Ligon Specialized Hauler, Inc. v. Hott

• Decision Date: 18 January 1979
• Docket Number: No. 2-377,2-377
• Citation: 384 N.E.2d 1071,179 Ind.App. 134
• Parties: LIGON SPECIALIZED HAULER, INC., Defendant-Appellant, v. Don E. HOTT, Plaintiff-Appellee. A 91.
• Court: Indiana Appellate Court

Page 1071

384 N.E.2d 1071

179 Ind.App. 134

LIGON SPECIALIZED HAULER, INC., Defendant-Appellant, v. Don E. HOTT, Plaintiff-Appellee.

No. 2-377 A 91.

Court of Appeals of Indiana, Fourth District.

Jan. 18, 1979.

Phillip E. Stephenson, Marion, for defendant-appellant.

CHIPMAN, Presiding Judge.

A Two Hundred and Nineteen Dollar ($219) judgment was rendered in favor of plaintiff-appellee Donald Hott against defendant-appellant Ligon Specialized Hauler, Inc. (Ligon). Ligon's appeal presents essentially three questions for our review:

1. Was the decision of the trial court unsupported by, and contrary to, the evidence?

2. Was the trial court's decision contrary to law in that Hott was an improper party in interest?

3. Should Ligon be entitled to a new trial in light of newly discovered evidence?

We affirm.

Our disposition of these questions has been hampered in two respects. First, the judgment presently under attack was rendered in the small claims docket of the Huntington County Court which pursuant to Ind.Code 33-10.5-7-2 (Supp.1977) ¹ resolves cases under significantly relaxed rules of procedure and evidence. This informality is evidenced in the case at bar by the total absence of pleadings and objections. Second, we have not been favored with an appellee brief which at first blush appears to impose upon this court the burden of controverting arguments advanced for reversal. However, in cases where the appellee fails to file a brief, Indiana courts have long applied a less stringent standard of review with respect to showings of reversible error. In light of these cases, appellant Ligon need only establish that the lower court committed prima facie error to win reversal. ² Fagan v. Royer, (1963) 244 Ind. 377, 193 N.E.2d 64, 69; Colley v. Carpenter, (1977) Ind.App., 362 N.E.2d 163, 166. Furthermore, the statement of facts contained in Ligon's brief is deemed by us to be accurate and sufficient for the disposition of this appeal. Colley at 166. Since the case at bar concerns a complicated and somewhat ambiguous factual situation regarding the proper parties to a lease agreement, we deal at length with the facts as elicited in Ligon's brief.

Plaintiff-appellee Hott brought this action against defendant-appellant Ligon for breach of a "trip lease" agreement. Hott owned the Agrarian Transport Company which leased trucks to companies which hauled general freight. One such company to which Hott leased trucks was Hine Line. According to Hott's testimony, he leased his trucks and drivers to Hine Line for the one-way hauling of freight to a specific destination and then Hott's drivers would enter into trip lease agreements under which the trucks would be leased to other companies for the return journey.

The questions presented in this appeal revolve in large part around a trip lease signed by the agents of Ligon and Hott to haul lumber from Arkansas to Tennessee. The record established that the lumber was in fact delivered and that Ligon was paid and, therefore, no question is presented regarding performance of the agreement by the owner- lessor of the truck. ³ The issue turns on who that owner-lessor is and, thus, to whom Ligon as lessee is liable under the trip lease agreement.

Trial commenced in the small claims docket of the Huntington County Court. Gary Wilmoski, Ligon's Assistant Claims Manager, and Hott were the only witnesses. During the course of trial, seven exhibits were introduced including the trip lease agreement in question. This agreement was signed by Don Fifer, Hott's driver, and an agent of Ligon. However, neither Hott's name nor his company's appears on this agreement; rather, it incorrectly denotes Fifer as the agent of Hine Line and Hine Line as the owner-lessor of the truck. Hott acknowledged that the truck had been leased to Hine Line, but testified that he was the owner-lessor and that Fifer was his employee.

PROPER PARTIES

Ligon presents a well reasoned, two-pronged attack in support of its contentions that the lower court's judgment is not supported by sufficient evidence and is contrary to the evidence. Emphasizing the omission of Hott's name on the trip lease agreement, Ligon submits an argument which is essentially founded on the lack of any contractual basis upon which Hott could base his claim. Ligon maintains, and we agree, that unless Hott has established his privity or third party beneficiary status, his action On the agreement must fail. Furthermore, any attempt to contradict the trip lease agreement and thereby establish the true owner-lessor of the truck would contravene the parol evidence rule. ⁴ Again, so far as it goes, we agree with Ligon's analysis. Nevertheless, we find sufficient evidence to support the lower court's award on a contractual ground overlooked by Ligon reformation.

The law in Indiana pertaining to the remedy of reformation is stated in Citizens' National Bank of Attica v. Judy, (1896) 146 Ind. 322, 340, 43 N.E. 259, at 264:

Equity will reform a written contract between the parties whenever, through mutual mistake, or mistake of one of the parties accompanied by the fraud of the other, it does not, as reduced to writing, correctly express the agreement of the parties. (citations omitted)

In order to reform the trip lease agreement and thereby "read out" Hine Line as owner-lessor, Hott must establish the elements enunciated in Pearson v. Winfield, (1974) 160 Ind.App. 613, 618-619, 313 N.E.2d 95, at 99:

A party seeking reformation on the ground of mutual mistake must establish by clear and satisfactory proof the true intentions common to all parties to the instrument, that a mistake was made, and that the mistake was mutual and consequently the instrument, as written, does not state the true intention or agreement of the parties.

The primary purpose of reformation is to effectuate the common intentions of all parties to an instrument which were incorrectly reduced to writing. It follows that a grant of reformation is necessarily predicated upon a prior understanding between all parties on all essential terms. Otherwise, there would be no standard to which an instrument could be reformed.

Even under our relaxed standard of review, we believe Hott has met this burden. ⁵

The uncontradicted evidence in this case clearly established grounds for reformation of the trip lease agreement so as to omit Hine Line as a contracting party and insert Hott in place thereof. The agreement itself established that Ligon intended to contract for the lease of a truck from the owner-lessor. ⁶ The agents of both Hott and Ligon apparently believed Hine Line to be that owner-lessor. Both believed Fifer was acting as the agent of Hine Line and not Hott. Both were mistaken. ⁷ Due to this mutual mistake of fact, we find appropriate reformation eminently proper.

This conclusion is buttressed by independent research which reveals that earlier decisions have also reformed contracts so as to include omitted parties. See, e. g., Parish v. Camplin, (1894) 139 Ind. 1, 37 N.E. 607; Collins v. Cornwell, (1892) 131 Ind. 20, 30 N.E. 796; Radebaugh v. Scanlan, (1907) 41 Ind.App. 109, 82 N.E. 544; Prescott v. Hixon, (1899) 22 Ind.App. 139, 53 N.E. 391. Unlike these cases, however, Hott also sought to Omit one listed as a party to the lease agreement. Although this twist raises an issue of first impression, we will not sanction the acceptance of free benefits by Ligon under this lease agreement. Except for the agreement itself, the record does not disclose that Hine Line had any interest in the lease agreement. Only due to the mistake of the actual contracting parties' agents was Hine Line listed as a party. If neither Hine Line nor Hott can receive payment, Ligon enjoys a windfall. We will not sanction such unjust enrichment.

CAPACITY AND JOINDER

Ligon also assails the judgment below on the grounds that Hott was an improper party in interest under Ind.Rules of Procedure, Trial Rule 17 and that Ligon may be subject to a second action on behalf of Hine Line for its interest in the trip lease agreement. We disagree.

Our holding on the previous issue disposes of Ligon's contention that Hott was not a real party in interest. Furthermore, Ligon's own brief acknowledges that Hott had an interest in this case since one of his trucks was involved in the lease agreement. We believe this sufficiently meets at least two of the three tests ⁸ enunciated by Dean Harvey which have been utilized by our courts to determine who is a real party in interest.

Although a more vigorous analysis is presented regarding Ligon's second argument, it too must fail. Ligon's brief and contentions at trial evidence that its primary concern in this action was to avoid multiple suits and double liability under the trip lease agreement. As stated in their brief, "(T)he real problem involved herein (is) that LIGON will be subject to a second suit on behalf of Hine Line for their interest in that lease agreement." In this factual setting Ligon argues that a new trial must be granted because Hott failed to bring Hine Line into this action. According to Ligon, it was unable to exercise this "option" of making Hine Line a party in light of the mandates of T.R. 14.

We believe that Ligon has overlooked T.R. 19 and misconstrued on whose part the obligation to join "indispensible" parties rests. Assuming, without deciding, that Ligon's speculation of potential double liability is well founded, an adequate remedy may be found in T.R. 19(A). ⁹ Since Ligon could have made a motion before or during trial to join Hine Line as a party, the question arises whether Ligon's failure ¹⁰ to do so constitutes a waiver under T.R. 19(C). ¹¹ Even under the relaxed procedures practiced in the small claims docket, we hold it does. See Warner v. Young American Volunteer Fire Dept., (1975) Ind.App., 326 N.E.2d 831, 838. We will not allow a party to sit idly by until appellate review before presenting appropriate motions for the joinder...