Scott Williams and Geoffrey Bond v. April Boomer ( 2014 )

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, Nov 26 2014, 9:34 am
collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT:
JOHN S. MERLAU
New Palestine, Indiana
IN THE
COURT OF APPEALS OF INDIANA
SCOTT WILLIAMS and )
GEOFFREY BOND, )
)
Appellants-Defendants, )
)
vs. ) No. 55A05-1404-SC-186
)
APRIL BOOMER, )
)
Appellee-Plaintiff. )
APPEAL FROM THE MORGAN SUPERIOR COURT
The Honorable Jane Spencer Craney, Judge
The Honorable Brian H. Williams, Magistrate
Cause No. 55D03-1306-SC-926
November 26, 2014
MEMORANDUM DECISION – NOT FOR PUBLICATION
BARNES, Judge
Case Summary
Scott Williams and Geoffrey Bond (“the Appellants”) appeal the small claims court’s
entry of judgment against them on a claim filed by April Boomer. We reverse.
Issues
The Appellants raise one issue, which we restate as whether the small claims court
properly entered judgment against them in their personal capacities.
Facts
In 2004, Boomer and her husband entered into a contract with G&S Custom Builders,
LLC, (“G&S”) for the construction of a home in Mooresville. Williams and Bond were the
two members of G&S. The contract included a warranty against major structural defects for
ten years.
In 2010, G&S was dissolved. In 2012, Boomer noticed the front porch of her home
appeared to be “twisting off the foundation.” Tr. p. 3. Boomer had the porch inspected by a
structural engineer, who concluded there was a structural problem with it.
In June 2013, Boomer filed a small claims action against the Appellants seeking to
recover the “cost to repair structural defect and resulting damage to plaintiff’s home.” App.
p. 4. The small claims court held a hearing at which Boomer, Williams, and Bond testified.
On March 20, 2014, the small claims court entered an order concluding in part:
There is no dispute the LLC entity would be liable under
the evidence presented. The Defendants Williams and Bond
assert they are shielded from personal liability due to the
existence of the defunct LLC. Both Defendants were active
principals in the LLC. All work by the LLC was subcontracted
to other construction vendors by the principals.
2
App. p. 5. Relying on Greg Allen Const. Co. v. Estelle, 762 N.E.2d 760, 766 (Ind. Ct. App.
2002), the small claims court went on to conclude:
As in Allen, the Defendants are subject to the common law duty
to perform its work in a workmanlike manner, and a conclusion
that the company breached its duty necessarily constitutes a
conclusion that Defendants were negligent in tort. Under this
analysis the Defendants are personally liable for their company’s
negligent failure to do the job in a workmanlike manner to the
extent that they participated in, authorized or directed negligent
conduct. The Court finds they directed the conduct and are
personally liable.
Id. at 6. The small claims court entered judgment against the Appellants personally in the
amount of $6,000. The Appellants filed a motion to correct error, which the small claims
court denied. They now appeal.
Analysis
As an initial matter, Boomer did not file an appellee’s brief. In that circumstance, we
do not undertake to develop arguments for her. See Morton v. Ivacic, 898 N.E.2d 1196, 1199
(Ind. 2008). Rather, we will reverse upon the Appellants’ prima facie showing of reversible
error. See id. Prima facie error means at first sight, on first appearance, or on the face it. Id
“Under Indiana Trial Rule 52(A), the clearly erroneous standard applies to appellate
review of facts determined in a bench trial with due regard given to the opportunity of the
trial court to assess witness credibility.” Trinity Homes, LLC v. Fang, 848 N.E.2d 1065,
1067 (Ind. 2006). Our supreme court has explained that this deferential standard of review is
particularly important in small claims actions, where the sole objective is dispensing speedy
justice according to the rules of substantive law. Id. at 1067-68. However, this deferential
3
standard does not apply to the substantive rules of law, which are reviewed de novo. Id. at
1068.
In Greg Allen Construction, the Estelles contracted with Greg Allen Construction,
Inc., for renovations to their home. Greg Allen, president, shareholder, and employee of
Allen Construction, signed the contract in his representative capacity. He then performed
work on the project and supervised other work. The Estelles began questioning the quality of
work, and litigation ensued. The Estelles alleged that Allen Construction and Greg Allen
breached the contract and were negligent. The trial court found that Allen was not
individually liable to the Estelles because he was acting on behalf of Allen Construction.
The Estelles appealed, and a panel of this court held:
Thus, when a person contracts to perform services, failure to
perform in a workmanlike manner may constitute both a breach
of contract and the tort of negligence. Wilson v. Palmer, 452
N.E.2d 426, 429 (Ind. Ct. App. 1983). Accordingly, since Allen
Construction was subject to the common law duty to perform its
work in a workmanlike manner, the trial court’s conclusion that
the company breached this duty necessarily constitutes a
conclusion that Allen Construction was negligent. Under the
rule from State of Indiana Civil Rights Comm’n set out above,
Allen could have been personally liable for his company’s
negligent failure to do the job in a workmanlike manner to the
extent that he participated in, authorized or directed Allen
Construction’s negligent conduct.
Greg Allen Const. Co., 762 N.E.2d at 776.
However, our supreme court granted transfer and vacated that portion of the opinion.
See Greg Allen Const. Co. v. Estelle, 798 N.E.2d 171 (Ind. 2003). Our supreme court
distinguished between a breach of contract claim and a tort claim in a construction setting
4
and explained, “The whole of the alleged wrong, deficient home improvements, centered on
the performance required by the contract created by Allen Construction and the Estelles. Any
duty Allen had to perform his individual duties flowed solely from this contract.” Id. at 173.
The basic theory underlying the distinction between
contract and tort is that tort liability is imposed by law and that
contract liability is the product of an agreement of the parties.
But only the principal, who is a party to the contract, has agreed
to perform the obligations of the agreement. To impose “the
same” liability on the agent is to make the agent the promisor
when the parties had arranged their affairs to put the principal,
and only the principal, on the line.
A defendant’s exposure to tort liability is best framed in
terms of what the defendant did. The proper formulation of the
reason Allen is not liable here is that his negligence consisted
solely of his actions within the scope of his authority in
negligently carrying out a contractual obligation of the
corporation as his employer. Nothing he did, and therefore
nothing the corporation did, constituted an independent tort if
there were no contract. Under those circumstances the Estelles
should be remitted to their contract claim against the principal,
and they should not be permitted to expand that breach of
contract into a tort claim against either the principal or its agents
by claiming negligence as the basis of the breach.
Id. The court concluded, “The rule of law is that a party to a contract or its agent may be
liable in tort to the other party for damages from negligence that would be actionable if there
were no contract, but not otherwise.” Id. at 175.
Here, Boomer sought the costs to repair the structural defect and resulting damage to
her home, a claim that arose out of her construction contract with G&S. She did not allege
that G&S, Williams, and/or Bond were negligent, nor was evidence of such presented at the
hearing. Because Boomer’s claim is for breach of contract, the Appellants have made a
5
prima facie showing that they may not be held personally liable pursuant to our supreme
court’s opinion in Allen.
Conclusion
Because Boomer’s claim is based in contract, not tort, the Appellants have made a
prima facie showing that they are not personally liable for G&S’s breach. We reverse.
Reversed.
BRADFORD, J., and BROWN, J., concur.
6