R. Bruce Wallace v. Alliance Environmental, Inc. and Ruth Brown

• Court: Indiana Court of Appeals
• Decided: June 4, 2012
• Docket: 49A04-1111-CC-665
• Status: Unpublished

Opinion

Pursuant to Ind.Appellate Rule 65(D), this Memorandum Decision shall not be FILED regarded as precedent or cited before any Jun 04 2012, 8:32 am court except for the purpose of establishing the defense of res judicata, collateral CLERK estoppel, or the law of the case. of the supreme court, court of appeals and tax court

ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE:

BRUCE D. BRATTAIN SCOTT A. WEATHERS MARIO GARCIA The Weathers Law Office, P.C. Brittain & Minnix Indianapolis, Indiana Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

R. BRUCE WALLACE, ) ) Appellant-Respondent, ) ) vs. ) No. 49A04-1111-CC-665 ) ALLIANCE ENVIRONMENTAL, INC. and ) RUTH BROWN, ) ) Appellee-Petitioner. ) )

APPEAL FROM THE MARION SUPERIOR COURT The Honorable David J. Dreyer, Judge Cause No. 49D10-0501-CC-441

June 4, 2012

MEMORANDUM DECISION - NOT FOR PUBLICATION

VAIDIK, Judge Case Summary

In our previous opinion in this case, we reversed the trial court’s award of

damages to Ruth Brown for R. Bruce Wallace’s breach of fiduciary duty and remanded

with instructions for revising the amount. The trial court recalculated the damages, and

Wallace filed a motion to correct errors, which was denied. He now appeals that denial,

contending that on remand the trial court failed to follow the specific instructions given

by this Court in calculating the damages he owed. We find that the trial court properly

calculated damages in accordance with our remand instructions and therefore affirm.

Facts and Procedural History

Alliance Environmental, Inc. was an environmental architectural engineering and

consulting services company. Wallace was its President and CEO, and Brown was a

minority shareholder beginning in November 2002. In 2005, Wallace negotiated a sale of

Alliance’s assets. Also in 2005, Alliance sued Brown to recover funds that it loaned to

Brown in 2003 that had yet to be repaid. Brown filed a third-party complaint, alleging

that she was entitled to a portion of the proceeds of Alliance’s asset sale and that Wallace

had breached the fiduciary duty that he owed her as a shareholder.

After a bench trial, the trial court entered judgment in the amount of $90,000 in

favor of Brown. Brown filed a motion to correct errors, which was denied. Brown

appealed, and a panel of this Court reversed and remanded with specific instructions: the

trial court was to consider what compensatory damages were due to Brown as a result of

Wallace’s breach of fiduciary duty and offset that number “by her financial gain resulting

from Alliance’s failure to repay the $75,000 loan from Wallace to Alliance and

Alliance’s failure to pay Wallace certain compensation in accordance with the 2 agreement.” Brown v. Alliance Envtl. Inc., No. 49A02-0909-CV-854, slip op. at 4 (Ind.

Ct. App. July 16, 2010). The certain compensation included both Wallace’s back-wages

dating to 1994 and certain deferred compensation. Id. This Court also found that the trial

court’s finding that Brown owned twelve percent of the common stock of Alliance was

clearly erroneous. Id. at 5.

On remand, the trial court found that Brown had a 2.7% ownership interest in

Alliance. It also adopted a report prepared by Kevin L. Petrow, CPA, as to the amount of

damages caused by Wallace’s breach of fiduciary duty. The report concluded that the

total damages were $1,583,754.62, the amount of the outstanding loan to Wallace was

$190,000, and Wallace’s deferred compensation was $138,503.42. After deducting the

loan and deferred compensation, the trial court found the total damages to be

$1,255,742.62 and Brown’s 2.7% share to be $33,528.33. The trial court accordingly

entered judgment against Wallace in the amount of $33,528.33. Wallace filed a motion

to correct errors, which was denied.

Wallace now appeals.

Discussion and Decision

Wallace raises one argument on appeal, which we restate as whether the trial court

abused its discretion in denying his motion to correct errors. Wallace contends that the

trial court failed to properly follow specific instructions from this Court on remand. A

trial court has considerable discretion to grant or deny motions to correct error. Young v.

Ind. Dep’t of Natural Res., 789 N.E.2d 550, 554 (Ind. Ct. App. 2003), trans. denied. We

review the trial court’s ruling on a motion to correct errors for an abuse of discretion. Id.

3 Since this Court has previously entered an opinion on this case, the law of the case

doctrine applies. The law of the case doctrine provides that an appellate court’s

determination of a legal issue binds both the trial court and the appellate court in any

subsequent appeal involving the same case and substantially the same facts. Dutchmen

Mfg., Inc. v. Reynolds, 891 N.E.2d 1074, 1082 (Ind. Ct. App. 2008) (citing Pinnacle

Media, LLC v. Metro. Dev. Comm’n of Marion Cnty., 868 N.E.2d 894, 901 (Ind. Ct. App.

2007), trans. denied), trans. denied. The purpose of the doctrine is to minimize

unnecessary relitigation of legal issues once they have been resolved by an appellate

court. Id. (citing Luhnow v. Horn, 760 N.E.2d 621, 625 (Ind. Ct. App. 2001)).

Accordingly, all issues decided directly or by implication in a prior decision are binding

in all further portions of the same case. Id. (citing Keesling v. T.E.K. Partners, LLC, 881

N.E.2d 1025, 1029 (Ind. Ct. App. 2008)).

In our previous opinion issued in this case, we instructed the trial court to only

consider financial losses resulting from Alliance’s loans during the time that Brown was

a shareholder. On remand, the trial court found that this amount was $1,583,754.62.

This amount was indicated in the Petrow report, Appellant’s App. p. 67, which was

conducted by a Certified Public Accountant who had access to all of Alliance’s financial

records when writing the report. While we acknowledge that we also received evidence

in the record that showed that Alliance’s losses during this time could have been

$300,529.93 less, id. at 123, 160, 137, 144, the Petrow report was prepared after a

“review of financial and other records of Alliance Environmental, Inc.” Id. at 64. All of

the debts included in the $1,583,754.62 amount were properly determined by the Petrow

report to have been incurred when Brown was a shareholder of Alliance, id. at 42, and we 4 will not reweigh the evidence on appeal. The Petrow report was adopted by the trial

court, so we find that the amount of total damages that the trial court calculated on

remand, therefore, was in compliance with the instructions articulated in our previous

opinion.

We also find that the trial court was correct in finding that the outstanding loan to

Wallace and his deferred compensation should be deducted from Brown’s total damages.

However, the trial court incorrectly labeled the two amounts – the amount of the

outstanding loan is $138,503.42, and the deferred compensation is $190,000. Id. at 63.

But since the amounts are correct and just labeled incorrectly, this error is harmless.

Finally, we find that the trial court’s determination that Brown had a 2.7%

ownership interest in Alliance was in compliance with our remand instructions. We

found the previous finding that Brown held a 12% interest in Alliance to be clearly

erroneous. Brown owned sixty shares of Alliance stock, and there were a total of 2250

shares of stock. Brown, No. 49A02-0909-CV-854, slip op. at 2. On remand, the trial

court correctly calculated this to be a 2.7% interest in the corporation.

We therefore affirm the trial court’s denial of Wallace’s motion to correct errors

and affirm the entry of judgment in favor of Brown in the amount of $33,528.33.

Affirmed.

CRONE, J., and BRADFORD, J., concur.