Darlage v. Drummond

576 N.E.2d 1303, 1991 Ind. App. LEXIS 1348, 1991 WL 161360
CourtIndiana Court of Appeals
DecidedAugust 22, 1991
Docket36A01-9007-CV-278
StatusPublished
Cited by15 cases

This text of 576 N.E.2d 1303 (Darlage v. Drummond) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Darlage v. Drummond, 576 N.E.2d 1303, 1991 Ind. App. LEXIS 1348, 1991 WL 161360 (Ind. Ct. App. 1991).

Opinion

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

George F. Darlage, as Surviving Partner of George F. Darlage and Joseph F. Dar-lage d/b/a Darlage Crane and Earthmov-ing Service, a Partnership; and Individual ly (George) appeals from a judgment awarding Cheryl R. Drummond, Individually as a Creditor of the Estate of Joseph F. Darlage, Deceased; and as Guardian Ad Litem of Christopher George Darlage and Elizabeth Jo Darlage, Sole Devisees of the Will of Joseph F. Darlage, Deceased (Cheryl) $125,000.00 plus 10% interest in an action involving a claim on a deceased partner's estate. We affirm.

ISSUES

We restate the issues on appeal as:

1. Does the Uniform Partnership Act 1 (UPA) govern a partnership's winding up when one partner dies and his estate's resolution is pending in probate court?

2. Does a creditor of the decedent's estate, who is also representing the devisees under the decedent's will, have standing to pursue a claim against the decedent's surviving partner, who has failed to follow the statutory procedures required in winding up a partnership upon a partner's death?

3. Is it proper for a court to award damages instead of ordering an accounting or appointing a receiver under the UPA where all the partnership assets have been sold?

4. Was an exhibit correctly admitted into evidence where the opposing party's objection to its admission was only to a small portion of the overall exhibit; the exhibit's foundation was sufficient; and, the opponent's argument went only to the exhibit's weight?

5. Was there any accord and satisfaction between the decedent's estate and the surviving partner where the agreement purporting to be the accord and satisfaction executed between the surviving partner and the decedent's executrix was unfair and was not approved by the probate court?

6. Does the evidence in the record support the trial court's award of damages representing the decedent's interest in the partnership?

FACTS

Cheryl Drummond and Joseph Darlage were married in August of 1974. They divorced in November of 1982. The disso *1306 lution decree awarded custody of the couple's two children to Cheryl. Joseph was required to pay Cheryl certain sums for the property settlement and for child support.

Joseph entered into a partnership with his father, George Darlage, in January of 1975, thereby creating "Darlage Crane and Earthmoving Service" (partnership). The partnership was the partners' primary livelihood until Joseph's death. Joseph died in a car accident on April 16, 1988. His estate was opened on April 22, 1983, with Jane Speer, Joseph's sister, qualified as the executrix under Joseph's will. The will named Cheryl and Joseph's two children as the sole devisees. On April 22, 1988, the probate court granted Jane's petition to continue Joseph's portion of the business. An accounting was made of the assets and liabilities of the partnership as of April 30, 1983, to settle the amount with the surviving partner. Cheryl was appointed guardian ad litem of Chery] and Joseph's children on May 25, 1983.

The partnership continued through the middle of December, 1988. The partnership mainly engaged in heavy crane and earth moving work. It also had a landfill service contract with the Jackson County Commissioners. Jane also worked for the business as bookkeeper. The business utilized a landfill owned by George and his wife Ethel. For many years until Joseph's death, and thereafter, the business paid $1,000.00 per month to use the landfill.

At trial, the deputy clerk of the Jackson Circuit Court testified that George had made no filings as required by the provisions of the Indiana Code governing ac-countings by surviving partners. 2 Partnership tax returns for the years 1981, 1982, and 1983 were introduced into evidence. The 1983 return was a final return. The returns for 1982 and 1983 reflected net losses; however, when depreciation was added back in, there was a positive cash flow. The real estate was not a partnership asset since it was held in the partners' individual names.

On December 19, 1983, George and Jane purported to settle the partnership accounts. They exchanged a list showing most of the equipment and liens thereon. George paid the estate $14,487.63. On the same day, Jane as executrix paid George $14,937.50, for a claim he had filed against Joseph's estate. This claim was paid while the estate was insolvent and before Jane either allowed or disallowed the claim on the claims docket. On January 18, 1985, the probate court entered a judgment giving Cheryl a sum from the estate; this sum remains unpaid. At trial, Jane testified that all claims against the estate have been paid except Cheryl's.

Jeff Bush, C.P.A., testified at length as an expert for Cheryl. He valued Joseph's interest in the partnership as of his date of death, also explaining the basis for Bush's evaluation. He used an independent equipment appraisal in making his determination, as well as a study of the partnership's tax returns, accounting documents, and partnership financial statements given to the Jackson County Bank for loan purposes in 1982. A financial statement dated December 31, 1982, showed Joseph's interest to be approximately $189,881.00.

In October of 1984, George sold the landfill land and the landfill service contract to Rumpke of Indiana, Inc. (Rumpke). Che ryl's exhibit 9 consisted of closing doe-uments to this sale, taken from Rumpke's files. William J. Rumpke authenticated and identified exhibit 9 as a true and accurate representation of the closing documents. The landfill services contract was valued at $100,000.00, and Mr. Rumpke testified that this was a reasonable value.

Using the $100,000.00 valuation and the other information provided in the partnership's records, including accounts receivable and accounts payable listings provided by Jane, Bush adjusted the accounts to arrive at an accurate value of the partnership. He determined that Joseph's interest in the partnership on his date of death was $90,061.17, which with eight percent per annum interest amounted to $188,126.67 as of December 81, 1989. Bush also commented that although the partnership capi *1307 tal and draw accounts were poorly maintained, based on his analysis of the accounts and the dealings between Joseph and George, the best estimate was that the partnership was owned one-half by each partner. George presented no expert to contradict Bush's testimony.

Other relevant facts will be stated in our discussion of the issues.

DISCUSSION AND DECISION

We first note that the trial court made findings of fact and conclusions of law sua sponte. Such sua sponte specific findings lead to appellate review under the general judgment standard. Vanderburgh County Board of Commissioners v. Rittenhouse (1991), Ind.App. 575 N.E.2d 663, 666. On appeal, a general judgment will be sustained upon any theory consistent with the evidence, and we will neither reweigh the evidence nor rejudge the witnesses' credibility. Picadilly v.

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Bluebook (online)
576 N.E.2d 1303, 1991 Ind. App. LEXIS 1348, 1991 WL 161360, Counsel Stack Legal Research, https://law.counselstack.com/opinion/darlage-v-drummond-indctapp-1991.