U.S. Marketing Concepts, Inc. v. Don Jacobs Buick-Subaru, Inc., BUICK-SUBAR

• Decision Date: 27 December 1989
• Docket Number: BUICK-SUBAR,No. 02A03-8908-CV-325,INC,02A03-8908-CV-325
• Citation: 547 N.E.2d 892
• Court: Indiana Appellate Court
• Parties: U.S. MARKETING CONCEPTS, INC. Appellant (Defendant Below), Herbert J. Weber and Advertising & Marketing Services, Inc., Appellants (Garnishee Defendants Below), v. DON JACOBSand Don Jacobs Toyota, Inc., Appellee (Plaintiffs Below).

Page 892

547 N.E.2d 892

U.S. MARKETING CONCEPTS, INC. Appellant (Defendant Below), Herbert J. Weber and Advertising & Marketing Services, Inc., Appellants (Garnishee Defendants Below), v. DON JACOBS BUICK-SUBARU, INC. and Don Jacobs Toyota, Inc.,

Appellee (Plaintiffs Below).

No. 02A03-8908-CV-325.

Court of Appeals of Indiana,

Third District.

Dec. 27, 1989.

Rehearing Denied Feb. 14, 1990.

John H. Heiney, Rothberg, Gallmeyer, Fruechtenicht & Logan, Fort Wayne, for appellants.

Ward W. Miller, Bloom, Bloom, More and Miller, Fort Wayne, for appellee.

STATON, Judge.

Defendant U.S. Marketing Concepts, Inc. (USMC) and garnishee defendants Herbert J. Weber (Weber) and Advertising & Marketing Services, Inc. (AMS) appeal from an order in favor of Don Jacobs Buick-Subaru, Inc. and Don Jacobs Toyota, Inc. (Jacobs) extending a judgment against USMC to Weber and AMS. ¹

Weber presents us with two issues on appeal:

1. Whether transfers from USMC to Weber and to AMS were made with the intent to hinder, delay and defraud Jacobs?

2. Whether sufficient consideration for the transfers would preclude an inference of fraudulent intent?

We affirm.

USMC was an Indiana corporation specializing in advertising promotions for automobile dealers. ² Don Jacobs Buick-Subaru, Inc. and Don Jacobs Toyota, Inc. are Wisconsin corporations that participated in one of USMC's promotions. The promotion involved vouchers entitling the holder to a vacation in Mexico. Jacobs purchased the vouchers from USMC to give to customers when they purchased an automobile. The entity (not a party) supplying the vouchers to USMC experienced financial difficulties and discontinued the Mexican vacations. Several of Jacobs' customers held vouchers which were not honored. Jacobs sued USMC for the dishonored vouchers and obtained a judgment for approximately $26,000. ³ Jacobs then filed a verified motion for proceedings supplemental naming Weber and AMS as garnishee defendants.

Weber was the sole shareholder and president of USMC and of its successor corporation, AMS. USMC's management formed AMS in January of 1987. Both USMC and AMS were advertising agencies. The only thing that distinguished the two was that AMS was not involved in the promotion of vacations to Mexico. Weber testified that the reason for "winding down" USMC in late August or September of 1986 was because complaints over the vouchers for a vacation in Mexico were becoming "excessive." R. 136. In the process of winding down USMC many of its assets were transferred to Weber and AMS. Jacobs attacked these transfers as fraudulent through its verified motion for proceedings supplemental. Ind.Rules of Procedure, Trial Rule 69(E).

Although the trial court made findings of fact and conclusions of law we will address this appeal as a general judgment supported by partial findings. See First Bank v. Samocki Bros. Trucking Co. (1987), Ind.App., 509 N.E.2d 187, 192-3, rehear. den., trans. den., and In re Marriage of Hudak (1981), Ind.App., 428 N.E.2d 1333, 1335. On appeal from a general judgment we look at the evidence most favorable to the decision of the trial court and will affirm if the decision can be sustained on any legal ground. Potts v. Offutt (1985), Ind.App., 481 N.E.2d 429, 430-1.

I. Intent

The trial court ordered that Jacobs could enforce judgment against garnishees Weber and AMS because transfers made to them from USMC were fraudulent.

According to Weber's testimony at the hearing for proceedings supplemental the transfers USMC made to him consisted of bonuses, commissions, and reimbursements for ordinary business expenses. Jacobs contends these transfers were made with the intent to hinder, delay and defraud Jacobs as creditor. On appeal we will neither reweigh the evidence nor rejudge the credibility of witnesses; our review is limited to a consideration of the evidence and reasonable inferences therefrom which support the judgment of the trial court. Kruse, Kruse & Miklosko v. Beedy (1976), 170 Ind.App. 373, 353 N.E.2d 514, 524, reh. den., trans. den. The trial judge, as fact finder, determines the presence or absence of fraudulent intent. We need only decide if there is sufficient evidence to support that determination.

Intent can be inferred from certain indicia called "badges of fraud." Some of the badges from which fraudulent intent may be inferred include: the transfer of property by a debtor during the pendency of a suit; a transfer of property that renders the debtor insolvent or greatly reduces his estate; a series of contemporaneous transactions which strip a debtor of all property available for execution; secret or hurried transactions not in the usual mode of doing business; any transaction conducted in a manner differing from customary methods; a transaction whereby the debtor retains benefits over the transferred property; little or no consideration in return for the transfer; a transfer of property between family members. Jones v. Central Bank of St. Johns and Barbara J. Wierick (1989),...