Fowl investment gone foul leads to reversal at COA

Despite ruffled feathers among parties involved in a bird investment project, a nearly $40,000 judgment for the investor has been reversed after a split Indiana Court of Appeals determined the trial court applied the wrong law in awarding relief.

In Charles Wolfe, et al. v. Robert Agro, 20A-PL-1242, Charles and Rachel Wolfe were raising chickens when Robert Agro invested money in 2014 to purchase 18 rare black birds. The birds cost $1,500 each, and Agro also purchased an electric egg hatcher and chicken coop that would be kept at the Wolfes’ property. That brought his total investment in the birds to $23,066.

In 2016, Agro sued the Wolfes, raising allegations of fraud and conversion and seeking treble damages, interest and attorney fees. The parties did not have a written agreement concerning the black birds, but Agro testified that he had a “partnership” with the Wolfes.

Several emails were admitted at trial showing Rachel and Agro discussing how they would “make money” from the birds. However, the emails also showed the deterioration of the relationship between the parties, with Agro repeatedly emailing Charles about the need to discuss tax concerns and the “reality of this chicken business … ,” which was struggling to make money. Agro’s messages expressed frustration about a lack of communication and accounting regarding the birds, and the Wolfes’ failure to provide him with profit and loss figures. Agro repeatedly asked to develop a business plan, but no plan was ever drafted.

Ultimately, the Randolph Superior Court concluded that the relationship between the parties was “not totally clear” but that that the Wolfes committed criminal conversion by failing to return Agro’s property when the relationship soured. The court declined to award treble damages but did award Agro $38,149.44 in attorney fees and expenses at an 8% interest rate.

“However … the evidence establishes that Agro and the Wolfes were in a partnership,” Judge L. Mark Bailey wrote in a Thursday reversal. “Therefore, Agro’s investment was the property of the partnership rather than his personal property, and his remedy for his losses from the partnership is governed by the Uniform Partnership Act, Indiana Code Sections 23-4-1-1 to 23-4-1-43, not the Crime Victims Relief Act.”

As evidence of a partnership, the majority of the Court of Appeals — which also included Judge Margret Robb — pointed to each party’s investment of money, time, labor and skill into the partnership and, notably, the emails that “make it clear that each party intended to enter into the Black Bird business in order to share in the profits.”

Thus, the trial court “clearly erred by applying the wrong law to properly-found facts when it held (Agro) was entitled to a return of that money through a civil action for criminal conversion,” Bailey wrote.

Judge Elizabeth Tavitas, however, would have affirmed.

“I agree with the trial court that the arrangement between the parties simply is not clear and fails to establish a partnership,” Tavitas wrote in a dissent opinion. “Further, I note that the Wolfes appeal only the trial court’s finding that they committed conversion of Agro’s funds or property. The Wolfes make no argument that Agro’s investment was the property of the partnership rather than his personal property or that Agro’s remedy is governed by the Uniform Partnership Act … .

“I would not address the Partnership Act provisions,” she continued, “and I would affirm the trial court’s finding” that the Wolfes converted Agro’s property.