Nance v. Miami Sand & Gravel, LLC

825 N.E.2d 826, 161 Oil & Gas Rep. 318, 2005 Ind. App. LEXIS 602, 2005 WL 851346
CourtIndiana Court of Appeals
DecidedApril 14, 2005
Docket48A02-0312-CV-1104
StatusPublished
Cited by45 cases

This text of 825 N.E.2d 826 (Nance v. Miami Sand & Gravel, LLC) 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
Nance v. Miami Sand & Gravel, LLC, 825 N.E.2d 826, 161 Oil & Gas Rep. 318, 2005 Ind. App. LEXIS 602, 2005 WL 851346 (Ind. Ct. App. 2005).

Opinion

OPINION

BARNES, Judge.

Case Summary

John and Georgia Nance appeal the trial court's judgment holding them jointly and severally liable, along with their son and daughter-in-law, Nick and Tonia Nance, to Miami Sand and Gravel, LLC ("Miami") for damages arising out of a failed business enterprise. We affirm in part, reverse in part, and remand.

Issues 1

The restated issues before us today are:

I. - whether the Comparative Fault Act required the trial court to apportion damages among John, Georgia, Nick, and Tonia;
II. - whether the trial court's findings and conclusions are sufficient to impose liability against John and Georgia for conversion, trespass, and contempt of court;
III. whether the trial court propefly calculated attorney fees owed to Miami by John and Georgia;
IV. whether the trial court properly held John and Georgia liable for various "costs"; and
V. - whether the seope of a permanent injunction entered against John and Georgia is overly broad.

Facts

John and Georgia own land in Madison County, on which is located a gravel pit. Over the years, John and Georgia periodically had attempted to turn the pit into a profitable mining operation. In 1998, Nick and Tonia formed N & N Sand and Gravel ("N & N") for this purpose; John and Georgia loaned Nick and Tonia substantial funds to carry out the operation. However, N & N failed to earn a profit in 1999 and 2000. In 2000, Nick met Mike Petti-john. The two agreed to form Miami, a new company created to mine gravel from the pit. At the time, Nick grossly exaggerated to Pettijohn the amount of gravel he had been excavating from the pit. Miami was formed as an LLC, with one member being N & N and the other being Central Indiana Sand & Gravel, LLC ("Central Indiana"), a company formed by Pettijohn and two of his relatives.

John and Georgia executed a twenty-year lease giving Miami the exclusive right to mine the gravel pit. The lease required Miami to pay royalties to John and Georgia for minerals sold from the premises at the rate of 20 cents per ton. The lease also provided that the weight of materials was to be measured by seales installed by Miami on the premises. Nick and Tonia were employees of Miami and ran day-today operations at the gravel pit.

The Miami business venture quickly deteriorated. From the outset, Miami's operations were being financed almost entirely by cash contributions from Central Indiana and Pettijohn's other businesses, *832 with little or no contribution from N & N. Nick and Pettijohn also had disagreements about whether to focus on excavating and selling gravel or dirt, The Department of Natural Resources temporarily shut down Miami's operations because it lacked a mining permit. Immediately after obtaining the permit, the Mining Safety and Health Administration shut down operations because of safety violations. There were frequent disputes between Tonia, who handled "on-the-scene" paperwork related to the gravel pit's finances, and Susie Pettijohn, who did the same for Central Indiana and Miami, relating to Tonia's poor record keeping.

Nick's and Tonia's activities became more and more questionable sometime in 2001. For example, Nick began requesting that Gary Sexton, a customer who frequently purchased dirt from the pit, make his checks out to N & N, rather than Miami. Nick also told Sexton, who purchased approximately $5000 in dirt every week from the pit, that he intended to "bleed" Pettijohn financially until he abandoned his interest in Miami. App. p. 53. Eventually, Sexton refused to purchase any more dirt from the pit while Nick and Pettijohn were "feuding." Id. i

In July 2001, Nick and Tonia opened a bank account they called "Our Miami." They then proceeded to divert several thousand dollars in sales receipts for purchases from the gravel pit into this account instead of forwarding the money .to Miami as required. Three checks payable to Nick for his purported salary, one payable to cash, and one payable to a third party were drawn on this account. Additionally, Tonia faxed copies of the sales receipts to Susie Peftijohn for the purpose of calculating royalties Miami owed to John and Georgia Miami made the royalty payments, but did not actually receive the funds for these sales. The evidence and the trial court's findings give no indication that John and Georgia were aware of or involved in the "Our Miami" account.

Also, on July 19, 2001, John and Georgia opened a bank account they called "John Nance d/b/a Pipe Creek Sand & Gravel" ("Pipe Creek"). Through Tonia, John and Georgia deposited $524.69 into this account from sales at the pit that should have gone directly to Miami. On July 25, 2001, however, John and Georgia closed this account.

Also on July 25, 2001, Pettijohn terminated Nick's employment with Miami for misappropriating funds and other reasons. On July 26, Nick drove John to Miami's office, where John returned to Pettijohn the $524 he had deposited in the "Pipe Creek" account. Nick also signed and gave Pettijohn an affidavit swearing, false-Ty, that the $524 represented the return of all money he had improperly diverted from Miami.

On July 27, John, Georgia, Pettijohn, Susie, and two attorneys met to discuss Miami and the overall mining operations. At that meeting, the parties discussed the difficulties Miami had had in installing operational seales at the gravel pit by which materials removed from the pit could be weighed and royalties owed to John and Georgia calculated on that basis, as provided by the mining lease. John and Georgia had been accepting royalty payments from Miami on a per-truckload and estimated weight basis and agreed to continue doing so until seales could be installed. John and Georgia also said that they wanted Miami to continue mining the pit without Nick's involvement. However, by July 31, John and Georgia indicated they had changed their minds and wanted Miami to cease operations and be held in breach of the lease for failing to install scales at the pit.

The antagonism among the parties continued. On August 7, 2001, Pettijohn and *833 his brother went to the pit. The Petti-johns were working at the pit when Nick and an unidentified individual drove onto the property behind some weeds, fired a gunshot, then left the property. Later, after the scales had been installed at the pit, UPS delivered weigh tickets for the scales to John and Georgia's house instead of to the pit office 200 yards away. Tonia was there at the time and advised Georgia to return the tickets to UPS and have them re-sent to the pit, rather than simply walking them to the pit herself. 2

On August 10, 2001, Miami filed a multi-count complaint against N & N, Nick, Tonia, John, and Georgia. It alleged inter alia that the parties were jointly and severally liable to Miami for conversion and trespass. -It also sought to enjoin the parties from interfering with Miami's operation of the gravel pit. In their answer filed separately from Nick and Tonia, John and Georgia denied any wrongdoing.

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Bluebook (online)
825 N.E.2d 826, 161 Oil & Gas Rep. 318, 2005 Ind. App. LEXIS 602, 2005 WL 851346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nance-v-miami-sand-gravel-llc-indctapp-2005.