Garrell "Gary" McCutcheon Jr., and Melissa K. McCutcheon v. Pavco Trucking Co. Inc., and Titan Transfer, Inc.

Pavco Trucking Company, Inc. (“Pavco”), operated a trucking company in

Clarksville, Indiana. Pavco employed the McCutcheons to haul freight by

truck. Pavco terminated the McCutcheons’ employment on February 14, 2014.

[3] On March 1, 2014, Titan and Pavco executed the Purchase Agreement which

enumerated a number of Pavco’s assets that would be transferred to Titan in

exchange for consideration of $40,000, an additional amount of cash equal to

two weeks of Pavco’s payroll, and a covenant-not-to-compete. The Purchase

Agreement provided in relevant part in Section 3:

[Pavco] represents and warrants to [Titan]:

***

(b) There are no judgments, liens, claims, actions or proceeding [sic] against the assets being conveyed except as described herein.

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 3 of 11



Appellant’s Appendix, Volume 2 at 87.

The Purchase Agreement further provided in Section 11:

[Pavco] shall be responsible for all debts, obligations, leases and expenses of the business prior to February 28, 2014, at midnight, and shall indemnify and hold [Titan] harmless from any liability thereon. [Titan] shall be responsible for all debts, obligations and expenses of the business after said effective date and shall indemnify and hold [Pavco] harmless from any liability thereon.

Id. at 90.

[4] The McCutcheons filed suit against Pavco and Titan on April 27, 2015, alleging

four claims of retaliatory discharge and wrongful termination. Id. at 19-24.

Titan appeared in the suit and answered the complaint. Pavco did not appear.

The McCutcheons ultimately obtained a default judgment against Pavco for

$180,656.28. Id. at 79-80. On April 6, 2017, the McCutcheons filed

proceedings supplemental against Titan seeking satisfaction of their default

judgment, arguing that, as a term of the Purchase Agreement, Titan had agreed

to assume liability for Pavco’s debts and obligations after February 28, 2014.1

Id. at 10, 83-84.

[5] On May 19, 2017, Titan moved for summary judgment, arguing in relevant part

that Titan could not be held liable for any of the allegations in the



1 As of the last date in the trial court’s chronological case summary, no hearing on the McCutcheons’ proceedings supplemental had occurred. Appellant’s App., Vol. 2 at 15.

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 4 of 11



McCutcheon’s complaint because Titan had never employed the McCutcheons

and because Titan had not assumed any liability from Pavco arising from

Pavco’s employment of the McCutcheons. Id. at 10, 95. In support of its

motion, Titan designated the Affidavit of Phillip Edwards, President of Titan,

who averred that Pavco and Titan had no mutual stockholders, members of

boards of directors, or shareholders. Id. at 121-22. Edwards also averred that

the transfer of assets from Pavco to Titan did not involve the transfer of any

stock. Id. at 122. In addition, Titan designated a certificate of existence from

the Indiana Secretary of State showing that Pavco existed and was authorized

to conduct business as of May 19, 2017. Id. at 136. The McCutcheons opposed

Titan’s motion and also moved for summary judgment, reasserting their

argument that, pursuant to the Purchase Agreement, Titan had assumed

liability for Pavco’s debts and obligations after February 28, 2014, and that their

default judgment was a debt that arose after that date. Id. at 140-52. As part of

the evidence in support of their summary judgment filings, the McCutcheons

designated their Affidavit in which they averred that after the transaction

between Pavco and Titan, Titan continued to use Pavco’s phone and facsimile

numbers, office personnel, equipment, and accounts, and that no change in

business had occurred. Id. at 137-38. The McCutcheons also designated the

Purchase Agreement and an article from the Shelbyville Times-Gazette

announcing Titan’s “acquisition” of Pavco. Id. at 161-68, 178.

[6] On October 19, 2017, the trial court entered its order granting summary

judgment for Titan, providing in relevant part:

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 5 of 11



The McCutcheons’ claims fail against [Titan] because the events alleged in the [complaint] occurred while the McCutcheons were working for [Pavco], and the McCutcheons never worked for [Titan]. Although [Titan] later acquired some of Pavco’s assets, it did not assume any liability arising from Pavco’s employment of the McCutcheons.

Id. at 16. This appeal ensued.

Discussion and Decision

[7] The McCutcheons contend that the trial court erred in concluding that Titan

was entitled to judgment as a matter of law, arguing that Titan expressly agreed

to assume liability for their default judgment against Pavco as part of the

Purchase Agreement.2

I. Standard of Review

[8] When reviewing a trial court’s grant or denial of summary judgment, we apply

the same standard as the trial court. Travelers Cas. & Sur. Co. v. United States

Filter Corp., 895 N.E.2d 1172, 1176 (Ind. 2008). “We must decide whether

there is a genuine issue of material fact that precludes summary judgment and,

if not, whether the moving party is entitled to judgment as a matter of law.” Id.

(citing Ind. Trial Rule 56(C)). “We also construe the designated evidence in a

light most favorable to the nonmoving party.” Id.



2 Pavco does not participate in this appeal.

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 6 of 11



[9] Matters of contract interpretation are particularly well-suited for de novo

appellate review because they generally present questions purely of law. In re

Indiana State Fair Litig., 49 N.E.3d 545, 548 (Ind. 2016). A contract may be

construed on summary judgment if it is not ambiguous or uncertain, or if any

ambiguity may be resolved without the aid of a factual determination. Id. “The

meaning of a contract is a question for the factfinder, precluding summary

judgment, only where interpreting an ambiguity requires extrinsic evidence.”

Id.

II. Assumption of Liability

A. Asset Only Transfer

[10] In Indiana3 the general rule concerning corporate successor liability is that when

one corporation simply purchases the assets of another, as opposed to

purchasing the stock of another, the buyer does not assume the debts and

liabilities of the seller. Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1233

(Ind. 1994). There are four generally recognized exceptions to the rule, namely

where (1) there is an implied or express agreement to assume the obligation; (2)

a fraudulent sale of assets was done in order to escape liability; (3) the purchase



3 The Purchase Agreement contained a choice of law provision dictating that the Agreement would be interpreted according to Tennessee law. Appellant’s App., Vol. 2 at 92. However, in their appellate briefs, both parties cite Indiana law only. The McCutcheons assert that Titan acknowledged in a summary judgment pleading that no conflict exists between Indiana and Tennessee law on contract interpretation. Brief of Appellant at 13 n.2. However, the McCutcheons did not include that pleading in their Appendix. As neither party has invoked the Purchase Agreement’s choice of law provision, we will interpret the Agreement according to Indiana law.

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 7 of 11



was actually a de facto consolidation or merger; and (4) the purchaser is a mere

continuation of the seller. Id. It is the first of these exceptions upon which the

McCutcheons rely, arguing that Titan expressly agreed through the Purchase

Agreement to assume Pavco’s liability for their judgment. Brief of Appellant at

15. The McCutcheons contend that there “is disagreement on the issue of

whether this was simply, and solely, an ‘asset purchase,’” id. at 14, but they also

acknowledge that the transfer of assets from Pavco to Titan did not involve the

transfer of any stock, id. at 17. In their reply to Titan’s brief on appeal, the

McCutcheons acknowledge that Titan did not assume all of Pavco’s debt as a

result of the asset transfer. Appellant’s Reply Brief at 6. Thus, inasmuch as the

McCutcheons argue that Titan assumed liability for their judgment strictly

because of the nature of the transfer of assets from Pavco to Titan, we reject that

argument as waived. See Reed v. Reid, 980 N.E.2d 277, 296-97 (Ind. 2012)

(holding that failure to comply with Indiana Appellate Rule 46(A)(8) by failing

to support a contention with cogent reasoning, citation to authority, and

citation to the record results in waiver of the issue).

[11] As an additional preliminary matter, we note that Winkler, which is cited by

both parties, itself relied on Markham v. Prutsman Mirror Co., 565 N.E.2d 385

(Ind. Ct. App. 1991), as authority for the above-referenced rule of successor

liability and its exceptions. Winkler, 638 N.E.2d at 1233. In enunciating the

rule and its exceptions, the Markham court also held that “[s]uccessor in assets

liability, under these exceptions, takes place only when the predecessor

corporation no longer exists, such as when a corporation dissolves or liquidates

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 8 of 11



in bankruptcy.” Markham, 565 N.E.2d at 387. However, nothing in the

authority cited by the court in Markham for this proposition explains why this

should be so where two corporate entities have expressly contracted for one to

assume the other’s liabilities. See id. (citing Wewoka Petroleum Corp. v. Gilmore,

319 P.2d 285, 289 (Okla. 1957) (holding that, pursuant to state statute,

voluntarily dissolved corporations continue to exist for purposes of being sued);

and Wilkerson v. C.O. Porter Mach. Co., 567 A.2d 598, 600-09 (N.J. Super. Law

Div. 1989) (examining the applicability of New Jersey’s product-line theory of

successor liability to the purchase of assets from predecessor corporation’s

bankruptcy)). In Winkler, our supreme court did not adopt this portion of

Markham, and we see no reason to disregard a contractual agreement made by

two corporate entities in an arms-length transaction simply because the

predecessor corporation continues to exist. As such, we address the issue of

whether Titan agreed to assume Pavco’s liability for the instant judgment as

part of the Purchase Agreement without reference to Pavco’s continued

corporate viability.

B. The Purchase Agreement

[12] The goal of the interpretation of contracts is to give meaning and effect to the

intention of the parties as expressed in the language of the contract itself. U.S.

Fidelity & Guar. Co. v. Warsaw Chem. Co., 990 N.E.2d 18, 21 (Ind. Ct. App.

2013), trans. denied. We construe the instrument as a whole, giving effect to

every portion, if possible. Id. Furthermore, we attempt to construe contractual

provisions so as to harmonize the agreement. Grimes v. Crockrom, 947 N.E.2d

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 9 of 11



452, 455 (Ind. Ct. App. 2011). We discern the meaning of a contract by

considering all of its provisions, not individual words, phrases, or even

paragraphs read alone. Care Grp. Heart Hosp., LLC, v. Sawyer, M.D., 93 N.E.3d

745, 756 (Ind. 2018). We first examine the contract language to determine

whether it is ambiguous. Id. at 752. If the language is unambiguous, we give

the words used their plain and ordinary meaning in the context of the whole

contract, without substitution or addition. Id.

[13] Both parties contend that the Purchase Agreement is unambiguous, see Br. of

Appellant at 19-22; Appellee’s Brief at 11-14, and we agree. Pursuant to the

plain wording of the contract, Pavco was to be responsible for all “obligations”

of the business which existed prior to February 28, 2014. Appellant’s App.,

Vol. 2 at 90. The word obligation “has many wide and varied meanings [and]

may refer to anything that a person is bound to do or forbear from doing,

whether the duty is imposed by law, contract, promise, social relations,

courtesy, kindness, or morality.” Black’s Law Dictionary (10th ed. 2014). In

addition, Pavco unambiguously warranted to Titan in the Purchase Agreement,

“There are no . . . claims . . . against the assets being conveyed except as

described herein.” Appellant’s App., Vol. 2 at 87. A claim may be defined as a

cause of action. Id. The word “claim” as used in the Purchase Agreement is

not modified by any language limiting its meaning to claims which were

already filed. No claims against Pavco’s assets were otherwise described in the

Purchase Agreement. Id. at 86-94.

Court of Appeals of Indiana | Memorandum Decision 10A05-1711-PL-2713 | August 9, 2018 Page 10 of 11



[14] Reading these terms and provisions together so as to give effect to each, the

warranty provision indicates that parties intended that no existing claims were

being transferred from Pavco to Titan as part of the transfer of assets. A claim

against a party falls within the general definition of “obligation” because the

party’s legal duties are implicated by the accrual of a cause of action. The

McCutcheons had a cause of action against Pavco as of the date of their

termination on February 14, 2014. See Jean v. Dugan, 20 F.3d 255, 265 (7th Cir.

1994) (applying Indiana law and holding that a claim for retaliatory discharge

accrues upon termination of employment). Since the McCutcheons’ claim

against Pavco was an obligation of the business that existed prior to February

28, 2014, it fell within the obligations reserved to Pavco pursuant to the

Purchase Agreement and for which Pavco agreed to hold Titan harmless. Any

other reading of the Purchase Agreement would render Pavco’s warranty

pertaining to claims meaningless and ineffective. The McCutcheons do not

address the warranty provision pertaining to claims. Rather, they invite us to

discern the meaning of the Purchase Agreement by concentrating solely upon

Section 11 in isolation, see Appellant’s Reply Br. at 5, and by considering their

action against Pavco and Titan only in its last incarnation when it was reduced

to judgment. This invitation runs afoul of the rule of contract construction

which requires us to discern the intent of the parties by examining the contract

as a whole. Care Grp. Heart Hosp., 93 N.E.3d at 756. Titan did not expressly

assume Pavco’s liability for any claim resulting from Pavco’s employment of

the McCutcheons, and the trial court’s grant of summary judgment was proper

because Titan was entitled to summary judgment as a matter of law.

Concluding that Titan did not expressly assume liability for a claim that existed against Pavco prior to the effective date of the Purchase Agreement, we affirm the trial court’s grant of summary judgment to Titan.



Affirmed.