Tobin v. Ruman, 45A04-0403-CV-171.
| Decision Date | 09 December 2004 |
| Docket Number | No. 45A04-0403-CV-171.,45A04-0403-CV-171. |
| Court | Indiana Appellate Court |
| Parties | William H. TOBIN, Appellant-Plaintiff, v. Saul I. RUMAN and Ruman Clements & Holub, P.C. f/k/a Ruman Clements Tobin & Holub, P.C. f/k/a Ruman Clements & Tobin, P.C., Appellees-Defendants. |
William H. Tobin, South Holland, IL, Appellant Pro Se.
David C. Jensen, John P. Twohy, Eichhorn & Eichhorn, Hammond, IN, Attorneys for Appellees.
Appellant/Cross-Appellee William H. Tobin appeals the trial court's grant of Appellees/Cross-Appellants Saul I. Ruman's (Ruman) and Ruman, Clements & Holub, PC's ("RCH")1 motion for summary judgment on Counts VI and VII of his amended complaint, where he sought damages for breach of oral contract and fraud. Specifically, Tobin contends that the trial court erred by: (1) holding that the Statute of Frauds applies to an oral employment contract of uncertain duration, barring its enforcement; and (2) granting summary judgment on his fraud claim where the Statute of Frauds does not operate as a bar and where the fraud claim is independent of his other theories of recovery.2 Ruman and RCH cross-appeal the trial court's grant of Tobin's motion for summary judgment on Counts II and III of his amended complaint, where he sought damages for violation of the Wage Payment Act and breach of contract. Specifically, Ruman and RCH contend that the trial court erred by: (1) holding that Count II sought money that constitutes "wages" under the Wage Payment Statute, qualifying Tobin for treble damages and attorney fees; (2) holding that Count III stated a claim for criminal conversion where Tobin did not plead conversion in his complaint and where Tobin was merely seeking payment of a debt; and (3) awarding Tobin attorney fees where he is a pro se plaintiff.
We conclude that the trial court: (1) improperly granted Ruman's and RCH's motion for summary judgment on Count VI; (2) properly granted Ruman's and RCH's motion for summary judgment on Count VII; and (3) properly granted Tobin's motion for summary judgment on Counts II and III, but based its rulings in part on improper grounds, resulting in improperly calculated damages. We therefore affirm in part, reverse in part, and remand for proceedings consistent with this opinion.
In 1981, Tobin began working for Ruman as an associate attorney in a law firm solely owned by Ruman. In January 1989, Ruman, Tobin, and three other attorneys formed a professional corporation, with Ruman owning a ninety-six percent equity interest in the new corporation. The other attorneys each took a one percent equity interest. Each of the one percent equity owners contributed $5,000 to RCH as part of the purchase price of his one share of stock. Additionally, in 1988, the firm allocated a $10,000 bonus for each of them as an additional contribution to RCH's capital.
At some point prior to incorporation, all five shareholders entered into an undated Agreement, which provided that any of the four one percent owners "may require Ruman to pay back his share of stock for the price paid at any time, plus interest." Cross-Appellee's Second App. p. 102. Additionally, Ruman allegedly assured the four other equity owners that they would all be compensated equally on an annual basis. Tobin was an at-will employee, subject to termination by either party at any time.
At the end of each calendar year, RCH issued IRS Form K-1 to its shareholders, reporting miscellaneous items of corporate income, credits, and deductions. These items were allocated and shown as distributed to the shareholders individually, to be reported on their individual tax returns. The shareholders paid annual income taxes on the K-1 allocations although they did not receive a distribution of those amounts from RCH. The accumulated total of all annual K-1 net amounts constitutes RCH's retained earnings, and there is a dispute as to whether each shareholder's pro rata share is separately calculated and accounted for or whether all shareholders' shares are commingled in a single account. Regardless, RCH acknowledges that the retained earnings belong to the shareholder to whom they were shown as distributed. Tobin's share of RCH's retained earnings totals $5,301.
On January 8, 2001, Tobin tendered his resignation and requested that RCH buy out Tobin's equity interest in the firm. After months of allegedly refusing Tobin's requests for documentation and information on how to value and redeem his equity interest in the firm, on June 29, 2001, Ruman tendered a check payable to Tobin in the amount of $10,000 for the "repurchase of stock in full and final settlement of any and all claims...." Cross-Appellee's Second App. p. 63. Tobin refused and returned the check. To date, RCH has neither repurchased Tobin's stock nor paid him his share of the retained earnings, but it has made at least two Offers of Judgment to Tobin for: (1) $15,000 plus interest pursuant to Count II; and (2) $5,301 pursuant to Count III. Appellees' Supp.App. p. 2-3. Tobin refused both Offers of Judgment. Id.
On August 6, 2001, Tobin filed a four-count complaint alleging, inter alia, breach of contract and fraud. Ruman and RCH moved for summary judgment on October 10, 2001. On March 22, 2002, Tobin amended his complaint to include six counts, which are summarized as follows:
Appellant's App. p. 98-110. Also on March 22, 2002, the trial court held oral argument on Ruman's and RCH's motion for summary judgment, which was admittedly moot as to the first five counts of Tobin's complaint due to the amendment. The trial court granted the motion for summary judgment as to Counts VI and VII.
On July 10, 2003, Tobin moved for partial summary judgment on Counts II and III of his amended complaint. Following oral argument on October 1, 2003, the trial court granted plaintiff's motion on January 5, 2004. Tobin now appeals the 2002 summary judgment against him and Ruman and RCH now appeal the 2004 summary judgment against them.
When reviewing a summary judgment ruling, this court stands in the shoes of the trial court, and does not weigh the evidence, but merely construes the pleadings and designated materials in a light most favorable to the non-movant. Becker v. Four Points Inv. Corp., 708 N.E.2d 29, 30 (Ind.Ct.App.1999),trans. denied. Summary judgment is appropriate when the pleadings, affidavits, testimony, and products of discovery demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Ind. Tr. R. 56(C). A factual issue is genuine if it cannot be foreclosed by reference to undisputed facts. Jones v. City of Logansport, 436 N.E.2d 1138, 1143 (Ind.Ct.App.1982). A fact is material if it affects the outcome of the litigation. Costello v. Mut. Hosp. Ins. Inc., 441 N.E.2d 506, 508 (Ind.Ct.App.1982),trans. denied.
Tobin argues that the trial court erred in granting Ruman's and RCH's motion for summary judgment on Counts VI and VII of his amended complaint. Although the trial court did not articulate its reasons for granting summary judgment, Ruman and RCH contended in their briefs and at the summary judgment hearing that both counts are barred by the Statute of Frauds. Specifically, they argue that the oral employment agreement, although at-will, remained in place for over twelve years and, therefore, falls within the Statute of Frauds. In addition, they argue that Tobin bases his fraud count on the breach of an oral agreement, pointing to authority holding that a litigant may not base a fraud claim on an oral agreement that is within the Statute of Frauds.
In Count VI of his amended complaint, Tobin argues that Ruman and RCH breached his oral employment contract.4 In particular, he contends that before the incorporation of RCH, Ruman assured Tobin and the other shareholders that all of the one percent equity owners would be compensated equally. Tobin now alleges that in fact, RCH paid him less than it paid the other three one percent shareholders, and that RCH is therefore in breach of the oral agreement. RCH contends that the oral agreement is within the Statute of Frauds, although RCH admits that Tobin was an at-will employee and that the contract was not to last for any specific duration of time.
The Statute of Frauds provides that "contracts which cannot be performed within one year must be in writing and signed by the party to be charged...." Mehling v. Dubois County Farm Bureau Coop. Ass'n, Inc., 601 N.E.2d 5, 7 (Ind.Ct.App.1992); see also Ind.Code § 32-21-1-1. This court recently reaffirmed the long-standing rule in Indiana as to when an oral contract falls within the Statute of Frauds:
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