, it is reviewed de novo by this court.” Id.

[38]   “We review the contract as a whole, attempting to ascertain the parties’ intent

       and making every attempt to construe the contract’s language ‘so as not to

       render any words, phrases, or terms ineffective or meaningless.’” Id. (quoting

       Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494, 501 (Ind. Ct. App.

       2007)). “And, in reading the terms of a contract together, we keep in mind that

       the more specific terms control over any inconsistent general statements.” Id. at

       827-28 (quoting DLZ Ind., LLC v. Greene Cty., 902 N.E.2d 323, 328 (Ind. Ct.

       App. 2009)).

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023     Page 20 of 31
       Analysis
[39]   Tricor challenges the trial court’s decision to grant Dealer’s and ElZayn’s

       motion for summary judgment, which concerned the first and second claims of
                                                                                        8
       Tricor’s complaint and several counterclaims/cross-claims. In briefing and at

       oral argument, the parties implicitly agree that the propriety of granting

       summary judgment to Dealer and ElZayn turns largely on whether the

       designated evidence shows there was an uncured default event under the MOU.

       Generally, the parties focus on whether Tricor could add the alleged EBITDA

       shortfall—the Goodwill Adjustment—to the debt and, if so, whether there was

       a financial default due to nonpayment of the increased loan balance. However,

       the MOU does not limit the definition of default to a financial default arising

       from underpayment on the Note. Rather, independent of Dealer’s financial

       obligations under the Note, the MOU refers to the parties’ interrelated contracts

       and states that an operational default occurs upon any material breach.

[40]   For the reasons herein, we conclude that the designated evidence discloses a

       potential operational default premised on ElZayn’s material breach of the

       Goodwill Agreement for failing to reimburse Allegiance for an EBITDA

       shortfall. Because of the contractual consequences for an operational default,

       8
        Because Tricor does not challenge other aspects of the appealed order, we need not address them.
       Moreover, for ease of reading, we hereafter use the term counterclaim to refer to a counterclaim/cross-claim.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023                          Page 21 of 31
       this genuine issue of material fact is dispositive, showing that Dealer and

       ElZayn are not entitled to summary judgment on the claims and counterclaims.

       Operational Default Under the Agreements
[41]   Under the MOU, there is an event of operational default if Dealer or ElZayn

       materially breach (1) the Operating Agreement; (2) the Contribution

       Agreement; or (3) any other agreement attached to or incorporated by reference

       in either the Operating Agreement or the Contribution Agreement. Appellants’

       App. Vol. III, p. 139. The Contribution Agreement refers to the Goodwill

       Agreement, which is attached as an exhibit to the Contribution Agreement.

       Appellants’ App. Vol. II, pp. 209 (¶3(c))-10(¶4(b)(iii)). Thus, upon a material

       breach of the Goodwill Agreement, there is a default event under the MOU.

[42]   As to the Goodwill Agreement—under which Allegiance purchased from

       ElZayn the personal goodwill associated with the Assurant Business—if there is

       an EBITDA shortfall (i.e., if the Assurant Business does not reach targeted

       earnings), ElZayn is obligated to reimburse Allegiance up to $2 million.

       Appellants’ App. Vol. III, p. 135 (¶ 2(a)). Because the parties disagree as to the

       proper EBITDA calculation, there is a genuine issue of material fact as to

       whether an EBITDA shortfall exists. Moreover, assuming—as we must at this

       point—that Tricor’s EBITDA calculation controls, the designated evidence

       indicates that (1) the Assurant Business resulted in an EBITDA shortfall and (2)

       ElZayn failed to reimburse Allegiance as required. Thus, the designated

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 22 of 31
       evidence shows a genuine issue of material fact as to whether ElZayn materially

       breached the Goodwill Agreement by failing to pay the Goodwill Adjustment

       to Allegiance, an event of material breach that would result in an operational

       default under the MOU.

[43]   At times, Dealer and ElZayn point out that the default provisions in the MOU

       set forth a notice and cure period. Indeed, in defining default, the MOU states

       that Tricor generally “shall provide written notice and 30 days opportunity to

       cure any . . . material non-compliance with the Organizational Agreements or

       actions materially detrimental to [Allegiance].” Id. at 139. According to Dealer

       and ElZayn, Tricor failed to give notice of an EBITDA shortfall, so there could

       be no liability for default under the MOU. Yet, the designated evidence

       includes October 2019 correspondence from Tricor to ElZayn wherein Tricor

       alerts ElZayn to an EBITDA shortfall. See id. at 176. And, ElZayn was

       designated as a notice recipient for Dealer under the Pledge Agreement. See id.

       at 149. Therefore, in light of the October 2019 correspondence regarding an

       EBITDA shortfall, there is a genuine issue of material fact as to whether Tricor

       gave effective notice to Dealer and ElZayn that there was an event of

       operational default under the provisions of the MOU.

[44]   We turn to the contractual consequences for an uncured operational default

       under the MOU. In this scenario, the MOU calls for a change in leadership,

       providing: “In the event of any [d]efault, Mr. ElZayn shall be deemed to have

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 23 of 31
       immediately resigned as President and CEO of [Allegiance].” Id. at 139. In a

       separate clause, the MOU expressly conditions ElZayn’s continued service as

       CEO on “the terms of this MOU,” further providing that the parties would

       “amend the [Allegiance] Operating Agreement to reflect these and all other

       changes required to implement the terms and conditions of this MOU.” Id.

[45]   The MOU also provides that an operational default results in “[a] default under

       the . . . Note.” Id. The Note contains a corresponding provision, stating that a

       default under the Note “shall be defined to have occurred as provided in the

       MOU.” Id. at 143. With respect to default, the Note contains an acceleration

       clause specifying that, upon default, Tricor may consider “all unpaid amounts

       under th[e] Note . . . immediately due and payable, without demand, notice or

       legal process of any kind[.]” Id.

[46]   Turning to the Unit Pledge Agreement—wherein Dealer pledged all its

       Allegiance Units as collateral for the loan—Tricor is protected in the event of

       “any [d]efault . . . as defined in the Note and the MOU[.]” Id. at 146. The

       agreement specifies that Tricor has “the right, on further notice to [Dealer], to

       transfer title to Tricor” the number of pledged units necessary to satisfy Dealer’s

       debt under the loan. Id. Moreover, although the Unit Pledge Agreement sets

       forth certain contingencies when there is a “non-payment [d]efault” (i.e., a

       default arising for some reason other than Dealer’s failure to pay amounts due

       on the Note), those contingencies do not modify Tricor’s right to obtain title to

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 24 of 31
       one or more of the Allegiance Units. See id. at 146-147 (Unit Pledge

       Agreement: Procedure Upon Default ¶1.3). Further, so long as there is $.01 of

       debt on the loan, Tricor has the right to at least one Allegiance Unit because the

       Unit Pledge Agreement prohibits the transfer of fractional units. See id. at 147

       (providing that “fractional units are not issued” in the transfer of units).

       Instead, Tricor must reimburse Dealer for any difference between the debt on

       the MOU Loan Facility and the value of the transferred Allegiance Unit.

[47]   All in all, based on the designated evidence, there are genuine issues of material

       fact as to whether (1) there was an EBITDA shortfall, (2) Tricor gave effective

       notice of that shortfall, triggering the cure period in the MOU, and (3) ElZayn

       failed to reimburse Allegiance for the EBITDA shortfall, resulting in a material

       breach of the Goodwill Agreement and an operational default under the MOU.

       The uncured default event would permit Tricor to unilaterally invoke the

       acceleration clause and satisfy the debt by obtaining title to a corresponding

       number of pledged Allegiance Units. The uncured default event would also

       result in Dealer’s consent to modify the Operating Agreement as needed to

       implement the consequences of the operational default, including consent to

       modify the Operating Agreement to divest ElZayn of executive authority.

[48]   We turn now to the interplay between an operational default and the claims

       upon which the trial court granted summary judgment to Dealer and ElZayn.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 25 of 31
       Operational Default and the Motion for Summary Judgment
       Dealer’s and ElZayn’s Motion for Summary Judgment on Tricor’s Complaint
[49]   We begin by analyzing whether Dealer and ElZayn are entitled to summary

       judgment on Tricor’s Amended Complaint, which sets forth two claims: (1)

       “Declaratory Judgment: EBITDA Calculation”; and (2) “Breach of Contract:

       Convertible Promissory Note[.]” Appellees’ App. Vol. II, pp. 227-29.

       First Claim
[50]   In its First Claim, Tricor sought a declaratory judgment as to the EBITDA

       Calculation. Id. at 227-28. As part of that judgment, Tricor asked the trial

       court to broadly declare that, apart from any liability for “fail[ure] to pay

       amounts due” under the Note, there were “other acts or omissions required by

       the loan documents” that “constitute a default under the loan documents.” Id.

       at 228. As earlier discussed, the designated evidence shows the possibility of an

       operational default. And an operational default would constitute a default

       under the loan documents. Appellants’ App. Vol. III, p. 139 (MOU ¶5(c)).

       Therefore, Dealer and ElZayn did not meet their burden of demonstrating they

       are entitled to summary judgment on Tricor’s First Claim.

       Second Claim
[51]   In its Second Claim, Tricor alleged a breach of contract with respect to the

       Note. Although aspects of the claim focus on non-operational default, the

       claim encompasses a broad allegation that Dealer and ElZayn were liable to

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 26 of 31
       Tricor under the terms of the Note. The Note includes a provision

       incorporating “all of the rights and powers set forth in the MOU and the

       Security Documents . . . as though they were set forth in this Note.” Id. at 142-

       43. One of those rights and powers would be to recover for liability based on an

       operational default. Thus, because the designated evidence does not preclude

       operational default, Dealer and ElZayn did not demonstrate that they are

       entitled to summary judgment on Tricor’s Second Claim.

       Summary Judgment as to Dealer’s and ElZayn’s Counterclaims

       Count 1
[52]   Turning to Dealer’s and ElZayn’s counterclaims, Count 1 contains an

       allegation that Dealer and ElZayn “have fully performed their respective

       obligations under the MOU and other agreements with Tricor and Allegiance.”

       Appellants’ App. Vol. II, p. 182. However, the designated evidence indicates

       that ElZayn did not fully perform his obligations under the Goodwill

       Agreement because he did not pay Allegiance for the EBITDA shortfall.

       Furthermore, Count 1 includes an allegation that Tricor “[f]alsely claim[ed] and

       declar[ed] a default,” resulting in Tricor’s “material breach[] of the MOU[.]”

       Id. Yet, as earlier discussed, the designated evidence indicates there is a

       genuine issue of material fact as to whether Tricor had grounds to declare a

       default.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 27 of 31
[53]   For these reasons, we conclude that Dealer and ElZayn did not demonstrate

       that they are entitled to summary judgment on Count 1 of their counterclaims.

       Count 2
[54]   In Count 2, Dealer and ElZayn alleged that Tricor breached the Note by falsely

       declaring a default under the Note. However, the Note contains a provision

       incorporating all of Tricor’s “rights and powers set forth in the MOU,”

       Appellants’ App. Vol. III, pp. 142, and the MOU provides that an operational

       default results in “[a] default under the . . . Note.” Id. at 139. Further, the

       Note states that a default “shall be defined to have occurred as provided in the

       MOU.” Id. at 143.

[55]   Because the designated evidence allows for an operational default premised on

       ElZayn’s failure to pay the Goodwill Adjustment, Dealer and ElZayn did not

       show they are entitled to summary judgment on Count 2 of their counterclaims.

       Counts 3 and 4
[56]   In Count 3, Dealer and ElZayn allege Tricor breached the Unit Pledge

       Agreement by—among other things— “wrongfully exercis[ing] dominion and

       control over the Collateral,” i.e., the Allegiance Units. Appellants’ App. Vol. II,

       pp. 183-84. Similarly, in Count 4, Dealer and ElZayn allege Tricor committed

       conversion by exercising dominion and control over the Allegiance Units.

       However, as earlier discussed, an operational default generates certain rights

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 28 of 31
       under the interrelated contracts, including Tricor’s right to accelerate the debt

       and transfer title to at least one Allegiance Unit. See Appellants’ App. Vol. III,

       p. 147 (providing that “fractional units are not issued” in the transfer of units).

[57]   Upon the designated evidence, Dealer and ElZayn have not shown that they

       are entitled to summary judgment on Counts 3 and 4 of their counterclaims.

       Count 5
[58]   As for Count 5, in which Dealer and ElZayn requested a declaratory judgment,

       they sought in Paragraph 120(G) a declaration that “the MOU . . . does not

       permit Tricor to unilaterally adopt such Amended Operating Agreement

       without Dealer VSC’s consent.” Appellants’ App. Vol. II, p. 187. One change

       to the Operating Agreement was to Section 7.1, concerning the management of

       Allegiance. That change gave the Board of Managers—instead of ElZayn—the

       authority to manage Allegiance’s day-to-day business operations. Compare

       Appellants’ App. Vol. III, p. 22 (old) with Appellees’ App. Vol. III, p. 22 (new).

       When the Operating Agreement was amended, Dealer remained a member of

       Allegiance in that Tricor claimed to hold 91 Allegiance Units while Dealer held

       9. Appellants’ App. Vol. II, p. 202 (ElZayn May 17, 2021 Ohio State court

       affidavit).

[59]   Looking exclusively at the Operating Agreement, Tricor could not unilaterally

       amend the governance document because of Section 7.7(a), which requires

       unanimous member consent for this type of action. Appellants’ App. Vol. III,

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023    Page 29 of 31
       p. 26 (Operating Agreement ¶7.7(a) (Action Requiring Unanimous Consent of

       Members)). Yet, for the following reasons, the designated evidence indicates

       that Section 7.7(a) does not control due to the potential operational default.

[60]   That is, Paragraph 5 of the MOU provides for a change in executive leadership

       upon default, specifying that “ElZayn shall be deemed to have immediately

       resigned as President and CEO of [Allegiance].” Id. at 139. Furthermore,

       Paragraph 7 of the MOU provides that ElZayn “shall continue (subject to the

       terms of the MOU) as the Company’s CEO and President, with the same duties

       and obligations.” Id. That paragraph further directs that the parties “will

       amend the Company’s Operating Agreement to reflect these and all other

       changes required to implement the terms and conditions of this MOU.” Id.

[61]   The original Operating Agreement identifies ElZayn as the CEO and sets forth

       only limited ways in which he could be removed: upon written resignation,

       permanent disability, or death. See id. at 23 (Operating Agreement ¶7.4

       (Resignation)). In sum, then, if there is an operational default—which is a

       surviving theory of liability based on the designated evidence—at least some

       modification to the Operating Agreement would be permissible to give effect to

       terms in the MOU stating that ElZayn was “deemed to have immediately

       resigned as President and CEO of [Allegiance].” Id. at 139. Thus, there is a

       genuine issue of material fact precluding summary judgment as to Paragraph

       120(G) of Count 5, which challenges all changes to the Operating Agreement.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 30 of 31
       Conclusion
[62]   We conclude that the entry of summary judgment in favor of Dealer and

       ElZayn was premature based on the record and reverse the court’s decision.

       Accordingly, we reverse and remand to the trial court for further proceedings

       on the merits.

[63]   Reversed and remanded.

       Riley, J., and Kenworthy, J., concur.

       Court of Appeals of Indiana | Opinion 22A-PL-1137 | September 28, 2023   Page 31 of 31