Estate of Lee v. Lee & Urbahns Co.
| Decision Date | 14 November 2007 |
| Docket Number | No. 49A02-0610-CV-933.,49A02-0610-CV-933. |
| Parties | The ESTATE OF Raymond LEE, By and Through co-personal representatives Juliann L. McGARRAH and Dinah L. Merritt, Appellant-Plaintiff, v. LEE & URBAHNS COMPANY, an Indiana general partnership, and John B. Urbahns, individually and in his capacity as general partner in Lee & Urbahns, Allison Run II, an Indiana general partnership, Allison Run III, an Indiana general partnership, Green Ridge Development, LLC, an Indiana limited liability corporation, Fortune Park Associates Limited Partnership, an Indiana limited partnership, F.P. Buildings 3 & 4 Limited Partnership, an Indiana limited partnership, Fortune Park Associates Building No. 7 Limited Partnership, a Minnesota limited partnership, Fortune Park Associates Building No. 8 Limited Partnership, a Minnesota limited partnership, Fortune Park Associates Building No. 9 Limited Partnership, an Indiana limited partnership, Fortune Park Associates Building No. 14 L.P., an Indiana limited partnership, U.S. 421, an Indiana limited partnership, Wayne Township, LLC, an Indiana limited liability corporation, Whitehall Associates, L.P. an Indiana limited partnership, John B. Urbahns in his capacity as general partner in Allison Run II, an Indiana general partnership, general partner in Allison Run III, an Indiana general partnership, the managing member of Green Ridge Development, LLC, an Indiana limited liability corporation, general partner in Fortune Park Associates Limited Partnership, an Indiana limited partnership, general partner in F.P. Buildings 3 & 4 Limited Partnership, an Indiana limited partnership, general partner in Fortune Park Associates Building No. 7 Limited Partnership, a Minnesota limited partnership, partner in Fortune Park Associates Building No. 8 Limited Partnership, a Minnesota limited partnership, general partner in Fortune Park Associates Building No. 9 Limited Partnership, an Indiana limited partnership, general manager of Fortune Park Associates Building No. 14 L.P., an Indiana limited partnership, partner in U.S. 421, an Indiana limited partnership, the managing member of Wayne Township, LLC, an Indiana limited liability corporation, and partner in Whitehall Associates, L.P. an Indiana limited partnership, Appellees-Defendants. |
| Court | Indiana Appellate Court |
Charles R. Whybrew, Tabbert Hahn Earnest & Weddle, LLP, Indianapolis, IN, Attorney for Appellant.
Cathy Elliott, Bryan H. Babb, Bose McKinney & Evans LLP, Indianapolis, IN, Attorneys for Appellee.
Appellant-Plaintiff the estate of Raymond O. Lee ("the Estate") appeals from the trial court's entry of judgment in favor of Lee & Urbahns Company and John B. Urbahns, individually and in his capacity as general partner in Lee & Urbahns, and several other named defendants (collectively, "Defendants"). The Estate contends that the trial court abused its discretion in refusing discovery of Urbahns's personal information, in refusing to admit a November 10, 2006, deposition of Rick Martin (a former employee of Lee & Urbahns), and in refusing to allow it to recall a witness in the second part of the bifurcated bench trial. The Estate further challenges the trial court's finding that it never informed Urbahns prior to trial that it needed to review additional documents. We affirm.
In approximately 1981, Raymond O. Lee and John B. Urbahns began developing land together as "Lee & Urbahns Company," a general partnership. Lee and Urbahns participated in several joint projects over the years, generally creating separate limited partnerships for each development. Both Lee and Urbahns also participated in projects on their own and with other partners. Lee & Urbahns Company did not participate directly in any of the real estate developments, but, rather, provided office space for Lee and Urbahns to run their respective business entities. Among the projects in which Lee and Urbahns participated together was U.S. 421, a limited partnership in which both held a 25% interest and which consisted of a parcel of approximately four acres in northwest Marion County. Lee and Urbahns also owned a nearby 2.6-acre parcel as tenants-in-common.
Lee died on March 15, 2001. Soon thereafter, Urbahns's attorney Barb Wolenty delivered to the Estate "an initial package of things [she] thought they would find helpful[.]" Tr. p. 497. At some point during the summer of 2001, the Estate gave Wolenty a list of documents that it needed in order to perform an independent appraisal, a list that Wolenty passed on to Lisa Reuter, Lee & Urbahns Company's accountant. In November of 2001, Reuter provided the Estate with a "[t]otal accounting as of the date of death" as to each relevant business entity. Tr. p. 1188. Later, Reuter provided the Estate with tax returns and financial statements for the years 1999 through 2002 for Lee & Urbahns Company and real estate developments Allison Run 2 and 3, Fortune Park 1, 2, 3, 4, 7, 8, and 9, Fortune Park 14 Building, U.S. 421, Wayne Township, Whitehall Phase 2, and Green Ridge. Although cash was occasionally transferred from entity to entity, Reuter gave the Estate all the documents it needed to trace the flow of that cash.
At some point, Urbahns had formed SMN Restaurants ("SMN"), a limited-liability corporation whose purpose was to collect properties that would then be sold to Costco and on which Costco would build a new store. In approximately February of 2002, SMN purchased the four-acre U.S. 421 tract and the 2.6-acre tract that had been owned by Lee and Urbahns as tenants-in-common. SMN paid U.S. 421 approximately $140,000 per acre and paid approximately $230,000 per acre for the tenants-in-common parcel, which was fair market value. Ultimately, the total amount of land Costco purchased from SMN was approximately fourteen acres, for which the total consideration paid was approximately $7,000,000.1
On January 23, 2003, Lee's daughter Linda McGarrah met with former Lee & Urbahns employee Rick Martin. Soon thereafter, on March 14, 2003, the Estate filed suit against Urbahns, Lee & Urbahns Company, and several other entities, which were apparently all of the partnerships and corporations that Lee and Urbahns had formed together over the years. The complaint alleged that Urbahns had failed to timely provide a full accounting of his and Lee's joint business activity to the Estate, that Urbahns had breached common law and statutory duties to the Estate, that Urbahns had committed conversion of certain of the Estate's assets, and that Urbahns had committed fraud, constructive fraud, and ultra vires acts by concealing information from the Estate for financial gain.
On May 18, 2004, the Defendants filed a motion to bifurcate issues and stay discovery. In its order granting the motion, the trial court ruled that any issues of punitive damages would be addressed in a separate phase of the trial and that the Estate was prohibited from discovering Urbahns's private financial information.
On March 7, 2005, the bench trial began. After three days, the trial court suspended the trial in order to allow the Estate time to secure Martin's testimony. On March 26 and May 14, 2005, Martin was deposed. On July 1, 2005, the trial court, in ruling on an Estate motion, ordered that the Estate could no longer seek discovery "by way of a Motion to Compel in the middle of a trial on the merits[.]" Appellant's App. p.2053.
On October 27, 2005, the Defendants filed an emergency motion for protective order after learning that the Estate had scheduled another deposition of Martin for November 10. On October 31, 2005, the trial court issued a protective order, providing in part that "[t]he Estate shall not seek to take any further depositions of Martin (or any other witness)[.]" Appellant's App. p. 2113. On November 10, 2005, the Estate nevertheless deposed Martin in Georgia with no defense attorneys present.
When the trial resumed on November 21, 2005, the trial court denied the Estate's motion to admit Martin's November 10 deposition. The trial court also denied the Estate's request to recall Lee's attorney David Shelton, who had testified in the March phase of the trial, on the basis that the request was not based on any new evidence, but, rather, was based on public documents that had been on file for approximately three years. According to the Estate's offer of proof, Shelton would have testified, inter alia, that Urbahns retained all of the proceeds from the sale of a third 1.3-acre parcel to SMN that, in fact, was owned by U.S. 421, that Urbahns underpaid the Estate for the four-acre U.S. 421 parcel and the tenants-in-common parcel, and that the total damages to the Estate were $918,906.01.
On September 25, 2006, the trial court issued its Findings of Fact, Conclusions of Law and Entry of Final Judgment, in which it ruled in favor of Defendants on all counts. The trial court concluded, inter alia, that Defendants had satisfied the requirements of the Indiana Surviving Partner Act, the Estate failed to present any evidence that it had suffered any injury resulting from any of Urbahns's actions, and the Estate failed to present any evidence of a breach of fiduciary duty, conversion, fraud, or ultra vires acts.
When, as here, the trial court enters findings of fact and conclusions thereon, we apply the following two-tiered standard of review: we determine whether the evidence supports the findings and the findings support the judgment. Clark v. Crowe, 778 N.E.2d 835, 839 (Ind.Ct.App. 2002). The trial court's findings of fact and conclusions thereon will be set aside only if they are clearly erroneous, that is, if the record contains no facts or inferences supporting them. Id. at 839-40. A judgment is clearly erroneous when a review of the record leaves us with a firm conviction that a mistake has been made. Id. at 840. This court neither reweighs the evidence nor assesses...
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