Appeals court affirms judgment against Zionsville company over unpaid promissory notes

The Indiana Court of Appeals on Tuesday affirmed a lower court’s decision that a Zionsville medical device company must pay its investors for their matured promissory notes, even though the notes violated securities laws.

The case dates to June 2024, when several investors filed a breach of contract complaint against VoCare Inc. for failure to pay their promissory notes, which had recently matured. Last summer, Hamilton County Judge Michael Casati granted summary judgment in the investors’ favor, awarding about $200,000 plus interest until the notes were paid in full.

VoCare was formed and incorporated in Lebanon in 2009 as a small startup. It has since moved to Zionsville.

In 2021, the U.S. Food and Drug Administration approved a device that VoCare developed to let physicians remotely monitor their patients’ vital signs.

The investors, AGS Capital LLC, Scott Weaver and Donald Woodley, had previously sued VoCare in 2022 for breach of fiduciary duties, which later sparked an investigation by the Indiana Secretary of State Securities Division, ultimately leading to a cease-and-desist order against the company and several of its officers in February 2024.

In appealing the 2025 summary judgment, VoCare contended that the promissory notes were negotiable instruments subject to the Uniform Commercial Code and that the notes were sold as unregistered securities in violation of the law. However, the company argued its obligation to pay the notes was nullified by the Uniform Commercial Code’s illegality defense – an argument the court waived because it was raised for the first time on appeal.

Even if the defense remained, the court still rejected VoCare’s arguments.

In the opinion, Court of Appeals Judge Stephen Scheele held that just because a promissory note violates securities law does not automatically make it void or unenforceable.

“Indiana law has protected the holder’s enforceability of a note issued in violation of securities laws for nearly a century,” Scheele wrote.

Anthony Holton, an attorney for Reminger Co. LPA and who represented VoCare on appeal, said the company has no comment.

Indianapolis attorney Jon Mattingly, who represented AGS Capital, did not immediately return The Indiana Lawyer’s call or email.

VoCare also argued that its repayment of the notes became “impossible or impractical” because of the Secretary of State’s cease-and-desist order. The court did not agree with the company’s conclusions.

“VoCare points to no authority demonstrating that such an order is the type of act of law contemplated by the impossibility doctrine, and we find none,” Scheele wrote.

The case Vocare, Inc. v. AGS Capital, LLC, et al., 25A-CC-02413.