ILNews

Car dealer responsible for buyer’s unauthorized purchases at auction

Back to TopCommentsE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  2. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

  3. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  4. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  5. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

ADVERTISEMENT