Arnie Cook v. Greeno Insurance, Inc., and Carl Greeno, Jr. ( 2012 )

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 FILED
Aug 23 2012, 8:21 am
establishing the defense of res judicata,
collateral estoppel, or the law of the
case. CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE
GREENO INSURANCE, INC.:
JOSHUA E. LEICHT
Kokomo, Indiana THOMAS J. TRAURING
Kokomo, Indiana
IN THE
COURT OF APPEALS OF INDIANA
ARNIE COOK, )
)
Appellant, )
)
vs. ) No. 34A02-1203-PL-199
)
GREENO INSURANCE, INC., and )
CARL GREENO, JR., )
)
Appellees. )
APPEAL FROM THE HOWARD SUPERIOR COURT
The Honorable George A. Hopkins, Judge
Cause No. 34D04-0907-PL-800
August 23, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
DARDEN, Senior Judge
STATEMENT OF THE CASE
Arnie Cook appeals the trial court’s grant of summary judgment in favor of
Greeno Insurance, Inc. (“GII”) in Cook’s action against GII and Carl Greeno, Jr.
(“Greeno”).1
We affirm.
ISSUE
Whether the trial court erred in granting GII’s motion for summary
judgment.
FACTS
Cook’s action against GII is inextricably linked with his relationship to his former
employer, Consolidated Roofing, Inc. (“Consolidated”), which was owned by Janis and
Kenneth Devlin. This relationship was the subject of a former appeal, which was
resolved in an unpublished memorandum decision. See Cook v. Consolidated Roofing,
Inc., No. 34A02-1104-CC-339 (Ind. Ct. App. Jan. 11, 2012). In our memorandum
decision, we stated the following:
Cook had been in the roofing business for many years in the Howard
County area and was the president and majority shareholder (Cook owned
80% of the corporation) in a corporation named A C Roofing, Inc. . . .
In 2003, Cook approached Janis and Kenneth Devlin about selling his
business to the couple, who were already involved in a roofing supply
company. . . . The Devlins eventually decided to purchase the company,
and they entered into lengthy negotiations with Cook. The negotiations
1
The trial court’s summary judgment order referred solely to GII, not to Greeno. Greeno was not a party
to the motion for summary judgment filed by GII and does not participate in this appeal.
2
resulted in the execution of two contracts on October 22, 2004, a real and
personal asset purchase agreement (purchase agreement) and an
employment contract. . . .
Pursuant to the employment contract, Consolidated agreed to employ Cook
as a manager and consultant on roofing issues for the term of five years,
commencing on November 1, 2004 and terminating on October 31, 2009.
This short, two-page agreement further provided in part:
Time
The Employee shall devote his entire time and attention to the
business of the Employer for the term of this contract. The
Employee shall not directly or indirectly render any services
of a business or commercial nature to any other person or
organization without the prior written consent of the
Employer.
****
Effect of Termination on Compensation
If this contract is terminated prior to completion of the term
of employment specified in this contract, the Employee shall
be entitled to compensation earned prior to the date of
termination as provided for in this contract computed pro rata
up to and including the date. The Employee shall be entitled
to no further compensation as of the date of termination.
Retirement
The parties agree that Employer shall provide a retirement
plan to Employee as shall be agreed upon by the parties and
at a minimum shall include health insurance and reasonable
compensation.
Cook worked for Consolidated for over a year as the primary spokesman
and marketing person for A C Roofing, also doing business as Arnie Cook
Exteriors. Although the Devlins were pleased with his performance, they
eventually began hearing rumors from others. For example, people told
them that Cook was talking about “taking his company back.” This was
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followed by suspicious behavior, such as indications that Cook had cut
three hidden holes in the drywall in an attempt to spy into Janis Devlin’s
office.
On March 2, 2006, Consolidated suspended Cook with pay. Consolidated’s
attorney notified Cook that during the indefinite suspension Cook was not
to conduct any business on behalf of the company and was not authorized
to purchase any material or attend any trade group meetings. . . .
Beginning in May 2006 and continuing through the spring of 2007, Cook’s
legal counsel [made certain demands of Consolidated]. Cook also sought to
establish the provisions of his retirement plan.
After about a year of paid suspension, Cook began investigating
establishing a roofing business with his son in at least one other area of
Indiana. As part of his activities while suspended, on March 27, 2007, he
purchased a commercial general liability policy in the name of Cook &
Cook, Inc. During his suspension, he also contacted two of Consolidated’s
roofing suppliers and obtained quotations for roofing supplies from at least
one of them. Further, after having business cards printed, he traveled to the
New Albany area and talked with contractors and building owners to try to
“drum up some business.” According to Cook, nothing came of these
business attempts and he did no roofing jobs.
Though Janis Devlin had heard that Cook was doing roofing jobs while on
paid suspension, she did not act upon these rumors until evidence of the
commercial general liability policy surfaced.2 At that point, Consolidated’s
legal counsel sent a letter to Cook, dated July 31, 2007, terminating his
employment for breach of the employment agreement.
On August 1, 2007, Cook filed a complaint against Consolidated . . .
[seeking] an order for retirement benefits, health insurance, and profit
sharing . . . .
Slip Op. at 1-3 (citations omitted).
2
The designated evidence is unclear, but the evidence was a certificate of insurance purchased from
Greeno, a GII employee, and apparently sent by Greeno to Cook at A C Roofing or Arnie Cook Exteriors.
4
In the aforementioned appeal, Cook contended that he was not terminated for
cause, as required by his employment contract. We held that his activities in violation of
his contract “provided Consolidation with ample cause for his termination.” Id. at 4.
In the appeal, Cook also contended that the trial court erred in determining that he
was not entitled to retirement benefits following his termination for cause. We disagreed,
holding that there was “simply no language in the employment agreement to support
Cook’s self-serving interpretation of the contract.” Id. at 5. We noted, “Having not
completed his five-year commitment to Consolidated, Cook was not entitled to retirement
benefits.” Id.
Here, Cook filed a complaint against GII and Greeno, alleging that GII and
Greeno intentionally interfered with his business relationship with Consolidated by
“providing false and/or confidential information [in the form of a certificate of insurance]
to [Consolidated].” (App. 8). Cook also maintained that Greeno breached his fiduciary
duty with Cook “by providing information [in the form of a certificate of insurance] to
[Consolidated] on or about July 23, 2007, without [Cook’s] consent.” (App. 8-9). Cook
alleged that he suffered damages “as a result of the intentional tortious interference with
the business relationship and breach of fiduciary duty.” (App. 9). Cook reasoned that
GII was liable for Greeno’s acts under the doctrine of respondeat superior.3
3
Under the doctrine of respondeat superior, an employer is vicariously liable for the wrongful or tortious
acts of its employees that were committed within the course and scope of their employment. Barnett v.
Clark, 889 N.E.2d 281, 283 (Ind. 2008).
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GII filed a motion for summary judgment, arguing that as a matter of law Cook
was barred by the doctrine of collateral estoppel from bringing an action for interference
with the business relationship and for damages due to termination of Cook’s contract
with Consolidated. GII also alleged that Greeno provided any false information about
Cook’s insurance coverage to Consolidated while acting alone and that there was no
genuine issue of material fact showing that Greeno acted within the course or scope of his
employment in doing so.
In granting summary judgment, the trial court specifically adopted proposed
conclusions of law filed by GII. These conclusions of law are identical to the claims
made in GII’s motion for summary judgment.
DECISION
Summary judgment is appropriate if there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. City of Terre Haute v.
Pairsh, 883 N.E.2d 1203, 1206 (Ind. Ct. App. 2008), trans. denied. When reviewing
entry of summary judgment, we stand in the shoes of the trial court. Koppin v. State, 761
N.E.2d 455, 460 (Ind. Ct. App. 2002), trans. denied. The moving party bears the burden
of showing that there are no genuine issues of material fact and that it is entitled to
judgment as a matter of law. Boston v. GYN, Ltd., 785 N.E.2d 1187, 1190 (Ind. Ct. App.
2003), trans. denied. We review only the designated evidentiary material in the record,
construing that evidence liberally in favor of the nonmoving party so as not to deny that
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party its day in court. Myers v. Irving Materials, 780 N.E.2d 1226, 1228 (Ind. Ct. App.
2003).
In reviewing a trial court’s ruling on a motion for summary judgment, we may
affirm on any grounds supported by the Indiana Trial Rule 56 materials. Catt v. Bd. of
Commr’s of Knox Cnty., 779 N.E.2d 1, 3 (Ind. 2002). The entry of specific conclusions
of law does not alter the nature of a summary judgment, which is a judgment entered
when there are no genuine issues of material fact to be resolved. Rice v. Strunk, 670
N.E.2d 1280, 1283 (Ind. 1996). In the summary judgment context, we are not bound by
the trial court’s specific conclusions. Id. They merely aid our review by providing us
with a statement of reasons for the trial court’s actions. Id.Cook alleges that the trial court erred in granting summary judgment because the
undisputed facts establish that GII is liable under the doctrine of respondeat superior for
actions by Greeno that constitute either (1) tortious interference with a contractual
relationship; (2) tortious interference with a business relationship; and/or (2) breach of a
fiduciary relationship.
In order to establish tortious interference with a contract, Cook is required to
show: (1) the existence of a valid and enforceable contract; (2) GII’s knowledge of the
existence of a contract; (3) GII’s intentional inducement of breach of the contract; (4) the
absence of justification; and (5) damages resulting from GII’s wrongful inducement of
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the breach. See Ind. Regional Recycling, Inc. v. Belmont Indus., Inc., 957 N.E.2d 1279,
1287 (Ind. Ct. App. 2011), trans. denied.
GII argues that Cook’s tortious interference with a contract claim is barred under
the doctrine of collateral estoppel. “Issue preclusion, or collateral estoppel, bars the
subsequent litigation of a fact or issue that was necessarily adjudicated in a former
lawsuit if the same fact or issue is presented in the subsequent lawsuit.” Edwards v.
State, 862 N.E.2d 1254, 1259 (Ind. Ct. App. 2007), trans. denied. Where collateral
estoppel is applicable, “the former adjudication will be conclusive in the subsequent
action even if the two actions are on different claims.” Id. In determining whether
collateral estoppels applies, “the prime consideration is whether the party against whom
the prior judgment is pled had a full and fair opportunity to litigate the issue and whether
it would be otherwise unfair under the circumstances to permit the use of collateral
estoppel. Sullivan v. American Cas. Co. of Reading, Pa., 605 N.E.2d 134, 138 (Ind. Ct.
App. 1995), trans. denied.
Here, Cook is estopped from asserting that GII caused a breach of his contract
with Consolidated where we have previously determined that no breach existed.
Accordingly, the trial court did not err in deciding, as a matter of law, that GII cannot
prevail on its tortious interference with a contract claim.
In order to establish tortious interference with a business relationship, Cook is
required to show: (1) the existence of a valid relationship; (2) GII’s knowledge of the
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existence of the relationship; (3) GII’s intentional interference with the relationship; (4)
the absence of justification; and (5) damages resulting from GII’s wrongful interference
with the relationship. Levee v. Beeching, 729 N.E.2d 215, 220 (Ind. Ct. App. 2000). As
noted above, in the previous appeal concerning the circumstances of this case, we
affirmed the trial court’s finding that Cook was terminated by Consolidated for cause and
that no contracts had been breached by Consolidated.
Here, Cook alleges that the interference with a business relationship occurred
when GII, through Greeno’s action of informing Consolidated about the insurance
provided to Cook, (presumably by sending the certificate to either A[rnie] C[ook]
Roofing or Arnie Cook Exteriors), caused Consolidated to withdraw its offer of
retirement benefits to Cook. In Murat Temple Ass’n, Inc. v. Live Nation Worldwide, Inc.,
953 N.E.2d 1125,1132 (Ind. Ct. App. 2011), trans. denied, we held that “an action for
intentional interference with a business relationship arises where there is no contract
underlying the relationship.” Here, where Cook and Consolidated’s relationship was
governed by a contract, Cook’s interference with a business relationship claim, as a
matter of law, cannot stand.
With reference to his breach of a fiduciary relationship claim, Cook is required to
show (1) the existence of a fiduciary relationship; (2) breach of the duty owed by the
fiduciary to the beneficiary; and (3) harm to the beneficiary. York v. Fredrick, 947
N.E.2d 969, 978 (Ind. Ct. App. 2011), trans. denied. A confidential relationship exists
9
when confidence is reposed by one party in another with resulting superiority and
influence exercised by the other. Id.As we stated above, we stand in the shoes of the trial court when we review a
summary judgment motion. See Koppin, 761 N.E.2d at 460. In conducting our review,
we consider only the designated material in the record. Myers, 780 N.E.2d at 1228.
We note that the mere act of sending a certificate of insurance to a client is not a
breach of a fiduciary duty. To prove such a breach, Cook was required to designate
evidence showing that Greeno (1) knew he should not have sent the certificate to A C
Roofing or Arnie Cook Exteriors (2) knew that by sending the certificate to A C Roofing
or Arnie Cook Exteriors he was actually sending the certificate to Consolidated; and/or
(3) knew of the troubled relationship between Cook and Consolidated. Our review of the
record shows that Cook designated no facts to establish what Greeno knew when he sent
the certificate. Thus, Cook failed to designate evidence to establish a breach of duty by
Greeno. Because GII’s potential liability is premised upon a breach by its employee, and
no designated evidence establishes a breach, the trial court did not err in granting GII’s
summary judgment motion.
Affirmed.
KIRSCH, J., and BARTEAU, SR. J., concur.
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