Branham Corp. v. Newland Res., LLC

• Decision Date: 15 October 2015
• Docket Number: No. 06A01–1409–PL–399.,06A01–1409–PL–399.
• Parties: The BRANHAM CORPORATION, Appellant–Plaintiff, v. NEWLAND RESOURCES, LLC and John E. Bator, et al., Appellees–Defendants.
• Court: Indiana Appellate Court

44 N.E.3d 1263

The BRANHAM CORPORATION, Appellant–Plaintiff,

v.NEWLAND RESOURCES, LLC and John E. Bator, et al., Appellees–Defendants.

No. 06A01–1409–PL–399.

Court of Appeals of Indiana.

Oct. 15, 2015.

Donn H. Wray, Marc A. Menkveld, Katz & Korin, PC, Mickey J. Lee, McGinnis Wutscher Beiramee, LLP, Indianapolis, IN, Roger L. Burrus, Burrus & Sease, LLP, Zionsville, IN, Attorneys for Appellant.

John E. Bator, Bator Law, Greenfield, IN, Appellee pro se.

SHARPNACK, Senior Judge.

Statement of the Case

[1] This is the fourth¹ appeal in this litigation between the parties stemming from a contract for assistance in negotiation for the provision of water and sewer utility services in Boone County. Here, the trial court granted The Branham Corporation's motion to voluntarily dismiss without prejudice proceedings supplemental to execution of garnishment against certain garnishee defendants, conditioning the same upon the payment of the attorney fees incurred by the garnishee defendants up to the time of the filing of the motion to dismiss. The trial court later issued an amended order establishing the amount of the various attorney fee awards, setting a deadline for the payment of those fees, and ordering the dismissal be converted to a dismissal with prejudice in the event of nonpayment of the fees by the established deadline. The trial court's order was stayed pending appeal. Branham now appeals and John E. Bator, a garnishee defendant, cross-appeals.² We affirm.

Issues

[2] Branham raises the following issues on appeal, which we consolidate and restate as:

I. Did the trial court err by applying Indiana Trial Rule 41(A)(2) to proceedings supplemental filed under Indiana Trial Rule 69(E) ?

II. Did the trial court err by ignoring its own mandatory local rule concerning signatures of an attorney of record on pleadings?

III. Did the trial court err by vacating a prior order after it had already become final and effective and no motion to correct error or appeal from that order had been pursued?

IV. Was Branham denied procedural and substantive due process?

Bator raises the following issue on cross-appeal:

V. Did the trial court err by limiting its award of attorney fees to only those fees incurred up to the filing of Branham's motion to dismiss?

Facts and Procedural History

Businesses, Attorneys, and Individuals Involved

[3] To give context to the relationship of the various businesses, attorneys, and individuals involved, we first set forth their various roles. Boone County Utilities, ETC, is an Indiana limited liability company wholly owned by Newland Resources, LLC. Newland is owned by four entities: EcoHoldings, LLC, EcoSource, LLC, Greenleaf, LLC, and White River Venture Partners. EcoHoldings, LLC, is the Managing Member of BCU. Appellant's App. p. 96.³ James B. Harmon is the Managing Member of EcoHoldings, LLC. Id. John Michael Kensill is the Managing Member of EcoSource, LLC. Id. Cornelius M. (Lee) Alig is the Managing Member of Greenleaf, LLC, and the principal of Royal Run Partners, LP, the developer of Royal Run subdivision. Id. Samuel Sutphin is the General Partner of White River Venture Partners. Id.

[4] Harmon also served as the Manager of BCU. Id. Kensill served as BCU's Assistant Manager. Id. Delores (Dee) Sutphin was BCU's Bookkeeper. Id.

[5] The Branham Corporation entered into an agreement with Newland to provide assistance in negotiating contracts to accept sewage flow from and for the sale of water in Boone County, and is the judgment creditor of a judgment entered against Newland on a breach of contract claim.

[6] Valenti–Held Real Estate Group, LLP is an affiliate of Valenti–Held Contractor/Developer, Inc., an owner/developer of approximately 462 acres of land located in Perry and Worth Townships of Boone County. Id. Valenti–Held entered into a series of contracts with BCU for the provision of water and sewage utility services within its development. Id.

[7] Melissa Garrard is an attorney who represented Newland and for a time Dee Sutphin. Thomas Eckerle is an attorney who represented Newland and its members with regard to liquidation of BCU's assets from September 22, 2003 to September 28, 2004, and also represented Newland and its members in the BCU bankruptcy case. John E. Bator and his former law firm represented BCU in BCU's Chapter 11 liquidation proceedings in bankruptcy court.

The Litigation

[8] Background information from prior appeals and actions in this matter is helpful to understand how the parties to this appeal arrived at this point. We draw our information from those cases and direct those interested in reading more about them to the pertinent citations listed below.⁴

[9] Newland was organized on October 11, 1994, and was originally formed to develop real estate, ultimately exploring a possible development project in Boone County known as the Royal Run Subdivision. In 1996, after considering options for the provision of water and sewer utility services to that subdivision, Newland formed a wholly-owned utility operating company known as BCU. Newland entered into an agreement with Branham for assistance in negotiating a contract with the City of Indianapolis for the acceptance of sewage flow from the BCU service area and a contract with the Indianapolis Water Company for the sale of water to BCU for delivery in the BCU service area. Among the numerous terms of the contract between Newland and Branham was a provision for the calculation and payment of a success fee.

[10] On June 5, 2002, the IURC initiated an investigation into the operation of BCU. An interim order entered on March 12, 2003, imposed several conditions on BCU. That order was followed by a second interim order issued by the IURC on December 17, 2003, finding BCU in substantial and material non compliance with many of the conditions imposed earlier and scheduling a hearing to consider either the appointment of a receiver or the sale of BCU.

[11] Ultimately, BCU filed a petition for Chapter 11 bankruptcy and the bankruptcy court established three claims bar dates, each in 2004. Branham filed several proofs of claim, each timely filed, but each based on its contract with Newland. After delays requested by Branham, a hearing was held on Branham's claims. The day before that hearing Branham filed an untimely proof of claim that raised different theories of recovery. The district court denied the timely proofs of claim because they were contract based and BCU, the debtor, was not a party to the contract. The untimely proof of claim was denied because it was untimely and raised new theories of recovery. The district court's judgment was affirmed by the Seventh Circuit Court of Appeals. In Re Boone County Utils., LLC, 506 F.3d 541 (7th Cir.2007).

[12] On February 11, 2004, the Town of Whitestown, BCU, and Valenti–Held entered into a Novation and Substitution Agreement that was conditioned upon approval from the bankruptcy court and any approval necessary from the IURC. Ultimately, the IURC deferred to the jurisdiction of the bankruptcy court. BCU filed a disclosure statement related to its amended liquidating plan of reorganization, and filed a plan establishing that Whitestown would pay $4,200,000.00 to BCU, and would pay $4,222,175.00 to Valenti–Held to resolve all of BCU's obligations to Valenti–Held. The bankruptcy court approved the agreement and the closing occurred on July 20, 2004 over Branham's objections.

[13] On October 31, 2005, Branham filed its first amended complaint against Newland and others. In the end, the only count remaining for trial was Branham's allegation of breach of contract against Newland regarding the calculation and payment of the success fee. At the conclusion of the jury trial, a verdict was returned in favor of Branham awarding damages in the amount of $397,853.92. The trial court entered judgment on the jury verdict and a panel of this Court affirmed the trial court's judgment. Newland Res., LLC v. Branham Corp., 918 N.E.2d 763 (Ind.Ct.App.2009).

[14] On June 22, 2010, the Boone Circuit Court entered an order awarding Branham post-judgment interest on the jury verdict that had been upheld on appeal. Newland was given twenty-one days from the date of the order in which to satisfy the judgment plus interest. However, Branham was unable to collect the judgment.

[15] Pursuant to BCU's liquidation plan in the bankruptcy proceedings, distributions from the sale were made to creditors, and then Newland, the sole equity holder in BCU, for its equity interest. Claims for administrative expenses, administrative claims of professionals, and priority tax claims were not classified under the plan, but were to be paid as soon as practicable after the sale. Branham was not listed as a secured creditor because BCU was not a party to the contract between Newland and Branham.

[16] On December 29 and 30, 2011, Branham filed a Verified Motion for Proceedings Supplemental to Execution and Garnishment (Cause No. 06C01–0409–PL–517) ("517"), and a Complaint for Damages (Cause No. 06C01–1201–CT–0001) ("0001"). In 0001, Branham alleged claims under the Indiana Crime Victims Relief Act⁵ and RICO⁶ based upon predicate offenses of fraud/fraudulent transfer, deception, and conversion/theft/receiving stolen property. In a nutshell, Branham alleged that the manner in which the 2004–2005 distribution made by Newland from the BCU sale proceeds purposely depleted Newland's assets such that Newland was unable to satisfy Branham's judgment against Newland.

[17] The trial court entered summary judgment motions against Branham in 0001. On appeal, we affirmed the trial court's grant of summary judgment against Branham and reversed the trial court's order dismissing Eckerle without prejudice, and remanded the matter to the trial court for entry of summary judgment in favor of Eckerle. This resolved the claims brought under 0001. Branham Corp. v. Newland Res., LLC, 17 N.E.3d 979 (Ind.Ct.App.2014).

[18] We now turn to the subject of this appeal which involves...