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V. Ganz Builders and Development Co., Inc. v. Pioneer Lumber, Inc.

Court of Appeals of Indiana

September 8, 2016

V. Ganz Builders and Development Co., Inc., and Vladimir Ganz, Appellants-Defendants,
v.
Pioneer Lumber, Inc., Appellee-Plaintiff

         Appeal from the Porter Superior Court The Honorable William E. Alexa, Judge Trial Court Cause No. 64D02-1211-CC-11607

          ATTORNEY FOR APPELLANTS J. Thomas Vetne Jones Obenchain, LLP South Bend, Indiana

          ATTORNEY FOR APPELLEE Terry K. Hiestand Hiestand Law Office Chesterton, Indiana

          Crone, Judge.

         Case Summary

         [¶1] V. Ganz Builders and Development Co., Inc. ("VGB"), signed an application for a line of credit with Pioneer Lumber, Inc. ("Pioneer"), and also signed a credit account agreement. The line of credit was secured by a personal guaranty agreement signed by VGB's president, Vladimir Ganz. Pioneer sued VGB and Ganz (collectively "Appellants") for breach of contract and to enforce the guaranty. Appellants filed a counter motion for summary judgment, asserting that Pioneer's claims were time-barred by the applicable statute of limitations. The trial court denied the motion, finding that Appellants waived this defense by failing to plead it in their answer to Pioneer's complaint. After a bench trial, the court entered judgment in Pioneer's favor. Appellants filed a motion to correct error, which was denied.

         [¶2] Appellants now appeal. As preliminary matters, Pioneer contends that Appellants failed to preserve their appellate rights and that they may not challenge the summary judgment order. Because Appellants' motion to correct error was timely filed, and because the summary judgment order was not a final judgment, we disagree. For their part, Appellants assert that the trial court erred in finding that they waived their statute of limitations defense and in denying their counter motion for summary judgment. Because Pioneer has not affirmatively shown that it was prejudiced by Appellants raising the defense on summary judgment, and because Pioneer's claims against Appellants were untimely filed, we reverse and remand with instructions to enter summary judgment in Appellants' favor.

         Facts and Procedural History

         [¶3] In 1996, VGB signed an application for a line of credit with Pioneer and also signed a credit account agreement. The line of credit was secured by a personal guaranty agreement signed by Ganz.[1] VGB used the line of credit to purchase tools and building supplies from Pioneer. Two accounts were governed by the line of credit: the General Account and the Real Estate Account. In November 2012, Pioneer filed a complaint against Appellants, alleging that VGB had breached the credit account agreement by failing to make timely payments on its purchases and that Ganz had defaulted on the guaranty agreement by failing to pay VGB's debts. Pioneer's complaint alleged that "[t]he last date upon which materials were purchased by [VGB] from Pioneer … was March 27, 2006" and that Appellants owed Pioneer over $40, 000 in unpaid balances plus finance charges and attorney's fees. Appellants' App. at 25. In January 2013, Appellants filed an answer and affirmative defenses to Pioneer's complaint.

         [¶4] In January 2014, Pioneer filed a motion for summary judgment as to both liability and damages. In April 2014, Appellants filed a counter motion for summary judgment, asserting for the first time that Pioneer's claims were time-barred by the six-year limitation on actions on accounts and contracts not in writing under Indiana Code Section 34-11-2-7. On July 3, 2014, the trial court issued an order granting Pioneer's summary judgment motion as to liability only and denying Appellants' counter motion for summary judgment.[2] The court found that Appellants waived the statute of limitations defense by failing to plead it in their answer. Appellants filed a motion to correct error, which the trial court denied.[3]

         [¶5] A bench trial on damages was held on November 19, 2015, and the trial court took the matter under advisement. See Trial Tr. at 63 ("The only thing I see here is to look at the statute and see what it computes and says. I'll let you know."). In an order file-stamped and signed on December 2, 2015, the trial court entered judgment in Pioneer's favor for over $61, 000 in unpaid balances, finance charges, and attorney's fees. The last line of the order reads, "ALL OF WHICH IS DONE on this 2nd day of December, 2015, nunc pro tunc November 20, 2015." Appellants' App. at 9 (underlining omitted). The order was noted in the chronological case summary ("CCS") on December 8, 2015. Id. at 5.

         [¶6] Indiana Trial Rule 59(C) provides that a motion to correct error, "if any, shall be filed not later than thirty (30) days after the entry of a final judgment is noted in the [CCS]." Appellants filed a motion to correct error on December 31, 2015, less than thirty days after the entry of the trial court's order was noted in the CCS but more than thirty days after the order's nunc pro tunc date. In their motion, Appellants again argued that Pioneer's claims were time-barred and asked the court to grant its counter motion for summary judgment. Pioneer filed a statement in opposition, arguing that Appellants should have but failed to appeal the trial court's denial of their counter motion for summary judgment and that their motion to correct error was untimely because it should have been filed within thirty days of the nunc pro tunc date. On February 5, 2016, the trial court issued an order summarily denying Appellants' motion to correct error without commenting on its timeliness. The order was noted in the CCS on February 16, 2016. Appellants' App. at 6.[4]

         [¶7] Indiana Appellate Rule 9(A)(1) provides in relevant part that if a party "files a timely motion to correct error, a Notice of Appeal must be filed within thirty (30) days after the court's ruling on such motion is noted in the [CCS.]" Appellants filed a notice of appeal on February 26, less than thirty days after the trial court's ruling on their motion to correct error was noted in the CCS. Additional facts will be provided below.

         Discussion and Decision

         Section 1 - Appellants' motion to correct error was timely filed.

         [¶8] As a threshold matter, we address Pioneer's citation-free argument that Appellants failed to preserve their appellate rights because they did not file their motion to correct error within thirty days of the December 2 order's November 20 nunc pro tunc date. Pursuant to Trial Rule 59(C), the event that triggered the thirty-day deadline was the notation of the order in the CCS, which occurred on December 8. Appellants filed their motion to correct error on December 31, well within the thirty-day deadline. Thus, Pioneer's argument is without merit.[5]

         Section 2 - The summary judgment order was interlocutory, and therefore Appellants may challenge the trial court's ruling that they waived their statute of limitations defense.

         [¶9] Pioneer also argues that Appellants may not challenge the trial court's ruling that they waived their statute of limitations defense because they failed to appeal the summary judgment order. We disagree. Indiana Trial Rule 56(C) states,

A summary judgment upon less than all the issues involved in a claim or with respect to less than all the claims or parties shall be interlocutory unless the court in writing expressly determines that there is no just reason for delay and in writing expressly directs entry of judgment as to less than all the issues, claims or parties.

         The trial court entered summary judgment upon less than all the issues and did not expressly direct entry of judgment as to less than all the issues. Thus, the summary judgment order here was interlocutory. And our supreme court has stated that "[a] claimed error in an interlocutory order is not waived for failure to take an interlocutory appeal but may be raised on appeal from the final judgment." Bojrab v. Bojrab, 810 N.E.2d 1008, 1015 (Ind. 2004). That is what Appellants have done here, and properly so.

         Section 3 - The trial court erred in finding that Appellants waived their statute of limitations defense.

         [¶10] We now address Appellants' argument that the trial court erred in finding that they waived their statute of limitations defense by failing to plead it in their answer. Indiana Trial Rule 8(C) states that a responsive pleading, such as an answer, "shall set forth affirmatively and carry the burden of proving … statute of limitations … and any other matter constituting an … affirmative defense." In its summary judgment order, the trial court acknowledged that a statute of limitations defense may be raised for the first time in a summary judgment motion, citing Honeywell, Inc. v. Wilson, 500 N.E.2d 1251 (Ind.Ct.App. 1986), trans. denied (1987). In Wilson, the plaintiff was injured by a press with a faulty safety switch and sued Honeywell and other defendants in 1983. The defendants were unaware that the ten-year products liability statute of limitations was an issue when they filed their answer and did not plead it as an affirmative defense. Only during discovery did they become aware that the switch had been manufactured in 1968. The defendants raised the statute of limitations issue in a summary judgment motion, which the trial court denied on the basis that "it is not permissible to raise the statute of limitations by summary judgment. The trial court held that the defense was waived since it had not been pleaded and since the answers had not been amended." Id. at 1252.

         [¶11] Our Court disagreed ...


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