MBK v. Harold L. Bailey, et al., Appellees-Plaintiffs (2026)

MEMORANDUM DECISION

Case Summary

[1] MBK Holdings, Inc., Bryan Konieczny and Mark Kehoskie (collectively, MBK), appeal the grant of summary judgment in favor of Harold Bailey and Carole J. Bailey (collectively, the Baileys). MBK maintains that the trial court should have granted its motion for summary judgment because a Consulting Agreement that the parties executed regarding the sale and purchase of a restaurant was illusory and a sham. MBK further asserts that the trial court erroneously granted summary judgment for the Baileys because there was a genuine issue of material fact as to the parties’ intent when they entered into the Consulting Agreement.

[2] We affirm.¹

Facts and Procedural History

[3] The Baileys owned Matey's, a restaurant and bar in Michigan City, that they sold to MBK. The parties executed an Asset Purchase Agreement (Purchase Agreement) on March l8, 2015, that provided for a purchase price of $500,000, a downpayment of $150,000, and a Promissory Note (Note) of $350,000. The Note, signed on June 30, 2015, required MBK to make $6,604.93 in monthly payments to the Baileys beginning on July 1, 2017, for 60 consecutive months until June l, 2022.

[4] The Small Business Administration (SBA) required MBK to obtain a Consulting Agreement to receive financing because neither Kehoskie—an attorney—nor Konieczny had prior experience in the bar and restaurant business. Harold agreed to be MBK's consultant when he learned that he could provide his services remotely, as he had moved to Pennsylvania.

[5] The Consulting Agreement, drafted by the Baileys, was executed by the parties on June 30, 2015, and ran for twenty-seven months beginning July 1, 2015, through September 30, 2017. Pursuant to the Consulting Agreement, MBK was to make an initial payment of $10,000 to the Baileys and then pay $7,469.08 per month, beginning October 1, 2015, and concluding on September l, 2017.

[6] The Consulting Agreement provided in relevant part as follows:

From time to time Bailey may consult with MBK with respect to various matters associated with the organization and operation of the restaurant and tavern facility, including, but not necessarily limited to, day-to-day operations of the restaurant business, day-to-day operations of the tavern activities (including the purchase and sale of alcoholic beverages [beer, wine, and liquor]), operation of activities licensed through the Indiana Alcohol and Tobacco Commission, and maintaining a working relationship with the personnel (employees) required to perform the operations at the restaurant and tavern business[.]

Appellants’ Appendix Vol. II at 25.

[7] The Consulting Agreement also specified the frequency with which MBK could contact Bailey for consulting services:

Notwithstanding the services which Bailey is to provide to MBK during the term of this Agreement, MBK may, periodically, not contact Bailey nor shall MBK require Bailey to provide daily or weekly consulting services. The parties further acknowledge and agree that this periodic use by MBK of Bailey's services shall not be cause for termination of the working relationship between Bailey and MBK during the term of this Agreement.

Id. at 26.

[8] Bailey believed the Consulting Agreement required him to be available for consultation with MBK on matters related to Matey's. In fact, during MBK's operation of the restaurant, the parties communicated via text or telephone about various issues including sales and computer problems. Harold also stopped in at Matey's to see how the business was progressing during his occasional return trips to Michigan City.

[9] On October 5, 2020, the Baileys filed a complaint against MBK for breaching the Consulting and Purchase Agreements. The Baileys asserted that MBK stopped making the required payments under both contracts and that it owed them the balance due plus interest and attorney's fees.

[10] MBK denied the allegations, and both parties subsequently filed motions for summary judgment. The Baileys claimed that they were entitled to judgment as a matter of law because the designated evidence demonstrated that MBK stopped making payments on the Purchase Agreement in July 2020 and was in breach thereof. The Baileys acknowledged, however, that MBK had made all payments due under the Consulting Agreement. The Baileys thus requested that the allegations advanced in the complaint that pertained to the Consulting Agreement be withdrawn.

[11] MBK asserted in its motion for summary judgment that the Consulting Agreement lacked a “meeting of the minds” and that it was entitled to judgment as a matter of law because it never “assented to the essential elements of the contract.” Appellants’ Appendix Vol. II at 65, 67. Moreover, MBK claimed that the Consulting Agreement was illusory and a “sham,” id. at 68, that neither party intended to be bound by it, and that the sole purpose of that contract was to satisfy SBA requirements. Thus, MBK asserted that all payments made to the Baileys should apply only toward the Purchase Agreement because the Consulting Agreement was unenforceable.²

[12] Following a hearing, the trial court summarily granted the Baileys’ motion for summary judgment, denied MBK's motion for summary judgment, and entered judgment for the Baileys on February 4, 2025. The trial court determined that “there are no genuine issues of material fact with respect to the contracts ․ or the validity or breach thereof.” Id. at 18. After conducting a hearing on damages, the trial court entered final judgment for the Baileys in the amount of $269,961 on March 20, 2025.

[13] MBK now appeals. Additional information will be supplied as necessary.

Discussion and Decision

[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). A fact is “material” if its resolution would affect the outcome of the case, and an issue is “genuine” if a trier of fact is required to resolve the parties’ differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences. Hughley, 15 N.E.3d at 1003. Summary judgment is improper if the moving party fails to carry its burden, but if it succeeds, then the non-moving party must come forward with evidence establishing the existence of a genuine issue of material fact. Manley, 992 N.E.2d at 673.

[15] We construe all factual inferences in the nonmoving party's favor and resolve all doubts as to the existence of a material issue against the moving party. Id. Our review of a summary judgment is limited to those materials designated to the trial court. Id. In reviewing a trial court's ruling on a motion for summary judgment, we may affirm on any grounds supported by the Indiana Trial Rule 56 materials. Flannagan v. Lakeview Loan Servicing, LLC, 184 N.E.3d 691, 695-96 (Ind. Ct. App. 2022). A trial court's grant of summary judgment on appeal to this court is clothed with a presumption of validity, and an appellant has the burden of demonstrating that the grant of summary judgment was erroneous. Est. of Ecker v. Est. of Samson, 59 N.E.3d 282, 284 (Ind. Ct. App. 2016).

[16] The primary and overriding purpose of contract law is to ascertain and give effect to the intentions of the parties. Gillette v. Gillette, 835 N.E.2d 556, 561-62 (Ind. Ct. App. 2005). If the parties’ intent can be gleaned from their written expression, that intention must be effectuated by the court. Id. We must read all contractual provisions as a whole and we will determine MBK's and the Baileys’ intent from the four corners of the Consulting Agreement at the time of its execution. See Robinson v. Century Personnel, 678 N.E.2d 1268, 1270 (Ind. Ct. App. 1997), trans. denied. Where possible, courts will construe contracts as being valid rather than void. Indiana-American Water Co., Inc. v. Town of Seelyville, 698 N.E.2d 1255, 1259 (Ind. Ct. App. 1998).

[17] “The basic requirements for a contract are offer, acceptance, consideration, and a meeting of the minds of the contracting parties.” Conwell v. Gray Loon Outdoor Mktg. Grp., Inc., 906 N.E.2d 805, 812-13 (Ind. 2009). There can be no contract unless both parties are bound. Rogier v. Am. Testing & Eng'g Corp., 734 N.E.2d 606, 618 (Ind. Ct. App. 2000), trans. denied. In other words, “the existence of a valid contract depends upon mutuality of obligation” of the parties. Marksill Specialties, Inc. v. Barger, 428 N.E.2d 65, 69 (Ind. Ct. App. 1981). An illusory promise is a promise which by its terms “makes performance entirely optional with the promisor.” Pardieck v. Pardieck, 676 N.E.2d 359, 364 n.3 (Ind. Ct. App. 1997), trans. denied. A contract is unenforceable if it fails to obligate one party to do anything. Ind.-Am. Water Co. v. Town of Seelyville, 698 N.E.2d 1255, 1260 (Ind. Ct. App. 1998).

[18] Here, MBK claims that the Consulting Agreement was a sham and an unenforceable illusory contract because neither party intended to be bound by it and Harold was not required to perform under its terms. The contract, however, reflects that MBK wanted Harold as its consultant and that Harold desired to provide that service. Moreover, the designated evidence established that Harold agreed to be a consultant for MBK after he learned that he could do so remotely while residing in Pennsylvania. And he believed that the Consulting Agreement required him to be available for consultation.

[19] The designated evidence further demonstrated that the Baileys provided MBK with access to information regarding inventory, payroll, taxes and withholdings, employee records, scheduling, and billing. Harold visited Matey's during his occasional trips back to Michigan City and would inquire about the restaurant's operations and provide MBK with advice and suggestions. When Harold was in Pennsylvania, he and MBK communicated by email and text messaging about the restaurant's operations.

[20] Harold's performance under the Consulting Agreement depended upon MBK's request for advice and consultation. As MBK may not have asked Harold for more detailed or additional consultations, it does not follow that Harold failed to perform and/or was not obligated to consult under the Consulting Agreement. Moreover, MBK made payments in accordance with the Consulting Agreement. For these reasons, we reject MBK's contention that the Consulting Agreement was an illusory contract or a sham simply because the SBA required such an agreement.

[21] MBK further claims that the trial court should have granted its motion for summary judgment because they were not made aware of the Consulting Agreement until closing and they did not review it or negotiate its terms. MBK asserts that the Consulting Agreement was “never explained to [Konieczny or Kehoskie],” and that several provisions that are typically set forth in these types of contracts were lacking in the Consulting Agreement. Thus, according to MBK, there was no meeting of the minds with respect to that contract.

[22] Notwithstanding these contentions, there is no designated evidence establishing that MBK was prevented from negotiating the Consulting Agreement for additional terms that they may have desired. There is no showing that MBK sought additional time to review, negotiate, or otherwise revise the Consulting Agreement. Appellants’ Brief at 21. Moreover, one of the principals—Kehoskie—is an attorney. He therefore is “presumed to understand the documents which he signs and cannot be released from the terms of a contract due to his failure to read it.” Shoaff v. First Merchants Bank, 201 N.E.3d 646, 656 (Ind. Ct. App. 2022). MBK may not successfully claim that it is not bound by the agreement because the principals failed to read it. See id. For these reasons, we reject MBK's claim that the parties lacked a meeting of the minds when executing the Consulting Agreement and that a genuine issue of material fact remained regarding the parties’ intent.

[23] In sum, MBK failed to establish that the Consulting Agreement was an illusory contract or a sham or that there is a genuine issue of material fact as to whether the parties intended to be bound by it. We therefore affirm the trial court's grant of summary judgment for the Baileys and the denial of MBK's motion for summary judgment.

[24] Judgment affirmed.

FOOTNOTES

1.   MBK petitioned for oral argument, and we deny that request by separate order issued contemporaneously with this opinion.

2.   [1] As noted above, the Consulting Agreement and Purchase Agreement were two separate contracts, and they set forth different amounts owed, different dates of execution, and different durations. There is no language in either contract that permits MBK to apply payments made on the Consultation Agreement to those required under the Purchase Agreement.

Altice, Judge.

Brown, J. and DeBoer, J., concur.