Country Contractors, Inc. v.
| Decision Date | 26 March 2014 |
| Docket Number | No. 32A01–1304–CC–155.,32A01–1304–CC–155. |
| Citation | 4 N.E.3d 677 |
| Parties | COUNTRY CONTRACTORS, INC., Stephen Songer, and Jahn Songer, Appellants–Defendants, v. A WESTSIDE STORAGE OF INDIANAPOLIS, INC., Appellee–Plaintiff. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Karl L. Mulvaney, Grantland M. Clapacs, Margaret M. Chistensen, Bingham Greenebaum Doll LLP, Indianapolis, IN, Attorneys for Appellants.
Gregory W. Black, Gregory W. Black, P.C., Plainfield, IN, Attorneys for Appellee.
Country Contractors, Inc. (“Country”) entered into a contract to provide excavation services for A Westside Storage of Indianapolis, Inc. (“Westside”). Country subcontracted out a substantial portion of the work and eventually left the worksite without completing the job. Westside filed a breach of contract action against Country and its two shareholders, Stephen Songer and Jahn Songer (“the Songers”). Following a bench trial, the trial court entered judgment against Country and against the Songers personally for breach of contract and slander of title.
Country and the Songers (collectively, “Appellants”) now appeal, claiming that the trial court clearly erred in piercing the corporate veil as to the Songers and in finding in favor of Westside on its slander of title claim. They also challenge the trial court's award of attorney's fees and delay damages. Finding the evidence insufficient to support the trial court's decision to pierce the corporate veil, we reverse the judgment as to the Songers. Finding the evidence sufficient to support the trial court's conclusion that Country slandered Westside's title, we affirm that portion of the trial court's judgment. With respect to damages, we affirm the trial court's award of attorney's fees and reverse its award of delay damages. We remand for a recalculation of prejudgment interest.
In 1983, the Songers formed Country Concrete, Inc., which was in the business of providing ready-mix concrete. The original officers were Stephen, his wife Jahn, and his mother Dorothy, now deceased. In the 1990s, the corporation began to expand its services to include general contracting for construction projects and excavation. It maintained an inventory of about 150 to 200 pieces of equipment, which it rented to other companies. In January 2007, acting on the advice of its insurance agent, Country Concrete filed an amendment to its articles of incorporation, changing its name to Country Contractors, Inc. Jahn was president, and Stephen was vice president. The two comprised the board of directors and shareholders. Corporate operations were handled by Jeff Baker, Lewis Smith, and Doug Pribbeno. The three men participated in bid preparation, contract execution, and project supervision. Although the corporation had enjoyed some profitable years, by 2007 and 2008 it was operating at a loss, due partly to its inability to collect outstanding balances from bankrupt customers.
In August 2007, Westside entered into negotiations with Pribbeno for Country to provide earthwork and construct a storm sewer on one of Westside's properties. Baker executed a contract proposal, and the parties eventually amended the contract to expand the work and increase the contract price from $202,855 to $235,000. The signatories to the contract and amendment were Pribbeno (for Country) and Larry Nielsen (for Westside).1 Although Country performed some of the excavation, Pribbeno hired out much of the project to O & M Excavating (“O & M”), which in turn contracted with Everett J. Prescott, Inc. (“Prescott”), Littleton & Sons Sand & Supply, Inc. (“Littleton”), and VCNA Prairie Aggregate (“Prairie”) to provide materials for the project. The Songers were not involved in the Westside contract.
Country and O & M began work on the project in mid—to late summer of 2008. During the fall of 2008, Westside paid Country $191,535.72 on the contract. Also during that time, O & M sent Country a series of invoices. Country paid O & M's first four invoices but did not pay the final invoice for $38,182.23, which it claimed never to have received. By the end of 2008, Country stopped working on the Westside project, which was not complete. In February 2009, O & M, Prescott, Littleton, and Prairie filed notices of intent to hold mechanic's liens on Westside's property. In May 2009, Westside paid the four mechanic's lien claimants in order to extinguish the liens and satisfy the bank holding the mortgage on the property. That same month, Country filed a notice of intent to hold a mechanic's lien on Westside's property land in the amount of $38,125. A couple months later, Westside contracted with John Hall Construction (“Hall”) to complete the project for $33,137.14. From beginning to end, Westside paid $286,162.86 in order to complete the project.
In May 2009, Westside filed a breach of contract action against Country, alleging failure to complete performance and failure to pay subcontractors and demanding an accounting of the payments it had made to Country on the contract. Westside later amended its complaint, joining the Songers as defendants and requesting a declaratory judgment piercing the corporate veil to hold these defendants personally liable for Country's breach of contract. With respect to the declaratory judgment request, Appellants filed a motion for partial summary judgment, which the trial court denied.
At the ensuing bench trial in January 2013, Westside sought damages for breach of contract and slander of title. Appellants requested that the trial court issue findings of fact and conclusions thereon pursuant to Indiana Trial Rule 52(A). On March 11, 2013, the trial court issued its findings, conclusions, and judgment in favor of Westside against Country and against the Songers personally. The $117,542.20 damage award consisted of $51,162.86 in additional costs to complete the Westside project; $14,959.34 in prejudgment interest; $17,500.00 in attorney's fees; and $33,920.00 in damages for delay of the project caused by Country's breach. Appellants' App. at 129. This appeal ensued.2 Additional facts will be provided as necessary.
Appellants challenge the sufficiency of evidence to support the trial court's judgment in favor of Westside on the issues of piercing the corporate veil, slander of title, attorney's fees, and delay damages. Where, as here, the trial court issues findings of fact and conclusions of law pursuant to a party's request, we apply a two-tiered standard of review. Baird v. ASA Collections, 910 N.E.2d 780, 785 (Ind.Ct.App.2009), trans. denied (2010). We first determine whether the evidence supports the findings and then determine whether the findings support the judgment. Id. We review for clear error and will reverse only if the trial court's findings are unsupported by any evidence or reasonable inferences drawn from the evidence or if the judgment is unsupported by the findings and conclusions. Id. In conducting our review, we neither reweigh evidence nor judge witness credibility; rather, we consider the evidence in the light most favorable to the judgment. Id. With respect to the trial court's findings of fact, we defer substantially; with respect to its conclusions of law, we apply a de novo standard. Id.
Here, the trial court's findings include the following:
10. In early September 2007, Westside entered into a contract with Country for the latter to provide earthwork and storm sewer construction for the job on the property owned by Westside.... The contract was signed by Larry Nielsen for Westside and Doug Prebbino [sic] for Country.
11. The original contract was for $96,145.00 for earthwork and $106,710.00 for storm sewer, totaling $202,855.00.
12. In 2008, the parties amended the original contract. According to Exhibit 2, the contract price increased $32,145.00 for a total price of $235,000.00.
13. Work on the project began sometime in 2008. No work is shown in the record until early September 2008 by O & M Excavating, owned by Brad Empson. Mr. Empson testified to being hired by Country through Doug Prebbino [sic].
14. O & M hired Everett J. Prescott, Inc., Littleton & Sons Sand & Supply, Inc., [and] VCNA Prairie Aggregate ... as subcontractors to do the work apart from excavating.
15. Exhibit 12 is several invoices from O & M to Country Contractors. The total billed by O & M is $165,976.36. The invoices and dates are:
a. 9/4/08—$66,454.72
b. 9/9/08—[$]13,249.38
c. 11/3/08—$3,332.43
d. 11/3/08—$44,757.60
e. 12/17/08—$38,182.23
16. After December 2008, no work was done on the project until approximately July 2009.
17. Country Contractors did not return to the job site after December 2008. According to its interrogatory answers (Exhibit 56), Country believed the job was completed in 2008 and “pulled out” in March 2009. Larry Nielsen was unaware Country had quit the job.
18. On February 6, 2009, O & M Excavating caused a notice of intent to hold mechanic's lien to be recorded for the work and materials on this job. The lien amount was for $38,182.23.
19. On February 10, 2009, Everett J. Prescott caused a notice of intent to hold mechanic's lien to be sent to Westside for $19,102.29 for work and materials on this job.
20. On February 13, 2009, Littleton & Sons Sand and Supply caused a notice of intent to hold mechanic's lien to be recorded for work and materials on this job. The lien amount was $4,896.32.
21. On February 17, 2009, VCNA Prairie Aggregate caused a notice of intent to hold mechanic's lien for work and materials on this job. The lien amount was $9,177.71.
22. In May 2009, Westside satisfied the lien claims of O & M Excavating, Everett J. Prescott, Littleton & Sons, and VCNA Prairie Aggregate. Westside paid $39,498.00 to the four (4) subcontractors to satisfy the liens.
23. In July 2009, Westside hired John Hall Construction to finish excavation work. John Hall provided stone, gravel, sand & grade work,...
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