FILED Apr 08 2025, 9:02 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
IN THE
Court of Appeals of Indiana Zotec Partners, LLC, and Medical Management Professionals, LLC, Appellants/Plaintiffs/Counterclaim Defendants,
v.
G. Darrell Hulsey and CBIZ Operations, Inc., Appellees/Defendants/Counterclaim Plaintiffs
April 8, 2025 Court of Appeals Case No. 24A-PL-870 Appeal from the Marion Superior Court The Honorable Heather Welch, Senior Judge Trial Court Cause No. 49D01-1612-PL-44334
Opinion by Judge Bradford
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 1 of 19 Judges Pyle and Kenworthy concur.
Bradford, Judge.
Case Summary [1] In 2012 and 2013, Zotec Partners, LLC (“Zotec”), negotiated to purchase
Medical Management Professionals, LLC (“MMP”), from CBIZ Operations,
Inc. (“CBIZ”). At the time, Darrell Hulsey was MMP’s CEO and President.
Hulsey happened to have a personal financial interest in Technology Partners,
Inc. (“TPI”), one of MMP’s software vendors, an interest that he did not
disclose to either CBIZ or Zotec.
[2] Zotec and CBIZ eventually agreed on terms, which prompted a lawsuit from
TPI. In a deal facilitated by Hulsey, the parties resolved TPI’s lawsuit in an
arrangement, pursuant to which MMP customers would remain on TPI’s
software platform and Zotec would pay TPI to use its platform for eighteen
months after the sale of MMP to Zotec was completed. Zotec’s purchase of all
MMP stock for $200 million was completed pursuant to a stock purchase
agreement (“the Agreement”).
[3] In 2016, Zotec became aware of Hulsey’s undisclosed interest in TPI and filed
suit against Hulsey and CBIZ, alleging fraud, deception, and breach of contract
against Hulsey; seeking to hold CBIZ liable for Hulsey’s alleged fraud under an
agency theory; and alleging that CBIZ had breached certain representations and
warranties that it had given in the Agreement. Zotec later added a claim
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 2 of 19 brought pursuant to the Indiana Uniform Securities Act (“IUSA”). CBIZ
countersued Zotec for breach of contract.
[4] In October of 2021, a jury found that Hulsey had committed common-law
fraud and breached his employment contract with Zotec, awarding it
$800,000.00 in damages. The jury entered a general verdict in favor of CBIZ as
to Zotec’s claims of fraud based on an agency theory. In June of 2022, the trial
court held a bench trial on Zotec’s IUSA claim and CBIZ’s counterclaim, ruling
in favor of CBIZ on both and ultimately awarding it over $3 million in damages
in its counterclaim.
[5] As restated, Zotec contends that the trial court erred in (1) trying its IUSA claim
to the bench instead of a jury, (2) ruling against it and applying an incorrect
legal standard in evaluating its IUSA claim, and (3) entering judgment in favor
of CBIZ on its counterclaim. Because we disagree with Zotec’s first two
contentions but agree with its third, we affirm in part, reverse in part, and
remand with instructions.
Facts and Procedural History [6] Zotec is a Carmel-based, medical-billing company, which, by 2012, was
exploring a potential purchase of MMP, a wholly-owned CBIZ subsidiary
whose CEO and President was Hulsey. Throughout December of 2012 and
early 2013, Zotec’s CEO discussed the potential purchase with CBIZ’s
chairman. At the time, MMP had contracts with TPI to provide the technology
platform MMP used to serve its radiology customers. As it happens, at some
point before TPI had become an MMP vendor, Hulsey had managed to acquire
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 3 of 19 an ownership interest in TPI worth approximately $11 million. Hulsey
informed neither CBIZ nor Zotec of his interest in TPI.
[7] After the diligence period, Zotec and CBIZ executed the Agreement. Shortly
after a public announcement of the Agreement, TPI notified Zotec that it had
filed a lawsuit related to the deal. With Hulsey serving as an intermediary, the
parties negotiated an arrangement that resolved TPI’s lawsuit. Pursuant to that
arrangement, MMP customers would remain on TPI’s platform, and Zotec
would pay TPI to use its platform for eighteen months after the sale of MMP to
Zotec was completed. In exchange, TPI was to then cooperate in the transition
of MMP customers onto Zotec’s platform. Still unaware of Hulsey’s interest in
TPI, Zotec agreed to the amended and restated Agreement. Zotec paid CBIZ
$200 million for all MMP stock. After CBIZ’s sale of MMP to Zotec, Hulsey
served as president of the MMP business until resigning a few months later.
[8] In late 2016, Zotec became aware of Hulsey’s ownership interest in TPI. In
December of 2016, Zotec filed suit against Hulsey and CBIZ, in which it
alleged fraud, deception, and breach of contract against Hulsey; sought to hold
CBIZ liable for Hulsey’s alleged fraud under an agency theory; and alleged that
CBIZ had breached certain representations and warranties that it had made in
the Agreement. Zotec later amended its complaint to add an IUSA claim.
CBIZ counterclaimed, alleging that Zotec had breached the Agreement by
pursuing breach-of-contract claims against it and seeking damages in the form
of attorney’s fees and expenses it had incurred in defending Zotec’s claims and
prosecuting its counterclaim.
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 4 of 19 [9] In May of 2021, Zotec moved for partial summary judgment on some of CBIZ’s
counterclaims, and CBIZ cross-moved, arguing that Zotec had no viable
remedy pursuant to the IUSA. In its order on Zotec’s and CBIZ’s cross-
motions, the trial court ordered Zotec to decide whether it wished to pursue its
IUSA claim pursuant to Indiana Code section 23-19-5-9(a)(1) (rescission of the
purchase) or section 23-19-5-9(a)(3) (money damages) and indicated that, if
Zotec elected to seek rescission, the claim would be tried to the bench. The trial
court denied Zotec’s motion to reconsider and Zotec’s and CBIZ’s requests to
certify the matter for interlocutory appeal. Zotec ultimately elected to pursue
the remedy of rescission.
[10] In October of 2021, all claims except Zotec’s IUSA claim and CBIZ’s breach-
of-contract counterclaim were tried to a jury. The jury found that Hulsey had
committed common-law fraud and breached his employment contract with
Zotec and awarded it $800,000.00 in damages. The jury, however, returned a
general verdict in favor of CBIZ on Zotec’s claims of common-law fraud,
criminal fraud, criminal deception, and breach of contract.
[11] On June 14 and 15, 2022, the trial court held a liability bench trial on Zotec’s
IUSA claim and CBIZ’s breach-of-contract counterclaim. The parties agreed to
try these claims based exclusively on the jury-trial record. The trial court found
that Zotec had failed to establish that Hulsey had been authorized by CBIZ to
make misrepresentations on its behalf, fatally undercutting Zotec’s IUSA
claims. Regarding CBIZ’s counterclaim, the trial court concluded that Zotec
had breached the Agreement in pursuing its breach-of-contract claims against
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 5 of 19 CBIZ. In December of 2023, the trial court conducted a bench trial on the
question of CBIZ’s damages. On March 12, 2024, the trial court awarded
CBIZ $3,148,503.33 in attorney’s fees and litigation expenses.
Discussion and Decision [12] As restated and reordered, Zotec contends that the trial court erred in (1) trying
its IUSA claim to the bench instead of a jury, (2) denying its IUSA claim, and
(3) entering judgment in favor of CBIZ on its counterclaim.
I. Whether Zotec’s IUSA Claim Should Have Been Tried to a Jury [13] Zotec contends that the trial court erred in concluding that Zotec’s IUSA claim
be tried by the trial court instead of a jury. The issue turns on whether Zotec’s
IUSA claim sounded in equity or in law, or, more specifically, whether Zotec’s
rescission claim sounded in equity or in law. Indiana Code section 23-19-5-9(a)
provides, in part, as follows:
An action under this subsection is governed by the following: (1) The purchaser may maintain an action to recover the consideration paid for the security, less the amount of any income received on the security, and interest at the greater of eight percent (8%) per annum or the rate provided for in the security from the date of the purchase, costs, and reasonable attorney’s fees determined by the court or arbitrator, upon the tender of the security, or for actual damages as provided in subdivision (3). (2) […] A purchaser that no longer owns the security may recover actual damages as provided in subdivision (3). (3) Actual damages in an action arising under this subsection are the amount that would be recoverable upon a tender less the value of the security when the purchaser disposed of it, and
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 6 of 19 interest at the greater of eight percent (8%) per annum or the rate provided for in the security from the date of the purchase, costs, and reasonable attorneys’ fees determined by the court or arbitrator. In sum, if the purchaser still owns the security in question, it may seek to
rescind the transaction and, if it has disposed of the security, it may seek actual
damages.
[14] Here, because Zotec still held the security, i.e., the MMP stock, its only
potential remedy under the IUSA was rescission, and it is well-settled that such
claims are equitable in nature, with no right to have them heard by a jury. See,
e.g., 3155 Dev. Way, LLC v. APM Rental Props., LLC, 52 N.E.3d 854, 861 (Ind.
Ct. App. 2016) (providing that a rescission claim invokes the equitable
jurisdiction of the court, so “no right to trial by jury exists”) (citation and
quotation marks omitted); Stevens v. Olsen, 713 N.E.2d 889, 891 (Ind. Ct. App.
1999) (“As of June 18, 1852, an action for rescission of a contract was of
exclusive equitable jurisdiction. Thus, rescission is an equitable remedy and
must be tried by the court.”), trans. denied; Ind. Trial Rule 38(A) (“Issues of law
and issues of fact in causes that prior to the eighteenth day of June, 1852, were
of exclusive equitable jurisdiction shall be tried by the court[.]”).
[15] In State v. $2,435 in United States Currency, 220 N.E.3d 542, 547–48 (Ind. 2023),
the Indiana Supreme Court made it clear that, even when remedies are
provided by statute rather than common law, the right to a jury trial still
depends on whether the claim is legal or equitable in nature. The Court’s
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 7 of 19 opinion clarified the scope of the right to trial by jury as provided for in Article
1, Section 20, of the Indiana Constitution:1
Parties in a civil case have a right to trial by jury in a cause of action (1) that was triable by jury at the adoption of the current constitution in 1851; or (2) if no such cause existed at the time, one that is essentially legal, rather than equitable, as those terms were understood in 1851, considering the complaint, the rights and interests involved, and the relief demanded. Id. at 548 (citation and quotation marks omitted). The Court then held that “a
claimant in an action brought under Indiana’s civil forfeiture statute has a
constitutional right to trial by jury” because actions for in rem forfeiture of
money are “readily analogous to the traditional common-law forfeiture of
property used in violation of the law[, …] an essentially legal action that
triggers the right to trial by jury.” Id. at 558.
[16] As it relates to securities-law claims in particular, Arnold v. Dirrim, 398 N.E.2d
426 (Ind. Ct. App. 1979), is on point, and we find it to be persuasive. In Arnold,
we applied essentially the same test the Indiana Supreme Court did in $2,435 to
determine whether a plaintiff seeking rescission pursuant to the Indiana
Securities Act had a right to jury trial. Id. at 438. After examining “the
essential character and nature of the claim for relief sought” and noting that
“[r]escission in the sense of the return of money upon tender of the securities is
an equitable remedy and is actually restitutionary in character[,]” we concluded
1 “In all civil cases, the right of trial by jury shall remain inviolate.”
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 8 of 19 that the claim sounded in equity and that “the trial court [had] properly denied
Arnold a jury trial.” Id.
[17] We further conclude that the fact that the IUSA was amended after Arnold does
not affect the outcome here. The version of Section 9(a) applied by Arnold
stated that purchasers “‘(m)ay sue either at law or in equity to recover the
consideration paid for the security […] upon the tender of the security […] or
for damages if he no longer owns the security.’” Id. (quoting then-Indiana
Code section 23-2-1-19(a)). While the current version of the statute makes no
reference to “at law or in equity,” the potential remedies and their underlying
nature remain the same. If, as here, the purchaser still has the security, the only
available remedy is the equitable one of rescission, and if the purchaser has
disposed of the security, the only available remedy is the legal one of damages.
Ind. Code § 23-19-5-9(a)(2), -9(a)(3)
[18] Zotec seems to suggest that, unless a statute specifically states that its offered
remedy is equitable, a plaintiff invoking that remedy has a constitutional right
to a jury trial. Zotec, however, offers no authority for this proposition and, as
CBIZ points out, accepting it would run counter to the Indiana Supreme
Court’s analysis in $2,435. Zotec does point to a single case, Cardinal Health
Ventures, Inc. v. Scanameo, 85 N.E.3d 637 (Ind. Ct. App. 2017), trans. denied, to
support its argument that it was entitled to a jury trial. In that case, we
concluded that Trial Rule 38(D) prohibited securities-act plaintiffs from
rescinding a jury demand without the defendant’s consent. Id. at 642. It is true
that the Cardinal Health court seems to have incorrectly characterized the
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 9 of 19 Scanameos’ claim as one for money damages, when it was clearly one for
rescission. Cardinal Health, however, did not turn on this distinction, rendering
any statement on the nature of the Scanameos’ claim obiter dictum. See Koske v.
Townsend Eng’g Co., 551 N.E.2d 437, 443 (Ind. 1990) (“In appellate opinions,
statements not necessary in the determination of the issues presented are obiter
dictum. They are not binding and do not become the law.”). Cardinal Health
was about whether the Scanameos could withdraw their jury trial request
without Cardinal Health’s consent, and, as such, the result would have been the
same even if it had been appropriate to have a jury trial. Under the
circumstances, we conclude that Cardinal Health does not help Zotec.
[19] In the end, a “monetary recovery” is involved when seeking rescission pursuant
to the IUSA, but only because money would be received in exchange for a
return of the security. That does not make the money “legal damages”:
“Rescission in the sense of the return of money upon tender of the securities is
an equitable remedy and is actually restitutionary in character.” Arnold, 398
N.E.2d at 438. The trial court correctly concluded that Zotec, who had chosen
to pursue the equitable remedy of rescission, had no right to a jury trial on its
IUSA claim.
II. Whether the Trial Court Erred in Denying Zotec’s IUSA Claim Against CBIZ [20] The trial court found against Zotec in its IUSA claim that CBIZ was liable for
Hulsey’s omissions regarding his interest in TPI, and Zotec argues that the trial
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 10 of 19 court used an incorrect standard in so doing. The statutory provision pursuant
to which Zotec sought relief was the “General fraud” section of the IUSA:
It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly: […] (2) to make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they were made, not misleading[.] Ind. Code § 23-19-5-1.
[21] Here, Zotec proceeded on a theory that CBIZ was vicariously liable for
Hulsey’s omissions because he had been acting as their agent at the time and his
actions had been within the scope of his agency. Whether a third party may
hold a principal liable for the acts or omissions of an agent turns on whether the
agent acted within the scope of their actual authority. Mid-Continent Paper
Converters, Inc. v. Brady, Ware & Schoenfeld, Inc., 715 N.E.2d 906, 909 (Ind. Ct.
App. 1999). “Actual authority is created by written or spoken words or other
conduct of the principal which, reasonably interpreted, causes the agent to
believe that the principal desires him so to act on the principal’s account.” Fid.
Nat. Title Ins. Co. v. Mussman, 930 N.E.2d 1160, 1165 (Ind. Ct. App. 2010),
trans. denied. “The focus of actual authority is the belief of the agent.” Id.
[22] CBIZ notes that the jury determined the question of Hulsey’s agency in the
negative when it entered a general judgment in CBIZ’s favor and invites us to
adopt the widely-followed rule that a jury’s verdict on legal claims binds a trial
court in its later consideration of equitable claims involving common issues of
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 11 of 19 fact. We accept CBIZ’s invitation. As CBIZ notes, every federal circuit2 and
courts in at least twenty other American jurisdictions3 embrace the rule “that
the court may not make findings contrary to or inconsistent with the jury’s
resolution of that same issue as implicitly reflected in its general verdict on the
damages claim.” Craft v. Bd. of Trs. of Univ. of Ill., 793 F.2d 140, 143 (7th Cir.
1986) (citation, quotation marks, and ellipses omitted).
2 See, e.g., Acosta v. City of Costa Mesa, 718 F.3d 800, 828 (9th Cir. 2013) (“In our circuit, ‘it would be a violation of the Seventh Amendment right to jury trial for the court to disregard a jury’s finding of fact.’”) (citation omitted); Ag Servs. of Am., Inc. v. Nielsen, 231 F.3d 726, 732 (10th Cir. 2000) (“The true test is whether the jury verdict by necessary implication reflects the resolution of a common factual issue. If so, the district court may not ignore that determination, and it is immaterial whether, as here, the district court is considering equitable claims with elements different from those of the legal claims which the jury had decided (as may often be the case).”); accord Troy v. Bay State Comput. Grp., Inc., 141 F.3d 378, 383 (1st Cir. 1998); Stone v. Kirk, 8 F.3d 1079, 1090–91 (6th Cir. 1993); Roebuck v. Drexel Univ., 852 F.2d 715, 737 (3d Cir. 1988); Wade v. Orange Cnty. Sheriff’s Office, 844 F.2d 951, 954 (2d Cir. 1988); Swentek v. USAIR, Inc., 830 F.2d 552, 559 (4th Cir. 1987); Ward v. Texas Emp’t Comm’n, 823 F.2d 907, 908–09 (5th Cir. 1987); Garza v. City of Omaha, 814 F.2d 553, 557 (8th Cir. 1987); Bouchet v. Nat’l Urban League, Inc., 730 F.2d 799, 803–04 (D.C. Cir. 1984); and Lincoln v. Bd. of Regents of Univ. Sys., 697 F.2d 928, 934 (11th Cir. 1983). 3 See, e.g., Wootten v. Ivey, 877 So. 2d 585, 590 (Ala. 2003) (“It is reasonable to conclude from the jury instructions given in this case that the jurors, for whatever reason, were not persuaded of the truthfulness of the plaintiffs’ claim that the defendants’ hog farm constituted a nuisance. Thus, in determining the plaintiffs’ claim for equitable relief based on the alleged nuisance, the trial court was bound by the jury’s finding that the hog farm did not constitute a nuisance.”) (emphasis in original); Hoopes v. Dolan, 85 Cal. Rptr. 3d 337, 348 (Cal. Ct. App. 2008) (“In a mixed trial of legal and equitable issues where legal issues are first tried to a jury, the court must follow the jury’s factual determinations on common issues of fact.”); accord Mun. of Anchorage v. Baugh Constr. & Eng’g Co., 722 P.2d 919, 928 n.7 (Alaska 1986); Churchill v. Univ. of Colo. at Boulder, 285 P.3d 986, 1008 (Colo. 2012); Glasgow v. Camanne Mgmt. Inc., 261 A.3d 208, 216–17 (D.C. 2021); Adams v. Citizens Bank of Brevard, 248 So. 2d 682, 684 (Fla. Dist. Ct. App. 1971); Lee v. Aiu, 936 P.2d 655, 665–66 (Haw. 1997); Vlieger v. Farm for Profit, Rsch. & Dev., Inc., 705 N.W.2d 339, 2005 WL 1963002, at *6 (Iowa Ct. App. Aug. 17, 2005); Avery v. Whatley, 670 A.2d 922, 926 (Me. 1996); Onvoy, Inc. v. ALLETE, Inc., 736 N.W.2d 611, 616–17 (Minn. 2007); Savannah Place, Ltd. v. Heidelberg, 164 S.W.3d 64, 70 (Mo. Ct. App. 2005); Breese v. Steel Mtn. Enters., Inc., 716 P.2d 214, 216 (Mont. 1986); Keshishian v. CMC Radiologists, 698 A.2d 1228, 1236 (N.H. 1997); Blea v. Fields, 120 P.3d 430, 434 (N.M. 2005); Mercantile & Gen. Reinsurance Co. v. Colonial Assur. Co., 624 N.E.2d 629, 630–31 (N.Y. 1993); Schumacher v. Schumacher, 469 N.W.2d 793, 800 (N.D. 1991); Wachovia Bank, N.A. v. Blackburn, 755 S.E.2d 437, 441 (S.C. 2014), abrogated on other grounds by Deutsche Bank Nat’l Tr. Co. v. Estate of Houck, 892 S.E.2d 280 (S.C. 2023); Zions First Nat’l Bank v. Rocky Mtn. Irrigation, Inc., 795 P.2d 658, 661–62 (Utah 1990); Wood v. Wood, 693 A.2d 673, 675 (Vt. 1997); and State ex rel. AmerisourceBergen Drug Corp. v. Moats, 859 S.E.2d 374, 386–87 (W.Va. 2021).
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 12 of 19 [23] In some cases, courts find the rule grounded in the constitutional right to a jury
trial. See, e.g., Acosta v. City of Costa Mesa, 718 F.3d 800, 828 (9th Cir. 2013) (“In
our circuit, ‘it would be a violation of the Seventh Amendment right to jury trial
for the court to disregard a jury’s finding of fact.’”) (quoting Floyd v. Laws, 929
F.2d 1390, 1397 (9th Cir. 1991)). Most, however, derive the rule from
principles of collateral estoppel. See, e.g., Snider v. Consolidation Coal Co., 973
F.2d 555, 559 (7th Cir. 1992) (“We believe the rule that binds the judge to the
jury’s findings is grounded in collateral estoppel and not the Seventh
Amendment[.]”). Either way, it appears that the analysis is the same, but, in
the interest of providing a justification for adopting this widely-followed rule,
we choose to adopt it as a measure to protect the right to trial by jury.
[24] That said, when we consider the effect of a jury’s verdict on a future bench trial,
we “must ascertain the scope, and corresponding restrictive impact, of the jury
verdict on the […] court’s factual findings.” Miles v. State of Ind., 387 F.3d 591,
599 (7th Cir. 2004). We must consider “the evidence and the instructions” and
how “the case was argued[.]” Ohio-Sealy Mattress Mfg. Co. v. Sealy, Inc., 585 F.2d
821, 844 (7th Cir. 1978). We are mindful that a “[general] verdict by itself and
out of the context of the trial could not necessarily be said to have foreclosed
any particular issue.” Id. In this case, however, the general verdict, in the
context of the claims raised and resolved, squarely addressed and resolved the
question of whether CBIZ could be held liable for Hulsey’s actions pursuant to
an agency theory.
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 13 of 19 [25] During the jury trial, Zotec argued that Hulsey had concealed his personal
financial relationship with TPI while serving as an agent for CBIZ. On that
basis, Zotec asked the jury to hold CBIZ liable for Hulsey’s fraudulent
omission. The trial court instructed the jury on the elements of fraud and fraud
by omission and on how to find CBIZ liable (or not) for Hulsey’s conduct:
If you decide that: (1) Hulsey was an agent of CBIZ; and (2) Hulsey was acting within the scope of his authority when he committed the alleged fraud; and (3) Hulsey is liable, then CBIZ is also liable. If you decide that Hulsey is not liable, then CBIZ is not liable. If, however, you decide that Hulsey is liable but was not acting as an agent for CBIZ or within the scope of the agent’s authority when he committed the[] alleged fraud then CBIZ is not liable for the acts of Hulsey. Tr. Vol. XIX p. 117 (emphasis added).
[26] Although the jury found Hulsey liable for fraud, it did not find CBIZ so, which
could only mean that the jury had found either that he (1) had not been an
agent of CBIZ or (2) had not committed fraud within the scope of his agency’s
authority. It does not matter which, because either one of these findings would
have been fatal to Zotec’s agency-based fraud claim against CBIZ. Because
Zotec’s IUSA claim against CBIZ is also based on an allegation of agency and
involves the same failures to disclose by Hulsey, it is also fatally undercut by the
jury’s verdict. To conclude otherwise would be to violate CBIZ’s right to trial
by jury. See, e.g., Acosta, 718 F.3d at 828.
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 14 of 19 III. Whether the Trial Court Erred by Entering Judgment in Favor of CBIZ on its Counterclaim [27] Zotec contends that the trial court erred in concluding that it had breached the
Agreement in filing suit against CBIZ and in requiring Zotec to indemnify
CBIZ for attorney’s fees and expenses incurred as a result.
When reviewing findings of fact and conclusions of law, we apply a two-tiered standard of review by first determining whether the evidence supports the findings and then whether the findings support the judgment. Bayview Loan Servicing, LLC v. Golden Foods, Inc., 59 N.E.3d 1056, 1066 (Ind. Ct. App. 2016). The trial court’s findings and judgment will be set aside only if they are clearly erroneous. Id. A judgment is clearly erroneous if it applies the wrong legal standard to properly found facts. Id. at 1066–67. To determine that a finding or conclusion is clearly erroneous, our review of the evidence must leave us with the firm conviction that a mistake has been made. Id. at 1067. Shelby’s Landing-II, Inc. v. PNC Multifamily Cap. Institutional Fund XXVI Ltd.
P’ship, 65 N.E.3d 1103, 1111 (Ind. Ct. App. 2016). Generally, disposal of a
breach-of-contract claim requires an evaluation of the terms of the Agreement.
See, e.g., John M. Abbott, LLC v. Lake City Bank, 14 N.E.3d 53, 56 (Ind. Ct. App.
2014) (“Where terms of a contract are clear and unambiguous, we will apply
the plain and ordinary meaning of the terms and enforce the contract according
to its terms.”). Under the circumstances of this case, however, we conclude
that this will not be necessary.
[28] At the heart of this issue is the characterization of Zotec’s breach-of-contract
claims. Zotec alleged that CBIZ’s failure to disclose Hulsey’s interest in TPI
had violated the following provisions of the Agreement:
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 15 of 19 Section 3.7 Absence-of Certain Changes, Events and Conditions. Since the Interim Balance Sheet Date, each member of the Company Group has operated in the ordinary course of business and there has not been, with respect to any member of the Company Group, any: (a) event, occurrence or development that has had, individually or in the aggregate, a Material Adverse Effect, or reasonably could result, individually or in the aggregate, in a Material Adverse Effect[.] Ex. Vol. I pp. 127–28.
Section 3.8 Material Contracts. (a) Section 3.8(a) of the Disclosure Schedule lists each of the following Contracts to which any member of the Company Group is a party (together with all Leases listed in Section 3.9(b) of the Disclosure Schedule, collectively, the “Material Contracts”): [….] (vi) all Contracts between or among any member of the Company Group, on the one hand, and Seller or any Affiliate of Seller, on the other hand; (vii) all Contracts limiting the freedom of any member of the Company Group to engage in any line of business, acquire any entity or compete with any Person or in any market or geographical area[.] Ex. Vol. I p. 130. CBIZ argued (and the trial court agreed) that the above
claims were, in effect, actually restated claims that CBIZ had failed to make a
representation that the Agreement had not required it to make, i.e., that Hulsey
had not had a financial interest in any entity having a business relationship with
MMP. The trial court used this characterization of Zotec’s claims to support its
conclusion that Zotec had breached the Agreement by suing CBIZ for failing to
make a representation it had not been required to make, or, more simply, for
violating a contract provision that did not exist.
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 16 of 19 [29] The trial court concluded that Zotec had breached section 3.24 of the
Agreement by suing CBIZ for failing to a make a representation it had not been
required to make.4 The record does not support this conclusion. In its
counterclaim, Zotec had identified particular acts and/or omissions by CBIZ
that it had claimed had violated particular provisions of the Agreement,
specifically Sections 3.7(a), 3.8(a)(vi), and 3.8(a)(vii). To the extent that such
acts and/or omissions might arguably make more sense as alleged violations of
provisions that have appeared in other contracts is irrelevant, and the fact that
Zotec ultimately failed to prove those alleged violations did not transform them
into something else. Indeed, neither CBIZ nor the trial court cites any relevant
legal authority for the proposition that Zotec’s claims can be recast in such a
way. “[A] plaintiff or claimant has a right to set up in his complaint or claim as
many considerations as he chooses,” Barnett v. Franklin Coll., 10 Ind. App. 103,
117, 37 N.E. 427, 432 (1894), and this right would mean little if a trial court
could simply alter them. See Humphreys v. Clinic for Women, Inc., 796 N.E.2d
247, 265 (Ind. 2003) (“[P]laintiffs are entitled to frame their own complaint[.]”)
(Boehm, J., dissenting).
[30] Because the trial court’s judgment against Zotec on CBIZ’s counterclaim rests
entirely upon its clearly-erroneous finding that Zotec had sued CBIZ for
4 Section 3.24 provides that “[e]xcept for the representations and warranties contained in this Article III,” CBIZ was making no “other express or any implied representation or warranty, either written or oral […] including any representation or warranty as to the accuracy or completeness of any information regarding any member of the Company Group furnished or made available to [Zotec.]” Ex. Vol. I p. 143.
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 17 of 19 violating a nonexistent contractual provision,5 we reverse the trial court’s
judgment in favor of CBIZ and its award of damages and remand with
instructions to enter judgment in favor of Zotec on CBIZ’s counterclaim.
Conclusion [31] We conclude that the trial court correctly determined that Zotec was not
entitled to have its IUSA claim tried to a jury. We also conclude that the trial
court correctly did not revisit factual matters that had already been determined
by a jury in the subsequent bench trial on Zotec’s IUSA claim. Finally, we
conclude that the trial court did err in entering judgment in favor of (and
awarding damages to) CBIZ on its counterclaim against Zotec and so reverse
and remand with instructions to enter judgment in favor of Zotec.
[32] We affirm the judgment of the trial court in part, reverse in part, and remand
with instructions.
Pyle, J., and Kenworthy, J., concur.
ATTORNEYS FOR APPELLANTS Jonathan G. Polak Tracy N. Betz Neil Peluchette Taft Stettinius & Hollister LLP Indianapolis, Indiana
5 Even if Zotec had sued CBIZ for allegedly violating a nonexistent contract provision, we fail to see how that would have entitled CBIZ to anything more than judgment on Zotec’s contract claim. The Agreement contains no fee-shifting provision, and CBIZ has not requested attorney’s fees on the basis that Zotec’s claims were frivolous.
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 18 of 19 ATTORNEYS FOR APPELLEE CBIZ OPERATIONS, INC. Wayne C. Turner Michael R. Limrick Christopher D. Wagner Hoover Hull Turner LLP Indianapolis, Indiana
Court of Appeals of Indiana | Opinion 24A-PL-870 | April 8, 2025 Page 19 of 19