Larry Hoover d/b/a Quality Electric, Inc. v. John Schuler (mem. dec.)

FILED
MEMORANDUM DECISION
Apr 02 2019, 9:46 am
Pursuant to Ind. Appellate Rule 65(D), CLERK
Indiana Supreme Court
this Memorandum Decision shall not be Court of Appeals
and Tax Court
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.
ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE
Larry C. Thrush Jay A. Rigdon
Wabash, Indiana Warsaw, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Larry Hoover d/b/a April 2, 2019
Quality Electric, Inc., Court of Appeals Case No.
18A-SC-2293
Appellant-Plaintiff,
Appeal from the Wabash Superior
v. Court
The Honorable Karen A. Springer,
John Schuler, Judge Pro Tempore
Trial Court Cause No.
Appellee-Defendant.
85D01-1806-SC-223
Friedlander, Senior Judge.
[1] Larry Hoover appeals the denial of his motion to correct error. This matter
stems from a small claims action Hoover initiated against John Schuler (“J.P.”)
to recover damages for alleged breach of contract, existence of an account
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1
stated, and unjust enrichment. Hoover presents three issues for review, which
we consolidate and restate as whether the trial court erred in denying his claim.
We affirm.
[2] The facts of this case are as follows. Hoover is the sole owner of Quality
Electric, Inc. (“Quality Electric”), an Indiana corporation with its principal
office located in Wabash, Indiana. Quality Electric provides heating, air
conditioning, electrical, and plumbing services.
[3] J.P. and his two sons, Mike and Scott Schuler, farmed together and also
operated Pro-Ag, LLC, a farm shop located in North Manchester, Indiana.
The farm shop was where all of the farm equipment was repaired and readied
for use on the farm.
[4] Scott Schuler is married to Hoover’s daughter. Hoover and J.P. have known
each other for at least thirty years.
[5] One afternoon, in 2012, J.P. was at the shop when a storm developed. The
wind blew a thirty-six-foot wide overhead door onto the shop’s roof, causing
substantial damage. That same day, Scott contacted a local crew to remove the
door and Quality Electric to perform electrical services. Quality Electric
employees completed the work in September 2012. In August 2013, Quality
Electric performed additional electrical services for the shop, specifically:
1
In Wabash County, small claims actions are filed in the Wabash Superior Court.
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“added more lighting to the shop and did some other . . . miscellaneous work[,]
adding receptacles and [a] switch.” Tr. Vol. II, p. 10.
[6] At some point, a conflict arose between J.P., Mike, and Scott because of “intra-
family disputes,” and on September 11, 2014, Scott sued Mike, J.P., and the
LLC in the Wabash Circuit Court. Appellant’s App. Vol. II, p. 5 (internal
quotations omitted). On March 18, 2015, the trial court appointed receivers.
[7] The parties eventually submitted to binding arbitration, which resulted in an
arbitration award issued on July 14, 2017. The arbitration panel found, among
other things, that the farm shop was located on J.P.’s land and was deemed
J.P.’s asset. The parties subsequently entered into a settlement agreement that
incorporated the arbitration award. The agreement was approved by the trial
court and ordered implemented on February 20, 2018.
[8] In August 2017, while the lawsuit was still pending and the matter was in
receivership, Hoover sent to the receivers the 2012 and 2013 invoices for the
work performed at the farm shop. The receivers declined to pay the invoices,
finding that the work predated the receivership. In their Thirtieth Report of
Receiver and Request for Compensation, the receivers reported the following to
the trial court regarding the invoices:
Both of these jobs were for work that occurred several years ago
and prior to the establishment of the Receivership. The
Receivers called Larry Hoover with Quality Electric to inquire
about these invoices. Larry indicated that the invoices were
indeed for work done on J.P.’s Farm Shop several years ago. He
said that at the time the work was done he thought that the shop
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was owned by Scott, since it adjoined Scott’s property. Larry
said he sometimes does not charge Scott for work he does for
him, and these two projects were some of those instances.
However, now that he is aware that J.P. owns this building, he
thought it was necessary to bill for these jobs.
Because this work occurred prior to the establishment of the
Receivership, the Receivers do not intend to pay these invoices
out of Receivership funds unless instructed to do so by the court
or unless all parties agree to this course of action. Furthermore,
these invoices were remitted to the Receiver after J.P.’s Shop was
returned to J.P. and removed from Receivership control. Thus,
without instruction from the court or agreement from the parties
to pay with Receivership funds, the Receivers intend to pass
these invoices along to J.P. and notify Quality Electric of this and
their stance that the invoices should be addressed to either
whomever ordered the work done or J.P., since he is the owner
of the building upon which the work was completed.
Exhibits Vol. III, p. 59.
[9] Hoover then sent the invoices to J.P. for payment. When the invoices went
unpaid, Hoover filed suit in small claims court in June 2018. A bench trial was
held on Hoover’s claim on July 13, 2018, at the conclusion of which the trial
court orally ruled in favor of J.P. On July 20, 2018, Hoover filed a motion to
correct error. On August 22, 2018, the court heard arguments on the motion
and entered its order denying the motion, which reads in pertinent part as
follows:
10. Hoover blames a former secretary for the almost five (5)
year delay to submit Plaintiff's Exhibit 1 [(the 2012 invoice)] and
the more than four (4) year delay to submit Plaintiff's Exhibit 2
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[(the 2013 invoice)]. Hoover claimed that a file had been “filed
without being billed” and was not discovered until “they asked
for a job to be done at one of the farms where they were going to
split the house meter from the farm operation meters.”
11. . . . Hoover offered no explanation as to why the
“misfiling” was not discovered when Quality Electric was asked
to perform the second job almost a year later. Hoover’s
explanation of why it took more than four years after the
completion of the second job to submit a bill for either of them
fell short.
12. A more plausible explanation became apparent when JP
admitted Defendant’s Exhibit B over Plaintiff’s hearsay
objection. Defendant’s Exhibit B is the Thirtieth Report of
Receiver and Request for Compensation . . . (“Receiver's
Report”). . . .
*****
22. This Court simply cannot conclude that Quality Electric is
entitled to recover its charges for the services and supplies
belatedly billed under the facts of this case. The Receiver’s
Report offers the most credible evidence as to why Hoover never
submitted the bills in question until August 31, 2017. The
totality of the circumstances lead [sic] this Court to believe that
the omission was an intentional act on Hoover’s part as opposed
to a mistake created by former office staff. The credible evidence
leads to the conclusion that Hoover never intended to bill for
those services until he learned that his son-in-law was divested of
any ownership interest in the Farm Shop Improvements by the
Arbitration Award. Quality Electric’s cries of unjust enrichment
fail to move this Court simply because it was J.P. instead of his
son/Hoover’s son-in-law who was awarded the Farm Shop
Improvements. This Court rejects Plaintiff’s contention that
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[Auffenberg v. Bd. of Trs. of Columbus Reg’l Hosp., 646 N.E.2d 328(Ind. Ct. App. 1995),] compels a judgment in favor of Quality
Electric. To the contrary, it compels a finding that J.P. met any
burden that he had under Plaintiff’s theory of an account stated
or unjust enrichment or something else.
Plaintiff’s Motion to Correct Errors filed July 20, 2018 is
hereby denied. Judgment remains entered in favor of the
Defendant and against the Plaintiff.
Appellant’s App. Vol. II, pp. 6, 9. This appeal followed.
[10] The issue is whether the trial court erred in denying Hoover’s claim. Hoover
specifically maintains the trial court erred in finding that there was no contract
between Hoover and J.P. and that J.P. “sustained his burden of proving that the
account stated was incorrect.” Appellant’s Br. p. 4. Hoover also contends the
trial court erred in denying his unjust enrichment claim.
[11] Judgments in small claims actions are “subject to review as prescribed by
relevant Indiana rules and statutes.” Trinity Homes, LLC v. Fang, 848 N.E.2d
1065, 1067 (Ind. 2006) (quoting Ind. Small Claims Rule 11(A)). Upon review
of claims tried by the bench without a jury, we shall not set aside the judgment
“unless clearly erroneous, and due regard shall be given to the opportunity of
the trial court to judge the credibility of the witnesses.” Ind. Trial Rule 52(A).
We define the clearly erroneous standard based upon whether the party is
appealing a negative or an adverse judgment. Garling v. Ind. Dept. of Nat.
Res., 766 N.E.2d 409 (Ind. Ct. App. 2002), trans. denied. Hoover had the burden
of proof at trial on his small claims action. A judgment entered against a party
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who bore the burden of proof at trial is a negative judgment. Id. On appeal, we
will not reverse a negative judgment unless it is contrary to law. LTL Truck
Serv., LLC v. Safeguard, Inc., 817 N.E.2d 664 (Ind. Ct. App. 2004). To determine
whether a judgment is contrary to law, we consider the evidence in the light
most favorable to the appellee, together with all the reasonable inferences to be
drawn therefrom. Id. The judgment will be reversed only if the evidence leads
to but one conclusion and the trial court reached the opposite conclusion. Id.Our 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.” Ind.
Small Claims Rule 8(A).
[12] An account stated is an agreement between the parties that all items of an
account and balance are correct, together with a promise, express or implied, to
pay the balance. Jackson v. Trancik, 953 N.E.2d 1087 (Ind. Ct. App. 2011). An
agreement that the balance is correct may be inferred from delivery of the
statement and the account debtor’s failure to object to the amount of the
statement within a reasonable amount of time. Auffenberg, 646 N.E.2d 328.
Failing to object to liability on an account until a suit is filed constitutes failure
to object to the account within a reasonable time and supports the inference of
an agreement that the account balance is correct. Id. Still, the general rule on
an account stated is that there must have been “prior dealings between the
parties, and after an examination of all the items by each of the parties, they
must have mutually agreed upon the items of the account, and that the balance
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struck is just and due from the party against whom it is stated.” Bottema v.
Hendricks Cty. Farm Bureau Co-op. Ass’n, Inc., 159 Ind. App. 175, 179, 306
N.E.2d 128, 130 (1974) (internal citations and quotations omitted). It is on this
latter basis that we find that Hoover cannot maintain an action against J.P. for
breach of contract or prevail on an account stated because he had no
contractual relationship with J.P. and was not in privity with him.
[13] The evidence simply does not support a finding that Hoover had a contractual
relationship with J.P., and there was no agreement with J.P. that the invoices
were correct or an express or implied promise from J.P. to pay the invoices.
According to the receivers’ report, Hoover told the receivers that at the time the
work was performed, he thought Scott owned the shop; sometimes Hoover
would not charge his son-in-law for work performed; the projects in question
were examples of work for which Hoover would not charge Scott; and Hoover
decided “it was necessary” to bill J.P. for the work only after he discovered that
J.P. owned the shop. Appellant’s App. Vol. II, p. 7. Hoover testified that Scott
contacted him and asked that the work be performed at the shop, that Hoover
“usually never . . . talked to [J.P.]” about work to be performed at the shop, and
that Hoover did not talk to J.P. about the work in question. Tr. Vol. II, p. 14.
Hoover did not send any invoices for the work until years later and did so only
after he found out that Scott did not own the shop. Scott testified that he was
“always the contact person for the day to day stuff and – and the repair work
just as [Hoover] said.” Id. at 23.
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[14] Indeed, Hoover also testified that he expected to be paid for the work he
performed at the shop; that “these [projects] would not be instances where I
would donate the money because it was part of the farming operation;” that he
“would never [donate his services] when . . . there was [sic] three different
people involved in the farming operation;” and that he failed to send invoices in
a timely manner because the paperwork was “misfiled.” Id. at 16, 17. The trial
court, however, disbelieved the testimony. See generally, McClendon v. State, 671
N.E.2d 486, 488 (Ind. Ct. App. 1996) (providing that the trier of fact is free
to believe or disbelieve witnesses as it sees fit). Based upon the foregoing, we
conclude the trial court did not err in finding no contractual relationship
between Hoover and J.P. and no existence of an account stated.
[15] Neither can Hoover recover damages based upon the theory of unjust
enrichment. Also called a quasi-contract, the claim “is a legal fiction invented
by the common-law courts in order to permit a recovery . . . where, in fact,
there is no contract, but where the circumstances are such that under the law of
natural and immutable justice there should be a recovery as though there had
been a promise.” Clark v. Peoples Sav. & Loan Ass’n, 221 Ind. 168, 171, 46
N.E.2d 681, 682 (1943). Our courts articulate three elements for these claims:
1) a benefit conferred upon another at the express or implied request of this
other party; 2) allowing the other party to retain the benefit without restitution
would be unjust; and 3) the plaintiff expected payment. Kelly v. Levandoski, 825
N.E.2d 850 (Ind. Ct. App. 2005), trans. denied. Put another way, “a plaintiff
must establish that a measurable benefit has been conferred on the defendant
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under such circumstances that the defendant’s retention of the benefit
without payment would be unjust. One who labors without an expectation of
payment cannot recover in quasi-contract.” Bayh v. Sonnenburg, 573 N.E.2d
398, 408 (Ind. 1991).
[16] Here, the evidence clearly shows that J.P. did not request the electrical services,
and Hoover did not expect payment for the work. Hoover sought payment
only after discovering that his son-in-law did not own the shop. As such, he
cannot recover on the theory of unjust enrichment.
[17] We find the trial court did not err when it denied Hoover’s claim. The
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judgment of the trial court is affirmed.
May, J., and Pyle, J., concur.
2
We decline to address J.P.’s counterclaim alleging the trial court erred in refusing to admit into evidence his
affidavit.
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