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Indiana Law Annotated

Vol. 25 No. 11 (November 10, 2003)

Table of Contents

NUSSBAUM TO GIVE HARRIS LECTURE FRIDAY

Martha Nussbaum, the Ernst Freund Distinguished Service Professor of Law and Ethics at the University of Chicago, will give the Law School's annual Harris Lecture at noon on Friday, Nov. 14, in the Moot Court Room. Her lecture is titled "Beyond the Social Contract: Capabilities and Global Justice."

Nussbaum is a widely published and globally celebrated scholar in law, philosophy, and political science. She is the author of numerous books, including Cultivating Humanity: A Classical Defense of Reform in Liberal Education (1997), Sex and Social Justice (1998), Women and Human Development (2000), and Upheavals of Thought: The Intelligence of Emotions (2001). At Chicago, Nussbaum holds positions in the philosophy department, law school, and divinity school and is an associate in the classics department and the political science department. She is the founder and coordinator of Chicago's Center for Comparative Constitutionalism and a former chair of the Committee on International Cooperation. For her groundbreaking and prolific scholarship, she has been awarded 22 honorary degrees from universities and colleges in the United States, Canada, and Europe.

Established in 1946 by a trust from the bequest of India Crago Harris in the name of her husband, Addison C. Harris, the Harris Lecture Series brings prominent scholars to the Law School every year. Past Harris lecturers have included Owen Fiss, Jules Coleman, Guido Calabresi, Frank Michelman, Barbara Babcock, Lawrence Tribe, Robert Bork, and Derrick Bell.

COURT OF APPEALS COMING TO LAW SCHOOL

The Court of Appeals of Indiana will hear an oral argument for Estate of Penzenik v. Penz Products at noon on Monday, Nov. 17, in the Moot Court Room. The panel will include Judge Margret G. Robb, Judge Mark Bailey, and Judge Edward W. Najam Jr. All are invited to attend.

***FOR THE CASE SYNOPSIS, SCROLL TO THE END OF THIS ISSUE.***

EVENTS & LECTURES

PROFESSOR FIDLER TO TALK ON PEACE IN THE MIDDLE EAST TUESDAY

The International Law Society (ILS) and the Middle Eastern Law Student Association (MELSA) are co- sponsoring a talk by Professor David Fidler entitled "The Roadmap to Peace in the Middle East" at noon on Tuesday, Nov. 11, in the Moot Court Room. Free pizza will be available for all in attendance.

CASONATO TO SPEAK ABOUT EUTHANASIA AND THE LAW THURSDAY

Professor Carlo Casonato, visiting faculty at the Chicago-Kent College of Law, will present a brown bag talk, "Active and Passive Euthanasia from a Comparative Perspective," at noon on Thursday, Nov. 13, in the Faculty Conference Room.

Casonato's legal interests include comparative constitutional law and bioethics. He earned a J.D. and a Ph.D. from the University of Trento in Italy and was an associate professor of comparative constitutional law and the university coordinator for the protection of linguistic minorities at the University of Trento before he came to Chicago-Kent. Casonato continues his legal scholarship in Italy as the coordinator of a biolaw research project at Trento's department of legal sciences. He also advises the Trento Ordine dei Medici (doctor's association) on research activity, education policies, and conferences and seminars, and is a member of several medical ethics committees in Italy.

NEWS FROM THE FACULTY

Professor Jeannine Bell's article, "O Say Can You See: Free Expression By the Light of Fiery Crosses," is forthcoming in the Harvard Civil Rights-Civil Liberties Law Review.

At the University of Toledo College of Law's symposium, "Celebrating the Fiftieth Anniversary of the Meaning and Legacy of Brown v Board of Education," on Oct. 31, Professor Kevin Brown delivered a paper entitled "Brown v Board of Education: Reexamination from the Perspective of the Post-Desegregation Society."

Professor David Fidler's book, SARS, Governance, and the Globalization of Disease, will be published in 2004 by Palgrave Macmillan (London).

Professor William Henderson's article, "Evidence to Upset the LSAT Status Quo: An Empirical Study to Show How Speed Confounds Law School Testing," is forthcoming in the Texas Law Review.

NEWS FROM CAREER SERVICES

ALTERNATIVE CAREERS PRESENTATION TUESDAY

Career Services is hosting "Alternative Careers" at 12:15 p.m. on Tuesday, Nov. 11, in room 122.

NEW YORK JOB MARKET PRESENTATION WEDNESDAY

Jennifer Ray, our New York job consultant, will present "New York Job Market" at 12:15 p.m. on Wednesday, Nov. 12, in room 121.

CAREER SERVICES COMMENT BOX: DROP US A LINE

There is now a comment box located outside the Career Services Office for your comments and suggestions. Once each week, the suggestions will be read, and responses will be published either in the next week's ILA or on our Web page. They will also be posted on the bulletin board in the hallway.

NEWS FROM STUDENT ORGANIZATIONS

ENVIRONMENTAL LAW SOCIETY MEETING WEDNESDAY

The Environmental Law Society will be holding a general meeting at noon on Wednesday, Nov. 12, in room 124. All are welcome to attend!

WOMEN'S LAW CAUCUS MEETING WEDNESDAY

The Women's Law Caucus will meet at noon on Wednesday, Nov. 12, in room 120 to finalize arrangements for the etiquette dinner and to discuss upcoming events (including the auction). Refreshments will be served. New members are always welcome!

LLSA HOSTS SALSA PARTY THURSDAY NIGHT

The Latino Law Student Association (LLSA) will be hosting its first annual Salsa Party at 9 p.m. on Thursday, Nov. 13, at Second Story, on 4th Street and College Avenue. Join us for free dance lessons, raffle prizes, and the "Best dressed for Salsa" contest. Tickets will be sold in advance at the Law School as well as at the door.

WOMEN'S LAW CAUCUS PRESENTS "HOW TO SURVIVE A FORMAL BUSINESS DINNER" NEXT WEEK

Formal business dinners are often an important part of call-back interviews. Don't miss a job opportunity because of poor table manners! Come to "How to Survive a Formal Business Dinner" at 6:30 p.m. on Wednesday, Nov. 19, at Terry's Banquet and Catering. Joe Boes, assistant director in the Office of Development at the Kelley School of Business, will guide guests through four delicious courses, teaching all how to turn a potentially intimidating experience into a thoroughly enjoyable one. Tickets are $18 and will be sold in the lobby from 11:00 a.m. to 1:00 p.m. prior to the dinner. Faculty, staff, and non-Law School guests are welcome. We hope you'll join us!

ANNOUNCEMENTS

MEETING ON SPEA GRADUATE SEMINAR IN EUROPE THURSDAY

Spend four weeks in Europe and earn four hours of credits! The School of Public and Environmental Affairs (SPEA) is presenting a graduate seminar in Europe from May 14 to June 15, 2004. The seminar, "The European Union (EU) in the 21st Century," will offer opportunities for study in Paris, Brussels, Berlin, Krakow, and Warsaw. A meeting about the seminar will be held at 3:30 p.m. on Thursday, Nov. 13, in room 124.

SCHEDULING EVENTS

ALL e-mail about reserving classrooms must be sent to BL-LAW-EVENTS. Mail must be sent to the correct address, bl-law-events (for Outlook users) or bl-events-law@exchange.indiana.edu (for non- Outlook users). Please include the date and time of event, length of time room will be needed, classroom requested and number of people attending event. Requests should be sent at least one week before the event and include the name of the person requesting, the organization planning the event, and an e-mail address. Confirmations will be sent by reply e-mail. Thank you!

AUDIO - VIDEO SERVICES

Requests for AV services may be sent to Beth at av@exchange.indiana.edu. Please include the name of your group and the e-mail address of the contact person, a description of what you want to do, and the date, location, starting time and duration of the event. Requests must be made at least 48 hours in advance and will be confirmed by e-mail.

CALENDAR

Nov. 10:

Nov. 11: Professor David Fidler, "The Roadmap to Peace in the Middle East," noon, Moot Court Room; Career Services "Alternative Careers" presentation, 12:15 p.m., room 122

Nov. 12: Environmental Law Society meeting, noon, room 124; Women's Law Caucus meeting, noon, room 120; Career Services "New York Job Market" presentation with Jennifer Ray, 12:15 p.m., room 121

Nov. 13: Professor Carlo Casonato, "Active and Passive Euthanasia from a Comparative Perspective," noon, Faculty Conference Room; LLSA first annual Salsa Party, 9 p.m., Second Story, 4th Street and College Avenue

Nov. 14: Harris Lecture: Professor Martha Nussbaum, "Beyond the Social Contract: Capabilities and Global Justice," noon, Moot Court Room

For more upcoming events, visit www.law.indiana.edu/calendar/calendarevents.shtml.

ILA: Please visit our Web site at www.law.indiana.edu/publications/ila/ilacurrent.shtml. The ILA is published every Monday with news about the coming week. If you have questions about an item appearing in the ILA, please contact Lesa Petersen (e-mail: petersen@indiana.edu; phone: 856-4044).

Submissions: Information and articles for the ILA should be submitted by Friday at 3 p.m. for inclusion in Monday's edition. Please e-mail all submissions to ila@indiana.edu.

***CASE SYNOPSIS: Estate of Penzenik v. Penz Products***

IN THE COURT OF APPEALS OF INDIANA

ESTATE OF GREGORY J. PENZENIK, LINDA A. PENZENIK, Personal Representative, Appellants-Plaintiffs,

vs.

PENZ PRODUCTS, INC., DAVID PENZENIK, and RICHARD PENZENIK, Appellees-Defendants.

APPEAL FROM THE ST. JOSEPH SUPERIOR COURT

The Honorable Jenny Pitts Manier, Judge

Cause No. 71D05-0003-CP-341

CASE SYNOPSIS

Facts and Procedural History

Penz is a closely held corporation owned by members of the Penzenik family. In 1991, the shareholders executed a buy-sell agreement ("the Agreement"), which purported to require the sale of all shares back to Penz upon a shareholder's death. By 1998, Penz was owned entirely by three brothers, David, Richard, and Gregory. On July 25, 1998, Gregory died. Gregory's widow, Linda, opened his estate and issued a notice to creditors.

In April 1999, Penz filed a "Petition to Enforce Compliance with Buy-Sell Agreement," requesting that the trial court order the Estate to sell the shares. After a trial at which the proper interpretation of the Agreement was hotly contested, the court found that the Estate was required to sell the shares to Penz. The Estate appealed, and the Court of Appeals held that Penz's petition for specific performance was not timely filed under Indiana Code Section 29-1-14-21. See Estate of Penzenik v. Penz Products, Inc., 749 N.E.2d 61, 62-63 (Ind. Ct. App. 2001) ("Penzenik I"). But the Court also stated that "[u]nlike the general claim statute, under which an untimely claim is forever barred, the consequence of a failure to file a timely claim under IC 29-1-14-21 is that the claimant must proceed against the distributees, rather than the estate." Penzenik I, 749 N.E.2d at 64-65.

While Penzenik I was pending in the trial court, the Estate filed a complaint against Penz for breach of fiduciary duty and minority shareholder oppression. Penz answered and filed a counterclaim seeking specific performance and declaratory relief. Then, following our decision in Penzenik I, Penz filed an amended counterclaim adding the Trust and its trustees as counterdefendants. On March 5, 2003, the trial court entered judgment in favor of Penz. The trial court ordered the Trust to sell Penz "all shares in Penz Products, Inc. previously owned by decedent Gregory Penzenik and now held by [the Trust.]" This appeal ensued.

Parties' Arguments

The Estate presents three issues on appeal. First, the Estate contends that the trial court erred when it found that the Trust was required to sell its shares to Penz under the Agreement. Second, the Estate contends that Penz did not present sufficient evidence to prove that the Agreement was validly executed. And third, the Estate maintains that the trial court abused its discretion when it excluded certain evidence.

The Agreement

The Appellants contend that "the Agreement does not give Penz the right to force a sale directly upon the Trust, the sole distributee of the shares." Specifically, the Appellants maintain that "the Personal Representative was the only person named in the Agreement from whom Penz had the right to purchase the shares. . . [and] [b]ecause Penz blew the claim deadline against the Personal Representative, Penz lost the right to exercise its right to purchase shares from the Personal Representative." The Agreement provides in relevant part as follows:

II.

PURCHASE AND SALE UPON DEATH OF STOCKHOLDER

Upon the death or total disability of a Stockholder, all of the shares of stock of the Corporation owned by him shall be sold and purchased as hereinafter provided.

***

B. Obligation of Corporation to Purchase. The Corporation shall have the right, but not be mandatorily obligated, to purchase from a deceased or totally disabled Stockholder's Personal Representative and the deceased Stockholder's Personal Representative shall, in the event of the exercise of its right to purchase, offer to sell to the Corporation all of the shares of the Corporation owned by the decedent and to which the deceased or totally disabled Stockholder or his Personal Representative shall be entitled, at a price calculated as hereinafter set forth in paragraph III hereof.

(Emphases added).

But Penz contends that the Appellants' interpretation of that provision is wrong. Penz claims that Paragraphs IX and XI support its position that Penz has the right to purchase the shares from the Trust. Those paragraphs provide in relevant part as follows:

IX.

APPLICABILITY TO ALL SHAREHOLDERS

This Agreement covers not only shareholders on the date hereof who have executed this Agreement, but also shareholders who subsequently acquire shares in the Corporation by gift or devise.

***

XI.

SURVIVABILITY

This Agreement shall be binding upon and insure to the benefit of the heirs, executors, administrators, guardians, successors, and assigns of the parties hereto.

Execution of Agreement

The Appellants also contend that Penz did not fulfill its burden to prove that the Agreement was validly executed pursuant to Trial Rule 9.2. As such, they maintain that the Agreement should not have been admitted into evidence. Penz responds that the Appellants have waived the issue on appeal, both for allegedly failing to cite to the record in support of their argument and for allegedly failing to raise the issue to the trial court. In the alternative, Penz maintains that the Agreement was properly admitted into evidence.

Indiana Trial Rule 9.2 provides in relevant part that execution of a written instrument filed with a pleading shall be admitted into evidence without proving its execution unless execution is denied under oath in the responsive pleading or by an affidavit filed therewith. But the requirement that execution of a written instrument be denied under oath or otherwise does not apply against a party who is or becomes dead. T.R. 9.2(G). Such parties shall be deemed to have denied execution or admissibility without any responsive pleading or denial. Id. Thus, the presumption of execution does not apply to establish execution of a written instrument by a person who is dead. Id.

Memorandum

Finally, the Appellants contend that the trial court abused its discretion when it excluded certain evidence. Specifically, the Estate sought to introduce into evidence a 1995 memorandum ("the memorandum") prepared by an attorney for Penz, Lawrence R. Williams, III, discussing methods by which Penz could divest Gregory Penzenik of all ownership interest in the corporation. The Appellants maintain that the memorandum was relevant to their affirmative defense of unclean hands, as well as their claims for breach of fiduciary duty and minority shareholder oppression. But Penz objected to the proffered evidence, stating that the memorandum was irrelevant and also invoking attorney-client privilege. The Estate argued that Penz had waived the attorney-client privilege because the memorandum had been introduced as an exhibit to Linda Penzenik's deposition. The trial court sustained Penz's objection on the basis of the attorney-client privilege, and the Estate made an offer of proof.

Appeal

This appeal has been assigned to Judge Edward W. Najam, Jr. of Monroe County, Judge Margaret G. Robb of Tippecanoe County, and Judge L. Mark Bailey of Decatur County. The panel will hear the oral argument on November 17, 2003, at 12:00 p.m., in the Moot Court Room of the Indiana University School of Law in Bloomington. Each side is allotted thirty minutes to argue its position.