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Car dealer responsible for buyer’s unauthorized purchases at auction

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After finding that a trial court did not err in reinstating an action after initially dismissing it with prejudice, the Indiana Court of Appeals affirmed summary judgment in favor of Automotive Finance Corp. on its action seeking repayment of loans made to purchase cars.

Robert Souza, principal of Somerville Auto Transport Service Inc. in Somerville, Mass., executed a loan agreement with AFC in which the dealer could request advances against a line of credit to finance its purchase of vehicles for resale. Souza later authorized Robson Merenciano to buy and sell cars for Somerville and to execute company checks or drafts with AFC.

A year later, Souza revoked Merenciano’s privileges and did not timely repay AFC for the amounts it advanced to Merenciano to buy 15 cars. AFC sued Souza and the dealership to recover the loan amounts.

Marion Superior Judge Michael Keele told the parties that the cause would be dismissed under Trial Rule 41(E) at a hearing June 27, 2011, unless sufficient cause was shown. But a hearing wasn’t held because court staff mistakenly told the judge that AFC’s attorney did not show up for the hearing. The next day, Keele dismissed the case with prejudice. But a week later, Keele reinstated the action after learning the AFC attorney was present the day of the hearing. AFC later won summary judgment and more than $200,000 for the principal loan amount, pre-judgment interest, and attorney fees.

The parties disputed whether Keele could even put the action back on the docket after dismissing it with prejudiced. Somerville claimed AFC had to file a Trial Rule 60(B) motion to get the case back on the docket, which it did not; AFC argued that Trial Rule 41(F) does not limit a court’s authority to take corrective action under Trial Rule 60(A) as well as the failure to hold a hearing under Trial Rule 41(E) rendered the dismissal order void.

Based on the circumstances of this case and in light of the requirements of the rule as interpreted by the courts, the trial court was required to hold a hearing under T.R. 41(E) prior to dismissing the cause of action, wrote Judge Elaine Brown in Somerville Auto Transport Service, Inc. and Robert Souza v. Automotive Finance Corporation, 49A02-1307-CC-559. The COA agreed with the judge that the dismissal entry was erroneous.

“We observe that, while the dismissal order here is not the result of a typographical error and involves a dismissal which, as Somerville notes, was an appealable order, we note that Trial Rule 60(A) by its terms does not preclude a trial court from correcting mistaken orders which are appealable orders. While the court’s mistake in this case — believing the parties did not appear to present arguments at the June 27, 2011 hearing — was not a fact expressly stated in the order of dismissal, the record shows and the trial court found that the order was based solely upon the court’s mistake or oversight. We find that the court’s mistaken belief, where the parties suggested in their filings and briefs that the mistake was the result of an oversight or a miscommunication between or actions taken by members of the court’s staff, is more akin to a mechanical mistake than a substantive mistake in character.”

The judges also upheld summary judgment in favor of AFC because it demonstrated that it reasonably believed Merenciano was an agent of Somerville for the purpose of purchasing vehicles using the line of credit or financing made available to Somerville by AFC pursuant to the agreement.
 

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  1. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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