V.P. Construction Co., Inc., Steven Rilenge, and Julie Rilenge v. Interior Renovation & Design, Inc., and Patricia A. Geisler (mem. dec.) ( 2018 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
regarded as precedent or cited before any Sep 28 2018, 8:50 am
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Robert Oakley Clinton E. Blanck
Daniel K. Dilley Rifkin, Blanck & Rubenstein, P.C.
Dilley & Oakley P.C. Carmel, Indiana
Carmel, Indiana
IN THE
COURT OF APPEALS OF INDIANA
V.P. Construction Co., Inc., September 28, 2018
Steven Rilenge, and Julie Court of Appeals Case No.
Rilenge, 49A02-1712-CC-2851
Appellants, Appeal from the Marion Superior
Court
(Defendants/Counterclaim-Plaintiffs The Honorable Thomas J. Carroll,
Judge
and Third-Party Plaintiff below),
Trial Court Cause No.
v. 49D06-1212-CC-48269
Interior Renovation & Design,
Inc., and Patricia A. Geisler,
Appellees,
(Plaintiffs/Counterclaim-Defendants
and Third-Party Defendant below)
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May, Judge.
[1] Appellants-Defendants, V.P. Construction Co., Inc. (“V.P.”), and Steven
Rilenge (“Steven”); and Appellant-Third-Party Plaintiff, Julie Rilenge (“Julie”)
(collectively, “Appellants”) appeal the trial court’s order granting damages in
favor of Interior Renovation & Design, Inc., (“Interior”) and Third Party-
Defendant, Patricia Geisler (“Geisler”) (collectively, “Appellees”). Appellants
present multiple issues for our consideration, which we consolidate and restate
as:
1. Whether the trial court erred in its findings regarding the
amounts of the mechanic’s liens;
2. Whether the trial court erred in its findings regarding the
breach of contract claims;
3. Whether the trial court erred in its findings regarding
Interior’s alleged tax liability; and
4. Whether the trial court erred in the amount of damages
awarded to Appellees.
We affirm.
Facts and Procedural History
[2] In 1983, Steven formed V.P., a corporation which performs general contracting
services. Steven is the chief operating officer and sole shareholder of V.P. In
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1986, V.P. hired Geisler as an office administrator to manage all V.P.’s day-to-
day operations.
[3] In 1989, when V.P. entered a contract that required unionized workers, Steven
arranged for Geisler and Julie, Steven’s wife, to form Interior. Geisler held
sixty percent, while Julie held forty percent of Interior shares and acted as
secretary. Following Interior’s incorporation, V.P. orally agreed that it would
exclusively subcontract Interior for its commercial and residential construction
projects. Geisler managed all of Interior’s operations, and Interior’s primary
employee was Geisler’s husband, a union carpenter. Geisler performed her
duties for V.P. and for Interior out of V.P.’s corporate office.
[4] V.P. and Interior did business together without issue until 2009. Between 2009
and 2011, Interior alleged, V.P. underpaid or failed to pay Interior for the
services Interior rendered on several projects and as a result of the
underpayment and non-payment, Interior accrued $96,179.53 debt to the
Internal Revenue Service (“IRS”); $5,984.78 in debt to the Indiana Department
of Revenue (“IDR”); and $64,284.20 in debt for union dues. Sometime in
2012, the IRS and the IDR sought to recover the back taxes from Interior’s
majority shareholder, Geisler. Geisler subsequently entered into a payment
plan, whereby she agreed to personally pay the federal and state taxes owed.
Geisler later sought Julie’s 40% contribution on the back taxes, but Julie refused
to pay.
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[5] Sometime in April 2012, Steven took over the financial management of V.P. In
May 2012, V.P. subcontracted Interior to remodel the lobby area for a Key
Bank. Geisler was aware that Key Bank paid V.P. for the work, but V.P. did
not pay Interior for the remodeling. Again, in May 2012, V.P. subcontracted
Interior to conduct remodeling for a Fifth Third Bank. Geisler was aware that
Fifth Third Bank paid V.P. for the remodeling, but Interior did not get paid for
its labor. In June 2012, on behalf of V.P., Interior remodeled Gallahue Hall at
Butler University. In the same month, Interior remodeled portions of the
Sigma Nu fraternity house at Butler University, and it installed an awning at
the house occupied by the Butler University President. In July 2012, V.P.
subcontracted Interior to conduct work at a private residence. In the same
month, Interior remodeled parts of Jordan Hall at Butler University. The last
project that Interior undertook for V.P. was in August 2012, when Interior
installed an exhaust fan at a private residence.
[6] On August 31, 2012, Geisler resigned from V.P. By that time, V.P. had failed
to pay Interior for at least eight projects. On October 25, 2012, Geisler, as
president of Interior, filed several mechanic liens with the Marion County
Recorder for unpaid services performed for V.P. For the Key Bank project,
Interior claimed that it was owed $3,750.00. For the Fifth Third project,
Geisler specified that the amount owed was $6,600.00. The outstanding
amounts for the Butler University projects were $5,500.00 for Gallahue Hall;
$3,500.00 for the Sigma Nu fraternity house; $4,400.00 for the President’s
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house; and $6,000.00 for Jordan Hall. Lastly, Geisler asserted Interior was
owed $350.00 for work conducted at a private residence.
[7] On November 5, 2012, eleven days after Geisler filed the mechanic liens, Julie,
without Geisler’s authority, executed a “Final Waiver of Lien” for each of the
mechanic’s liens, indicating Interior waived all the liens Geisler had filed on
October 25, 2012. Julie did not tender any funds to Interior or deposit funds
into Interior’s bank account, despite the fact she indicated Interior had received
final payment for the projects listed on the mechanic’s liens.
[8] On December 17, 2012, Interior filed a breach of contract action against V.P.
and Steven, alleging failure of payment on eight construction projects in 2012.
Interior also claimed that V.P. was the alter ego of Steven and piercing of the
corporate veil of V.P. was appropriate in order to hold Steven personally liable
for V.P.’s breach of contract.
[9] On January 17, 2014, Interior filed an Amended Complaint reasserting its
claims against V.P. and Steven from its original Complaint. The Amended
Complaint included a new breach of contract claim against V.P. and Steven,
alleging that from “2009 to 2011” V.P. and Steven breached “the oral contract
by failing and refusing to pay Interior, for each project on which Interior
performed work, an amount sufficient to cover Interior’s federal and state
payroll taxes and union dues.” (Appellants’ App. Vol. II at 11.) Interior also
added Julie as a defendant and alleged Julie had breached her fiduciary duty to
Interior by executing waivers for several liens without authorization. Interior
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alleged Julie committed fraud, conspiracy, and tortuiously interfered with
Interior’s business by falsely affirming to the Marion County Recorder that the
mechanic liens had been satisfied by V.P. On April 24, 2014, V.P. filed its
answer with respect to Interior’s amended complaint. The record shows that on
June 16, 2014, V.P. and Julie filed a counterclaim against Interior. 1
[10] On October 24, 2017, Steven, Geisler, and Julie appeared for a bench trial, with
Geisler and Steven testifying. On November 7, 2017, the trial court issued a
judgment in favor of Interior. The order also denied all counterclaims by V.P.
and Julie. 2
Discussion and Decision
Standard of Review
[11] Where, as here, the trial court enters findings sua sponte after a bench trial, the
findings control our review and judgment only as to those issues specifically
referenced in the findings. Samples v. Wilson, 12 N.E.3d 946, 949-50 (Ind. Ct.
App. 2014). When the trial court does not make specific findings on an issue,
1
That counterclaim was not enclosed for our review. Additionally, we note Appellants have filed a copy of
the “MyCase” summary, representing such as the Chronological Case Summary required as part of the
Appendix, despite the fact the summary clearly states at the top of the page, “This is not the official court
record. Official records of court proceedings may only be obtained directly from the court maintaining a
particular record.” (Appellants’ App. at 2.) While this is not a violation of the Indiana Rules of Appellate
Procedure, we note the Chronological Case Summary is the official record of the court. See Anderson v.
Horizon Homes, 644 N.E.2d 1281, 1287 (Ind. Ct. App. 1995) (Chronological Case Summary is official record
of the court), trans. denied.
2
On August 14, 2018, Appellants filed a Motion to Stay with this court. Our opinion makes the motion
moot, and we have issued an order denying the motion contemporaneously with the opinion.
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we apply a general judgment standard, and we may affirm on any legal theory
supported by the evidence adduced at trial. Id. at 950.
A two-tier standard of review is applied to the sua sponte findings
and conclusions made: whether the evidence supports the
findings, and whether the findings support the judgment.
Findings and conclusions will be set aside only if they are clearly
erroneous, that is, when the record contains no facts or inferences
supporting them. A judgment is clearly erroneous when a review
of the record leaves us with a firm conviction that a mistake has
been made. In conducting our review, we consider only the
evidence favorable to the judgment and all reasonable inferences
flowing therefrom. We will neither reweigh the evidence nor
assess witness credibility.
Id.
Amount Awarded for Mechanic’s Liens
[12] Regarding the payment of mechanic’s liens filed by Interior, the trial court
ordered, “Interior is awarded $40,062.54 in compensatory damages from [V.P.]
for unpaid fees earned on eight construction projects in 2012, plus court costs
and prejudgment interest at the rate of eight percent (8%) per annum from
October 25, 2012.” (Appellants’ App. Vol. II at 25.) On appeal, Appellants
argue the mechanic’s liens were invalid “thereby rendering all claims against
[Julie] premised thereon baseless.” (Br. of Appellants at 19) (formatting
omitted). Appellants also challenge the amounts awarded to Appellees as
payment for the mechanic’s liens.
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[13] First, Appellants did not argue before the trial court that the mechanic’s liens
were invalid. The mechanic’s liens were offered into evidence without
objection, (see Tr. Vol. II at 31), and Appellants cross-examined Geisler
regarding the amounts, but Appellants have not directed us to a portion of the
transcript wherein they argued the mechanic’s liens were invalid. Therefore,
their arguments regarding the validity of the mechanic’s liens are waived. See
Breneman v. Slusher, 768 N.E.2d 451, 463 (Ind. Ct. App. 2002) (issues raised for
the first time on appeal are waived), reh’g denied, trans. denied.
[14] Appellants’ arguments regarding the amounts of the mechanic’s liens are
invitations for us to reweigh evidence and judge witness credibility. Appellees
presented evidence and testimony regarding the amounts of those liens, and the
trial court was free to credit testimony and evidence at its discretion. See
Samples, 12 N.E.2d at 950 (appellate court will not reweigh evidence or judge
the credibility of witnesses). Further, the proceedings were a bench trial, and
we presume trial courts know and follow the law. Boone Cty. Rural Elec.
Membership Corp. v. Layton, 664 N.E.2d 735, 739 (Ind. Ct. App. 1996), trans.
denied.
Breach of Contract and Tax Liability
[15] Regarding the breach of contract and tax liability claims, the trial court ordered:
Interior is awarded $166,446.43 in compensatory damages from
[V.P.] for unpaid state and federal tax withholdings and union
dues, plus court costs and prejudgment interest at the rate of eight
percent (8%) per annum from November 28, 2012. [V.P.’s]
obligation to pay this award shall be offset by [Julie’s] . . .
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obligation to cover and pay Interior 40% of the back taxes, i.e.,
$40,865.72, plus court costs and prejudgment interest at the rate
of eight percent (8%) per annum from November 2, 2012.
(Appellants’ App. Vol. II at 25.) Appellants argue the trial court made a “sua
sponte ruling on these issues during the bench trial that effectively dismissed
Appellee’s [sic] claims for unpaid taxes and union dues.” (Br. of Appellants at
18.) However, Appellants do not indicate the location in the record in which it
alleges the trial court made this statement; thus the issue is waived for failure to
make a cogent argument by neglecting to cite to “parts of the Record of Appeal
relied on.” Ind. Appellate Rule 46(A)(8)(a). See Nealy v. American Family Mut.
Ins. Co., 910 N.E.2d 842, 845 n.2 (Ind. Ct. App. 2009) (on appeal “we will not
search the record to find a basis for a party’s argument”), trans. denied; and see
Thacker v. Wentzel, 797 N.E.2d 342, 345 (Ind. Ct. App. 2003) (failure to present
cogent argument results in waiver of issue on appeal).
Amount of Damages 3
[16] The trial court awarded Interior the following damages for various claims:
a. Interior is awarded $166,446.43 in compensatory damages
from [V.P.] for unpaid state and federal tax withholdings and
3
Appellants also argue the trial court sua sponte made a statement during trial that precluded it from piercing
the corporate veil and holding Steven personally liable for damages due to Interior. However, Appellants
have not cited case law to support this contention, and thus it is waived for failure to make a cogent
argument. See Young v. Butts, 685 N.E.2d 147, 151 (Ind. Ct. App. 1997) (“We demand cogent argument
supported with adequate citation to authority because it promotes impartiality in the appellate tribunal.”); see
also App. R. 46(A)(8)(a) (Argument section of appellant’s brief must “contain the contentions of the appellant
on the issues presented, supported by cogent reasoning. Each contention must be supported by citations to
the authorities, statutes, and the Appendix or parts of the Record on Appeal relied on[.]”).
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union dues, plus court costs and prejudgment interest at the rate
of eight percent (8%) per annum from November 28, 2012.
[V.P.’s] obligation to pay this award shall be offset by [Julie’s]. . .
obligation to cover and pay Interior 40% of the back taxes, i.e.,
$40,865.72, plus court costs and prejudgment interest at the rate
of eight percent (8%) per annum from November 2, 2012.
b. Interior is awarded $40,062.54 in compensatory damages
from [V.P.] for unpaid fees earned on eight construction projects
in 2012, plus court costs and prejudgment interest at the rate of
eight percent (8%) per annum from October 25, 2012.
c. Interior is awarded $30,800.00 in compensatory and punitive
damages from Julie [] for her willful breach of fiduciary duty and
tortious interference with Interior’s prospective advantage, plus
court costs and prejudgment interest at the rate of eight percent
(8%) per annum from November 5, 2012.
d. Interior is awarded $92,400.00 in statutory treble damages,
$25,225.25 in reasonable attorney’s fees and $395.77 in costs
from Julie . . . under Ind. Code § 34-24-3-1 for her intentional
conversion of Interior’s mechanic’s liens.
(Appellants’ App. Vol. II at 25.) Appellants argue Appellees did not present
evidence to support the trial court’s computation of damages and that the
damage amounts were a windfall for Appellees.
[17] Appellants’ arguments are invitations for us to reweigh the evidence and judge
the credibility of witnesses, which we cannot do. See Samples, 12 N.E.2d at 950
(appellate court will not reweigh evidence or judge the credibility of witnesses).
Geisler testified she owed, as owner of Interior, $96,179.53 in back taxes to the
Internal Revenue Service; $5,984.78 to the Indiana Department of Revenue;
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and $64,282.20 in unpaid union dues. (See Tr. Vol. II at 15-16.) Those
amounts total $166,446.43, which is the amount the trial court awarded.
Giesler testified to the amounts she believed Interior was owed for the eight
projects, an amount which totaled $40,062.54, which also matches the amount
the trial court awarded. Additionally, the trial court admitted copies of the
mechanic’s liens that were fraudulently waived by Julie, which totaled
$30,800.00 - the amount awarded for Julie’s torts. Finally, it was within the
trial court’s discretion to award prejudgment interest on all of the amounts. 4
See Hayes v. Chapman, 894 N.E.2d 1047, 1054 (Ind. Ct. App. 2008)
(prejudgment interest may be awarded where the amount of damages can be
ascertained by simple mathematical computation), trans. denied.
Conclusion
[18] The trial court did not err when it ordered Appellants to pay various damages
to Appellees. Those arguments not waived by Appellants are impermissible
requests for our court to reweigh evidence and judge the credibility of witnesses.
Accordingly, we affirm.
[19] Affirmed.
4
Appellants challenge the trial court’s award of attorney’s fees in their reply brief. As an argument cannot be
advanced for the first time in a reply brief, the issue is waived. See Crossmann Communities, Inc. v. Dean, 767
N.E.2d 1035, 1044 (Ind. Ct. App. 2002) (issues raised for the first time in a reply brief are waived); and see
Ind. Appellate Rule 46(C) (“No new issues shall be raised in the reply brief.”).
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Mathias, J., concurs
Riley, J., dissent with separate opinion.
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IN THE
COURT OF APPEALS OF INDIANA
V.P. Construction Co, Inc., Court of Appeals Case No.
Steven Rilenge, and Julie 49A02-1712-CC-2851
Rilenge,
Appellants,
(Defendant/Counterclaim-Plaintiffs
and Third-Party Plaintiff below),
v.
Interior Renovation & Design,
Inc. and Patricia A. Geisler,
Appellees,
(Plaintiff/Counterclaim-Defendant and
Third-Party Defendant below)
Riley, Judge, dissenting.
[20] I respectfully dissent from the majority’s determination to consider the
Appellants’ claims on the merits. The crux of the Appellee’s action at trial was
for the recovery of damages for breach of contract with respect to unpaid and
underpaid projects. The bulk of the Appellants’ brief focuses on whether the
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liens were valid instead of discussing why the trial court’s award of damages
was erroneous. Consequently, I find the Appellants’ argument on the validity
of the liens is not of material assistance in determining whether the trial court’s
judgment on damages was erroneous. Pursuant to Indiana Appellate Rule
46(A)(8)(a), the argument section of an appellant’s brief should “contain the
contentions of the appellant on the issues presented, supported by cogent
reasoning. Each contention must be supported by citations to the authorities,
statutes, and the Appendix or parts of the Record on Appeal relied on . . . .”
[21] This court has previously stated:
We demand cogent argument supported with adequate citation
to authority because it promotes impartiality in the appellate
tribunal. A court which must search the record and make up its
own arguments because a party has not adequately presented
them runs the risk of becoming an advocate rather than an
adjudicator. A brief should not only present the issues to be
decided on appeal, but it should be of material assistance to the
court in deciding those issues. On review, we will not search the
record to find a basis for a party’s argument . . . nor will we
search the authorities cited by a party in order to find legal
support for its position.
Young v. Butts, 685 N.E.2d 147, 151 (Ind. Ct. App. 1997) (internal citations
omitted). Although its prefered to dispose of cases on their merits, where an
appellant fails to substantially comply with the appellate rules, then dismissal of
the appeal is warranted. Hughes v. King, 808 N.E.2d 146, 147 (Ind. Ct. App.
2004). This court has discretion to dismiss an appeal for the appellant’s failure
to comply with the Rules of Appellate Procedure. See Miller v. Hague Ins.
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Agency, Inc., 871 N.E.2d 406, 407 (Ind. Ct. App. 2007) (“Although we will
exercise our discretion to reach the merits when violations are comparatively
minor, if the parties commit flagrant violations of the Rules of Appellate
Procedure we will hold issues waived, or dismiss the appeal.”), reh’g denied.
[22] Here, I find that the Appellants have failed to advance their arguments with
cogent reasoning on the issue of whether the trial court’s judgement with
respect to damages was erroneous, and I find that addressing Appellants claims
on the merits would require this court to make and advance arguments for
them. See Basic v. Amouri, 58 N.E.3d 980, 984 (Ind. Ct. App. 2016).
Accordingly, I would dismiss this appeal for the foregoing reasons.
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