E. Scott Treadway v. Stewart & Irwin, P.C., Mary Schmid, Ronald Smith, Donald Wray, Peter Kovacs, Jeffrey Halbert, James Brauer, Glenn Bowman, and Edward Bielski (mem. dec.)

MEMORANDUM DECISION
Dec 10 2015, 9:49 am
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.

APPELLANT PRO SE ATTORNEY FOR APPELLEES
E. Scott Treadway Christopher C. Hagenow
EST Law, LLC Blackwell Burke & Ramsey, PC
Indianapolis, Indiana Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

E. Scott Treadway, December 10, 2015

Appellant-Plaintiff, Court of Appeals Case No.
49A04-1503-CT-95
v. Appeal from the Marion Superior
Court.
The Honorable Heather A. Welch,
Stewart & Irwin, P.C., Mary Judge.
Schmid, Ronald Smith, Donald Cause No. 49D12-1305-CT-20905
Wray, Peter Kovacs, Jeffrey
Halbert, James Brauer, Glenn
Bowman, and Edward Bielski,
Appellees-Defendants.

Shepard, Senior Judge

[1] E. Scott Treadway appeals a grant of summary judgment in favor of Mary

Schmid, Ronald Smith, Donald Wray, Peter Kovacs, Jeffrey Halbert, James

Brauer, Glenn Bowman, and Edward Bielski (collectively “Individual

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 1 of 14
 Defendants”) and the partial grant of summary judgment in favor of Stewart &

Irwin, P.C.

[2] Concluding that we do not have jurisdiction over the partial judgment entered

for Stewart & Irwin and that the trial court appropriately granted summary

judgment to the Individual Defendants, we affirm.

Facts and Procedural History
[3] In March 2008, attorney Treadway entered into an Of Counsel Agreement with

Stewart & Irwin, P.C. This agreement outlined the parties’ duties and

responsibilities, as well as the manner of compensation. It provided Treadway

office space, support staff, and billing services for his primarily hourly-billing

business litigation practice. In return, Stewart & Irwin received a percentage of

the fees he collected.

[4] Greenfield Builders, Inc. (“GBI”) was a client Treadway brought with him.

GBI had litigation in South Carolina for which Treadway was lead counsel,

working on a contingency fee basis. At the conclusion of the GBI litigation,

Stewart & Irwin paid Treadway $254,421.75 in fees, but Treadway believed he

was due more.

[5] The Of Counsel Agreement states that it does not cover contingency fee cases,

and the parties never executed an additional agreement to deal with

contingency fee cases. Unable to reach an agreement with Stewart & Irwin on

the amount of fees he was owed from the GBI litigation, Treadway sued

Stewart & Irwin and the Individual Defendants. The Individual Defendants
Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 2 of 14
 moved for summary judgment, and Stewart & Irwin moved for partial

summary judgment. Treadway filed a response. Following a hearing, the trial

court granted judgment for the Individual Defendants and partial summary

judgment for Stewart & Irwin. Subsequently, upon request of the Individual

Defendants, the court certified as final and appealable its order as to them. This

appeal followed.

[6] In this Court, Treadway has moved to file a supplemental appendix and has

tendered one. The Individual Defendants have objected to the supplement and

moved to strike a portion of Treadway’s original appendix.

[7] The documents contained in Treadway’s supplemental appendix, as well as

those in the identified portion of his original appendix, were not before the trial

court, are therefore not part of the record on appeal, and cannot be considered

by this Court. See Boczar v. Meridian St. Found., 749 N.E.2d 87, 92 (Ind. Ct.

App. 2001) (matters outside record cannot be considered by court on appeal);

see also Ind. Appellate Rule 27 (record on appeal shall consist of clerk’s record

and all proceedings before trial court). Moreover, as this is an appeal from a

summary judgment, we can consider only those materials specifically

designated to the trial court, and none of these documents were included in

Treadway’s designation of evidence. See Pond v. McNellis, 845 N.E.2d 1043,

1053 (Ind. Ct. App. 2006) (appellate review of summary judgment is limited to

materials designated to trial court), trans. denied.

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 3 of 14
[8] Therefore, by separate order, we deny Treadway’s motion to file a

supplemental appendix, and we grant the Individual Defendants’ motion to

strike pages 255-270 of Treadway’s original appendix.

Issues
[9] Treadway presents various arguments to support his contention that the trial

court erroneously granted summary judgment in favor of the Individual

Defendants. Reorganized and restated, these contentions are:

I. Whether the court erred by granting Defendants’ motion
to strike.
II. Whether the trial court erred in granting summary
judgment for the Individual Defendants on Treadway’s
claim for breach of contract.
III. Whether the trial court erred in granting summary
judgment for the Individual Defendants on Treadway’s
claims of promissory estoppel and unjust enrichment.
IV. Whether the trial court erred in granting summary
judgment for the Individual Defendants on Treadway’s
claims of conversion and breach of fiduciary duty.
Finally, the Individual Defendants raise on cross-appeal the issue of:
V. Whether the Individual Defendants are entitled to
appellate attorney fees.

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 4 of 14
 Discussion and Decision
Appellate Jurisdiction
First, on cross-appeal, is the question whether this Court has jurisdiction over
the partial grant of summary judgment for Stewart & Irwin.

[10] Upon request by the Individual Defendants, the trial court certified as final and

appealable that portion of its order on summary judgment pertaining to them.

Thus, although not disposing of all claims as to all parties, the judgment as to

the Individual Defendants is final under Appellate Rule 2(H)(2) in as much as

the court expressly determined in writing that there was no just reason for delay

and entered judgment accordingly. See Smith v. Deem, 834 N.E.2d 1100, 1104

(Ind. Ct. App. 2005), trans. denied.

[11] That part of the order pertaining to Stewart & Irwin, however, was not certified.

Thus, it is not a final judgment under Appellate Rule 2(H) and remains

interlocutory, appealable only under Appellate Rule 14. The court’s order as to

Stewart & Irwin is not appealable as of right pursuant to Rule 14(A), and

Treadway did not seek permission to appeal under Rule 14(B). We do not

presently have jurisdiction over the portion of the trial court’s judgment that

pertains to Treadway’s claims against Stewart & Irwin.

I. Motion to Strike
[12] Treadway asserts that the trial court erred by striking a portion of his affidavit,

designated as evidentiary material in his opposition to Defendants’ motion for

summary judgment. We review a trial court’s order on a motion to strike for an

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 5 of 14
 abuse of discretion. Williams v. Tharp, 914 N.E.2d 756, 769 (Ind. 2009). An

abuse of discretion occurs when the trial court’s decision is against the logic and

effect of the facts and circumstances before it. Illiana Surgery & Med. Ctr., LLC v.

STG Funding, Inc., 824 N.E.2d 388 (Ind. Ct. App. 2005). Further, the trial

court’s decision will be reversed only upon a clear showing of prejudicial error.

Sun Life Assur. Co. of Can. v. Ind. Dep’t. of Ins., 868 N.E.2d 50 (Ind. Ct. App.

2007), trans. denied.

[13] Here, the court struck portions of paragraphs 15, 17, 18, 19, 20, 22, 23, 26, and

27 of Treadway’s affidavit, finding the statements were impermissible

conclusions and speculation. It also struck paragraph 29 as hearsay, portions of

paragraph 21 as hearsay and impermissible conclusions, and a portion of

paragraph 25 as impermissible conclusions. Treadway’s argument on appeal is

simply that these statements are statements of fact and are neither hearsay nor

impermissible conclusions.

[14] Indiana Trial Rule 56(E) requires that “[s]upporting and opposing affidavits

shall be made on personal knowledge, shall set forth such facts as would be

admissible in evidence, and shall show affirmatively that the affiant is

competent to testify to the matters stated therein.” Mere assertions of

conclusions of law or opinions will not suffice in an affidavit. Kader v. Dep’t of

Corr., 1 N.E.3d 717, 724 (Ind. Ct. App. 2103). Upon review, we find the

statements in paragraphs 15, 17, 18, 19, 20, 22, 23, 26, and 27 to be opinions,

conclusions of law, and statements not based on personal knowledge. Further,

we find that both paragraphs 21 and 29 contain hearsay as well as legal

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 6 of 14
 conclusions. Finally, paragraph 25 contains impermissible conclusions and

opinions. These qualities do not comport with the requirements for affidavits.

The court did not abuse its discretion in granting the motion to strike.

II. Piercing the Corporate Veil
[15] We turn now to the issues at the heart of the trial court’s order. Treadway

contends that the court erred when it determined there was insufficient evidence

to support piercing the corporate veil to hold the Individual Defendants liable

under the Of Counsel Agreement.

[16] On appeal from a grant or denial of summary judgment, our standard of review

is identical to that of the trial court: whether there exists a genuine issue of

material fact and whether the moving party is entitled to judgment as a matter

of law. Winchell v. Guy, 857 N.E.2d 1024 (Ind. Ct. App. 2006). Appellate

review is limited to those materials designated to the trial court. Pond, 845

N.E.2d at 1053. Thus, we are not permitted to search the materials on appeal

for, or make a decision based upon, materials that were not specifically

designated. Collins v. J.A. House, Inc., 705 N.E.2d 568 (Ind. Ct. App. 1999),

trans. denied. All facts and reasonable inferences are construed in favor of the

non-movant. Pond, 845 N.E.2d at 1053. Moreover, summary judgment may be

affirmed if it is proper on any basis shown in the record. Pfenning v. Lineman,

947 N.E.2d 392 (Ind. 2011). The party appealing the judgment carries the

burden of persuading the appellate court that the trial court’s decision was

erroneous. Bradshaw v. Chandler, 916 N.E.2d 163 (Ind. 2009).

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 7 of 14
[17] The elementary principle of corporate law is that corporate shareholders are

liable for acts of the corporation only to the extent of their investment and are

not personally liable for the corporation’s acts. CBR Event Decorators, Inc. v.

Gates, 962 N.E.2d 1276, 1281 (Ind. Ct. App. 2012), trans. denied. Courts are

reluctant to disregard corporate identity, and they do so only where the party

seeking to pierce the corporate veil can establish that the corporate form has

been misused and the result of that misuse is fraud or injustice. Id.

[18] Whether a court should exercise its equitable power to pierce a corporate veil

involves a highly fact-sensitive inquiry. Konrad Motor & Welder Serv., Inc. v.

Magnetech Indus. Servs., Inc., 973 N.E.2d 1158 (Ind. Ct. App. 2012). The party

seeking to pierce bears the burden of establishing that: (1) the corporate form

was so ignored, controlled or manipulated that it was the mere instrumentality

of another, and (2) the misuse of the corporate form constitutes a fraud or

promotes injustice. CBR Event Decorators, Inc., 962 N.E.2d at 1282. In

determining whether such a party has met its burden, evidence of the following

factors is pertinent: (1) undercapitalization; (2) absence of corporate records;

(3) fraudulent representation by corporation shareholders or directors; (4) use of

the corporation to promote fraud, injustice, or illegal activities; (5) payment by

the corporation of individual obligations; (6) commingling of assets and affairs;

(7) failure to observe required corporate formalities; or (8) other shareholder

acts or conduct ignoring, controlling, or manipulating the corporate form. Id.

[19] In support of his position, Treadway points to portions of several paragraphs in

his affidavit, but the segments he refers to were rightly struck by the trial court.

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 8 of 14
 He also directs us to the sole paragraph of his affidavit that was not struck. It

states that the shareholders of Stewart & Irwin referred to themselves and one

another as “partners.” Appellant’s Br. p. 11.

[20] Treadway neither supplies case law that holds this to be an impropriety nor

explains how this act, without more, is sufficient to pierce the corporate veil.

Further, beyond the “partner” label, he has failed to designate evidence that the

shareholders of the corporation acted as anything but shareholders. This dearth

of evidence in no way satisfies the considerable burden he must fulfill in order

to pierce the corporate veil. The trial court did not err on this issue.

III. Promissory Estoppel & Unjust Enrichment
[21] In his complaint, Treadway asserted claims of promissory estoppel and unjust

enrichment against the Individual Defendants. Essentially he argues that

because he did not receive all the fees he was owed from the GBI litigation, the

Individual Defendants must have received money that belonged to him.

[22] The elements of the doctrine of promissory estoppel are: (1) a promise by the

promisor; (2) made with the expectation that the promisee will rely thereon; (3)

which induces reasonable reliance by the promisee; (4) of a definite and

substantial nature; and (5) injustice can be avoided only by enforcement of the

promise. Huber v. Hamilton, 33 N.E.3d 1116, 1124 (Ind. Ct. App. 2015). In

addition, to prevail on a claim of unjust enrichment, a plaintiff must establish:

(1) a benefit conferred upon another at the express or implied consent of such

other party; (2) allowing the other party to retain the benefit without restitution

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 9 of 14
 would be unjust; and (3) the plaintiff expected payment. Good v. Ind. Teachers

Ret. Fund, 31 N.E.3d 978, 982 (Ind. Ct. App. 2015), trans. denied.

[23] As for promissory estoppel, the designated evidence fails to show a promise

made to Treadway by the Individual Defendants. Treadway refers to a promise

by the Individual Defendants to collect fees and remit them to him, but for

support he cites to paragraphs in his designated affidavit, portions of which

were struck by the trial court and the remainder of which merely reiterate his

allegations without providing any evidence. He also refers to the Of Counsel

Agreement, but it was executed by Treadway and Stewart & Irwin, not by the

Individual Defendants. We find no evidence in the designated materials that

the Individual Defendants made any promise to Treadway or that shows the

existence of a genuine issue of material fact as respects promissory estoppel.

[24] Likewise, Treadway has not designated any evidence that the Individual

Defendants received any of the funds he alleges are his. Once again he refers to

various struck paragraphs and to memoranda he sent to Mary Schmid, who

was President of Stewart & Irwin at the time, and to Stewart & Irwin’s

Executive Committee. The portions of the paragraphs in his affidavit that were

not struck and the memoranda restate his claims but provide no actual evidence

in support thereof. Thus, the trial court did not err in granting judgment for the

Individual Defendants on these issues.

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 10 of 14
 IV. Conversion and Breach of Fiduciary Duty
[25] Treadway raised claims of conversion and breach of fiduciary duty against the

Individual Defendants in his complaint. The trial court granted summary

judgment for the Individual Defendants on these allegations, determining they

were time-barred because Treadway had failed to file them within the two-year

statute of limitations.

[26] An action for conversion is governed by a two-year statute of limitations.

French v. Hickman Moving & Storage, 400 N.E.2d 1384 (Ind. Ct. App. 1980); see

Ind. Code § 34-11-2-4(a)(2) (1998). Similarly, breach of fiduciary duty is a tort

claim subject to the two-year statute. Shriner v. Sheehan, 773 N.E.2d 833 (Ind.

Ct. App. 2002), trans. denied; see Ind. Code § 34-11-2-4(a)(2). Under Indiana’s

discovery rule, a cause of action accrues, and the statute of limitations begins to

run, when the plaintiff knew or, in the exercise of ordinary diligence, could

have discovered that an injury had been sustained as the result of the tortious

act of another. Doe v. United Methodist Church, 673 N.E.2d 839 (Ind. Ct. App.

1996), trans. denied.

[27] Here, the undisputed evidence shows that on August 19, 2010, Treadway

received a check from the GBI litigation proceeds. According to his complaint,

Treadway “promptly notified [Stewart & Irwin] that it was not entitled to the

money it retained, that the money belonged to [him] and demanded that the

money be remitted to [him].” Appellant’s App. p. 13. Treadway states he

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 11 of 14
 severed his relationship with Stewart & Irwin in September 2010. The

complaint was filed on May 17, 2013, outside the two-year period.

[28] In hopes of avoiding the limitations period, Treadway argues fraudulent

concealment and continuing wrong, but these doctrines prove unhelpful to his

cause. When a plaintiff obtains information that would lead to the discovery of

the cause of action through ordinary diligence, the statute of limitations begins

to run, regardless of any fraudulent concealment perpetrated by the defendants.

Dickes v. Felger, 981 N.E.2d 559 (Ind. Ct. App. 2012). And, the doctrine of

continuing wrong will not prevent the statute from beginning to run when the

plaintiff learns of facts which should lead to the discovery of his cause of action

even if his relationship with the tortfeasor continues beyond that point. C & E

Corp. v. Ramco Indus., Inc., 717 N.E.2d 642 (Ind. Ct. App. 1999). In support of

his argument on this issue, Treadway cites to his supplemental appendix and to

pages 255-270 of his original appendix, both of which are not part of the record

on appeal in this case and which have been denied filing and struck from the

record, respectively. The designated evidence shows that, by his own

admission, Treadway was aware of the fees issue by August 2010, making his

May 2013 complaint untimely. Thus, the trial court correctly determined that

these claims are barred by the statute of limitations, and summary judgment for

the Individual Defendants was proper on these issues.

V. Appellate Attorney Fees
[29] Finally, the Individual Defendants request appellate attorney fees pursuant to

Indiana Appellate Rule 66(E) due to Treadway’s procedural bad faith caused by
Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 12 of 14
 his “many departures from proper appellate procedure.” Appellees’ Br. p. 45.

Appellate Rule 66(E) provides, in part, that this Court “may assess damages if

an appeal . . . is frivolous or in bad faith. Damages shall be in the Court’s

discretion and may include attorneys’ fees.” Procedural bad faith arises when a

party flagrantly disregards the form and content requirements of the rules of

appellate procedure, omits and misstates relevant facts appearing in the record,

and files briefs written in a manner calculated to require the maximum

expenditure of time, both by the opposing party and the reviewing court.

Wressell v. R.L. Turner Corp., 988 N.E.2d 289, 299 (Ind. Ct. App. 2013), trans.

denied. Although Rule 66(E) permits an award of damages on appeal, we act

with restraint in this regard due to the potential chilling effect on the right to

appeal. Id.

[30] The Individual Defendants contend that Treadway submitted materials on

appeal that were not before the trial court or that were stricken from the record

by the trial court, made improper factual claims, failed to serve a copy of his

corrected brief upon opposing counsel, and submitted a disorganized brief.

Pretty much true, but we conclude these deficiencies did not quite pass the

sanctions threshold.

Conclusion
[31] We conclude that this Court does not have jurisdiction over the partial

summary judgment granted to Stewart & Irwin and that the trial court did not

abuse its discretion in granting the Individual Defendants’ motion to strike

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 13 of 14
 portions of Treadway’s affidavit. Though we conclude that the court properly

granted judgment for the Individual Defendants, we decline to award appellate

fees.

[32] Affirmed.

[33] Robb, J., and Pyle, J., concur.

Court of Appeals of Indiana | Memorandum Decision 49A04-1503-CT-95 | December 10, 2015 Page 14 of 14