Stacey-Rand, Inc. v. J.J. Holman, Inc.
| Citation | 527 N.E.2d 726 |
| Decision Date | 30 August 1988 |
| Docket Number | No. 54A01-8712-CV-305,STACEY-RAN,INC,54A01-8712-CV-305 |
| Parties | , a Tennessee Corporation; Stacey-Rand of America, Inc., A Tennessee Corporation; James J. Heeren & Sons, Inc., A Tennessee Corporation; James J. Heeren & Patricia L. Heeren, Defendants-Appellants, v. J.J. HOLMAN, INC., an Indiana Corporation, Plaintiff-Appellee. |
| Court | Court of Appeals of Indiana |
James W. Greives, Rosenthal, Greives & O'Bryan, Lafayette, for defendants-appellants.
This is an appeal of a jury verdict entered in favor of J.J. Holman, Inc. and against James J. Heeren and Sons, Inc., a Tennessee Corporation. We affirm.
Jim Heeren and John Holman separately owned certain interests in Nutri-System Weight-Loss franchises. On July 1, 1983, Holman entered into a Management Agreement with Heeren and Associates, Inc. to have Heeren and Associates, Inc. manage Holman's Nutri-System centers in Crawfordsville and Lafayette, Indiana.
Subsequently various discussions and negotiations occurred regarding the sale of these centers by Holman. These negotiations involved correspondence, phone conversations and face-to-face discussions between Heeren and Holman. The correspondence from Holman would usually be on the letterhead of J.J. Holman, Inc. and signed by "John" or "John Holman". The correspondence signed by "Jim" or "Jim Heeren" would usually be on letterhead listing the various corporations in which Heeren was involved, all showing the same business office. A contract for sale of the centers was entered into on July 21, 1984. There was a default in making the payments required by the contract and on November 1, 1985, Holman filed a breach of contract lawsuit against Stacey-Rand, Inc. of Tennessee and requested a jury trial. Holman subsequently amended its complaint adding more specific claims and naming Stacey-Rand of Indiana, Inc., James J. Heeren, and Patricia L. Heeren as additional defendants. In a second amended complaint, Holman named James J. Heeren and Sons, Inc. as the final defendant.
After Holman completed the plaintiff's case-in-chief, the trial court granted the defendants' motion for a directed verdict in favor of all the defendants except Stacey-Rand of Indiana, Inc., with respect to Counts I, II, and III of Holman's complaint. The court entered judgment against Stacey-Rand of Indiana, Inc. for Sixty Thousand Six Hundred Dollars ($60,600.00). The trial court granted summary judgment in favor of the defendants on Count IV of the plaintiff's complaint. Only Counts V and VI remained to be litigated. These counts requested that the trial court "pierce the corporate veil" of Stacey-Rand, Inc., of Tennessee and James J. Heeren and Sons, Inc. The defendants moved for a dismissal of the jury on the grounds that the remedies sought by Holman involved issues of equity. The trial court denied this motion and allowed the trial to proceed before the jury. A verdict was rendered in which the jury found for the plaintiff, Holman, and against the defendants, James J. Heeren and Sons, Inc. and James Heeren. The jury further found that Patricia Heeren was not liable on Holman's claim. It is from this judgment that the defendants now appeal.
1. Did the trial court err in failing to dismiss the jury where the only remaining issue was equitable in character?
2. Was there inadequate evidence to support the jury verdict and was the jury verdict contrary to law?
We note at the outset that the appellee, J.J. Holman, Inc. declined to file a brief in this appeal. Therefore, the appellants may obtain relief upon showing only prima facie error. Paxton v. Paxton (1981), Ind.App., 420 N.E.2d 1346, 1348; Tucker v. Tucker (1980), Ind.App., 406 N.E.2d 321, 323.
At the close of the plaintiff's case-in-chief a directed verdict was entered in favor of the appellants, except for Stacey-Rand of Indiana, Inc. on the first three counts of the plaintiff's second amended complaint. Stacey-Rand of Indiana, Inc. was found liable on these counts and was ordered to pay the plaintiffs $60,600. Count IV of the plaintiff's complaint previously had been decided in favor of all the appellants on a motion for summary judgment. Therefore, only Counts V and VI of the second amended complaint remained to be litigated. Both these counts were equitable claims requesting the court to pierce the corporate veil of Stacey-Rand of Indiana, Inc. and find James J. Heeren and Sons, Inc. and James Heeren liable for the judgment entered against Stacey-Rand of Indiana, Inc. The appellants first contend the trial court committed reversible error in failing to dismiss the jury upon their motion at that time.
This court has recognized that there are cases where, to prevent fraud or injustice, it is necessary to disregard the fiction of distinct corporate existence, and to hold as a matter of equity that such separate legal entity does not exist. Clark Auto Co., Inc. v. Fyffe (1954), 124 Ind.App. 222, 227, 116 N.E.2d 532, 535. See also, Merchants Nat'l Bank v. H.L.C. Enterprises, Inc. (1982), Ind.App., 441 N.E.2d 509, 514; Hart, Shaffner and Marx v. Campbell (1941), 110 Ind.App. 312, 320, 38 N.E.2d 895, 899; Feucht v. Real Silk Hosiery Mills, Inc. (1938), 105 Ind.App. 405, 411, 12 N.E.2d 1019, 1021. It is a well known tenet that a plaintiff is not entitled to a jury trial when claiming a cause in equity. However, a defendant in a suit in equity has no constitutional right to a trial by the court without a jury, and rarely, if ever, can the submission of an issue to a jury be deemed a ground of error. 27 Am.Jur.2d Sec. 238. Therefore, while the plaintiff's request to pierce the corporate veil of Stacey-Rand of Indiana, Inc. was equitable by nature, the trial court was not under an absolute duty to dismiss the jury before proceeding with the trial.
The appellants next contend that the jury verdict finding both James J. Heeren and Sons, Inc. and James Heeren liable to John Holman was contrary to law and was not supported by sufficient evidence. When a judgment is challenged as being contrary to law this court must affirm the...
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