Dean Kruse and the foundation he founded have won one in court.
The Indiana Court of Appeals ruled this week that the Dean V. Kruse Foundation Inc. is entitled to damages beyond the earnest money paid in a real-estate deal that soured and became a court fight.
The deal involved the foundation's sale of real estate in southern Indiana in 2006, according to information in the appeals court's decision.
The foundation operates a World War II and automobile museum in Auburn. In 2003, Kimball International donated its furniture factory, a 42.79-acre parcel of real estate with a 300,000 square foot manufacturing facility located in West Baden, to the foundation.
The foundation previously had tried but failed to sell the property through brokers. In 2006, it was sold at auction. The buyer, Jerry Gates, a real-estate developer, won the auction for an amount totaling $4.2 million, including a buyer's premium of 5 percent. A month later, Gates canceled the deal.
The foundation sued for damages based on Gates' backing out of the sale contract. He argued that forfeiting $100,000 in earnest money he put up at the time he and the Kruse foundation struck the deal is the only compensation allowed under the contract. A lower court agreed with Gates.
The appeals court disagreed. It said that forfeiting the earnest money was a penalty set out in the contract but not an agreed measure of damages. It also sent the case back to the lower court so that the lower court could properly determine damages due the foundation.
Kruse's father, Russell Kruse, started the tradition of a Labor Day weekend collector-car auction in Auburn more than 40 years ago, and Dean Kruse built it into a lucrative enterprise purchased by eBay in 1999. Dean Kruse bought it back in 2002. In 2009 and 2010, the business crumbled as more and more sellers complained that they had not been paid for consignments, and Kruse sold the business in 2010.
