Paulson v. Centier Bank
| Decision Date | 13 October 1998 |
| Docket Number | No. 56A03-9612-CV-434,56A03-9612-CV-434 |
| Citation | 704 N.E.2d 482,1998 WL 754455 |
| Parties | Wayne D. PAULSON and Diane Paulson, Appellants-Defendants and Counter-Claimants, v. CENTIER BANK f/k/a The First Bank of Whiting, Appellee-Plaintiff and Counter-Defendant. |
| Court | Indiana Appellate Court |
Wayne and Diane Paulson appeal the trial court's findings of fact and conclusions of law entering judgment against them and for the First Bank of Whiting (now known as Centier Bank) in the principal amount of $246,977.60 plus accrued interest on the Bank's complaint and also entering judgment against the Paulsons on their counterclaim. We affirm and remand.
The Paulsons raise several issues for our review, which we consolidate and restate as:
1. Whether the trial court's findings of fact and conclusions of law met the requirements of Trial Rules 54 and 58 to be a final, lawful judgment;
2. Whether the Paulsons were denied their constitutional right to a fair trial by the fifteen month delay between the bench trial and the entry of judgment; 1
3. Whether the trial court properly interpreted and applied several legal authorities cited in the findings of fact and conclusions of law; 2
4. Whether the trial court properly denied the Paulsons' motion for recusal; 35. Whether the trial court's findings of fact and conclusions of law are clearly erroneous; and
6. Whether the evidence supports the trial court's calculation of damages.
Beginning in 1981, Wayne Paulson borrowed from the Bank to invest in a series of limited partnerships in which his friend and attorney, Morton Efron, was the general partner [the "Efron investments"]. Wayne testified that he was not in a position financially to participate in the Efron investments, but was given 100% financing by the Bank and assured that distributions from the Efron investments would cover the interest due on the notes, and that when the Efron investments were sold, the proceeds would pay the principal; in the meantime, Wayne believed that no money would be due on the notes. The notes, however, did not contain any provisions to that effect, including only standard repayment terms. Wayne executed several renewals on the notes because the Efron investments did not perform as hoped, and eventually, his wife, Diane, began co-signing renewals.
In 1987, the outstanding balances on Wayne's loans for the Efron investments were consolidated into a single note, signed by both Wayne and Diane at the Bank's request, in the principal amount of $286,185.69. The Paulsons made several agreements with the Bank to reduce the principal amount of the consolidated note, and although they made a few lump sum payments, they largely failed to follow through with the agreements. In July 1989, the Paulsons signed an "Extension and Modification Agreement," extending the time for payment of the consolidated note to January 1, 1990. When the note came due on that date, the Paulsons defaulted and the Bank sued. The Paulsons answered and filed a counterclaim against the Bank, alleging fraud or constructive fraud, breach of fiduciary duty, and that there was a different agreement than that actually signed based upon oral statements.
The bench trial took 10 days, concluding on September 28, 1994. On January 9, 1996, the court entered findings of fact and conclusions of law in favor of the Bank on its Complaint, and ruled against the Paulsons on their counterclaims. Several days later, the trial court entered nunc pro tunc findings and conclusions, later explaining that the nunc pro tunc entry was to correct typographical errors in the original entry. The Paulsons filed a motion to correct errors and also a motion for the judge to recuse himself, both of which were denied. This appeal ensued. Additional facts will be supplied as needed.
The Paulsons first contend that because the trial court's judgment reserved ruling on the parties' request for attorney fees and because the judgment does not contain all the formal elements recited in Trial Rule 58(B), the judgment is not a final, lawful judgment within the meaning of Trial Rules 54 and 58. The judgment reads:
Based upon the foregoing findings and conclusions, the Court NOW ORDERS, ADJUDGES AND DECREES that Wayne and Diane Paulson are liable to Centier Bank on the Note executed for the sum of $246,977.60, together with accrued interest of $194,115.83 based upon per diem interest from August 10, 1984 at $101.19 per day.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Paulsons shall take nothing by way of their counterclaims.
The Court now sets this matter for hearing on the 28th day of February, 1996 to determine the issue of attorney fees.
Trial Rule 54(B) provides that a judgment which adjudicates one or more but less than all of the claims of the parties in a given action is interlocutory and not appealable unless the trial court, in writing, "expressly determines that there is no just reason for delay, and ... expressly directs entry of judgment...." Although it is true that the judgment as set forth above reserved the question of attorney fees and did not expressly direct entry of judgment as to the other claims decided therein, as required by Trial Rule 54(B), we fail to see, and the Paulsons have not alleged, how they have been prejudiced by this omission.
The purpose of Trial Rule 54(B) is to avoid piecemeal litigation and appeal of various issues in a case and to preserve judicial economy by protecting against the appeal of orders that are not yet final. Chesterfield Management, Inc. v. Cook, 655 N.E.2d 98, 100 (Ind.Ct.App.1995), trans. denied. In this case, the Paulsons filed a motion to correct errors pursuant to Trial Rule 59, indicating that they believed the trial court's order to be final as to the claims decided therein. 5 Also, the trial court held a single hearing on both the Paulsons' motion to correct error and the Bank's application for attorney fees, and in a single order, denied the motion to correct errors and entered judgment for the Bank as to the attorney fees. Therefore, all claims were finally decided in the trial court by that order and the Paulsons' time for appealing any and all issues to this court began, eliminating any concern over piecemeal litigation or judicial economy. 6 In addition, the parties made a joint motion immediately prior to trial to bifurcate the issue of attorney fees, which the trial court granted, directing that "in the event that attorney's fees are ordered, there shall be a subsequent hearing as to the amount of said fees." R. 165. The parties clearly anticipated the exact procedure employed here: that a judgment as to all issues but attorney fees would be entered, and in the event that the court ordered payment of attorney fees, a separate hearing would be held as to that issue.
Likewise, the Paulsons have not been prejudiced by the trial court's failure to comply with the dictates of Trial Rule 58(B). Trial Rule 58(B) requires that a judgment contain certain information, some of which the judgment in this case does not contain. However, the "sufficiency of a judgment 'is to be tested by its substance rather than its form.' " Henderson v. Sneath Oil Co., Inc., 638 N.E.2d 798, 803 (Ind.Ct.App.1994) (quoting 46 Am.Jur.2d Judgments § 64). The trial court's judgment clearly specifies the result on both the Bank's claim and the Paulsons' counterclaim, and makes a certain and definite statement of the amount of the money judgment awarded. The form and content requirements of Trial Rule 58(B) are primarily related to the management of court records as opposed to the validity of the judgment itself. Id. However, because Trial Rule 58(B) requires that a judgment contain specific elements, and because the judgment herein does not meet those requirements, we remand for the trial court to prepare, sign and enter its judgment in accordance with the rule.
The Paulsons allege numerous errors in the trial court's findings of fact and conclusions of law.
In entering judgment in favor of the Bank, the trial court entered specific findings of fact and conclusions of law pursuant to a request by the Paulsons. When a party has requested specific findings of fact and conclusions of law thereon pursuant to Trial Rule 52(A), the reviewing court may affirm the judgment on any legal theory supported by the findings. Mitchell v. Mitchell, 695 N.E.2d 920, 923 (Ind.1998). However, before affirming on a legal theory supported by the findings but not espoused by the trial court, the reviewing court should be confident that its affirmance is consistent with all of the trial court's findings of fact and the inferences drawn therefrom. Id.
In reviewing the judgment, we must first determine whether the evidence supports the findings and second, whether the findings support the judgment. Ahuja v. Lynco Ltd. Medical Research, 675 N.E.2d 704, 707 (Ind.Ct.App.1996), trans. denied. The findings and judgment will not be set aside unless they are clearly erroneous. Culley v. McFadden Lake Corp., 674 N.E.2d 208, 211 (Ind.Ct.App.1996). Findings of fact are clearly erroneous when the record lacks any evidence or reasonable inferences from the evidence to support them. Ahuja, 675 N.E.2d at 707. A judgment is clearly erroneous when it is unsupported by the findings of fact. Id. In determining whether the findings or judgment are clearly erroneous, we consider only the evidence favorable to the judgment and all reasonable inferences flowing therefrom, and we will not reweigh the evidence or assess witness credibility. Id.
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