Shelby's Landing -II, Inc., Richard Deckard, Jr., Marilyn Deckard, and Deckard Realty & Development Co., Appellants-Defendants,
PNC Multifamily Capital Institutional Fund XXVI Limited Partnership, Columbia Housing SLP Corporation and Shelby's Landing II - L.P., Appellees-Plaintiffs.
from the Shelby Superior Court The Honorable Charles D.
O'Connor, Special Judge Trial Court Cause No.
Attorney for Appellees Kenneth J. Munson Hoover Hull Turner
LLP Indianapolis, Indiana
Attorney for Appellants Christopher J. McElwee Monday Jones
& Albright Indianapolis, Indiana
of the Case
Appellants-Defendants, Shelby's Landing-II, Inc.
("Shelby's Landing"); Richard Deckard, Jr.
("Richard"); Marilyn Deckard ("Marilyn");
and Deckard Realty & Development Co. ("Deckard
Realty") (collectively, "the Defendants"),
appeal the trial court's judgment in favor of
Appellees-Plaintiffs, PNC Multifamily Capital Institutional
Fund XXVI Limited Partnership ("PNC Multifamily");
Columbia Housing SLP Corporation ("Columbia"); and
Shelby's Landing II-L.P. ("the Partnership")
(collectively, "the Plaintiffs"), in their breach
of contract claim. The Defendants argue that it was error for
the trial court to find that they had misappropriated the
Partnership's funds and committed theft because the
Plaintiffs did not raise misappropriation or theft claims in
their complaint. They also argue that the trial court abused
its discretion by awarding the Plaintiffs an unreasonable
amount of attorney fees.
We conclude that, regardless of the trial court's
misappropriation and theft findings and conclusions, there
were adequate uncontested findings and conclusions to support
the trial court's judgment. Because we also conclude that
the trial court awarded the Plaintiffs a reasonable amount
for their attorney fees, we affirm the trial court's
1. Whether the trial court erred when it entered findings
that the Defendants had committed misappropriation and theft.
2. Whether the trial court abused its discretion in
determining the amount of attorney fees to award the
In April 2005, Shelby's Landing, Deckard Realty,
Columbia, and PNC Multifamily entered into a limited
partnership agreement ("Partnership Agreement"),
forming the Partnership. The purpose of the Partnership was
to "construct, rehabilitate, acquire, own, maintain,
manage, lease, sell, mortgage, or otherwise dispose" of
property in Shelbyville, Indiana, in order to profit from a
tax credit system designed to encourage private investment in
low-income housing developments. (App. 220). The Partnership
Agreement named Shelby's Landing as the General Partner
of the Partnership; PNC Multifamily and Columbia as the
Limited Partners (collectively, "the Limited
Partners") of the Partnership; and Deckard Realty as the
developer of the Partnership. The President of Shelby's
Landing, Richard, was also the President of Deckard Realty.
Pursuant to the Partnership Agreement, Shelby's
Landing's duties as General Partner included, in relevant
part: (1) managing the Partnership's business; (2)
keeping and maintaining the Partnership's accounting
records; (3) advancing all funds necessary to meet operating
deficits; (4) maintaining tenant security deposits in
separate accounts; and (5) making an immediate capital
contribution to fund any necessary credit adjustment amounts.
It was also prohibited from, without the consent of the
Limited Partners, borrowing from the Partnership; commingling
partnership funds with the funds of any other person; or
causing the Partnership to make any loan or advance to any
The same day that the partners executed the Partnership
Agreement, Deckard Realty, Richard, and Marilyn
(collectively, "the Guarantors") executed a
guaranty agreement ("Guaranty Agreement"). In the
Guaranty Agreement, the Guarantors guaranteed:
to the Partnership and the Limited Partners the full and
prompt payment, performance, observance, compliance, and
satisfaction of all obligations, covenants, representations,
and warranties on the part of the General Partner to be paid,
performed, observed, complied with, or satisfied with respect
to the [Partnership] Agreement.
(App. 305). The terms of the Guaranty Agreement also provided
. . . Upon any default by the Partnership or the General
Partner or the Developer or Other Obligors relating to any
obligation under the [Partnership] Agreement, the Limited
Partners may, at either of their option, proceed directly and
at once against the Guarantor[s] to collect the full amount
of the Guarantor[s'] liability hereunder, or any portion
thereof, without first proceeding against the Partnership,
the General Partner, the Developer, any Other Obligors, or
any person, corporation, partnership, or other entity.
Subsequently, due to delays in the development of the
Shelbyville property, the partners executed an amendment to
the Partnership Agreement ("Adjuster Note")
recognizing that the Partnership, Shelby's Landing, and
the Guarantors owed the Limited Partners an adjusted amount
of $950, 000 plus interest ("Adjuster Amount"), to
be paid in installments. Shelby's Landing, Richard, and
Marilyn guaranteed the Adjuster Note as Guarantors.
Three years later, on or about November 10, 2010, the Limited
Partners sent Shelby's Landing a written notice that it
was in default under the Partnership Agreement. Specifically,
they alleged that Shelby's Landing had: (1) failed to
take all actions necessary to maintain and operate the
Shelbyville property; (2) defaulted under the construction
loan for the property; (3) defaulted in repaying the Adjuster
Note; and (4) made loans or advances to itself or other
affiliates without the consent of the Limited Partners. The
Limited Partners demanded that Shelby's Landing cure its
default by November 16, 2010, or face removal from its status
as General Partner.
Shelby's Landing did not cure its alleged breaches of the
Partnership Agreement, and the Limited Partners sent it
another written notice of default on June 22, 2011. In this
second notice, the Limited Partners again requested that
Shelby's Landing cure the breaches they had identified in
their November 10 notice of default. They also alleged that
Shelby's Landing had committed additional breaches of
contract since November 10, including failing to provide the
Limited Partners with federal and state tax returns and
audited Partnership financial statements. The Limited
Partners demanded that Shelby's Landing cure all of the
alleged defaults by July 5, 2011, or be subject to removal
from being General Partner. They also stated that they were
sending the notice to the Guarantors pursuant to the terms of
the Guaranty Agreement, "to demand that Guarantor[s]
immediately cure or cause to be cured the defaults of
[Shelby's Landing]." (App. 171).
Shelby's Landing again failed to cure its defaults.
Accordingly, on August 17, 2011, the Limited Partners and the
Partnership sent Shelby's Landing a notice of its removal
as General Partner. Five days later, on August 22, 2011, the
Plaintiffs-the Limited Partners and the Partnership-filed a
complaint against the Defendants-Shelby's Landing and the
Guarantors. In their complaint, the Plaintiffs raised breach
of contract and breach of guaranty claims. In addition to
declaratory and other forms of relief, the Plaintiffs also
requested recovery of their attorney fees.
On September 7, 2012, the Plaintiffs filed a motion for
partial summary judgment requesting, among other judgments, a
declaration that Shelby's Landing had been properly
removed as General Partner and a judgment against
Shelby's Landing and the Guarantors for the amounts due
under the Adjuster Note. The trial court granted the motion
for a partial summary judgment on July 19, 2013, and held a
trial to determine the remaining issues of liability and
damages on January 26, 2015.
At trial, the parties presented evidence of liability and
damages, and the Plaintiffs attempted to admit two affidavits
from their attorneys and invoices documenting the
attorneys' fees. The Defendants objected to the admission
of the affidavits and invoices on grounds of hearsay, but the
trial court conditionally admitted them, pending post-hearing
argument from the parties.
As a result of other evidence admitted at the January 26
trial, the trial court entered the following findings of fact
and conclusions of law:
* * *
29) [Shelby's Landing], as the General Partner through
August 17, 2011, was responsible for the day-to-day
management of the [Partnership], and, as such, was and is
responsible to the [P]artnership for the misuse of
30) As Guarantors, [Richard] and [Marilyn] and Deckard Realty
are jointly and severally responsible for the General
Partner's obligations to the Partnership for any misuse
of partnership funds.
* * *
33) The sum of $1, 596, 290.46 was paid with checks written
to or for the benefit of Affiliates of the General Partner,
as that term is defined on page ...