Kincaid v. Lazar
| Citation | 405 N.E.2d 615 |
| Decision Date | 17 June 1980 |
| Docket Number | No. 1-180A23,1-180A23 |
| Parties | Robert F. KINCAID and Georgetown Associates, Inc., Defendants-Appellants, v. Alexander LAZAR, Plaintiff-Appellee. |
| Court | Court of Appeals of Indiana |
Jack G. Hittle, Church, Roberts & Beerbower, Noblesville, James Lowry, Kendall, Stevenson & Lowry, Danville, for defendants-appellants.
R. Ronald Calkins, Coates, Hatfield & Calkins, Indianapolis, John M. Howard, Jr., Howard & Lawson, Danville, for plaintiff-appellee.
Defendants-appellants Robert F. Kincaid (Kincaid) and Georgetown Associates, Inc. (Georgetown) appeal a judgment of the Hendricks Circuit Court in favor of plaintiff-appellee Alexander Lazar (Lazar) in his suit for payment for professional services.
Trial was had to the court which entered findings of fact, conclusions of law, and judgment as follows, in relevant part:
"FINDINGS OF FACT
1. In early 1976, . . . Kincaid . . . engaged . . . Lazar . . . to render services and to advise him regarding the formation of a retail pizza business; the parties were brought together by one Priscilla Barker, who would also become involved in the formation of the business.
2. Lazar is a public accountant; Kincaid was engaged in a retail meat business.
3. The parties, along with Priscilla Barker and the parents of Kincaid were to be the parties who were to be involved in beginning the business.
4. It was decided that a Corporation would be formed to begin and run the business.
5. There was no separate agreement that Lazar would be compensated for his services, other than agreement that he would receive stock in the Corporation which was to be formed; Lazar understood that his services initially were to be in the form of investment.
7. Kincaid and Lazar agreed that Lazar should receive twenty percent (20%) of the initial stock issue of the Corporation; this agreement was reached sometime in June of 1976.
8. The parties agreed that Kincaid and his parents would 'finance' the Corporation, and that Lazar's only contribution was to be the rendering of accounting services and advice.
9. Lazar rendered accounting services and advice and spent Two Hundred, Eighty-seven (287) hours working for Kincaid and Georgetown and the reasonable value of the advice and services is $40.00 per hour.
10. Kincaid and his parents put all of the capital into the Corporation, and assumed all liability for the debt financing of the Corporation.
11. Lazar projected the necessary capitalization he thought would be required for the business, which projections were based on information he obtained from the potential suppliers.
12. Kincaid never promised or told Lazar what amount of actual cash he and his family would put into the Corporation, and there were never any discussions regarding the amount of actual cash versus the amount of debt financing for the Corporation.
13. Articles of Incorporation were filed with the Indiana Secretary of State, and the Corporation received its Charter from the Indiana Secretary of State on August 25, 1976; the Corporation was formed under the name Georgetown, Associates, Inc.
14. On August 26, 1976, a 'Subscription Meeting' . . . was held; the meeting was adjourned without the issuance of any stock to any party due to disputes arising with Priscilla Barker, regarding the percentage of stock she was to receive, and the meeting was also adjourned due to other minor questions which were raised at the meeting by all parties.
15. Plaintiff believed that the ratio of equity capital to debt capital established for the Corporation would subject him as a stockholder to possible liability in excess of his subscription, and he resigned as a shareholder, director and officer in consideration of the other shareholders agreeing to hold him harmless and not call his subscription.
16. Neither Lazar nor Priscilla Barker ever formally or informally demanded the issuance of their stock.
17. Lazar was never refused the issuance of his stock.
18. Sometime after the 'Subscription Meeting', and before April 18, 1977, the Corporation began doing business.
19. Prior to April 18, 1977, the business originators continued discussions which culminated in a written Agreement on (sic) originators executing a written Agreement entitled 'Agreement for the Release and Resignation of Alexander Lazar.'
20. The written Release and Resignation of Lazar provided, among other things, for the relinquishing by Lazar of 'any and all interest he may have in Georgetown Associates, Inc., either as a Subscriber, Shareholder, Officer, Director, or in any other capacity.'
21. There was consideration for the Release and Resignation of Alexander Lazar; Lazar was relieved of any and all liability, both past and future, from any 22. The Release and Resignation of Alexander Lazar does run in favor of the Corporation, Georgetown Associates, Inc.
liability he may have incurred either as a Subscriber, Shareholder, Officer, or Director of Georgetown Associates, Inc.
24. Lazar rendered no services to the Corporation after the signing of the Release and Resignation.
25. The written Release and Resignation is clear and unambiguous.
26. Lazar was represented by counsel with regard to his negotiation and execution of the written Release and Resignation.
27. Although Lazar had informed his counsel of his alleged claim for services, neither Lazar nor his counsel ever mentioned to the Defendants any intention to file or request a demand for payment of his services until almost six months after the signing of the Release and Resignation.
28. Neither the release nor the delay in making the claim, constitute a bar to Plaintiff's recovery of the reasonable value of services rendered; there has been no event occur to give rise to an estoppel of Plaintiff's right to assert his claim nor has there been any accord and satisfaction.
29. Plaintiff's advice and services were performed at the insistance and request of Defendant Kincaid and are properly chargeable to him individually and to the Corporation as well.
30. The reasonable value of Plaintiff's services is $11,480.00 and he should recover that from Defendants.
1. Defendant Robert F. Kincaid and Defendant Georgetown Associates, Inc. jointly and severally are justly indebted to Plaintiff in the sum of $11,480.00.
2. Plaintiff is entitled to entry of judgment herein consistent with said conclusion.
JUDGMENTIT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that Alexander Lazar have and recover of and from Robert F. Kincaid and Georgetown Associates, Inc. and each of them, the sum of $11,480.00. . . ."
Defendants' appeal raises two issues for review:
I. Whether the Agreement for the Release and Resignation of Alexander Lazar prohibits Lazar from recovering against Georgetown on a claim for services rendered by Lazar prior to Georgetown's incorporation; and
II. Whether Kincaid is personally liable to Lazar for the services rendered.
We reverse.
Defendants appeal from a judgment in a cause tried to the court. Our well-established standard of review in such instance was stated in University Casework Systems, Inc. v. Bahre, (1977) Ind.App., 362 N.E.2d 155, 159:
It is also well established that the judgment of a trial court will be affirmed if sustainable on any basis, Ertel v. Radio Corporation of America, (1976) Ind.App., 354 N.E.2d 783, and that we will not weigh the evidence nor determine the credibility of the witnesses but will look only to the evidence and reasonable inferences therefrom which tend to support the trial court's decision. Bureau of Motor Vehicles v. Pentecostal House of Prayer, Inc., (1978) Ind., 380 N.E.2d 1225.
At issue is the effect of the following agreement among the parties executed on April 18, 1977:
"AGREEMENT FOR THE RELEASE AND RESIGNATION OF ALEXANDER LAZAR
WHEREAS, Alexander Lazar has signed an initial subscription for the purchase of shares of Georgetown Associates, Inc., and
WHEREAS, such subscription has not been paid or called for by the Corporation as of this date, and
WHEREAS, the undersigned Alexander Lazar intends not to purchase such shares and intends to relinquish any interest he may have in the assets of said Corporation, and to resign as an officer and director of said Corporation, and
WHEREAS, in consideration of such relinquishing of rights, the remaining shareholders agree to hold the said Alexander Lazar harmless from any liability he may have incurred as either a subscriber, shareholder, officer or director of Georgetown Associates, Inc., . . .
1. Alexander Lazar hereby relinquishes any and all interest he may have in Georgetown Associates, Inc., either as a subscriber, shareholder, officer, director or in any other capacity.
2. Alexander Lazar hereby resigns as an officer and director of Georgetown Associates, Inc.
3. The remaining undersigned subscribers and shareholders of Georgetown Associates, Inc., and as the remaining Board of Directors, hereby accept the resignation of Alexander Lazar as an officer and director of the Corporation.
4. The remaining undersigned subscribers and shareholders of the Corporation, and in their capacity as officers and directors, hereby agree to hold Alexander Lazar harmless from any liability he may have incurred either as a subscriber, shareholder, officer, or director of Georgetown Associates, Inc."
Defendants argue that finding of fact No. 28, that the Agreement for the Release and Resignation of Alexander Lazar (hereinafter Agreement) does not...
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