Paula Hercamp, Kyle Hercamp, and Matthew Hercamp v. Justin M. Pyle, State Farm Mutual Automobile Insurance Company, Enterprise Leasing Company of Indianapolis, LLC and EAN Holdings, LLC (mem. dec.) ( 2019 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any
Oct 10 2019, 5:36 am
court except for the purpose of establishing
the defense of res judicata, collateral CLERK
Indiana Supreme Court
estoppel, or the law of the case. Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEY FOR APPELLEES
Ann C. Coriden Bruce B. Paul
Timothy P. Coriden Stites & Harbison, PLLC
Coriden Glover, LLC Jeffersonville, Indiana
Columbus, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Paula Hercamp, Kyle Hercamp, October 10, 2019
and Matthew Hercamp, Court of Appeals Case No.
Appellants-Plaintiffs, 18A-CT-2958
Appeal from the
v. Jackson Superior Court
The Honorable
Justin M. Pyle, State Farm AmyMarie Travis, Judge
Mutual Automobile Insurance Trial Court Cause No.
Company,1 Enterprise Leasing 36D01-1708-CT-30
Company of Indianapolis, LLC,
and EAN Holdings, LLC,
Appellees-Defendants.
1
Justin M. Pyle and State Farm Mutual Automobile Insurance Company are not participating in this appeal,
but because they are parties of record in the trial court, they are parties on appeal. See Ind. Appellate Rule
17(A).
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Kirsch, Judge.
[1] Paula Hercamp (“Paula”), Kyle Hercamp (“Kyle”), and Matthew Hercamp
(“Matthew”) (collectively, “the Hercamps”) appeal the trial court’s separate
entries of summary judgment for EAN Holdings, LLC (“EAN”) and Enterprise
Leasing Company of Indianapolis, LLC (“Enterprise”), and raise two issues,
which we consolidate and restate as: whether the trial court erred in granting
summary judgment to both EAN and Enterprise.
[2] We affirm.
Facts and Procedural History
[3] In the early hours of August 5, 2015, Justin M. Pyle (“Pyle”) became
intoxicated, drove his car, and crashed it off the road. Appellants’ App. Vol. II at
128. At 7:00 a.m., the accident was investigated by Matthew Schalliol, Chief of
Police for Walkerton, Indiana (“Chief Schalliol”), who smelled a “strong odor
of alcoholic type beverage emanating from Pyle’s person.” Id. Pyle admitted to
Chief Schalliol that he had been drinking and was not sure if he was too
intoxicated to drive. Id.
[4] About four and one-half hours later, at 11:32 a.m., Pyle went to a Plymouth,
Indiana Enterprise store to rent a Nissan Altima (“the Altima”), which EAN
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had leased to Enterprise as a vehicle to rent to customers. Id. at 100-04.2 Pyle
did not appear to be intoxicated, presented a valid driver’s license to the
Enterprise employee who waited on him, and signed the rental agreement. Id.
at 88, 101. The next day, on August 6, 2015, Pyle was driving the Altima in
Jackson County when he collided with a 2004 Chevrolet Avalanche (“the
Avalanche”), which Paula was driving and in which Kyle rode as a passenger;
Matthew owned the Avalanche. Id. at 23, 27. Both Paula and Kyle were hurt.
Id. at 28, 31, 34.
[5] On August 4, 2017, the Hercamps filed a complaint against EAN, Pyle, and
State Farm Automobile Insurance Company,3 arguing, as to EAN, that it
negligently entrusted the Altima to Pyle. Id. at 17-25. On September 12, 2017,
the Hercamps filed an amended complaint, which added Enterprise as a
defendant, and likewise alleged that Enterprise had negligently entrusted the
Altima to Pyle. Id. at 26-37. On February 16, 2018, EAN and Enterprise filed
separate motions for summary judgment, but both made the same argument,
i.e., that even if Pyle was drunk when Enterprise entrusted the Altima to Pyle,
neither EAN nor Enterprise had actual knowledge that Pyle was intoxicated at
the very moment that Enterprise rented the car to Pyle, thus entitling them to
summary judgment. Id. at 76-107. In support, both EAN and Enterprise
2
The record contains conflicting information about whether EAN or Enterprise actually owned the Altima.
Appellants’ App. Vol. II at 106 and 61, 88, 75, 104. However, as we explain later, this issue of fact is not
material to our resolution of the Hercamps’ appeal.
3
State Farm insured the Avalanche. Id. at 22, 33.
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designated, inter alia: 1) the rental agreement; and 2) Pyle’s response to requests
for admission, in which he stated that he presented a valid driver’s license to the
Enterprise employee who waited on him and that he was not intoxicated when
he rented the Altima. Id. at 85, 88, 101, 104. On April 16, 2018, in response to
both motions for summary judgment, the Hercamps argued, in part, that there
were material issues of fact regarding knowledge of Pyle’s intoxication at the
time he rented the Altima because he appeared to be intoxicated four and one-
half hours earlier. Id. at 108-44. In support, the Hercamps designated evidence
showing that in the hours preceding Pyle’s renting of the Altima: 1) Pyle had
been drinking and crashed his car; 2) when Chief Schalliol investigated the
accident around 7:00 a.m., four and one-half hours before Pyle rented the
Altima, Chief Schalliol smelled the “strong odor” of alcohol emanating from
Pyle; 3) Pyle acknowledged he may have been too intoxicated to drive; and 4)
Pyle presented Chief Schalliol with paperwork outlining complaints from Pyle’s
coworkers about his irrational behavior. Id. The Hercamps also designated
evidence showing that in the six weeks preceding the accident: 1) Pyle had
exhibited a pattern of erratic behavior and was cited for several driving-related
offenses; and 2) that behavior resulted in the removal of firearms from Pyle’s
home and the issuance of a protective order against Pyle. Id. at 127-38. On
June 6, 2018, both EAN and Enterprise filed replies in support of their motions
for summary judgment. Id. at 145-61. On November 12, 2018, the trial court
granted both EAN’s and Enterprise’s motions for summary judgment, found
there was no just reason for delay, and entered judgment on the issues disposed
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of by its summary judgment rulings. Id. at 13-16; see Ind. Trial Rule 56(C). The
Hercamps now appeal.
Discussion and Decision
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
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. A fact is material
if its resolution would affect the outcome of the case, and an
issue is genuine if a trier of fact is required to resolve the parties’
differing accounts of the truth, or if the undisputed material facts
support conflicting reasonable inferences.
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 non-
movant to come forward with contrary evidence showing an
issue for the trier of fact. And although 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.
Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (internal citations and
quotations omitted). We may affirm a grant of summary judgment upon any
theory supported by the designated evidence. Miller v. Danz, 36 N.E.3d 455,
456 (Ind. 2015). “A defendant in a negligence action may obtain summary
judgment by demonstrating that the undisputed material facts negate at least
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one element of the plaintiff’s claim.” Frohardt v. Bassett, 788 N.E.2d 462, 467
(Ind. Ct. App. 2003), trans. denied.
[6] As to negligent entrustment, a plaintiff:
must demonstrate that another: (1) entrusted her car; (2) to an
incapacitated person or one who is incapable of using due care;
(3) with actual and specific knowledge that the person is
incapacitated or incapable of using due care at the time of the
entrustment; (4) proximate cause; and (5) damages.
Bailey v. State Farm Mut. Auto. Ins. Co., 881 N.E.2d 996, 1001 (Ind. Ct. App.
2008) (internal quotations omitted) (emphasis added); see also Johnson v. Owens,
639 N.E.2d 1016, 1022 (Ind. Ct. App. 1994), trans. denied; Stocker v. Cataldi, 489
N.E.2d 144, 145 (Ind. Ct. App. 1986), trans. denied. A person who is
intoxicated can be considered incompetent to drive safely. Sutton v. Sanders, 556
N.E.2d 1362, 1365 (Ind. Ct. App. 1990). Evidence about what the entrusting
person or entity should have known is not dispositive. Ellsworth v. Ludwig, 140
Ind. App. 437, 441, 223 N.E.2d 764, 766 (1967), trans. denied; Stocker, 489
N.E.2d at 145-46. “[I]n order to recover against the owner-bailor of a car, the
borrower-bailee must be drunk at the very moment of the entrustment, and the bailor
must have actual and immediate knowledge of this fact.” Ellsworth, 223 N.E.2d at
765 (emphasis added). Thus, to incur liability, EAN and Enterprise must have
had actual and immediate knowledge that Pyle was incompetent to drive at the
very moment Enterprise entrusted the Altima to him. See id.; see also Frohardt,
788 N.E.2d at 470.
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[7] The actual knowledge requirement in auto-related negligent entrustment claims
was established by our Supreme Court in Fisher v. Fletcher, 191 Ind. 529, 133
N.E. 834 (1922). Fisher held that where a person borrows or rents a vehicle
from another, a bailor-bailee relationship is created. Id. at 835. Generally, a
bailor is not responsible for injuries to a third party caused by the bailee’s
negligence. Id. However, an exception to this rule exists when “the bailor has
[e]ntrusted a dangerous article to one whom he knows to be unfamiliar with its
dangerous quality, uninstructed in its use, or incompetent to use due care.” Id.
In Fisher, Frank Clemens (“Clemens”) was a chauffeur for Stoughton Fletcher
(“Fletcher”). Fletcher often allowed Clemens to borrow the vehicle Clemens
drove as a chauffeur for his personal use even though Fletcher knew “Clemens
was in the habit of drinking to excess, and of becoming intoxicated when he
was released from his regular work.” Id. at 834. One evening, Clemens
borrowed the vehicle, and while driving under the influence of alcohol, he
crashed into Fisher, who was travelling in a horse-drawn carriage. Id. at 835.
In suing Fletcher, Fisher argued that Fletcher negligently entrusted the vehicle
to Clemens because Fletcher knew that Clemens was a “wild and reckless
driver” because while working for Fletcher, Clemens had been involved in
several car accidents and had been fined and convicted for driving-related
offenses. Id. at 834-35. Nonetheless, the Supreme Court held that Fletcher
could not be liable for negligent entrustment because Fisher had only alleged
that Clemens “was in the habit of becoming intoxicated,” not that Fletcher
knew Clemens was intoxicated at the time Fletcher entrusted the vehicle to
Clemens. Id. at 836.
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[8] In Ellsworth, we applied Fisher’s actual-knowledge requirement. Ellsworth, 223
N.E.2d at 765. Ellsworth, employed as a truck driver, was “well known in the
community for his ability to consume alcoholic beverages.” Id. One day,
Ellsworth sought and obtained permission from his employer to borrow his
employer’s truck. Id. Ellsworth was later in an accident, and the officer who
investigated the accident testified that Ellsworth was drunk. Id. However, we
held that there was no evidence that Ellsworth’s employer had actual
knowledge that Ellsworth was drunk when the employer entrusted the truck to
Ellsworth, so the trial court did not err in granting the employer’s motion for a
new trial. Id. at 766.
[9] Applying Fisher and Ellsworth, we assume without deciding that Pyle was
intoxicated when he rented the car from Enterprise. Nonetheless, we conclude
that both EAN’s and Enterprise’s designated evidence demonstrated the
absence of any genuine issue of material fact as to their actual knowledge about
Pyle’s alleged intoxication at the very moment Enterprise rented the Altima to
Pyle. In his response to the requests for admissions, Pyle stated that he was not
intoxicated when he rented the Altima and that he presented a valid driver’s
license to the Enterprise employee who rented the Altima to him. Appellants’
App. Vol. II at 85, 101.4 Thus, the designated evidence demonstrated a lack of
4
The Hercamps argue that although Pyle’s admissions are relevant, they are not conclusive of Enterprise’s
and EAN’s knowledge because admissions apply to and bind only the answering party. See, e.g., Gen. Motors
Corp., Chevrolet Motor Div. v. Aetna Cas. & Sur. Co., 573 N.E.2d 885, 890 (Ind. 1991). However, the cited cases
apply this prohibition where the admission impugns a co-defendant, not a plaintiff. See e.g., Shoup v. Mladick,
537 N.E.2d 552, 553 (Ind. Ct. App. 1989). Therefore, Pyle’s admissions were binding as to the Hercamps.
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material issue of fact as to whether EAN or Enterprise had immediate and
actual knowledge of Pyle’s alleged intoxication when Pyle rented the Altima
from Enterprise. Therefore, the burden shifted to the Hercamps to come
forward with contrary evidence showing an issue for the trier of fact. See
Hughley, 15 N.E.3d at 1003.
[10] The Hercamps try to meet this burden by citing evidence nearly identical to
facts in both Fisher and Ellsworth that did not create a material issue of fact
about whether the party who entrusted the vehicle to another had actual
knowledge at the moment of the entrustment that the person borrowing the
vehicle was intoxicated. See Fisher, 133 N.E. at 836; Ellsworth, 233 N.E.2d at
765. The Hercamps designated evidence showing that in the six weeks
preceding the accident: 1) Pyle had exhibited a pattern of erratic behavior and
was cited for several driving-related offenses; and 2) this behavior resulted in the
removal of firearms from Pyle’s home and the issuance of a protective order
against Pyle. Appellants’ App. Vol. II at 127-38. The Hercamps also designated
evidence showing that in the hours preceding Pyle’s renting of the Altima: 1)
Pyle had been drinking and crashed his car; 2) when Chief Schalliol
investigated the accident around 7:00 a.m., four and one-half hours before Pyle
rented the Altima, Chief Schalliol smelled the “strong odor” of alcohol
emanating Pyle; 3) Pyle acknowledged to Chief Schalliol that he may have been
The Hercamps were free to discover and designate evidence to create material issues of fact about EAN’s and
Enterprise’s actual knowledge about Pyle’s intoxication but failed to do so.
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too intoxicated to drive; and 4) Pyle presented Chief Schalliol with paperwork
outlining complaints from Pyle’s coworkers about his irrational behavior. Id.
[11] The Hercamps’ designated evidence does not meet their burden to show a
material issue of fact about EAN’s and Enterprise’s actual knowledge that Pyle
was intoxicated at the moment he rented the Altima from Enterprise. See
Hughley, 15 N.E.3d at 1003; Ellsworth, 223 N.E.2d at 766. Both Fisher and
Ellsworth make clear that a person’s past behavior -- such as a habit of
drunkenness, motor vehicle accidents, and traffic offenses -- do not, as a matter
of law, show that the party entrusting a vehicle to another person had actual
knowledge at the moment of the entrustment that the other person was
intoxicated or otherwise unfit to drive. See Fisher, 133 N.E. at 835-36; Ellsworth,
223 N.E.2d at 766-67. Facts regarding Pyle’s past behavior is precisely the kind
of evidence the Hercamps highlight to show material issues of fact. They cite
Pyle’s behavior as far back as six weeks before Pyle rented the Altima,
including driving offenses and erratic behavior. They also cite evidence
showing that Pyle was intoxicated four and one-half hours before he rented the
Altima.
[12] Such evidence does not create a material issue of fact that Enterprise had actual
knowledge at the very moment it rented the Altima to Pyle that Pyle was
intoxicated. See Ellsworth, 223 N.E.2d at 765. EAN’s and Enterprise’s
designated evidence showed the absence of a genuine issue of material fact, that
such a showing shifted the burden to the Hercamps to come forward with
contrary evidence showing a material issue of fact, and that the Hercamps failed
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to meet that burden. See Hughley, 15 N.E.3d at 1003. Thus, both EAN and
Enterprise demonstrated that the undisputed material facts negated at least one
element of the Hercamps’ negligent entrustment claim, entitling both EAN and
Enterprise to summary judgment. See Frohardt, 788 N.E.2d at 467. Therefore,
the trial court did not err in granting EAN’s and Enterprise’s motions for
summary judgment.5 See Stocker, 489 N.E.2d at 145 (mother’s knowledge of
son’s occasional marijuana use did not create material issue of fact about
whether she had actual knowledge her son was intoxicated at the moment she
entrusted her vehicle to him); Johnson, 639 N.E.2d at 1022 (affirming entry of
summary judgment where no material issue of fact about whether seller of car
knew, at the time of the sale, that the purchaser of the car did not have a valid
driver’s license).
[13] Affirmed.6
Vaidik, C.J., and Altice, J., concur.
5
The Hercamps ask us to discard Fisher’s actual-knowledge requirement and, in its stead, apply a test that
would require negligent-entrustment plaintiffs, when suing a for-profit entity, to show only that the entrusting
party should have known that the other person was intoxicated or otherwise impaired. Appellants’ Br. at 16, 19.
We leave that issue for the Indiana Supreme Court and the Indiana General Assembly.
6
Since we find that EAN and Enterprise were entitled to summary judgment because they demonstrated that
the undisputed material facts negated one element of the Hercamps’ negligent entrustment claim – actual
knowledge of Pyle’s intoxication at the very moment Enterprise rented the Altima to Pyle - we need not
address the Hercamps’ argument that summary judgment is inappropriate because there is a material issue of
fact about whether EAN or Enterprise owned the Altima.. See Frohardt, 788 N.E.2d at 467.
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