LLC LLC LTD v. CPM (2025)

MEMORANDUM DECISION

Case Summary

[1] As part of a hotel construction project, general contractor CPM Construction Planning and Management, Inc. (CPM) entered into an agreement with supplier Seawin Global, LLC, Seawin Hospitality, LLC, and/or Seawin Shower LTD (collectively Seawin) for Seawin to provide glass panels and materials for 102 shower doors. Following delivery, CPM filed a complaint against Seawin asserting that the glass panels were nonconforming and unusable.

[2] Following a bench trial, the court entered judgment in favor of CPM, awarding $18,150 in compensatory damages and $14,530 in incidental and consequential damages. The court also awarded $102,605.73 in attorney's fees, pursuant to Ind. Code § 26-1-2-721 (Section 721), Indiana's Uniform Commercial Code (UCC) “Remedies for fraud” provision. Later, the court granted CPM's request to allow supplemental attorney's fees in the amount of $39,975, resulting in a total award of attorney's fees in the amount of $142,580.73.

[3] Seawin raises six issues on appeal, which we consolidate and restate as:

1. Did Seawin breach the parties’ contract by delivering nonconforming glass panels?

2. Did the trial court abuse its discretion in its awards of compensatory, incidental, and consequential damages?

3. Did the trial court err in determining that Seawin had engaged in fraud or misrepresentation such that CPM was entitled to recover attorney's fees pursuant to Section 721?

4. Did the trial court abuse its discretion when it denied Seawin's request for attorney's fees?

[4] We affirm in part and reverse in part.

Facts & Procedural History  1

[5] In 2020, CPM, an Indiana corporation, was the general contractor for the construction of a hotel in Plainfield (the Project). The Project called for, in each room, a fixed-glass shower door system consisting of a glass panel, U-channels to hold the glass, and other associated hardware. On April 17, 2020, CPM issued a written Purchase Order (P.O.) to Seawin, an out-of-state entity not registered to do business in Indiana, for the purchase of 102 “shower doors for project” for the price of $23,932.08. Appellant's Appendix Vol. III at 9. The P.O. did not specify dimensions for the glass panels but stated, in paragraph 2, that “[a]ll materials must be submitted with product information, color samples & shop drawings for review and approval prior to fabrication/ordering/delivery.” Id.

[6] In the months following the P.O., Seawin created multiple, successive shop drawings that illustrated specifications for the shower door system. The drawings did not include the use of shims to adjust the glass panel height. The shop drawings were submitted to CPM via Seawin's manufacturer's representative, Terry Engledow. In April through August 2020, Seawin exchanged a series of emails with CPM employees to discuss the height measurement for the glass panels.

[7] Most of the emails were between Engledow and the following CPM employees: Robert Goins and Brian Greb (project superintendents); Jason Burke (project manager); and Ross Kent (project engineer). Also included in some of the emails, directly or copied, was Greg Shilman, Seawin's owner and CEO, and George Slater, Seawin's business development director. Summarized, the email correspondence reflects the following concerning the glass panels:

April 30, 2020 – Engledow emailed Burke and others that CPM needed to provide Seawin with “actual height of the panel for production.” On August 4, Engledow emailed “I still don't have the measurements for the glass shower panels.”

August 5, 2020 – Goins emailed Engledow advising, “Need 86” for all of them[.]” In reply, Engledow asked for clarification as to whether that 86” was the height from the top of the shower base curb to the bottom of the ceiling or if it was “the height you want the glass panel to be.” Goins responded that 86” was the measurement “for the glass itself,” noting that the shower height openings in the rooms “vary anywhere from a tight 86 1/4 to 86 7/8” but he thought it best to make all the panels 86” to avoid having “102 different measurements.” A couple hours later, Slater suggested “glass height of 85 5/8” to compensate for the out of plumb openings in the rooms.

August 7 – Goins expressed that he was “concerned” that Slater's suggestion of 85 5/8” would not “be enough.” Following further email discussions, Goins directed, “Let's do 85 7/8.”

August 10 – Engledow emailed Kent and others stating “per conversations with [Goins] last Friday, we've adjusted the heights of the glass panels[.]”

August 13 – Engledow emailed Burke, Goins, and others attaching “revised shop drawings [ ] for the glass shower panel” that had been prepared “per bob goins instructions.”

Appellant's Appendix Vol. IV at 24, 36, 39, 40, 41, 43, 45, 46, 47, 49, 52 (emphases added). Engledow asked CPM to sign and return the revised shop drawings as soon as possible. On August 13, 2020, Burke, on behalf of CPM, signed and approved those shop drawings (the Approved Drawings) and returned them to Seawin.

[8] Meanwhile, CPM paid Seawin a fifty-percent deposit on July 9, 2020, and paid the balance on October 26, 2020. The glass panels and other materials were delivered to the Project in December 2020. Although a label on the exterior of the boxes indicated a height of 85 7/8” for the glass panels, installers discovered that the glass was shorter than represented. Burke emailed Engledow on

December 14:

The glass dimensions on the box say that the glass is 85 7/8” tall but when you actually measure the glass ․ it only measures 85” tall[.] obviously this is almost an inch too short. I need you to contact me first thing this morning as this has to be resolved today. . . as it stands now I have $25,000.00 worth of useless glass on site.

Id. at 61. CPM's president, Jacob Williams, and its vice president and director of operations, Jason Williams, became involved and, during December 2020 and January 2021, had various communications with Engledow, Slater, Shilman, and Seawin's legal counsel in New Jersey regarding the glass issue.

[9] At Seawin's request, CPM asked the hotel's owner if it would be willing to change the specifications to allow larger U-channels to accommodate the glass panels delivered to the Project. The owner, however, was unwilling to deviate from its standardized design specifications. After Seawin refused to replace the glass panels, CPM purchased 102 glass panels with a height measurement of 85 7/8” from another supplier for $18,150.

[10] In early February 2021, CPM's counsel sent a demand letter to Seawin's counsel, asking for payment of $18,150 to resolve the situation. The letter additionally stated that if Seawin had submitted shop drawings to CPM that varied from Seawin's own prior representations concerning the dimensions of the glass panels “in an effort to mislead and deceive” CPM, then such conduct “could give rise to” a claim for fraud or material misrepresentation, which under unspecified “Indiana statutory law” would entitle CPM to recover its attorney's fees. Appellant's Appendix Vol. VI at 6; Exhibits Vol. VII at 94. CPM did not receive a response to that letter.

[11] On April 6, 2021, CPM filed a complaint,² alleging that the glass panels failed to conform both to CPM's written requirements and Seawin's express representations concerning the size of the glass, that the glass received was not usable, and that CPM had rejected or revoked acceptance of the glass. In addition to compensatory, incidental, and consequential damages, the complaint's prayer for relief requested an award of attorney's fees.

[12] In September 2021, Seawin filed a motion for summary judgment, asserting that the parties’ contract consisted only of the P.O. and the Approved Drawings and that those documents “unambiguously” showed that the parties intended for “the shower doors” to be “approximately 85” high” and that Seawin delivered glass panels that, with u-channels, would result in shower doors of that size. Appellant's Appendix Vol. V at 3, 9. Seawin also sought summary judgment on CPM's request for attorney's fees, arguing that CPM had no legal basis to recover fees.

[13] Seawin designated Shilman's affidavit, stating that

85 7/8” is the distance from shower base level to ceiling level, [and] the CPM representative apparently and incorrectly thought that measurement applied to the height of the glass panels, which it clearly does not. Pursuant to the Purchase Order and [Approved Drawings], the height of the shower doors was to be approximately 85”, which is what Seawin delivered to CPM.

Exhibits Vol. VII at 117. Shilman attached to his affidavit, as Exhibit A, a set of drawings that he represented were the Approved Drawings. He noted that those drawings included some “minor changes” from what Seawin had sent to CPM for approval and explained that the changes were “probably” caused by “an issue with CPM's software that it used to open the submittal file[.]” Id. at 116.

[14] In its response, CPM disputed Seawin's assertion that the contract consisted of the P.O. and the Approved Drawings only – and excluded the email discussion regarding glass panel size – because paragraph 2 of the P.O. “plainly contemplated that the particulars about the shower doors, including their dimensions” were to be discussed. Appellant's Appendix Vol. V at 36. CPM also maintained that Shilman's averment that the parties agreed that “the shower doors should be approximately 85” high” was facially false and appeared to be an attempt “to create a false narrative post facto” concerning the agreed dimensions of the glass panels. Id. at 23.

[15] As to attorney's fees, CPM argued that it was entitled to recover fees under Section 721, which allows recovery of fees for material misrepresentation or fraud. CPM argued that Seawin had submitted shop drawings to CPM for approval “knowing that they materially varied from the express representations made to CPM” and did so “in an effort to mislead and deceive CPM into approving and signing those final shop drawings ․ concerning the exact dimensions of the glass shower panels.” Id. at 52-53.

[16] In reply, Seawin maintained that “this is not a fraud case,” as fraud was not pled in the complaint, initially or later by amendment, and CPM had no evidence of fraud. Id. at 58. Seawin urged that the circumstances did not “even support an inference of fraud,” noting that there would be “nothing to gain” by a shower door supplier intentionally manufacturing 102 shower doors of the wrong size. Id. at 62. Therefore, Seawin argued that Section 721 had no application and that it was entitled to summary judgment on CPM's request for attorney's fees. In September 2022, the court denied Seawin's motion.

[17] The matter proceeded to a three-day bench trial in January and February 2023. CPM president Jacob Williams was the only CPM employee to testify. He testified that he had reviewed the emails concerning the specifications for the glass panels and that CPM understood that the shop drawings, revised per Goins's instructions and approved by Burke, provided that the glass panel height was 85 7/8”. He also testified that none of the shop drawings sent to CPM showed the use of setting blocks or shims to adjust the panel height.³

[18] The trial court questioned Williams as to why the 85 1/8” glass panels delivered to the Project would not work in the shower openings. Williams sketched a depiction of the largest shower opening and showed that, even using the 3/16” shim delivered to the site with the glass panels, the panels were still “half an inch short.” Transcript Vol. 3 at 148. The trial court noted that the shower openings varied somewhat in size from room to room and asked Williams how many of the glass panels would have fit in the 102 openings at the Project, and Williams estimated that it “would have been less than half.” Id. at 149. Upon further questioning, Williams conducted additional measurement calculations, this time using the “shortest” shower opening, and testified that, even using the shim, the glass panes still would be at risk of falling out such that the panels were not usable in “100% of the [shower space] openings.” Id. at 150.

[19] During his testimony, Williams addressed the set of drawings that Shilman had attached to his affidavit as Exhibit A and represented to be the Approved Drawings. Williams testified that, while reviewing Exhibit A for trial, he noticed discrepancies from his own copy of those drawings and, upon clicking the pdf for Exhibit A, saw that Shilman had added comments and made changes after CPM had approved the drawings. This was contrary to Shilman's affidavit testimony that the changes seen on Exhibit A were caused by CPM's software.

[20] Williams testified that, in addition to purchasing replacement glass panes from another vendor for $18,150, CPM incurred incidental and consequential damages of at least $14,530 in employee time spent addressing the issue with the glass panels that were delivered by Seawin. A summary of that employee time was admitted, over Seawin's hearsay objections, as Exhibit 44.

[21] Seawin moved for judgment on the evidence as to CPM's assertion of fraud, arguing that fraud is required under Ind. Trial Rule 9.1 to be pled with specificity, Section 721 does not allow for recovery of fees in a breach of contract case, and, even if it did, CPM failed to present evidence on the elements of fraud, highlighting there was no evidence at trial concerning intent or reliance. The court denied Seawin's motion.

[22] Shilman testified for Seawin. Shilman stated that the height of 85 7/8” in the Approved Drawings was a measurement “from the base to the ceiling” and that, by approving those drawings, CPM had agreed to a “height opening” of 85 7/8”, not glass panels of that height. Transcript Vol. 3 at 200-201, 205. He also testified that the glass panels that were delivered were usable with setting blocks or shims in the bottom U-channel. Shilman acknowledged that Seawin does not manufacture the glass panels but rather, contracts with a company in China, Sea Win Sanitary Ware Co. LTD, of which he is a fifty percent owner. Shilman also acknowledged that he had created a production copy of the Approved Drawings and, in doing so, changed some of the specifications previously approved by CPM. Shilman testified that his production copy was sent to Seawin's vendor, who created its own manufacturer's shop drawing for use in fabricating the glass panels, which were shipped directly to the Project site.

[23] Following trial, the parties submitted proposed findings and conclusions, and on December 6, 2023, the court issued a forty-six-page order, entering judgment for CPM. Included in the court's findings were determinations that Engledow was an agent for Seawin, he had numerous communications with CPM regarding the precise size of the glass panels, CPM understood that the revised shop drawings depicted a fixed glass panel with a height of 85 7/8”, and Burke approved those drawings. The trial court also found that none of the communications between the parties made any reference to using shims inside the U-channels and that even if shims were used, the panels were still too short to use in any of the shower openings. The court determined that the panels did not conform to the written requirements of CPM. The court's findings also addressed that Shilman had, after Burke approved the drawings, made a production copy that included changes to certain previously-approved specifications.

[24] The trial court then concluded, in part, that the case was governed by Indiana's version of the UCC, that Seawin breached its contract with CPM and failed to cure when given the opportunity to do so, and that CPM was entitled to compensatory damages for the cost to purchase replacement glass panels. The court also found that CPM was entitled to incidental and consequential damages in employee time spent resolving the issue.

[25] Additionally, the court determined that CPM was entitled to recover attorney's fees under Section 721 because:

37. Seawin induced CPM to approve the Final Revised Shop Drawings ․ by leading CPM to believe that [those drawings] signed by Greg Shilman reflected, in the depiction denoted “fixed panel” ․ a Glass Panel height of 85 7/8”․

38. Even if Seawin's conduct in August 2020 did not amount to a material misrepresentation, its conduct and communications did constitute a material misrepresentation in the numerous correspondences in December 2020 and January 2021 when CPM was giving Seawin the opportunity to cure and the transaction was still “alive” and in the performance stage. Seawin ․ took the position that CPM agreed to Glass Panels shorter than 85 7/8” by approving and initialing the Approved Shop Drawings in the face of uncontroverted documentary evidence that the Glass Panels delivered to the Project did not conform to the requirements of CPM or the express representations made by Seawin's representative.

* * *

45. Seawin's representations to CPM [that] the Glass Panels delivered to the Project jobsite were manufactured in exact accordance with the Approved Shop Drawings ․ when in fact those Approved Shop Drawings were altered without the knowledge or approval of CPM by Seawin and the Chinese Manufacturer ․ amount to material misrepresentations of fact while the transaction was still “alive” and in the performance stage;

* * *

48. Seawin argues CPM should not be entitled to recover attorney's fees ․ as CPM did not plead the elements of fraud with specificity as required by Ind. Trial Rule 9(B). However, Ind. Trial Rule 9(B) is a rule of pleading, intended to give a defendant notice of the particulars of a plaintiff's claim for fraud and prevent surprise at trial;

49. Here, Seawin was informed before this litigation was commenced, in the [ ] final demand letter ․ [that] CPM may pursue recovery of its attorney's fees if litigation became necessary. ․ [T]he legal issues of CPM's [ ] recovery of attorney's fees under [Section 721] ․ was fully briefed by the parties in connection with the Defendants’ motion for summary judgment on or about September 19, 2021. Seawin has been on notice of CPM's claim for attorney's fees ․ for over two years.

* * *

50. Ind. Trial Rule 15(B) provides: When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. ․

51․ Where a trial ends without objection as to its course, the evidence controls, and the unpled issue is deemed to be tried by consent of the parties. ․

Appellant's Appendix Vol. II at 54-59.

[26] The trial court entered judgment against Seawin in the amount of $18,150 in compensatory damages, $14,530 in incidental and consequential damages, and $102,605 in attorney's fees. At CPM's request, the court issued an amended final judgment allowing supplemental attorney's fees of $39,975, for $142,580.73 in fees and a total judgment of $175,160. Seawin now appeals.

Discussion & Decision

[27] When the trial court issues findings of fact and conclusions of law, we employ a two-tied standard of review. Paul v. Stone Artisans. Ltd., 20 N.E.3d 883, 886 (Ind. Ct. App. 2014). We first determine whether the evidence supports the findings, and second, whether the findings support the judgment. Id. We will not set aside the trial court's findings or judgment unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses. Ind. Trial Rule 52(A). Questions of law are reviewed under a de novo standard. Paul, 20 N.E.3d at 886.

1. Breach of Contract

[28] Seawin challenges the trial court's conclusion that it breached the parties’ contract by delivering nonconforming glass panels.

[C]onstruction of the terms of a written contract generally is a pure question of law. The goal of contract interpretation is to determine the intent of the parties when they made the agreement. This [c]ourt must examine the plain language of the contract, read it in context, and, whenever possible, construe it so as to render every word, phrase, and term meaningful, unambiguous, and harmonious with the whole.

Castleton Corner Owners Ass'n, Inc. v. Conroad Assoc., L.P., 159 N.E.3d 604, 610 (Ind. Ct. App. 2020).

[29] Seawin maintains that “all parties agree that Seawin delivered exactly what it was obligated to under the contract[.]” Appellant's Brief at 9. But clearly all parties do not agree. Seawin's claim that it delivered exactly what was ordered is based on the premise that (1) the contract consisted only of the P.O. and the Approved Drawings, and (2) the parties had agreed in those two documents for a “glass shower door” – i.e., a fixed pane of glass together with U-channels – to be 85 7/8” inches in height. Id. at 17, 20. Seawin maintains that it delivered glass that with the use of shims would result in shower doors of 85 7/8” and, thus, no breach occurred.

[30] Seawin asks us to ignore the string of emails between it and CPM concerning the exact height measurement for the glass panel, arguing that those were extrinsic to the contract and irrelevant. We find that argument to be without merit. Paragraph 2 of the P.O. required submittal and approval of specifications, and, consistent with that, Engledow asked for, and the parties discussed, the precise height that the glass panel should be for production. Goins initially told Seawin to use 86” for all of them, and Engledow then asked for clarification about whether that 86” referred to the height from the top of the shower base curb to the bottom of the ceiling or to the height that CPM wanted the glass panel to be. Goins confirmed that 86” referred to the height of the glass panel only. Slater then proposed 85 5/8” for the glass panel, but Goins was concerned that such would not be enough. A couple of hours later, Goins decided, “Let's do 85 7/8.” Appellant's Appendix Vol. IV at 47. A few days later, Engledow advised that, “per conversations with [Goins] last Friday” Seawin had adjusted the height of the glass panels and that he was awaiting the shop drawings. Id.at 49. On August 13, Engledow emailed, attaching the shop drawings that had been revised “per bob goins instructions.” Id. at 52. Burke initialed those drawings, indicating CPM's approval. Seawin's assertion at trial and now that CPM had contracted for “glass shower doors” with a height of 85 7/8” – not for glass panels of that height – is inconsistent with the evidence.⁴ The trial court's conclusion that Seawin breached its contract with CPM by delivering nonconforming goods to CPM was not clearly erroneous.

2. Damages Awards

[31] Seawin argues that even if we find that it breached the contract, the awards for compensatory damages and incidental and consequential damages lacked evidentiary support and should be reversed. Generally, the computation of damages is a matter within the sound discretion of the trial court, and we will not reverse a damage award unless it is based on insufficient evidence or is contrary to law. Berkel & Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d 649, 658 (Ind. Ct. App. 2004); see also Int'l Bus. Machs. Corp. v. State, 138 N.E.3d 255, 258 (Ind. 2019) (“[A] damage award should not be reversed if it is within the scope of the evidence before the trial court.”). In determining whether an award is within the scope of the evidence, we may not reweigh the evidence or judge the credibility of witnesses. Knapp v. Estate of Wright, 76 N.E.3d 900, 909 (Ind. Ct. App. 2017), trans. denied. A court is not required to calculate damages with mathematical certainty, but the calculation must be supported by evidence in the record and may not be based on mere conjecture, speculation, or guesswork. Ponziano Const. Servs. Inc. v. Quadri Enterprises, LLC, 980 N.E.2d 867, 873 (Ind. Ct. App. 2012).

[32] Ind. Code § 26-1-2-712(1) provides that, after a breach, the buyer may “cover” by making a reasonable purchase of goods in substitution of those due from the seller. Seawin asserts that the evidence showed that “as many as 50 of the 102 Glass Shower Doors Seawin delivered could have been installed[.]” Appellant's Brief at 27. Thus, it claims, the trial court “had no evidence” to support a compensatory damages award for all 102 glass panels. Id. at 28. We disagree.

[33] Seawin's argument is based on Williams's testimony that, even with the use of shims delivered to the site, “less than half” of the panels were usable. Transcript Vol. 3 at 149, 152. Seawin maintains that Williams's testimony reflects that around half of the panels were in fact usable. In later testimony, however, Williams conducted additional mathematical calculations, utilizing the varying sizes of the shower openings, with and without the use of shims, and testified that “100 percent” of the panels would have an issue with being safely secured – thereby correcting or changing his prior “less than half” estimate. Id. at 150. On this record, we find that the trial court was presented with evidence from which it reasonably could find that CPM incurred $18,150 in damages to cover 102 nonconforming glass panels.

[34] Seawin also challenges the award of $14,530 for incidental and consequential damages as unsupported by admissible evidence. I.C. § 26-1-2-712(2) provides that a buyer may recover from a seller incidental and consequential damages. Incidental damages include “expenses reasonably incurred in inspection, receipt . . and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach[.]” I.C. § 26-1-2-715(1). Consequential damages include “any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise[.]” I.C. § 26-1-2-715(2).

[35] The trial court's award was based on Exhibit 44, which was offered during Jacob Williams's testimony. Exhibit 44, created by Williams, was an estimate of the hours that he and three other CPM employees – Ross Kent, Jason Burke, and Jason Williams – spent, prior to litigation, addressing the problem with the glass panels delivered by Seawin. Seawin objected at trial, asserting there was “no foundation” and much of the exhibit was not based on Williams's personal knowledge and was hearsay. Transcript Vol. 2 at 180. The trial court overruled the objections finding that any such deficiencies went to its weight, not its admissibility. Seawin maintains that Exhibit 44 should have been excluded as hearsay and, even if properly admitted, Exhibit 44 fails to calculate damages with reasonable certainty because “[t]he total $14,530.00 in damages is calculated by multiplying an unsupported number of hours by an unsupported monetary value for those hours.” Appellant's Brief at 31.

[36] We review decisions concerning the admissibility of evidence for an abuse of discretion. Walker v. Cuppett, 808 N.E.2d 85, 92 (Ind. Ct. App. 2004). An abuse of discretion occurs if the trial court's action is clearly erroneous and against the logic and effect of the facts and circumstances before the court. Id. A trial court may also abuse its discretion if its decision is without reason or is based upon impermissible considerations. Id.

[37] Here, Williams, president of CPM, created the document as part of litigation to provide a summary of CPM's incidental and consequential damages, namely the financial damages beyond having to buy replacement glass that CPM incurred as a result of Seawin's delivery of nonconforming goods. Williams testified that, in addition to reviewing his own time and records, he requested and received the information from the other employees identified in the exhibit. Williams acknowledged that he had not personally observed each of the other listed employees performing all the hours reported by each as reflected on the exhibit but testified that he had spent “a lot of hours” working with one or more CPM employees to resolve the glass situation. Transcript Vol. 2 at 179.

[38] As to Seawin's claim that the exhibit did not quantify the damages with reasonable certainty, Exhibit 44 reflects the approximate number of hours spent by each person (Williams – 69.3; Burke – 80; Kent – 40; and Jason Williams – 16) and provides the hourly rate of each person, which Williams testified were the “typical” hourly rates CPM charged for each of those individuals. Id. at 175. As to Williams and Kent, the exhibit included a breakdown of tasks performed, i.e., Williams had 250 emails, a 7-hour internal meeting, calls with CPM's lawyer totaling 42 hours, and 12 hours spent in rebuttal to Seawin's attorney. Kent's 40-hour approximation was comprised of emails, onsite walkthroughs, an internal meeting, calls with Engledow, and tracking. Williams testified that the exhibit's total of $14,530 was a conservative estimate of time spent by CPM, noting that it did not even include time spent by Goins or Greb.

[39] On this record, we are satisfied that the trial court did not abuse its discretion in admitting Exhibit 44 and find that that the trial court's award of $14,530 in incidental and consequential damages was not erroneous.

3. Attorney's Fees Award to CPM

[40] Seawin appeals the trial court's decision to award attorney's fees to CPM.⁵ The general rule in Indiana is that each party bears its own fees unless a statute, agreement, or stipulation authorizes a fee award. Sapp v. Flagstar Bank, FSB, 12 N.E.3d 913, 928 (Ind. Ct. App. 2014), trans. denied. Here, CPM sought and recovered attorney's fees pursuant to Section 721, entitled “Remedies for Fraud,” which provides, in part:

Remedies for material misrepresentation or fraud include all remedies available under this chapter for non-fraudulent breach. In all suits based on fraud or material misrepresentation, if the plaintiff recovers judgment in any amount, the plaintiff shall also be entitled to recover reasonable attorney fees[.]

I.C. § 26-1-2-721 (emphases added).⁶

[41] In apparent acknowledgment that Section 721 permits an award of fees only in cases of fraud or misrepresentation,CPM argued to the trial court that its claims against Seawin included a component of fraud or misrepresentation.⁷ The trial court agreed, determining that Seawin had engaged in material misrepresentation or fraud in one or more of the following ways: (1) by inducing CPM to sign the revised shop drawings that, according to Seawin, showed shower doors, not just glass panels, with a height of 85 7/8”; (2) by taking the position that CPM had agreed to glass panels shorter that 85 7/8”; and (3) by representing to CPM that the glass panels delivered to the Project site were manufactured in exact accordance with the Approved Drawings, when in fact those drawings had been modified by Shilman and/or Seawin's vendor without CPM's knowledge. Seawin contends that the trial court's determination that CPM was entitled to an award of fees under Section 721 was clearly erroneous. We agree for several reasons.

[42] As an initial matter, T.R. 9(B) requires that fraud be pled with specificity. CPM's complaint did not include a fraud claim or assert allegations of such. Nor did it identify or even mention any misrepresentation, intentional or otherwise. In February 2021, CPM's attorney advised, by demand letter, that if Seawin had submitted drawings to CPM “in an effort to mislead and deceive [CPM] into approving [the drawings]” then CPM might have “a claim for fraud or material misrepresentation.” Appellee's Appendix Vol. III at 113. However, CPM never sought leave to so amend the complaint.

[43] Further, the record does not support the trial court's determination that fraud or misrepresentation was tried by express or implied consent of the parties. Rather, Seawin “made its protestations known ․ at every opportunity.” Appellant's Brief at 44. That is, Seawin sought summary judgment on the complaint's general request for attorney's fees. Then, when CPM presented Section 721 in its response brief as a basis for a fee award – the first time that statute had been offered as a basis – Seawin filed its reply challenging the application of Section 721 to the present case. Seawin continued to oppose any award for fees based on fraud or misrepresentation at trial, including in its opening statement, in a motion for judgment on the evidence during trial, and in closing argument.

[44] Regardless, even if fraud had been expressly pled or tried by implied consent, CPM failed to prove it as a matter of law. Fraud requires proof of (1) a material representation of fact which (2) was false, (3) was made with knowledge or reckless ignorance of its falsity, (4) was made with the intent to deceive, (5) was rightfully relied upon by the complaining party, and (6) proximately caused injury to the complaining party. Wind Wire, LLC v. Finney, 977 N.E.2d 401, 404 (Ind. Ct. App. 2012). Here, the trial court did not enter findings on those elements, nor did any witness testify to them – or to any misrepresentation generally. Indeed, Williams was the only CPM employee to testify, and he did not testify that any material misrepresentation of fact was made to him or to CPM with intent to deceive or that CPM relied on such.

[45] In sum, we agree with Seawin that this is a “quintessential contract case,” not a fraud case, and Section 721 is inapplicable. Appellant's Brief at 34. For these reasons, we find that the trial court erred when it determined that CPM was entitled to recover attorney's fees under Section 721, and we reverse the trial court's award of fees in favor of CPM.

4. Denial of Seawin's Request for Attorney's Fees

[46] Seawin appeals the trial court's denial of its oral request for attorney's fees pursuant to Ind. Code § 34-52-1-1, Indiana's general recovery statute, which permits an award of attorney's fees if the court finds that a party:

(1) brought the action or defense on a claim or defense that is frivolous, unreasonable, or groundless;

(2) continued to litigate the action or defense after the party's claim or defense clearly became frivolous, unreasonable, or groundless; or

(3) litigated the action in bad faith.

[47] We review the trial court's decision whether to award attorney fees under an abuse of discretion standard. Harco, Inc. of Indianapolis v. Plainfield Interstate Fam. Dining Assoc., 758 N.E.2d 931, 941 (Ind. Ct. App. 2001). An abuse of discretion occurs if the trial court's decision is clearly against the logic and effect of the facts and circumstances before the court, or if the court has misinterpreted the law. Id.

[48] Seawin maintains that the trial court's denial of its request for fees was an abuse of discretion because CPM's claim for attorney's fees was groundless and frivolous. More specifically, Seawin argues that CPM made “ever-changing arguments” in terms of what legal basis it had for fees, eventually asserting in response to summary judgment that it had a right to recover fees under Section 721, even though no Indiana case had awarded fees under that statute in a strictly breach of contract case. Appellant's Brief at 62.

[49] When reviewing a court's decision on attorney's fees, we must remain cognizant of the fine balance between respect for an attorney's duty of zealous advocacy and the important policy of discouraging unnecessary and unwarranted litigation. Kitchell v. Franklin, 26 N.E.3d 1050, 1060 (Ind. Ct. App. 2015), trans. denied. We have held that a claim is “frivolous”

if it is made primarily to harass or maliciously injure another; if counsel is unable to make a good faith and rational argument on the merits of the action; or if counsel is unable to support the action by a good faith and rational argument for extension, modification, or reversal of existing law.

Dunno v. Rasmussen, 980 N.E.2d 846, 850-51 (Ind. Ct. App. 2012). A claim is groundless if no facts exist which support the legal claim relied on and presented by the losing party. Kopka, Landau & Pinkus v. Hansen, 874 N.E.2d 1065, 1075 (Ind. Ct. App. 2007).

[50] Although we conclude today that CPM is not entitled to fees under Section 721, the law is well-settled that a claim is neither groundless nor frivolous merely because a party loses on the merits. Smyth v. Hester, 901 N.E.2d 25, 33 (Ind. Ct. App. 2009), trans. denied. Here, the trial court considered CPM's request for fees on Seawin's motions for summary judgment and for judgment on the evidence, and each time ruled in favor of CPM. It likewise ultimately entered judgment that included a fee award to CPM. The trial court was thus repeatedly persuaded by CPM's argument for fees under Section 721. Despite our disagreement and reversal, we do not find that CPM's pursuit of fees was frivolous or groundless so as to warrant an award of attorney's fees in Seawin's favor. We thus affirm the trial court's denial of Seawin's request for an award of attorney's fees.

[51] Judgment affirmed in part and reversed in part.

FOOTNOTES

2.   CPM named as defendants Seawin Global, LLC, Seawin Hospitality, LLC, Seawin Shower Ltd, and/or Seawin Shower. Seawin does not argue on appeal that any of the entities should be excluded from the judgment and acknowledges that all “are ‘Seawin’ for purposes of the appeal.” Reply Brief at 28 n.1.

3.   Williams also testified that, during discovery, Seawin produced a shop drawing that was written in Chinese and prepared by a company called Seawin Sanitary Ware Co. LTD. The drawing reflected a shower door height of 85 3/16”, which was not a height that had ever been discussed. Williams testified that it was at this time that CPM first learned that Seawin did not actually manufacture the glass panels.

4.   To the extent that Seawin suggests that it delivered conforming goods because the glass panels were usable with shims that were delivered with the glass panels, we observe that neither the P.O., the drawings, nor the emails refer to using shims inside the U-channels, and, further, Williams testified that the delivered glass panels could not be safely used even with shims.

5.   Seawin does not challenge the amount of the award.

6.   According to the UCC Comment, the “Purposes” of Section 721 are:To correct the situation by which remedies for fraud have been more circumscribed than the more modern and mercantile remedies for breach of warranty. Thus the remedies for fraud are extended by this section to coincide in scope with those for non-fraudulent breach. This section thus makes it clear that neither rescission of the contract for fraud nor rejection of the goods bars other remedies unless the circumstances of the case make the remedies incompatible.(Emphasis added).

7.   CPM has not provided us, nor have we found, any Indiana case holding that Section 721 permits an award of fees in a strictly breach-of-contract case. In support of its position that Section 721 permits an award of fees here, CPM provides us with one, non-controlling case, Spangler v. Sears, Roebuck & Co., 752 F.Supp. 1437 (S.D. Ind. 1990). There, a consumer who sustained injuries while using a lawn mower brought an action against the manufacturer and seller of the mower, asserting a number of claims, including fraudulent concealment. In addition to seeking damages, the plaintiff asserted entitlement to attorney's fees under Section 721. The defendants asserted that Section 721 was inapplicable and asked the court to strike the request for fees, which the court declined to do, stating “this court can find no reason to deny plaintiff the right to seek attorneys fees pursuant to its fraudulent concealment claim.” Id. at 1450 (emphasis added). The Spangler court specifically stated that “[p]laintiffs still must prove fraudulent concealment before they are entitled to attorney fees.” Id. at 1451. Thus, while relevant, Spangler is distinguishable, as no fraud-type claim was pled in the present case.

Altice, Chief Judge.

Judges Bradford and Kenworthy concur. Bradford, J. and Kenworthy, J., concur.