Kansas City Services, Inc. v. Bryan Connan, Julie Connan, and Connan's Zionsville Investors, LLC (mem. dec.)

MEMORANDUM DECISION
                                                                         FILED
Pursuant to Ind. Appellate Rule 65(D), this
                                                                    Feb 03 2017, 8:08 am
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the                       CLERK
                                                                     Indiana Supreme Court
purpose of establishing the defense of res judicata,                    Court of Appeals
                                                                          and Tax Court
collateral estoppel, or the law of the case.



ATTORNEY FOR APPELLANT                                 ATTORNEY FOR APPELLEES
Matthew A. Griffith                                    Kent M. Frandsen
Griffith Law Group, LLC                                Parr Richey Obremsky Frandsen &
Indianapolis, Indiana                                  Patterson LLP
                                                       Lebanon, Indiana



                                             IN THE
     COURT OF APPEALS OF INDIANA

Kansas City Services, Inc.,                                 February 3, 2017

Appellant-Plaintiff,                                        Court of Appeals Case No.
                                                            06A01-1606-PL-1274

        v.                                                  Appeal from the Boone Superior
                                                            Court

Bryan Connan,1 Julie Connan,                                The Honorable Matthew C. Kincaid,
                                                            Judge
and Connan’s Zionsville
Investors, LLC,                                             Trial Court Cause No. 06D01-1310-
                                                            PL-557
Appellees-Defendants.




Bradford, Judge.




1
  This appellee is variously referred to in the record and the parties’ briefing as “Brian” or “Bryan.” The
Brief of Appellees, however, identifies him as “Bryan Connan,” which we shall assume is the correct spelling.

Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017         Page 1 of 18
                                          Case Summary
[1]   Appellant-Plaintiff Kansas City Services, Inc. (“KCS”), appeals from the trial

      court’s ruling on its restitution claim against Appellees-Defendants Bryan

      Connan, Julie Connan, and Connan’s Zionsville Investors, LLC (“CZI”). In

      2002, Bryan and Julie owned a commercial building in Zionsville (“the

      Property”) and entered into a land contract to sell it to William Rabb. By late

      2008, payments on the land contract were $2500.00 per month, the Connans

      had transferred the Property to CZI, and Rabb was delinquent. Rabb brought

      his father-in-law John Petrowski, the owner of KCS, to a meeting with Bryan.

      KCS began making payments on the land contract in 2009 and entered into

      communications with Bryan to purchase the Property. Although the parties

      ultimately were not able to reach an agreement to sell KCS the Property, KCS

      continued payments until April of 2013, totaling over $140,000.00 altogether.


[2]   On October 25, 2013, KCS filed a complaint against the Connans and CZI for

      breach of contract, conversion, and unjust enrichment. CZI counterclaimed for

      breach of contract and foreclosure against KCS. CZI also filed a complaint for

      foreclosure against Rabb. On October of 2014, CZI obtained a default

      judgment of foreclosure against Rabb. On January 21, 2015, the trial court

      determined that no contract for the sale of the Property had been formed

      between KCS and CZI and that KCS was not entitled to recover on a theory of

      unjust enrichment because CZI had conferred a benefit of foregoing foreclosure

      upon Rabb for four years and Petrowski had hoped to preserve the Property for

      his children. On appeal, we affirmed the trial court’s determination that no

      Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 2 of 18
      sales contract had been formed, reversed the conclusion that KCS could not

      recover for unjust enrichment, and remanded for a restitution hearing. The trial

      court concluded that KCS was entitled to approximately $22,000.00 in

      restitution. KCS appeals, contending that the trial court erred in (1) setting its

      restitution award at anything less than the amount it paid on the sales contract,

      (2) calculating interest, and (3) not ruling that the Connans were personally

      liable for restitution. CZI contends that the trial court’s award of restitution is

      proper and that KCS failed to establish that the Connans should be personally

      liable for restitution but acknowledge that the trial made an error in calculating

      interest on the restitution award. We affirm the trial court’s ruling on the base

      amount of restitution and agree that KCS has not shown that piercing the

      corporate veil is warranted but remand for the entry of an updated award of

      interest in the amount of $4409.33.



                            Facts and Procedural History
[3]   The underlying facts of this case were outlined, in part, by our disposition of a

      previous appeal in this case:


              [3] On January 29, 2002, the Connans and William Rabb
              (“Rabb”) executed a land contract whereby Rabb agreed to pay
              the Connans $218,000.00 for real property located at 95 East
              Pine in Zionsville (“the Property”). Rabb tendered a down
              payment of $10,000.00 and promised to make monthly payments
              of $1,383.83 for sixty months and a balloon payment thereafter.

              [4] On April 1, 2007, the Connans and Rabb executed an
              Addendum to Purchase Agreement, changing the purchase price

      Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 3 of 18
        to $195,000.00 and the installment payments to $2,500.00. On
        January 30, 2008, the Connans quit-claimed their interest in the
        Property to CZI.

        [5] In December of 2008, Rabb met with Bryan Connan and
        advised Connan that his father-in-law, John Petrowski
        (“Petrowski”), “would start making the payments for [Rabb].”
        Petrowski owns KCS, a real estate investment company.

        [6] On February 6, 2009, Petrowski, as an authorized signer,
        issued a KCS check to CZI in the amount of $4,943.55. The
        Memo portion of the check reflected that the payment was “Dn
        Pmt. Bldg 95 E Pine, Zionsville, Ind 46077.” KCS began to
        make monthly payments of $2,500.00 to CZI. [Although
        attempts to negotiate a sales contract for the Property were
        ultimately unsuccessful, KCS continued monthly payments until
        April of 2013].

        ….

        [11] In 2011, the Property was damaged when a water pipe
        burst.… Petrowski proposed to [Bryan] that Indiana Insurance
        Company “needs to be involved” and expressed willingness to
        join Connan in pursuing recovery from Indianapolis Water
        “legally to protect our financial interest in the building.” [Bryan]
        received an insurance check in the amount of $15,000.00. No
        repairs were performed.

        ….

        [14] On October 25, 2013, KCS filed a complaint against the
        Connans and CZI for breach of contract, conversion, and unjust
        enrichment. On December 16, 2013, CZI counterclaimed for
        breach of contract and foreclosure against KCS. CZI also filed a
        complaint for foreclosure against Rabb. On October of 2014,
        CZI obtained a default judgment of foreclosure against Rabb.

        ….


Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 4 of 18
              [16] On January 21, 2015, the trial court entered its findings of
              fact, conclusions of law, and judgment. In relevant part, the trial
              court determined that no contract for the sale of the Property had
              been formed. The trial court found that KCS was not entitled to
              recover on a theory of unjust enrichment because CZI had
              conferred a benefit of foregoing foreclosure upon Rabb for four
              years and Petrowski had hoped to preserve the Property for his
              children. CZI prevailed upon its counterclaim and was granted
              relief from the cloud on its title relative to KCS’s equitable
              interest affidavit. In sum, CZI and the Connans retained
              possession of the Property with clear title, insurance proceeds, a
              judgment against Rabb, and all sums paid by KCS.

      Kansas City Servs., Inc. v. Connan, Cause No. 06A04-1502-PL-66, slip op. at 1-3

      (Ind. Ct. App. 2015) (footnotes and record citations omitted).


[4]   KCS appealed, alleging that the trial court erred in failing to find that a contract

      for the sale of real estate existed between KCS and CZI and in determining that

      KCS could not recover on a theory of unjust enrichment. Id. at 1. We affirmed

      the trial court’s ruling that no contract existed between KCS and CZI but

      remanded for a hearing on the proper amount of restitution to be paid to KCS.

      Id. at 5.


[5]   On March 23, 2016, the trial court held a hearing on the question of restitution,

      at which Bryan testified. Bryan testified that neither KCS nor Petrowski ever

      informed him that if KCS were not given its own purchase contract for the

      Property, it would seek to have all of its payments returned. Bryan estimated

      that the reasonable market commercial rental value of the Property in 2009 was

      approximately $1500.00 per month, but that Rabb’s company continued to

      occupy the Property preventing the collection of rent from another tenant.
      Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 5 of 18
      According to Bryan, he believed that Petrowski/KCS was taking over Rabb’s

      purchase contact and its balance when KCS began payments. When the

      Property was water-damaged, Bryan testified that he did not repair or re-rent

      the Property because he did not have possession of it and was still receiving

      payments on it.


[6]   On May 19, 2016, the trial court issued its judgment on remand on KCS’s

      restitution claim, which reads, in part, as follows:


                                          FINDINGS OF FACT

                      1.      Between January 2002 and January 2008 Bryan R.
              Connan and Julie Connan, husband and wife (the “Connans”),
              owned a commercial building located at 95 East Pine Street,
              Zionsville (the “Building”).
                      2.      In January 2002, the Connans entered into a land
              contract to sell the Building to William J. Rabb (“Rabb”) for the
              price of $218,000 with monthly payments over a five year term
              and a balloon payment due in February 2007. The purchaser
              was required to keep the Building insured, maintained and the
              utilities paid.
                      3.      In April 2007, the Connans and Rabb executed an
              addendum to the contract reflecting a reduced principal balance
              of $195,000, payments of $2,500 a month and extending the date
              for Rabb’s balloon payment to Mach 2012.
                      4.      In January 2008, the Connans conveyed by
              quitclaim deed ownership of the Building to CZI, an Indiana
              liability entity of which they are the sole members.
                      5.      Around Christmas 2008, Rabb was delinquent in his
              contract payments and he brought John Petrowski, the owner of
              Kansas City Services, Inc. (“KCS”), to a meeting with Bryan
              Connan. Thereafter, communications occurred between [Bryan]



      Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 6 of 18
        and KCS regarding KCS’s desire to purchase the Building from
        CZI.
               6.     After the meeting between KCS and [Bryan], Rabb
        made no further payments on his contract. However, Rabb’s
        business furnishings, inventory and equipment remained in the
        Building until the time of the January 2015 trial.
               7.     Beginning in February 2009 through April 2013
        KCS made approximately fifty-five payments by check payable to
        CZI for $2,500 each. Including an initial catch-up payment and
        some taxes installments, KCS paid CZI the total sum of
        $142,065.
               8.     KCS presumed its payments to CZI were being
        applied toward its intended purchase of the Building.
               9.     CZI received and deposited those payments in its
        company bank account. None of the money has gone to Bryan
        or Julie Connan personally.
               10. CZI thought the KCS payments were being made
        pursuant to Rabb’s purchase contract and were applied to that
        contract, and CZI would have conveyed clear title to Rabb
        and/or KCS had that contract been fulfilled.
               11. In the Summer of 2009, CZI made it clear that any
        contract with KCS would have to be guaranteed by Petrowski
        personally; KCS refused but it continued making the $2,500
        monthly payments.
               12. KCS ceased making payments to CZI in May 2013
        and later that year filed this lawsuit against CZI and the
        Connans.
               13. As confirmed by the Court of Appeals, CZI and
        KCS did not reach a meeting of the minds on all material terms
        of an agreement. No enforceable contract was ever formed
        between KCS and CZI.
               14. In October 2013 Connans obtained a default
        judgment of forfeiture thereby vacating Rabb’s interests in the
        Building.
               15. However, until November 2015, KCS continued to
        contend in this Court and on appeal that it had an enforceable
        right to purchase the Building. The pendency of that claim

Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 7 of 18
        prevented CZI from being able to take possession of the Building
        and sell or lease it.
               16. In reliance on KCS’s continuing payments between
        February 2009 and April 2013, CZI allowed Rabb to remain in
        possession of the Building. CZI did not seek to terminate
        whatever KCS’s rights until after the payments had stopped.
               17. Between 2009 and 2015, the fair market rental value
        of the Building on a triple net basis was between $1,500 and
        $1,800 a month. (KCS Exh. 54; [Bryan] testimony) Taking the
        mid-point of that monthly rental range from February 2009
        through November 2015 yields a total rental loss to CZI since
        February 2009 of $132,000, not including interest thereon.
               18. CZI would have removed Rabb and retaken
        possession of the Building in early 2009 and rented it for fair
        value in the marketplace thereafter had CZI knew that KCS
        would seek to recover the payments it made to CZI.
               19. A big part of this misunderstanding was that KCS
        did not make clear to CZI its intended course of action if its own
        contract was not formed. Had it informed CZI that
        reimbursement of its payments would be sought if a contract was
        not reached, CZI would have either reached agreement with
        KCS or declared a forfeiture, reclaimed possession of the
        Building, and mitigated its loss. KCS never gave CZI adequate
        notice; instead, it knowingly allowed CZI to forego its rights and
        remedies against Rabb. In fact, KCS’s own pleadings merely
        sought to enforce a contract; they make no mention of an
        alternative claim for restitution.
               19. Sometime in later 2009 and 2011, the Building
        sustained extensive interior water damage from frozen pipes
        because the utilities had been disconnected. That condition was
        not immediately discovered and it resulted in significant mold
        damage.
               20. The parties stipulated at trial that because of the
        water and mold damage the fair market value of the Building at
        the time of trial was only $60,000. This is a $140,000 reduction
        in value from the Building’s roughly $200,000 value in early
        2009.

Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 8 of 18
                21     CZI’s financial position was materially harmed both
        by the loss of $132,000 in rental income from the Building and
        $140,000 in diminished from the time of contracting to the
        current date. Either of these elements approaches KCS’s
        payments of $142,000.
                22. By reason of the water damage, CZI recovered the
        sum of $15,000 under a casualty policy it purchased and paid for.
        That was the full extent of coverage for water damage. The
        money has been retained by CZI.
                23. The market rate of interest since 2009 has [been] at
        three percent (3%) or less. There is no evidence that CZI earned
        more than that on the money or that KCS could have earned a
        greater rate of return than 3%.
                24. If KCS is entitled to recover pre-judgment interest
        on its payments since February 2009, the calculation is
        complicated because of the somewhat varying payments over
        time. The amount can be reasonably approximated by taking the
        mid-point of $142,000 ($71,000) x 3% per year = $2,130 per year
        calculated from the mid-point of the payment stream (March
        2011) though the present date. That is $2,310 / yr x seven years
        (February 2009 through March 2016) = $15,000.
                35. No factual basis has been presented for any personal
        liability of defendants Bryan or Julie Connan. By the time of its
        first payment in February 2009, KCS was on notice that CZI
        owned the Building. All of KCS’s payments were made payable
        to CZI, and it retains the funds in its company account. No
        testimony or exhibits suggest any commitment made or
        obligation undertaken by either [Bryan] individually.

                                CONCLUSIONS OF LAW

                1.     A restitution action for unjust enrichment seeks a
        remedy based in equity. Troutwine Estates Dev. Co., LLC v. Comsub
        Design and Eng’g, Inc., 854 N.E.2d 890, 897 (Ind. Ct. App. 2006),
        trans. denied.



Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 9 of 18
               2.      The objective of an unjust enrichment award is not
        to calculate the amount of the plaintiff’s loss, but rather to
        determine the extent to which a defendant has been enriched.
               3.      As distinct from compensatory damages, restitution
        remedies a defendant’s unjust enrichment rather than a plaintiff’s
        loss. Restitution measures the extent of the defendant’s gain and
        seeks to disgorge that gain. Rollings v. Smith, 716 N.E.2d 502,
        507 (Ind. Ct. App. 1999).
               4.      Enrichment from a money payment is measured by
        the amount of the payment or the resulting increase in the
        defendant’s net assets, whichever is less. RESTATEMENT
        (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT,
        Sec. 49(2). [Emphasis added]
               5.      If receipt of a benefit has led a recipient, such as
        CZI, without notice, to change position in such a manner that an
        obligation to make restitution of the original benefit would be
        inequitable to the recipient, the liability in restitution is to that
        extent reduced. CZI did not have notice of KCS’s intent to seek
        restitution if a contract was not informed and its liability in
        restitution should be thereby reduced.
               6.      Under these established principles of unjust
        enrichment, despite receiving KCS’s, $142,065, this exchange
        cannot be viewed in isolation. It doesn’t reflect added value to
        CZI. If CZI had merely rented the Building to Rabb or KCS it
        would have earned $1,500-1,800 a month and retained ownership
        of a building worth over $200,000. Instead it regains property
        diminished by $140,000 in value, recovers no rental income, and
        is asked to reimburse KCS for all of its payments plus interest.
        That is not an equitable result here.
               7.      KCS has failed to carry its burden of proof that
        Bryan and/or Julie Connan have any personal indebtedness to
        KCS.

                                    JUDGMENT ENTRY

              Consistent with the above findings and conclusions, the
        Court now enters judgment in favor of plaintiff Kansas City
Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 10 of 18
              Services, Inc., against defendant Connan’s Zionsville Investors,
              LLC, in the sum of $22,708.04. Judgment is entered in favor of
              Bryan R. Connan and Julie Connan on plaintiff’s claim.

      Appellant’s App. pp. 39-45. The trial court clarified in a note issued on May

      25, 2016, that the restitution amount represented the $142,046.65 received by

      CZI from KCS offset by rent of $1500.00 per month from 2009 to 2015 that CZI

      did not collect but could have, according to Bryan’s testimony. To this total of

      $22,046.65 the trial court added interest of six percent on the average balance of

      KCS’s money for the period in question, interest which it calculated at $661.39.



                                 Discussion and Decision
[7]   The trial court entered findings of fact and conclusions of law pursuant to

      Indiana Trial Rule 52.


              When a court has made special findings of fact, an appellate
              court reviews sufficiency of the evidence using a two-step
              process. “First, it must determine whether the evidence supports
              the trial court’s findings of fact; second, it must determine
              whether those findings of fact support the trial court’s
              conclusions of law.” Estate of Reasor v. Putnam County, 635
              N.E.2d 153, 158 (Ind. 1994) (citation omitted). Findings will
              only be set aside if they are clearly erroneous. Id. “Findings are
              clearly erroneous only when the record contains no facts to
              support them either directly or by inference.” Id. (citation
              omitted). A judgment is clearly erroneous if it applies the wrong
              legal standard to properly found facts. State v. Van Cleave, 674
              N.E.2d 1293, 1296 (Ind. 1996), reh’g granted in part, 681 N.E.2d
              181 (Ind. 1997). In order to determine that a finding or
              conclusion is clearly erroneous, an appellate court’s review of the


      Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 11 of 18
              evidence must leave it with the firm conviction that a mistake has
              been made. Id. at 1295.

      Yanoff v. Muncy, 688 N.E.2d 1259, 1262 (Ind. 1997).


              I. Amount of Restitution for Unjust Enrichment
[8]   The trial court found that KCS was entitled to $22,046.65 in base restitution.

      KCS contends that the trial court erred in awarding anything less than the

      $142,046.65 that it paid toward the Property, plus eight percent annual interest.


              A claim for unjust enrichment “is a legal fiction invented by the
              common law courts in order to permit a recovery … where the
              circumstances are such that under the law of natural and
              immutable justice there should be a recovery…” Bayh v.
              Sonnenburg, 573 N.E.2d 398, 408 (Ind. 1991) (citation omitted).
              “A person who has been unjustly enriched at the expense of
              another is required to make restitution to the other.”
              RESTATEMENT OF RESTITUTION § 1 (1937). To prevail on a
              claim of unjust enrichment, a claimant must establish that a
              measurable benefit has been conferred on the defendant under
              such circumstances that the defendant’s retention of the benefit
              without payment would be unjust. Bayh, 573 N.E.2d at 408.

      Zoeller v. E. Chicago 2nd Century, Inc., 904 N.E.2d 213, 220 (Ind. 2009).


              Restitution is described as “a return or restoration of what the
              defendant has gained in a transaction.” 1 DAN B. DOBBS, LAW
              OF REMEDIES § 4.1(1), t 551 (2nd ed. 1993). As distinct from
              damages, restitution is an award made to remedy defendant’s
              unjust enrichment rather than plaintiff’s loss. Id. § 3.6(2), at 343.
              Stated differently, restitution measures the remedy by the
              defendant’s gain and seeks to force disgorgement of that gain. Id.
              § 4.1(1), at 555.

      Rollings v. Smith, 716 N.E.2d 502, 507 (Ind. Ct. App. 1999) (footnote omitted).
      Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 12 of 18
[9]    KCS’s argument is that the amount of its restitution must necessarily be the

       entire amount it paid to CZI. KCS cites to no authority for this proposition,

       and we are aware of none. Moreover, we agree with CZI that, had we

       previously determined that KCS was entitled to be repaid all of the money it

       paid to CZI, there would have been no need to remand for a hearing on the

       question.


[10]   That said, KCS has failed to convince us that the trial court’s disposition is

       unjust. Although KCS paid on the original land contract for several years, it is

       incorrect to assert, as KCS does, that it got nothing for its payments. A

       reasonable inference can be drawn that, at least initially, KCS paid on Rabb’s

       land contract to protect the interests of Rabb and Rabb’s wife, who actually ran

       the business operating on the Property, and continued payment guaranteed

       continued possession and control of the Property. If that possession and control

       was not profitably exercised (whether by Rabb, Rabb’s wife, or KCS), that is

       hardly CZI’s fault. Even though KCS’s payments did not result in ownership of

       the Property, it was not at all unreasonable to at least charge KCS “rent” for the

       period it was paying on the land contract, which is essentially what the trial

       court’s order does.


[11]   Bryan testified that the fair rental value of the Property in 2009 was $1500.00

       per month, a figure confirmed by KCS’s appraiser. Looked at from CZI’s

       perspective, it was not unreasonable to conclude that it was entitled to rent for

       the period of time the Property was possessed by Rabb. It is also not

       unreasonable, however, to conclude that CZI was not entitled to keep the larger

       Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 13 of 18
       payments on the land contract because the Property was, in fact, never sold.

       The trial court’s order struck that particular balance. KCS has not established

       that the trial court’s order of base restitution in the amount of $22,046.65 was

       inequitable.2


                                     II. Pre-Judgment Interest
[12]   KCS contends that the trial court also abused its discretion in not awarding it

       the $72,000.00 in pre-judgment interest it requested. Indiana Code section 34-

       51-4-7 provides that “[t]he court may award prejudgment interest as part of a

       judgment.” Indiana Code section 34-51-4-9 provides that “[t]he court shall

       compute the prejudgment interest at the simple rate of interest determined by

       the court. The rate set by the court may not be less than six percent (6%) per

       year and not more than ten percent (10%) per year.”


                The prejudgment interest statute permits the trial court to award
                prejudgment interest, but does not require an award of
                prejudgment interest. We review a trial court’s ruling on a
                motion for prejudgment interest under the prejudgment interest
                statute for an abuse of discretion. [Inman v. State Farm Mut. Auto.
                Ins. Co., 981 N.E.2d 1202, 1208 (Ind. 2012)]. The trial court
                abuses its discretion when its decision is “clearly against the logic
                and effect of the facts and circumstances before it.” Turner v.
                State, 953 N.E.2d 1039, 1045 (Ind. 2011). The prejudgment
                interest statute grants the trial court “broad discretion to




       2
         It is worth noting that the trial court’s restitution order does not take into account the significant water
       damage to the Property that occurred when it was not in CZI’s possession and the utilities were allowed to be
       turned off.

       Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017         Page 14 of 18
                 determine when an award of prejudgment interest is warranted.”
                 [Inman, 981 N.E.2d at 1208].

       Alsheik v. Guerrero, 979 N.E.2d 151, 155 (Ind. 2012) (some citations omitted).


[13]   As an initial matter, KCS’s requested award of pre-judgment interest is based

       on restitution of some $142,000.00, to which we have already ruled it is not

       entitled. We also disagree with KCS’s contention that it is entitled to eight

       percent pre-judgment interest, apparently compounded monthly. The trial

       court’s order of six percent is within the statutory range, and KCS does not

       explain why it is entitled to more. Moreover, Indiana Code section 34-51-4-9

       makes it clear that interest will be “at the simple rate of interest determined by the

       court.” (Emphasis added).


[14]   That said, CZI concedes that the trial court was within its discretion to order

       that pre-judgment interest be paid on the $22,046.65 restitution award at six

       percent simple interest. CZI also acknowledges that the trial court made an

       error in calculating the interest, which it determined to be $661.39 for an eighty-

       month period of unjust enrichment. It is apparent that this amount represents

       six percent interest on the principal for only one year of the unjust enrichment

       period of six and two-thirds years. The correct amount of simple interest for the

       period in question is $4409.33.3




       3
           This amount is calculated by simply multiplying the interest for one year by six and two-thirds.


       Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017            Page 15 of 18
[15]   KCS spends the bulk of its argument on its contention that the trial court

       essentially allowed CZI to retry the case during the restitution proceeding. KCS

       points out that the restitution hearing should have been limited to determining

       the appropriate amount of restitution. We conclude that, contrary to KCS’s

       claims, this was, in fact, the case. Without going into most of KCS’s

       contentions in detail, they seem to all be based on the false premise that it is

       automatically entitled to restitution equal to the total amount paid on the land

       contract. If this were true, then much of the evidence presented at the hearing

       would indeed have been irrelevant. Because it is not, however, evidence related

       to fair market rent for the Property for the time period in question, etc., is

       relevant. Suffice to say that our reading of the record is that: (1) the evidence

       admitted at the restitution hearing was relevant to the amount of restitution and

       (2) the question of whether a sales contract existed between KCS and CZI was

       not revisited.


[16]   KCS specifically focuses on what it claims was the trial court allowing CZI to

       introduce evidence that Bryan believed KCS was making payments on Rabb’s

       land contract on Rabb’s behalf. Even if we assume that the trial court did allow

       such evidence, we do not see how Bryan’s beliefs about KCS’s motives were

       relevant. Whether KCS’s payments were made on Rabb’s behalf or with an

       intent to purchase the Property for itself, Bryan testified that CZI did not

       foreclose on the Property because payments were still being made; the

       motivation for those payments does not seem particularly relevant. Finally, the

       evidence relied upon by the trial court to determine restitution had nothing to


       Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 16 of 18
       do with whether a real estate contract existed between KCS and CZI. What it

       boils down to is that the trial court’s ruling was based on (1) the amount KCS

       paid over the years and (2) the amount of rent CZI could have collected had it

       foreclosed in 2009. The evidence related to these two questions has nothing to

       do with revisiting the question of whether KCS and CZI formed a valid real

       estate contract. KCS has not established that the trial court allowed CZI to

       “retry” the case.


                         IV. Personal Liability for Restitution
[17]   KCS argues that the trial court should have ordered Bryan and Julie personally

       liable for restitution, in addition to CZI.


               While an Indiana court will impose personal liability to protect
               innocent third parties from fraud or injustice, the burden is on the
               party seeking to pierce the corporate veil to prove that the
               corporate form was so ignored, controlled or manipulated that it
               was merely the instrumentality of another and that the misuse of
               the corporate form would constitute a fraud or promote injustice.

       Aronson v. Price, 644 N.E.2d 864, 867 (Ind. 1994).


[18]   We conclude that KCS has wholly failed to carry their burden in this regard.

       At the restitution hearing, although KCS argued that Bryan, Julie, and CZI

       benefitted from the payments KCS made, it presented no evidence whatsoever

       that CZI’s corporate form was so ignored, controlled, or manipulated so as to

       constitute a fraud or promote injustice. Aside from the fact that it was not

       explicitly asked to do so, the trial court did not err in failing to hold Bryan and

       Julie personally liable for CZI’s restitution payment to KCS.

       Court of Appeals of Indiana | Memorandum Decision 06A01-1606-PL-1274 | February 3, 2017   Page 17 of 18
[19]   We affirm the judgment of the trial court in part and remand with instructions

       to order restitution in the amount of $22,046.65 plus interest of $4,409.33 for a

       total award of $26,455.98.


       Vaidik, C.J., and Brown, J., concur.




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