Extra Energy Coal Co. v. Diamond Energy and Resources, Inc., 3-1183A379

• Citation: 467 N.E.2d 439
• Decision Date: 23 August 1984
• Docket Number: No. 3-1183A379,3-1183A379
• Parties: EXTRA ENERGY COAL COMPANY, Appellant (Plaintiff Below), v. DIAMOND ENERGY AND RESOURCES, INC.; General Petroleum Products Incorporated of Gary; Chris D. Zahiralis; Gus Karas; Irene Stalmah; and Helen Zahiralis, Appellees (Defendants Below).
• Court: Court of Appeals of Indiana

Page 439

467 N.E.2d 439

EXTRA ENERGY COAL COMPANY, Appellant (Plaintiff Below), v. DIAMOND ENERGY AND RESOURCES, INC.; General Petroleum

Products Incorporated of Gary; Chris D.

Zahiralis; Gus Karas; Irene Stalmah;

and Helen Zahiralis, Appellees

(Defendants Below).

No. 3-1183A379.

Court of Appeals of Indiana,

Third District.

Aug. 23, 1984.

Kathryn D. Schmidt, Fred M. Cuppy, Gerald K. Hrebec, Thomas, Burke, Dyerly & Cuppy, Merrillville, for appellant.

Rhett L. Tauber, Jill L. Olson, Theodoros, Anderson & Tauber, P.C., Merrillville, for appellees.

HOFFMAN, Judge.

At the trial of this action plaintiff-appellant Extra Energy Coal Company sought judgment against the defendants-appellees Diamond Energy and Resources, Inc.; General Petroleum Products Incorporated of Gary, Indiana, Inc.; Chris D. Zahiralis; Gus Karas; Irene Stalmah; and Helen Zahiralis upon a debt incurred by Diamond Energy and Resources, Inc. The trial judge entered findings of fact and conclusions of law pursuant to Trial Rule 52 of the Ind.Rules of Procedure and judgment was rendered in favor of the defendants-appellees. Plaintiff-appellant appeals from that negative judgment.

The evidence most favorable to the appellees-defendants shows that plaintiff Extra Energy Coal Company (Extra Energy) was a Kentucky partnership engaged in the business of recycling slate pile and washing coal. Defendant Diamond Energy and Resources, Inc. (Diamond Energy) was incorporated in Indiana in 1976 as a commodities brokerage firm, involved specifically here in coal brokerage. Defendant General Petroleum Products of Gary, Indiana, Inc. (General Petroleum), an Indiana corporation established in 1955, was engaged in the distribution of refined products, including fuel oil and gasoline. The remaining defendants were shareholders of Diamond Energy and General Petroleum and held positions as directors and officers in both corporations.

In 1978, Diamond Energy, through its representative, Ben Smith, negotiated with Extra Energy to purchase coal. Prior to the sale of coal, Walter Tanner and Joseph C. Hauk, as representatives of Extra Energy, conducted an extensive investigation into the credit worthiness of Diamond Energy. A Dunn & Bradstreet report was secured on General Petroleum and bank references were obtained on General Petroleum and Chris Zahiralis, the incorporator and majority shareholder of Diamond Energy and General Petroleum. No information was available or obtained on Diamond Energy. Extra Energy, through its representatives, agreed to sell coal to Diamond Energy knowing that it had no credit history of its own but that General Petroleum and Chris Zahiralis were financially stable. Extra Energy made no request of General Petroleum or any of the individual defendants that they act as guarantors or co-purchasers nor were any representations made by any of the other defendants that they would be liable for debts incurred by Diamond Energy. Extra Energy knew at all times that Diamond Energy and General Petroleum were separate and distinct entities and that it was conducting business with Diamond Energy only. Coal was subsequently sold to Diamond Energy. Billings were mailed directly to Diamond Energy and paid until a dispute arose as to the quality of coal Diamond Energy received.

Extra Energy initiated litigation solely against Diamond Energy in Lake County Superior Court and obtained a judgment in the amount of $22,591.90. During proceedings supplemental to judgment, Extra Energy was made aware that Diamond Energy was no longer operating and had no assets. Extra Energy initiated the present suit against the defendants attempting to "pierce the corporate veil" and hold all defendants liable for the judgment returned against Diamond Energy.

In its findings of fact and conclusions of law the trial court held Diamond Energy and General Petroleum to be separate and distinct legal entities. The trial court concluded that Diamond Energy was not the mere instrumentality of General Petroleum nor the alter ego of the individual defendants. Extra Energy transacted business with Diamond Energy voluntarily and with full knowledge that it was a corporation distinct from General Petroleum and the individual defendants. The court found no evidence of fraud or bad faith attributable to any of the defendants or that Extra Energy was in any way deceived as to with whom it was dealing. Plaintiff-appellant challenges the court's findings as being insufficient, inadequate, and clearly erroneous and claims its conclusions are contrary to law.

It is clear that this Court may not reweigh the evidence presented at trial nor rejudge the credibility of the witnesses but must consider the evidence most favorable to the appellees and all reasonable inferences that may be drawn therefrom. Ind. Dept. of State Rev. v. Estate of Cohen, (1982) Ind.App., 436 N.E.2d 832. If there is conflicting evidence presented at trial, it is for the trier of fact to resolve the conflicts, and if there is evidence of probative value presented to support the findings of fact and conclusions of law, the judgment will not be disturbed. Dowell v. Fleetwood, (1981) Ind.App., 420 N.E.2d 1356. The findings and ...