Herman & Kittle Properties, Inc. v. G & G Construction Company of Indiana ( 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.
Dec 31 2013, 9:30 am
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
GREG A. BOUWER GERALD B. COLEMAN
Koransky, Bouwer and Poracky, P.C. Coleman Stevenson & Montel, LLP
Dyer, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
HERMAN & KITTLE PROPERTIES, INC., )
)
Appellant/Defendant, )
)
vs. ) No. 49A05-1304-PL-169
)
G & G CONSTRUCTION COMPANY OF )
INDIANA, )
)
Appellee/Plaintiff. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Thomas J. Carroll, Judge
Cause No. 49D06-1210-PL-40722
December 31, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
VAIDIK, Judge
Case Summary
This case arises from a contract for construction on residential property in Lake
County. A dispute arose between the contractor, Herman & Kittle Properties Inc.
(“Herman & Kittle”) and subcontractor on the project, G&G Construction Company of
Indiana (“G&G”). G&G filed a breach-of-contract claim against Herman & Kittle.
Herman & Kittle filed a motion to dismiss, alleging that it had signed the contract in an
agency capacity and thus could not be held personally liable under the contract. Herman
& Kittle also alleged that venue was improper. The trial court denied both of Herman &
Kittle’s motions. Because the express language of the contract indicates that Herman &
Kittle agreed to be personally bound by the contract—rather than simply in an agency
capacity—we affirm the trial court.
Facts and Procedural History
Merrillville Lakes, LLC (“Merrillville Lakes”) owns residential property in Lake
County. Herman & Kittle and G&G are both Indianapolis-based construction companies.
In 2009, G&G entered into a $900,000 contract with Merrillville Lakes and
Herman & Kittle to act as a subcontractor on the construction project and perform
carpentry services. On the title page of the contract, Herman & Kittle is named as
contractor. See Appellant’s App. p. 17. Underneath this designation is also the phrase
“agent for owner.” Id. G&G signed as subcontractor and Merrillville Lakes signed as
owner. Id. Throughout the contract, there are numerous references to the three distinct
parties—contractor, subcontractor, and owner—and the different rights and
responsibilities of each party.
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At some point, a dispute arose between Herman & Kittle and G&G, and in 2012,
G&G filed a breach-of-contract claim against Herman & Kittle in Marion Superior Court.
Merrillville Lakes was also named as a defendant. Herman & Kittle filed a motion to
dismiss and a motion to transfer venue. In its motion to dismiss, Herman & Kittle argued
that G&G entered into a contract with Merrillville Lakes only—Herman & Kittle alleged
that it signed the contract as Merrillville Lake’s agent and therefore was not personally
liable under the contract. Because Herman & Kittle alleged they were not personally
bound by the contract, they also asserted that venue in Marion County was improper. In
response, G&G argued that Herman & Kittle was personally bound and venue was
proper.
The trial court denied Herman & Kittle’s motions to dismiss and transfer venue.
Herman & Kittle now appeals.
Discussion and Decision
On appeal, Herman & Kittle contends that the trial court erred by denying its
motions to dismiss and transfer venue.
I. Motion to Dismiss
The standard of appellate review for motions to dismiss depends on whether the
trial court resolved disputed facts, and if so, whether there was an evidentiary hearing.
Wayne Cnty. Prop. Tax Assessment Bd. of Appeals v. United Ancient Order of Druids–
Grove No. 29, 847 N.E.2d 924, 926 (Ind. 2006). Where, as here, the trial court ruled on a
paper record, we review the motion to dismiss de novo. Id.3
In its motion to dismiss, Herman & Kittle argued that G&G entered into a contract
with Merrillville Lakes only—Herman & Kittle alleged that it signed the contract as
Merrillville Lake’s agent. Herman & Kittle claims it is not personally bound by the
contract because “where an agent discloses its principal . . . the agent is not personally
bound by the contract.” Appellant’s Br. p. 7 (citing Carlson Wagonlit Travel, Inc. v.
Moss, 788 N.E.2d 501, 503 (Ind. Ct. App. 2003)). But as G&G correctly notes, there is
an exception to that rule. Even if an agent discloses its principal, the agent may still be
bound by the contract if the agent agrees to be so bound. Carlson, 788 N.E.2d at 503
(citing Boesch v. Marilyn M. Jones & Assocs., 712 N.E.2d 1061, 1062 (Ind. Ct. App.
1999), trans. denied). An agent may agree to assume personal liability through express
language or custom, usage, and the prior course of dealings between the parties.
See McDonald v. Smart Prof’l Photo Copy Corp., 664 N.E.2d 761, 765 (Ind. Ct. App.
1996); Clark Adver. v. Avco Broad. Corp., 178 Ind. App. 451, 454, 383 N.E.2d 353, 355
(1978).
Here, the express language of the contract indicates that Herman & Kittle agreed
to be personally bound. The contract names and defines Merrillville Lakes and Herman
& Kittle individually, and Herman & Kittle is defined as contractor throughout the
contract. Although Herman & Kittle argues that we should read the term contractor to
“incorporate[] the phrase ‘agent for Owner’ throughout the entire agreement,”
Appellant’s Br. p. 8, we decline to do so. The contract defines and employs the terms
“owner” and “contractor” separately; there is nothing in the contract that indicates that
the terms are interchangeable. Rather, the contract defines their rights and
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responsibilities differently, and treats them as separate parties in a number of ways, such
as in requiring that both contractor and owner be named as additional insureds. See
Appellant’s App. p. 23.
The contract also gives Herman & Kittle a number of individual rights as
contractor that are separate and distinct from Merrillville Lakes.1 For example, Herman
& Kittle may also terminate the work—and thus, G&G’s services—on the project at any
time, for its convenience. Id. at 36. Subject to certain conditions, Herman & Kittle also
has the power to terminate the contract for cause. Id. at 34-35. Herman & Kittle also has
the right to recover attorney’s fees if G&G files an invalid or inappropriate
subcontractor’s lien, as well as damages if G&G defaults. Id. at 29-30. And the contract
also expressly recognizes Herman & Kittle’s right to indemnification and any other legal
or equitable claims arising from the contract. Id. at 32-37.
Because the express language of the contract indicates that Herman & Kittle
agreed to be personally bound—rather than simply in an agency capacity—the trial court
did not err in denying Herman & Kittle’s motion to dismiss.
II. Preferred Venue
Herman & Kittle also argue that the trial court erred by denying its motion to
transfer venue. We disagree.
We review the trial court’s order on a motion to transfer venue pursuant to Indiana
Trial Rule 75(A) under an abuse-of-discretion standard. Brower Corp. v. Brittain, 792
1
Herman & Kittle argues that “rights do not equal control,” and claims that Merrillville Lakes
has ultimate authority over the project. Appellant’s Reply Br. p. 4. Even if this is true, it does not negate
the fact that Herman & Kittle possesses a number of individual rights separate and distinct from
Merrillville Lakes, which shows Herman & Kittle’s agreement to be personally bound by the contract.
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N.E.2d 75, 77 (Ind. Ct. App. 2003) (citation omitted). An abuse of discretion occurs
when the trial court’s decision is clearly against the logic and effect of the facts and
circumstances before it, or if the trial court has misinterpreted the law. Id.Trial Rule 75(A) allows a case to be filed in any court in any county in Indiana.
When a party files a motion for preferred venue, the trial court must transfer the case to
the county selected by the moving party if the selected county is a county of preferred
venue and the county in which the action is filed is not a county of preferred venue. Id.However, if the suit is initially filed in a county of preferred venue, a transfer of venue
will not be granted. Id.Rule 75(A)(1) provides that preferred venue lies in “the county where the greater
percentage of individual defendants included in the complaint resides, or, if there is no
such greater percentage, the place where any individual defendant so named resides . . . .”
Ind. Trial Rule 75(A)(1). Because Herman & Kittle, one of two defendants in this case,
is based in Marion County and is personally bound by the contract, preferred venue lies
in Marion County. The trial court properly denied Herman & Kittle’s motion to transfer
venue.
Affirmed.
RILEY, J., and MAY, J., concur.
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