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Morris v. Crain
Court of Appeals of Indiana
March 7, 2017
Don Morris and Randy Coakes, Appellants-Plaintiffs,
Brad Crain and Richard Redpath, Appellees-Defendants
from the Hendricks Superior Court The Honorable Mark A.
Smith, Judge Trial Court Cause No. 32D04-1208-PL-91
Attorney for Appellants James E. Ayers Wernle, Ristine &
Ayers Crawfordsville, Indiana
Attorneys for Appellees Sean M. Clapp Ian T. Keeler Clapp
Ferrucci Indianapolis, Indiana
Don Morris and Randy Coakes (collectively
"Plaintiffs") appeal the trial court's entry of
summary judgment in favor of Brad Crain and Richard Redpath
("Crain"). The sole restated issue presented for our
review is whether the trial court erred when it entered
summary judgment for Crain. Concluding that genuine issues of
material fact remain for trial, we reverse and remand for
and Procedural History
This is essentially the third appeal surrounding an alleged
business relationship that existed among these parties. In
one of those prior appeals, this Court set out the relevant
underlying facts and procedural history.
The facts most favorable to [Plaintiffs], the non-movants for
summary judgment, are as follows. In 2006, Morris was
employed by Waste Recovery, which provided biological
effluent destruction systems products. When it became
apparent that the company was insolvent, Morris approached
Redpath in regard to forming a new company to "take
control of the niche industry." On November 15, 2006,
Waste Recovery ceased doing business; Morris paid a rent
installment and agreed to execute a five-year lease for the
premises previously occupied by Waste Recovery. He initiated
remodeling of the premises and began to investigate
Later in November, Crain, Coakes, Redpath, and Morris
conducted a conference call regarding the new business.
Morris and Coakes drafted a spreadsheet of proposed ownership
shares (45% to Morris, as President, 25% and 20% to Crain and
Redpath, respectively, as Vice-Presidents, and 2% each to
Coakes, Biesecker, Johnson, Ross, and Sollars). After
negotiation, the shares allocation was changed to 40% for
Morris, 30% for Crain, and 20% for Redpath (with the others
retaining 2% each).
Marketing materials were distributed indicating that Redpath,
Morris, and Crain were "principals" of BioSafe.
Nonetheless, in January of 2007, Articles of Organization for
BioSafe were filed with the Indiana Secretary of State,
indicating that Crain and Redpath were the sole members, each
having 50% ownership.
In August of 2007, Crain advised Morris that a building in
Brownsburg had been leased in anticipation of acquiring Waste
Recovery assets. The following month, Morris asked Crain
about signing to purchase Waste Recovery assets, and was told
that Crain and Redpath had been representing that they were
each 50/50 owners. Later that month, BioSafe successfully bid
for the assets of Waste Recovery. Redpath advised Morris that
new investors now owned 50% of BioSafe.
The new owners of record were Justin Bisland
("Bisland") and LPM Investments, LLC. In October of
2007, Bisland came into the BioSafe offices and fired Morris.
Morris was unable to locate the electronic document he had
drafted with regard to shared ownership; he reached the
conclusion that it had been deleted from the company files.
On March 5, 2010, Morris and Coakes filed their complaint. An
amended complaint asserted that Morris and Coakes had
equitable interests and contractual rights in BioSafe and
that they had standing to bring a shareholder derivative
action. They sought the appointment of a receiver, an
accounting and disgorgement of funds, and BioSafe's
dissolution. The defendants answered, denying that Redpath
and Crain had created a false document, made false
representations, brought about the plaintiff's ouster,
diverted funds, or met with Morris to discuss ownership
participation. The defendants also denied that Morris and
Coakes held an equitable interest, or that they had standing
to bring a shareholder derivative claim.
On February 8, 2011, the majority of the defendants moved for
summary judgment; Crain and Redpath subsequently joined in
the motion. The parties made their respective designations of
materials. The trial court conducted a hearing on July 26,
2011, at which argument of counsel was heard. BioSafe's
counsel argued that the shareholder derivative claims were
unfounded or, at a minimum, were premature, and that the case
distilled to "a case of an oral contract at best between
Mr. Crain and Mr. Redpath and Mr. Morris and Mr. Coakes ...
of dubious merit." Counsel for Crain and Redpath argued
that there had, at most, been discussion about a business yet
to be formed, "an offer that was never accepted."
On the following day, the trial court issued an order
dismissing defendants Biesecker, Johnson, Ross, and Sollars
and ordering the remaining parties to submit documents:
1.Plaintiffs, within ten (10) days, must file with the Court
a document stating with specificity the legal theories the
Plaintiffs assert against the Defendants.
2.Within ten (10) days thereafter, the Defendants must file a
document stating with specificity the legal elements of the
Plaintiffs theories that the ...
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