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COA reverses ruling in right of contribution case

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The Indiana Court of Appeals used common law today to reverse a judgment in favor of a man suing his business partner for failing to contribute to guarantee payments.

Frank Rogers co-owned two businesses with Equicor Development, in which Gregory Small is president – Plainfield Place and Patriot’s Place. In Plainfield Place, Equicor owned about 40 percent membership interests, Rogers had nearly 54 percent and another man had nearly 6 percent. Equicor and Rogers each owned a 50 percent membership interest in Patriot’s Place.

The men purchased property to develop and entered into loan agreements with Busey Bank on the Plainfield Place land and with Monroe Bank for the Patriot’s Place land. The men executed personal guaranties as security for the promissory notes.

They defaulted on the notes; Rogers paid some money to the banks, but Small did not. Rogers sued Small, asserting a “right of contribution” against him for the amount paid by Rogers in excess of his pro rata share and for the disproportionate benefit received by Small through Equicor’s management fees and real estate commissions. Both men filed for summary judgment; the trial court ruled in favor of Rogers, finding it wasn’t necessary for Rogers to have paid the liability in full and the law finds the right of contribution when one party pays more than his share of the common obligation. It awarded $43,050.47 in damages to Rogers.

But the trial court erred in ruling in favor of Rogers, the appellate court held in Gregory M. Small v. Frank A. Rogers, No. 29A02-1001-PL-30. Using common law because Indiana Code is silent as to the liability between co-guarantors, the Court of Appeals applied the same theory of contribution that has been applied to co-sureties – “the right of contribution operates to make sure those who assume a common burden carry it in equal portions.”  

In order to be entitled to contribution, Rogers had to have paid the debt or more than his proportionate share of it. But the evidence showed he only paid a portion of the amounts due under the promissory notes and far less than his share of the debts.

Judge Carr Darden wrote that Rogers’ reliance on Balvich v. Spicer, 894 N.E.2d 235, 243 (Ind. Ct. App. 2008), is misplaced. In Balvich, the banks reduced the co-guarantors’ debt to two judgments and the Spicers had paid more than their proportionate share, thereby satisfying the judgments. In the instant case, the debt owed by Rogers and Small hadn’t been reduced to judgment, so there can be no satisfaction of the judgment and no discharge of the debt, wrote Judge Darden.

“Rather, in this case, the debt still exists. Rogers did not discharge the debt, either by paying the debt or a judgment on the debt. Furthermore, the amounts paid by Rogers do not constitute more than his proportionate share of the more than $5,000,000.00 of debt incurred,” wrote the judge.

“To hold otherwise would result in a claim for contribution being asserted upon each and every payment made toward a debt until the debt is discharged,” he wrote in a footnote. “Of course, this is not to say that the amounts paid toward a debt cannot, or will not, be credited to the party asserting the right of contribution once the guaranteed debt is discharged.”
 

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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