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Judgment affirmed in failed Corydon auto dealership sale

March 15, 2018

The Indiana Court of Appeals affirmed summary judgment in favor of a planned buyer of a Corydon auto dealership in a dispute that arose after the sale fell through.

In 2011, Gerdon Auto Sales and John Jones Chrysler Dodge Jeep Ram entered into a contract in which Jones would buy the Gerdon dealership, but the contract was contingent on Jones obtaining financing and an obligation that Jones employ William Gerdon for one year after the sale, among other contingencies.

Jones was unable to obtain financing for the property because the bank was concerned about environmental issues and the appraised value of the real estate. Jones did not attempt to secure alternate financing or offer any collateral on loan other than the property it intended to purchase.

Gerdon sued in February 2015, claiming breach of contract and breach of duty of good faith and fair dealing. Gerdon also argued that the statute of limitations on good faith and fair dealing claims is 10 years rather than two.

Harrison Circuit Court granted summary judgment in favor of Jones, and the COA affirmed Thursday in Gerdon Auto Sales, Inc. and William L. Gerdon v. John Jones Chrysler Dodge Jeep Ram, a/k/a John Jones Automotive Group and John Jones Chrysler City, Inc., 31A01-1708-CT-1859.   

“(W)e hold that the provision of the Contract regarding the contingencies is not ambiguous. Because the Contract does not contain any ambiguities, we will not impose a duty of good faith and fair dealing on the parties,” Judge Edward Najam wrote for the court. “Thus, the claim that Jones breached the duty of good faith and fair dealing was not available to Gerdon, and we need not address the statute of limitations issue. The trial court did not err when it granted summary judgment for Jones on that claim.”

The court also did not address the issue of William Gerdon’s standing to sue, because the court did not err in granting summary judgment. 

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