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COA upholds dismissal of claim against construction company

February 6, 2018

The Indiana Court of Appeals has upheld the dismissal of a White County woman’s fraud and damages claim against the construction company that built her home, finding the woman’s claims were barred by the doctrine of res judicata based upon an earlier small claims judgment.

In February 2016, Janet Freels filed a small claims action against James F. Koches and Sunset Builders, Inc., alleging the company had failed to properly perform construction work on her home, causing $6,000 in damages. The small claims court ruled against Freels, but she did not appeal.

Instead, Freels filed another complaint against Sunset in the White Superior Court, this time alleging “poor workmanship” resulting in more than $30,000 in damages. She also alleged fraud and conversion entitling her to damages and fees.

Sunset moved to dismiss Freels’ second complaint under the doctrine of res judicata, and the trial court agreed. Freels appealed that ruling in Janet Freels v. James Koches and Sunset Builders, Inc., 91A02-1708-PL-1988, but the Indiana Court of Appeals upheld the trial court’s decision on Tuesday.

On appeal, Freels relied on the case of Biggs v. Marsh, which held that “(t)he evidence to establish the material elements of a fraudulent misrepresentation of an existing fact reasonably relied upon by (homebuyers) to their detriment differs substantially from the evidence necessary to sustain” a claim for specific performance. However, Judge Edward Najam wrote in a Tuesday opinion that Biggs has since been clarified by the holding in Hilliard v. Jacobs, 957 N.e.2d 1043, 1047-48 (Ind. Ct. App. 2011).

Hilliard held that “(e)ven though individual pieces of evidence may differ between the two sets of claims…the same general evidence would be used to adjudicate all of Hilliard’s claims.” The court also noted that all the evidence was available from the beginning of the Hilliard litigation.

Similarly, Freels’ additional claims in her second complaint could have and should have been litigated in her initial small claims action, Najma wrote.

“Nothing about the facts alleged in Freels’ subsequent action in the White Superior Court demonstrates that the ‘new’ information relied upon was unavailable to her at the time she filed her action in the small claims court,” he wrote. “Rather, the underlying facts demonstrate that both litigations are ‘essentially the same.’”

In a separate memorandum decision also handed down on Tuesday, the appellate court upheld the small claims court’s denial of Freels’ motion for relief from judgment under Indiana Trial Rule 60(B)(2). Freels filed that motion more than one year after the smalls claims court entered judgment against her on her claim against Sunset, Najam said, making it untimely under Trial Rule 60(B).

That case is Janel Freels v. James F. Koches and Sunset Builders, Inc., 91A04-1708-SC-1990.

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