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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. Number one, only $1 was earmarked as punitives. Most of the $1,950,000 was earmarked as pain and suffering. But I will give you, JS, that sure does sound punitive! Number two, remittitur, for certain, but how does one unring the dinner bell that has now been sounded? Catholic school blood is in the sharktank.

  2. Hi, I had an auto accident on 12/26/2012 on I-65 near Lafayette, IN. I rear hit a semi truck. Meanwhile, I got a traffic ticket. I went to White Superior Court to have a hearing. I thought that I could win the case. I lost. I am not sure if you will be able to reverse the judgment in the White Superior Court. Meanwhile, I will try to let the insurance agency for the truck driver to pay the damages to my car. I wonder if your office is willing to handle the case. Thanks.

  3. Putting aside the question of how they got past the pastoral purpose/ 1st Amendment/ MSJ hurdle-- let me ask this: a million bucks in punitive damages? are you kidding me? absolutely ridiculous. Remittitur.

  4. Compromising precious constitutional rights in order to protect them? Rather like the military intelligence slogan that the town had to be destroyed in order to save it. Looks like Joseph, Mary and Baby Jesus will have quite the eventful Boxing Day this year. Wise men will arrive to find no one to accept their gifts? Oh well, wisdom not all that desired this xmas anyway. Maybe the ACLU and Christian attorneys can work out a "three days every third year" visitation compromise and all of this messy litigation stuff can just be boxed up as well? It is an art form, now isn't it? Thomas More, a man of manifold compromises is undoubtedly cheering on wildly.

  5. From the MCBA: “This situation is not just about the death of Michael Brown, but the thousands of other African-Americans who are disproportionately targeted and killed by police officers.” The association said it was “saddened and disappointed” by the decision not to indict Ferguson police officer. HOPING that the MCBA will denouce the execution style killig of two NYC police officers this day, seemingly the act of one who likewise believes that the police are targeting blacks for murder and getting away with it. http://www.mediaite.com/online/two-nypd-cops-fatally-shot-in-ambush-in-brooklyn/ Pray this violence soon ends, and pray it stays far away from Indiana.

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