LaDonna Snyder, as Personal Representative of the Estate of Alan Lance Wright v. Alisa K. Wright and BioConvergence LLC (mem. dec.)

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Dec 18 2019, 8:54 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEES
Mark J. Roberts Clifford R. Whitehead
Maggie L. Smith Evansville, Indiana
Jeffrey S. Dible
Jenai M. Brackett
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
LaDonna Snyder, as Personal December 18, 2019
Representative of the Estate of Court of Appeals Case No.
Alan Lance Wright, 18A-PL-2702
Appellant-Defendant, Appeal from the
Boone County Circuit Court
v. The Honorable
J. Jeffrey Edens, Judge
Alisa K. Wright and Trial Court Cause No.
BioConvergence LLC, 06C01-1703-PL-239
Appellees-Plaintiffs.
Altice, Judge.
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Case Summary
[1] Alisa K. Wright’s (Alisa) marriage to Alan Lance Wright (Lance), now
deceased, was dissolved in January 2017 in the Boone Superior Court. As part
of the dissolution, matters were alleged and presented concerning Lance’s
conduct while employed with BioConvergence LLC (BioC) – a company that
Alisa formed in 2004 – and whether such conduct constituted dissipation of
assets for purposes of division of the marital estate. In September 2016, shortly
before the dissolution final hearing, Alisa filed in another court a complaint,
later amended to add BioC as a plaintiff, asserting eight claims against Lance
stemming from his employment with BioC and his position on the board of
directors, including breach of fiduciary duty, breach of contract, tortious
interference with business relationships, and misappropriation of trade secrets.
About a year after the dissolution was final, Lance filed a motion for summary
judgment asserting that the claims had been fully adjudicated by the dissolution
court and were barred by res judicata. The trial court denied his motion, and
the personal representative of Lance’s estate, 1 LaDonna Snyder (Snyder), now
appeals asserting that summary judgment should have been granted because the
dissolution court already resolved the matters involving Lance’s conduct related
to BioC.
[2] We affirm.
1
Lance passed away in January 2019.
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Facts & Procedural History
[3] Alisa and Lance married in 1987, after graduating from college, where Alisa
studied pharmacy and Lance studied engineering. There were no children born
of the marriage. Alisa and Lance each had careers at different businesses, then,
in 2004, Alisa formed and began working at BioC, a service provider to the life
sciences industry that provides contract services, including development,
production, testing, supply chain, and consulting services, to the
pharmaceutical industry. BioC is headquartered in Bloomington, Indiana, and,
as reflected in its 2005 Articles of Incorporation, its initial members were Alisa,
Lance, and two other individuals. Lance began working part-time for BioC in
2004 and began serving on the Board of Directors and Board of Advisors in
2005. In 2006, he left employment with another company and joined BioC full-
time, where he remained until he was terminated in August 2012. Lance was,
at first, Chief Engineering Officer at BioC, and, in 2008, he became Chief
Operating Officer. Alisa at all times has been the majority member and Chief
Executive Officer of BioC. At the time of their dissolution, Alisa owned
approximately 75% and Lance owned approximately 5% of BioC’s total units.
[4] In August 2012, Lance filed a petition for dissolution in the Boone Superior
Court. In the dissolution proceedings, Alisa claimed that Lance had dissipated
marital assets, including BioC, by engaging in misconduct that harmed both
Alisa and BioC. During the dissolution proceeding, in August 2014, BioC’s
four-person Board of Directors consented to allowing the Board’s Chairperson,
Kathy Jackson, to intervene in the dissolution on behalf of BioC to protect the
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confidentiality of certain requested documents. In September 2016, the
dissolution court held a six-day final hearing. Alisa testified and presented
evidence in support of her position that Lance had dissipated assets of BioC by
committing “deceit, willful misconduct, negligence, and fraud,” in “violation of
the operating agreement and his duties as an officer and member” and engaged
in the “concealment of key . . . information that is needed to make good
business decisions and that he knew were needed to make good business
decisions.” Appellant’s Appendix Vol. III at 5. More specifically, Alisa testified
that Lance concealed meetings he had with other BioC employees regarding
Alisa and BioC; concealed communications relating to the valuation of BioC
and securities fraud claims; engaged in an extramarital affair with a BioC
employee; assisted in and provided information to another BioC employee for
suit against Alisa and BioC; made false and defamatory statements about Alisa;
took emails containing BioC information when leaving employment at BioC;
and disclosed confidential information to third-parties.
[5] In January 2017, the dissolution court issued findings and conclusions in which
it determined that a 50/50 split of the marital estate was appropriate. Its
findings and conclusions included:
8. Between 2005 and November of 2008, Lance and Alisa paid
into BioC a total of approximately $3,260,000.00 of combined
capital contribution in exchange for units in November 2005 and
November 2008. Units were allocated as to give Alisa
approximately 75% and Lance approximately 5% of the total
units of BioC.
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***
13. Alisa advances two theories about Lance and his work at
BioC. One, he was incompetent. 2 Two, he was deceitful. 3 For
2
In its findings, the dissolution court footnoted as follows:
A spouse’s dereliction of business duties when a business entity is an asset of the marriage
constitutes dissipation. Stutz v. Stutz, 556 N.E.2d 1346, 1349 (Ind. Ct. App. 1990).
As the principle is suggested to apply here, Lance supposedly dropped the ball on the
filing of a timely warranty claim for architectural windows installed by his friend Greg
Menefee’s company for [a] custom building. Sixteen windows in the BioC building had
to be replaced. Lance probably could have handled that project better, but there is no
showing that that shortcoming materially impacted the company’s value or profitability.
Then there is the fact that Lance’s job functions after he left BioC were taken over by
other employees — he was not replaced. The Court heard testimony from those taking
on his responsibilities tantamount to that there were messes that had to be cleaned up
after Lance left. Employees who have followed Lance may truly think that. But it rings
hollow to the Court. Lance worked for BioC for more than six years. If he was
incompetent enough to have harmed BioC’s business, he’d have been fired long before.
Lance’s work was adequate. It was satisfactory enough at least to not harm BioC’s
business or the wealth of the parties.
Appellant’s Appendix Vol. II at 57.
3
Here, the dissolution court footnoted:
When considering dissipation and whether a party wasted or misused marital assets, Indiana law
requires this Court to consider whether the allegedly dissipating party had the intent to hide, deplete,
or divert a marital asset; whether supposedly wasteful expenditures, acts or omissions benefitted the
mar[ital] enterprise or occurred for a purpose entirely unrelated to the marriage; whether the waste
was remote in time and effect or occurred just before the filing of a divorce petition; and whether the
diminishment was excessive or de minimis.” Estudillo v. Estudillo, 956 N.E.2d 1084, 1094 (Ind. Ct.
App. 2011).
There was some suboptimal behavior at BioC from late 2011-2012. By late 2011, the Wright[s’]
marriage was unraveling. Lance was considering leaving the home and in April 2012 indicated that
he would disengage from BioC. Yet these two had to continue to work together. It could not have
been a pleasant time and Lance is credible in his claims that Alisa was not doing her best managerial
work. But if Lance, not the boss but the COO reporting to Alisa, ever had license to critique her job
performance as CEO it was decidedly not soon after a certain admitted “error in judgment” on his
part. Lance wasn’t his best self either.
No paramour ever financially benefited to the detriment of the marital estate or BioC. Lance did
not dissipate. The only other point in bringing it up is to explain why the Court does not find
credible Lance’s version that Alisa was wrecking the company. Alisa did the best she could and she
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either or both of these reasons, generally a theory of dissipation,
Lance ought to receive a share of the marital estate of less than
fifty percent, so she theorizes. While he does not call for an
unequal distribution, Lance, for his part, suggests that Alisa was
managing the company poorly and that he and his acolytes
working there saved it.
14. But, at least insofar as harming BioC and diminishing the
marital estate, the Court finds that any mistakes Lance made
during his six plus years working at BioC did not do that. Any of
Lance’s dishonesty or surreptitious office politicking, while
personally hurtful to Alisa, did not financially harm her or BioC.
15. Alisa and a human resources employee met with Lance on
August 9, 2012 to inform him that his last day at BioC was to be
August 31, 2012. In that meeting, Lance was told not to return
to BioC until the following Monday. Lance disobeyed that
instruction and, along with two other employees, visited BioC on
Saturday August 11, 2012. Further, Lance returned alone to
BioC on Sunday, August 12, 2012. Lance admits he retrieved
some emails and financial records of BioC but says that he was
entitled to do that and that many items retrieved were personal in
nature. It is suspicious that he would come into the office on the
weekend when specifically told not to and then collect material.
But again the Court has not been shown how this disobedience
harmed the value of BioC. As for his right as a minority owner
to review financial records, Lance certainly had the right to look
at financial records of a business in which he was a minority
was being productive. She may have been focused on the external aspects of BioC’s business,
finding new clients and diversifying business, but that is [a] big part of what a CEO does. Any
notion that Alisa’s job performance as CEO harmed BioC is just not supported by the facts. BioC is
today a profitable going concern mainly because of Alisa’s vision in starting the company and
because of her leadership.
Id. at 57-58.
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owner. But taking them out was not the proper way to go about
exercising that right.
***
18. When Lance left, the value of the business, as will be
discussed in more detail below, was about $1.5 million. BioC is
Alisa’s creation. Of the $3.2 million that Alisa and Lance
invested during its start-up phase, most of which was money
Alisa brought into the marriage, more than half of that was gone
in 2012. In evaluating whether something other than a 50/50
division of wealth is appropriate, as of 2012 the parties’ relative
contribution to the marital estate is an equitable wash. Put
another way, from 1987-2005, Alisa has made most of the money
the Wrights earned. From 2005-2012, she lost most of what they
lost.
***
24. Alisa’s interest of 58,381.624 units 74.88% of BioC is worth
$1,403,706.00. Lance’s 4,223.81 units 5.42% is worth
$101,604.00. The total value to the marital estate of the Wrights’
interest in BioC of 62,605.433 units 80.3% of the controlling units
of BioC is $1,505,310.00. Each unit Lance and Alisa own is
worth $24.05.
Appellant’s Appendix Vol. II at 56-60.
[6] During the hearing, the dissolution court heard evidence about a transfer of
$100,000 in 2011 and 2012 from Lance and Alisa to their friends Greg and Julie
Menefee, who also owned units of BioC. The Menefees asked the Wrights for
the $100,000 because Greg needed to increase his liquid assets on his personal
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balance sheet in order for him to be able to be bonded in the construction
industry. Ultimately, the Wrights wrote eight checks to the Menefees for the
funds, and there was conflicting testimony presented at the dissolution final
hearing as to whether the $100,000 was a loan or a gift, with Lance maintaining
that the two couples had helped each other out in the past and he intended to
give the money to the Menefees, and Alisa testifying that the $100,000 was a
short term loan that she intended would be repaid. The dissolution court found
that the eight checks were “a business accommodation,” not gifts, and it further
stated:
55. What Alisa has is a personal asset; a chose in action which is a claim
to a right to recover money from the Menefees. Maybe it is a loan.
Maybe it is equitable claim for unjust enrichment. Whatever kind
of expected (hoped for) repayment chose of action it is, it is not part of the
marital estate and it is not capable of division. McNevin v. McNevin,
447 N.E.2d 611, 615 (Ind. Ct. App. 1983). Neffle v. Neffle, 483 N.E.2d
767, 771 (Ind. Ct. App. 1985), trans. denied. “The contingent and
speculative nature and value of a chose in action is what makes it
incapable of division and hence excluded from marital property.”
Id. at 771-72.
56. Whatever Alisa is able to recover in her lawsuit against the
Menefees, if indeed she is able recover anything, she is entitled to
keep. This Court has nothing to say about its value and who it
ought to be set off to, because it is not marital property. It is too
speculative.
57. . . . [I]f Lance took a position identical to Alisa’s – that there
was always the understanding that the Menefees would pay back
the money within a short period of time – the claim against the
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Menefees would still be only a chose in action and not marital asset
subject to division. . . .
Id. at 65-66 (emphases added).
[7] Alisa appealed the dissolution court’s decision, raising various challenges, and
this court issued a memorandum decision on September 28, 2017, affirming the
trial court’s equal division of marital property. Wright v. Wright, No. 06A01-
1701-DR-52 (Ind. Ct. App. Sept. 28, 2017), trans. denied. In addressing Alisa’s
claim that the court’s division was erroneous because of Lance’s alleged
dissipation stemming from his conduct at BioC, the Wright court stated:
Wife asserts that Husband’s “obvious and heinous breaches of
his fiduciary obligations resulted in dissipation of the marital
estate, and specifically [Wife]’s share of it.” Appellant’s Br. at
20. In support of that contention, Wife first maintains that there
was “sufficient evidence” of Husband’s dissipation, such as
testimony that he “worked with others to increase the expenses
and risk to BioC,” he “breached certain fiduciary duties,” and his
“actions introduced uncertainty into BioC’s operations.”
Appellant’s Br. at 20. But the trial court expressly found that
“any mistakes [Husband] made during his six-plus years working
at BioC” did not harm BioC or diminish the value of the marital
property. Appellant’s App. Vol. 2 at 56. We will not reweigh
that evidence on appeal.
Wright, slip op. at *9.
[8] Meanwhile, on September 2, 2016, which was shortly before the dissolution
trial began, Alisa filed in the Monroe Circuit Court a complaint against Lance,
which Alisa amended in August 2017 to add BioC as a party plaintiff and
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additional claims. 4 As is relevant here, the Amended Complaint alleged the
following facts common to all counts:
14. While acting as a member, director, and/or officer of BioC,
Mr. Wright engaged in the following deliberate and repeated
willful mismanagement and misconduct, and he individually and
deliberately directed and persuaded others to do the same by his
use of deceit to conceal and deny the truth of the relevant
matters:
a. He knowingly, intentionally, and deliberately concealed from
BioC and from Ms. Wright, and by deceit he persuaded others to
conceal from BioC and from Ms. Wright, factual information
that he was obligated to disclose to BioC and to Ms. Wright.
b. Over the course of several years while married to Alisa, he
knowingly, intentionally, and deliberately engaged in a lengthy
extramarital affair with another BioC employee, and while
engaged in this affair he improperly advanced her career, her
financial goals, and her personal goals within BioC, he
improperly gave her access to confidential BioC information, and
he caused BioC to enter into a loan agreement with her on
improperly favorable terms.
c. When confronted about his extramarital affair, he falsely
denied the existence of the affair and continued to knowingly,
intentionally, and deliberately conceal and distract from the affair
by defaming Ms. Wright.
4
In February 2017, the Monroe Circuit Court court granted Lance’s petition to transfer venue, and the case
was transferred to the Boone Circuit Court.
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d. He knowingly, intentionally, and deliberately collaborated
with, provided confidential information and documents to, and
assistance to, BioC’s former chief financial officer, Kathryn Eddy
(“Ms. Eddy”) for use by Ms. Eddy in her lawsuit against BioC
and Ms. Wright, and he actively colluded with Ms. Eddy, her
agents, and other third-parties, in advancing meritless claims
asserted by Ms. Eddy against BioC and Ms. Wright.
e. He knowingly, intentionally, and deliberately made false and
defamatory statements to third-parties, including BioC
employees and members, accusing Ms. Wright of having
significantly failing physical and mental health, in order to
undermine her leadership of BioC and to trigger a provision in
BioC’s operating agreement that could give him control of the
company if Ms. Wright were incapacitated.
f. He knowingly, intentionally, and deliberately concealed from
BioC and from Ms. Wright that he, Ms. Eddy, and other BioC
employees were conducting secret on-site and off-site meetings in
hopes of building support for a plan to reorganize BioC and strip
Ms. Wright of her BioC ownership, and her authority to lead
BioC, in favor of Mr. Wright.
g. He knowingly, intentionally, and deliberately concealed from
Ms. Wright and from BioC secret communications among
himself, Ms. Eddy, and BioC’s accounting firm that were
material to the valuation of BioC and to alleged securities fraud
claims.
h. He knowingly, intentionally, and deliberately improperly
forwarded and removed from BioC’s computer system numerous
e-mail messages containing confidential and proprietary
information, as well as trade secrets.
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i. He knowingly, intentionally, and deliberately improperly
removed property from BioC upon his departure from the
company.
Appellant’s Appendix Vol. III at 77-79. Alisa and BioC asserted eight claims
against Lance: Count I, Breaches of Fiduciary Duty; Count II, Breach of
Contract; Count III, Tortious Interference with Business Relationship; Count
IV, Misappropriation of Trade Secrets; Count V, Computer Tampering; Count
VI, Conversion; Count VII, Criminal Mischief; and Count VIII, Defamation.
[9] On January 15, 2018, Lance filed a Motion for Summary Judgment on the
Amended Complaint. His motion asserted that res judicata – both claim
preclusion and issue preclusion – barred Alisa’s and BioC’s claims, arguing that
“the claims and issues in . . . the Amended Complaint all arise from the same
acts of Lance’s alleged misconduct [that were] litigated in the Dissolution
Proceeding.” Id. at 7. Lance argued that the dissolution court heard
considerable testimony and evidence on Alisa’s dissipation claim related to
Lance’s conduct and determined that BioC was not harmed, and thus their
“attempt to relitigate the same issues and claims that were already adjudicated”
was precluded by res judicata. Id. at 2. Lance urged that Alisa’s own appeal
from the dissolution court’s decision illustrated his point – that the same claims
she makes in her Amended Complaint had already been decided against her –
because she argued in her appellant’s brief that Lance’s “obvious and heinous
breaches of his fiduciary obligations resulted in dissipation of the marital estate,
and specifically Alisa’s share of it” and that it was “unjust for Lance to
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improperly benefit from activities that undermined Alisa and BioC[.]” Id. at 6.
Lance acknowledged that BioC was not a party in the dissolution proceeding,
but maintained that BioC “is in privity with Alisa and its interests were
involved and litigated in the Dissolution Proceeding” such that “BioC is also
bound by such judgment.” Id. at 3.
[10] Alisa and BioC filed their Plaintiffs’ Response in Opposition to Lance’s
Motion, arguing, inter alia, that (1) the claims against Lance asserted in the
Amended Complaint were choses in action, and the dissolution court made its
intention clear that the parties’ choses in action were not part of the marital
estate and that its dissolution decree should not bind non-parties; (2) res
judicata was not applicable, as neither the claims nor the issues were expressly
adjudicated in the prior dissolution proceeding, highlighting that the dissolution
court did not determine any of the necessary elements of the causes of action,
and, while it found that Lance did not dissipate marital assets, it did not
determine whether Lance was liable for the claims as asserted in the Amended
Complaint; and (3) as to Lance’s claim that Alisa was in privity with BioC,
“Alisa was never in privity with BioC, as her interests were solely for her
personal benefit (i.e., acquire a larger share of the marital estate) and were never
aligned with BioC’s interest in the pending claims (i.e., obtain a monetary
judgment), which could never have been achieved in the dissolution
proceeding.” Id. at 177. Alisa and BioC also urged that material facts were in
dispute and precluded summary judgment for Lance.
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[11] Following a July 2018 hearing, the trial court issued an order on September 4,
2018, denying Lance’s motion. It stated, in part:
Generally, Lance argues that res judicata, under both issue
preclusion and claim preclusion, bars Alisa from bringing this
matter. Further, Lance argues BioC is barred from bringing this
claim because it is a privy to Alisa.
At issue is whether or not [the dissolution court]’s finding, that
Lance did not dissipate the value of BioC, is sufficient to
determine this separate action as a matter of law based on similar
facts but under a different context.
The Court finds that, although the issues were similar; the specific
issues in play in this matter, as to both plaintiffs, could not have been
fully determined by the dissolution Court.
Accordingly, the Court finds that res judicata does not bar Alisa
from bringing this matter.
Further, even if BioC was privy to Alisa, for reasons stated above
res judicata does not bar it from bringing this matter.
Appellant’s Appendix Vol. II at 23 (emphasis added). The trial court certified its
order for interlocutory appeal, and we accepted jurisdiction.
Discussion & Decision
[12] Snyder contends that the trial court should have granted Lance’s motion for
summary judgment. When reviewing the entry or denial of summary judgment,
our standard of review is the same as that of the trial court: summary judgment
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is appropriate only where there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. Hilliard v. Jacobs, 957
N.E.2d 1043, 1046 (Ind. Ct. App. 2011) (citing Ind. Trial Rule 56(C)), trans.
denied, cert. denied 568 U.S. 998 (2012). The reviewing court construes all
factual inferences in the non-moving party’s favor and resolves all doubts as to
the existence of a material issue against the moving party. Einhorn v. Johnson,
996 N.E.2d 823, 828 (Ind. Ct. App. 2013), trans. denied.
[13] Snyder argues that Alisa and BioC are trying to re-assert “the same matters in
new litigation in front of a different judge” by “assigning new names and labels
to [the] claims” and that res judicata prevents them from doing so because the
matter was fully adjudicated in the dissolution action. Appellant’s Brief at 5.
“Res judicata, whether in the form of claim preclusion or issue preclusion (also
called collateral estoppel), aims to prevent repetitious litigation of disputes that
are essentially the same, by holding a prior final judgment binding against both
the original parties and their privies.” Webb v. Yeager, 52 N.E.3d 30, 40 (Ind.
Ct. App. 2016), trans. denied.
a. Claim Preclusion
[14] Snyder argues that Alisa and BioC’s “overarching allegation” in the Amended
Complaint is that Lance, while acting as member, director, and/or officer of
BioC, engaged in “deliberate and repeated willful mismanagement and
misconduct, and he individually and deliberately directed and persuaded others
to do the same by his use and deceit to conceal and deny the truth” and that the
dissolution court already “rejected every single one of Alisa’s claims of
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misconduct related to BioC” when it concluded “that Lance did not engage in
dissipation of any BioC assets[.]” Appellant’s Brief at 12, 25, 30. Snyder urges
that Plaintiffs cannot “relitigate what amounts to substantially the same claims
that were litigated in the Dissolution Proceeding[.]” Id. at 25.
[15] Claim preclusion bars litigation of a claim after a final judgment has been
rendered in a prior action involving the same claim between the same parties or
their privies. Thrasher, Buschmann, & Voelkel, P.C. v. Adpoint, Inc., 24 N.E.3d
487, 494 (Ind. Ct. App. 2015); MicroVote Gen. Corp. v. Ind. Election Com’n, 924
N.E.2d 184, 191 (Ind. Ct. App. 2010). Four requirements must be met for a
claim to be prohibited under the doctrine of claim preclusion: (1) the former
judgment must have been rendered by a court of competent jurisdiction; (2) the
former judgment must have been rendered on the merits; (3) the matter now in
issue was, or could have been, determined in the prior action; and (4) the
controversy adjudicated in the former action must have been between the
parties to the present suit or their privies. MicroVote, 924 N.E.2d at 191. Snyder
maintains that all four of the claim preclusion requirements have been met. We
disagree.
[16] Even if there was considerable testimony and evidence presented to the
dissolution court in support of Alisa’s contentions that Lance committed
misconduct in various ways, we cannot say that the dissolution court addressed
the material elements of the Amended Complaint’s legal claims or rendered
judgment on the merits on each of them. For instance, it did not expressly
determine if Lance breached a fiduciary duty, if an employment or
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confidentiality contract existed or if he breached it, whether he breached the
operating agreement, whether BioC had certain business relationships with
other companies or individuals and whether Lance interfered with those,
whether he defamed Alisa, or whether he committed criminal mischief or
computer tampering. Although Alisa raised similar allegations and presented
evidence concerning aspects of Lance’s conduct at BioC – in the course of
asserting that Lance dissipated assets – this fact does not preclude her or BioC
from filing a lawsuit to recover a money judgment. An overlap in some
evidence does not equate to a full adjudication on the merits. Furthermore, in
their Amended Complaint, Alisa and BioC seek compensatory damages,
punitive damages, and treble damages; none of these remedies were available to
either of them in the dissolution proceeding.
[17] As to the requirements of jurisdiction and privity, the record reflects that the
dissolution court expressly stated in its order that it was not determining or
affecting any non-party’s rights, other than as to discovery. In that same vein,
in a dissolution discovery order, the court stated:
When persons to whom one is not married, however, are
believed to have committed legal wrongs, the court where one
seeks to hold those others “accountable” is not a divorce court.
This court in this case ‘has neither the authority nor responsibility
to hold persons outside of this marriage “accountable” to either
Ms. or Mr. Wright.
Persons besides Mr. and Mrs. Wright, though not parties to this
case, may be potential witnesses. This court’s jurisdiction to hold
anyone “accountable,” other than Mr. and Mrs. Wright, is
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limited to the authority to compel non-parties to disclose
information relevant to this divorce; to produce evidence they
possess and to testify as to what they have seen or heard.
Appellant’s Appendix Vol. III at 244 (emphases in original).
[18] Here, we reject Snyder’s suggestion that Alisa was in privity with BioC and
represented BioC’s interests. The term privity describes the relationship
between persons who are parties to an action and those who are not parties to
an action but whose interests in the action are such that they may nevertheless
be bound by the judgment in that action. MicroVote, 924 N.E.2d at 196. “The
term includes those who control an action, though not a party to it, and those
whose interests are represented by a party to the action.” Id. While Snyder
maintains that Alisa controlled BioC and thus represented its interests, Alisa
and BioC dispute that assertion, arguing that, at a minimum, a question of fact
exists on the issue because, at the time of the dissolution proceedings, BioC was
controlled by its four-member Board, whose chairperson was Kathy Jackson.
Alisa and BioC point out that the Board authorized Jackson to intervene on
BioC’s behalf for the protection of BioC’s confidential information, and there
would have been no need for Jackson to intervene if Alisa was already
representing or protecting BioC’s interests. BioC had no opportunity to litigate
or conduct discovery in the dissolution action related to the claims presented in
the Amended Complaint, and we conclude that Alisa was not in privity with
BioC in the dissolution action.
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[19] We find that the four prongs of claim preclusion were not met and, accordingly,
the trial court properly denied Lance’s motion for summary judgment on this
basis.
b. Issue Preclusion
[20] “The second branch of the principle of res judicata is issue preclusion, also
known as collateral estoppel.” Freels v. Koches, 94 N.E.3d 339, 342 (Ind. Ct.
App. 2018). In general, issue preclusion prohibits 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. Id. The doctrine applies even if
the second adjudication is on a different claim. Id. However, issue preclusion
does not extend to matters that were not expressly adjudicated and can be
inferred only by argument. Id.
[21] Where, as here, a defendant seeks to prevent a plaintiff from asserting a claim
that the plaintiff has previously litigated and lost, the use has been termed
“defensive” collateral estoppel. Thrasher, 24 N.E.3d at 494. There are three
requirements for the doctrine of collateral estoppel to apply: (1) a final
judgment on the merits in a court of competent jurisdiction; (2) identity of the
issues; and (3) the party to be estopped was a party or the privity of a party in
the prior action. Id. Two additional considerations are relevant in deciding
whether collateral estoppel is appropriate: whether the party against whom the
prior judgment is asserted had a full and fair opportunity to litigate the issue
and whether it would be otherwise unfair under the circumstances to permit the
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use of issue preclusion. Sims v. Scopelitis, 797 N.E.2d 348, 351 (Ind. Ct. App.
2003), trans. denied.
[22] Snyder argues that issue preclusion applies to bar Alisa and BioC’s current
claims because “[t]he ‘issue’ of whether Lance’s (alleged) misconduct caused
Alisa or BioC harm is identical in both this lawsuit and the dissolution
proceeding[,]” and the dissolution court “expressly resolved that very issue
against Alisa/BioC.” Appellant’s Brief at 42.
[23] While Snyder suggests that the already-decided issue was whether Alisa or
BioC were harmed by Lance’s conduct, we find that description frames the
issue too broadly. Alisa alleged and sought to prove that Lance dissipated
marital assets and to a degree that the presumptive equal division was rebutted.
The dissolution court did not determine whether, under the various legal claims
now advanced in the Amended Complaint, Lance caused any damage or was
liable to Alisa and BioC for damages, and if so, in what amount. That is, while
the dissolution court determined that Lance’s conduct did not constitute
dissipation, i.e., the marital estate was not harmed to an extent that the equal
division had been rebutted, it did not determine whether Lance was legally
liable to Alisa to any degree for his actions. Moreover, as stated, BioC was not
a party to the prior action nor did Alisa represent BioC’s full interests, and BioC
did not have a full and fair opportunity to litigate the claims it now makes.
Issue preclusion does not bar either Alisa or BioC from proceeding on their
Amended Complaint.
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[24] Accordingly, we find that the trial court properly denied Lance’s motion for
summary judgment. 5
[25] Judgment affirmed.
Brown, J. and Tavitas, J., concur.
5
Alisa and BioC maintain that Lance’s summary judgment motion was properly denied, not only because
the requirements of claim preclusion and issue preclusion were not met, but also pursuant to McNevin v.
McNevin, 447 N.E.2d 611 (Ind. Ct. App. 1983), where a former wife (Nancy) brought a personal injury claim
against her former husband (Robert) to recover damages for Robert’s alleged assault on Nancy prior to
dissolution. The trial court dismissed Nancy’s complaint for personal injuries finding that her tort claim was
or should have been considered in the property settlement. On appeal, this court reversed, and in so doing
found that Nancy’s personal injury claim was a chose in action that “fails to qualify as marital property
because it was not susceptible to division at the time of dissolution” as “any attempt at valuation would be
based on pure speculation[.]” Id. at 616, 618. Alisa and BioC urge that McNevin is dispositive to the present
situation and establishes that Alisa’s current claims are choses in action and were not part of the marital
estate (and not now barred by res judicata); Snyder argues that McNevin is inapplicable and distinguishable
because, in that case, the parties submitted a settlement agreement in the dissolution and had not already
fully litigated matters, as he claims occurred in the present case. Because we find that summary judgment
was properly denied because Snyder failed to satisfy the necessary requirements of res judicata, we do not
reach the parties’ McNevin arguments.
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