Ed McCarthy v. Tim (John) Ralston (mem. dec.)

MEMORANDUM DECISION FILED Pursuant to Ind. Appellate Rule 65(D), this Aug 01 2018, 6:45 am

Memorandum Decision shall not be regarded as CLERK precedent or cited before any court except for the Indiana Supreme Court Court of Appeals purpose of establishing the defense of res judicata, and Tax Court

collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE R. Patrick Magrath Mary Jean Stotts Alcorn Sage Schwartz & Magrath, LLP Joas & Stotts Madison, Indiana Madison, Indiana

IN THE COURT OF APPEALS OF INDIANA

Ed McCarthy, August 1, 2018

Appellant-Plaintiff, Court of Appeals Case No. 39A01-1711-PL-2717 v. Appeal from the Jefferson Superior Court

Tim (John) Ralston, The Honorable Michael J. Hensley, Appellee-Defendant. Judge

Trial Court Cause No. 39D01-1604-PL-311

Shepard, Senior Judge. [1] The trial court divided equally between Appellant Ed McCarthy and Appellee

Tim Ralston all the equipment related to their business venture. Concluding

the trial court’s judgment is not in error, we affirm.

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Facts and Procedural History [2] At the time of the events relevant to this lawsuit, McCarthy lived in Hoboken,

New Jersey. In 1990, he began making and selling a variety of food sauces and

incorporated his business under the name of “Hoboken Eddie’s.” In 1996,

McCarthy met Ralston, who is from Madison, Indiana, at a food fair in

Hoboken. [3] In an effort to expand his sauce production and distribution business, McCarthy

set up a sauce making operation the following year at “Venture Out Business

Center,” a small business incubator in Madison. Up to this point, McCarthy

had been growing peppers for his sauces at his farm in New York, but Ralston

agreed to grow peppers in Indiana as well. [4] For the next several years, both men contributed to the business venture of

growing peppers and making sauce. Ralston even purchased a building in

Hanover which he began to renovate so that it could be used to make the

sauces. [5] However, the relationship deteriorated, and in September of 2015, McCarthy

filed a series of three small claims actions against Ralston claiming the seizure

of business and personal property, misappropriation of funds, breach of

contract, and destruction of property. In response, Ralston filed three

counterclaims. In March and April of 2016, the claims were consolidated and

transferred to the court’s plenary docket.

Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018 Page 2 of 6 [6] In September 2016, McCarthy filed a complaint under the plenary cause

number requesting return of all his property as well as reimbursement for lost

revenue and for the value of destroyed pepper plants. Ralston counterclaimed

for reimbursement for the purchase of pepper plants, for the cost of the labor

force, for the cost of production items and for the cost of the building

renovation, payment of sales earnings, and payment for his labor. The court

conducted a bench trial on the parties’ claims and entered judgment of $0 for

both parties, stating that their claims “cancel each other out.” Appellant’s

Appendix Vol. 2, p. 126. The trial court further ordered McCarthy to retrieve

the mobile restaurant from Ralston’s property and for the parties to divide

evenly the remaining equipment, with Ralston retaining the building in 1 Hanover. McCarthy now appeals.

Issue [7] McCarthy presents two issues, which we consolidate and restate as: whether

the trial court erred in failing to award monetary damages to McCarthy and by

awarding the parties an equal division of the equipment.

Discussion and Decision [8] McCarthy had the burden of proof at trial and now appeals from a negative

judgment; therefore, he may prevail on appeal only upon establishing that the

1 In his reply brief, McCarthy requests the Court to strike certain material from the record in this case. We grant this request.

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judgment is contrary to law. See Estate of Kappel v. Kappel, 979 N.E.2d 642 (Ind.

Ct. App. 2012). A judgment is contrary to law when the evidence is without

conflict and leads to but one conclusion, which the trial court did not reach. Id.

In evaluating McCarthy’s appeal, we neither reweigh the evidence nor judge the

credibility of the witnesses, and we consider only the evidence most favorable to

the judgment together with all reasonable inferences to be drawn therefrom. Id. [9] The trial court determined the parties’ monetary claims canceled each other out

and awarded nothing to either party. With regard to the equipment, the court

ordered the parties to divide it evenly. [10] The evidence here is murky at best. Neither party provided the court with an

accounting, legitimate spreadsheets, income statements, or balance sheets

indicating what was paid by whom to whom for what. In support of his claim

for reimbursement for lost revenue as a result of being unable to use the

equipment stored on Ralston’s property, McCarthy testified that he/Hoboken

Eddie’s bought much of the equipment in reliance on Ralston’s purchase and

renovation of the building in Hanover. Tr. pp. 107-08. However, no evidence

was presented as to the amount of lost revenue. Further, to support his claim of

reimbursement for the value of the demolished 2015 pepper crop, McCarthy

testified that Hoboken Eddie’s paid $3,012 for the pepper plants in 2015. Id. at

99; see also Plaintiff’s Ex. 8. But again, no evidence was presented to

substantiate his claim for lost profits from sauce due to the destroyed pepper

crop. Finally, McCarthy requested that all equipment be turned over to him

and testified that he paid for all of it. Tr. pp. 92, 104, 105, 135.

Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018 Page 4 of 6 [11] In response to McCarthy’s claims, Ralston testified that there was never a time

that Hoboken Eddie’s was not able to produce sauce because they always used

the space in the Venture Out Business Center. Id. at 166. As borne out by the

parties’ testimony, the sole issue McCarthy and Ralston agree on is that

Hoboken Eddie’s purchased pepper plants in 2015 for $3,000, and Ralston

destroyed them. Id. at pp. 32-33. [12] Although in his counterclaim Ralston sought reimbursement for eleven years of

pepper purchases in the amount of $20,000, his testimony at trial evidenced

only seven or eight years of purchases at $1,000 per year. Id. at 7, 168. In

addition, in support of his counterclaim for sales earnings, Ralston testified that

he made a sale of sauces to a client for which he was owed commission of

$4,500. Id. at 27-28. He also testified vaguely and, like McCarthy, without

documentary evidence, to amounts he claims he is owed for labor costs he paid

as well as labor he performed himself. Further, Ralston explained that, as a

direct result of him providing all of his labor free of charge and receiving only

partial reimbursement for payments to the labor force over the years, McCarthy

had money available to purchase equipment; therefore, Ralston believes he is

entitled to the value of certain equipment as reimbursement. Id. at 22, 23-24,

26-27, 152. Finally, in support of his claim for $30,000 for the purchase and

renovation of the building in Hanover, Ralston testified that he would not have

purchased the building if not for McCarthy’s promise to rent it out for sauce

production. Id. at 19, 20, 193.

Court of Appeals of Indiana | Memorandum Decision 39A01-1711-PL-2717 | August 1, 2018 Page 5 of 6 [13] To refute Ralston’s counterclaims, McCarthy testified that Ralston was paid for

the peppers and for his work. Id. at 84, 85, 101, 102, 119, 120. In addition,

McCarthy testified that he never received money from the sale of sauces on

which Ralston claims he is owed commission; rather, McCarthy claims that

Ralston sold $25,000 worth of sauces and kept the money. Id. at 102, 103, 146.

Conclusion [14] In light of the confusing and at times limited evidence presented in this case, we

cannot say the trial court clearly erred in concluding that the parties owed one

another nothing and should split the equipment 50/50. In other words,

McCarthy has not shown that the evidence points unerringly to a conclusion

opposite that reached by the trial court. [15] Judgment affirmed.

Bailey, J., and Mathias, J., concur.

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