David Sipe, et al., Appellants-Defendants v. LLC (2025)

MEMORANDUM DECISION

Case Summary

[1] Four years ago, Mr. and Mrs. Sipe contracted with Restor Group (Restor), a construction and development company out of Carmel, to do significant work on their home after it was damaged in a hailstorm. (Tr. Vol. 2 at 6) Restor began its work in the fall of 2021, replacing the roof, siding, deck boards, and other miscellaneous exterior items. However, after relaying concerns to Restor's CEO, Brian Southard, on more than one occasion, Mrs. Sipe terminated the contract and forbade Restor from returning to the property before the project had been completed. At the time the Sipes terminated the contract, they had only paid $38,000 of the $149,554.09 contract price. The Sipes then contracted with Rhino Roofing & Exteriors (Rhino) whose only job was to replace the unfinished roof at a cost of around $25,000.

[2] Restor subsequently sued the Sipes for breach of contract, unjust enrichment, and foreclosure of a mechanic's lien. The Sipes answered and counterclaimed for breach of contract. At the bench trial, Mrs. Sipe and Eric Rhodes, the Vice President of Sales for Rhino, were not permitted to testify regarding certain technical matters because they were not previously disclosed as expert witnesses. The trial court later issued its order finding in favor of Restor. However, the Sipes filed a motion to correct error, asserting Mrs. Sipe and Rhodes should have been permitted to testify as skilled lay witnesses. The court granted the motion and reopened the trial to allow such testimony. In its subsequent order, the court entered judgment in favor of Restor on all its claims and awarded $123,426.99 in damages plus attorney's fees. The damages award takes into consideration the amount the Sipes paid to Rhino for the roof replacement. The court entered judgment against the Sipes on their counterclaim.

[3] The Sipes appeal, arguing certain findings were clearly erroneous and that the trial court's judgment against their breach of contract counterclaim is not supported by its findings, particularly as to the cost of replacing the roof. Finding the court's judgment and damages award inconsistent, we reverse and remand solely for clarification of that award.

Facts and Procedural History

[4] After the Sipes’ home sustained damage from a hailstorm in 2021, they filed a claim with their insurance carrier to cover repairs. On August 31, 2021, the Sipes contracted with Restor to do a significant amount of work on their home including replacing the roof, the siding, and the planks of their deck. Based on conversations between Mrs. Sipe and Southard throughout the project, the scope of the work changed with some tasks added and others removed. Nonetheless, replacing the roof, siding, and deck planks remained part of the project. There was no deadline in the parties’ contract for when the work needed to be completed.¹

[5] Mrs. Sipe specifically chose blue, factory-painted LP Smartside-brand siding for their home because she believed the materials would have longevity and be low maintenance. She also chose Trex composite decking because she had seen it used by a neighbor and liked its look. Restor began work in the fall of 2021 and quickly discovered that the deck's existing frame was unlevel and unsupportive. Restor informed Mrs. Sipe of this issue and explained that placing new deck boards on an unlevel frame would produce imperfect results. Despite the warning, she wanted them to install new planks atop the old framing because replacing the deck frame was not covered under her insurance policy.

[6] Mrs. Sipe was out of town from the end of November through the beginning of 2022. During her intermittent returns to the home in early 2022, she began expressing concerns about the project to Southard, including debris around the home, exposed nails, and missing caulking. Southard assured her that all her concerns would be addressed, the work was not completed, and that Restor's team would perform a walk-through near the end of the project to assess its work and make a list of the necessary final touches. Around March or April, after Southard had a heated discussion with Mrs. Sipe about her concerns, she terminated the contract with Restor. Neither Restor nor its subcontractors were permitted to return to the Sipes’ property to finish the contracted projects.

[7] Shortly after terminating the contract with Restor, Mrs. Sipe sought the assistance of Rhino. Rhodes came to the home, inspected the roof, siding, and other areas, and presented the Sipes with an estimate for replacing the roof and siding. Rhino estimated it would cost $53,046 to replace the Sipes’ siding. Amended Exhibits Vol. 2 at 140. However, the Sipes decided to only have Rhino replaced their leaking roof at a cost of $25,543.75.

[8] Because Restor had been paid only $38,000 of the $149,554.09 contract price when the contract was terminated, it filed suit against the Sipes in May of 2022 for breach of contract, unjust enrichment, and foreclosure of a mechanic's lien. The Sipes filed their answer and a counterclaim, asserting Restor breached the contract “by improperly performing the work for which” it was contracted. Appellants’ Appendix Vol. 2 at 24.

[9] A bench trial was held in December 2023 at which Restor's lead contractor, Edwin Gutierrez, testified that Restor's work was in accordance with industry standards. While he admitted that multiple items were unfinished or needed to be fixed—including a portion of the roof, some deck boards, and final touches such as caulking and trash clean-up—both he and Southard testified that such items would have been finished and remedied by Restor had Mrs. Sipe not terminated the contract. Gutierrez also testified that many of Mrs. Sipe's issues with the deck were from her choice to lay the new boards over the existing frame. Southard testified that Restor was neither informed of nor given the opportunity to remedy any leaks that had occurred at the home.

[10] Mrs. Sipe and Rhodes testified at the bench trial, but their testimonies were limited because the trial court granted Restor's Motion to Exclude Expert Testimony, which claimed the Sipes “failed to timely disclose experts.” Appellants’ App. Vol. 2 at 68. However, after the court entered its order with findings and conclusions in March 2024, the Sipes filed a motion to correct error. The Sipes asserted, in part, that Mrs. Sipe and Rhodes were skilled lay witnesses under Indiana Evidence Rule 701 based on their personal knowledge and experience and that their testimonies were improperly limited.² As such, they requested the court reopen the evidence and allow them to testify about their opinions on Restor's work. The court granted the motion, reopened the trial, and permitted Mrs. Sipe and Rhodes to testify as skilled lay witnesses.

[11] Rhodes testified about the plethora of photographs he took of the work done by Restor on the roof and other areas around the home while conducting his preliminary inspection. He discussed some portions of the roof and other areas he believed were not done correctly or to the standards his team adhered to, such as a lack of roof flashing in some spots, old nails left in place, shingles cut incorrectly, and improper sealant placement. Mrs. Sipe testified about many of her concerns, including the roof and leaks, the siding paint and caulking, and the unlevel deck and deck ramp. She testified that the deck framing was not replaced because Southard “didn't think it was necessary.” Transcript Vol. 4 at 102. She further testified that she and her husband had experienced five different leaks, apparently from the roof, since Restor had stopped work at the property. See id. at 101. As to the deck, Mrs. Sipe was unhappy with the unevenness of the wheelchair ramp, the unevenly cut boards, warped boards, and the exposed fasteners.

[12] After Mrs. Sipe's and Rhodes’ testimony concluded, and upon Restor's motion for findings and conclusions pursuant to Indiana Trial Rule 52(A),³ the trial court issued findings of fact and conclusions of law. See Appellants’ App. Vol. 2 at 129. The court concluded that Restor was entitled to recover on its complaint and that the Sipes were not entitled to any recovery against Restor. It entered judgment in favor of Restor on its breach of contract claim for $123,426.99 plus attorney's fees and entered judgment against the Sipes on their counterclaim. The court found that the Sipes failed to quantify most of their alleged damages except the cost to replace the roof. Thus, in calculating the damages owed to Restor, the court offset the amount of damages awarded to Restor by $25,545.75, what the Sipes paid Rhino to redo the roof. The Sipes appeal.

Discussion and Decision

[13] The Sipes argue that certain findings and conclusions made by the trial court were in error. We will “not set aside the 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.” TKG Assocs., LLC v. MBG Monmouth, LLC, 259 N.E.3d 306, 315 (Ind. Ct. App. 2025) (quoting Steele-Giri v. Steele, 51 N.E.3d 119, 123 (Ind. 2016)), reh'g denied. In our review of the findings and conclusions, we apply a two-tiered standard of review and determine first whether the evidence supports the findings and if so, whether the findings support the judgment. Id. “Findings of fact are clearly erroneous when the record contains no facts to support them, and a judgment is clearly erroneous if no evidence supports the findings, the findings fail to support the judgment, or if the trial court applies an incorrect legal standard.” Id. (quoting Perrill v. Perrill, 126 N.E.3d 834, 840 (Ind. Ct. App. 2019), trans. denied).

[14] The Sipes first challenge Finding 45 which states, “The court does not find Mr. Rhodes's or Mrs. Sipe's testimony regarding the siding compelling or credible.” Appellants’ App. Vol. 2 at 138. The Sipes claim this finding provides us “an opportunity to decide whether the evidence in terms of photographs and the testimony of these witnesses is compelling and credible.” Appellants’ Brief at 24. We disagree.

[15] Our review under a clearly erroneous standard specifically excludes reweighing evidence or judging witness credibility. Cooley v. Cooley, 229 N.E.3d 561, 564 (Ind. 2024) (“Without reweighing the evidence or reassessing witness credibility, we determine whether the evidence supports the court's findings and, if so, whether those findings support its judgment.”) (emphasis added). But in challenging Finding 45, the Sipes assert that the photographs they offered show “obvious issues with the siding” and that the trial court therefore gave “undue weight” to contrary testimony given by Restor. Appellants’ Br. at 23, 24. In determining credibility, we note that it is possible the court considered more than the Sipes’ photographs. Moreover, the Sipes have not shown that what is depicted in the photographs shows inadequate workmanship that is so blatant it renders the court's finding clearly erroneous, especially in light of the fact that Restor was not permitted to finish its work. This challenge is merely a request for our Court to reweigh evidence and judge witness credibility, and we decline their invitation to do so.

[16] The Sipes also challenge Findings 48 and 49. Finding 48 states that “[t]he Sipes provided no testimony or evidence of the costs to remedy the alleged defects with the deck; the court does not find the Sipes’ testimony or evidence regarding the deck compelling or credible.” Appellants’ App. Vol. 2 at 139. The challenged portion of Finding 49 states that “the Sipes have presented no evidence to the court to quantify the estimated miscellaneous damages[,]” including alleged “damage to the brick steps, the interior drywall[,] and personal property and failure to remove vegetation and trash.” Id. The Sipes assert “they showed that they were being asked to pay for work that was either not performed, not fully performed[,] or performed poorly[,]” and that in addition to showing the roof repair cost was $25,000, “another measure of damages could have been the amount the [they] paid to Restor for work that was done shoddily and needed to be redone.” Appellants’ Br. at 25-26 (emphasis added). In other words, they contend that the damages “could have been” full reimbursement of what they had already paid. Id. at 26.

[17] We first note that the Sipes fail to direct us to where in the record they presented evidence of damages related to the deck and the other miscellaneous areas, since their brief lacks citation to the record as required by our appellate rules. Ind. Appellate Rule 46(A)(8)(a) (requiring appellants to support each contention in their argument “by citations to ․ the Appendix or parts of the Record on Appeal relied on”). Nonetheless, our review of the record and the Sipes’ own words reveal that these findings were not erroneous. Claiming on appeal that another measure of damages “could have been” some (still unspecified) amount confirms that the Sipes did not present specific evidence to the trial court to quantify the damages or deficient performance as to the deck or miscellaneous areas. R & R Real Est. Co., LLC v. C & N Armstrong Farms, Ltd., 854 N.E.2d 365, 370 (Ind. Ct. App. 2006) (quoting Noble Roman's, Inc. v. Ward, 760 N.E.2d 1132, 1140 (Ind. Ct. App. 2002)) (“In actions for breach of contract, damages must be proven with reasonable certainty.”), reh'g denied.

[18] The trial court cannot estimate damages without evidence presented to support them. Id. at 371 (quoting Noble Roman's, 760 N.E.2d at 1140) (“[A] factfinder may not award damages on the mere basis of conjecture or speculation.”). When Mrs. Sipe and Rhodes testified about the deck, neither addressed how much it would cost to repair the alleged issues, showed that full replacement was necessary, or that full reimbursement of what the Sipes had already paid was warranted. Although Mrs. Sipe testified she did not feel she had gotten what she “bargained for[,]” such a statement does not quantify the damages warranted for replacement or repair. Tr. Vol. 4 at 111. Similarly, the Sipes claimed Restor damaged their brick walkway yet failed to quantify the damages in any respect. See Tr. Vol. 3 at 22; Tr. Vol. 4 at 122-23. They claimed damages to personal property but offered no quantification of repair or replacement. See Tr. Vol. 3 at 22, 36. Mrs. Sipe testified about damages to their drywall, but she presented no evidence as to the value of those damages or what it would cost to repair them. In fact, she testified that Restor repaired the drywall at no expense to the Sipes. See id. at 59; Tr. Vol. 4 at 121-22. Thus, the Sipes have failed to show that the trial court's findings regarding the lack of evidence as to damages were clearly erroneous.

[19] Lastly, the Sipes assert that the trial court erred in ruling against them on their counterclaim because that judgment “is inconsistent with the ․ finding that the Sipes had to pay more than $25,000 to have the roof work redone.” Appellants’ Br. at 26. Related to this issue, the court found that

52. Mr. Rhodes testified that the total cost to the Sipes to complete and remedy the roof was $25,545.75. The court accepts, and will utilize, Mr. Rhodes’ testimony and evidence in this regard․

․

56. Restor's damages can, therefore, be calculated as follows utilizing the evidence in the record:

CATEGORY AMOUNT Contract Sum $149,554.09 Less Payments Made ($38.,000.000 Less Cost to Compelte & Remedy Work ($25,545.75) Plus Interest (18% from 41.2022 to 9.1 2024) $37,418.65 Plus Attorneys’ Fees TBD TOTAL $123.426.99

57. The Sipes’ cost to replace the roof was $25,545.75․ The court accepts this evidence.

Appellants’ App. Vol. 2 at 140.

[20] The trial court then concluded and ordered that

10. Restor is entitled to damages in the amount of $123,426.99, plus attorney's fees.

11. The Sipes claimed “Restor breached the Contract by improperly performing the work for which they were contracted.” ․

12. Restor and/or its subcontractors admitted that certain items needed to be completed and/or remedied; however, these items were not completed or remedied due to the Sipes’ wrongful termination of the Contract.

13. Restor's experts ․ all testified the work was completed in accordance with the Contract, the Building Code, the manufacturer's instructions, and industry standards.

14. The Sipes offered the skilled lay witness testimony of Mr. Rhodes and Mrs. Sipe concerning the roof. The court finds the testimony of Mr. Rhodes compelling and credible as it relates only to the cost to replace or finish the roof․

․

16. Based on all the facts and evidence presented, and in full consideration of the law applicable to this cause, the court determines that Restor is entitled to recover from the Sipes on its Complaint and the Sipes are not entitled to any recovery against Restor.

․

C. Judgment is entered against the Sipes on their Breach of Contract Claim against Restor[.]

Id. at 142-43 (emphasis in original).

[21] We agree there is inconsistency here. The trial court considered the price the Sipes paid to replace their roof in its damages calculation while simultaneously concluding that the uncompleted or unremedied items “were not completed or remedied due to the Sipes’ wrongful termination of the Contract.” Id. at 142. In other words, the court concluded that the Sipes materially breached the contract first, and that any breach on Restor's part was due to the Sipes’ “wrongful termination of the Contract.”⁴ Id.

[22] “It is well established that ‘[w]hen one party to a contract commits the first material breach of that contract, it cannot seek to enforce the provisions of the contract against the other party if that other party breaches the contract at a later date.’ ” TKG Assocs., 259 N.E.3d at 316 (quoting A House Mechanics, Inc. v. Massey, 124 N.E.3d 1257, 1262 (Ind. Ct. App. 2019)). Because the trial court concluded that the Sipes materially breached the contract first—by wrongfully terminating it—they would not be entitled to recover against Restor and the court's judgment against their breach of contract counterclaim would be correct. Ream v. Yankee Park Homeowner's Ass'n, Inc., 915 N.E.2d 536, 547 (Ind. Ct. App. 2009) (“A party first guilty of a material breach of contract may not ․ recover damages from the other party to the contract.”), trans. denied. However, offsetting Restor's damages by the amount the Sipes paid to replace the roof causes some confusion, as the court did not indicate why reducing Restor's damages was warranted.

[23] The Sipes argue that by offsetting Restor's damages by the cost to replace the roof, the court must have agreed with them that “Restor materially breached the Contract by improperly performing the roofing work for which they were contracted.” Appellants’ Br. at 27 (internal brackets omitted). However, we do not necessarily find this to be true, as the court's conclusions specifically show it ruled against the Sipes’ entire breach of contract claim. See Appellants’ App. Vol. 2 at 143.

[24] It is possible the trial court took into consideration other principles of damages calculation, such as when “a party injured by a breach of contract may recover the benefit of its bargain but is limited in its recovery to the loss actually suffered.” Sheek v. Mark A. Morin Logging, Inc., 993 N.E.2d 280, 289 (Ind. Ct. App. 2013), trans. denied; see also L.H. Controls, Inc. v. Custom Conveyor, Inc., 974 N.E.2d 1031, 1043 (Ind. Ct. App. 2012) (“A party injured by a breach of contract may not be placed in a better position than it would have enjoyed if the breach had not occurred.”). It is unclear from its order how the trial court arrived at its damages award which included an offset of the roof replacement cost in light of its judgment in favor of Restor on its breach of contract claim. As such, we find it necessary to remand the issue back to the trial court for clarification on the basis for its damages calculation.

Conclusion

[25] Finding that the challenged findings are not clearly erroneous, we affirm the trial court's judgment in favor of Restor on its claims and against the Sipes on their counterclaim. However, because the court's damages award appears inconsistent with its judgment in Restor's favor on all claims, we reverse the damages award and remand solely for clarification of the basis for the court's calculation and for recalculation if necessary.

[26] Affirmed in part and reversed and remanded in part.

FOOTNOTES

1.   Mrs. Sipe testified that she told Restor the work must be completed by November 15, 2021. See Tr. Vol. 4 at 84. However, the parties’ contract states that “any representations, statements, or other communications not written in this contract are agreed to be immaterial, and not relied on by either party, and do not survive the execution of this contract.” Amended Exhibits Vol. 1 at 6.

2.   Mrs. Sipe testified about her experience in construction, including assisting her dad in building their family home when she was young, working as an electrician's assistant, and operating heavy machinery for an airport construction project. See Transcript Vol. 2 at 229-31.

3.   Indiana Trial Rule 52(A) provides, in relevant part, that “[u]pon its own motion, or the written request of any party filed with the court prior to the admission of evidence, the court in all actions tried upon the facts without a jury ․ shall find the facts specially and state its conclusions thereon.”

4.   The contract between Restor and the Sipes specifically states that it “cannot be cancelled once work is commenced except by mutual written agreement of the parties.” Am. Exs. Vol. 1 at 6.

DeBoer, Judge.

Altice, C.J., and Pyle, J., concur.