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FOR PUBLICATION
ATTORNEYS FOR APPELLANTS: RICHARD N. BELL AREND J. ABEL KELLEY J. JOHNSON Cohen & Malad, LLP Indianapolis, Indiana APPELLEE PRO SE: FREDERICK N. BEEGLE, III Rockville, Indiana ATTORNEYS FOR APPELLEE JOHN BUCHOLTZ: JOHN B. DRUMMY PFENNE P. CANTRELL ERIC D. JOHNSON Kightlinger & Gray, LLP Indianapolis, Indiana ATTORNEY FOR APPELLEES FLORIDA UNDERWRITING CO. and DENNIS BAUGHER: DAVID S. WALLACE Muncie, Indiana ATTORNEY FOR APPELLEES WILLIAM JONES and ADVANCED INSURANCE MARKETING: B. JOSEPH DAVIS Muncie, Indiana

IN THE COURT OF APPEALS OF INDIANA
LINDA KEESLING, HAROLD LEPHART and PRISCILLA LEPHART, HAGAR ANDERSON, JAMES BRIDGES, EARL and EVELYN HAIBE, ESCAR APP, MABEL McGUFFEY, RUTH AMICK, and DORA BUTRUM, Appellants-Plaintiffs, vs. ) ) ) ) ) ) ) ) )

No. 18A04-0501-CV-10

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FREDERICK BEEGLE, III, JOHN BUCHOLTZ, RONALD VAN DEUSEN, FLORIDA UNDERWRITING CO., DENNIS BAUGHER, WILLIAM JONES, and ADVANCED INSURANCE MARKETING, Appellees-Defendants.

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APPEAL FROM THE DELAWARE CIRCUIT COURT The Honorable Marianne L. Vorhees, Judge Cause No. 18C01-0202-PL-08

December 21, 2006 OPINION - FOR PUBLICATION CRONE, Judge

Case Summary Plaintiffs Linda Keesling, Harold and Priscilla Lephart, Hagar Anderson, James Bridges, Earl and Evelyn Haibe, Escar App, Mabel McGuffey, Ruth Amick, and Dora Butrum (collectively, "Appellants") appeal the trial court's orders granting summary judgment in favor of defendants Frederick Beegle, III, John Bucholtz, Ronald Van Deusen, Florida Underwriting Co., Dennis Baugher, William Jones, and Advanced Insurance Marketing (collectively, "Appellees"). We affirm in part, reverse in part, and remand. Issues We consolidate, reorder, and restate Appellants' four issues as the following two: I. Whether the trial court abused its discretion in excluding the affidavit of Joe Richman; and Whether the trial court properly granted summary judgment in favor of Appellees.

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Facts and Procedural History 1 The facts most favorable to Appellants, the non-movants, indicate that in 1986, Paul Rubera founded Alpha Telcom, Inc. ("Alpha"), an Oregon company that sold, installed, and maintained telephones and business systems. S.E.C. v. Alpha Telcom, Inc., 187 F. Supp. 2d 1250, 1254 (D. Or. 2002), aff'd, 350 F.3d 1084 (9th Cir. 2003). In 1997, Charles Tummino approached Rubera and suggested selling "payphones to individuals who would then enter into a service agreement with Alpha to install, service, and maintain the payphones." Id. Rubera consulted Alpha's attorney, Dan Lacy, who issued an opinion letter concluding that the arrangement would not constitute the sale of a security. Lacy sought an opinion from Florida attorney James Leone, who reached the same conclusion. "In October 1998, American Telecommunications Company, Inc. (ATC) was created. Tummino operated ATC as the marketing and sales arm of the payphone program, while Alpha's focus was on obtaining phone sites, installation, service and management of the phones." Id. at 1255. Before retiring from ATC in late 1998, Tummino introduced Rubera to Ross Rambach and Mark Kennison, owners of Strategic Partnership Alliance, LLC ("SPA"). SPA sold programs similar to those offered by Alpha. In early 1999, Rubera hired SPA "as an independent marketing and sales firm for ATC. Thereafter, SPA was responsible for hiring, training and supervising the sales representatives who were marketing the payphone program." Id. at 1256.

In their brief, Appellants include many incidental facts that are irrelevant to the issues raised in their appeal. Appellants also make factual assertions based on an affidavit that was excluded by the trial court. We admonish counsel to refrain from doing likewise in future cases.

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Rambach and Kennison contacted Dennis Baugher, president and sole owner of Florida Underwriting, who agreed to recruit sales representatives for the payphone program. Each sales representative signed an agreement with ATC in which he or she "expressly acknowledge[d] that he/she [would] be acting as an independent contractor and not as an employee, for all purposes[.]" Id. at 838. Baugher received override commissions on the sales made by his recruits. 2 Baugher recruited William Jones, co-owner of Advanced Insurance Marketing, who in turn recruited sales representative Joe Richman. 3 Jones received an override commission on Richman's sales. Richman sold payphones to plaintiffs Linda Keesling, Harold and Priscilla Lephart, and Hagar Anderson. 4 Rambach also contacted John Lang, who recruited sales representative Ronald Van Deusen. Van Deusen sold payphones to plaintiff James Bridges. Other sales representatives were also recruited. John Bucholtz sold payphones to plaintiffs Earl and Evelyn Haibe, Escar App, Mabel McGuffey, Ruth Amick, and Dora Butrum. Frederick Beegle, III, also sold payphones but not to any of the Appellants. According to Appellants' fourth amended complaint, investors agreed to pay $5,000 per phone, and approximately ninety percent of the investors entered into an additional

An override commission is a "commission paid to a manager on a sale made by a subordinate." BLACK'S LAW DICTIONARY 1136 (8th ed. 2004). For the sake of convenience, we refer to Baugher and Florida Underwriting as "Baugher" and to Jones and Advanced Insurance Marketing as "Jones" unless otherwise indicated. The designated evidence is conflicting as to whether Richman or Robert Hall was Anderson's sales representative. Compare Appellants' App. at 668 (affidavit from Baugher stating that he received an override commission on sales to Anderson by Richman) with id. at 803 (affidavit from Tom Anderson, Anderson's son and attorney-in-fact, stating that Robert Hall sold payphones to his mother). We address this issue in greater detail in section II(A)(1), infra.
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agreement with Alpha to service their phones. Appellants' App. at 111. The service agreements "provided that investors were to receive thirty percent of the net revenue from the phone, while Alpha was to receive seventy percent as a monthly fee." Id. at 112. "[I]f revenues from the phone did not generate a base amount of $58.34 in any given month (which amounts to a fourteen percent return on a $5,000 investment), Alpha agreed to waive a portion of its seventy percent fee to maintain that monthly base payment." Id. "Alpha created a computer program that automatically paid each investor the base amount each month, regardless of whether the investor's particular phone generated enough revenue to pay that amount." Id. Investors were allowed to sell the phones back at the original price after thirty-six months and were also given the option of purchasing buyback insurance, which "would cover the investor's purchase price if for some reason the company became unable to repurchase the phones." Id. at 111-12. Alpha's revenues failed to cover its expenses, and in August 2001, Alpha filed for Chapter 11 bankruptcy protection. 5 In February 2002, four Appellants filed a complaint alleging that the defendants had directly or indirectly sold them unregistered securities in violation of the Indiana Securities Act. Appellants also alleged that certain defendants had violated the Indiana Corrupt Business Influence Act and had committed theft, conversion, and common law fraud. In March 2004, Bucholtz moved for summary judgment. In August 2004, Appellants filed their
Appellants allege that the payphone program was a pyramid or Ponzi scheme, but the district court in Alpha Telcom attributed Alpha's financial woes to "bad advice, poor management," the acquisition of worthless or nonexistent payphone sites by one of Rambach and Kennison's enterprises, and "sudden artificial buyback demand created by SPA, and the accompanying sudden artificial demand for new phones." 187 F. Supp. 2d at 1261, 1262. Thus, it would appear that the fact that "payments made by Alpha to existing investors came from the sale of phones to new investors" was a matter of default, rather than design, as Appellants contend. Id. at 1257.
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fourth amended complaint. In November 2004, Beegle moved for summary judgment. The trial court ultimately granted final summary judgment in favor of Beegle as to all Appellants and in favor of Bucholtz as to Keesling, the Lepharts, Anderson, and Bridges. Bucholtz settled with the remaining Appellants. Appellants timely filed notices of appeal. In January 2005, Jones moved for summary judgment. In February 2005, Baugher moved for summary judgment. On March 16, 2005, the trial court held a hearing on those and other pending summary judgment motions. On March 29, 2005, the trial court issued orders granting summary judgment in favor of Baugher and Jones. Both orders stated, "If [Appellants] believe the Court has disregarded evidence in the record that creates an issue of fact, [Appellants] should file a Motion to Reconsider as soon as possible, preferably within five (5) days from this order's date, in order for the Court to consider the Motion and correct any errors before the trial date scheduled in this case." Appellants' App. at 542, 547 (emphasis added). On April 4, 2005, Appellants filed a motion to reconsider, which the trial court denied on April 6. On April 7, 2005, Appellants filed a motion for leave to supplement their motion to reconsider with an affidavit from Richman, which the trial court denied that day. On April 8, 2005, the trial court entered final judgment in favor of Baugher and Jones. Appellants timely filed a notice of appeal.

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In May 2005, Van Deusen moved for partial summary judgment. In August 2005, the trial court granted Van Deusen's motion as to all Appellants except James Bridges. 6 Appellants timely filed a notice of appeal. On June 9, 2005, this Court consolidated the appeals involving Beegle, Bucholtz, Baugher, and Jones, which were fully briefed as of December 14, 2005. On November 8, 2005, this Court consolidated three additional appeals involving Van Deusen, Leone, and David Winstead. On January 31, 2006, this Court vacated in part the November 2005 order, leaving the Van Deusen appeal consolidated with the instant appeal and ordering rebriefing. Leone and Winstead are appellees in a second appeal, see Keesling v. Winstead, No. 18A020601-CV-73 (Ind. Ct. App. Dec. 21, 2006), and Leone is the appellant in a third, see Leone v. Keesling, No. 18A04-0510-CV-626 (Ind. Ct. App. Dec. 21, 2006). We now address the merits of Appellants' appeal. Discussion and Decision
According to Appellants, Bridges's claims against Van Deusen remain pending in the trial court. Appellants correctly observe that although the trial court's August 2005 order granting summary judgment in favor of Van Deusen against the remaining Appellants states that "Final Judgment is hereby entered" in Van Deusen's favor, Appellants' App. at 625, the order does not comply with the certification requirements of Indiana Trial Rule 54(B) and is therefore not a final order. See Ind. Trial Rule 54(B) ("A judgment as to one or more but fewer than all of the claims or parties is final when the court in writing expressly determines that there is no just reason for delay, and in writing expressly directs entry of judgment, and an appeal may be taken upon this or other issues resolved by the judgment; but in other cases a judgment, decision or order as to less than all the claims or parties is not final.") (emphasis added); Georgos v. Jackson, 790 N.E.2d 448, 452 (Ind. 2003) ("Trial Rule 54(B) certification of an order that disposes of less than the entire case must contain the magic language of the rule. This is intended to provide a bright line so there is no mistaking whether an interim order is or is not appealable."). Appellants state that they "have requested that the trial court enter a nunc pro tunc order curing this deficiency" and ask that we "not consider any issues relating to the finality of the Van Deusen judgment until the trial court acts." Appellants' Br. at 4 n.2. A review of the record in the companion case of Leone v. Keesling, No. 18A04-0510-CV-626 (Ind. Ct. App. Dec. 21, 2006), reveals that Appellants made their request on March 2, 2006, the date their original brief in this appeal was filed, and that the trial court made a corrective nunc pro tunc entry the following day. Appellees' App. at 57 (chronological case summary). Appellants do not mention this development in their reply brief and have not taken further action regarding the trial court's ruling in favor of Van Deusen.
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I. Exclusion of Richman's Affidavit Because Appellants rely on statements in the affidavit of sales representative Joe Richman in attempting to establish genuine issues of material fact, we first address their contention that the trial court improperly excluded the affidavit. "The admission or exclusion of evidence is a determination entrusted to the discretion of the trial court, and we will reverse a trial court's decision only when the court has abused its discretion." Lachenman v. Stice, 838 N.E.2d 451, 464 (Ind. Ct. App. 2005), trans. denied (2006). 7 Appellants assert that the trial court had discretion to admit the affidavit as "supplemental evidence" under Indiana Trial Rule 56(E). Appellants' Br. at 24. Trial Rule 56(E) states in pertinent part that "[t]he court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits." Our supreme court has stated that it is within the trial court's discretion to accept an affidavit filed later than the thirty-day deadline specified in Trial Rule 56(C) for responding to a summary judgment motion. Ind. Univ. Med. Ctr., Riley Hosp. for Children v. Logan, 728 N.E.2d 855, 858 (Ind. 2000). Even assuming, without deciding, that Richman's affidavit "supplemented" affidavits from Baugher, Jones, Beegle, and Van Deusen that Appellants timely designated in opposition to Baugher's and Jones's summary judgment motions, we cannot conclude that

In his affidavit, Richman stated, among other things, that Jones and Baugher provided him with brochures and a manual regarding the payphone program, that he relied on their direction in conducting his sales activities, and that he received updates from them regarding the payphone program. Appellants' App. at 558-560. Appellants complain that the trial court's order "gave no reason at all for excluding the Richman affidavit" and claim that "[s]uch an order is not the reasoned exercise of discretion; it is the absence of the exercise of discretion." Appellant's Br. at 25. The trial court was not required to give a reason for excluding the affidavit, and its decision to exclude the affidavit constitutes an exercise of discretion.

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the trial court abused its discretion in excluding an affidavit that was filed after it held a hearing and ruled on the motions. Cf. Fort Wayne Lodge, LLC v. EBH Corp., 805 N.E.2d 876, 885-86 (Ind. Ct. App. 2004) (finding no abuse of discretion in admission of supplemental affidavit filed after thirty-day deadline but before summary judgment hearing).8 II. Summary Judgment We now address Appellants' arguments regarding the trial court's grant of summary judgment in favor of Appellees. Our standard of review is well settled: Summary judgment is appropriate only where the designated evidentiary matter shows that there are no genuine issues as to any material fact and that the moving party is entitled to a judgment as a matter of law. When reviewing a grant of a motion for summary judgment, we stand in the shoes of the trial court. Once the moving party demonstrates, prima facie, that there are no genuine issues of material fact as to any determinative issue, the burden falls upon the non-moving party to come forward with contrary evidence. The nonmoving party may not rest upon the pleadings but must instead set forth specific facts, using supporting materials contemplated under Trial Rule 56, which show the existence of a genuine issue for trial. The party appealing the grant of summary judgment bears the burden of persuading this court that the trial court erred, but we still carefully scrutinize the entry of summary judgment to ensure that the non-prevailing party was not denied its day in court. We do not weigh the evidence but rather consider the facts in the light most favorable to the non-moving party. We may sustain the judgment upon any theory supported by the designated evidence. The trial court here entered specific findings of fact and conclusions thereon. Although such findings and conclusions facilitate appellate review by offering insight into the trial court's reasons for granting summary judgment, they do not alter our standard of review and are not binding upon this court.

Appellants contend that the material in Richman's affidavit was unavailable until the day before it was filed. Appellants' Br. at 24. This contention is not well taken. After Richman failed to appear at a deposition set for September 3, 2003, Appellants failed to exercise due diligence to obtain his testimony by other means, such as a motion to compel. Only after the trial court entered summary judgment against Appellants and "it became clear that [Baugher and Jones] had hung him out to dry" did Appellants obtain an affidavit from Richman. Appellants' Br. at 24. The trial court properly refused to consider Appellants' twelfth-hour revelations.

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Legacy Healthcare, Inc. v. Barnes & Thornburg, 837 N.E.2d 619, 624-25 (Ind. Ct. App. 2005) (citations omitted), trans. denied (2006). We consider the claims against each of the Appellees in turn. II(A)(1). Baugher

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