Craig Neibert v. Jody A. Perdomo

FILED

May 18 2016, 8:12 am

CLERK

Indiana Supreme Court

Court of Appeals

and Tax Court

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE

Patti J. Taylor Stephen R. Snyder

Taylor Law Office, P.C. Randall L. Morgan

Warsaw, Indiana Snyder Morgan LLP

Syracuse, Indiana

Karl L. Mulvaney

Margaret M. Christensen

Jessica Whelan

Bingham Greenebaum Doll LLP

Indianapolis, Indiana

IN THE

COURT OF APPEALS OF INDIANA

Craig Neibert, May 18, 2016

Appellant-Petitioner, Court of Appeals Case No.

43A03-1503-CC-99

v. Interlocutory Appeal from the

Kosciusko Superior Court

Jody A. Perdomo, The Honorable Joe V. Sutton,

Appellee-Respondent Judge

Trial Court Cause No.

43D03-1202-CC-100

Crone, Judge.

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Case Summary

[1] In this interlocutory appeal, Craig Neibert challenges the trial court’s grant of

involuntary dismissal of his implied contract and unjust enrichment claims

against his ex-girlfriend Jody A. Perdomo, arising out of the renovation of one

house and the construction of another. He submits that the trial court erred in

(1) granting Perdomo’s motion for involuntary dismissal before he had rested

his case; (2) concluding that he had not presented evidence of breach of implied

contract and/or unjust enrichment sufficient to survive Perdomo’s motion for

involuntary dismissal; (3) excluding an expert witness’s report concerning the

value of Neibert’s renovation, excavation, and construction services; (4) failing

to issue special findings of fact as part of its interlocutory order; and (5) failing

to address his claim for replevin in its interlocutory order. 1 Finding that the

uncontroverted evidence is sufficient to support Neibert’s contractual claims,

we conclude that the trial court clearly erred in granting Perdomo’s motion for

involuntary dismissal. Finding this issue dispositive, we need not address the

remaining issues, except for the admissibility of Neibert’s expert witness’s

report, as it relates to the record on remand. As such, we reverse and remand

for proceedings consistent with this opinion.

1

Perdomo concedes the replevin issue and agrees that Neibert’s replevin claim is appropriate for

consideration on remand.

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Facts and Procedural History 2

[2] In 2000, childhood friends Neibert and Perdomo began a romantic relationship.

At that time, Perdomo resided in Florida and worked as a hairstylist. Neibert

resided in Indiana and worked mainly in construction, while also performing

side jobs at his parents’ mobile home park. In 2001, Perdomo and her daughter

moved to Indiana to reside with Neibert and his daughter in Neibert’s home. A

year later, Perdomo and Neibert spent a few weeks in Florida fixing up

Perdomo’s house to prepare it for sale. Neibert later described his work on the

Florida house as a “gift,” in recognition that neither he nor Perdomo was

wealthy or “blessed with extra money.” Tr. at 59.

[3] In 2003, Neibert bought Perdomo a ring and asked her to be his “best friend

and partner.” Id. at 26, 146. Later that year, Perdomo’s father passed away

and left her cash, his house (“Father’s House”), and a sixty-five-acre plot of

farmland with some dilapidated structures on it. In recognition of his

friendship with Neibert, he left Neibert $15,000. At the end of that year,

Perdomo and Neibert began a renovation project on Father’s House, which had

been deemed uninhabitable and uninsurable and had a value of about $71,000.

Perdomo paid for most of the materials, and Neibert provided the vast majority

of the labor, with some help from his son and a few friends. The renovation

project took over a year to complete, after which Father’s House was listed for

2

We held oral argument at Valparaiso University Law School on April 15, 2016. We commend counsel on

their excellent advocacy and thank our hosts for their hospitality.

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sale for between $150,000 and $160,000. Perdomo believed it to be worth

around $180,000. A sale was never consummated, and Perdomo leased

Father’s House at $200 per week. She did not share the rental proceeds with

Neibert or pay him for his work on Father’s House.

[4] In 2006, Neibert and Perdomo decided to build a home on the farmland (“the

New House”). Their plan was to live there together and make it their dream

home. After researching plans on the Internet, the couple settled on a plan for

the New House. Perdomo applied for a building permit and listed Neibert as

the contractor. The project also required excavation work, which Neibert

performed. The project took five years to complete, but the couple moved from

Neibert’s house into the largely unfinished New House in 2007. Neibert

continued to work almost full time on the project and averaged around $7000 to

$10,000 in annual income from other sources. In the ensuing years, the

couple’s relationship began to sour, and, at one point, Perdomo threw her ring

at Neibert and told him to keep it. Neibert continued to reside with Perdomo

and to work on the New House. In August 2011, with the New House ninety-

percent finished, the couple ended their relationship and Neibert moved out.

He did not receive payment for any construction or excavation services

performed on the New House.

[5] Neibert filed an action against Perdomo, seeking damages based on implied

contract or unjust enrichment for labor, equipment, and materials he provided

in renovating Father’s House and in constructing the New House. He also

sought replevin, claiming that Perdomo was in possession of several items of his

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personal property at the New House and had threatened him with violence if he

entered the property. Perdomo filed a counterclaim, alleging that Neibert had

been unjustly enriched by living rent-free in the New House.

[6] At the ensuing bench trial, Neibert presented evidence concerning the couple’s

relationship, their decade of cohabitation, and his expectation of co-ownership

of the properties. He also presented evidence regarding his customary rates and

work hours connected to both the renovation of Father’s House and the

excavation and construction on the New House project, as well as evidence that

Perdomo receives rental income from Father’s House. He testified that

Perdomo had not paid him rent while living in his house and that he had not

paid Perdomo rent while living in the New House. Id. at 178. Near the end of

his case in chief, he stated his intent to call Perdomo as a witness but said that

he would proceed out of order in the interest of efficiency and examine her

during her presentation of evidence. The trial court said, “Okay it is your call,”

and passed the case to Perdomo, who immediately moved for an involuntary

dismissal pursuant to Indiana Trial Rule 41(B). Id. at 600. The trial court went

off record and received legal authority from both parties concerning their

respective positions on Perdomo’s motion. The court put the remainder of the

trial on hold while it took the matter under advisement.

[7] Two months later, the trial court sua sponte issued a notice granting Neibert

time to file a response to Perdomo’s motion to dismiss. Thereafter, Neibert

filed a “Response to Motion for Involuntary Dismissal and Request for

Findings.” Appellant’s App. at 47. In his response, for the first time, he

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submitted that he had not rested his case in chief but had reserved his

examination of Perdomo until her testimony during her presentation of

evidence. He also asserted that the evidence he presented was nevertheless

sufficient to survive dismissal. Perdomo filed a response claiming that she

never acquiesced to Neibert’s request to reserve her testimony as alleged.

[8] The trial court subsequently issued a half-page interlocutory order granting

Perdomo’s motion for involuntary dismissal and dismissing Neibert’s implied

contract and unjust enrichment claims. The order did not include

comprehensive findings of fact and conclusions thereon. Rather, the trial court

specified that it found that Neibert “did rest on his case in chief,” that he had

the “opportunity to call [] Perdomo … but elected to wait for cross

examination,” and that Perdomo “did not agree to ‘reserve’ [her] testimony for

cross examination … but remained silent.” Appellant’s App. at 60. With

respect to Neibert’s substantive contract claims, the trial court stated, “[T]he

Court adopts and reiterates [Perdomo’s] position with respect to no recovery

under a contract theory and no recovery under a theory of unjust enrichment.”

Id. The order did not address Neibert’s replevin claim or Perdomo’s

counterclaim.

[9] Neibert filed a motion for entry of final judgment, an alternative request for

certification of the order for interlocutory appeal, and a request for stay

pursuant to Indiana Trial Rule 54(B) and Appellate Rule 14(B). The trial court

certified the order for interlocutory appeal, and we accepted jurisdiction.

Additional facts will be provided as necessary.

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Discussion and Decision

Section 1 – Neibert presented evidence sufficient to

survive the involuntary dismissal of his contractual

claims.

[10] Neibert contends that the trial court erred in granting Perdomo’s motion for

involuntary dismissal pursuant to Trial Rule 41(B), which reads in pertinent

part,

After the plaintiff or party with the burden of proof upon an

issue, in an action tried by the court without a jury, has

completed the presentation of his evidence thereon, the opposing

party, without waiving his right to offer evidence in the event the

motion is not granted, may move for a dismissal on the ground

that upon the weight of the evidence and the law there has been

shown no right to relief. The court as trier of the facts may then

determine them and render judgment against the plaintiff or may

decline to render any judgment until the close of all the evidence.

If the court renders judgment on the merits against the plaintiff or

party with the burden of proof, the court, when requested at the

time of the motion by either party shall make findings if, and as

required by Rule 52(A). Unless the court in its order for

dismissal otherwise specifies, a dismissal under this subdivision

… operates as an adjudication upon the merits.

[11] We review the grant or denial of a Trial Rule 41(B) motion to dismiss using a

clearly erroneous standard. In re M.D., 906 N.E.2d 931, 932 (Ind. Ct. App.

2009), trans. denied. In conducting such review, we neither reweigh evidence

nor judge witness credibility. Id. We reverse only when the evidence is not

conflicting and points unerringly to a conclusion different from the one reached

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by the trial court. Id. “[I]n Indiana there is a marked judicial deference for

deciding disputes on their merits and for giving parties their day in court,

especially in cases involving material issues of fact, substantial amounts of

money, or weighty policy determinations.” Wright v. Miller, 989 N.E.2d 324,

328 (Ind. 2013) (citation omitted).

[12] More specifically, Neibert maintains that he presented sufficient evidence of his

contractual claims to survive the involuntary dismissal of those claims. Because

the parties did not have a written contract, Neibert sought recovery under the

theories of unjust enrichment and implied contract.

[13] “Also referred to as quantum meruit or quasi-contract, unjust enrichment

requires a party who has been unjustly enriched at another’s expense to make

restitution to the aggrieved party.” Reed v. Reid, 980 N.E.2d 277, 296 (Ind.

2012). To recover for unjust enrichment, the plaintiff must show that (1) he

rendered a measurable benefit to the defendant at the defendant’s express or

implied request; (2) he expected payment from the defendant; and (3) allowing

the defendant to retain the benefit without restitution would be unjust. Id.

Equitable principles prohibit the unjust enrichment of a person who accepts the

unrequested benefits provided by another despite having the opportunity to

decline those benefits. Bright v. Kuehl, 650 N.E.2d 311, 316 (Ind. Ct. App.

1995).

[14] Similarly, to recover under implied contract, the plaintiff generally must

establish that the defendant impliedly or expressly requested the benefits

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conferred. Id. at 315. “Any benefit, commonly the subject of pecuniary

compensation, which one, not intending it as a gift, confers upon another who

accepts it, is an adequate foundation for a legally implied or created promise to

render back its value.” Id.

[15] A contract can be implied from the relationship between parties. Id. at 313.

Here, the parties were involved in a romantic relationship during the relevant

timeframe, having cohabited for approximately one decade. A person who

cohabits with another person without ever marrying is entitled to relief if he

establishes an express contract, an implied contract, or unjust enrichment.

Turner v. Freed, 792 N.E.2d 947, 950 (Ind. Ct. App. 2003).

[16] Historically, couples who cohabited without marriage were excluded from

equitable relief upon a showing of the expectation of shared ownership of

property acquired during their cohabitation. The seminal cases allowing

recovery for cohabiting couples involved circumstances in which the couples

cohabited either before marriage or after divorce. See Glasgo v. Glasgo, 410

N.E.2d 1325 (Ind. Ct. App. 1980) (with court narrowly tailoring its holding to

circumstances where couple cohabited after divorce and evidence supported an

agreement to share ownership of possession acquired during cohabitation

portion of relationship), trans. denied; see also Chestnut v. Chestnut, 499 N.E.2d

783, 787 (Ind. Ct. App. 1986) (where couple cohabited before marriage and

court expressly “reserve[d] for another day the question of whether premarital

cohabitation without subsequent marriage gives rise to potential relief.”). Later,

the Bright court would expressly eliminate the exclusion from relief for couples

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who cohabit without ever marrying. 650 N.E.2d at 315. However, the court

found that the cohabitant was not entitled to relief under the facts of that case.

Id. Thereafter, the Turner court granted equitable relief based on the parties’

expectation of shared ownership of property acquired during a cohabitation that

did not result in marriage. 792 N.E.2d at 950. We emphasize that Glasgo and

its progeny do not create a new legal theory of recovery. Rather, these cases

simply eroded and eventually eliminated an exclusion for cohabitants seeking

relief on theories of implied contract and unjust enrichment in a previously

prohibited context. Therefore, while we resolve the case based on the elements

of unjust enrichment and implied contract, we note that the cohabitation

relationship is important to the extent that it provides evidence of the couple’s

relative expectations.

[17] In Turner, Freed filed a petition for palimony after the end of her ten-year

cohabitation with Turner. She claimed that she was entitled to part of the value

of Turner’s business under a theory of unjust enrichment for the domestic

services that she had provided him during their cohabitation. Id. at 948. The

trial court agreed and awarded her $18,000. Turner appealed, and another

panel of this Court found that Freed had presented evidence sufficient to

support the trial court’s finding that Turner would be unjustly enriched if Freed

were awarded no part of the value of the assets that Turner had acquired solely

in his name during their cohabitation. 792 N.E.2d at 951. The Turner court

reasoned that although Turner had provided more financially during the

relationship, he also had received a substantial benefit in the form of Freed’s

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homemaking and housekeeping services, childcare for their child and

sometimes for Turner’s other child, and her help with Turner’s delivery routes,

all of which enabled him to develop his business. Id. at 950.

[18] Turner is procedurally distinct in that it involves the appeal of a final judgment

rather than an interlocutory appeal of an involuntary dismissal order.

However, it is factually similar to this case in that it also involves the alleged

unjust enrichment of one cohabitant who holds assets solely in his/her name

but whose ability to acquire and grow those assets has been greatly enhanced by

the contributions from the other. Both Freed and Neibert conferred a

substantial benefit in the form of services, equipment, and materials contributed

in furtherance of the relationship. If anything, Neibert’s services, in the nature

of renovation, excavation, and construction, were more easily quantifiable in

dollars and cents than were Freed’s (though Freed’s were certainly no less

important). Perhaps most importantly, Turner illustrates that to prevail, the

aggrieved party need not establish an expectation of monetary payment for the

services rendered.

[19] Here, Neibert admits that he never asked Perdomo for monetary compensation

for his services in renovating Father’s House and in excavating and constructing

the New House. Perdomo maintains that Neibert performed these services

gratuitously. She cites as support Neibert’s testimony that he had previously

helped her fix up her Florida home as a “gift,” in recognition that neither of

them was wealthy or “blessed with extra money.” Tr. at 59. However, he

made no similar statement of donative intent when he performed the labor on

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Father’s House and the New House. 3 In fact, he specifically testified that he did

not intend these services to be a gift, insisting rather that he performed these

services with the expectation of being a joint owner in the property based on his

relationship with Perdomo. Id. at 58, 146. When asked whether he could have

afforded to spend the hours and money for materials on Father’s House and the

New House without any compensation, he responded, “No.” Id. at 60.

Neibert also recounted an incident after he moved out when he went to the

New House to get one of the couple’s three grills: “[Perdomo] came running

out of the house pushing around on me, telling me not to get worked up and

she says it would be worth at least two hundred thousand dollars to get rid of

my .… A-S-S.” Id. at 530.

[20] Ron Speigle, a friend with whom Neibert bartered services, testified about a

conversation in which Perdomo had told him, “I told [Neibert] he gets half the

farm.” Id. at 231. He also testified that both Neibert and Perdomo used the

term “our property” when referencing the New House. Id. at 234. Michael

Atkinson testified concerning conversations in his presence in which Perdomo

and Neibert indicated their intent to live together in the New House and that

“they were building it large enough to when they got older to have the bottom

[floor] suitable for wheelchair access.” Id. at 257-58. Due to Perdomo’s motion

3

“A gift will be valid only if the donor had the present intent to make a gift—if, that is, the donor intended to

make a gift at the time of delivery.” Lucas v. Frazee, 471 N.E.2d 1163, 1169 (Ind. Ct. App. 1984) (Young, J.

dissenting) (citing Lewis v. Burke, 248 Ind. 297, 304, 226 N.E.2d 332, 336 (1967)).

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for involuntary dismissal, Perdomo did not testify at trial and thus did not

controvert any of this testimony on the record.

[21] As for the value of his services, Neibert presented evidence concerning his

normal hourly rate and his estimated number of hours spent on the two

projects. He also presented evidence showing that Father’s House went from

previously uninhabitable and uninsurable and worth about $71,000 to worth at

least $155,000 after he renovated it. An insurance policy application listed the

value of the previously nonexistent New House at $261,000. Moreover,

Neibert’s expert Roger Bruce testified extensively concerning the value of

Neibert’s labor. He described the unique features of the New House, including

the roof slopes, forty-five-degree corners, tile work, and framing, and provided

detailed figures concerning the value of the structure and labor, beginning with

the foundation and working upwards. Id. at 304-23, 355. He estimated that he

could sell the New House project for $269,601.51. Id. at 348. This included

adjustments for aspects of the job that had not been completed when Neibert

moved out and ceased work on the project. Bruce’s extensive testimony

concerning the number of hours to complete the New House spanned over a

hundred pages of transcript and provided in-depth analysis of the photographic

exhibits. We acknowledge Perdomo’s claim that Neibert’s friends provided

some of the labor on the projects, but we also note the friends’ testimony that

they had a practice of helping each other without remuneration in exchange for

services on their respective projects.

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[22] In sum, the uncontroverted evidence shows with respect to Neibert’s unjust

enrichment claim that he (1) rendered a measurable benefit to Perdomo in the

form of construction and excavation services, materials, and equipment at

Perdomo’s implied request as evidenced on the building permit application, in

her selection of plans, and in her continued participation in purchasing

materials and cleaning up the job site; (2) he expected a proprietary interest in

the property in exchange; and (3) allowing Perdomo to retain (a) the rental

income and/or increase in value due to the renovation of Father’s House and

(b) the sole ownership of the New House, without restitution would be unjust.

Similarly, with respect to his implied contract claim, the evidence shows that

Neibert (1) conferred a benefit; (2) in the form of services commonly the subject

of pecuniary compensation; (3) not intending the services as a gift; (4) and

which services were accepted by Perdomo, thus laying “an adequate foundation

for a legally implied or created promise to render back its value.” Bright, 650

N.E.2d at 315.

[23] Based on the foregoing, we conclude that Neibert presented uncontroverted

evidence sufficient to survive involuntary dismissal of his contractual claims,

and as such, the trial court clearly erred in granting Perdomo’s Rule 41(B)

motion. Consequently, we reverse and remand for completion of the trial on

the merits.

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Section 2 – The trial court abused its discretion in

excluding Neibert’s expert witness’s report on the value

of Neibert’s services.

[24] Because of its implications on remand, we address Neibert’s challenge to the

trial court’s exclusion of Plaintiff’s Exhibit 15, Roger Bruce’s written report

concerning the value of Neibert’s renovation, excavation, and construction

services. We use an abuse of discretion standard when reviewing a trial court’s

ruling on the admissibility of expert testimony. Estate of Borgwald v. Old Nat’l

Bank, 12 N.E.3d 252, 256 (Ind. Ct. App. 2014). Indiana Evidence Rule 702(a)

states, “If scientific, technical, or other specialized knowledge will assist the

trier of fact to understand the evidence or to determine a fact in issue, a witness

qualified as an expert by knowledge, skill, experience, training, or education,

may testify thereto in the form of an opinion or otherwise.” The trial court is to

control the admission of proffered expert testimony rather than admitting what

is offered and leaving it to the trier of fact to determine weight to be accorded to

the testimony. WESCO Distrib., Inc. v. ArcelorMittal Ind. Harbor LLC, 23 N.E.3d

682, 696 (Ind. Ct. App. 2014), trans. dismissed (2015). Once the expert’s opinion

is deemed admissible under Rule 702, “then the accuracy, consistency, and

credibility of the expert’s opinions may properly be left to vigorous cross-

examination, presentation of contrary evidence, argument of counsel, and

resolution by the trier of fact.” Estate of Borgwald, 12 N.E.3d at 257 (quoting

Sears Roebuck & Co. v. Manuilov, 742 N.E.2d 453, 461 (Ind. 2001)).

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[25] Here, the trial court was the trier of both law and fact. After extended

questioning and argument on the record, the trial court qualified Bruce as an

expert concerning the value of renovation, excavation, and construction

services, and Bruce was examined at length. However, when it came to ruling

on Exhibit 15, Bruce’s written estimate of the value of Neibert’s services, the

trial court was clearly concerned that Bruce had not personally inspected the

quality of Neibert’s workmanship or even visited the New House and thus

lacked personal knowledge. Neibert maintains that because the trial court

deemed Bruce an expert, it should have admitted Exhibit 15 and accorded it

weight commensurate with its method of preparation. We agree.

[26] As for the trial court’s concern that Bruce had not personally inspected the New

House, such is the nature of an expert witness. See Bunch v. Tiwari, 711 N.E.2d

844, 848 (Ind. Ct. App. 1999) (“an expert may utilize hearsay information in

forming his opinion.”); see also Ind. Evidence Rule 703 (“An expert may base an

opinion on facts or data in the case that the expert has been made aware of or

personally observed. Experts may testify to opinions based on inadmissible

evidence, provided that it is a type reasonably relied upon by experts in the

field.”) (emphasis added). Bruce testified at length concerning his extensive

experience estimating projects. See Tr. at 185-92 (testifying that out of the two

to three houses he built per year and the ten to twenty remodels he had done

per year, about half of the projects had required him to submit a written

estimate). He described his process for compiling an estimate, stating that he

used a formal checklist and that, in the case of his estimate for Neibert, he

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actually had “more information because it was already built and … we didn’t

have to guess.” Id. at 189, 92. He later detailed his experience at valuing

projects within the county and explained the sources of the figures contained in

Exhibit 15, which included not only information obtained directly from Neibert

but also blueprints, photos of the exterior, and aerial site photos. Id. at 277-89.

When asked whether he needed to see the actual work in person in order to

determine a project’s value, he replied, “No.” Id. at 280.

[27] The trial court also expressed concern that Bruce had not prepared the final

written document himself but instead had delegated the data entry to Carl Siler,

a former employee with a software program that would compile the

information and calculate the figures listed in the estimate. Perdomo objected

to Exhibit 15 based in part on her inability to examine Siler concerning the

reliability of the software program that he used to generate the estimate. In

response, Neibert cited Bruce’s testimony that he had personally supplied all the

data used in generating the estimate and that Siler’s role was merely to input

Bruce’s figures into the program, which merely did “the math.” Id. at 345.

Bruce also explained that he had reviewed the estimate and made corrections

after Siler generated the initial report. He likened the arrangement to a real

estate appraiser providing all the information to an employee or agent, who

actually prepares the appraisal.

[28] In short, as trier of both law and fact, the trial court accepted Bruce as an

expert, heard his extensive testimony concerning his written estimate, and

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should have admitted the estimate and weighed it accordingly. The trial court

abused its discretion in excluding Exhibit 15.

[29] Reversed and remanded.

Vaidik, C.J., and Barnes, J., concur.

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