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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. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

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