Annon II, Inc. v. Rill

• Court: Indiana Appellate Court
• Writing for the Court: RATLIFF
• Citation: Annon II, Inc. v. Rill, 597 N.E.2d 320 (Ind. App. 1992)
• Decision Date: 06 August 1992
• Docket Number: No. 49A02-9111-CV-535,49A02-9111-CV-535
• Parties: ANNON II, INC., Merchants National Corporation, and Merchants National Bank & Trust Company of Indianapolis, Appellants-Defendants, v. Eric RILL, Appellee-Plaintiff. 1 .

Page 320

597 N.E.2d 320

ANNON II, INC., Merchants National Corporation, and Merchants National Bank & Trust Company of Indianapolis, Appellants-Defendants, v. Eric RILL, Appellee-Plaintiff.

No. 49A02-9111-CV-535 ¹.

Court of Appeals of Indiana First District.

Aug. 6, 1992.

Rehearing Denied Sept. 10, 1992.

Transfer Dismissed Sept. 22, 1992.

David C. Campbell, Karl L. Mulvaney, Nana Quay-Smith, Douglas E. Cressler, Bingham Summers Welsh & Spilman, Indianapolis, for appellants-defendants.

Henry J. Price, Jerry Garau, Price & Barker, Indianapolis, for appellee-plaintiff.

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

Annon II, Inc., Merchants National Corporation, and Merchants National Bank & Trust Company of Indianapolis ("Merchants") appeal from a judgment in favor of Eric Rill in an action for breach of a contract in the sale of real estate and an award of $3,585,000 compensatory damages and $2,000,000 punitive damages. We affirm in part, reverse in part, and remand.

ISSUES

We consolidate and restate the issues as follows:

1. Did the trial court err in denying Merchants' motion for change of venue, when the motion was filed more than ten days after the issues were closed on the merits?

2. Did the trial court err in admitting evidence of: Rill's calculated lost operating income, also referred to as lost profits, over a period of five years; the expected value of Midway Motor Lodge ("Midway") upon resale; and, Rill's prior hotel sales, when Merchants stipulated to the admission of various exhibits and similar evidence was admitted by Merchants' experts in calculating Midway's fair market value?

3. Was the jury's award of punitive damages supported by clear and convincing evidence?

FACTS

In 1984 and 1985, Midway began experiencing difficulty repaying a $7,000,000 construction loan that it had obtained from Merchants. Midway eventually was turned over to Merchants in 1986. Merchants immediately began making arrangements to sell Midway. Merchants hired a management group to run Midway and had it appraised. The Rooney Group stated in its appraisal done at Merchants request that Midway had a market value of $11,000,000. Record at 2362 and 2368. A report by Valuation Counselors Center, Inc. indicated a fair market value of $5,100,000. Record at 2370. In January 1987, Rill became aware that Midway was for sale. Rill, a former president of the Ramada Hotel Company, was a "turnaround specialist" ² in the hotel business.

Rill came to Indianapolis in January of 1987, where he met with Chris Heath, an officer of Merchants, to discuss purchasing Midway. On March 3, 1987, Sunbelt, the ultimate purchaser of Midway, made an offer to purchase Midway for $4,100,000. The following day, Rill submitted an offer in the amount of $3,600,000. On March 25, 1987, Bruce Wooldridge, a bank officer at Merchants, met with Sunbelt's representatives. Wooldridge and Sunbelt signed a handwritten term sheet indicating a purchase price of $4,150,000. During the meeting, Heath privately informed Wooldridge that Rill had telephoned with a higher offer. Rill offered to purchase Midway for $4,300,000. That afternoon Heath and Wooldridge telephoned Rill. Pursuant to the telephone conversation, Wooldridge had a proposal typed, signed it on behalf of Merchants, and sent it to Rill for his signature. Record at 3279. Rill signed the proposal upon receipt. Wooldridge took both Sunbelt's agreement and Rill's agreement to Merchants' loan committee for approval. Both loans were approved. Record at 3285-88.

On April 3, 1987, Rill telephoned Merchants to schedule a meeting in Indianapolis and was told by Heath that they had a deal. Record at 2262-63. On April 6, Wooldridge met with a representative from Sunbelt and explained that Sunbelt's proposal would be considered a "backup offer." Record at 3288-90. Sunbelt's representative, Mubarek Amarsi, told Wooldridge that Sunbelt believed that a deal was in place, and Sunbelt would seek legal action. Later in the afternoon on April 6, Heath and Wooldridge met with Rill. Wooldridge and Rill discussed a "Purchase and Sale Agreement" that Rill's attorney had prepared. At the conclusion of the meeting, Wooldridge told Rill he was looking forward to closing. Record at 2266.

After the meeting with Rill, Wooldridge decided to reopen negotiations with Sunbelt for Midway's purchase. Record at 3298-99. Sunbelt increased its offer to $4,305,000. On April 8, 1987, Rill telephoned Heath and was told that Merchants was still working on the documents. Record at 2267. Later that same day, Heath sent Rill a letter which stated that "management does not feel it would be in its best interest to further negotiate the contract." Record at 2513. At no time did Merchants advise Rill that there was another interested buyer or proposal being considered. Record at 2263-65.

On April 27, 1987, Rill filed his complaint against Merchants, contending that it had breached a contract with Rill for the sale of Midway. Record at 37. Prior to trial, Merchants stipulated that the March 25, 1987 proposal created an enforceable contract between it and Rill. Record at 874. Merchants further admitted that its failure to close the transaction and convey Midway to Rill resulted in a breach of contract. Id. Hence, the case was tried on the issue of damages only. The jury awarded Rill compensatory damages in the amount of $3,585,000 and punitive damages in the amount of $2,000,000. Merchants appeals. Additional facts will be stated in our discussion of the issues.

DISCUSSION AND DECISION

On appeal, a general judgment will be sustained upon any theory consistent with the evidence. Picadilly v. Colvin (1988), Ind., 519 N.E.2d 1217, 1218-1219. We will neither reweigh the evidence nor judge the witnesses' credibility, but consider only the evidence most favorable to the judgment along with all reasonable inferences to be drawn therefrom. Parke County v. Ropak, Inc. (1988), Ind.App., 526 N.E.2d 732, 738, trans. denied. We decide whether there is substantial evidence of probative value supporting the trial court's judgment. Id. Only where there is a total failure of evidence or where the jury's verdict is contrary to the uncontradicted evidence will it be reversed. Terre Haute Regional Hospital, Inc. v. El-Issa (1984), Ind.App., 470 N.E.2d 1371, 1378, trans. denied. Thus, Merchants labors under a heavy burden in asserting error.

Issue One

Merchants argues that the trial court erroneously denied its motion for change of venue pursuant to Ind.Trial Rule 76, and thus, the trial court lacked jurisdiction over this case. We disagree.

In 1987, the rule provided in pertinent part:

"(1) In all civil actions, except those to enforce a statute defining an infraction, where the venue may now be changed from the judge or the county, such change shall be granted upon the filing of an unverified application or motion without specifically stating the ground therefor by a party or his attorney. Provided, however, a party shall be entitled to only one change from the county and only one change from the judge....

(2) In any action except criminal no change of judge or change of venue from the county shall be granted except within the the time herein provided. Any application for a change of judge or change of venue shall be filed not later than ten days after the issues are first closed on the merits."

T.R. 76(1) and (2) (emphases added). As a general proposition, at the time involved here, the duty to grant a change of venue was mandatory upon the trial judge, as long as the motion was filed within the time limits prescribed by T.R. 76(2). ³ State ex rel. First Bank of Whiting v. Porter Superior Court (1983), Ind., 447 N.E.2d 568, 569; City of Fort Wayne v. State ex rel. Hoagland (1976), 168 Ind.App. 262, 265, 342 N.E.2d 865, 867-68. Merchants is correct in its assertion that if it had filed a timely motion for change of venue, the trial court would have been required to grant the motion. However, Merchants' calculation of the prescribed time period in which it had to file its motion for change of venue is erroneous.

The issues were first closed on the merits in this case on June 22, 1987, when Sunbelt ⁴ filed its answer. See Matter of Estate of Niemiec (1982), Ind.App., 435 N.E.2d 999, 1001, n. 2 (in determining if change of venue motion is timely, it is original complaint and original answer which trigger time limitations in T.R. 76). The ten (10) days in which to file a motion for change of venue lapsed on Thursday, July 2, 1987; however, Merchants' motion was not filed until Monday, July 6, 1987. Hence, Merchants' change of venue motion was untimely.

Merchants argues that it is entitled under Ind.Trial Rule 6(E) to the benefit of three (3) additional days for mail service; and therefore, since day thirteen (13) fell on Sunday, July 5, it had until Monday, July 6 to file a timely motion. See T.R. 6(A) (filing due on the weekend is carried to next day the clerk's office is open). Merchants' reliance on T.R. 6(E) to extend the prescribed time period for filing its change of venue motion is misplaced. T.R. 6(E) states:

"Whenever a party has a right or is required to do some act or take some proceedings within a prescribed period after the service of a notice or other paper upon him and the notice or paper is served upon him by mail, three days shall be added to the prescribed period."

As Rill points out, the three day extension provision of T.R. 6(E) only applies when a party has a right or is required to do some act within a prescribed period "after the service of a notice" upon the party. T.R. 6(E). See, e.g., Ind.Trial Rule 6(C) (responsive pleading required to be served "within 20 days after the service of the prior pleading"); Ind.Trial Rule 33(C) (responses to interrogatories due "not less than thirty (30) days after service thereof"); Ind.Trial Rule 56(C) (adverse party has "thirty days after service of the motion to serve a response and any opposing...