Benjamin Osborne, Appellant-Plaintiff v. LLC (2025)

MEMORANDUM DECISION

Case Summary

[1] Benjamin Osborne appeals the denial of his request for attorney's fees arising from a failed sale of real property. We affirm in part, reverse in part, and remand for further proceedings.

Facts and Procedural History

[2] This is the second appeal in this case. In our first decision, we set forth the following facts:

In the fall of 2013, Osborne wanted to sell an investment property (the Property) located in Indianapolis. Through an internet search, Osborne found the website HouseBuyerNetwork.com, called the number provided, and was directed to [Arthur] Small. Small is a real estate agent with fifty years of experience, and he is a member-owner with a thirty-five percent interest in Results, LLC, which has a registered assumed business name of We Buy Houses (Results).

Osborne met with Small at the Property and permitted Small to inspect it. During this meeting Osborne informed Small that his current mortgage balance on the property was $57,000, and they discussed the type of offer Osborne might expect from the company Small “represented.” Thereafter, Osborne and Small talked on the phone several times before Osborne received an “official offer” letter from “We Buy Houses/House Buyer Network” on November 22, 2013. The offer letter provided as follows:

A corporate buyer, doing business as We Buy Houses, will purchase your house as a FOR SALE BY OWNER as follows: our offer to buy is for $38,000 based upon the purchase price being $19,000 under your current loan balance ․ [y]ou will need to bring $19,000 to closing․ Your loan balance is to be paid by us via conditional sales contract at the same terms as your current loan. Upon your verbal acceptance, we will generate a purchase agreement, a conditional sales contract and title work.

The letter stated that the “real estate market is very poor today” and that “[a]ll facts considered, we feel this is a fair offer for your house.” The letter concludes with “Cordially, We Buy Houses/House Buyer Network” and a phone number. No individual person's signature appears on the offer letter. Osborne called the number and talked with Small, who held himself out as a representative of the buyer. Osborne and Small discussed the terms set out in the offer letter, and Small reiterated that the low offer was due to potential rehab costs and poor market conditions.

On December 3, 2013, Osborne was presented with a Purchase Agreement for the Property in which the buyer was specifically identified as Results. The buyer's signature line is signed by Small as “agent” for Results. In the Purchase Agreement, there is a provision in which “Buyer [i.e., Results] discloses to Seller that Buyer” holds an Indiana real estate license. Under the section “Further Conditions,” it is noted “Real estate agent Art Small represents corporate buyer.” Osborne accepted the offer by signing and returning the Purchase Agreement on December 10, 2013. The purchase proceeded to closing on December 20, 2013. Prior to closing, Osborne asked if he needed to bring his real estate agent with him and was told that Small could “essentially facilitate [the transaction] for both parties.”

As instructed by Small, Osborne brought to closing a check in the amount of $18,708.17 made payable to Results. At that time, Osborne was presented with a Conditional Sales Contract (the Contract). Like the Purchase Agreement, the Contract identified the Buyer as Results. The Contract also provided that Osborne would execute a quitclaim deed and that such deed would be held in escrow by Realty Executives 100% Success, LLC (Realty Executives). As pertains to Small, the Contract provided:

4. It is specifically understood and acknowledged by the parties herein that Art Small is the real estate agent representing the Buyer in this transaction and that he and/or family members have an interest in the Company purchasing the real estate herein and has made full disclosure thereof.

The final paragraph of the Contract provided: “The undersigned person executing this [Contract] on behalf of [Results] represents and certifies that he/she is a duly elected managing member of Buyer.” Small signed on behalf of Results and next to his signature he wrote “Agent.” Small explained to Osborne that he was signing as an agent of Buyer because the Buyer was out of town. In addition to the escrow agreement and the Contract, Osborne was presented with and signed a special power of attorney authorizing Small to act on his behalf for the limited purpose of communicating and dealing with the holder of Osborne's mortgage.

Results took possession of the property and began making monthly mortgage payments on January 1, 2014. Results incurred costs of $313 to clean out the Property before it could be rented or sold. Small then secured a tenant for the Property and the tenant was given an option to purchase. After several months, the tenant moved out and did not exercise the option to purchase. Results then defaulted on the Contract by failing to make mortgage payments pursuant to the terms thereof.

Osborne was notified by his mortgage company that payments were not being made. Osborne attempted to contact Results by telephone and ended up speaking with Small. Small told Osborne that Results would catch up on the payments once another renter was secured, as Results depended on the rental income to make those payments. At some point in the fall of 2014, the deed to the Property was returned to Osborne. Osborne regained possession of the Property and retained the tenants then living there for four to five months. Osborne then sold the Property for $60,000.

Small v. Osborne, No. 21A-PL-2568, 2022 WL 3905902, *1-2 (Ind. Ct. App. Aug. 31, 2022) (mem.) (footnotes and citations omitted), reh'g denied, trans. denied.

[3] Osborne sued Small, Results, Realty Executives, and several other defendants. His claims included breach of contract (Results), fraud (Small, Results, Realty Executives), conversion (Results), and constructive fraud (Small). Results was defaulted after it failed to answer, Realty Executives won summary judgment on the claim against it, and a bench trial was held on Osborne's claims against Small. The trial court ruled that Small had committed both fraud and constructive fraud. The court then scheduled a hearing to determine the damages owed by Results and Small and to address Osborne's request for attorney's fees. (Results was dissolved in 2018 but remained a party to the case.) Before that hearing was held, Small appealed the court's ruling on liability. As relevant here, we affirmed. See id. at *3-5.

[4] On remand, the trial court found Results and Small jointly and severally liable for approximately $30,000 in compensatory damages, punitive damages, and prejudgment interest. The court issued a separate order addressing Osborne's request for attorney's fees. As relevant here, Osborne's request relied on Paragraph U of the Purchase Agreement:

ATTORNEY'S FEES: Any party to this Agreement who is the prevailing party in any legal or equitable proceeding against any other party brought under or with relation to the Agreement or transaction shall be additionally entitled to recover court costs and reasonable attorney's fees from the non-prevailing party.

Appellant's App. Vol. III p. 79.¹ Mistakenly believing that the Purchase Agreement was between Osborne and Realty Executives (which had been dismissed from the case) rather than Osborne and Results, the court found this provision to be inapplicable and denied Osborne's fee request.

[5] Osborne now appeals.

Discussion and Decision

[6] Osborne contends the trial court erred by denying his request for attorney's fees. Results hasn't filed a brief in response, and Small, acting pro se, filed a conclusory one-page statement that doesn't address the substance of Osborne's arguments. When an appellee does not respond to an appeal, we will not undertake the burden of developing an argument on their behalf. Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1068 (Ind. 2006). Rather, we will reverse the trial court's judgment if the appellant's brief presents a case of prima facie error. Id. In this context, “prima facie error” means error “at first sight, on first appearance, or on the face of it.” Id.

[7] “Indiana adheres to the American rule that in general, a party must pay his own attorneys’ fees absent an agreement between the parties, a statute, or other rule to the contrary.” R.L. Turner Corp. v. Town of Brownsburg, 963 N.E.2d 453, 458 (Ind. 2012). Osborne argues that Results and Small should both be ordered to pay attorney's fees under Paragraph U of the Purchase Agreement, quoted above. As to Results, we agree. Osborne was the prevailing party in a legal proceeding against Results “brought under or with relation to the Agreement or transaction.” The only reason the trial court denied Osborne's request for fees from Results under the Purchase Agreement was that it mistakenly believed the agreement was between Osborne and Realty Executives rather than Osborne and Results. We therefore reverse the denial of attorney's fees as to Results and remand this matter to the trial court to determine an appropriate fee award.

[8] As for Small, while he was a member-owner of Results and signed the Purchase Agreement on behalf of Results, he was not personally a party to the agreement. Therefore, he is not subject to its attorney-fee provision. See Zitzka v. Brogdon, 222 N.E.3d 1025, 1031 (Ind. Ct. App. 2023) (addressing the same Paragraph U attorney-fee provision and holding that a person who was involved in a real-estate transaction but was not personally a party to the purchase agreement could not be held liable for fees), trans. denied.

[9] Osborne's reliance on State, Civil Rights Commission v. County Line Park, Inc., 738 N.E.2d 1044 (Ind. 2000), is misplaced. There, our Supreme Court held that while “an officer of a corporation is generally not personally liable for the torts of the corporation or other officers or agents merely because of her office,” an officer is personally liable “for the torts in which she has participated or which she has authorized or directed.” Id. at 1050. But Osborne isn't asking us to hold Small liable for a tort—that already happened when the trial court ordered Small to pay nearly $30,000 for fraud and constructive fraud. Osborne is asking us to hold Small liable for attorney's fees under an agreement to which he is not a party. County Line Park provides no support for that request.

[10] It is of course possible that Small will pay some or all of the attorney's fees Results is ordered to pay, since he was a member-owner and the company is no longer in business. But that issue is beyond the scope of this appeal. We simply hold that Osborne has not shown a legal basis for a fee award against Small directly.²

[11] Affirmed in part, reversed in part, and remanded.

FOOTNOTES

1.   Osborne also argued that he was entitled to attorney's fees under two statutes—Indiana Code sections 34-24-3-1 and 34-52-1-1. He doesn't mention those statutes on appeal.

2.   Osborne also argues that he is entitled to fees under the Conditional Sales Contract between himself and Results. He waived this argument for two reasons: he didn't rely on that contract in the trial court, and, on appeal, he doesn't direct us to any specific language from the contract that would support his argument. But even if the Conditional Sales Contract includes language favorable to Osborne, it would make no practical difference. Results is already liable to Osborne for attorney's fees under the Purchase Agreement, and Small was not a party to the Conditional Sales Contract and therefore couldn't be held directly liable for fees under its provisions.

Vaidik, Judge.

Chief Judge Altice and Judge Scheele concur. Altice, C.J., and Scheele, J., concur.