Larry Martin v. Gino Burelli (mem. dec.) ( 2018 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be
May 29 2018, 10:20 am
regarded as precedent or cited before any
court except for the purpose of establishing CLERK
Indiana Supreme Court
the defense of res judicata, collateral Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Kathleen A. DeLaney Russell T. Clarke, Jr.
Annavieve C. Conklin Emswiller Williams Noland &
DeLaney & DeLaney, LLC Clarke, P.C.
Indianapolis, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Larry Martin, May 29, 2018
Appellant, Court of Appeals Case No.
18A-MI-25
v. Appeal from the Porter Superior
Court
Gino Burelli, The Honorable Jeffrey W. Clymer,
Appellee. Judge
Trial Court Cause No.
64D02-1507-MI-6414
Barnes, Judge.
Case Summary
[1] Larry Martin appeals the trial court’s grant of a motion for preliminary
injunction to Gino Burelli. We remand.
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Issue
[2] Martin raises one issue, which we restate as whether the trial court properly
granted a motion for preliminary injunction to Burelli.
Facts
[3] Burelli, Dominico Idoni, and Kevin MacKay are owners of a rare Briggs
Cunningham Corvette that is valued at several million dollars. Burelli and
Idoni each owned thirty-five percent of the vehicle, and MacKay owned the
remaining thirty percent. The vehicle is currently located in Indiana.
[4] In June 2009, Martin obtained a judgment in Maryland against Idoni for
$250,600 plus ten percent interest per annum. In July 2015, Martin filed a
notice of filing a foreign judgment in Indiana and a praecipe for writ of
attachment and order for execution of the judgment. Martin alleged that Idoni
had a thirty-five percent ownership interest in the vehicle that was sufficient to
satisfy the judgment. The trial court entered a writ of attachment and order for
execution of the judgment and ordered the Porter County Sheriff’s Department
to seize the vehicle.
[5] Burelli filed a motion to intervene in the action, which the trial court granted.
Burelli also filed a motion to vacate the writ of attachment and order for
execution of judgment. Burelli alleged that he held an insurance policy on the
vehicle with Zurich Insurance and that a condition of the policy was that the
vehicle remain in Burelli’s care, custody, and control. Burelli requested that the
vehicle be returned to his possession to avoid cancellation of the insurance
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policy. Burelli also argued that the vehicle should not be sold because Idoni
owned only a minority interest in the vehicle. After a hearing, the trial court
ordered that the vehicle be returned to Burelli’s care “during the pendency of
this action or until further order of the Court.” Appellant’s App. Vol. II p. 79.
The trial court also found that a lien existed on the vehicle in the amount of
Martin’s judgment. Finally, the trial court ordered Burelli to provide a report to
Martin and the court on January 1, 2016, and quarterly after that date regarding
“[g]ood faith efforts to restore, market and sell such vehicle and report of
vehicle location.” Id. at 80. The trial court noted that Martin had the right to
apply for further relief if the vehicle was not sold by August 2017. Burelli filed
reports in January 2016, April 2016, July 2016, October 2016, January 2017,
and May 2017.
[6] On September 18, 2017, Martin filed a verified motion for proceedings
supplemental. He alleged that, with interest, he was now owed almost
$430,000 and that Idoni had not satisfied the judgment. He also asserted that
Burelli had filed late reports, failed to file a July 2017 report, failed to sell the
vehicle, and failed to satisfy the lien. Burelli responded by filing a “Verified
Motion for Temporary Restraining Order and Permanent Injunction.” Id. at
145. Burelli asserted in his motion that, in September 2017, Idoni conveyed his
interest in the vehicle to Burelli to satisfy a debt of more than $1,376,699 and
that Burelli now controlled seventy percent ownership of the vehicle. Martin
then filed a petition for contempt and sanctions against Burelli.
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[7] At a hearing on the motions, Burelli testified that he had retained a broker to
sell the vehicle and that he would like until August 2018 to complete a sale.
The broker also testified at the hearing. At the end of the hearing, the trial
court stated:
With respect to finding that the intervenor is in bad faith, the
Court makes these findings: The Court -- the car is currently in
the possession of either Top Flight Corvettes or Gino Burelli or
Harbor. It is currently insured. It’s insured through Zurich’s
policy with Harbor, so, therefore, as long as the car is still within
Harbor’s possession, it’s part of the overall Zurich floor plan
policy. One small concern that the Court has, which may
address premiums with Harbor, is that to some extent perhaps
the lienholders would be loss payees on this particular car, but I
don’t even know who it’s titled to. It’s titled to someone’s name
in Florida. But the Court makes these findings: That the car is
currently in possession of Harbor which is pursuant to the
August 7, 2015, order and the car is insured. The Court finds
that there were quarterly reports that were made, although they
were not made timely. The car is currently -- it appears to be safe
and the car is currently insured. It appears that there’s currently
a contract -- a brokerage contract with Mr. Goldsborough which
has a sliding scale. . . . The motion for bad faith and contempt is
denied. The -- what I would like to do is clean up the record in
such a way that it makes it easiest to sell the car because selling
the car and getting the most money for the sale of the car benefits
Mr. Goldsborough, benefits Mr. MacKay, benefits Mr. Burelli,
and whenever it’s sold, benefits the judgment, plaintiff, creditor.
And the sooner that that happens, the better, and the sooner it
benefits the judgment of the plaintiff.
To the extent that the Court has heard evidence that says that
that cloud that exists over the title, I don’t know if there’s
anything that the Court can do to clean up that cloud in that it
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appears right now that there are lienholders that are Larry
Martin, judgment creditor, Mr. MacKay, and Mr. Burelli as
some part owners of the vehicle. Given what Mr. Goldsborough
has said, that he would satisfy those liens including Mr. Martin’s
lien before making distributions ultimately to Mr. Burelli which
is the normal course of business with car assignment and car
liens. So I ruled on the motion regarding contempt.
I ruled on the affidavit and striking the affidavit. I’ve sort of half
ruled on the temporary restraining order. So what I want you to
do, Mr. Bush, is submit an order that grants in part the
temporary restraining order. What I want to do is I want to issue
an order so if somebody looked at the court file, they’ll see that
the title is as clean as can possibly be.
Now, to address some other additional issues: The Court is not
going to order that this be sold at the Barrett-Jackson auction in
January. The Court finds that the obligation to make quarterly
reports under the August 7, 2015, order continues to exist. The
car is to remain in the possession of Harbor insured by
Harbor/Top Flight Corvettes/Mr. Burelli until it’s sold. The
August 7, 2015, order said that the car should be sold. It did not
say what would happen if it was not sold. The Court’s convinced
given what I’ve heard today that a forced sale, whether it’s a
sheriff sale in Porter County or sale at Barrett-Jackson, would not
necessarily return the greatest amount of money although it
would return the soonest amount of money, and I don’t believe
that’s fair to Mr. Burelli.
*****
What they asked for -- you asked that this be sold at Barrett-
Jackson in Scottsdale in January. That request is denied. The
finding that they were held in contempt doesn’t satisfy the Trial
Rules. And -- however, the quarterly reports need to be filed on
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time. Mr. Martin’s interest is still protected through the Zurich
insurance policy. . . . The lien is going to remain in place and go
up by $68 every day at ten percent interest. Your client is going
to get more money the longer that it takes to sell. Your client’s
interest is protected by order of this Court. . . .
Tr. Vol. II pp. 95-100.
[8] The trial court then entered a written order as follows:
1. That the Court finds that the subject Corvette
automobile is currently in the possession of Intervenor
Gino P. Burelli, II (hereinafter referred to as “Burelli”),
and has been since the last Order of this Court, and is
housed, per the requirements of a certain Zurich Policy
of Insurance at the Harbor Automotive store located in
Portage, Indiana;
2. That Burelli shall continue to store, house and safe
keep the Corvette pursuant to all requirements of the
Zurich Insurance Policy, and shall maintain said
Zurich policy insuring the subject Corvette until said
vehicle is sold, or until further Order of this Court;
3. That Burelli currently has a brokerage contract with
Charles Goldsborough to sell said Corvette automobile;
that Charles Goldsborough has been made aware of,
and has acknowledged in open court, the judgment lien
of Judgment-Plaintiff Larry Martin (hereinafter referred
to as “Martin”);
4. That Martin’s Verified Motion for Proceedings
Supplemental should be and is hereby denied; that
Martin’s judgment shall continue to accrue interest at
the judgment interest rate set forth in the Judgment
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from the State of Maryland, Montgomery County,
Cause No. 111475-C of 10% per annum on the unpaid
judgment itself, until paid in full;
5. That Martin’s judgment lien in the subject Corvette
automobile is hereby confirmed by this Court, in the
principal sum of $250,600.00, with present interest
(November 30, 2017) in the amount of $185,449.29, for
a total current amount of $436,049.29, with interest
continuing to accrue at the rate of $68.61 per diem;
6. That Burelli’s Verified Motion for Temporary
Restraining Order and Permanent Injunction is
granted, in part, in that Martin is preliminarily
restrained and enjoined from any further attempt to
seek physical possession of the subject Corvette
automobile, or to have it sold at auction prior to
midnight, August 7, 2018;
7. That during the period of time from the date of this
Court Order until August 7, 2018, Burelli shall utilize
his best efforts to sell the subject Corvette either
individually, or through a broker, for the highest
possible price given the unique nature of said Corvette
automobile; that if said vehicle has not been sold and
Martin’s judgment lien satisfied, by said date, there will
be an auction of some type as determined by the Court;
8. That Burelli shall prepare and file quarterly reports,
concerning the efforts to sell and/or refurbish said
Corvette automobile from the date of this Order
through August 7, 2018, with the first quarterly report
due on or before December 31, 2017, and quarterly
thereafter until such time as the car is sold, or until
further Order of this Court; the Court finds that the
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quarterly reports required pursuant to prior Order of
this Court were not timely filed; Burelli is cautioned
that said reports must be filed timely or the Court may
entertain a motion for sanctions should he fail to do so;
9. That in the event the subject Corvette is sold, said funds
shall be held in escrow and disbursed by the broker or
other sales agent in the following priority:
a. the judgment lien of Martin shall first be satisfied
including interest up to the date of payment (the
broker or sales agent shall confirm the amount
through counsel for Martin and counsel for Burelli);
b. any brokerage or sales agent fee;
c. any amount remaining due Kevin J. Mackay
pursuant to the prior agreement between Kevin J.
Mackay and Burelli;
d. the remaining sum to be paid to Burelli;
10. That Burelli shall have the right to pay off Martin’s
judgment at any time, which payoff shall include
interest up to the date of payoff;
11. That Martin’s request for a finding of contempt and
bad faith against Burelli is denied[.]
Appellant’s App. Vol. II pp. 9-11. Martin now appeals.
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Analysis
[9] Martin is appealing the trial court’s order in the proceedings supplemental in
Martin’s attempts to collect a judgment against Idoni. “Just as equitable
principles are involved in proceedings supplemental as a remedy to creditors in
discovering assets in collection of their judgments, it is appropriate under these
specific circumstances for the trial court to exercise its equitable power here to
protect the interests of” third parties, such as garnishee defendants. Branham
Corp. v. Newland Res., LLC, 44 N.E.3d 1263, 1273 (Ind. Ct. App. 2015). “As a
general proposition, the trial court has full discretion to fashion equitable
remedies that are complete and fair to all parties involved.” Id. (quoting Swami,
Inc. v. Lee, 841 N.E.2d 1173, 1178 (Ind. Ct. App. 2006), trans. denied).
“Nonetheless, trial courts will not exercise equitable powers when an adequate
remedy at law exists.” Id. “Where necessary, equity has the power to pierce
rigid statutory rules to prevent injustice.” Id. “But if substantial justice can be
accomplished by following the law, and the parties’ actions are clearly governed
by rules of law, equity follows the law.” Id.
[10] Here, Burelli filed a motion for a preliminary injunction to delay a sheriff’s sale
of the vehicle. On appeal, Martin argues that the trial court erred by granting
Burelli’s motion for preliminary injunction. In general, to obtain a preliminary
injunction, the moving party must demonstrate by a preponderance of the
evidence: (1) a reasonable likelihood of success at trial; (2) the remedies at law
are inadequate; (3) the threatened injury to the movant outweighs the potential
harm to the nonmoving party from the granting of an injunction; and (4) the
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public interest would not be disserved by granting the requested injunction.
Cent. Indiana Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 727 (Ind. 2008). The
reasonable likelihood of success at trial factor appears to be inapplicable here
because we are dealing with proceedings supplemental, and there is no
argument that Martin’s lien is invalid. Injunctions in the context of proceedings
supplemental, although rare, are permissible. See, e.g., 13 Ind. Law Encyc.
Execution § 36 (“An injunction to prevent a party from making use of a writ of
execution will be granted where there is some recognized ground for equity to
interpose its power to grant relief.”). We also note that “[e]quity will not
interfere to restrain a sale under execution of property belonging to a person
other than the judgment debtor, unless such property has a special value,
rendering compensation in damages impossible, or such sale will result in
consequential damages, or the claim of one party involves or depends on some
equitable interest or feature.” 13 Ind. Law Encyc. Execution § 37 (citing Boone v.
Van Gorder, 164 Ind. 499, 74 N.E. 4 (1905))
[11] Indiana Trial Rule 52(A) requires a trial court to make special findings of fact
without request “in granting or refusing preliminary injunctions.” Further,
Indiana Trial Rule 65(D) provides: “Every order granting temporary injunction
and every restraining order shall include or be accompanied by findings as
required by Rule 52 . . . .” A trial court’s failure to enter findings of fact and
conclusions of law, as required by Indiana Trial Rule 52 and Indiana Trial Rule
65, in an order granting a preliminary injunction constitutes reversible error.
GKC Indiana Theatres, Inc. v. Elk Retail Inv’rs, LLC., 764 N.E.2d 647, 651 (Ind.
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Ct. App. 2002). “The purpose of Rule 52(A) is ‘to provide the parties and the
reviewing court with the theory upon which the trial judge decided the case in
order that the right of review for error may be effectively preserved.’” In re
Paternity of S.A.M., 85 N.E.3d 879, 885 (Ind. Ct. App. 2017) (quoting Carmichael
v. Siegel, 670 N.E.2d 890, 891 (Ind. 1996)). “Oral findings and conclusions can
achieve this purpose so long as they are thoroughly detailed in the record.” Id.
[12] Here, the trial court’s order is lacking the required special findings of fact that
are required pursuant to Indiana Trial Rule 52 and 65. The trial court’s order
addresses several motions, including the motion for a preliminary injunction.
However, the specific portions of the order addressing the motion for
preliminary injunction merely grant the preliminary injunction and give details
on how Burelli should attempt to sell the vehicle. The trial court did not
mention any of the factors that are considered in evaluating whether to grant a
preliminary injunction. Even if we consider the trial court’s oral comments at
the end of the hearing, the findings are simply inadequate to permit appellate
review. The trial court explained the relief it was ordering without explaining
why an injunction was necessary. We remand this cause for the trial court to
make specific findings of fact and conclusions thereon as required by Indiana
Trial Rule 52 and Indiana Trial Rule 65.
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Conclusion
[13] The trial court’s findings are inadequate to permit appellate review of its order
granting Burelli’s preliminary injunction. We remand with instruction for the
trial court to make specific findings of fact and conclusions thereon.
[14] Remanded.
Vaidik, C.J., and Pyle, J., concur.
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