MPJ ENTERPRISES LLC v. FIRST MERCHANTS BANK (2025)

MEMORANDUM DECISION

[1] MPJ Enterprises, LLC (“MPJ”), Indiana Flooring and Linoleum Co. Inc. (“Indiana Flooring”), Michael P. Jackson (“Michael”), Peggy D. Jackson, Anthony M. Jackson, and Judy M. Key (collectively, “Plaintiffs”) appeal the trial court's order entering summary judgment in favor of First Merchants Bank (“Defendant” or “First Merchants”). We affirm.

Facts and Procedural History

[2] On July 12, 2023, Plaintiffs filed a complaint against First Merchants alleging that MPJ, Indiana Flooring, and Michael held a line of credit (the “LOC”) with First Merchants in the principal amount of $250,000. It alleged that Indiana Flooring employed Nate Wills and “promoted him in 2018 as Director of Administration/Human resources for his accounting background and experience.” Appellants’ Appendix Volume II at 15. It alleged that Wills “was not authorized to access the LOC” and that he “was authorized as a signatory on a checking account owned by Indiana Flooring.” Id. at 16. The complaint alleged that, in July 2021, Wills emailed First Merchants requesting access to the LOC and asking for certain private information about the terms of the LOC, First Merchants provided the information to Wills and advanced $250,000 from the LOC to Indiana Flooring's checking account, and Wills withdrew the LOC proceeds from the checking account. It alleged that, sometime thereafter, Wills paid approximately $80,000 toward the LOC and, in December 2021, First Merchants advanced $80,000 from the LOC and deposited the amount in Indiana Flooring's checking account. The complaint set forth claims of negligence under Counts I, II, and III, breach of contract under Count IV, breach of implied contract under Count V, and breach of fiduciary duty under Count VI.

[3] In August 2023, First Merchants filed a motion to compel arbitration. In October 2023, the court issued an order stating that it “does compel arbitration for the claims relating to the deposit accounts” and “[t]he [LOC] account is bifurcated and permitted to proceed before this Court.” Id. at 73. In August 2024, the parties filed a stipulation of partial dismissal stating that “[t]he only remaining claim at issue in the Complaint is Count IV – Breach of Contract” and “[a]ll other counts were previously resolved.” Id. at 113.

[4] On February 12, 2025, First Merchants filed a motion for summary judgment with respect to Count IV and designated portions of Michael's deposition and various documents, instruments, and email messages. In his deposition, Michael stated that he was previously the owner of Indiana Flooring, his stock was now in his son's name, MPJ held the real estate, Indiana Flooring leased the building from MPJ, and he was the sole member of MPJ. He stated that Wills “was in charge of everything financial” and “handled as a management position all of the incoming money, all the outgoing money, and all the payroll.” Id. at 123.

[5] First Merchants designated a Promissory Note dated April 5, 2017 (the “Note”) identifying the “Borrower” as Indiana Flooring, MPJ, and Michael (collectively, “Borrowers”) in the principal amount of $250,000. The Note provided:

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing by Borrower or as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. The following person or persons are authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender's address above, written notice of revocation of such authority: Michael Jackson, Managing Member of [Indiana Flooring]; Michael Jackson, manager member of [MPJ]; and Michael Jackson, individually; or an authorized person.

Id. at 157.

[6] First Merchants also designated a “Corporate Authorization Resolution” (the “Authorization”). Id. at 152. On the first page, under the title of the document, the instrument stated:

By: INDIANA FLOORING AND LINOLEUM CO INC   OPERATING ACCOUNT   3025 N SCATTERFIELD RD   ANDERSON, IN 46012-1231

Referred to in this document as “Corporation”

Id. The Authorization provided “I, ANTHONY M JACKSON, certify that I am Secretary (clerk) of the above named corporation” and that “the resolutions on this document are a correct copy of the resolutions adopted at a meeting of the Board of Directors of the Corporation ․ held on 3/06/2019.” Id. The document stated: “Agents. Any Agent listed below, subject to any written limitations, is authorized to exercise the powers granted as indicated below.” Id. It then set forth the typed names and handwritten signatures of Judy M. Key on line “A”, Michael on line “B”, Anthony M. Jackson on line “C”, and “Nathaniel D Wills” on line “D”. Id. On the second page, the document stated: “Powers Granted. (Attach one or more Agents to each power by placing the letter corresponding to their name in the area before each power. Following each power indicate the number of Agent signatures required to exercise the power.).” Id. at 153. Under the phrase “Indicate A, B, C, D, E, and/or F,” the letters “A, B, C, D” appear in type on the line corresponding to the statement “(1) Exercise all of the powers listed in this resolution.” Id. The space after the following statement was left blank: “Limitations on Powers. The following are the Corporation's express limitations on the powers granted under this resolution.” Id. The Authorization then set forth resolutions in seven numbered paragraphs. It provided in part:

Resolutions

The Corporation named on this resolution resolves that,

* * * * *

(3) The signature of an Agent on this resolution is conclusive evidence of their authority to act on behalf of the Corporation. Any Agent, so long as they act in a representative capacity as an Agent of the Corporation, is authorized to make any and all other contracts, agreements, stipulations and orders which they may deem advisable for the effective exercise of the powers indicated on page one, from time to time with the Financial Institution, subject to any restrictions on this resolution or otherwise agreed to in writing.

Id. The Authorization is executed by Anthony M. Jackson.

[7] In addition, First Merchants designated an “Account Agreement” dated March 6, 2019, which identified, under “Account Title & Address” the following: “Indiana Flooring and Linoleum Co. Inc. Operating Account 3025 N Scatterfield Rd Anderson, IN 46012-1231.” Id. at 191 (capitalization omitted). The Account Agreement included Wills’ signature and listed “Nathaniel D Wills” as an “Authorized Signer.” Id. at 192.

[8] In a memorandum in support of its motion for summary judgment, First Merchants argued the Note “expressly states that the individuals who are authorized to request advances from the [LOC] include any ‘an authorized person,’ and Mr. Wills is specifically named as an authorized person in [the Authorization] provided to First Merchants.” Id. at 199. It argued, “[a]lternatively, and in addition, Mr. Wills possessed apparent authority to request advances from the [LOC].” Id.

[9] In a memorandum in opposition to First Merchants’ motion for summary judgment, Plaintiffs argued that the Authorization “pertains only to the Operating Account and does not touch or concern the [LOC].” Id. at 217. They asserted “[p]age one of the [Authorization] states in the header that [ ] the authorization is ‘By: Indiana Flooring and Linoleum Co. Inc. Operating Account.’ ” Id. (citation omitted).

[10] First Merchants filed a reply arguing the Authorization “does not exclusively apply to [Indiana Flooring's] Operating Account.” Id. at 233. It states that “the header of the [Authorization] that Plaintiffs point to, at the top of page 1 ․ is the address of [Indiana Flooring],” that “[t]he actual text and plain and unambiguous language of the [Authorization] provides that ‘[t]he signature of an Agent on this resolution is conclusive evidence of their authority to act on behalf of the Corporation [Indiana Flooring]. Any Agent ․ is authorized to make any and all contracts, agreements, stipulations and orders ․,’ ” and that “[n]owhere in the [Authorization] does it state that it was intended to apply only to the Operating Account.” Id. at 233-234.

[11] On May 14, 2025, the court held a hearing. On June 18, 2025, the court issued an order providing:

The issue before the court on summary judgment is whether the [Authorization] made [Wills] an “authorized person” capable of accessing the [LOC] as created by the [Note].

* * * * *

The undisputed facts are that Plaintiffs executed a [Note] which provided a [LOC] for $250,000.00. By the plain and unambiguous terms of the [Note], an “authorized user” could access those funds. Plaintiffs also executed the [Authorization] wherein [Wills] was giving [sic] the power to act on behalf of [Indiana Flooring]. The plain and unambiguous language contained in the body of the [Authorization] neither limits Wills’ authority as to which accounts he could access nor specifically excepts out the [LOC]. The fact that the address listed on the [Authorization] for [Indiana Flooring] includes the words “Operating Account” does not limit the powers contained in the body of the [Authorization]. If Plaintiffs, as the drafters of the [Authorization], had intended for the [Authorization] to be limited to only certain accounts, it was incumbent upon them to clearly say so in the [Authorization], rather than rely on the address line to limit the powers being given. Thus, under the plain and unambiguous language of the [Note] and the [Authorization], [Wills] was an authorized person vested with the power to access the [LOC]. Consequently, Defendant did not breach its contract with Plaintiffs when [Wills] was granted access to the [LOC].

The Court finds that there are no genuine issues as to the material facts set forth in Count IV of Plaintiffs’ Complaint and that Defendant is entitled to judgment as a matter of law.

Id. at 12-13. The court granted First Merchants’ motion for summary judgment and dismissed the case.

Discussion

[12] Plaintiffs assert that Wills was not authorized to initiate advances from the LOC and thus the entry of summary judgment in favor of First Merchants was improper. They contend the Authorization pertained solely to the Operating Account and did not concern the LOC. They argue “it is clear from its face that the [Authorization] is a form provided by First Merchants,” the form was a “fill in the blank” form which “was clearly not drafted by Indiana Flooring, but rather by First Merchants,” and “if the [Authorization] is considered ambiguous, such language should be construed against First Merchants.” Appellants’ Brief at 10-11. They argue “[p]age one of the [Authorization] states in the header that [ ] the authorization is ‘By: Indiana Flooring and Linoleum Co. Inc. Operating Account’ ” and “[t]his, in and of itself, shows that the [Authorization] was not contemplated to cover the [LOC], but only was meant to cover the Operating Account which was only in the name of Indiana Flooring.” Id. at 11 (quoting Appellants’ Appendix Volume II at 152). They argue the Note “does not define an authorized person within the document” and does not “indicate how a person is to become authorized.” Id. at 12.

[13] First Merchants has not filed an appellee's brief. When an appellee fails to submit a brief, we may reverse if the appellant establishes prima facie error. Bixler v. Delano, 185 N.E.3d 875, 877 (Ind. Ct. App. 2022). Prima facie is defined as “at first sight, on first appearance, or on the face of it.” Id.

[14] We review summary judgment de novo, applying the same standard as the trial court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). The moving party bears the initial burden of making a prima facie showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Manley v. Sherer, 992 N.E.2d 670, 673 (Ind. 2013). If the moving party carries its burden, then the nonmoving party must come forward with evidence establishing the existence of a genuine issue of material fact. Id. Our review is limited to those materials designated to the trial court. Mangold ex rel. Mangold v. Ind. Dep't of Nat. Res., 756 N.E.2d 970, 973 (Ind. 2001).

[15] To the extent we must interpret the Note and Authorization, we observe that interpretation of a contract generally is a question of law and is reviewed de novo. Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 251 (Ind. 2005). Loan documents are subject to the rules of contract construction. Lundsford v. Deutsche Bank Tr. Co. Americas as Trs., 996 N.E.2d 815, 822 (Ind. Ct. App. 2013). If an agreement's terms are clear and unambiguous, courts must give those terms their clear and ordinary meaning. Dunn, 836 N.E.2d at 251. We interpret an agreement so as to harmonize its provisions rather than place them in conflict. Id. at 252. Generally, an ambiguous contract will be construed against its drafter. Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1132 (Ind. 1995). A contract will be found to be ambiguous only if reasonable persons would differ as to the meaning of its terms. Beam v. Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002), reh'g denied. Our paramount goal is to ascertain and effectuate the intent of the parties. Scheffer v. Centier Bank, 101 N.E.3d 815, 823 (Ind. Ct. App. 2018). This requires the contract to be read as a whole, and the language construed so as not to render any words, phrases, or terms ineffective or meaningless. Id. When a contract contains general and specific provisions relating to the same subject, the specific provision controls. U.S. Bank Tr., N.A. for LSF9 Master Participation Tr. v. Spurgeon, 99 N.E.3d 671, 675-677 (Ind. Ct. App. 2018) (citing Ryan v. Lawyers Title Ins. Corp., 959 N.E.2d 870, 874-877 (Ind. Ct. App. 2011) (noting discrepancy between general pre-printed text of purchase agreement and more specific language in type filled in on the form and finding the specific filled-in language controlled over the more general pre-printed language)).

[16] Here, the Note set forth the terms of First Merchants and Borrowers’ rights and obligations with respect to the LOC. Specifically, the Note provided that advances may be requested orally or in writing and that First Merchants may but need not require that oral requests be confirmed in writing. The Note stated: “The following ․ persons are authorized to request advances and authorize payments under the [LOC] until Lender receives from Borrower ․ written notice of revocation of such authority: Michael Jackson ․; or an authorized person.” Appellants’ Appendix Volume II at 157.

[17] The Authorization, in turn, identifies the “Agents” authorized to act on behalf of Indiana Flooring, as the “Corporation,” and specifies the powers of the authorized persons. Id. at 152. The document contains Will's name in type on line “D” and contains his handwritten signature. Id. Under “Powers Granted,” and following the statement “[a]ttach one or more Agents to each power by placing the letter corresponding to their name in the area before each power,” the letters “A, B, C, D” appear in type filled in on a pre-printed blank line in front of the statement “(1) Exercise all of the powers listed in this resolution.” Id. at 153. The “Resolutions,” in paragraph (3), specifically states that “[t]he signature of an Agent on this resolution is conclusive evidence of their authority to act on behalf of the Corporation.” Id. (emphasis added). It also states “[a]ny Agent ․ is authorized to make any and all other contracts, agreements, stipulations and orders which they may deem advisable ․ with the Financial Institution, subject to any restrictions on this resolution or otherwise agreed to in writing.” Id.

[18] While the words “Operating Agreement” appear above Indiana Flooring's address, we observe that all of the references to the powers of an “Agent” throughout the text and operative language of the Authorization relate to the Agent's authority to act on behalf of the “Corporation” and not to the Agent's authority to act with respect to certain accounts. The section “Limitations on Powers” in the document was left blank. Id. The language of the Authorization, including the specific filled-in language, is unambiguous and is clear to reveal the intent of including Wills’ name as an Agent in the document. Also, the “Account Agreement” lists Wills as an “Authorized Signer” with respect to Indiana Flooring's bank account, and thus an interpretation of the Authorization that it applied solely to the bank account would render the Authorization merely duplicative of the authorization terms of the Account Agreement. Id. at 191-192. The designated evidence established that Wills was authorized to request advances under the LOC. The trial court did not err in granting First Merchants’ motion for summary judgment on Count IV of Plaintiffs’ complaint.

[19] For the foregoing reasons, we affirm the trial court's order.

[20] Affirmed.

Brown, Judge.

Felix, J., and Scheele, J., concur.