John Barkers and Specialty Limos, LLC v. Jason Price ( 2015 )

Dec 29 2015, 8:32 am
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE
James K. Wisco Dan J. May
Foley, Foley & Peden, P.A. Kokomo, Indiana
Martinsville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
John Barker and Specialty December 29, 2015
Limos, LLC, Court of Appeals Case No.
Appellants-Plaintiffs, 34A02-1506-PL-626
Appeal from the Howard Superior
v. Court
The Honorable Douglas A. Tate,
Jason Price, Judge
Appellee-Defendant. Trial Court Cause No.
34D03-1407-PL-10
Najam, Judge.
Statement of the Case
[1] John Barker and Specialty Limos, LLC (collectively, “Barker”) appeal the trial
court’s entry of summary judgment for Jason Price. Barker raises a single issue
for our review, which we restate as whether the trial court erred when it
interpreted the parties’ contract. We affirm in part, reverse in part, and remand
for further proceedings.
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Facts and Procedural History
[2] In 2014, Barker contacted Price about a van Price had advertised for sale. The
advertisement described the van as a 1994 Ford E-350. The advertisement
promised a “clean” certificate of title but did not indicate a sale price.
Appellant’s App. at 14.
[3] Barker and Price agreed to meet, and, on April 9, Barker inspected the van.
Following Barker’s inspection, he orally agreed to purchase the van from Price
for $15,000. The parties then agreed in writing that Barker would make an
immediate $2,000 deposit and Price would provide Barker “title by 4/14/14 or
deposit will be refunded in full” (“the deposit agreement”). Id. at 15. The
deposit agreement described the van as a Ford E-350 but did not specify the
model year.
[4] Sometime prior to April 14, 2014, Price provided Barker with a certificate of
title for the van.1 The certificate indicated that the owner of the van was a third
party. On the reverse side of the certificate, the owner appeared to have
1
Attached to a motion to correct error following the entry of summary judgment, Barker included an
affidavit in which he asserted that Price had failed to present the certificate of title by April 14, 2014. And,
on appeal, Barker asserts that this affidavit creates a genuine issue of material fact on this point. But the
affidavit Barker submitted with his motion to correct error was not consistent with his affidavit in support of
his motion for summary judgment, in which he made no assertion whatsoever that Price had not timely
submitted the certificate of title. Rather, in response to the summary judgment motions Barker had only
asserted that the certificate of title was deficient. See Appellant’s App. at 12-13. Barker had his opportunity
to designate evidence on the summary judgment motions prior to the court’s ruling on them. He cannot
unilaterally use a motion to correct error to circumvent our trial rules’ requirements for the timely
designation of materials in support of or against summary judgment. See Ind. Trial Rule 56(I); see also New
Albany-Floyd Cnty. Educ. Ass’n v. Ammerman, 724 N.E.2d 251, 257 n.11 (Ind. Ct. App. 2000) (noting that
evidence submitted not in support of a summary judgment motion but, rather, only in support of a motion to
correct error “cannot be considered in [the summary judgment] context on appeal”).
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assigned her interest as a “seller,” although the place for the purchaser’s name
was blank. Id. at 17. The certificate also described the van as a 1993 model
rather than a 1994 model. Barker refused to accept the certificate of title and
demanded a refund of his $2,000. Price, in turn, refused to refund the deposit.
[5] Barker filed a small claim against Price for breach of contract, which was later
transferred to the court’s plenary docket. In his complaint, Barker alleged that
Price had failed to provide a certificate of title in accordance with the deposit
agreement, which entitled Barker to a refund of the deposit. On September 15,
2014, Barker filed a motion for summary judgment. Price responded and filed
his own motion for summary judgment. After a hearing, the trial court entered
summary judgment for Price. In relevant part, the trial court concluded that the
year of the van was not a term material to the deposit agreement because that
“agreement makes no reference to the year of the vehicle”; that Barker had
accepted the van when he inspected it and paid the deposit; and that the
certificate of title that Price tendered satisfied his obligation under the deposit
agreement. Id. at 8-9. This appeal ensued.
Discussion and Decision
Overview
[6] Barker appeals the trial court’s entry of summary judgment for Price. Our
supreme court has stated our standard of review as follows:
We review summary judgment de novo, applying the same
standard as the trial court: “Drawing all reasonable inferences in
favor of . . . the non-moving parties, summary judgment is
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appropriate ‘if the designated evidentiary matter shows that there
is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.’” Williams v.
Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). . . .
The initial burden is on the summary-judgment movant to
“demonstrate [ ] the absence of any genuine issue of fact as to a
determinative issue,” at which point the burden shifts to the
nonmovant to “come forward with contrary evidence” showing
an issue for the trier of fact. Id. at 761-62 (internal quotation
marks and substitution omitted). And “[a]lthough the non-
moving party has the burden on appeal of persuading us that the
grant of summary judgment was erroneous, we carefully assess
the trial court’s decision to ensure that he was not improperly
denied his day in court.” McSwane v. Bloomington Hosp. &
Healthcare Sys., 916 N.E.2d 906, 909-10 (Ind. 2009) (internal
quotation marks omitted).
Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (alterations original to
Hughley).
[7] Summary judgment is a “high bar” for the moving party to clear in Indiana. Id.
at 1004. Further:
Summary judgment is a desirable tool to allow the trial court to
dispose of cases where only legal issues exist. But it is also a
“blunt . . . instrument” by which the non-prevailing party is
prevented from having his day in court. We have therefore
cautioned that summary judgment is not a summary trial and the
Court of Appeals has often rightly observed that it is not
appropriate merely because the non-movant appears unlikely to
prevail at trial. In essence, Indiana consciously errs on the side
of letting marginal cases proceed to trial on the merits, rather
than risk short-circuiting meritorious claims.
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Id. at 1003-04 (citations and some quotations omitted; omission original to
Hughley).
[8] This appeal requires the interpretation of a contract. Interpretation and
construction of contract provisions are questions of law. John M. Abbott, LLC v.
Lake City Bank, 14 N.E.3d 53, 56 (Ind. Ct. App. 2014). As such, cases involving
contract interpretation are particularly appropriate for summary judgment. Id.
And because the interpretation of a contract presents a question of law, it is
reviewed de novo by this court. Jenkins v. S. Bend Cmty. Sch. Corp., 982 N.E.2d
343, 347 (Ind. Ct. App. 2013), trans. denied. We review the contract as a whole,
attempting to ascertain the parties’ intent and making every attempt to construe
the contract’s language “so as not to render any words, phrases, or terms
ineffective or meaningless.” Four Seasons Mfg., Inc. v. 1001 Coliseum, LLC, 870
N.E.2d 494, 501 (Ind. Ct. App. 2007).
[9] Generally, Indiana’s courts apply the “four corners rule” to determine the
parties’ intent in entering into a written contract. Brill v. Regents Comm’ns, Inc.,
12 N.E.3d 299, 309 (Ind. Ct. App. 2014), trans. denied. That is, if the contract
unambiguously demonstrates the parties’ intent, we will simply apply the
contract as written and, generally, “parol or extrinsic evidence is inadmissible to
expand, vary, or explain the instrument . . . .” Id. (quotations omitted).
However, the prohibition against the use of parol evidence “is by no means
absolute.” Id. (quotations omitted). And “where the existence . . . of a contract
or the terms thereof is the point in issue, and the evidence is conflicting or
admits of more than one inference, it is for the [trier of fact] to determine
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whether a contract in fact exists.” City of Indianapolis v. Twin Lakes Enter., Inc.,
568 N.E.2d 1073, 1079 (Ind. Ct. App. 1991), trans. denied.
[10] Here, Barker asserts that the entry of summary judgment for Price is erroneous
for two reasons. First, he asserts that the model year of the van was a term
material to his agreement to purchase it, and Price failed to present a certificate
of title for a 1994 van. Second, he asserts that the certificate of title was in the
name of a third party and, therefore, that Price did not satisfy his obligation to
deliver title as provided under the deposit agreement. We address each
argument in turn.
Whether the Model Year of the Van was a Material Contract Term
[11] We first consider Barker’s argument that the certificate of title presented by
Price did not comply with the deposit agreement because the certificate showed
a different model year for the van than the year specified in the advertisement.
This issue turns on the scope of the deposit agreement, which is the only writing
between the parties regarding sale of the van. The deposit agreement simply
states that, in exchange for a $2,000 deposit, Price “will have title by 4/14/14”
for a “Ford E-350 Van.” Appellant’s App. at 15. Because the deposit
agreement does not specify the model year of the vehicle, Price asserts that the
year must not have been a material term. As Price puts it, “the advertisement
merged into the [deposit agreement].” 2 Appellee’s Br. at 3. We must agree
2
Price also suggests that Barker conceded at the summary judgment hearing that the model year of the van
was not a material contract term, but we cannot agree. Barker plainly argued that the model year was a
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with Barker that there is a genuine issue of material fact regarding whether the
model year of the vehicle was a term material to the parties’ agreement.
[12] We begin with a basic point: the deposit agreement does not contain the entire
agreement between the parties. As our supreme court has explained:
An integrated agreement is a writing constituting the final
expression of one or more terms of the parties’ agreement.
Restatement (Second) of Contracts § 209 (1981). The question of
whether an agreement is an integration is one of fact[] that[,]
unlike other questions of fact, is decided by the judge as a
question preliminary to application of the parol evidence rule. Id.
In determining whether a writing is integrated, the judge should
examine the writing itself to see whether it appears complete on
its face and should also consider any other relevant evidence. Id.
Sees v. Bank One, Ind., N.A., 839 N.E.2d 154, 162 n.7 (Ind. 2005).
[13] The deposit agreement is not the entire agreement in that it omits at least one
essential term, namely, the sale price for the van. And it does not contain an
integration clause. Thus, we cannot agree with Price’s contention that the
advertisement or any other prior negotiations “merged” into the deposit
agreement. See, e.g., I.C.C. Protective Coatings, Inc. v. A.E. Staley Mfg. Co., 695
N.E.2d 1030, 1035-36 (Ind. Ct. App. 1998), trans. denied. To the contrary, it is
material term; when the trial court made it clear to Barker that it did not agree and wanted to advance the
hearing to the next issue, Barker stated, “Ok, alright.” Tr. at 18. This is not a concession.
Further, in his affidavit in support of his motion for summary judgment, Price suggested that Barker had
refused to accept the certificate of title because Barker had “found another van prior to 4/14/[2]014.”
Appellant’s App. at 22. Of course, whether Barker had purchased another vehicle says nothing about
whether Price had complied with his end of the parties’ bargain.
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apparent that the deposit agreement was only part of a larger agreement
between the parties and that part of the agreement was not reduced to writing.
[14] Likewise, we are not persuaded by Price’s argument that the deposit agreement
speaks for itself when it omitted the model year from the vehicle’s description.
Price contends, in effect, that he could have produced a certificate of title for a
Ford E-350 van manufactured in any year without affecting his deal with
Barker. When the entire agreement between the parties is taken into account,
we cannot say as a matter of law that the model year was not a material term.
Indeed, in most automobile sales, the model year is a material term. Both new
and used vehicles are typically offered for sale and sold based, in part, on the
model year. And there is usually a correlation between the model year and the
sale price.
[15] As the deposit agreement did not contain the entire agreement, it is necessary
for the trier of fact to consider parol evidence. That is, the parol evidence rule,
which operates to exclude “contemporaneous oral statements that contradict
the terms of an integrated written agreement,” does not apply here because
there is no integrated written agreement. Sees, 839 N.E.2d at 162; cf. Krieg v.
Hieber, 802 N.E.2d 938, 943-44 (Ind. Ct. App. 2004) (noting that, even when
the parol evidence rule does apply, there are numerous exceptions, such as
using extrinsic evidence to show a mistake in the formation of a contract or “to
apply the terms of a contract to its subject matter”).
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[16] Accordingly, whether the parties here considered the model year of the vehicle
to be a term material to their agreement must be resolved by considering
evidence extrinsic to the deposit agreement, including the original
advertisement. The advertisement demonstrates that Price offered a 1994
vehicle, and the evidence suggests that Barker agreed to purchase the vehicle
advertised. Thus, we must conclude that whether the year of the vehicle was a
term material to the parties’ agreement is a question of fact that must be
resolved by considering all the evidence, not merely a question of law based
only on an interpretation of the deposit agreement. See id.
[17] In its summary judgment order, the trial court concluded, in the alternative,
that Barker had accepted the van regardless of the model year when he paid the
deposit after having inspected the van. But while Barker had inspected the van
and paid the deposit, the deposit agreement makes it clear that Barker’s
acceptance remained contingent upon Price’s delivery of the certificate of title.
There is no designated evidence to show that Barker knew when he inspected
the van that the model was anything other than the 1994 vehicle advertised, and
Barker immediately rejected the van as nonconforming when he learned that it
was not a 1994 vehicle. See Ind. Code § 26-1-2-606(1) (2014) (stating that an
acceptance of goods occurs when the buyer signifies to the seller that the buyer
will take or retain goods “in spite of their nonconformity”). Indeed, not until
Price tendered the certificate of title did Barker have any reason to know that
the model year was something other than 1994.
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[18] On appeal, in defending the trial court’s reasoning that Barker had accepted the
van, Price cites Indiana Code Section 26-1-2.1-515. But that Section of the
Indiana Code applies only to lease agreements. As the Code makes clear
elsewhere, “a sale . . . is not a lease.” I.C. § 26-1-2.1-103(1)(j). In any event,
under the relevant sales provision of the Indiana Code, I.C. § 26-1-2-606(1), the
designated evidence does not show that Barker’s execution of the deposit
agreement and payment of the deposit, alone, signified that the van was
“conforming” with respect to the model year. Accordingly, we are not
persuaded by this alternative explanation for the trial court’s order.
[19] In sum, the deposit agreement is not the entire agreement between Barker and
Price. Accordingly, the trial court erred when it concluded that the deposit
agreement precluded Barker’s claim that the model year was a term material to
the parties’ agreement for sale of the van. And we cannot say that the
designated evidence otherwise shows that Price is entitled to judgment as a
matter of law on this issue. We reverse the court’s entry of summary judgment
for Price and remand for further proceedings. On remand, the court shall
consider not only the deposit agreement but also extrinsic evidence to
determine whether, as between the parties, the model year was a term material
to their agreement.
Whether a Certificate of Title in Another’s Name is Valid
[20] To prevent this issue from recurring on remand, we briefly address Barker’s
alternative argument that the trial court erred when it concluded that Price had
delivered a valid certificate of title pursuant to the deposit agreement even
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though the certificate of title was not in Price’s name. In particular, Barker’s
only arguments here are, first, that title in a third-party’s name is not clear title
and, second, that the Indiana Certificate of Title Act, I.C. §§ 9-17-1-1 to -8-9,
controls such issues rather than the sales provisions of the Indiana Uniform
Commercial Code.
[21] This court has previously rejected those arguments. Specifically, in Marlow v.
Conley, 787 N.E.2d 490 (Ind. Ct. App. 2003), Medley purchased a truck from
Conley at a car show, and Conley gave Medley a certificate of title that was in
the name of Marlow, a third party. Marlow eventually sued Medley for
replevin of the truck on the grounds that Conley had acquired the certificate of
title from him through fraud and Medley should have known better when he
saw a third party’s name on the certificate of title.
[22] In a thorough analysis, we concluded that Medley held valid title. Id. at 498-99.
In most relevant part, we explained that a defrauding buyer obtains title that is
voidable, not void, “which means that when title gets into the hands of a bona
fide purchaser for value then he will prevail over the defrauded seller.” Id. at
493. We also held that receipt of a certificate of title in the name of a third
party, standing alone, does not demonstrate that a buyer is not a “good faith
purchaser for value.” Id. at 497-98. And we explicitly rejected Marlow’s
reliance on the Indiana Certificate of Title Act rather than the sales provisions
of the UCC adopted in Indiana. Id. at 495-97.
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[23] Barker’s arguments with respect to the validity of the open title presented by
Price are indistinguishable from the arguments we considered and rejected in
Marlow. Thus, we apply Marlow and reject Barker’s arguments that the
certificate of title that Price tendered is not a “clean” title as advertised. To be
sure, Barker and Price could have agreed that Price be the owner named on the
certificate of title as an explicit term of their sale agreement, but there is no
designated evidence to suggest that they did. Accordingly, the trial court
correctly rejected Barker’s arguments, and we affirm that portion of the trial
court’s judgment.
[24] Thus, we affirm in part, reverse in part, and remand for further proceedings.
[25] Affirmed in part, reversed in part, and remanded.
Riley, J., and May, J., concur.
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