Preview:

Pursuant to Ind.Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

FILED
May 19 2011, 9:31 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEY FOR APPELLANTS: SHAWN P. RYAN South Bend, Indiana

ATTORNEYS FOR APPELLEES: LONNIE D. JOHNSON BELINDA R. JOHNSON-HURTADO Clendening Johnson & Bohrer P.C. Bloomington, Indiana

IN THE COURT OF APPEALS OF INDIANA
MARK KRAMER and KERRI KRAMER, Appellants, vs. KRAMER FURNITURE AND CABINET MAKERS, INC. and THOMAS KRAMER, Appellees. ) ) ) ) ) ) ) ) ) )

No. 71A04-1008-PL-599

APPEAL FROM THE ST. JOSEPH SUPERIOR COURT The Honorable Margot F. Reagan, Judge Cause No. 71D04-0510-PL-387

May 19, 2011

MEMORANDUM DECISION - NOT FOR PUBLICATION

NAJAM, Judge

STATEMENT OF THE CASE Mark Kramer and Kerri Kramer (the Kramers) appeal from the trial court`s entry of judgment following a bench trial in favor of Kramer Furniture and Cabinet Makers, Inc. (Kramer Furniture) on Kramer Furniture`s complaint on account, for breach of contract and unjust enrichment, on the Kramers` counterclaim, and on the Kramers` third-party complaint against Thomas Kramer. The Kramers contend that the court misapplied a $19,750 credit for antiques (the antiques credit) to the balance Tom Kramer owed on a promissory note to Mark Kramer as of September 1999 rather than to invoices the Kramers owed Kramer Furniture for labor and materials provided for construction of the Kramers` new home through December 2010. Thus, the Kramers contend that the trial court erred when it entered a money judgment for Kramer Furniture rather than for the Kramers. The trial court made findings and conclusions under Trial Rule 52(A). We conclude that the evidence supports the findings and that the findings support the conclusions and judgment on this issue and, therefore, we affirm. FACTS AND PROCEDURAL HISTORY Following a bench trial, and after considering the Kramers` motion to correct error, the trial court entered amended findings of fact and conclusions as follows: Findings of Fact A. Identification of Parties and Their Respective Claims and Defenses 1. Mark Kramer (Mark) and Kerri Kramer (Kerri) are married. These defendants together will be referred to as (Kramers). 2. Mark and Thomas Kramer (Tom) are brothers.

2

3. Mark owned a business known as Termiguard, Inc. (Termiguard) during relevant time periods. 4. Tom is the owner of Kramer Furniture & Cabinet Makers, Inc. (Kramer Furniture), successor to Warehouse Antiques, Inc. and Thomas H. Kramer, Inc. 5. Tom operates Kramer Furniture, which has been in the business of buying and selling antiques, and restoring and producing cabinets. 6. The current operation of Kramer Furniture primarily involves manufacturing cabinets and furniture. 7. On October 3, 2005, Kramer Furniture filed its Complaint (Complaint) against the Kramers requesting judgment in its favor for monies owed due (i) on account, (ii) from a breach of contract, or (iii) for unjust enrichment. 8. Kramer Furniture`s Complaint originally requested judgment in the amount of $23,620.29 plus an additional prime plus one percent (1%) finance charge compounded daily until the date of judgment. Kramer Furniture has requested leave to revise its request for judgment to conform with the evidence produced at trial in an amount of $40,866.06, plus statutory prejudgment interest through the date of judgment and that . . . motion has been granted. 9. On January 18, 2006, the Kramers filed their Answer to Kramer Furniture`s Complaint and raised three (3) affirmative defenses claiming that each barred Kramer Furniture`s Complaint: (i) unclean hands, (ii) accord and satisfaction, and (iii) right to an offset. 10. On January 18, 2006, the Kramers filed, along with their Answer, their Counterclaim against Kramer Furniture (Counterclaim) and a ThirdParty Complaint against Tom (Third-Party Complaint). 11. With their Counterclaim, the Kramers alleged that Kramer Furniture undertook a debt Tom owed to Mark and they requested judgment in an amount to be proven at trial, which they appear to have claimed was in excess of $34,000.00. 12. With their Third-Party Claim against Third-Party Defendant, Tom, the Kramers alleged that Kramer Furniture and Tom failed to accurately account for the goods and services Kramer Furniture provided to the
3

Kramers in their new home, and that Tom continued to owe a debt to the Kramers in an amount to be proven at trial. 13. As to both their Counterclaim and Third-Party Claim, the Kramers alleged that they incurred attorney`s fees in this matter exceeding $13,000.00. 14. Kramer Furniture and Tom objected to the admission of the Kramers` attorney`s fees because it was not within the issues set by the pleadings and as such would prejudice Kramer Furniture in its defenses on the merits. Their objections were overruled. 15. Kramer Furniture and Tom, respectively, answered the Counterclaim and the Third-Party Claim and raised four (4) affirmative defenses to each: (i) full accord and satisfaction, (ii) waiver and estoppel, (iii) full and complete payment, and (iv) laches. B. Promissory Note 1. On October 3, 1987, Tom entered into a Note (Promissory Note) in favor of Termiguard wherein Termiguard loaned Tom the principal sum of $50,000.00. 2. 3. This Promissory Note was subsequently assigned to Mark. Relevant provisions of the Promissory Note include: a. Interest to be charged on the Promissory Note was eight and three-fourths percent (8 3/4%) annually; b. The Promissory Note was to be paid off in full on January 3, 1988; A provision of the Note provided: c. If I am in default, the Note Holder may send me a written notice telling me that if I do not pay the overdue amount by a certain date, the Note Holder may require me to pay immediately the full amount of principal which has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is delivered or mailed to me; Another provision of the Note provided:

4

d. If the Note Holder has required me to pay immediately in full as described above, the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses include, for example, reasonable attorneys` fees; and e. Unless applicable law requires a different method, any notice that must be given to me under this Note will be given by delivering it or by mailing it by first class mail to me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. 4. Throughout the life of the Note, neither Mark nor Termiguard issued any written notice of default to Tom regarding payments due under the Promissory Note. 5. At trial, Tom presented evidence for payments totaling $68,548.45 (principal plus interest) as of September 13, 1999. He also submitted two documents that purported to represent payments of $7,000.00 and $1,036.84 on the balance of the promissory notes. 6. He did not present cancelled checks or bank statements for those two payments. The documents appeared to have been reconstructed. The document showing a $7,000.00 payment to Termiguard, Inc. did not contain a note like others which was: Interest due on Note @ 8.75%. Instead, it said Loan Principal Repayment. It was dated September 9, 1989, close to a $12,000.00 loan Mark made to Tom (not the subject of this lawsuit). Mark testified that he didn`t charge interest on the $12,000.00 loan. Further, Mark did not recall receiving the two additional payments claimed by Tom. Mark acknowledged the remaining payments. Tom failed to prove that these amounts were paid by a preponderance of the evidence. Therefore he paid $60,511.61 on the note as of September 13, 1999. 7. Towards repayment for the Note, Tom also transferred some antiques to Mark and Kerri, some of which were transferred back to him. 8. The parties agreed that the value of the antiques kept by the Kramers was to be deducted from the balance due under the promissory note. 9. The antiques that remained with Mark and Kerri had the following values: Dresser
5

$15,000.00

Three Pitchers Coffer Sampler Windsor Side Chair TOTAL

$ 750.00 $ 750.00 $ 2,500.00 $ 750.00 $19,750.00

10. The appropriate credit to Tom for the antiques is approximately $19,750.00. 11. At all relevant times Tom was the owner, a director and an officer of Kramer`s Furniture and had the authority to bind that company to its agreement with the Kramers. 12. As of September 13,1999, Kramer Furniture owed Mark $19,411.83 on the Note. ($39,161.83 minus the antiques valued at $19,750.00). The $39,161.83 figure is from Kramer Furniture's calculations of payments and interest as of September 13, 1999 leaving this amount owed. C. Home Construction Work 1. On December 27, 1999, the Kramers contracted to build a new home at 13937 Hearthside Drive, Granger, Indiana (New Home), with Nugent Builders (Nugent) and entered into a Sales and Specification Agreement (Nugent Contract) with Nugent. 2. At the same time, the Kramers and Tom discussed whether Kramer Furniture would provide certain materials and labor for the Kramers` New Home (the Agreement). 3. In return, Kramer Furniture would be compensated. The offer and acceptance of the terms of the agreement relating to the work and consideration were oral. 4. Nugent was to pay Kramer Furniture for materials and labor it supplied in accordance with the Nugent Contract (Nugent Allowances). 5. The value of the materials and labor Kramer Furniture provided in excess of the Nugent Allowances would be credited for amounts Tom owed under the Promissory Note (Setoff). 6. The materials and labor provided in excess of the Nugent Allowances and the Setoff were understood by Tom to be paid for by the Kramers to Kramer Furniture.
6

7. The Kramers agreed to accept Kramer Furniture`s offer to provide materials and labor as the Kramers requested and the value of these materials and labor would be credited by the Nugent Allowances and the Setoff. 8. The relevant provisions of the Nugent Contract are: a. Allowances. Dollar amounts designated as allowances on either the contract or proposals are estimates. After the work is performed, the actual cost exceeds the allowance the difference shall be charged to the Purchaser [the Kramers]. If the actual cost is less than the allowance, the Purchaser shall receive a refund at closing b. Exterior Doors: Front door unit with Transom and round top (as per unit) with an allowance of $1,620.00. Other exterior doors, to be insulated metal doors, no storm doors included. c. Interior Trim: To be 3-1/4 casing on windows and doors, and 41/4 base, Coffer Ceiling in Great Room with Crown; Tray ceiling in Master Bedroom; 2-pieced Crown Molding in Dining Room, Living Room, Den and Sitting Room. Chair Rail in Dining Room Living Room, Den and Foyer. d. Kitchen Allowance: An allowance of $45,000.00 to include the following: Kitchen Cabinets and Counter Tops, Bathroom Vanities and Vanity Tops. 9. Kramer Furniture invoiced Nugent on three (3) separate occasions for the work it performed pursuant to the Nugent Contract, and Nugent paid all three (3) invoices in full for a total amount of $60,594.05. The work Kramer Furniture performed was completed on or about December 10, 2000. 10. The Kramers worked with Kramer Furniture selecting and requesting the designs and materials they wanted installed in their New Home. 11. Kramer Furniture, at the Kramers` request, provided other materials and labor, including but not limited to, customized cabinetry, a wine rack, a custom-made Mahogany Front Door, lighting, and specialized designs. 12. Kramer Furniture also restored various furniture pieces for the Kramers and provided other miscellaneous items of furniture.
7

13. In total, the Kramers requested, and Kramer Furniture provided and installed, the following materials at the following costs: House Cabinetry Kitchen & Granite Locker Area & Top Laundry Area & Top Master Bath & Tops Bedroom Baths & Tops $40,783.00 $ 6,118.00 $ 4,660.00 $ 4,359.00 $ 4,172.00 $60,092.00

Study

Download Mark Kramer, et al. v. Kramer Furniture and Cabinet Makers, Inc., et al..pdf

Indiana Law