Lambert v. Farmers Bank, Frankfort, Ind., 29A02-8705-CV-00214
| Decision Date | 01 March 1988 |
| Docket Number | No. 29A02-8705-CV-00214,29A02-8705-CV-00214 |
| Citation | 519 N.E.2d 745 |
| Parties | William C. LAMBERT and Agricultural Aerial Applicators, Inc., Defendants-Appellants, v. The FARMERS BANK, FRANKFORT, INDIANA, Plaintiff-Appellee. |
| Court | Indiana Appellate Court |
Phillip L. Stewart, Carmel, for defendants-appellants.
James D. Moore, Kathryn J. Cook, Ryan, Hartzell, Ryan & Moore, Frankfort, for plaintiff-appellee.
Debtor appeals judgment that a certain corporation was his alter ego and that corporate assets were subject to execution in satisfaction of debtor's personal liabilities. We affirm.
On October 14, 1983, William Lambert, individually and as president of Agricultural Aerial Applicators, Inc. (AAA), entered into an agreement to borrow money from Farmers Bank of Frankfort, Indiana (Bank). Under the terms of the promissory note the Bank loaned to Lambert the sum of $20,000, to be repaid on January 12, 1984, with an interest rate of 13.5%. As security for the loan, Lambert listed collateral securing other loans to the Bank and Lambert's deposit accounts.
Lambert defaulted on the loan, and on November 8, 1984, the Bank filed a complaint seeking $20,000 plus interest and attorney's fees as provided in the note. An agreed judgment was entered on February 8, 1985, which awarded the Bank a total of $25,118.89. The Bank filed its initial motion for proceedings supplemental on March 1, 1985. Hearings were conducted to establish the extent of Lambert's assets, income, and property which could be reached to satisfy the judgment. The Bank filed a second motion for proceedings supplemental on April 11, 1986, and a writ of execution was issued. The sheriff returned the execution unsatisfied when an investigation revealed that "Lambert's" vehicles and other property were not titled in his own name.
On October 16, 1986, the Bank filed a motion for determination of ownership of assets wherein it alleged that Lambert used several corporate entities for the purpose of defrauding creditors. The trial court found that Lambert exercised extensive control over a corporation entitled Lambert Enterprises, Inc., conducted that corporation's business without regard to the corporate form, failed to distinguish between personal and corporate assets, and attempted to place his assets beyond the reach of creditors by titling the assets in the corporate name. Furthermore, the court determined that the Bank had relied on Lambert's representations that he owned and controlled Lambert Enterprises in extending credit to Lambert. The court concluded that Lambert Enterprises, Inc. was the alter ego of William Lambert and that the corporate assets were in fact personal assets subject to execution in satisfaction of William Lambert's personal debts. Lambert appeals that decision.
Did the trial court err in finding Lambert Enterprises, Inc. to be the alter ego of its president and in allowing creditors of the president to reach corporate assets?
Before we discuss the merits of Lambert's appeal, we address the Bank's contention that the appellant failed to comply with certain Indiana Rules of Procedure. Specifically, the Bank claims Lambert's Motion to Correct Errors was defective in that it lacked the specificity required under Indiana Rules of Procedure, Trial Rule 59(A)(4), (8), (D). Failure to comply with the requirements of T.R. 59 may result in waiver of the claimed error on appeal, however, we prefer to decide cases on the merits rather than on technicalities. Antrup v. State (1978), 175 Ind.App. 636, 639, 373 N.E.2d 194, 196, trans. denied. An alleged error will be deemed waived only where the appellant's non-compliance with the rules is so substantial that it impedes our consideration of the issues. Id. Although Lambert's motion lacked specificity, we are able to glean from his brief and from the record the gist of his arguments.
In addition, the Bank claims Lambert's brief was defective under Indiana Rules of Procedure, Appellate Rule 8.3(A)(4), (7). Lambert failed to include a verbatim statement of the trial court's judgment, and he failed to set forth specifically in his brief the errors assigned in the motion to correct errors and intended to be raised on appeal. While it is preferable to have alleged trial court errors quoted verbatim in the corresponding argument section of the appellant's brief, failure to do so will not necessarily preclude our review. In re Marriage of Moser (1984), Ind.App., 469 N.E.2d 762, 765. An accumulation of procedural violations may require us to dismiss an appeal, however, the errors in this case do not thwart our review; therefore, we proceed to discuss the merits of the appellant's claims.
The appellant, William Lambert, claims that Lambert Enterprises is a distinct corporate entity which should not be liable for the debts of Lambert or any other corporation. The Bank, however, claims it relied on Lambert's representations that he owned all the stock in Lambert Enterprises when the Bank agreed to loan money to Lambert and AAA. It is clear that we may not reweigh the evidence presented at trial or evaluate the credibility of witnesses. Extra Energy Coal Co. v. Diamond Energy and Resources, Inc. (1984), Ind.App., 467 N.E.2d 439, 441. Where conflicting evidence is presented at trial, it is the task of the trier of fact to resolve the conflicts. Id. If evidence of probative value was presented which supports the trial court's findings of fact and conclusions of law, the judgment will not be disturbed. Id.
The trial court found that Lambert Enterprises was the alter ego of William Lambert and that the corporate entity should be disregarded. We agree. As a general rule, Indiana courts are reluctant to disregard corporate identity and do so only to protect third parties from fraud or injustice when transacting business with a corporate entity. Id., at 441-42. Likewise, the separate existence of a corporation may be disregarded to prevent injustice when a third party transacts business with an individual who fraudulently uses a corporation as a shield from liability. In order to disregard the corporation's separate existence under the...
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