Strodtman v. Integrity Builders, Inc., 30A05-9510-CV-421
| Decision Date | 11 July 1996 |
| Docket Number | No. 30A05-9510-CV-421,30A05-9510-CV-421 |
| Citation | 668 N.E.2d 279 |
| Parties | Lawrence E. STRODTMAN and Margo M. Strodtman, Appellants-Plaintiffs, v. INTEGRITY BUILDERS, INC., and Jeffrey S. Turner, Individually and in his Representative Capacity, Appellees-Defendants. |
| Court | Indiana Appellate Court |
Lawrence E. Strodtman and Margo M. Strodtman ("Strodtmans") appeal the trial court's granting of Integrity Builders, Inc. ("Integrity") and Jeffrey S. Turner's ("Turner") motion for summary judgment. The Strodtmans raise four issues on appeal, which we restate as:
1. Whether Integrity breached its contract with the Strodtmans?
2. Whether Turner is personally liable for activities done during his role as Integrity's president?
3. Whether the trial court abused its discretion in denying the Strodtmans' verified motion to join claims, remedies, and persons?
4. Whether the trial court abused its discretion in limiting the Strodtmans' discovery?
We reverse and remand.
On July 30, 1993, the Strodtmans filed a petition naming the Cumberland Plan Commission and Integrity Builders questioning the zoning of a subdivision that Integrity planned to develop adjacent to the Strodtmans' real estate. This petition was ultimately dismissed because on October 20, 1993, the Strodtmans and Integrity, with Turner acting on behalf of Integrity as its president, entered into a signed written contract. The contract provided that the Strodtmans dismiss their petition and not oppose the development. In consideration, Integrity agreed to make changes to its development plan, and provide specified landscaping on development real estate adjacent to the Strodtman's real estate. While the Strodtmans dismissed their petition with prejudice, Integrity did not provide the landscaping.
On January 28, 1994, Integrity conveyed the real estate to Hanson & Horn Contractors, Inc., who on February 14, 1994, transferred the real estate to Solidarity Partners. These two deeds were recorded, and copies were attached to Integrity and Turner's motion to dismiss filed on November 21, 1994.
In August of 1994, Turner assured Lawrence Strodtman that the landscaping would still occur. During this time, work was done on the development unconnected to the contract.
On September 29, 1994, the Strodtmans filed a complaint seeking specific performance, an injunction and punitive damages. The complaint alleged that Integrity and Turner breached the contract, and that Turner committed fraudulent misrepresentation.
On November 21, 1994, Integrity and Turner filed a motion to dismiss, which the trial court treated as a motion for summary judgment. On January 26, 1995, the Strodtmans filed a verified motion to join claims, remedies and persons.
After a hearing, on July 12, 1995, the trial court granted summary judgment for Integrity and Turner. The trial court found that there were no issues of material fact; that neither Integrity nor Turner owned the real estate when the Strodtmans filed their complaint; that Integrity did have a contract with the Strodtmans; that neither Integrity nor Turner made any of the changes, alleged in the complaint, to the land prior to transferring it; and that Turner was not individually liable for any actions that he took while serving as Integrity's president. Also, the trial court denied the Strodtmans' motion to join claims, remedies and persons.
When reviewing a grant of a motion for summary judgment we stand in the shoes of the trial court, and we are not limited to reviewing the trial court's reasons for granting summary judgment. Claxton v. Hutton, 615 N.E.2d 471, 473 (Ind.Ct.App.1993). We resolve any doubt about a fact or any inference to be drawn from it in favor of the nonmoving party. Id. We will affirm the trial court's decision only if no genuine issues of material facts exist and the movant is entitled to judgment as a matter of law. Ind.Trial Rule 56(C); ACONA v. Smithley, 621 N.E.2d 1116, 1119 (Ind.Ct.App.1993). A fact is material for purposes of summary judgment if its resolution is decisive of either the action or a relevant secondary issue. Lee v. Weston, 402 N.E.2d 23, 24 (Ind.Ct.App.1980).
Although the trial court made findings of fact and conclusions of law, it does not change the nature of our review of summary judgment. The entry of specific facts and conclusions in a summary judgment order aids our review by providing us with a statement of reasons for the trial court's decision, but it has no other effect. P.M.S., Inc. v. Jakubowski, 585 N.E.2d 1380, 1381 n. 1 (Ind.Ct.App.1992).
The contract between the Strodtmans and Integrity required the Strodtmans to not oppose Integrity's real estate development, and Integrity to provide specified landscaping and develop the land in accordance with a diagram's specifications. The Strodtmans fulfilled their obligations by withdrawing their petition opposing the development. However, the Strodtmans contend that Integrity and Turner breached the contract by not providing the specified landscaping, and not developing the land as agreed, specifically by not providing a finished site status consistent with the plat, by relocating the drainage easement for lot 48, by not providing the earth berm along lots 34 and 35, and by building a fifteen-foot hill. 1
Integrity contends that because it did not own the real estate at the time of the changes to the real estate it did not breach the contract with the Strodtmans. The trial court agreed with this contention. The trial court provided:
It is clear from the record in this cause that the real estate which is the subject matter of Plaintiffs' Complaint was not at the time of the filing of the Complaint owned by the Defendant Corporation or by Jeffrey S. Turner individually. The contract sued upon by the Plaintiffs was executed by the Defendant Corporation which had not taken any action concerning the real estate as alleged in Plaintiffs' Complaint.... Accordingly the law is with the Defendants and against the Plaintiffs on Plaintiffs' Complaint and Defendants are entitled to Judgment in this matter as a matter of law.
A party breaches a contract either by placing itself in a position where it is unable to perform its contractual obligations, or by failing to perform all of its contractual obligations. Rauch v. Circle Theatre, 176 Ind.App. 130, 138, 374 N.E.2d 546, 552 (1978). Here, the contract provided that "Integrity at its sole expense shall provide landscaping along the common border with Strodtman as shown on the Landscape Plan attached hereto...." R. 12. The contract is clear regarding this provision, thus no genuine issue exists regarding Integrity's corresponding obligation. And, Integrity does not argue that they have done this act.
This contract did not contain a provision that would release Integrity from this contractual obligation if it sold the land to a different developer. By transferring the land, Integrity voluntarily placed itself in the position where it could not perform this contractual obligation. Thus, as a matter of law we determine that Integrity breached its contract with the Strodtmans regarding this obligation to provide the specified landscaping. Other than the landscaping, the contract did not obligate Integrity to do any of the acts that the Strodtmans contend Integrity has not done, nor to prevent the subsequent owners from doing the acts of which the Strodtmans complain.
In their complaint, the Strodtmans requested specific performance as a possible remedy. However, a court may not grant specific performance when a party no longer controls a contract's subject matter. Risk v. Thompson, 237 Ind. 642, 651, 147 N.E.2d 540, 545 (1958). Here, specific performance is inappropriate because Integrity no longer owns the real estate. However, the Strodtmans alternatively requested monetary damages for the breach. Transfer of ownership of the real estate does not preclude this remedy. Thus, we reverse the trial court's entry of summary judgment and remand this case for a calculation of damages.
The Strodtmans contend that the trial court committed reversible error by not piercing the corporate veil thereby finding Turner to be personally liable for his actions taken regarding the real estate. Indiana Code section 23-1-26-3(b) (West 1989) provides: "Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that the shareholder may become personally liable by reason of the shareholder's own acts or conduct." The Strodtmans, as the party seeking to pierce the corporate veil, bear the burden "to prove that the corporate form was so ignored, controlled or manipulated that it was merely the instrumentality of [Turner,] and that the misuse of the corporate form would constitute a fraud or promote injustice." Aronson v. Price, 644 N.E.2d 864, 867 (Ind.1994), reh'g denied, (1995).
To support their request to pierce the corporate veil, the Strodtmans present the following facts: (1) Turner negotiated with the Strodtmans resulting in the contract; (2) Turner, acting on behalf of Integrity, agreed to obligations that became part of the contract; and (3) Turner acted alone during the contract negotiations. Assuming that all of these facts are true, they do not show that Turner acted in a way that ignored, controlled or manipulated Integrity's corporate form. It is not unusual for a corporate officer to act in such a manner in the capacity as corporate president.
Also, the Strodtmans contend that Turner signed the contract with no intent of honoring its obligations so that the Strodtmans would not oppose...
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