Tariq Qureshi and Mehnaz Qureshi v. Richard E. Coulter, Cox/Hammond Realty Group, and Darrell Cox ( 2013 )

Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
Apr 08 2013, 9:24 am
ATTORNEY FOR APPELLANTS:
DOUGLAS W. MEYER
Plainfield, Indiana
IN THE
COURT OF APPEALS OF INDIANA
TARIQ QURESHI AND
MEHNAZ QURESHI, )
)
Appellants-Plaintiffs, )
)
vs. ) No. 32A01-1211-SC-497
)
RICHARD E. COULTER, )
COX/HAMMOND REALTY GROUP, )
AND DARRELL COX, )
)
Appellees-Defendants. )
)
APPEAL FROM THE HENDRICKS SUPERIOR COURT
The Honorable Stephenie Lemay-Luken, Judge
Cause No. 32D05-1205-SC-1652
April 8, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
VAIDIK, Judge
Case Summary
When a real-estate deal fell through, potential buyers Tariq Qureshi and Mehnaz
Qureshi entered into a Mutual Release from Purchase Agreement, which entitled them to
a return of their $5000 earnest-money deposit. The $5000 check was made payable to the
seller’s real-estate agent, who cashed the check and never returned the money. The
Qureshis filed a small-claims action against the seller, the seller’s real-estate agent, and
his real-estate agency. The Qureshis now appeal the trial court’s judgment in favor of the
seller. Finding that the seller is not liable to the Qureshis for their earnest money, we
affirm the trial court.
Facts and Procedural History
Richard E. Coulter owned commercial real estate at 1620 E. Main Street in
Plainfield, Indiana. Coulter selected Darrell (Bill) Cox to serve as his real-estate agent;
Cox was associated with Cox/Hammond Realty Group. Tr. p. 27. Cox listed the
property for sale.
In April 2012, the Qureshis made an offer on the property that was subject to and
contingent upon a satisfactory inspection. Following an unsatisfactory inspection, the
Qureshis made a counter-offer, which was not timely accepted by Coulter. As a result of
the untimely counter-offer, on April 25, 2012, the parties entered into a “Mutual Release
From Purchase Agreement” that rescinded the original purchase agreement and provided
in pertinent part:
It is further agreed by all parties that the earnest money deposit of Five
Thousand and 00/100 ($5,000.00) shall be . . . returned to Buyers . . . .
2
Ex. 1 (formatting altered). The Release was signed by the Qureshis, Coulter, and Cox.
Id.
The Qureshis’ real-estate agent, Nina Mayberry, had personally handed the $5000
earnest-money check, which was made payable to “Cox/Hammond Realty,” Ex. 2, to Cox
when he came to her office to give her the initially accepted purchase agreement. The
check was then cashed on April 16, 2012. Id. After the Release was signed, Cox made
several promises to Mayberry that he would return the $5000, but he never did. Tr. p. 15-
16. Coulter also attempted to contact Cox to have him return the $5000, but he also was
unsuccessful. Id. at 26. The Qureshis have never received a refund of their $5000
earnest money.
The Qureshis filed a small-claims action against Coulter, Cox, and Cox/Hammond
Realty Group. Neither Cox nor anyone on behalf of Cox/Hammond Realty Group
appeared for trial. Accordingly, the court entered judgment in favor of the Qureshis and
against Cox and Cox/Hammond Realty Group in the amount of $5000 plus attorney fees
of $1000 and court costs of $92. However, the court entered judgment in favor of
Coulter and against the Qureshis because the Qureshis “submitted their earnest money
check at issue to Cox/Hammond Realty Group and Darrell W. Cox. Richard E. Coulter
at no time had possession of the earnest money check or the $5000 from the earnest
money check.” Appellant’s App. p. 5. The Qureshis filed a motion to correct error,
which the trial court denied. Id. at 10.
The Qureshis now appeal the judgment against them and in favor of Coulter.1
1
Neither Cox nor Cox/Hammond Realty Group appeals. On March 19, 2013, Cox filed a Notice
of Bankruptcy explaining that he filed for Chapter 13 bankruptcy on February 26, 2013. Because this
3
Discussion and Decision
As a preliminary matter, we note that Coulter has not filed an appellee’s brief.
Under that circumstance, we do not undertake to develop the appellee’s arguments.
Branham v. Varble, 952 N.E.2d 744, 746 (Ind. 2011). Rather, we will reverse upon an
appellant’s prima-facie showing of reversible error. Id.
Judgments in small-claims actions are “subject to review as prescribed by relevant
Indiana rules and statutes.” Ind. Small Claims Rule 11(A). Under Indiana Trial Rule
52(A), the clearly erroneous standard applies to appellate review of facts determined in a
bench trial with due regard given to the opportunity of the trial court to assess witness
credibility. Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1067 (Ind. 2006). This
“deferential standard of review is particularly important in small claims actions, where
trials are informal, with the sole objective of dispensing speedy justice between the
parties according to the rules of substantive law.” Id. at 1067-68 (quotation omitted).
But this deferential standard does not apply to the substantive rules of law, which are
reviewed de novo just as they are in appeals from a court of general jurisdiction. Id. at
1068.
The Qureshis argue that Coulter is liable for the $5000 under the doctrine of
respondeat superior. In support, the Qureshis cite a Seventh Circuit case applying
Indiana law, Tippecanoe Beverages, Inc. v. S.A. El Aguila Brewing Co., 833 F.2d 633
(7th Cir. 1987). In this case, the Seventh Circuit noted that although respondeat superior
appeal concerns the Qureshis’ claim against Coulter and does not concern Cox, we proceed to address the
merits of this appeal.
4
is more commonly used to impose liability on an employer for his employee’s torts, 2 it
can also be used to impose liability on a principal for torts “committed by an agent within
the scope of the agent’s actual or apparent authority.” Id. at 637. Here, the Qureshis
argue that Cox and Coulter had an agency relationship pursuant to Indiana Code chapter
25-34.1-10. Even assuming that Cox and Coulter had a statutory agency relationship,3
the Qureshis have failed to prove that Cox acted within the scope of his authority when
he kept the money following the execution of the “Mutual Release From Purchase
Agreement.” The Release, signed by Cox on April 25, 2012, clearly provides that the
earnest money “shall be returned” to the Qureshis. Mayberry personally handed the
$5000 earnest-money check, which was made payable to “Cox/Hammond Realty,” to
Cox. The check was then cashed on April 16, 2012. Coulter never saw the check or
received any of its proceeds. Several attempts were made to get the money back from
Cox, including by Coulter. Because Cox acted outside his authority by not returning the
money in accordance with the Release—which is a standard document used by realtors—
Coulter is not liable to the Qureshis under the doctrine of respondeat superior. 4 The
Qureshis have not established prima facie error. We therefore affirm the trial court.
2
Under the doctrine of respondeat superior, an employer, who is not liable because of his own
acts, can be held liable for the wrongful acts of his employee that are committed within the scope of
employment. Columbus Reg’l Hosp. v. Amburgey, 976 N.E.2d 709, 714 (Ind. Ct. App. 2012), reh’g
denied, trans. denied.
3
The Qureshis do not argue that Coulter and Cox had a common-law agency relationship. See
Demming v. Underwood, 943 N.E.2d 878 (Ind. Ct. App. 2011) (analyzing investor’s and realtor’s
relationship under both common-law agency and statutory agency), reh’g denied, trans. denied.
4
As for the Qureshis’ argument that Coulter is liable for the $5000 based on breach of contract,
we agree with the trial court that because Coulter neither possessed the check nor received any of the
proceeds, he is not liable on this basis.
5
Affirmed.
KIRSCH, J., and PYLE, J., concur.
6