FROM DAVIESS CIRCUIT COURT HONORABLE JAY A. WETHINGTON, JUDGE
ACTION NO. 15-CI-00419
FOR APPELLANT: Jasper Dudley Ward IV Louisville, Ky.
FOR APPELLEE: James P. Grohmann Joseph Charles Klausing
BEFORE: COMBS, DIXON AND NICKELL, JUDGES.
Bill Saalwaechter, appeals from an order of the Daviess
Circuit Court granting Appellee, attorney Thomas
Carroll's, motion for summary judgment and dismissing
Saalwaechter's complaint alleging breach of contract,
breach of fiduciary duties and professional negligence
arising out the parties' attorney-client relationship.
Finding no error, we affirm.
lawsuit arises from Carroll's representation of
Saalwaechter in a transaction beginning in July 2007
involving a pawn shop business and surrounding real estate in
Evansville, Indiana. The underlying facts surrounding the
business transaction are complicated at best. The 7th Circuit
Court of Appeals so noted in attempting to set forth the
facts in Saalwaechter's appeal in a collateral case in
The precise terms of the transaction were murky, however.
Later, government regulators would have trouble understanding
the deal, and some of the particulars remain unclear even on
As best we can tell, Saalwaechter expected that he would
purchase the property and pawn business from the Dukes; lease
everything back to a third party, Ryan McDaniel; and
eventually, after giving McDaniel time to put together
financing, sell to him at a small profit. While they put
together financing, McDaniel and the former manager of Fares
Loan, Jeremy Kamuf, would continue to operate the shop and
make regular payments to Saalwaechter in exchange for the
repurchase option. In essence, Saalwaechter would extend a
short-term bridge loan to be paid back, with interest, within
just a few months.
The plan hit a snag when Kamuf failed to make the required
monthly payments. Saalwaechter investigated, only to find out
that McDaniel did not know about the deal at all-what
Saalwaechter had thought to be McDaniel's guarantee of
the loan turned out to be a forgery. Saalwaechter evicted
Kamuf from the premises but, without a functioning pawn shop
on the property, worried that his real estate investment
would quickly lose value.
Saalwaechter therefore decided his best course was to operate
the pawn business himself. To his surprise, he discovered
that he had never purchased the pawn business or its
inventory, just the underlying real estate. It later became
clear that Tom Carroll had purchased the Fares Loan assets
himself. Carroll had also set up a new company, Evansville
Pawn LLC, obtained a pawn license, and retained someone named
John Jones to manage it (alongside Kamuf, it seems). Carroll
showed Saalwaechter documents describing the deal and
containing Saalwaechter's signature, but Saalwaechter
claimed that he had never seen them before.
The plot further thickened when [the Indiana Department of
financial Institutions "DFI"] received materials
indicating that Carroll had procured the Evansville Pawn
license on behalf of Kamuf, who was paying Carroll a monthly
fee for the business (separate from the fee Kamuf was paying
Saalwaechter for the real estate). Such "straw
licensing" is prohibited under Indiana law. Ind. Code
§ 28-7-5-10.5. DFI refused to renew Evansville
Pawn's license, and ordered Carroll to wind up his pawn
Saalwaechter then decided to create his own entity, Fares
Pawn LLC. Just before Evansville Pawn's license was set
to expire, Saalwaechter and Carroll agreed that Fares Pawn
would take possession of Evansville Pawn's inventory and
liquidate its outstanding pawns. Saalwaechter also applied
for a pawn license for Fares Pawn. Until DFI approved the
application, he planned to operate as a buy/sell business.
Unlike a pawnbroker, a buy/sell business does not take the
customer's property as collateral for a short-term loan,
but instead buys the item outright. This sort of business
does not require a license, but it is less lucrative than
Shortly after Saalwaechter submitted his license application,
DFI informed him that, because he had no background in the
pawn industry, he would need to find a store manager with two
years' experience. Saalwaechter, who had expected to
manage the store himself, reluctantly listed the only person
he knew with that qualification: John Jones, the manager for
. . . Months later, while running background checks for
Saalwaechter's application, DFI learned that Jones had
previously been convicted of a theft- and drug-related felony
in Kentucky. . . . DFI also concluded that Jones had not been
forthright with officials when they interviewed Jones and
Carroll about Carroll's pawn license application in 2007.
. . .
Based on this information, DFI told Saalwaechter that they
would not give him a license so long as Jones worked at the
pawn shop. Saalwaechter, who earlier had not wanted to hire
Jones, now protested. He claimed that he had worked alongside
Jones for several months and considered him a good employee.
Saalwaechter later met with two members of the DFI ...