Ahuja v. Lynco Ltd. Medical Research

• Court: Indiana Appellate Court
• Writing for the Court: STATON
• Citation: Ahuja v. Lynco Ltd. Medical Research, 675 N.E.2d 704 (Ind. App. 1996)
• Decision Date: 19 November 1996
• Docket Number: No. 02A03-9512-CV-421,02A03-9512-CV-421
• Parties: Shashi AHUJA, M.D., Appellant-Defendant, v. LYNCO LTD. MEDICAL RESEARCH, Appellee-Plaintiff.

Page 704

675 N.E.2d 704

Shashi AHUJA, M.D., Appellant-Defendant, v. LYNCO LTD. MEDICAL RESEARCH, Appellee-Plaintiff.

No. 02A03-9512-CV-421.

Court of Appeals of Indiana.

Nov. 19, 1996.

Transfer Denied April 29, 1997.

Patrick J. Arata, Beth A. Webber, Arata & Pappas, Fort Wayne, for Appellant-Defendant.

Ward W. Miller, Bloom, Bloom, More & Miller, Fort Wayne, for Appellee-Plaintiff.

OPINION

STATON, Judge.

Shashi Ahuja ("Ahuja") appeals a judgment in favor of Lynco Ltd. Medical Search ("Lynco") for $20,000. Ahuja presents several issues for our review which we consolidate and restate as follows:

I. Whether the contract is void because Lynco was not licensed to operate as an employment agency in Indiana.

II. Whether the trial court erred in finding that a contract existed between Lynco and Ahuja.

III. Whether the evidence was sufficient to support the award of damages to Lynco.

We affirm.

The facts most favorable to the judgment reveal that Ahuja was interested in hiring an associate cardiologist. He mailed solicitation letters to a large number of medical schools. He also received a telephone call from a representative of Lynco, which was an employment agency specializing in placement of medical professionals. Over the course of several months during late 1992, Lynco provided Ahuja with the names of several candidates, including Deepak Shah ("Shah"). Lynco also provided Shah with Ahuja's name and telephone number. A few days later Shah noticed Ahuja's solicitation letter posted on the bulletin board at his medical school.

In November 1992, Lynco sent Ahuja a form agreement for their services. The contract provided that if Ahuja hired a person referred to him by Lynco, he would pay Lynco $20,000 for their services. Ahuja never executed the contract nor returned it to Lynco. Without notifying Lynco, Ahuja arranged for Shah to travel to Fort Wayne for an interview. Lynco continued to communicate with Ahuja concerning Shah's interest in the position and their fee. They also asked Ahuja to return the executed contract several times.

Ahuja offered the associate position to Shah and Shah accepted. His starting salary was $160,000. When Ahuja refused to pay Lynco for its services, Lynco filed this lawsuit. After a bench trial, the trial court entered findings of facts and conclusions of law concluding that a contract existed between the parties. The trial court entered judgment in favor of Lynco for $20,000. This appeal ensued.

I. Contract

Ahuja first argues that the trial court erred in determining that a contract existed between Lynco and him because Lynco was not licensed to operate an employment agency in Indiana. We note at the outset that the trial court entered findings of fact and conclusions of law. When a party has requested specific findings of fact and conclusions thereon pursuant to Ind. Trial Rule 52(A), the reviewing court cannot affirm the judgment on any legal basis; rather, this Court must determine whether the trial court's findings are sufficient to support the judgment. Vanderburgh Co. Bd. of Comm'rs v. Rittenhouse, 575 N.E.2d 663, 665 (Ind.Ct.App.1991), trans. denied. In reviewing the judgment, we must first determine whether the evidence supports the findings and second, whether the findings support the judgment. Id. The judgment will be reversed only when clearly erroneous, i.e., when the judgment is unsupported by the findings of fact and conclusions entered on the findings. DeHaan v. DeHaan, 572 N.E.2d 1315, 1320 (Ind.Ct.App.1991), trans. denied. Findings of fact are clearly erroneous when the record lacks any evidence or reasonable inferences from the evidence to support them. Id. To determine whether the findings or judgment are clearly erroneous, we consider only the evidence favorable to the judgment and all reasonable inferences flowing therefrom, and we will not reweigh the evidence or assess witness credibility. Id.

Here, the record does not reflect a request for such findings by either party. Instead the trial court entered the specific findings of fact and conclusions sua sponte. However, the same standard of review applies when the trial court gratuitously enters specific findings of fact and conclusions, with one notable exception. When the trial court enters such findings sua sponte, the specific findings control only as to the issues they cover, while a general judgment standard applies to any issue upon which the court has not found. In re Marriage of Snemis, 575 N.E.2d 650, 652 (Ind.Ct.App.1991). We may affirm a general judgment on any theory supported by the evidence adduced at trial. Id.

Both Ahuja and Lynco devote a substantial portion of their briefs to arguing whether Lynco's business is governed by IND.CODE § 25-16-1-1 et seq. which controls the licensing of employment agencies in Indiana. ¹ Ahuja contends that because Lynco failed to comply with the statute, they are prohibited from enforcing any contracts they make in Indiana. In its findings of fact and conclusions of law, the trial court determined that Ahuja was not entitled to the benefits of the statute because it was enacted to protect job applicants rather than employers. Regardless of whether the trial court's conclusion is correct, the determination of who is permitted to claim the benefits of the statute is unnecessary. To the extent that a judgment may be based on superfluous findings and conclusions which are not fatal to the judgment, those findings and conclusions will not warrant reversal even if they are erroneous. Lever Brothers Co. v. Langdoc, 655 N.E.2d 577, 583 (Ind.Ct.App.1995).

The determination of whether Lynco is governed by IC 25-16-1 et seq. is irrelevant because even if Lynco did violate the statute, that violation does not void the contract. There is a strong presumption of the validity of contracts. Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1129-30 (Ind.1995). However, courts have refused to enforce contracts on public policy grounds in three types of situations: (1) agreements that contravene a statute, (2) agreements that clearly tend to injure the public in some way, and (3) agreements that are otherwise contrary to the declared public policy of Indiana. Id. at 1130.

The question here is whether the contract between Ahuja and Lynco contravenes the licensing statute. To determine whether a contract actually contravenes a statute, the language of the statute must be reviewed. Continental Basketball Association, Inc. v. Ellenstein Enterprises, Inc., 669 N.E.2d 134, 140 (Ind.1996). Unless the language of the statute clearly and unambiguously states that the legislature intended that the courts be unavailable for enforcement of contracts made in violation of it, a contract will not be found to contravene a statute. Id. Language which will clearly show such legislative intent includes words such as "void" and "unenforceable." Id.

If clear and unambiguous language is not present in the statute, the court must engage in a balancing test to determine whether a particular contract should be enforced under the statute. Id. The considerations to be balanced are (1) the nature of the subject matter of the contract, (2) the strength of the public policy underlying the statute, (3) the likelihood that refusal to enforce the bargain or term will further that policy, (4) how serious or deserved would be the forfeiture suffered by the party attempting to enforce the bargain, and (5) the parties' relative bargaining power and freedom to contract. Id. (citing Fresh Cut, supra ).

The statute governing employment agencies does not use terms such as "void" or "unenforceable." Rather, it prohibits unlicensed employment agencies from engaging in business in Indiana. IND.CODE § 25-16-1-1 (1993). In the event of a violation, the statute authorizes the Department of State Revenue to investigate and institute criminal or civil proceedings. IND.CODE § 25-16-1-17 (1993) and IND.CODE § 25-16-1-18 (1993). Due to the failure of the legislature to use language indicating its intent to make the courts unavailable to persons who violate the statute and its inclusion of remedial provisions, we conclude that the legislature did not intend all contracts made in violation of the statute to be void. See Continental Basketball, supra.

We must then apply the balancing approach utilized in Fresh Cut. Here, we find no compelling reasons to declare the contract void. A review of the statute shows that its purpose was to protect job applicants, rather than employers, from unscrupulous employment agencies. See, e.g., IND.CODE § 25-16-1-12 (1993) (requiring that agency notify applicant if strike or lock-out is occurring at company prior to referral); IND.CODE § 25-16-1-13 (1993) (prohibiting agency from sharing fees received from applicants with employers); IND.CODE § 25-16-1-14 (1993) (prohibiting referral to places of "bad repute"); IND.CODE § 25-16-1-15 (1993) (requiring refund of fee in the event of referral to non-existent job opening). This public policy would not be furthered by refusing to enforce the contract between Ahuja and Lynco. In addition, by failing to enforce the contract, we would be penalizing Lynco while rewarding Ahuja who would receive the benefits of Lynco's services without paying for them. Such a forfeiture is undeserved when it was Ahuja who attempted to circumvent the contract by working directly with Shah after obtaining his name from Lynco. Finally, there is nothing inherent in the subject matter of the contract which suggests that it should not be enforced. Accordingly, we conclude that the contract between Lynco and Ahuja is not void as against public policy.

II. Existence of Contract

Ahuja next contends that the trial court erred in determining that a contract existed between the parties. When the evidence is conflicting, the existence of a contract is a factual determination. City of Indianapolis v. Twin Lakes, 568 N.E.2d 1073, 1078 (Ind.Ct.App.1991), reh. denied, trans....