Jamrosz v. Resource Benefits, Inc.
| Citation | 839 N.E.2d 746 |
| Decision Date | 27 December 2005 |
| Docket Number | No. 45A03-0410-CV-467.,45A03-0410-CV-467. |
| Parties | Joseph JAMROSZ, Jeffrey Jamrosz And Systems Communications, Inc., Appellants-Defendants, v. RESOURCE BENEFITS, INC., and Albert Volk, Appellees-Plaintiffs. |
| Court | Supreme Court of Indiana |
Lonnie M. Randolph, East Chicago, for Appellant.
Nick Katich, Stephanie Shappell, Katich & Shappell, Crown Point, for Appellee.
Jeffrey Jamrosz, Joseph Jamrosz, and Systems Communications, Inc. ("SCI") (collectively, "Defendants") appeal a jury verdict in favor of Resource Benefits, Inc. ("Resource Benefits") and Albert Volk and the trial court's denial of a motion to correct error. Jeffrey raises four issues, which we restate as:
I. Whether the trial court abused its discretion by allowing Volk to testify regarding an alleged oral agreement where the parties had also entered into a written agreement with an integration clause;
II. Whether the trial court erred by denying Jeffrey's motion for judgment on the evidence under Ind. Trial Rule 50;
III. Whether the trial court erred by instructing the jury regarding a Federal Communications Commission ("FCC") regulation; and
IV. Whether the trial court abused its discretion by denying Jeffrey's motion to bifurcate the issues of liability and damages.
Joseph and SCI raise ten issues, which we consolidate and restate as:
V. Whether the evidence is sufficient to sustain the jury's verdict against Joseph and SCI for breach of contract, conversion, fraud, constructive fraud, and civil conspiracy;
VI. Whether the trial court erred by failing to rule on Joseph and SCI's motion for declaratory relief;
VII. Whether the trial court pierced the corporate veil by making Joseph jointly and severally liable for the jury's verdict;
VIII. Whether the trial court erred by denying Joseph and SCI's motion for judgment on the evidence under Ind. Trial Rule 50; and
IX. Whether the trial court erred when it failed to specify which portion of the verdict each Defendant was responsible for paying.
We affirm in part and reverse in part.1
The relevant facts follow. SCI is a corporation in the business of performing repairs and service on radios and also owns various radio towers, including one in Crown Point, Indiana. Joseph is the owner of SCI, and Jeffrey is Joseph's son.
Resource Benefits is a company formed by Volk, a pharmacist, to obtain Specialized Mobile Radio ("SMR") licenses.2 In 1993 and 1994, Resource Benefits applied to the FCC for sixty SMR licenses and was eventually awarded four SMR licenses, including one in Crown Point, Indiana. The Crown Point license was issued on March 9, 1994. The license included five frequencies, and certain equipment and installations were necessary to make the system operational.
In December 1994, Volk contacted Joseph because Volk wanted to lease tower space from SCI and needed assistance in making the system operational. After they signed a lease in March 1995, Joseph found that the coordinates of the license were not the same as the coordinates for SCI's tower. Joseph advised Volk that Volk could not use his license on SCI's tower and that if Volk wanted to use the tower, he would have to move the license to the tower's coordinates. Additionally, because Resource Benefits had failed to construct the system for the Crown Point license within twelve months of being issued a license, as was required by FCC rules, the license was at risk of being cancelled.
According to Volk, Joseph orally proposed that Jeffrey would file a finder's preference application and that Jeffrey would request that the FCC move the frequencies to SCI's tower. A finder's preference application allowed individuals to assist the FCC in recovering licenses that had been cancelled automatically due to violations of FCC rules, such as the failure to timely construct the system. The finder's preference application allowed an individual to claim such licenses. Thus, if a finder's preference application was granted, the license would be in Jeffrey's name rather than Resource Benefits' name.
The parties agreed that Jeffrey would file a finder's preference application to save Resource Benefits' license, obtain an extra year to construct the system, and move the coordinates of the license. In return, the license would still belong to Resource Benefits, Resource Benefits would construct the system, and Resource Benefits would pay $15,000 to Jeffrey when Resource Benefits sold the license ("Oral Agreement"). According to Jeffrey, although he had ownership of the license on paper, he was merely a "namesake." Transcript at 161.
Jeffrey filed a finder's preference application on October 18, 1995. Volk did not object to Jeffrey's finder's preference application. On December 6, 1996, the FCC notified Volk that Jeffrey had filed a finder's preference application, that Jeffrey presented evidence of a violation of 47 C.F.R § 90.631 (1995), and that a violation of this rule resulted in automatic cancellation of Resource Benefits' license. Specifically, Resource Benefits failed to construct the station at the licensed location, there was no activity detected on the frequencies, and Resource Benefits did not oppose the finder's preference. Thus, Resource Benefits' license was automatically cancelled, and Jeffrey was awarded the license. Volk then paid John Reardon, his attorney in Washington, D.C., to assist Jeffrey with moving the coordinates of the license. Jeffrey and Volk never met or talked about the agreement because they wanted to maintain the appearance of an "arm's length transaction" and to avoid the appearance or suggestion of collusion, which was against FCC regulations. Transcript at 162. The Oral Agreement and all further discussions were made between Joseph and Volk.
On February 5, 1997, Reardon faxed a draft of an agreement between Resource Benefits and Jeffrey to Volk. The draft agreement provided that, within one year, Jeffrey would sell the license, that payment for the license would be made directly to Volk, and that Jeffrey would be paid the greater of a set amount or a percentage of the sale price. The draft agreement also provided that, if Jeffrey failed to sell the license within one year, Jeffrey would construct the system and assign the license to Resource Benefits, and that Resource Benefits would pay $10,000.00 to Jeffrey. The draft agreement was never signed by the parties.
Reardon then drafted another agreement. According to Volk, on February 24, 1997, Joseph visited him and gave him the new agreement, which was already signed by Jeffrey. When Volk questioned why they needed it, Joseph said, Transcript at 272. Volk signed the agreement on behalf of Resource Benefits. Thus, Jeffrey and Resource Benefits entered into the following agreement ("Purchase Agreement"):
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") made as of the 24th day of February, 1997 by and between JEFFREY A. JAMROSZ ("Seller") and RESOURCE BENEFITS, INC. ("Buyer").
A. Seller has obtained an award of a finder's preference for target station WPEF 815 and seeks to develop and file an application for permanent authorization of those facilities.
B. Seller desires to sell to Buyer and Buyer desires to purchase from Seller the License used in, or held for use, in connection with the System (the "Assets"). The "System" shall mean the frequencies originally licensed as station WPEF 815 in Crown Point, Indiana ..., as well as any associated equipment.
C. Seller and Buyer desire to enter into this Agreement to effect the management and then sale of the Assets to Buyer.
1. Purchase and Sale of Assets. Upon the terms and subject to the conditions hereinafter set forth, on the Final Closing Date (as herein defined), Seller will sell and deliver to Buyer, and Buyer will purchase and acquire from Seller, all of Seller's right, title and interest in and to the Assets, in consideration of the payment by Buyer of the Purchase Price (as defined herein).
2. FCC Consent. Seller agrees to cooperate with Buyer in applying for consent from the FCC for the assignment of the License to Buyer or to a third party of Buyer's choosing. Such applications executed by the Seller shall be submitted to the FCC by Buyer within sixty (60) days of the Initial Closing Date (as defined herein).
* * * * * *
4. Purchase Price. The purchase price shall be Fifteen Thousand Dollars ($15,000) of which Five Thousand Dollars ($5,000) will be paid by check or wire transfer at the Initial Closing and Ten Thousand Dollars ($10,000) and [sic] shall be paid by check or wire transfer on the Final Closing Date.
* * * * * *
7. Construction and Operation of the System. Prior to the Final Closing Date, Buyer shall be responsible for overseeing, arranging for and directing the planning, designing, constructing, equipping and operating of the System and its business, all of the foregoing being subject to the general authority of Seller. Seller agrees that Buyer may assign these responsibilities to a third party, such as Nextel Communications.
In consideration of Buyer's willingness to construct the System, or appoint agents to construct the System, Seller agrees to lease to Buyer or its agents the right to use the System until the earlier of February 28, 1998 or the Final Closing Date subject only to Section 9 hereof. Buyer shall use its best efforts consistent with sound commercial practice to conduct such business and to render, assist with, obtain or contract for all services, as shall be necessary for the design, construction and operation of the System ....
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8. Costs. Seller and Buyer agree that all of Buyer's costs in connection with the construction and its use of the System shall be paid by Buyer ....
9. Retention of Control by Seller. Prior to the Final Closing Date, Seller will supervise Buyer's...
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