Aaron Coates v. Valeo Financial Advisors, LLC (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 Mar 26 2018, 8:56 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 ATTORNEYS FOR APPELLEE
Christopher J. Spataro Andrew W. Hull
Elizabeth A. Klesmith Evan D. Carr
Tuesley Hall Konopa LLP Hoover Hull Turner LLP
South Bend, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Aaron Coates, March 26, 2018
Appellant-Defendant, Court of Appeals Case No.
49A04-1710-PL-2464
v. Appeal from the Marion Superior
Court
Valeo Financial Advisors, LLC, The Honorable Heather A. Welch,
Appellee-Plaintiff. Special Judge
Trial Court Cause No.
49D01-1505-PL-15418
Najam, Judge.
Statement of the Case
[1] Aaron Coates appeals the trial court’s entry of summary judgment in favor of
Valeo Financial Advisors, LLC (“Valeo”) on Valeo’s complaint alleging breach
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of contract, breach of fiduciary duty, and account stated. Coates presents a
single issue for our review, namely, whether the trial court erred when it
entered summary judgment in favor of Valeo. We affirm.
Facts and Procedural History
[2] On September 15, 2009, Coates began employment as a financial planner with
Valeo, a financial advisory firm, and Coates signed an employment agreement
(“the agreement”). The agreement provided in relevant part as follows:
10. Covenants Against Solicitation and Interference
(a) Non-Solicitation. During the Restricted Period (as defined
below), Employee will not, directly or indirectly, (i) solicit, either
for himself or on behalf of others, any of the Company’s Clients
or prospective Clients; . . . (iii) divert or attempt to divert any
business of the Company to a Competitor; (iv) interfere in any
manner with the business or operations then being conducted by
the Company. . . .
(b) Definitions. For purposes of this Section 10 . . . the following
terms have the following meanings:
(i) Restricted Period. “Restricted Period” means the
period of time during Employee’s employment with
the Company and a period of twenty-four (24)
months from the effective date of termination of his
employment with the Company. In the event of a
breach of this Agreement by Employee, the
Restricted Period will be extended automatically by
the period of the breach.
***
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(iv) Clients. “Clients” means any person or entity for
whom the Company performed services for within
the preceding twenty-four (24) month period with or
without direct remuneration to the Company . . . .
***
12. Clients.
***
(b) Employee Lead Service Clients. In the event of Employee’s
termination of employment with the Company, Employee may
remove certain Employee Lead Service Clients from the
Restrictive Covenants. To remove an Employee Lead Service
Client from the Restrictive Covenants, Employee must pay a
“removal fee” to the Company calculated as of the effective date
of Employee’s termination. . . .
Appellant’s App. Vol. II at 63-65. In 2010, Valeo distributed to employees an
updated version of the agreement, which included no substantive changes to its
terms.
[3] Near the end of December 2014, Coates terminated his employment with
Valeo. And on December 29, Coates “delivered to Valeo” letters from six of
Valeo’s clients stating that each of them “wish[ed] to terminate [the client’s]
advisory relationship with Valeo . . . effective 12/29/2014.” Id. at 129. All six
clients were “subject to the removal fee” provision of the agreement. Id. at 24.
Accordingly, on January 15, 2015, Valeo sent Coates an account reconciliation
setting out the removal fee Coates owed Valeo for each client. The aggregate
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amount of the six removal fees was $37,476.96. Coates did not pay Valeo, but
he also did not expressly object to the stated amount of the removal fees.
[4] On May 8, Valeo filed a complaint against Coates alleging breach of contract,
breach of fiduciary duty, and an account stated claim. Coates timely filed his
answer. On May 1, 2017, Valeo moved for summary judgment on all three
claims, and Coates, pro se, filed a memorandum in opposition to summary
judgment. In his memorandum, Coates made two contentions: that a question
of fact exists regarding whether he was an employee or independent contractor;
and that “[s]ummary judgment is inappropriate in any matter where each party
contends the other party breached a contract.” Appellant’s App. Vol. II at 238.
Following a hearing, the trial court entered summary judgment in favor of
Valeo. This appeal ensued.
Discussion and Decision
[5] Our standard of review for summary judgment appeals is well established:
We review summary judgment de novo, applying the same
standard as the trial court: “Drawing all reasonable inferences in
favor of . . . the non-moving parties, summary judgment is
appropriate ‘if the designated evidentiary matter shows 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.’” Williams v.
Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
fact is ‘material’ if its resolution would affect the outcome of the
case, and an issue is ‘genuine’ if a trier of fact is required to
resolve the parties’ differing accounts of the truth, or if the
undisputed material facts support conflicting reasonable
inferences.” Id. (internal citations omitted).
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The initial burden is on the summary-judgment movant to
“demonstrate[] the absence of any genuine issue of fact as to a
determinative issue,” at which point the burden shifts to the non-
movant to “come forward with contrary evidence” showing an
issue for the trier of fact. Id. at 761-62 (internal quotation marks
and substitution omitted). And “[a]lthough the non-moving
party has the burden on appeal of persuading us that the grant of
summary judgment was erroneous, we carefully assess the trial
court’s decision to ensure that he was not improperly denied his
day in court.” McSwane v. Bloomington Hosp. & Healthcare Sys.,
916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks
omitted).
Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (alterations original to
Hughley). We may affirm an entry of summary judgment on any theory
supported by the designated evidence. Alva Elec., Inc. v. Evansville-Vanderburgh
Sch. Corp., 7 N.E.3d 263, 267 (Ind. 2014).
[6] It is well settled that issues not raised before the trial court on summary
judgment cannot be argued for the first time on appeal and are waived.
Dunaway v. Allstate Ins. Co., 813 N.E.2d 376, 387 (Ind. Ct. App. 2004). Here, in
his memorandum in opposition to summary judgment, Coates’ argument
consisted of the following two contentions: that summary judgment is
“inappropriate when a fact specific question of an employee or independent
contractor relationship exists that weighs on claims of statutory relief”; and that
“[s]ummary judgment is inappropriate in any matter where each party contends
the other party breached a contract.” Appellant’s App. Vol. II at 238. And
Coates concluded his memorandum as follows:
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All Counts of Valeo’s Complaint and Motion turn on the
existence of a valid contract, and Coates’ performance
thereunder. Therefore, in light of clear case precedent,
Defendant Coates is confident that Plaintiff’s Motion for
Summary Judgment is not appropriate for all three Counts, and
therefore sees no justification in further burdening the Court by
addressing each of Valeo’s claims in its Motion.
Id. at 239.
[7] On appeal, Coates abandons the arguments he made to the trial court and
asserts entirely new arguments, including his contention that genuine issues of
material fact exist to preclude summary judgment on each of Valeo’s claims.1
Coates’ primary contention on appeal is that the trial court “had sufficient
designated evidence at its disposal to deny Plaintiff’s Motion for Summary
Judgment.”2 Appellant’s Br. at 20. But because Coates’ appeal rests on
arguments he did not make to the trial court and because he did not direct the
trial court to the designated evidence he now asserts establishes genuine issues
of material fact, he has waived his arguments on appeal. See Dunaway, 813
1
For instance, Coates contends for the first time on appeal that the agreement is void. We reject Coates’
assertion that he argued this issue in his memorandum in opposition to summary judgment. While Coates
quoted from his answer regarding his contention that he was not an “employee,” nothing in his
memorandum in opposition to summary judgment resembles a cogent argument on the issue of whether the
agreement is void.
2
Coates relies heavily on the fact that he designated his answer as evidence in opposition to summary
judgment. But it is well settled that, once a summary judgment movant designates evidence to establish a
prima facie case, the non-movant “may not rest upon the mere allegations or denials of his pleading.” T.R.
56(E) (emphasis added). Rather, “his response, by affidavits or as otherwise provided in this rule, must set
forth specific facts showing that there is a genuine issue for trial.” Id.; see also Hughley, 15 N.E.3d at 1004.
Because Coates did not set forth specific facts to the trial court showing that there was a genuine issue for
trial by any evidence other than his answer, he did not meet his burden under Trial Rule 56(E).
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N.E.2d at 387; see also McGill v. Ling, 801 N.E.2d 678, 688 (Ind. Ct. App. 2004)
(rejecting summary judgment nonmovant’s argument that issue raised for first
time on appeal not waived where there were “facts in the summary judgment
record to support [her] argument”), trans. denied.
[8] Waiver notwithstanding, we agree with the trial court that Valeo designated
evidence to establish a prima facie case for breach of contract, breach of fiduciary
duty, and account stated.3 At that point, the burden shifted to Coates to
designate to the court each material issue of fact which he maintained
precluded entry of summary judgment and the evidence relevant thereto. T.R.
56(C). Coates did not satisfy his burden, and the trial court did not err when it
entered summary judgment in favor of Valeo.
[9] Affirmed.
Mathias, J., and Barnes, J., concur.
3
Valeo’s designated evidence in support of summary judgment included the affidavit of Gregory Fulk, Chief
Operating Officer of Valeo. In his affidavit, Fulk stated that Coates “solicited and diverted” each of the six
Valeo clients in contravention of the agreement. Appellant’s App. Vol. II at 101. Coates made no objection
to the admission of that affidavit to the trial court. Accordingly, to the extent Coates now contends that Fulk
was without personal knowledge that Coates solicited or diverted the clients, he has waived that issue for our
review. Paramo v. Edwards, 563 N.E.2d 595, 600 (Ind. 1990) (noting a complaining party has a duty to direct
the trial court’s attention to a defective affidavit, and failure to raise an objection constitutes waiver).
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