Court Opinion

ID: 8212579
Source: CourtListenerOpinion
Date Created: 2022-10-07 14:04:57.723661+00
Date Added: 2024-06-11T16:42:11.563617
License: Public Domain

RENDERED: SEPTEMBER 30, 2022; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                           Court of Appeals

                              NO. 2020-CA-0322-MR

ALLEN FAMILY PARTNERSHIP #1,
LLC, ALISA ALLEN NASH, CHERYL
MELINDA ALLEN, JAN ALLEN
PFEIFER, PATRICIA GAIL ALLEN,
AND TYLER ALLEN,
INDIVIDUALLY AND
DERIVATIVELY ON BEHALF OF
STATION PLACE LLC                                                    APPELLANTS

             APPEAL FROM JEFFERSON CIRCUIT COURT
v.       HONORABLE JUDITH E. MCDONALD-BURKMAN, JUDGE
                     ACTION NO. 17-CI-001736

WALTER SWYERS AND HYSINGER
GROUP                                                                  APPELLEES

                            OPINION
      REVERSING IN PART, VACATING IN PART, AND REMANDING

                                   ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; K. THOMPSON AND L. THOMPSON,
JUDGES.

THOMPSON, K., JUDGE: This appeal asks us to determine whether the Jefferson

Circuit Court correctly interpreted an agreement setting forth the terms for
distributing funds from the sale of an office building in Indianapolis, Indiana. We

reverse and remand because the trial court’s distribution formula does not follow

the agreement’s unambiguous terms.

              This litigation has been remarkably bitter, sprawling, and protracted.

The trial court record is over 8,000 pages long, and there are thousands of

additional pages of exhibits and deposition transcripts. To avoid this Opinion

becoming unwieldy, we shall discuss only the most necessary facts, procedural

history, and issues.1

              Station Place, LLC owned and operated a commercial office building

in Indianapolis (the Building). At one time, Station Place was owned equally by

the Allen Family Partnership #1 (the Partnership), Walter Swyers, and the

Hysinger Group (Hysinger), but, in 2005, Swyers and Hysinger sold the majority

of their ownership interests to Tyler Allen, Patricia Gail Allen, Cheryl Melinda

Allen, Jan Allen Pfeifer, and Alisa Allen Nash (the Allens). Thereafter, Swyers

and Hysinger each owned 3.3%, the Allens collectively owned 60%, and the

Partnership owned 33.4% of Station Place.

              Station Place sold the Building in 2017 for $10 million. This action

revolves around properly distributing the net funds from that sale.

1
 We have considered all the arguments in the parties’ original and supplemental briefs but will
discuss only those we deem necessary as the remainder are redundant, irrelevant, or otherwise
without merit.

                                              -2-
               Despite the large sums of money at stake, the parties did not draft a

pre-sale agreement setting forth in detail how the funds from selling the Building

would be distributed. Instead, they agreed to some basic distribution terms in two

similar, but not identical, memoranda.

               The first memorandum was written in 2007 by Swyers (the 2007

memo) and it contains these relevant provisions:

                      Our December, 2005 transaction was based on an
               $8,000,000 price, postponing any defeasance penalty[2]
               until the time of ultimate sale to a third party, with each
               of us then sharing 1/3 each of any proceeds above the
               $8,000,000 plus the defeasance. [Hysinger] and I
               [Swyers] each have retained a 3 1/3 % interest in the
               building. The mortgage . . . balance at time of sale will
               not be reduced much below the $4,500,000 amount . . . .

                      The mortgage is payable March, 2011 and at that
               time there will be no defeasance, therefore, we should
               have the additional $1,000,000 to distribute 1/3 each,
               unless it is reduced by a commission on the sale[.]

               In August 2010, the parties agreed to another memorandum (the 2010

memo), which the trial court found to be the controlling document. The parties do

not dispute that the 2010 memo controls. However, Swyers and Hysinger contend

the 2007 memo and 2010 memo together form the operative agreement, an

argument with which we do not agree.

2
 The parties agree that defeasance in this context refers to a penalty for paying off the mortgage
before its due date. By the time the Building was sold, the defeasance was no longer relevant.

                                               -3-
            The 2010 memo provides in relevant part:

               In December 2005, Bill Hysinger and Walt Swyers
            agreed with Nolen Allen to sell to Nolen’s five children
            60% of the Station Place interest held by
            Hysinger/Swyers . . . with the understanding that the
            transfer was based upon an $8,000,000.00 value and
            upon ultimate sale of the property, that the Allen interest,
            Hysinger and Swyers would share proceeds above
            $8,000,000.00 on a one-third each basis . . . .

               Sale of Station Place [i.e., the Building] is expected to
            occur . . . and the distribution of net proceeds are agreed
            to be as follows:

                     1. A sale up to $8,000,000.00 shall be distributed
                        33.34% to Allen Family Partnership #1 Ltd;
                        60% to the Nolen C. Allen family members
                        (12% each) and 3.3% each to Hysinger Group,
                        LLC and Walter J. Swyers, Jr.

                     2. If the ultimate net sales price is in excess of
                        $8,000,000.00, Hysinger, Swyers and Allen
                        Family Partnership #1 Ltd shall each be entitled
                        to one-third of net proceeds of the sale in
                        excess of $8,000,000.00[.]

The 2010 memo does not define net proceeds; the 2007 memo does not utilize the

term net proceeds.

            After the Building was sold, Swyers, the managing member of Station

Place, distributed about $594,695 each to himself and Hysinger. Believing Swyers

had overpaid himself and Hysinger, the Partnership and the Allens (collectively

Appellants) filed this action against Swyers and Hysinger in the Jefferson Circuit

                                          -4-
Court. The parties agree that Kentucky is a proper venue, but that Station Place’s

operating agreement requires applying Indiana substantive law.

             In addition to numerous other claims, Appellants sought an “accurate

accounting of the amount of all Station Place monies that Swyers has advanced to

himself since the January 2017 Building sale” and a “detailed statement of the

debits and credits between the parties arising from the operation and management

of Station Place.” Swyers filed counterclaims seeking, among other relief,

indemnification. For reasons unclear from the face of the record, the 2010 memo

was not produced until after discovery had begun.

             During the course of the protracted litigation, the trial court made

several pertinent decisions. First, the trial court held that the 2010 memo controls.

Also, the trial court held that Swyers had performed in accordance with the 2010

memo, meaning he “did not act with willful misconduct.” In other words, the trial

court concluded that the non-accounting claims against Swyers were inherently

without merit because he had complied with the 2010 memo. Thus, the trial court

granted summary judgment to Swyers and Hysinger on all claims against them,

except the one seeking an accounting. The court also held that Swyers was a

prevailing party entitled to receive indemnification.

             In November 2019, the court conducted a two-phase bench trial. The

first phase was to ascertain the amount of indemnification owed to Swyers. The

                                         -5-
second phase was devoted to Appellants’ accounting claim, at which the only

witness was an accountant, Faith Crump, called by Appellants.3

               In her testimony, Crump generally opined that the funds from the sale

of the Building should be distributed in accordance with the master settlement

statement (the Settlement) prepared in conjunction with that sale. Notably, Swyers

signed the Settlement in his role as Station Place’s managing member.

               On cross-examination, Crump agreed that the only expenses

specifically addressed in either the 2007 and 2010 memos were the mortgage,

defeasance, and the sales commission. In so doing, she acknowledged that the

numerous other costs and expenses listed on the Settlement were not explicitly

mentioned in either memo. However, Crump did not meaningfully waver from her

core position that all applicable expenses and costs had to be addressed in order to

properly calculate the amount of money available for distribution (i.e., net

proceeds).

3
 Generally, an action for an accounting “require[s] a person in possession of financial records to
produce them, demonstrate how money was expended, and return pilfered funds in his or her
possession. An action for an accounting has the purpose of adjusting the account of the litigants
and of rendering complete justice in a single action.” 1 AM. JUR. 2d Accounts and Accounting §
50 (2022) (footnotes and citations omitted). “Thus, an accounting does not yield a judgment for
damages, but rather seeks to restore to the plaintiff what is rightfully his or hers.” 1A C.J.S.
Accounting § 6 (2022). Accordingly, “[a]n accounting is proper where there is an unascertained
amount owing that cannot be determined without an examination of the debits and credits on the
books to determine what is due and owing.” Id. Here, the trial court did not conduct a searching
examination of Station Place’s ledgers, so the bench trial was not a true accounting.
Nonetheless, for ease of reference, we shall refer to that phase of the bench trial as an
accounting.

                                               -6-
                 The trial court later issued its post-trial decision, the gist of which is

its agreement with Swyers and Hysinger that the only costs or expenses which

factor into determining net proceeds are the mortgage and realtor’s commission.

Thus, the trial court rejected Appellants’ claims that Swyers had overpaid himself

and Hysinger and, instead, held that Swyers and Hysinger were each entitled to

additional money. Specifically, the court held:

                 The mortgage balance of $4,048,272.25 was deducted
                 from the first $8,000,000.00 resulting in the sum of
                 $3,981,727.75 [sic][4] for distribution. Swyers and the
                 Hysinger Group received 3 1/3% in the amount of
                 $131,592.53 each with the balance of $3,688,542.69
                 going to the Plaintiffs. The sales commission was to be
                 deducted from the sales proceeds in excess of
                 $8,000,000.00, resulting in the sum of $1,700,000.00 for
                 distribution. This sum was to be distributed per the
                 [2010 memo] in thirds. Thus, each party was to receive
                 $566,666.67. Based on these calculations Swyers and the
                 Hysinger Group were to receive a total of $698,259.19
                 each. Swyers distributed the sum of $594,695 each,
                 leaving for distribution the sum of $103,564.20 each.
                 Ms. Crump confirmed that if the calculations are
                 performed in accordance with the parties’ agreement,
                 then “$698,259.19 is what you get.”

The trial court also held that Appellees were entitled to a substantial amount of

money in indemnification and interest. Appellants then filed this appeal.

                 Before we may address the merits, we must first resolve Appellees’

argument that Appellants failed to preserve the issues for our review. As Swyers

4
    The court’s math is incorrect. $8,000,000 - $4,048,272.25 = $3,951,727.75.

                                                -7-
and Hysinger stress, Appellants now accept the primacy of the 2010 agreement but

formerly argued the funds should be distributed differently, such as pursuant to

Station Place’s operating agreement. Of course, the 2010 memo was not produced

until discovery had commenced, as the trial court noted in an order, so we cannot

fault Appellants for not initially relying on that document. After the trial court

found the 2010 memo controlled, Appellants accepted the ruling but continued to

argue that Swyers had overpaid himself and Hysinger. In other words, though

some of the finer points of their arguments have evolved, Appellants’ core position

– they are owed more money and Swyers and Hysinger less – has remained

constant.

               For example, though it does not specifically cite the 2010 memo,

paragraph seventy-eight of the second amended complaint alleges that Swyers

“chose to pay himself and Hysinger more than they were owed, and chose to pay

Plaintiffs less than they were owed.” Similarly, Appellants’ prehearing statement

in this Court asserts that Swyers gave himself and Hysinger “much more than

[their] recoverable interest in the proceeds of the sale” and the trial court “fail[ed]

to calculate and incorporate [Appellants’] outstanding amounts owed under the

August 11, 2010 agreement[.]”5

5
  We disagree with Swyers’ and Hysinger’s assertion that Appellants’ briefs impermissibly
contain arguments not addressed in their prehearing statement. Prehearing statements are
intended to provide the Court with a brief recitation of a party’s central arguments. Prehearing

                                               -8-
              Essentially, Swyers and Hysinger contend that Appellants have

violated the principle whereby “a party may not generally assume successive

positions in the course of the same litigation with respect to the same fact or set of

facts which are inconsistent and mutually contradictory.” Gregory and Appel, Inc.

v. Duck, 459 N.E.2d 46, 50 (Ind. Ct. App. 1984). See also, e.g., Rowe v. Shepherd,

283 S.W.2d 188, 190 (Ky. 1955). But we do not perceive that Appellants have

adopted inherently contradictory positions since they all along have argued that

they received too little money and Swyers and Hysinger too much.

              Finally, and crucially, as Appellants correctly note in their reply brief,

the trial court held a bench trial on their accounting claims. The purpose of that

trial was to ascertain how the funds received from selling the Building should be

distributed under the terms of the 2010 memo. Under Kentucky and Indiana law,

issues tried by express or implied consent are deemed to have been raised by the

pleadings. See, e.g., CR 15.02; Puckett v. McKinney, 175 Ind. App. 673, 676, 373

N.E.2d 909, 911 (1978). Therefore, notwithstanding Appellees’ disagreement, we

deem the issue of proper distribution of net proceeds pursuant to the 2010 memo to

have been sufficiently raised. After all, that was the sole purpose of the accounting

statements are not intended to be procedural pitfalls; substantial compliance with Kentucky Rule
of Civil Procedure (CR) 76.03 is sufficient. Capital Holding Corp. v. Bailey, 873 S.W.2d 187,
197 (Ky. 1994). Appellants’ prehearing statement substantially complies with CR 76.03.

                                              -9-
phase of the bench trial. In short, under these unique facts, we deem Appellants’

arguments to have been sufficiently preserved.

               Turning to the merits, our review of a decision issued after a bench

trial is as follows:

               Under CR 52.01, the trial court is required to make
               specific findings of fact and state separately its
               conclusions of law relied upon to render the court’s
               judgment. Further, those findings of fact, shall not be set
               aside unless clearly erroneous, and due regard shall be
               given to the opportunity of the trial court to judge the
               credibility of the witnesses. In fact, judging the
               credibility of witnesses and weighing evidence are tasks
               within the exclusive province of the trial court.

                      If the trial judge’s findings of fact in the
               underlying action are not clearly erroneous, i.e., are
               supported by substantial evidence, then the appellate
               court’s role is confined to determining whether those
               facts support the trial judge’s legal conclusion. However,
               while deferential to the lower court’s factual findings,
               appellate review of legal determinations and conclusions
               from a bench trial is de novo.

Barber v. Bradley, 505 S.W.3d 749, 754 (Ky. 2016) (internal quotation marks,

brackets, and citations omitted).6 Because contract interpretation is deemed a

6
  Though we accept the parties’ agreement that Indiana substantive law controls, “the law of the
forum controls remedies and procedures.” Ley v. Simmons, 249 S.W.2d 808, 808 (Ky. 1952). In
any event, Indiana’s standards of review are similar. See, e.g., Carmichael v. Siegel, 754 N.E.2d
619, 625 (Ind. Ct. App. 2001). We will apply Kentucky’s summary judgment standards.
Lipsteuer v. CSX Transp., Inc., 37 S.W.3d 732, 735 (Ky. 2000).

                                              -10-
substantive issue, Bourke v. Dun & Bradstreet Corporation, 159 F.3d 1032, 1036

(7th Cir. 1998), we shall apply Indiana contract interpretation principles.

             Under Indiana law, a court must give the terms of an unambiguous

contract their plain, ordinary meaning. Reuille v. E.E. Brandenberger Const., Inc.,

888 N.E.2d 770, 771 (Ind. 2008). And if a contract is unambiguous, a court “may

not look to extrinsic evidence to expand, vary, or explain the instrument but must

determine the parties’ intent from the four corners of the instrument.” Celadon

Trucking Services, Inc. v. Wilmoth, 70 N.E.3d 833, 839 (Ind. Ct. App. 2017).

Kentucky law is similar. See, e.g., Cantrell Supply, Inc. v. Liberty Mut. Ins. Co.,

94 S.W.3d 381, 384-85 (Ky.App. 2002).

             We begin with a broad overview of what we perceive to be the trial

court’s two main errors. First, the court should not have adopted the parties’

complicated bifurcation for determining and allotting net proceeds. Under the

parties’ approach, the gross sales price was cleaved into two discrete portions – the

first $8 million and the remaining $2 million. The mortgage was to be deducted

from the first $8 million, with the remaining balance of that portion to be

distributed pursuant to the parties’ ownership interest in Station Place. The

realtor’s commission (and, in Appellants’ view, sundry other costs and expenses)

was to be deducted from the remaining $2 million of the gross sales price, with the

remaining balance of that $2 million distributed one-third each to Swyers,

                                        -11-
Hysinger, and the Partnership. However, that under/over $8 million bifurcation

has no explicit textual support in the plain language of the 2010 memo, and the

parties’ understanding is not controlling.

             Instead, the 2010 memo bases its distribution formulae on whether

there were $8 million in net proceeds. If not, the memo requires all net proceeds

to be distributed pursuant to the parties’ ownership interests; if so, the memo

requires only the net proceeds over $8 million to be distributed under the one-third

each formula, with the first $8 million in net proceeds to be distributed according

to the parties’ ownership interests. There is nothing in the memo which states that

the gross sales price is to be split, with the mortgage being deducted from the first

$8 million and the realtor’s commission (and other costs) deducted from the

remaining $2 million.

             In other words, the entire first $8 million of the net proceeds must be

distributed according to the parties’ ownership interests in Station Place. The one-

third each formula only takes effect if there are net proceeds above $8 million, and

only applies to net proceeds above $8 million. However, given a $10 million gross

sales price and over $4 million in mortgages, basic math shows that there cannot

possibly have been $8 million in net proceeds:

                                         -12-
             $10,000,000.00 (gross sales price)
             - $3,781,326.44 (first mortgage)
             - $266,945.81 (second mortgage)
             - $300,000.00 (realtor’s commission)
               $5,651,727.75 (absolute maximum possible net
                             proceeds)

Thus, the one-third each formula never came into play, so the entirety of the net

proceeds must be distributed according to the parties’ ownership interests.

             We are aware that this conclusion is not in accordance with the

parties’ subjective interpretation of the 2010 memo in their briefs (though

Appellants seem to recognize in their supplemental brief that there were not $8

million in net proceeds). But, under longstanding Indiana precedent, the terms of

an unambiguous contract prevail over any contrary, subjective intent of a party:

                     It is fundamental that one who executes a contract
             of a certain character is bound by its terms even though
             he meant something different and thought the words
             conveyed his meaning. A court must give effect to the
             meaning and intent of the parties as expressed in the
             language of their contract. . . . In absence of anything to
             show legal impediment to prevent their entering into any
             contract they see fit or expressing it in the language of
             their own choice, the rights of the parties must be
             determined according to the contract. The sole duty of a
             trial court in a proceeding, such as before us, is to
             determine what is meant by the language of the
             instrument. In other words, the object to be attained in
             interpreting a contract is to ascertain the meaning and
             intent of the parties as expressed in the language used.

Miller v. Frankfort Bottle Gas, Inc., 136 Ind. App. 456, 460, 202 N.E.2d 395, 397-

98 (1964). See also, e.g., 11 WILLISTON ON CONTRACTS, The parties’ expressed

                                        -13-
intent governs any subjective, unexpressed intent § 31:4 (4th ed. 2022); Cantrell

Supply, Inc., 94 S.W.3d at 385; Claire’s Boutiques, Inc. v. Brownsburg Station

Partners LLC, 997 N.E.2d 1093, 1098 (Ind. Ct. App. 2013). Therefore, since the

net proceeds did not exceed $8 million, the trial court erred by not allocating them

pursuant to the parties’ ownership interests, notwithstanding their contrary

arguments.

             The second main error made by the trial court is accepting Swyers’

and Hysinger’s argument that the only costs and expenses which may be deducted

from the gross sales price to determine net proceeds are the mortgages and

realtor’s commission. That position is unsupported by any specific language in the

2010 memo.

             Though it is the contract’s key term, the 2010 memo does not define

net proceeds. The parties could have intended for net proceeds to have a

specialized meaning since, generally, parties may agree to any contractual terms

which do not violate the law or public policy. See, e.g., Ransburg v. Richards, 770

N.E.2d 393, 395-96 (Ind. Ct. App. 2002). However, since the plain language of

the contract contains nothing showing the parties intended net proceeds to have an

idiosyncratic meaning, we must use the term’s ordinary meaning. Hilbert v.

Conseco Services, L.L.C., 836 N.E.2d 1001, 1008 (Ind. Ct. App. 2005).

                                        -14-
                We asked for supplemental briefing, mainly on the issue of whether

the ordinary definition of net proceeds should apply. The parties seem to agree

that it does.

                When interpreting a term undefined within a contract, as here, Indiana

courts turn to dictionaries for guidance. See, e.g., Reuille, 888 N.E.2d at 771.

Black’s Law Dictionary defines net proceeds in relevant part as “[t]he amount

received in a transaction minus the costs of the transaction (such as expenses and

commissions).” Net proceeds, BLACK’S LAW DICTIONARY (11th ed. 2019). A

financial dictionary similarly defines net proceeds in relevant part as “[t]he money

one receives from a transaction after all commissions, fees, and related expenses.

For example, if one sells his/her house, the net proceeds are the funds one receives

from the buyer after all realtor’s fees and other closing costs.”7 Thus, the

definition of net proceeds here is the typical one: the amount of money remaining

for distribution after all applicable expenses and fees have been deducted.

                What are the applicable costs and expenses? Crump did not testify

that the mortgages and realtor’s commission were the only proper costs or

expenses. Instead, she generally testified that the distribution should align with the

7
  Farlex Financial Dictionary (2009), available for viewing at https://financial-
dictionary.thefreedictionary.com/net+proceeds (last visited Sep. 9, 2022). See also
INVESTOPEDIA https://www.investopedia.com/terms/n/netproceeds.asp. (last visited Sep. 9, 2022)
(defining net proceeds in relevant part as “the amount the seller receives following the sale of
an asset after all costs and expenses are deducted from the gross proceeds”).

                                             -15-
Settlement, which lists over $1 million in additional costs and expenses. And no

other witnesses testified at the accounting trial, so Crump’s testimony is essentially

unrebutted. In fact, Swyers signed the Settlement, and neither he (nor Hysinger)

has explained the dichotomy between his signing a document at or near closing

which he now attacks as somehow inapplicable. And there is nothing in the 2010

memo specifically limiting the costs and expenses to be considered when

determining net proceeds. In sum, the trial court’s conclusion that the mortgage

and realtor’s commission are the only expenses relevant to determining net

proceeds is unsupported by the plain language of the contract, witness testimony,

or the applicable principles of contract interpretation.

             The trial’s post-trial rulings do not meaningfully discuss the

Settlement. Substantively, the trial court held:

             The [$300,000] sales commission was to be deducted
             from the sales proceeds in excess of $8,000,000.00,
             resulting in the sum of $1,700,000.00 for distribution.
             This sum was to be distributed per the August 11, 2010
             agreement in thirds. Thus, each party was to receive
             $566,666.67. . . . Ms. Crump confirmed that if the
             calculations are performed in accordance with the
             parties’ agreement, then “$698,259.19 is what you get.”

The trial court did not address the numerous other costs and expenses listed in the

Settlement or Crump’s testimony that, generally, a proper distribution should align

with the Settlement.

                                         -16-
               Crump testified that the 2007 memo – upon which the Swyers and

Hysinger rely greatly – mentions only defeasance, mortgage, and a realtor’s

commission. But Crump consistently maintained that all necessary expenses and

costs had to be considered to determine net proceeds and the distributions should

align with the Settlement.8

               We will not flyspeck the litany of costs and expenses listed on the

Settlement. Crump generally testified that the Settlement was the controlling

document in determining the relevant costs and expenses, Swyers signed the

Settlement, and neither he nor Hysinger presented any witnesses at the accounting

trial to contradict Crump. Accordingly, Swyers’ and Hysinger’s self-serving

protestations that the Settlement is incorrect or somehow violates the plain terms of

the 2010 memo are belated and unavailing. The roughly $1 million in additional

costs and expenses listed on the Settlement must be taken into account. The costs

8
 Swyers misleadingly asserts in his brief that Crump admitted that “no expenses, other than the
mortgage and the sales commission, should be deducted . . . in order to arrive at Appellees’ share
of the sales proceeds . . . .” We strongly disagree.

       Swyers points to his counsel’s asking Crump as recorded on video, whether, in the 2007
memo, “the only expense that is to be taken other than the mortgage if there’s no defeasance is
the commission, correct? In this letter, the only expense that is supposed to be taken is the
commission?” Crump responded, “that’s the only one addressed in the letter.” In other words,
all Crump admitted was an uncontested fact – the realtor’s commission and mortgages (along
with the defeasance, which had been rendered obsolete) are the only expenses specifically
mentioned in the 2007 memo. Crump did not testify that those were the only costs and fees
which may be properly considered when determining net proceeds, nor can such an inference be
reasonably drawn from her testimony.

                                              -17-
and expenses listed on the Settlement shall be used on remand to determine the

proper distribution of net proceeds.

             In sum, the 2010 memo is unambiguous. The one-third each clause

was never triggered because there were less than $8 million in net proceeds. The

trial court erred in holding to the contrary, and its decision is thus reversed. On

remand, the costs and expenses listed on the Settlement should be subtracted from

the gross sales price to determine net proceeds, which shall then be distributed

according to each party’s ownership interest in Station Place.

             Finally, our conclusion is not altered by Swyers’ and Hysinger’s

insistence that the 2007 memo also controls. We will not extend this already

lengthy Opinion by addressing the 2007 memo in detail as the trial court plainly

held that the 2010 memo controls. The 2010 memo is unambiguous, so the 2007

memo is impermissible, extrinsic evidence, Swyers’ and Hysinger’s arguments to

the contrary notwithstanding. Celadon Trucking Services, Inc., 70 N.E.3d at 839.

             Nonetheless, even if we were to consider it, the 2007 memo does not

change our conclusions. Though Swyers and Hysinger insist that it does, there

simply is no explicit statement in the 2007 memo that the realtor’s commission,

mortgages, and defeasance were the only costs and expenses to be considered

when allocating the net funds received from selling the Building. Instead, the 2007

memo discusses the mortgage balances and realtor’s commission in its

                                         -18-
hypothetical discussion of the amounts which would be available for distribution if

the Building were to be sold at various times. It is common knowledge that there

are a host of costs and expenses inevitably associated with any real estate

transaction. The 2007 memo contains no language whatsoever eliminating those

inevitable other expenses from consideration in determining the amount of funds to

be distributed after the sale. In other words, discussing the hypothetical impact of

a couple of expenses – standing alone – does not eliminate all other expenses from

consideration.

             Tellingly, Swyers and Hysinger do not cite to specific, concrete

evidence to support their assertions that the defeasance, mortgage, and realtor’s

commission were the only ones relevant under the 2007 memo. For example,

while Hysinger’s brief argues they are the only relevant costs and expenses, the

brief does not cite to any specific portions of the record to support that argument

other than Crump’s unremarkable acknowledgement that those were the only costs

or expenses specifically mentioned in the 2007 memo. We again emphasize that

neither Hysinger nor Swyers presented any witnesses at the accounting trial. No

matter how vehemently or frequently made, arguments made by counsel are not

evidence. Nevel v. State of Indiana, 818 N.E.2d 1, 5 (Ind. Ct. App. 2004); Dixon v.

Commonwealth, 263 S.W.3d 583, 593 (Ky. 2008).

                                        -19-
             Where does that leave us? The trial court’s conclusions based on the

accounting trial are clearly erroneous because they are not supported by the record

or applicable contract principles. Failing to consider all pertinent costs and

expenses and applying the inapplicable one-third each formula led the trial court to

significantly inflate the amount due to Swyers and Hysinger. In turn, that

conclusion caused the trial court to conclude erroneously that Swyers could not be

found liable for the non-accounting claims because he had complied with the 2010

memo. Actually, Swyers significantly overpaid himself and Hysinger and, in so

doing, violated the plain terms of the 2010 memo.

             We need not delve deeply into the minutiae of the non-accounting

claims, given the trial court’s holding. We note that, standing alone, the fact that

Swyers overpaid himself and Hysinger is insufficient for Appellants to prevail on

their non-accounting claims. Swyers would likely not be liable on Appellants’

claims if he, for example, merely made a good faith mistake in calculating the

amount of money due to himself and Hysinger. Instead, Appellants must generally

show that Swyers acted willfully, recklessly, or in bad faith. Given the

concentration on the accounting claim in the parties’ briefs, the non-accounting

claims received only fleeting attention. The parties’ mistaken interpretation that

the one-third each formula did apply likely in part negates the needed showing to

the extent that Swyers followed this joint understanding in overpaying. Thus, it is

                                         -20-
sufficient for us to state that the parties have not pointed to evidence showing

definitively that Swyers did, or did not, act culpably regarding the non-accounting

claims.

              In other words, Swyers or Appellants may potentially prevail on the

non-accounting claims. At absolute bare minimum, it is certainly not impossible

for Appellants to prevail on those claims. Accordingly, the trial court erred by

granting summary judgment. See, e.g., Blackstone Mining Co. v. Travelers Ins.

Co., 351 S.W.3d 193, 198 (Ky. 2010) (holding that a trial court must view the

evidence “in the light most favorable to the nonmoving party” and summary

judgment is proper only if, in a practical sense, “it appears impossible that

the nonmoving party will be able to produce evidence at trial warranting a

judgment in his favor”) (citations omitted). Therefore, the trial court’s decision to

grant summary judgment on the non-accounting claims must be vacated and

remanded for further proceedings. Appellants seem to concede that their unjust

enrichment claims fail in light of the trial court’s conclusion that the 2010 memo

controls the parties’ rights; accordingly, the trial court’s denial of this claim is

conclusive.

              The trial court’s erroneous conclusions on Appellants’ claims also

means the trial court erred when it concluded that Swyers is entitled to

indemnification and he and Hysinger are entitled to receive attorney’s fees and

                                          -21-
interest as prevailing parties. Neither Hysinger nor Swyers should be a prevailing

party on the accounting claims, and it is not yet known with certainty who will

prevail on the non-accounting claims. Therefore, the trial court’s determination

that Swyers and Hysinger are entitled to indemnification/attorney’s fees and

interest is vacated and remanded for further proceedings, which shall be conducted

after the non-accounting claims so that it will then be known who has prevailed on

those claims.

             For the foregoing reasons, 1) the Jefferson Circuit Court’s post-trial

decision on the accounting claims is reversed. On remand, we instruct the trial

court to recalculate net proceeds by using the costs and expenses listed on the

Settlement, after which the net proceeds shall be distributed according to each

party’s ownership interest in Station Place; 2) the grant of summary judgment on

Appellants’ non-accounting claims is vacated and remanded for further

proceedings; 3) the order awarding Swyers and Hysinger

indemnification/attorney’s fees and interest is vacated and remanded for further

proceedings, to be conducted after the resolution of the non-accounting claims.

             ALL CONCUR.

                                        -22-
BRIEFS FOR APPELLANTS:      BRIEFS FOR APPELLEE WALTER
                            SWYERS:
Christopher E. Schaefer
Emily P. Mattingly          William F. McMurry
Louisville, Kentucky        Mikell T. Grafton
                            Louisville, Kentucky

                            BRIEFS FOR APPELLEE
                            HYSINGER GROUP:

                            W. Edward Skees
                            New Albany, Indiana

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