Fraud case against car dealership should have survived summary judgment, COA rules in reversal

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(IL file photo)

A man who claims a dealership told him the engine in his truck was under warranty when it really wasn’t should be able to take his case before a jury, the Court of Appeals of Indiana ruled in reversing a trial court’s grant of summary judgment.

L.T. Garrett bought a truck from a Nissan dealer in Lafayette in 2018 and claimed that, over the phone, a salesperson indicated the truck had a replacement engine that was subject to a warranty issued by the engine manufacturer and good for two years.

A representative repeated the promises about the warranty for the engine the next day when Garrett went to the dealership.

The dealership denies that any such representations were made. The warranty was actually expired.

A little more than a year after buying the truck, the engine failed, and Garrett tried to get it repaired via the warranty. That’s when he learned there was no warranty.

The dealership refused to pay for the repairs.

Garrett filed a complaint in 2019 in the Bartholomew Circuit Court. He asserted claims of fraud via material misrepresentation, fraud via material omission, constructive fraud and violation of the Indiana Deceptive Consumer Sales Act.

The dealer served discovery requests, including requests for admission on Garrett. The dealership asked Garrett to admit that it made no representations regarding the truck having a warranty; it was unreasonable for Garrett to believe that there was such a warranty; Garrett was offered the option to purchase a warranty; he declined that offer; and, the written purchase agreement represented the complete terms of the sale.

The parties disagreed about the timeliness of the requests, and Garrett ultimately didn’t respond.

In June 2022, the dealership filed a motion for summary judgment that relied on the requests, with the dealership treating the requests as being deemed admitted by operation of rule.

Because Garrett’s counsel emailed the dealership in response to the requests on the day they were sent, the trial court ruled the requests were not deemed admitted.

The trial court went on to grant the dealership’s request for summary judgment on all claims.

Both parties appealed.

Garrett challenged the grant of summary judgment, and the dealership challenged the trial court’s denial of the requests in its summary judgment motion.

The Court of Appeals ruled in favor of Garrett.

First addressing the dealership’s cross-appeal, the Court of Appeals said it was “reluctant to intrude upon the trial court’s discretion, especially as it pertains to discovery disputes.”

But the appellate court also noted the penalty for failure to respond to a request for admission is “severe” and said Garrett “should have availed himself” even by simply drawing up denials of the requests.

Garrett’s counsel admitted that in an appellant’s brief, saying the “prudent thing to have done was to submit either a formal objection or to answer” within the 30-day window.

The Court of Appeals said that Indiana Trial Rule 36, which governs requests for admission, is part of an “overarching preference of our court system” to resolve cases on the merits, and that the rule is meant to streamline the process by allowing parties to “essentially stipulate to matters which are not seriously in dispute.”

But that wasn’t the purpose of the dealership’s request, the Court of Appeals ruled. Instead, the dealership tried to get Garrett to “plead himself out of court.”

That tactic, the opinion says, is being used at an “increasingly frequent” rate and is “entirely at odds with the spirit of the rule.”

Turning to summary judgment, the Court of Appeals ruled granting it wasn’t appropriate.

“The trial court’s analysis with respect to the partial summary judgment motion boils down to the idea that Garrett should have taken a close look at the paperwork he was handed,” the opinion says, referencing the purchase agreement. “If he had done so, or if any reasonable person had done so, he would have concluded that the statements regarding the warranty were untrue, and, thus, it would be unreasonable to rely upon them.”

But the Court of Appeals referenced the designated evidence supporting the claim that the dealership represented to Garrett that there was a warranty.

“The question then becomes whether it was reasonable for Garrett to rely upon those representations, assuming they were made,” the opinion says. “This is a question for the jury.”

The Court of Appeals thus reversed the trial court’s grant of the dealership’s motion for summary judgment, ordered the trial court to vacate that judgment and remanded for further proceedings.

Judge Peter Foley wrote the opinion. Chief Judge Robert Altice and Judge Melissa May concurred.

The case is L.T. Garrett v. Nissan of Lafayette, LLC, 22A-CT-2583.

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