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Stardust Ventures, LLC v. Roberts

Court of Appeals of Indiana

December 28, 2016

Stardust Ventures, LLC, Appellant-Defendant,
Gary Roberts and Teresa Roberts, Appellees-Plaintiffs.

         Appeal from the Henry Circuit Court Trial Court Cause No. 33C03-1404-PL-18 The Honorable Bob A. Witham, Judge

          Attorney for Appellant Jeffrey S. Zipes Coots Henke & Wheeler, P.C. Carmel, Indiana

          Attorneys for Appellees Andrew M. McNeil Philip R. Zimmerly Bose McKinney & Evans LLP Indianapolis, Indiana

          Robb, Judge.

         Case Summary and Issue

         [¶1] Gary and Teresa Roberts (the "Robertses") entered into an agreement ("Purchase Agreement") with Stardust Ventures, LLC ("Stardust") to purchase a houseboat. Thereafter, the Robertses cancelled the agreement and brought suit to recover $75, 000 paid to Stardust. Stardust filed a motion to dismiss stating it elected to arbitrate the dispute, as agreed upon in the Purchase Agreement. The trial court denied Stardust's motion to dismiss, and subsequently entered summary judgment in favor of the Robertses. Stardust appeals, raising several issues for our review, one of which we find dispositive: whether the trial court erred in denying its motion to dismiss. Concluding the trial court erred in denying Stardust's motion to dismiss, we reverse and remand to the trial court for entry of an order directing the parties to proceed to arbitration.

         Facts and Procedural History

         [¶2] Stardust is a custom houseboat builder located in Monticello, Kentucky. In late 2013, the Robertses and Stardust began negotiating for the construction of a customized houseboat. In November 2013, Stardust and the Robertses reached an oral agreement on the price, time of delivery, floor plan, decorations, and specifications. Specifically, the parties agreed to a price of $775, 000 and a delivery of the houseboat in the "midsummer [2014] timeframe." Brief of Appellees at 8. In recognition of their oral agreement, Stardust provided the Robertses with a quote ("Quote"), dated November 3, 2013. The Quote outlined the general specifications of the houseboat and also stated the price and payment schedule. The Quote also stated Stardust required a non-refundable $10, 000 deposit to secure a build slot in its facility and payment of twenty percent of the total purchase price before it would begin construction of the houseboat.[1]

         [¶3] On November 20, 2013, the Robertses paid $75, 000 to Stardust. Although they had not paid twenty percent of the purchase price, the Robertses were under the impression their houseboat would be built directly after that of their friend's, who had recently contracted with Stardust, and that their build would commence within six to eight weeks after Stardust received their $75, 000 payment. However, Stardust had an internal policy of not beginning a build until it received twenty percent of the total purchase price, and because it did not yet have the full $155, 000 from the Robertses, Stardust's management had an internal discussion "on what to do to get [the Robertses' boat] started" in January 2014. Appellant's Appendix at 76. Ultimately, Stardust decided to outsource the build of a different houseboat to create room in its facility for the construction of the Robertses' houseboat, and on January 23, 2014, Stardust contracted with Sunstar Houseboats, Inc., to build the hull of a houseboat it was then constructing in order to create room for the Robertses' houseboat.

         [¶4] In late January 2014, without having commenced construction of the Robertses' houseboat, Stardust sent an unsigned Purchase Agreement titled "Stardust Cruisers Purchase Agreement" to the Robertses. The Robertses signed the Purchase Agreement and returned it to Stardust on February 4, 2014. The Purchase Agreement also contains the signature of Jerry Harden, the president of Stardust, dated February 12, 2014. The Purchase Agreement signed by the parties includes the agreed upon price, $775, 000, and a provision stating the Purchase Agreement incorporates the plans and specifications for the houseboat as provided by the Quote. In addition, the Purchase Agreement includes an arbitration clause. According to the Purchase Agreement, the option of arbitration belonged solely to Stardust, and if Stardust chose to proceed to arbitration, any dispute arising out of the Purchase Agreement would be decided in accordance with the American Arbitration Association, subject to several procedural limitations. The Purchase Agreement also includes an integration clause, which states, "The entire understanding between the parties is set forth in this Agreement. This agreement supersedes and voids all prior proposals, letters and agreements, oral and written, . . ." Id. at 31.

         [¶5] On March 4, 2014, the Robertses informed Harden they desired to cancel their agreement. The Robertses were frustrated Stardust had not yet commenced construction of their houseboat and concerned Stardust would be unable to complete construction by midsummer of 2014, as the parties had agreed. Harden requested the Robertses confirm their cancelation in writing, and on March 5, 2014, the Robertses emailed Harden to confirm their cancellation of the agreement. The following day, Harden replied to the Robertses' email and stated, "I have advised our bookkeeping department. I will let you know when your check will be ready." Id. at 19.

         [¶6] A few weeks later, when Stardust failed to send a check, the Robertses hired counsel to secure the return of their money. On March 24, 2014, Harden sent a letter to the Robertses stating Stardust was "in the process of collecting the costs related to your construction. The cost of that work will be deducted prior [to] considering a refund." Id. at 21. Stardust never returned any of the $75, 000 and later stated its offer to return any of the $75, 000 was a mistake and against policy because deposits are non-refundable.

         [¶7] On April 14, 2014, the Robertses filed a complaint seeking to recover the $75, 000 paid to Stardust. The complaint alleged Stardust never returned a signed copy of the Purchase Agreement; therefore, the Robertses alleged they had validly revoked their offer to purchase a houseboat from Stardust, and Stardust was obligated to return the $75, 000. On June 11, 2014, Stardust filed a motion to dismiss stating it elected to invoke its right to arbitrate the dispute in accordance with the Purchase Agreement. The trial court denied Stardust's motion to dismiss on August 7, 2014.

         [¶8] On October 19, 2015, the Robertses filed their motion for summary judgment and supporting designated materials. Stardust responded on December 7, 2015, and the trial court held a hearing on the matter on January 15, 2016. The trial court granted the Robertses' motion for summary judgment and entered a $75, 000 judgment in favor of the Robertses. The Robertses filed a motion to correct error on February 24, 2016, alleging the trial court erred in failing to award prejudgment interest. Stardust filed a motion in opposition to the Robertses' motion to correct error and a cross-motion to correct error. The trial court did not hold a hearing nor did ...

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