Nguyen v. Nguyen, 29A02-1012-SC-1370
| Decision Date | 25 October 2011 |
| Docket Number | No. 29A02-1012-SC-1370,29A02-1012-SC-1370 |
| Parties | TIMMY NGUYEN AND TIMMY NGUYEN d/b/a INDIANAPOLIS VITE BAO, Appellant. v. HANG T. AND THOM T. NGUYEN, Appellees. |
| Court | Indiana Appellate Court |
Pursuant to Ind.Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT:
STEVEN SAMS
Steven Sams, P.C.
STEVEN A. HOLT
Holt Fleck & Romine
Noblesville, Indiana
APPEAL FROM THE HAMILTON SUPERIOR COURT
SMALL CLAIMS DIVISION
The Honorable Wayne A. Sturtevant, Judge
MEMORANDUM DECISION - NOT FOR PUBLICATIONBROWN, Judge Timmy Nguyen and Timmy Nguyen d/b/a Indianapolis Viet Bao appeal a small claims court's judgment in favor of Hang T. Nguyen. Timmy raises several issues, which we consolidate and restate as whether the court erred in ruling in favor of and entering judgment for Hang. We affirm in part, reverse in part, and remand.1
The relevant facts follow. In 2003, Timmy and Hang became involved in a home-based business which published a Vietnamese magazine titled Indianapolis Viet Bao. Hang sold advertising in the magazine, collected advertising fees, and deposited the fees into the Viet Bao business checking account. Hang worked for Viet Bao for forty hours per week during the last two weeks of each month. Timmy also worked as an electrical advisor for another employer. At some point, Timmy and Hang had a disagreement regarding money withdrawn from the Indianapolis Viet Bao business checking account.2
Hang and his wife, Thom T. Nguyen,3 filed a claim in Marion County, apparently Timmy filed a counterclaim, and the cause was transferred to the small claims court in Hamilton County in September 2009.4 After discovery and a number of continuances,the court held a hearing on December 8, 2010, at which the parties presented evidence and argument and the court took the matter under advisement.
On December 14, 2010, the small claims court entered judgment in favor of Hang in the amount of $10,976.5 Specifically, in its written Judgment, the court noted that Timmy's counterclaim alleged conversion through fraudulent cash and check transactions and intentional interference with Timmy's business relationships. With respect to the count for intentional interference with a business relationship, the court found that Timmy failed to present evidence that he had contracts with the advertisers or that Hang committed any illegal act. With respect to the conversion count, the court found that the evidence showed that Hang was granted permission to write checks on behalf of Viet Bao and that this was a common routine which Timmy observed every month when he obtained and accepted the bank statements related to the business.
The court then noted that Hang's notice of claim alleged that Timmy converted funds from the parties' jointly-owned business by fraud and deception, and that Hang contends that the parties entered into a partnership while Timmy contends that Hang was an independent contractor. The court noted that Timmy's testimony indicated that "payment was on a '50/50' basis from the net profits of the business" and that Hang "had de facto signature rights to the business bank account and wrote the majority of the checks with [Timmy's] knowledge and acceptance." Appellant's Appendix at 7. The court then determined "from all of the evidence presented that the parties were engagedin a partnership, but also [] that such finding is not essential to the Court's ruling." Id. The court found that "[w]hether the parties had established a partnership or not, it is clear from [Timmy's] own testimony that there was a contractual relationship between the parties for the services that [Hang] provided." Id. The court found that in exchange for Hang's efforts, "his cell phone and vehicle expenses (both gasoline and repairs) would be paid and then after the expenses of the business were paid, the parties would share the net income '50/50.'" Id. The court determined that "[t]o the extent that [Timmy] paid personal expenses out of company assets before providing [Hang] his share of the net proceeds, [Timmy] breached his contract with [Hang] and converted monies that belonged to [Hang]." Id.
The court noted that the evidence focused on two situations, the first involving nine payments of $512 each and the second involving several alleged $900 payments to Timmy's wife. The court found that the evidence established that nine payments from the Viet Bao business checking account, each in the amount of $512, "were going to [Timmy's] personal bank account at American Federal that in [Timmy's] own words had 'nothing to do with business'" and that the total of the nine checks was $4,608. Id. at 7-8. The court stated that half of that amount, $2,304, "contractually belonged to" Hang, that "[t]his is the amount that [Timmy] knowingly or intentionally exerted unauthorized control over," that Timmy "conveyed it to his own account without [Hang's] consent and by affirmatively creating or confirming a false impression in [Hang] that the money was going to pay an Internal Revenue debt of the business," and that "there was intent to permanently deprive [Hang] of any part of the value or use of this money." Id. at 8. Thecourt also found that Hang failed to prove his allegation that several payments of $900 to Timmy's wife were fraudulent.
In calculating the judgment, the court found that Timmy "violated Indiana Code § 35-43-4-2 and/or Indiana Code § 35-43-4-3" and that Hang is entitled to three times his actual damages of $2,304, which is $6,912. Id. at 9. The court reduced the damage award to the jurisdictional limit in the small claims court of $6,000. The court also found that Hang is entitled to reasonable attorney fees under Ind. Code § 34-24-3-1 in the amount of $4,900 and court costs in the amount of $76. The court entered a total judgment in the amount of $10,976.
The issue is whether the small claims court erred in ruling in favor of and entering judgment in favor of Hang and against Timmy. Judgments in small claims actions are "subject to review as prescribed by relevant Indiana rules and statutes." Ind. Small Claims Rule 11(A). Our standard of review is particularly deferential in small claims actions, where "[t]he trial shall be informal, with the sole objective of dispensing speedy justice between the parties according to the rules of substantive law." Ind. Small Claims Rule 8(A); Mayflower Transit, Inc. v. Davenport, 714 N.E.2d 794, 797 (Ind. Ct. App. 1999). Nevertheless, the parties in a small claims court bear the same burdens of proof as they would in a regular civil action on the same issues. Ind. Small Claims Rule 4(A); Mayflower Transit, 714 N.E.2d at 797. While the method of proof may be informal, the relaxation of evidentiary rules is not the equivalent of relaxation of the burden of proof. Mayflower Transit, 714 N.E.2d at 797. It is incumbent upon the party who bears the burden of proof to demonstrate that it is entitled to the recovery sought. Id.
Timmy presents arguments on appeal that: (A) the evidence was insufficient to show the formation or existence of a partnership; (B) the evidence shows that Hang converted funds which belonged to Timmy; (C) the court erred in finding that Timmy breached any agreement or converted funds belonging to Hang; and (D) the court erred in awarding damages and attorney fees to Hang under Ind. Code § 34-24-3-1.
A. Finding that a Partnership Existed
Timmy essentially argues that the evidence was insufficient to show the formation or existence of a partnership. Because this case was tried before the bench in small claims court, we review for clear error. McKeighen v. Daviess Cnty. Fair Bd., 918 N.E.2d 717, 720 (Ind. Ct. App. 2009) (citing Lowery v. Hous. Auth. of City of Terre Haute, 826 N.E.2d 685 (Ind. Ct. App. 2005)). We will affirm a judgment in favor of a party having the burden of proof if the evidence was such that a reasonable trier of fact could conclude that the elements of the claim were established by a preponderance of the evidence. Id. We presume that the trial court correctly applied the law and give due regard to the trial court's opportunity to judge the credibility of the witnesses. Id. We will not reweigh the evidence, and we will consider only the evidence and reasonable inferences therefrom that support the trial court's judgment. Id.
Timmy specifically argues that "the parties did not share equally in each other's profits," that "[t]he proceeds from the sale of advertising were apportioned 50%-50%, or some other percentage split, without regard to the expenses of either party," and that "Hang may have a net profit in a particular year, while Timmy may have a net loss for the same year, due to equipment or other expenses." Appellant's Brief at 8-9. Timmyargues that the "record reveals that both Timmy and Hang intended any share of the profits to constitute wages" and that "[t]herefore, pursuant to Indiana Code § 23-4-1-7(4)(b), the parties' agreement providing for pre-expense division of profits is akin to wages based on a percentage of gross income, i.e., commission." Id. at 9. Timmy further argues that the evidence does not show that the parties held themselves out as partners, assumed the debts of each other, or intended to form a partnership.
Hang argues that the parties' behaviors revealed that they were partners who intended to share net profits, and that the evidence shows that he had complete access to the business checking account, that Timmy did not supervise Hang's activities, that the parties worked under the same arrangement for four years with no objection from Timmy until Hang discovered Timmy was cheating him, that Timmy did not deduct any expenses for wages, commissions, or contract labor on his 2007 tax returns, that Timmy made...
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