FOR PUBLICATION
ATTORNEY FOR APPELLANT:
JOHN L. LISHER
Osborn Hiner & Lisher, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
TAMKO ROOFING PRODUCTS, INC.,
Appellant-Defendant,
vs.
DENNIS M. DILLOWAY,
Appellee-Plaintiff.
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No. 46A05-0608-CV-443
APPEAL FROM THE LA PORTE SUPERIOR COURT
The Honorable Paul J. Baldoni, Judge
Cause No. 46D03-0603-SC-363
May 11, 2007
OPINION - FOR PUBLICATION
RILEY, Judge
STATEMENT OF THE CASE
Appellant-Defendant, Tamko Roofing Products, Inc. (Tamko), appeals the trial
court’s Judgment in favor of Appellee-Plaintiff, Dennis Dilloway (Dilloway), for
damages in the amount of two thousand nine hundred dollars and no cents ($2,900.00).
We affirm.
ISSUES
Tamko raises four issues on appeal, which we consolidate and restate as the
following three issues:
(1) Whether the trial court abused its discretion by failing to admit into evidence
Tamko’s Exhibit A and Dilloway’s Exhibit 3;
(2) Whether the trial court erred in finding that Tamko waived its right to
arbitration; and
(3) Whether the trial court erred in awarding damages to Dilloway.
FACTS AND PROCEDURAL HISTORY
In or around March of 2004, Dilloway went to Richardson’s, a building supply
store in Michigan City, Indiana, in search of siding and shingles for his house. He
obtained a brochure for Tamko shingles, which he took home to discuss with his wife.
Based on pictures in the brochure, he and his wife chose Tamko’s “Mountain Slate”
colored shingles, and hired David Baker (Baker) to order and install the shingles. Shortly
thereafter, on a Monday, Baker began tearing off the old shingles and installing the new
Tamko shingles.
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On the following Saturday, after Baker had completed the installation, Dilloway
observed that the shingles were a completely different color than the “Mountain Slate” he
had selected from Tamko’s brochure. Rather than the primary color being a shade of
brown, the shingles reflected an overall blue hue. Dilloway contacted Baker about the
discoloration, and confirmed that Baker had ordered Tamko’s “Mountain Slate” colored
shingles, per Dilloway’s request. Consequently, Dilloway telephoned Tamko to notify
them of his complaint, and a Tamko representative told Dilloway that he should have
viewed, in person, the different shingle color choices before ordering, as variances in
color can occur. The Tamko representative also informed Dilloway of a disclaimer on its
brochure regarding possible color variations in the shingles, which states: “Reproduction
of these colors is as accurate as modern printing will permit. [Tamko] recommends
viewing an actual roof installation or several full-sized shingles prior to final color
selection for the full impact of color blending and patterns.” (Appellant’s App. p. 58).
Due to his dissatisfaction with the color, Dilloway had Baker re-shingle the roof
with brown shingles, not from Tamko, at a cost of $2,900.00.
On March 16, 2006, Dilloway filed a Complaint for Damages in LaPorte County
Superior Court No. 3, Small Claims Division. The complaint was based on an alleged
discrepancy in the color of the Tamko shingles. On June 23, 2006, a bench trial was
held. After the direct examination of Dilloway, Tamko orally moved for dismissal based
a mandatory binding arbitration clause contained in its Limited Warranty, which is
printed on all packages of its shingles. The trial court took the motion under advisement,
and Tamko proceeded to cross-examine Dilloway. Dilloway then rested its case. In light
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of its defense that the case was subject to mandatory arbitration, Tamko presented no
evidence.
Closing arguments were made and the trial court took the matter under
advisement. On July 17, 2006, the following Findings and Judgment were entered:
Findings and Judgment
1. The [c]ourt has jurisdiction of the parties and issues.
2. [Tamko’s] counsel moved for dismissal, arguing that by the parties’
contract, [Dilloway’s] claim should be submitted to arbitration. The
[c]ourt took that motion under advisement. The [c]ourt now finds that
[Tamko’s] motion comes too late. [Dilloway’s] claim was filed on
March 13, 2006. Prior thereto, [Dilloway] has been in contact directly
with [Tamko]. At no time when he first complained about the quality of
the shingles directly to [Tamko] up until the date of trial, did [Tamko]
request arbitration. The [c]ourt finds that [Tamko’s] Motion to Dismiss
is without merit.
3. [Dilloway] has ordered from [Tamko] shingles called ‘Mountain Slate.’
The preponderance of the evidence established that [Tamko] provided to
[Dilloway] shingles that were the wrong color. [Dilloway’s] contractor
installed the first shingles – the incorrect color – for the cost of
$4,600.00. After the mistake was discovered, [Dilloway] had his
contractor remove the incorrect shingles and replace them with the new
shingles for a cost of $2,900.00.
4. [Dilloway] is entitled to recover [from Tamko] the amount of $2,900.00
for the cost of the replacement shingles.
(Appellant’s App. p. 10).
Tamko now appeals. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
I. Standard of Review
Ordinarily, judgments in small claims actions are “subject to review as prescribed
by relevant Indiana rules and statutes”; and when tried before a bench, without a jury, the
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reviewing court shall not set aside the judgment “unless clearly erroneous, and due regard
shall be given to the opportunity of the trial court judge the credibility of the witnesses.”
Ind. Small Claims Rule 11(A); Counceller v. Ecenbarger, Inc., 834 N.E.2d 1018, 1021
(Ind. Ct. App. 2005). However, Dilloway has chosen not to file an appellate brief in this
case. When an appellee fails to submit an appellate brief, it is within this court’s
discretion to reverse the trial court’s ruling if the appellant makes a prima facie showing
of reversible error. Patricia Ann Brown, C.P.A. v. Brown, 776 N.E.2d 394, 397 (Ind. Ct.
App. 2002), trans. denied. “This rule is not for the benefit of the appellant. It was
established for the protection of the court so that the court might be relieved of the burden
of controverting the arguments advanced for a reversal where such a burden rests with the
appellee.” Id. (quoting Kokomo Ctr. Township Consol. Sch. Corp. v. McQueary, 682
N.E.2d 1305, 1307 (Ind. Ct. App. 1997)). “Prima facie error is error appearing at first
sigh, on first appearance, or on the face of the argument.” Brown, 776 N.E.2d at 397
(internal citation omitted).
II. Admission of Evidence
First, Tamko argues that the trial court erred by failing to admit into evidence
Tamko’s Exhibit A, a copy of its Limited Warranty, and Dilloway’s Exhibit 3, a wrapper
from the bundle of Tamko shingles. While both of these exhibits were submitted to the
trial court, neither was formally admitted into evidence.
The trial of a small claims action “ ‘shall be informal, with the sole objective of
dispensing speedy justice between the parties according to the rules of substantive law.”
LTL Truck Service, LLC v. Safeguard, Inc., 817 N.E.2d 664, 668 (Ind. Ct. App. 2004).
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Thus, even though the parties bear the same burdens of proof as they would in a regular
civil action on the same issues, the evidentiary rules are relaxed. Id. Nevertheless, the
burden of proof with respect to damages in with the plaintiff, and the fact finder may not
award damages on the mere basis of conjecture or speculation. Id.
In the present case, speaking to Tamko’s Exhibit A, the trial court stated, “Okay.
We’ll show Exhibit A submitted.” (Transcript p. 20). We conclude that since small
claims proceedings are by their nature less formal than plenary proceedings, drawing a
distinction between ‘submitted’ and ‘admitted’ is splitting hairs. In our view, the trial
court had every intention of admitting Tamko’s Exhibit A into evidence for its
consideration. See Miller v. Geels, 643 N.E.2d 922, 932 (Ind. Ct. App. 1994), trans.
denied.
As for Dilloway’s Exhibit 3, which consisted of the wrapping paper for the
shingles, we find that while discussing Exhibit 4 – pictures of the actual shingles on the
roof – the trial court stated, “Give me the wrapping paper they came in, though, and the
shingles we’ll not keep here. Show the wrapping paper to be Exhibit 3.” (Tr. p. 11).
The trial court went on to say, “Okay. We’ll show Group Exhibit 4 (photos) admitted.”
(Tr. p. 11). Thus, again, in light of the informal evidentiary setting in a small claims
court, we believe that the trial court’s statements show an intention to admit both
Exhibits 3 and 4. As such, we conclude that the trial court did not err by excluding
relevant evidence, and that the exhibits in question were admitted, for all practical
purposes, into evidence.
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III.
Arbitration
Next, Tamko claims that the trial court erred in finding that it had waived its right
to arbitration. Specifically, the trial court denied Tamko’s oral motion to dismiss based
on the mandatory arbitration clause contained in its Limited Warranty, finding that
Tamko had waived its right to arbitration by not requesting to arbitrate the case in a
timely manner.
However, Tamko asserts that it “requested arbitration prior to any
submission of its evidence and prior to any adjudication on the merits by the trial court,”
and thus timely requested that the case go to arbitration. (Appellant’s Br. p. 18).
Due to the fact that Tamko’s oral motion to dismiss was based upon its contention
that arbitration was required before litigation, we view the motion more satisfactorily as a
motion to compel arbitration. We apply a de novo standard of review to a trial court’s
ruling on a motion to compel arbitration. Roddie v. North American Manufactured
Homes, Inc., 851 N.E.2d 1281, 1284 (Ind. Ct. App. 2006).
When determining whether the parties have agreed to arbitrate a dispute, we apply
ordinary contract principles governed by state law. Safety Nat. Cas. Co. v. Cinergy
Corp., 829 N.E.2d 986, 1000 (Ind. Ct. App. 2005), trans. denied. Additionally, “[w]hen
construing arbitration agreements, every doubt is to be resolved in favor of arbitration,”
and the “parties are bound to arbitrate all matters, not explicitly excluded, that reasonably
fit within the language used.” Id. (quoting Mislenkov v. Accurate Metal Detinning, Inc.,
743 N.E.2d 286, 289 (Ind. Ct. App. 2001)); see also Roddie, 851 N.E.2d at 1284 (noting
Indiana’s strong policy in favor of enforcing arbitration agreements).
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However,
arbitration agreements will not be extended by construction or implication. Safety Nat.
Cas. Co., 829 N.E.2d at 1000.
Furthermore, as outlined in Roddie:
When a party seeks to compel arbitration, it must satisfy a two-pronged
burden of proof. First, it must demonstrate the existence of an enforceable
agreement to arbitrate the dispute. Second, it must prove that the disputed
matter is the type of claim that the parties agreed to arbitrate. Once the
court is satisfied that the parties contracted to submit their dispute to
arbitration, the court is required by statute to compel arbitration.
Roddie, 851 N.E.2d at 1284.
In the case before us, the record discloses that Tamko’s Limited Warranty contains
a “Mandatory Binding Arbitration” clause. Tamko’s Exhibit A (Index). 1
Nevertheless, the trial court concluded that Tamko had waived any right to mandatory
arbitration by not bringing forth a request to arbitrate until after Dilloway presented his
case-in-chief. We agree.
“Although a written agreement to submit a dispute to arbitration is valid and
enforceable, the right to require such arbitration may be waived by the parties.” Safety
Nat. Cas. Co., 829 N.E.2d at 1004 (quoting Shahan v. Brinegar, 390 N.E.2d 1036, 1041
(Ind. Ct. App. 1979)). Such a waiver need not be in express terms and may be implied by
the acts, omissions or conduct of the parties. Safety Nat. Cas. Co., 829 N.E.2d at 1004.
Whether a party has waived the right to arbitration depends primarily upon whether that
party has acted inconsistently with its right to arbitrate. Id. Waiver is a question of fact
under the circumstances of each case. Id. “In determining if waiver has occurred, courts
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Tamko’s Exhibit A can be found in the record’s “Index,” which provides us with no page numbers. We
suggest Tamko consult Ind. Appellate Rule 51(C) when filing Appendices with this court in the future.
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look at a variety of factors, including the timing of the arbitration request, if dispositive
motions have been filed, and/or if a litigant is unfairly manipulating the judicial system
by attempting to obtain a second bite at the apple due to an unfavorable ruling in another
forum.” Id. (quoting Finlay Properties, Inc. v. Hoosier Contracting, LLC, 802 N.E.2d
453, 455 (Ind. Ct. App. 2003)).
In Safety Nat. Cas. Co., Safety sought to compel arbitration in a dispute with
Cinergy, but the trial court concluded that Safety’s “failure to respond to Cinergy’s five
notice letters, its delay in seeking and in moving to compel arbitration once litigation was
filed[,] and its acquiescence to its Plaintiff status” resulted in a waiver of Safety’s right to
arbitration. Safety Nat. Cas. Co., 829 N.E.2d at 1004. However, on appeal, we found
that Safety had not acted inconsistently with its right to arbitrate after litigation was filed
because Safety had sent Cinergy a letter demanding arbitration and filed a motion to
compel arbitration after Cinergy filed its complaint. Id. at 1005. In addition, the record
revealed that the first pleading filed by Safety was a motion to dismiss itself as a plaintiff
on the grounds that the insurance policies in dispute contained arbitration provisions and
that selection of an arbitration panel was underway. Id.
However, here, the record is absent of any actions by Tamko to compel arbitration
until it so moved to dismiss the case at trial, after Dilloway had already presented his
evidence. Thus, Tamko asks this court to hold that a request to arbitrate is timely as long
as both sides have not yet presented evidence and the trial court has not yet made its
ruling. We find this proposition without merit, as such a holding would only foster a
system that wastes valuable judicial time and resources. Therefore, because we find
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Tamko’s timing of an arbitration request was belated and that it filed no dispositive
motions prior to trial, we conclude that the trial court properly determined Tamko had
waived its right to arbitration. See Safety Nat. Cas. Co., 829 N.E.2d at 1004.
III.
Breach of Warranty and Breach of Contract
Tamko’s last two arguments essentially contend that the trial court wrongfully
awarded damages to Dilloway. First, Tamko claims that if the trial court based its award
on a breach of warranty, it incorrectly did so because Dilloway failed to give proper
written notice to Tamko of his dissatisfaction with the shingles. Alternatively, Tamko
asserts that if the trial court based its award of damages on a breach of contract, it
incorrectly did so because there was no contract between it and Dilloway, as Baker – the
installer Dilloway hired – actually purchased the shingles.
Typically, we apply a clearly erroneous standard in a review of a small claims
court’s award of damages, and affirm a general judgment with findings if it can be
sustained on any legal theory supported by the evidence. Collections, Inc. v. Wolfe, 818
N.E.2d 14, 16 (Ind. Ct. App. 2004). However, as previously noted, since Dilloway did
not file an appellee’s brief in this case, we only look for a prima facie showing of
reversible error. See Brown, 776 N.E.2d at 397.
A. Breach of Warranty
First, addressing Tamko’s argument that it did not breach any warranty to
Dilloway, we find evidence in the record to substantiate Tamko’s claim that its Limited
Warranty requires that the purchaser notify Tamko by certified mail, within thirty (30)
days, following discovery of any problem with the shingles.
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Nevertheless, an
examination of the record also reveals that Tamko did not argue to the trial court that
written notice of dissatisfaction with the shingles was required. Rather, the transcript
indicates that Tamko instead argued below that Dilloway did not give reasonable notice
to Tamko under I.C. § 26-1-2-607 that the shingles were the wrong color. As a general
rule, a party may not present an argument or issue to an appellate court unless the party
raised that argument or issue to the trial court. GKC Indiana Theatres, Inc. v. Elk Retail
Investors, LLC., 764 N.E.2d 647, 651 (Ind. Ct. App. 2002). Therefore, we consider
Tamko’s argument pertaining to the notification requirements under its Limited Warranty
waived for appellate review.
As a second theory, Tamko argues that it did not breach any warranty to Dilloway
because claims based on variation in the color of the shingles are excluded by language in
its Limited Warranty. Again, we fail to find that Tamko made this argument to the trial
court. Instead, the transcript reflects that the only arguments made by Tamko to the trial
court were: (1) that arbitration was mandatory; and (2) that Dilloway did not give
reasonable notice of the breach under I.C. § 26-1-2-607. Thus, we also waive this
argument for our review. See id.
B. Breach of Contract
Finally, we address Tamko’s claim that if the trial court based its award of
damages on a breach of contract, it improperly did so. Specifically, Tamko contends that
there could be no breach of contract because no contract existed between it and Dilloway.
Once more, we cannot find in the record that Tamko raised the argument to the trial court
that no privity of contract existed between it and Dilloway. Consequently, Tamko has
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waived this argument for our review as well. See id. As a result, we affirm the trial
court’s award of damages to Dilloway.
CONCLUSION
Based on the foregoing, we conclude that the trial court: (1) did in fact admit into
evidence Tamko’s Exhibit A and Dilloway’s Exhibit 3; (2) did not err in determining that
Tamko waived its right to arbitration; and (3) properly awarded damages to Dilloway.
Affirmed.
KIRSCH, J., and FRIEDLANDER, J., concur.
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