Williams v. Younginer

• Decision Date: 26 July 2006
• Docket Number: No. 87A01-0504-CV-180.,87A01-0504-CV-180.
• Citation: 851 N.E.2d 351
• Parties: Jerry W. WILLIAMS, and Jerry W. Williams Builder, Inc., Appellants-Defendants, v. Jeff YOUNGINER and Beth Younginer, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

851 N.E.2d 351

Jerry W. WILLIAMS, and Jerry W. Williams Builder, Inc., Appellants-Defendants, v. Jeff YOUNGINER and Beth Younginer, Appellees-Plaintiffs.

No. 87A01-0504-CV-180.

Court of Appeals of Indiana.

July 26, 2006.

COPYRIGHT MATERIAL OMITTED

Stacy K. Harris, Rudolph, Fine, Porter & Johnson, LLP, Evansville, IN, Attorney for Appellants.

J. Herbert Davis, Adam J. Farrar, Bamberger, Foreman, Oswald and Hahn, LLP, Evansville, IN, Attorneys for Appellees.

OPINION

MATHIAS, Judge.

Jerry W. Williams ("Williams") and Jerry W. Williams Builder, Inc. ("Builder, Inc.") (collectively "Defendants") appeal from a jury verdict in Warrick Superior Court, raising the following combined and restated issue:

I. Whether the trial court erred when it denied Defendants' motion for judgment on the evidence and motion to correct error on the issue of Williams's personal liability.

Jeff and Beth Younginer ("the Younginers") raise the following issues on cross appeal:

II. Whether the trial court erred when it granted Defendants' motion for judgment on the evidence on the Younginers' punitive damages claim; and,

III. Whether the trial court erred when it granted Defendants' motion for judgment on the evidence on the Younginers' breach of contract claim.

Concluding that the trial court properly denied Defendants' motions on Williams's personal liability, properly granted judgment on the evidence on the issue of punitive damages, but improperly granted judgment on the evidence on the breach of contract claim, we affirm in part, reverse in part, and remand for proceedings consistent with this opinion.

Facts and Procedural History

In late 2000, Jeff Younginer accepted a job with Toyota Motor Manufacturing in southwestern Indiana. In preparation for moving their family from South Carolina, the Younginers engaged the services of an Indiana realtor. On December 16, 2000, while looking at houses in the Lake Ridge Subdivision in Newburgh with their realtor, they came upon a newly constructed home for sale at 1966 Waters Ridge Drive. While viewing the home, Jeff took a brochure listing the home's specifications, photo, and realty company information. The brochure also stated, "For more information call: Jerry Williams." Appellants' App. p. 303. The Younginers did not notice any problems with the home and did not observe any leaking, cracking, or mold on the basement walls.

Williams operated Building, Inc., a Kentucky corporation, in the business of building and marketing homes under the trade name Prestige Homes. On December 17, 2000, the Younginers made an offer to purchase the home located at 1966 Waters Ridge Drive. Williams counter-offered, and the Younginers accepted. The Younginers signed a real estate purchase agreement as "buyers" and Williams signed the document as "seller." Williams printed his name, Jerry W. Williams, above his signature. Nowhere in the document did Williams indicate that he was signing in his capacity as president of Builder, Inc. The name "Jerry W. Williams Builder, Inc." did not appear in the real estate purchase agreement. However, Williams crossed out the words "social security number" on the document and wrote in the federal tax identification number of Builder, Inc. and listed Builder, Inc.'s address and telephone number below his signature. Williams admitted at trial that he should have signed the real estate purchase agreement as president of Builder, Inc., but that it was "an oversight on [his] part." Tr. p. 70.

The sale of the home closed on February 15, 2001. The Younginers took possession and moved into the home the next day. In April 2001, the Younginers noticed water leaking on the west wall of their basement. They contacted Williams, who sent his father, Floyd Williams, to look into the problem. Floyd Williams suggested that the problem might be due to over-watering of the lawn, so the Younginers stopped watering the lawn. The water seepage continued on the west wall of the basement and later appeared on the north wall. The walls became discolored, cracked, and developed mold. Despite multiple attempts by Williams and professionals he referred to the Younginers to remedy the problems, the water problems persisted.

On December 9, 2002, the Younginers filed a complaint against Williams alleging breach of implied warranty of fitness for habitation, breach of implied warranty of workmanship, breach of contract, negligence, fraud, and constructive fraud. On March 14, 2003, they amended their complaint to add Builder, Inc. as a defendant. On July 17, 2003, the Younginers added a claim against both Williams and Builder, Inc. alleging breach of express warranty.

A jury trial commenced on January 24, 2005. After the presentation of the Younginers' evidence, the Defendants moved for judgment on the evidence on the breach of contract, negligence, fraud, and constructive fraud claims, as well as on all claims against Williams personally. The trial court granted judgment on the evidence on the negligence and fraud claims, and denied the motion on all other claims. After the Defendants presented their evidence, they again moved for judgment on the evidence on the claims against Williams personally. The trial court denied their motion.

The jury returned verdicts in favor of the Younginers and against Williams and Builder, Inc. on all claims, and found the Younginers' damages to be $62,305.77. Prior to trial, the parties agreed to bifurcate the issues of punitive damages and attorney's fees. On Defendants' motion, the trial court granted judgment on the evidence on the claims for punitive damages and breach of contract, but denied Defendants' motion as to the other claims. The court then entered judgment on the jury's verdict for breach of implied warranty of fitness for habitation, breach of implied warranty of workmanship, breach of express warranty, and constructive fraud against both Builder, Inc. and Williams.

On February 24, 2005, Defendants filed a motion to correct error, which the trial court denied. Defendants now appeal the denials of their motion for judgment on the evidence and motion to correct error, and the Younginers bring a cross appeal of the trial court's grant of judgment on the evidence on their claims for punitive damages and breach of contract.

Standard of Review

The Defendants challenge both the denial of their motions for judgment on the evidence under Indiana Trial Rule 50¹ and the denial of their motion to correct error under Indiana Trial Rule 59 on the issue of Williams's personal liability.

In reviewing a trial court's ruling on a motion for judgment on the evidence, the appellate court is to consider only the evidence and reasonable inferences most favorable to the non-moving party. PSI Energy, Inc. v. Roberts, 829 N.E.2d 943, 950 (Ind.2005), reh'g granted 834 N.E.2d 665 (citing Clark v. Wiegand, 617 N.E.2d 916, 918 (Ind.1993)).

Judgment on the evidence in favor of the defendant is proper when there is an absence of evidence or reasonable inferences in favor of the plaintiff upon an issue in question. The evidence must support without conflict only one inference which is in favor of defendant. If there is any probative evidence or reasonable inference to be drawn from the evidence or if there is evidence allowing reasonable people to differ as to the result, judgment on the evidence is improper.

Sipes v. Osmose Wood Preserving Co., 546 N.E.2d 1223, 1224 (Ind.1989) (quoting Jones v. Gleim, 468 N.E.2d 205, 206-07 (Ind.1984)).

In considering a motion to correct error based on a claim of insufficient evidence, if the trial court determines that there is a total absence of evidence supporting a necessary element of the plaintiff's case, the court should enter judgment for the defendant. PSI, 829 N.E.2d at 950 (citing State v. Emry, 753 N.E.2d 19, 21 (Ind.Ct.App.2001)). On the other hand, if there is some evidence to support the jury's verdict, the trial court must determine whether the jury's verdict is supported by sufficient evidence without weighing the evidence or judging the credibility of the witnesses. Id. Both rules mandate that the motion be granted when there is insufficient evidence under the law to support a verdict. Id. (citing Huff v. Travelers Indem. Co., 266 Ind. 414, 420, 363 N.E.2d 985, 990 (1977)).

I. Williams's Personal Liability

The Defendants argue that the trial court erred when it denied their motions on the issue of Williams's personal liability for breach of implied warranty of fitness for habitation, breach of implied warranty of workmanship, breach of express warranty, and constructive fraud.

A. Implied Warranties

First, Defendants contend that Williams fully disclosed his status as an agent of Builder, Inc. at the closing of the sale, and that he may not be held personally liable for the warranties entered into by Builder, Inc. They assert that the implied warranties for fitness of habitation and workmanship did not arise until the closing of the sale of the home, thus it is irrelevant in what capacity Williams signed the purchase agreement. The Younginers in turn contend that the implied warranties arose with the execution of the purchase agreement, which Williams signed in his personal capacity, exposing him to liability for any breach of the warranties. We agree that the warranty of habitability, as well as the warranty of workmanship, are implied-in-fact in the sales contract, that is, the purchase agreement. See Johnson v. Scandia Assocs., Inc., 717 N.E.2d 24, 27 (Ind.1999) (discussing Barnes v. Mac Brown & Co., Inc., 264 Ind. 227, 342 N.E.2d 619 (1976)).

Defendants also argue that even if the warranties arose with the execution of the purchase agreement, the purchase agreement was no longer in effect because it merged with the deed at the time of the closing of the sale. The doctrine of merger by deed provides that "[i]n the absence of fraud or mistake, all prior or contemporaneous negotiations or executory agreements,...