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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
Dec 22 2011, 9:02 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEYS FOR APPELLANTS: ALLYSON R. BREEDEN RHETT D. GONTERMAN Ziemer, Stayman, Weitzel & Shoulders Evansville, Indiana

ATTORNEYS FOR APPELLEE: CATHY A. NESTRICK CHAD M. SMITH Bamberger, Forman, Oswald & Hahn, LLP Evansville, Indiana

IN THE COURT OF APPEALS OF INDIANA
SENIOR MARKET DEVELOPMENT, LLC and AHREN BAUMGART, Appellants-Defendants, vs. TITAN FINANCIAL GROUP, LLC, Appellee-Plaintiff. ) ) ) ) ) ) ) ) ) )

No. 82A01-1103-PL-138

APPEAL FROM THE VANDERBURGH CIRCUIT COURT The Honorable Carl A. Heldt, Judge Cause No. 82C01-1002-PL-76

December 22, 2011

MEMORANDUM DECISION - NOT FOR PUBLICATION

CRONE, Judge

Case Summary Senior Market Development, LLC ("SMD"), and Ahren Baumgart appeal the trial courts judgment awarding $11,712.48 in attorneys fees and expenses to Titan Financial Group, LLC ("Titan"), on Titans complaint for breach of contract. On appeal, SMD and Baumgart contend that the trial court erred when it awarded attorneys fees to Titan despite concluding that Titan had failed to prove it suffered other damages as a result of the breach. Titan responds that a contract between the parties provides the legal justification for an award of attorneys fees under the circumstances presented. We agree with Titan and affirm the trial courts judgment. We remand to the trial court for an assessment of appellate attorneys fees against SMD and Baumgart. Facts and Procedural History1 In March of 2008, Baumgart and Andrew Rice were co-owners of two separate entities, SMD and Titan, which operated as field marketing organizations ("FMOs"). An FMO markets products for companies with which it has contracted and recruits and trains brokers to sell products for the companies. SMD and Titan entered into a contract with US Healthcare Holdings, LLC (hereinafter referred to as "Welborn"), 2 pursuant to which SMD and Titan together agreed to act as the FMO for Welborns Medicare Advantage healthcare

We note that counsel for the Appellants included portions of the trial transcript in the Appendix submitted to this Court. We direct counsel to Indiana Appellate Rule 50(F), which provides, "Because the Transcript is transmitted to the Court on Appeal pursuant to Rule 12(B), parties should not reproduce any portion of the Transcript in the Appendix." Throughout the trial transcript, US Healthcare Holdings, LLC, is referred to as "Welborn" because Welborn Heath Plans was the underwriter of the US Healthcare Medicare plans. Accordingly, for clarity, we will also refer to Welborn rather than US Healthcare.
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and prescription drug plans. Welborn agreed to pay SMD and Titan a commission of $200 the first year for each new customers plan and $100 each plan year that a customer renewed. In August of 2009, Baumgart and Rice decided to sever their business relationship. They entered into an "Agreement for Exchange of Limited Liability Company Interests" (the "Agreement") on August 6, 2009. Appellants App. at 15-25. Pursuant to the Agreement, Baumgart would own 100% of SMD and Rice would own 100% of Titan. In addition, Titan assigned to SMD all of its right, title, and interest in the Welborn contract. As consideration for such assignment, SMD agreed to pay Titan 40% of the FMO commission received from Welborn for all members enrolled prior to March 31, 2010. Pursuant to Paragraph 4(f) of the Agreement, during the time period that net commission is owed to Titan, SMD agreed that it would neither terminate the current and future Welborn contracts nor take any action which would cause Welborn to terminate the contracts. Id. at 17. On December 17, 2009, Baumgart, on behalf of SMD, sent a letter to Welborn resigning as FMO effective April 1, 2010. SMD was dissatisfied with Welborn and Welborn was dissatisfied with SMD for what was viewed as a "bad selling season." Tr. at 72. After SMD terminated the Welborn contract, Titan filed a complaint against SMD and Baumgart for breach of contract and seeking declaratory judgment on February 10, 2010.3 In the breach of contract action, Titan sought damages for "the lost commission resulting from the breach

We note that a copy of Titans complaint is not included in the record on appeal. However, it appears that in addition to a breach of contract claim, Titans complaint sought declaratory relief and provisional orders requiring the payment of commissions to the trial court until final resolution of the case. Titan also filed a "Motion for Emergency Hearing and to Set Expedited Trial." Although an emergency hearing date was initially set for February 26, 2010, the hearing never occurred. Appellants App. at 36.
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of the Agreement by Baumgart and SMD" as well as "reasonable attorneys fees." Appellants Br. at 1. On April 12, 2010, SMD and Baumgart filed their answer and affirmative defenses, including the defense that Titan had not suffered any damage as result of their breach of the Agreement. The trial court held a bench trial on December 2, 2010. Thereafter, on December 30, 2010, the trial court entered the following judgment: The Court having heard the evidence and argument of counsel, and being duly advised, now finds that the Plaintiff proved by a preponderance of the evidence that the Defendants breached paragraph 4(f) of the August 6, 2009 Agreement. The Court further finds that the Plaintiff failed to prove damages by a preponderance of the evidence, with the exception of attorney fees and expenses. IT IS, THEREFORE, CONSIDERED, ORDERED, ADJUDGED AND DECREED BY THE COURT that the Plaintiff recover of and from the Defendants the amount of Eleven Thousand Seven Hundred Twelve Dollars Forty-Eight Cents ($11,712.48) in attorney fees and expenses. IT IS FURTHER ORDERED that the Defendants recover no attorneys fees or expenses. Appellants App. at 1. SMD and Baumgart filed a motion to correct error which the trial court denied following a hearing on March 8, 2011. This appeal ensued. We will state additional facts in our discussion when necessary. Discussion and Decision Here, the trial court entered a general judgment in favor of Titan. We will affirm a general judgment "if it can be sustained upon any legal theory consistent with the evidence." UFG, LLC v. Southwest Corp., 784 N.E.2d 536, 543 (Ind. Ct. App. 2003), trans. denied. We do not reweigh the evidence or judge witness credibility, but we consider only the evidence

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most favorable to the judgment along with all reasonable inferences that can be drawn therefrom. Id. Moreover, our scope of review when considering a damage award in a breach of contract case is limited. Coffman v. Olson & Co., 906 N.E.2d 201, 210 (Ind. Ct. App. 2009), trans. denied. We do not reweigh evidence or judge witness credibility, and will consider only the evidence favorable to the award. Id. The award cannot be based on speculation, conjecture, or surmise, and must be supported by probative evidence. Id. We will reverse the trial courts award only when it is not within the scope of the evidence of record. Id. at 210-11. The parties do not dispute that SMD and Baumgart breached Paragraph 4(f) of the Agreement when SMD terminated the Welborn contract during the time period that net commission was owed to Titan. Nevertheless, SMD and Baumgart maintain that Titan cannot prevail on a claim for breach of contract, and consequently recover attorneys fees, merely because it proved breach of a term of the Agreement. Specifically, SMD and Baumgart contend that Titan was required to prove that it suffered damages as a direct result of the breach before Titan could also recover attorneys fees. SMD and Baumgart correctly state that to recover for breach of contract, a plaintiff must prove that (1) a contract existed; (2) the defendant breached the contract, and (3) the plaintiff suffered damage as a result of the defendants breach. Collins v. McKinney, 871 N.E.2d 363, 370 (Ind. Ct. App. 2007). Consequential damages may be awarded on a breach of contract claim when the non-breaching partys loss flows naturally and probably from the

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breach and was contemplated by the parties when the contract was made. Indianapolis City Market Corp. v. MAV, Inc., 915 N.E.2d 1013, 1024 (Ind. Ct. App. 2009). However, SMD and Baumgart erroneously assume that attorneys fees and expenses are not recoverable in this case in the absence of an award of other damages. Specifically, SMD and Baumgart argue that attorneys fees cannot be considered "damages arising from the defendants breach." Appellants Reply Br. at 3. Despite their urging, we need not decide whether the attorneys fees and expenses incurred by Titan in pursuing its breach of contract claim should be considered damages that flowed naturally and probably from the breach.4 Instead, the Agreement of the parties specifically provided for the recovery of attorneys fees incurred in connection with any breach, nonfulfillment, or default in the performance of any covenant of the Agreement, and neither the trial court nor this Court need look any further than the Agreement itself. We begin by recognizing that generally, Indiana follows the American Rule, which requires each party to pay his or her own attorney fees. Steward v. TT Commercial One, LLC, 911 N.E.2d 51, 58 (Ind. Ct. App. 2009), trans. denied. However, the parties may shift the obligation to pay such fees through a contract or agreement, and courts will enforce the agreements as long as they are not contrary to law or public policy. Id. We agree with Titan

The weight of authority in Indiana provides that attorneys fees are not recoverable as consequential damages in a breach of contract action in the absence of an agreement, statute, or rule. See Thor Electric, Inc. v. Oberle & Assocs., 741 N.E.2d 373, 382 (Ind. Ct. App. 2000) (citing Indiana Ins. Co. v. Plummer Power Mower & Tool Rental, Inc., 590 N.E.2d 1085, 1093 (Ind. Ct. App. 1992)).
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that Paragraph 10 of the parties Agreement entitled "Indemnification" supports the trial courts award of attorneys fees to Titan in this case. Appellants App. at 20. Indemnity has been defined as "[t]he right of an injured party to claim reimbursement for its loss, damage or liability from a person who has such a duty." BLACKS LAW DICTIONARY 784 (8th ed. 2004). Rights of indemnification can arise in three contexts: (1) express contractual obligation, (2) statutory obligation, or (3) common law implied indemnity. Sears, Roebuck, & Co. v. Boyd, 562 N.E.2d 458, 461 n.2 (Ind. Ct. App. 1990). Generally, an indemnity agreement involves a promise by one party (the indemnitor) to reimburse another party (the indemnitee) for the indemnitees loss, damage, or liability. Henthorne v. Legacy Healthcare, Inc., 764 N.E.2d 751, 756 (Ind. Ct. App. 2002). If the words of an indemnity agreement are clear and unambiguous, they are to be given their plain and ordinary meaning. Id. Thus, we will construe an indemnity agreement to cover all losses and damages to which it reasonably appears the parties intended to apply. Id. Paragraph 10 of the Agreement provides in relevant part: (b) Baumgart and SMD shall indemnify and defend [TITAN] their independent contractors, agents, attorneys, and accountants, and their successors and assigns (collectively, the "TITAN Indemnities [sic]"), in respect of, and hold them harmless from and against, and shall pay (i) the full amount of any and all Losses (as hereinafter defined) suffered, incurred or sustained by any and/or all of the TITAN Indemnities [sic] (or to which any and/or all of the TITAN Indemnities [sic] may become subject) arising out of, resulting from, based upon, in connection with or relating to any breach of or inaccuracy in the representations and warranties, or any breach, nonfulfillment or default in the performance of any covenant or agreement, on the part of Baumgart and SMD contained in this Agreement, and (ii) the full amount of any and all Losses suffered, incurred or sustained by any and/or all of the TITAN Indemnities [sic] (or to which any and/or all of the TITAN
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Indemnities [sic] may become subject) arising out of, resulting from, based upon, in connection with or relating to the business or condition of SMD arising before or after the Effective Date [.] (c) As used in this section, "Loss" or "Losses" means any and all damages, fines, fees, penalties, deficiencies, diminution in value of investment, losses and expenses, including without limitation, interest, reasonable expenses of investigation, court costs, reasonable fees and expenses of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment (such fees expenses to include without limitation, all reasonable fees and expenses, including, without limitation, reasonable fees and expenses of attorneys incurred in connection with (i) the defense of any claims or (ii) asserting or disputing any rights under this Agreement against any party thereto or otherwise[)].

Appellants App. at 20-21. The unambiguous language of Paragraph 10 of the Agreement indicates that SMD and Baumgart agreed to indemnify Titan for "the full amount of any and all Losses ... arising out of, resulting from, based upon, in connection with or relating to ... any breach, nonfulfillment or default in the performance of any covenant or agreement ... contained in this Agreement." Id. The term "Losses" is defined to include "reasonable fees and expenses of attorneys, incurred in connection with ... asserting or disputing any rights under this Agreement against any party thereto or otherwise." Id. There is no requirement in Paragraph 10 that Titan prove a textbook case of breach of contract and/or that Titan prove that it suffered additional damages or losses as a result of SMD and Baumgarts nonfulfillment of Paragraph 4(f) of the Agreement. Based upon the broad language used by the parties in Paragraph 10, it reasonably appears that the parties intended that the indemnity provision cover attorneys fees incurred by Titan in connection with its assertion of a breach of contract

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claim against SMD and Baumgart.5 Accordingly, we cannot say that the trial court erred when it awarded Titan its attorneys fees. SMD and Baumgart make much of the fact that indemnification clauses generally provide coverage for the risk of harm sustained by a third party as opposed to harm suffered by the indemnitee. See City of Hammond v. Plys, 893 N.E.2d 1, 4 (Ind. Ct. App. 2008) (indemnity clause covers risk of harm sustained by third persons that may be caused by either indemnitor or indemnitee). Thus, they argue that the indemnification provision here was not meant to apply to a breach of contract action between the parties to the Agreement. To the contrary, the plain language of the indemnification provision here provides that SMD and Baumgart shall indemnify, defend, hold harmless, and pay Titan the full amount of any losses incurred in "asserting or disputing any rights under this Agreement against any party thereto or otherwise." Id. (emphasis added).6 The provision specifically refers to a cause of action between the parties to the Agreement and does not require that the losses be incurred by a

SMD and Baumgart contend that Titan cannot now rely on Paragraph 10 of the Agreement to justify the trial courts award of attorneys fees because Titan did not specifically rely upon that provision during trial. However, the entirety of the parties Agreement was clearly in evidence before the trial court. We remind SMD and Baumgart that we will affirm a general judgment "if it can be sustained upon any legal theory consistent with the evidence." UFG, 784 N.E.2d at 543.

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SMD and Baumgart also maintain that the trial courts interpretation of Paragraph 10 of the Agreement to allow an award of attorneys fees would render Paragraph 20 of the Agreement meaningless. Paragraph 20 provides: "In the event any party incurs any costs, including reasonable attorneys fees to enforce the terms of this Agreement, the prevailing party in such action shall be entitled to recover such costs." Appellants App. at 23. Although Paragraph 20 may be somewhat redundant of Paragraph 10, that is not to say that Paragraph 20 is rendered meaningless. Both provisions support an award of attorneys fees under different circumstances. We must accept an interpretation of the contract that harmonizes its provisions, as opposed to one that causes the provisions to conflict or be rendered meaningless. See Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870 N.E.2d 494, 501 (Ind. Ct. App. 2007).
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third party. Again, we need look no further than the Agreement itself to determine the rights and liabilities of the parties. Finally, SMD and Baumgart suggest that to allow an award of attorneys fees to Titan in the absence of proof of other damages is somehow unfair and would create an unnecessary likelihood of frivolous or oppressive lawsuits. We wholeheartedly disagree and emphasize that the parties here contracted to provide for such an award. Courts in Indiana have long recognized the freedom of parties to enter into contracts and have presumed that contracts represent the freely bargained agreement of the parties. Trimble v. Ameritech Publ'g, Inc., 700 N.E.2d 1128, 1129 (Ind. 1998). SMD and Baumgart have given us no reason to question whether they, as sophisticated parties, should be bound by their Agreement with Titan. In sum, the trial court did not err when it awarded Titan its attorneys fees pursuant to the Agreement. SMD and Baumgart do not challenge the amount of the award, and we find the award to be within the scope of the evidence presented. Additionally, Titan correctly asserts that, pursuant to the Agreement, it is entitled to reasonable attorneys fees incurred in defending this appeal. We therefore remand to the trial court for a hearing to determine Titans appellate attorneys fees. Affirmed and remanded. BAILEY, J., concurs MATHIAS, J., dissents with separate opinion.

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IN THE COURT OF APPEALS OF INDIANA
SENIOR MARKET DEVELOPMENT, LLC and AHREN BAUMGART, Appellants, vs. ) TITAN FINANCIAL GROUP, LLC, Appellee. ) ) ) ) ) ) ) )

No. 82A01-1103-PL-138

MATHIAS, Judge, dissenting I respectfully dissent from the majoritys conclusion that Titan is entitled to recover attorney fees and expenses pursuant to the parties Agreement. The majority concludes that Titan is entitled to attorney fees based on Paragraph 10 of the parties Agreement. However, as noted by SMD and Baumgart, Titan did not argue to the trial court that it was entitled to attorney fees under Paragraph 10; instead, Titan based its trial argument solely on Paragraph 20 of the Agreement and did not argue about Paragraph 10 until its motion to correct error. "A party waives an issue by presenting it for the first time in a motion to correct error." Giltner v. Ivers, 954 N.E.2d 1035, 1040 (Ind. Ct. App. 2011). But even considering Titans argument regarding Paragraph 10 on the merits, I disagree with the majority. Contractual provisions allowing recovery of attorney fees should

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be strictly construed. BKCAP, LLC v. Captec Franchise Trust 2000-1, 701 F. Supp. 2d 1030, 1035-36 (N.D. Ind. 2010) (citing Chicago Southshore & South Bend R.R. v. Itel Rail Corp., 658 N.E.2d 624, 634 (Ind. Ct. App. 1995)). And, strictly construed, Paragraph 10 is an indemnification agreement. Indemnity "transfers liability from one who has been compelled to pay damages to another who should bear the entire loss." Henthorne v. Legacy Healthcare, Inc., 764 N.E.2d 751, 756 (Ind. Ct. App. 2002) (quoting 41 Am.Jur.2d Indemnity

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