Reed v. Dillon

• Decision Date: 13 February 1991
• Docket Number: No. 49A02-9006-CV-355,49A02-9006-CV-355
• Parties: Ralph REED, Kay Reed, R. Jeffrey Reed, and Mark Reed, Individually and d/b/a Ralph Reed and Son, Inc., and Reed Equipment, Inc. Defendants-Appellants, v. John DILLON, Indiana Insurance Commissioner, as Liquidator of Guard Casualty and Surety Insurance Company, Plaintiff-Appellee. 1
• Court: Indiana Appellate Court

Page 585

566 N.E.2d 585

Ralph REED, Kay Reed, R. Jeffrey Reed, and Mark Reed Individually and d/b/a Ralph Reed and Son, Inc. and Reed Equipment, Inc. Defendants-Appellants, v. John DILLON, Indiana Insurance Commissioner, as Liquidator of Guard Casualty and Surety Insurance Company Plaintiff-Appellee.

No. 49A02-9006-CV-355. ¹

Court of Appeals of Indiana, Fifth District.

Feb. 13, 1991.

Seth Thomas Pruden, Mark C. Bainbridge, Bamberger & Feibleman, Indianapolis, for defendants-appellants.

Caryl Forsythe Dill, Indianapolis, for plaintiff-appellee.

SHARPNACK, Judge.

Defendants Ralph Reed, Kay Reed, R. Jeffrey Reed, Mark Reed, Ralph Reed and Son, Inc., and Reed Equipment, Inc. (hereinafter collectively, "defendants") appeal the trial court's entry of summary judgment in favor of plaintiff, the Indiana Insurance Commissioner as liquidator of Guard Casualty and Surety Insurance Company. Because we find that genuine issues of material fact remain for determination by the finder of fact, we reverse.

The corporate defendants in this action, Ralph Reed and Son, Inc. and Reed Equipment, Inc., contracted to construct sewers for a number of municipalities. Plaintiff's predecessor, Guard Casualty & Surety Insurance Co. of Indianapolis, issued twelve bonds in connection with these construction projects. These bonds guaranteed the performance of the construction contracts as well as the labor and material payments to be made in connection with the contracts. The various defendants, both individual and corporate, agreed to indemnify Guard against any losses which it might sustain due to the corporate defendants' failure to perform their obligations under the construction contracts.

The corporate defendants failed to perform, and plaintiff alleged that Guard was forced to pay out a total of $209,179.45 on its bond obligation. Some time after Guard paid out these funds, it went into liquidation.

Before Guard went into liquidation, its attorney, Grover B. Davis, entered into negotiations with representatives of the defendants in an attempt to recover some of the money which Guard had paid out due to defendants' contractual defaults. During the course of these negotiations, Davis wrote the following letter to a representative of the defendants:

Ronald W. Buchmeier, Esquire

500 Union Federal Building

Indianapolis, Indiana 46204

Re: Ralph Reed & Sons, Inc.

Dear Ron:

This letter will confirm our telephone conversations on February 3, 1984, regarding the Anderson Project and Springmill Lane Project.

We have conditionally agreed that Guard Casualty & Surety Insurance Company would receive an additional $10,000 from the exchange for which Guard Casualty & Surety would release Ralph Reed and his sons from the General Agreements of Indemnity. This Agreement is conditioned upon the following:

1. The actual receipt of Guard Casualty & Surety Insurance Company of the $10,000 free and clear of claims and liens;

2. The receipt of Guard Casualty & Surety Insurance Company of audited personal financial statements from Ralph Reed and his two sons who are being released; and

3. Guard Casualty & Surety's investigation of the assets of the persons to be released.

I would appreciate your signing a copy of this and returning it to me if this is in compliance with our conversations.

Sincerely,

McClure, McClure & Kammen

GROVER B. DAVIS,

Attorney at Law

After Guard went into liquidation, the insurance commissioner, acting as liquidator, filed this action to recover the amounts which Guard paid out on the bonds, less credit for certain sums received from the Anderson, Indiana sewer project. The defendants appeared and filed an Answer in which they admitted that they had defaulted on the construction contracts and that, because of their default, Guard suffered losses on the bonds which it issued. The defendants further admitted that they had agreed to indemnify Guard for the losses which it suffered due to their failure to perform their obligations under the construction contracts. The defendants, however, raised the affirmative defense of accord and satisfaction.

On November 22, 1988 the defendants filed with the court a response to plaintiff's motion for production of documents ². In its motion, the plaintiff had requested that the defendants produce any documents upon which they were relying in order to establish their defense of accord and satisfaction. The defendants produced the Grover Davis letter. On June 2, 1989, the plaintiff filed a motion to strike defendants' response to its request for production, and, on June 6, 1989, the court ordered the Grover Davis letter stricken from the record.

Some four and one-half months later, on October 27, 1989, the plaintiff filed a motion for summary judgment with supporting affidavit. The defendants filed their response to the motion for summary judgment on October 31, 1989. Appended to defendants' response was an affidavit executed by Ralph Reed and a copy of the Grover Davis letter, which was attached as an exhibit to the Reed affidavit. On November 7, 1989, the plaintiff filed a reply brief in support of its motion for summary judgment. The defendants filed a rebuttal to plaintiff's reply brief on November 13, 1989. On January 19, 1990, the trial court granted plaintiff's motion for summary judgment as follows:

Comes now the plaintiff, by counsel, Caryl Forsythe Dill, and come now the defendants, by counsel, Seth T. Pruden, upon the plaintiff's Motion for Summary Judgment filed herein, which motion in the words and figures following, to-wit:

(H.I.)

And this cause having been submitted to the Court for finding, and the Court being duly advised in the premises, now finds that the allegations of the plaintiff's complaint are true, and there being no issue of material facts, now finds for the plaintiff and against the defendants, Ralph Reed, Kay Reed, J. Jeffrey Reed, and Mark Reed, individually, and d/b/a Ralph Reed and Son, Inc. and Reed Equipment, Inc., and finds the plaintiff is entitled to a judgment in the following sums:

                Unpaid principal                                                    $202,245.01
                Interest at 10% per annum from the date of payment of the bonds to   121,333.37
                  October 31, 1989
                Interest at 10% per per annum from November 1, 1989 through            4,213.44
                  January 17, 1990
                Attorney fees and costs                                                2,000.00
                                                                                    -----------
                                                                                    $329,791.81
                

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED by the Court that the plaintiff recover of and from the defendants, Ralph Reed, Kay Reed, J. Jeffrey Reed, and Mark Reed, individually, and d/b/a Ralph Reed and Son, Inc. and Reed Equipment, Inc., the sum of Three Hundred Twenty-Nine Thousand Seven Hundred Ninety-One Dollars and Eighty-One Cents ($329,791.81).

So ORDERED, ADJUDGED, AND DECREED this 26th day of January, 1990.

The defendants raise two issues on appeal which we restate as follows:

1. Was the Grover Davis letter properly before the trial court for consideration on plaintiff's motion for summary judgment?

2. Was the evidence of accord and satisfaction sufficient to defeat plaintiff's motion for summary judgment?

In Indiana, summary judgment is not to be granted lightly, because entry of summary judgment prevents the losing party from fully litigating the claim before the court. Mullen v. Tucker (1987), Ind.App., 510 N.E.2d 711, 715. In reviewing a trial court's entry of summary judgment, we are bound by the same standards as the trial court. Lafary v. Lafary (1985), Ind.App., 476 N.E.2d 155, 158. We may not affirm the entry of summary judgment unless the proponent of the motion has shown that there exists no genuine issue of material fact, and that he is entitled to judgment as a matter of law. Korba v. Trans World Airlines (1987), Ind.App., 508 N.E.2d 48, 51. Even if there is no genuine dispute as to any material fact, we may not affirm if the undisputed facts give rise to conflicting inferences. Mullen, 510 N.E.2d at 715. Where there is any doubt as to the existence of a factual issue, the trial court should not grant summary judgment, and, should it grant the motion where such doubt persists, we may not affirm the entry of judgment. Farthing v. Life Insurance Co. of North America (1986), Ind.App., 500 N.E.2d 767, 769.

Plaintiff contends that there is no evidence of an accord and satisfaction because the trial court, upon plaintiff's motion, had stricken the Grover Davis letter from the record of proceedings. Plaintiff notes that defendants did not challenge the trial court ruling striking the letter. Plaintiff fails to note, however, that the trial court struck the letter before defendants offered it in support of their response to plaintiff's motion for summary judgment. Plaintiff did not object or file a motion to strike the letter when defendants filed the letter in support of their response to plaintiff's motion.

Defendants note that plaintiff did not object to the Grover Davis letter appended to the response brief. Defendants further note that plaintiff, in his reply brief, argued that the letter itself did not establish an accord and satisfaction but did not argue that the letter was not properly before the court ³.

Although plaintiff vigorously argues that the Grover Davis letter was not properly before the court when it considered plaintiff's motion for summary judgment, and although defendants equally vigorously argue that the letter was properly before the court, neither side has offered any case law in support of its position. In particular, neither party has cited any precedent which holds that a court order striking a document from the record of the case bars a party from placing that document into the record at a later point in the proceedings. On the other hand, neither party has cited a case which holds that...