Court Opinion

ID: 2728315
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:31:24.494185+00
Date Added: 2024-06-11T12:40:02.842700
License: Public Domain

Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                          FILED
regarded as precedent or cited before                        Jan 15 2013, 9:53 am
any court except for the purpose of
establishing the defense of res judicata,                           CLERK
                                                                  of the supreme court,
collateral estoppel, or the law of the case.                      court of appeals and
                                                                         tax court

ATTORNEYS FOR APPELLANT:                           ATTORNEYS FOR APPELLEE:
RICHARD C. HERSBERGER                              JEFFREY C. MCDERMOTT
JUDY G. HESTER                                     Carmel, IN
Indianapolis, IN
                                                   LIBBY Y. GOODKNIGHT
                                                   BRYAN S. STRAWBRIDGE
                                                   Indianapolis, IN

                               IN THE
                     COURT OF APPEALS OF INDIANA

DESIGNPLAN, INC. and JILL D. WILLEY,               )
                                                   )
       Appellant-Plaintiff,                        )
                                                   )
               vs.                                 )       No. 29A05-1203-PL-120
                                                   )
JOHN R. PRICE and THE NATIONAL BANK                )
OF INDIANAPOLIS CORPORATION,                       )
                                                   )
       Appellee-Defendant.                         )

                     APPEAL FROM THE HAMILTON SUPERIOR COURT
                           The Honorable William J. Hughes, Judge
                     The Honorable William P. Greenaway, Magistrate Judge
                               Cause No. 29D03-1012-PL-1609

                                        January 15, 2013

                MEMORANDUM DECISION - NOT FOR PUBLICATION

PYLE, Judge
                                   STATEMENT OF THE CASE

        Designplan, Inc. (“Designplan”) and Jill D. Willey (“Willey”) as Trustee of the Jill

D. Willey Revocable Stewardship Trust (“Willey Trust”) (collectively “Appellants”)1

appeal the trial court’s order granting summary judgment to National Bank of

Indianapolis (“NBI”) as Trustee of the Richard Webster Trust (“Webster Trust”).2

        We affirm.

                                                  ISSUE

        Whether the trial court erred by granting summary judgment to NBI on
        Appellants’ claims of breach of fiduciary duty and unlawful corporate
        distribution.

                                                 FACTS

        Designplan was an Indiana corporation that provided architectural and design

services. Designplan was owned by Richard Webster (“Webster”), who had 525 shares

(“the Webster Shares”); Willey, who had 375 shares; and three other individuals, two of

whom each had 50 shares and one of whom had 40 shares. Webster and Willey were

directors of Designplan and operated the business. The parties agree that Designplan was

a close corporation.3

1
 Willey filed, pursuant to Indiana Appellate Rule 46(G), a notice of joinder in Designplan’s Appellant’s
Brief, and this Court accepted her notice.
2
 John R. Price, who is a party of record in the case below, has not actively participated in this appeal but,
pursuant to Indiana Appellate Rule 17(A), is a party to this appeal.
3
  Our Supreme Court had explained that a “close corporation [is] one that typically has relatively few
shareholders and whose shares are not generally traded in the securities market.” Melrose v. Capitol City
Motor Lodge, Inc., 705 N.E.2d 985, 900 (Ind. 1998) (citing Barth v. Barth, 659 N.E.2d 559, 561 n. 5 (Ind.
1995)).
                                                     2
        On January 17, 2002, Webster, Willey, and Designplan entered into a Buy-Sell

Agreement in regard to Designplan’s purchase of Webster’s and Willey’s shares upon his

or her death.4 Specifically, the Buy-Sell Agreement provided that:

                Purpose of Agreement – The purpose of this Agreement is to provide
        for continuity in the management and policies of [Designplan] by providing
        for the purchase of any deceased Shareholder’s shares by [Designplan].

                                               *****

            4. Purchase and Sale of Shares of Deceased Shareholder. Upon the
        death of any listed Shareholder, [Designplan] shall purchase, and the estate
        of the deceased Shareholder shall sell to [Designplan], all of the shares of
        [Designplan] owned by the deceased Shareholder at the time of death, for
        the price and upon the terms and conditions specified in this Agreement.

            5. Determination of Purchase Price. Upon the death of a Shareholder
        the purchase price shall be the greater of the following two amounts: (a)
        the value of his/her stock as established in accordance with Paragraph 6 of
        this Agreement; or (b) an amount equal to the total proceeds of the policies
        on his/her life which are subject to this Agreement. The term “proceeds”
        shall include the face value of the policy, any addition, dividends, or
        accumulations paid with the claim, less any loans and unpaid interest
        outstanding against the policy.

            6. Determination of Value of Shares. The price of the capital stock of
        each Shareholder to be sold pursuant to this Agreement shall be the fair
        market value of the shares as determined by two independent appraisers on
        the last day of the month immediately preceding such date of death.

           7. Purpose and Provisions of Insurance.   In order to assure that all or
        a substantial part of the purchase price for the shares of a deceased
        [S]hareholder will be available immediately in cash upon his death,

4
  Our Indiana Supreme Court has noted that “[m]any closely-held corporations enter into buy and sell
agreements with their principal shareholders” and that “[g]enerally, under such an agreement, the
corporation is obligated to purchase the stock held by a shareholder in the event of his or her death.”
Melrose, 705 N.E.2d at 987 n.2. The Indiana Supreme Court further explained that “[p]urchasing life
insurance policies on the lives of shareholders is one method for the corporation to fund such a purchase”
and that when the “shareholder dies, the insurance proceeds received by the corporation are used to
purchase the deceased shareholder’s stock in the corporation.” Id. (citing 1 F. Hodge O’Neal & Robert B.
Thompson, O’Neal’s Close Corporations, § 7.46 (3d ed. 1991)).
                                                    3
[Designplan] has procured and made subject to this Agreement insurance
on the lives of the said Shareholders as follows:

   (a) Richard M. Webster is insured under Policy No. L4022075, issued
       by Prudential Financial in the face amount of $1,565,000 and
       [Designplan] is the applicant, owner, and beneficiary thereof.

   (b) Jill Willey is insured under Policy No. 1A23974650, issued by
       Pacific Life Insurance Company in the face amount of $1,158,137
       and [Designplan] is the applicant, owner, and beneficiary thereof.

    8. Beneficiary and Owner of Policies. [Designplan] shall be the
beneficiary and sole owner of all policies issued to it subject to this
Agreement. So long as this Agreement is in effect, [Designplan] agrees
that it will maintain such insurance in full force and effect and pay all
premiums falling due on all policies issued to it subject to this Agreement.

                                   *****

    12. Payment of Purchase Price.         The purchase price payable to the
estate of the deceased Shareholder shall be paid in cash, or in cash and
notes, to the estate of the deceased Shareholder upon:

   (a) The estate of the deceased Shareholder becoming capable in the
       opinion of the legal counsel for [Designplan] of transferring to
       [Designplan] full legal and equitable tax-free title to the shares of the
       deceased Shareholder; and

   (b) Delivery to the Secretary of [Designplan] of the certificates
       representing the shares of the deceased Shareholder properly
       endorsed in the manner required to transfer full legal and equitable
       tax-free title of those shares to [Designplan].

                                   *****

    19. Binding on Heirs. This Agreement shall be binding upon
[Designplan] and the Shareholders, and their respective heirs, legal
representatives, executors, administrators, successors and assigns; provided,
however, that nothing herein shall be construed as an authorization or right
of any party to assign his rights or obligations hereunder. Any rights given
or duties imposed upon the estate of a deceased Shareholder shall inure to
the benefit of and be binding upon the legal representative of such
decedent’s estate in his fiduciary capacity. If any of the Shareholders is a

                                       4
       trustee of, or transfers his shares into a revocable living trust, the
       distributees of such trust or trusts, their respective heirs, legal
       representatives, executors, administrators, successors, and assigns shall be
       bound by the terms of this Agreement.

(App. 26-29)5 (emphasis added). The Buy-Sell Agreement was signed by Webster and

Willey as shareholders. In addition, Willey also signed the Buy-Sell Agreement as

President of Designplan.

       More than six years later, on October 13, 2008, Webster, Willey, and Designplan

executed an amendment to the Buy-Sell Agreement (“Amendment”) to change the

purchase price of the shares to the greater of: “a.) the proceeds from the insurance policy

on the life of the deceased corporate officer at the date of death; or b.) the book value of

the shares as determined on the last day of the month immediately preceding such date of

death.” (App. 30). The Amendment was signed by Webster and Willey as shareholders;

Willey also signed as President of Designplan.

       On October 17, 2008, Webster underwent open-heart surgery. On October 20,

2008, Webster transferred all the Webster Shares in Designplan to the Webster Trust, of

which NBI was the trustee.6 That same day, Willey also transferred all of her shares to

the Willey Trust. The following day, on October 21, 2008, Webster died.

5
  Both Appellants and NBI submitted an appellate appendix. We will refer to Appellants’ Appendix as
(App.) and to NBI’s Appendix as (Appellee’s App.). Because Appellants’ Appendix did not include all
documents relating to the motion for summary judgment, we direct Appellants’ attention to Indiana
Appellate Rule 50(A)(2)(f), which provides that an Appellant’s Appendix “shall contain” the “pleadings
and other documents from the Clerk’s Record in chronological order that are necessary for resolution of
the issues raised on appeal[.]” See also Kelly v. Levandoski, 825 N.E.2d 850, 856 (Ind. Ct. App. 2005)
(explaining that, under Appellate Rule 50(A), an appellant’s appendix should include “‘all documents
relating to the disposition of the motion for summary judgment, including any documents that [appellee]
designated and filed with the trial court’”) (quoting Yoquelet v. Marshall County, 811 N.E.2d 826, 830
(Ind. Ct. App. 2004)), trans. denied.

                                                  5
          Following Webster’s death, Designplan collected the benefits of the $1,565,000

life insurance policy that it had on Webster.                Thereafter, on December 11, 2008,

Designplan wrote a check for $1,546,072.08 to NBI in exchange for the Webster Shares.7

Later, in early 2009, Designplan was dissolved.

          In December 2010, Designplan and Willey, as Trustee of the Willey Trust, filed a

complaint against Designplan’s former attorney, John R. Price, and against NBI, as

Trustee for the Webster Trust. In the complaint, Designplan and Willey alleged that

Price was “negligent” for “failing to properly advise and inform Willey and Designplan

with respect to the redemption of Webster’s Shares.” (Appellee’s App. 6). They also

appeared to allege a claim of legal malpractice against Price in relation to his

representation of Designplan in a lawsuit, filed in 2007, in which Designplan was sued by

another company for money owed on a consulting contract.8 They did not make a

specific claim against NBI in the complaint, but they alleged that the Webster Trust and

Webster’s wife held “the bounty of the illegal redemption of the Webster Shares” and

asserted that “equity demand[ed] that this money be returned in full to Designplan to be

used to pay Designplan’s creditors,” including the parties from the consulting contract

lawsuit, who sought to reduce an arbitration award against them. (Appellee’s App. 8).

6
    The Webster Trust was created by Webster in November 2003.
7
  The Designplan check was apparently written by Jill Speraw, who was the individual who owned 40
shares of Designplan.
8
 This 2007 lawsuit went to arbitration in 2010 and resulted in an arbitration award against Designplan for
$631,500.
                                                    6
        In May 2011, NBI filed a motion for summary judgment.                           In June 2011,

Appellants moved to amend their complaint and to strike NBI’s motion for summary

judgment, and the trial court granted both motions. In Appellants’ amended complaint,

they alleged three counts: (1) a negligence claim against Price; 9 (2) a claim of unlawful

corporate distribution against NBI; and (3) a claim that NBI had breached its fiduciary

duty to Designplan and Willey.             Specifically, in regard to the unlawful corporate

distribution claim against NBI, Appellants—basing their claim under Indiana Business

Corporation Law—alleged that the Webster Trust had “received an improper distribution

from Designplan in violation of Indiana law, specifically IC [§] 23-1-28-3, when it

exchanged its Webster Shares of Designplan pursuant to the Buy-Sell Agreement” and

that “[p]ursuant to I.C. [§] 23-1-35-4, the Webster Trust [was] liable to Plaintiffs in the

amount of the distribution that the Webster Trust [had] received from Designplan.”

(App. 22, 23). As for the fiduciary duty claim, Appellants alleged that NBI had breached

its fiduciary duty “when it redeemed the Webster Shares in exchange for the life

insurance proceeds thereby leaving Designplan insolvent and unable to pay debts that

existed prior to the redemption of the Webster Shares.” (App. 22).

        In September 2011, NBI filed a second motion for summary judgment, arguing

that it was entitled to judgment as a matter of law on both claims. Concerning the

unlawful corporate distribution claim, NBI asserted that it was entitled to summary

judgment because the redemption of shares was a contractual commitment under the

Buy-Sell Agreement and did not constitute a “distribution” under the Indiana Business
9
  Appellants alleged that Price was negligent in his representation of Designplan with respect to both the
redemption of the Webster shares and the consulting contract lawsuit.
                                                    7
Corporation Law statutes. NBI also argued that it was entitled to summary judgment on

the breach of fiduciary duty claim because it had acted in compliance with the terms of

the Buy-Sell Agreement when it accepted the life insurance proceeds in exchange for

Designplan’s redemption of the Webster Shares.

       In Appellants’ response to NBI’s motion for summary judgment, they alleged that

NBI’s acceptance of the insurance proceeds for its shares of Designplan stock was a

breach of NBI’s duty not to cause harm to Designplan and its shareholders. It argued that

NBI’s compliance with the Buy-Sell Agreement was irrelevant because, at the time of the

redemption, the agreement required an unlawful corporate distribution and that NBI had a

“fiduciary obligation” to not cause Designplan and its directors to “unwittingly violate

I.C. § 23-1-28-3, and become liable for the amount of the redemption.” (Appellee’s App.

111). Appellants asserted that Designplan had made an unlawful corporate distribution,

at the direction of attorney Price, when it redeemed Webster’s shares from NBI, but they

argued that Willey, as the remaining director of Designplan, was statutorily entitled to

“contribution” from NBI for the unlawful distribution under Ind. Code § 23-1-35-4(b).

       In NBI’s reply, it argued that Willey was not entitled to contribution from NBI

under Ind. Code § 23-1-35-4(b) because she had not been held liable for the alleged

unlawful distribution.

       On December 20, 2011, a summary judgment hearing was held before the trial

court’s magistrate. Thereafter, the trial court issued an order granting NBI’s motion for

                                           8
summary judgment and entering final judgment under Indiana Trial Rule 54(B).10

Appellants filed a motion to correct error and a motion for a hearing before the elected

judge.       Despite denying the latter motion, the trial court judge held a hearing on

Appellants’ motion to correct error and then denied the motion. Appellants now appeal.

                                                DECISION

          Appellants argue that the trial court erred by granting NBI’s motion for summary

judgment. Specifically, Appellants argues that the trial court erred by granting summary

judgment to NBI on Appellants’ claims of breach of fiduciary duty and unlawful

corporate distribution.

          When reviewing a trial court’s order granting summary judgment, we apply the

same standard as that used in the trial court. Kopczynski v. Barger, 887 N.E.2d 928, 930

(Ind. 2008). Summary judgment is appropriate only where the designated evidence

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.” 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

facts support conflicting reasonable inferences.” Williams v. Tharp, 914 N.E.2d 756, 761

(Ind. 2009) (internal citations omitted). When the defendant is the moving party, the

defendant must show that the undisputed facts negate at least one element of the

plaintiff’s cause of action or that the defendant has a factually unchallenged affirmative

10
     Appellants’ claims against attorney Price remain.
                                                         9
defense that bars the plaintiff’s claim. Dible v. City of Lafayette, 713 N.E.2d 269, 272

(Ind. 1999).

       A trial court’s grant of summary judgment is “‘clothed with a presumption of

validity,’” and an appellant has the burden of demonstrating that the grant of summary

judgment was erroneous. Williams, 914 N.E.2d at 762 (quoting Rosi v. Bus. Furniture

Corp., 615 N.E.2d 431, 434 (Ind. 1993)). In reviewing a trial court’s ruling on a motion

for summary judgment, we may affirm on any grounds supported by the designated

evidence. SMDfund, Inc. v. Fort Wayne-Allen Cnty. Airport Authority, 831 N.E.2d 725,

728 (Ind. 2005), cert. denied.

       NBI’s act of receiving the life insurance proceeds in exchange for the Webster

Shares, which was done pursuant to the Buy-Sell Agreement, is the basis for Appellants’

claims against NBI.11 Designplan and Willey—who signed the Buy-Sell Agreement and

complied with the Agreement’s terms when Designplan collected the life insurance

proceeds and exchanged those proceeds for the Webster shares—argue that NBI caused

Designplan to engage in an unlawful corporate distribution and breached a fiduciary duty

when NBI complied with the same terms of the Buy-Sell Agreement.

A. Unlawful Corporate Distribution

       Appellants argue that the trial court erred by granting summary judgment to NBI

on Appellants’ claim for unlawful corporate distribution.

11
   This exchange of life insurance proceeds for the Webster Shares also makes up part of Appellants’
negligence claim against attorney Price. Our decision in this case relates only to NBI, and we make no
statement or determination as to Appellants’ claims against other defendants.
                                                 10
       Appellants’ claim of unlawful corporate distribution against NBI was brought

under the Indiana Business Corporation Law (BCL). “The Indiana General Assembly

passed the [BCL] in 1986 based on the recommendations of the Indiana General

Corporation Law Study Commission.” In re ITT Derivative Litig., 932 N.E.2d 664, 667

(Ind. 2010) (citing 1986 Ind. Acts 1377–1532)). While the BCL is modeled after the

1984 version of the Revised Model Business Corporation Act (RMA), it is not an exact

copy of the RMA. Id. The BCL “applies to all domestic corporations closely held and

public corporations alike[,]” and it “sets forth corporate director duties, responsibilities,

and standard[s] of conduct expected of corporate directors.” Melrose v. Capitol City

Motor Lodge, Inc., 705 N.E.2d 985, 988 (Ind. 1998) (citing Ind. Code §§ 23–1–17–3, 23–

1–35–1 to 23–1–35–4).

       Appellants assert that Designplan’s payment of the life insurance proceeds in

exchange for the Webster Shares was a “distribution” prohibited under Indiana Code §

23-1-28-3, which provides:

       A distribution may not be made if, after giving it effect:

       (1) the corporation would not be able to pay its debts as they become due in
       the usual course of business; or

       (2) the corporation’s total assets would be less than the sum of its total
       liabilities plus (unless the articles of incorporation permit otherwise) the
       amount that would be needed, if the corporation were to be dissolved at the
       time of the distribution, to satisfy the preferential rights upon dissolution of
       shareholders whose preferential rights are superior to those receiving the
       distribution.

Ind. Code § 23-1-28-3. A distribution is defined under the BCL as follows:

                                             11
        (a) “Distribution” means a direct or indirect transfer of money or other
        property (except a corporation’s own shares) or incurrence or transfer of
        indebtedness by a corporation to or for the benefit of its shareholders in
        respect of any of its shares under IC 23-1-28. A distribution may be in the
        form of a declaration or payment of a dividend; a purchase, redemption, or
        other acquisition of shares; a distribution of indebtedness; or otherwise.

        (b) The term does not include:

                 (1) amounts constituting reasonable compensation for past or present
                 services or reasonable payments made in the ordinary course of
                 business under a bona fide retirement plan or other benefit program;
                 or
                 (2) the making of or payment or performance upon a bona fide
                 guaranty or similar arrangement by a corporation to or for the benefit
                 of its shareholders.

        However, the failure of an amount to satisfy subdivision (1), or of a
        payment or performance to satisfy subdivision (2), is not determinative of
        whether the amount, payment, or performance is a distribution.

Ind. Code § 23-1-20-7. The BCL sets forth the potential for a director’s liability for an

unlawful corporate distribution as follows:

        (a) Subject to section 1(e) of this chapter,[12] a director who votes for or
        assents to a distribution made in violation of this article or the articles of
        incorporation is personally liable to the corporation for the amount of the

12
  Section 1(e) “provides that a director ‘is not liable’ for an act or omission unless ‘[t]he breach or failure
to perform constitutes willful misconduct or recklessness.’” Galligan v. Galligan, 741 N.E.2d 1217, 1226
(Ind. 2001) (quoting Ind. Code § 23-1-35-1(e)). When discussing Indiana Code § 23-1-35-1, our Indiana
Supreme Court explained that “Indiana has statutorily implemented a strongly pro-management version of
the business judgment rule” and that this “rule includes ‘a presumption that in making a business
decision, the directors of a corporation acted on an informed basis, in good faith and in the honest belief
that the action taken was in the best interests of the company.’” G & N Aircraft, Inc. v. Boehm, 743
N.E.2d 227, 238 (Ind. 2001) (quoting Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984), overruled on
other grounds by Brehm v. Eisner, 746 A.2d 244 (Del. 2000)). This presumption can only be overcome
by showing that a director engaged in recklessness or willful misconduct. Id. Indeed, “[s]ubsection (e)
[of Indiana Code § 23-1-35-1] reflects the public policy of Indiana that personal liability should be
imposed on directors only in limited circumstances and should be construed in furtherance of that
objective.” See Ind. Code § 23-1-35-1(e) cmt. See also Ind. Code § 23-1-17-5 (providing that official
comments to the BCL may be published and “may be consulted by the courts to determine the underlying
reasons, purposes, and policies of [the BCL] and may be used as a guide in its construction and
application”).

                                                     12
        distribution that exceeds what could have been distributed without violating
        this article or the articles of incorporation.

        (b) A director held liable for an unlawful distribution under subsection (a)
        is entitled to contribution:

                (1) from every other director who voted for or assented to the
                distribution, subject to section 1(e) of this chapter; and

                (2) from each shareholder for the amount the shareholder accepted.

Ind. Code § 23-1-35-4 (emphasis added).

        In arguing that the trial court erred by granting summary judgment to NBI on their

unlawful corporate distribution claim, Appellants ask that we determine, as a matter of

law, that: (1) Designplan’s payment to NBI pursuant to the Buy-Sell Agreement was a

“distribution” under Indiana Code § 23-1-20-7; (2) this payment constituted an unlawful

corporate distribution under Indiana Code § 23-1-28-3;13 and (3) NBI’s “wrongful

acceptance” of the life insurance proceeds would make it liable for contribution to

Designplan and Willey under Indiana Code § 23-1-35-4. Appellants’ Br. at 16.

        However, we need not make any determinations regarding whether there has been

a violation of the BCL. It is undisputed that there has been no claim or complaint against

Willey or Designplan that they violated the BCL or made an unlawful corporate

distribution that Willey would be personally liable. It seems that the BCL, which serves

as a shield to protect directors such as Willey from liability, should not now be used as a

sword against NBI seeking contribution for a liability against Willey that has not even

13
  By asserting that the payment was an unlawful corporate distribution, Appellants are implicitly making
an admission that they violated the BCL—or that their act of paying the insurance proceeds was reckless
or constituted willful misconduct—and that Willey is personally liable for the unlawful corporate
distribution pursuant to Indiana Code § 23-1-35-4.
                                                  13
been established. See In re ITT Derivative Litig., 932 N.E.2d at 669 (“explaining that the

liability standard of subsection (e) responded to increasing amount of litigation against

directors, the increasing expense of defending such claims, and the increasing cost of

director and officer liability insurance”) (citing Ind. Code § 23-1-35-1(e) cmt.)). Thus,

we cannot say that the trial court erred by granting summary judgment to NBI on

Appellants’ claim of unlawful corporate distribution.14

B. Breach of Fiduciary Duty

         Appellants also argue that the trial court erred by granting summary judgment to

NBI on Appellants’ claim for breach of fiduciary duty.

         A claim for breach of fiduciary duty requires proof of three elements: (1) the

existence of a fiduciary relationship; (2) a breach of the duty owed by the fiduciary to the

beneficiary; and (3) harm to the beneficiary. Farmer’s Elevator Co. of Oakville, Inc. v.

Hamilton, 926 N.E.2d 68, 79 (Ind. Ct. App. 2010), trans. denied. A defendant is entitled

to summary judgment as a matter of law when the undisputed material facts negate at

least one element of the plaintiff’s claim. Rhodes v. Wright, 805 N.E.2d 382, 387 (Ind.

2004).

         Here, Appellants alleged in their complaint that NBI, as trustee of the Webster

Trust, owed a fiduciary duty to Appellants and that NBI breached that duty when it,

14
  Appellants, acknowledging that Willey has not been held liable as a director for a claim of unlawful
corporate distribution under which she could seek contribution under the BCL statutes, argue that
Designplan, as a corporate entity, should be able to recover the life insurance proceeds from NBI under
some sort of fraud on the corporation claim. Appellants neither asserted a fraud claim against NBI in its
complaint nor raised such an argument on summary judgment. Thus, we need not address the argument.
See McGill v. Ling, 801 N.E.2d 678, 687 (Ind. Ct. App. 2004) (“Generally, a party may not raise an issue
on appeal that was not raised to the trial court, even in summary judgment proceedings.”), trans. denied.
                                                   14
pursuant to the Buy-Sell Agreement, exchanged the Webster Shares for Designplan’s

payment of the life insurance proceeds. On appeal, the parties characterize NBI as a

shareholder and agree that it owed a fiduciary duty to Willey and Designplan. Thus, they

do not challenge the existence of duty and, instead, direct their arguments to whether NBI

breached its duty to Appellants. We will do the same.

         “Shareholders of close corporations owe fiduciary duties substantially different

from the duties owed by their counterparts in publicly traded corporations.” McLinden v.

Coco, 765 N.E.2d 606, 615 (Ind. Ct. App. 2002) (citing Melrose, 705 N.E.2d at 900).

“Indiana courts have characterized closely-held corporations as ‘incorporated

partnerships’ and as such have imposed a fiduciary duty upon shareholding ‘partners’ to

deal fairly not only with the corporation but with fellow shareholders as well.” Melrose,

705 N.E.2d at 991. Thus, “‘shareholders in a close corporation stand in a fiduciary

relationship to each other, and as such, must deal fairly, honestly, and openly with the

corporation and with their fellow shareholders.’” Id. (quoting Barth v. Barth, 659 N.E.2d

559, 561 (Ind. 1995)). “The standard imposed by a fiduciary duty is the same whether it

arises from the capacity of a director, officer, or shareholder in a close corporation.” G &

N Aircraft, Inc. v. Boehm, 743 N.E.2d 227, 240 (Ind. 2001). Whether a particular act or

omission is a breach of duty is generally a question of fact for the jury, but can be a

question of law where the facts are undisputed and only a single inference can be drawn

from those facts. Northern Ind. Pub. Serv. Co. v. Sharp, 790 N.E.2d 462, 466 (Ind.

2003).

                                            15
      The undisputed facts reveal that Designplan, Willey, and Webster entered into a

Buy-Sell Agreement, in which Designplan agreed to secure life insurance on Webster and

Willey and to use those proceeds to purchase Webster’s and Willey’s shares in

Designplan upon his or her death. Under the Buy-Sell Agreement, Webster and Willey

agreed to sell all of their shares to Designplan and agreed that the agreement would be

binding on their heirs. Prior to Webster’s death, he transferred his Webster Shares into

his Webster Trust, for which NBI was trustee.        After Webster’s death, Designplan

collected the life insurance proceeds and paid those proceeds to NBI in exchange for the

Webster Shares.    It is undisputed that this was all done pursuant to the Buy-Sell

Agreement.

      Appellants now contend that NBI breached a fiduciary duty owed to them because

Designplan’s payment of the insurance proceeds in exchange for the Webster Shares left

Designplan unable to cover its debts. NBI argues that Appellants “cannot affirmatively

invite the conduct of which they now complain and then argue that there was no

corporate authorization for the redemption of the Webster Shares or that NBI failed to act

openly, honestly, and fairly with [Appellants].” NBI’s Br. at 11. We agree.

      Appellants’ argument that NBI breached a fiduciary duty because it (1) did not

inquire into whether Designplan had enough money to cover its debts before it complied

with the Buy-Sell Agreement; and (2) accepted Designplan’s payment of the life

insurance proceeds in exchange for the Webster Shares, is without merit. Designplan

collected the life insurance proceeds and paid them to NBI to purchase the Webster

                                           16
Shares. It cannot now claim NBI breached its fiduciary duty for Designplan’s own

actions.

       Based on the undisputed designated evidence, we conclude that NBI did not

breach its duty to deal fairly, honestly, and openly with Appellants. Because there is no

breach of duty, we conclude that the trial court did not err by granting NBI’s motion for

summary judgment. See, e.g., Rhodes, 805 N.E.2d at 385 (holding that a defendant is

entitled to judgment as a matter of law when the undisputed material facts negate at least

one element of the plaintiff’s claim).

       Affirmed.

FRIEDLANDER, J., and BROWN, J., concur.

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