Kenworth of Indianapolis, Inc. v. Seventy-Seven Limited, Convey All, LLC, Keller Trucking, Inc. (mem. dec.) ( 2016 )

MEMORANDUM DECISION FILED
Pursuant to Ind. Appellate Rule 65(D), Mar 24 2016, 8:20 am
this Memorandum Decision shall not be CLERK
Indiana Supreme Court
regarded as precedent or cited before any Court of Appeals
and Tax Court
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
David T. Schaefer Scott A. Benkie
Anthony M. Zelli Benkie & Crawford
Dinsmore & Shohl LLP Indianapolis, Indiana
Louisville, Kentucky
Rodney V. Taylor
Hilary A. Barnes
Christopher & Taylor
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Kenworth of Indianapolis, Inc., March 24, 2016
Kenworth of Indianapolis, Inc. Court of Appeals Case No.
d/b/a ITC Acceptance 49A02-1504-PL-249
Company, and Paccar Inc., Appeal from the Marion Superior
Appellants-Defendants, Court
The Honorable Cynthia Ayers,
v. Judge
Trial Court Cause No.
Seventy-Seven Limited, Convey 49D04-1010-PL-43362
All, LLC, Keller Trucking, Inc.,
K&K Aggregate, Inc., Huber
Transport, LLC, Triple H
Trucking, LLC, and Custom
Hauling, Inc.
Appellees-Plaintiff.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 1 of 10
Altice, Judge.
Case Summary
[1] Kenworth of Indianapolis, Inc. (Kenworth)1 and Paccar Inc. (Paccar)2
(collectively, the Defendants) raised a statute of limitations defense in their third
motion for summary judgment. During a subsequent status hearing, Seventy-
Seven Limited, Convey All, LLC, Keller Trucking, Inc., K&K Aggregate, Inc.,
Huber Transport, LLC, Triple H Trucking, LLC, and Custom Hauling, Inc.
(collectively, the Plaintiffs), argued that the Defendants had waived the statute
of limitations defense by not raising it in response to what the Plaintiffs
characterize as their cross-motion for summary judgment found in their
response to the Defendants’ first motion for summary judgment. The trial court
agreed with the Plaintiffs, concluding that the Defendants had waived the
defense. The Defendants present one issue for our review: Did the trial court
properly conclude that the Defendants waived their limitations defense?
[2] We reverse and remand.
Facts & Procedural History
1
Kenworth is a local dealer of Kenworth trucks.
2
Paccar is the parent company of Kenworth Truck Company.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 2 of 10
[3] This case involves a fleet of heavy-duty trucks manufactured by Paccar and sold
by Kenworth to the Plaintiffs.3 The Plaintiffs took delivery of the trucks
beginning in late 2005 and continuing into early 2006. For each truck, the
respective buyer signed a limited warranty agreement, which provided, in
pertinent part, for a one-year limitation period from the accrual of a cause of
action to file a claim against the Defendants.4
[4] Immediately after delivery of the first set of trucks, several of the buyers
complained to Kenworth that the trucks vibrated excessively while idling or at
specified RPMs. Kenworth contacted Paccar, who then consulted with the
manufacturers of the engine, transmission, and engine mounts, to resolve the
vibration problem. In September 2006 the decision was made to install
modified engine mounts. The new mounts initially reduced the vibration to
acceptable levels, but the problem reoccurred in 2007. In 2008, the Defendants
installed a different engine mount that they believed would be more durable.
Again, the vibration was initially reduced to acceptable levels. By the end of
2008, the vibration problem was reoccurring in several of the trucks. At that
point, Paccar provided the Plaintiffs with an extended warranty for a period of
3
Plaintiffs were among a group of thirteen trucking companies that together ordered forty-nine identically
configured trucks from Kenworth. These companies had independently been buying Kenworth trucks for
years, but decided to coordinate truck orders to obtain discount pricing.
4
The default provision under the Uniform Commercial Code is that an action for breach of any contract for
sale must be commenced within four years after the cause of action accrues. Ind. Code § 26-1-2-725(1). This
provision further provides: “By the original agreement the parties may reduce the period of limitation to not
less than one (1) year, but may not extend it.” Id.Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 3 of 10
4 years or 250,000 miles, whichever came first. The warranty also included free
engine mount replacements for as long as the Plaintiffs owned the trucks.
[5] On October 4, 2010, the Plaintiffs filed a complaint alleging breach of express
and implied warranties, breach of contract, and constructive fraud. The
Plaintiffs also sought rescission of the contract. The Plaintiffs amended their
complaint in 2011 to add claims of estoppel and a claim of a valid rejection of
non-conforming goods under the UCC. A third amended complaint was filed
in 2013.5 The Defendants filed an answer to the initial complaint and the
amended complaints and in each asserted the expiration of the statute of
limitations as an affirmative defense.
[6] On June 3, 2013, the Defendants jointly filed a motion for summary judgment
with regard to the Plaintiffs’ claims for breach of warranty, incidental and
consequential damages, and rescission of the contract based upon revocation of
acceptance. On August 20, 2013, the Plaintiffs filed “Plaintiffs’ Response in
Opposition to Defendants’ (Paccar, Inc. and Kenworth of Indianapolis, Inc.)
Joint Motion for Summary Judgment.” Appellants’ Appendix at 117. The trial
court held a summary judgment hearing on August 28, 2013. The Defendants
presented their arguments and then in their response, the Plaintiffs stated that
they were “asking for summary judgment on those points . . . as a cross
motion.” Transcript of August 28, 2013 Hearing at 33. The Defendants
5
This pleading is not included in the record on appeal.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 4 of 10
responded, asserting that the Plaintiffs had not filed a motion for summary
judgment and at the very least, they were entitled to notice and an opportunity
to be heard if indeed the Plaintiffs were moving for summary judgment. To
show that they had filed a cross-motion, the Plaintiffs pointed to the last
sentence of their response brief, which states, “Plaintiffs respectfully submit that
Plaintiffs’ Cross-Motion for Summary Judgment as to the Breach of Contract,
Breach of Warranty, and Constructive Fraud be granted.” Id. at 163. On
October 24, 2013, the trial court entered an order denying the Defendants’
motion for summary judgment and the Plaintiffs’ cross-motion for summary
judgment. The Defendants requested that the trial court certify this order for
interlocutory appeal, which request the trial court denied.
[7] The Defendants filed a third motion for summary judgment 6 on August 18,
2014. In this motion, the Defendants asserted a statute of limitations defense.
During a status conference on August 26, 2014, the Plaintiffs argued that the
Defendants had waived their limitations defense by not raising it in response to
their cross-motion for summary judgment, which they claimed was included in
their response to the Defendants’ first motion for summary judgment. On
September 18, 2014, both sides filed briefs in support of their respective
positions regarding the issue of waiver of the limitations defense. On
September 25, 2014, the trial court issued an order denying, in part, the
6
According to an entry in the chronological case summary, the Defendants filed a second motion for
summary judgment with respect to a claim of actual fraud on January 22, 2014. A second CCS entry
indicates that this motion was granted after a hearing.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 5 of 10
Defendants’ third motion for summary judgment, finding that the Defendants
had waived their limitations defense.7 The Defendants filed a motion to correct
error, which the trial court denied after a hearing. Upon the Defendants’
request, the trial court certified the partial summary judgment order for
interlocutory appeal. This court accepted jurisdiction.
Discussion & Decision
[8] The narrow issue before us is whether the trial court properly determined that
the Defendants had waived their statute of limitations defense. The Defendants
assert that no waiver can occur unless the Plaintiffs actually filed a motion for
summary judgment, thereby putting them on notice and affording them an
opportunity to respond. The Plaintiffs assert that they filed a cross-motion for
summary judgment by requesting such in the last sentence of their response to
the Defendants’ first motion for summary judgment. The trial court sided with
the Plaintiffs and expressly denied the Plaintiffs’ cross-motion for summary
judgment.
[9] Our Supreme Court has recently addressed an issue similar to that presented
here. In a petition for rehearing in WellPoint, Inc. v. Nat’l Union Fire Ins. Co. of
Pittsburgh, PA, 38 N.E.3d 981, 983-84 (Ind. 2015), our Supreme Court was
presented with the scenario where the defendant sought summary judgment and
7
On October 31, 2014, the trial court held another hearing to consider the remaining arguments raised in the
Defendants’ third motion for summary judgment.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 6 of 10
raised some but not all of its affirmative defenses. The Court noted the
defendant’s success on many of its claims would have established its non-
liability as to one or more counts of the complaint. Id. at 984. The denial of the
defendant’s summary judgment motion, however, would not have disposed of
the entire issue of liability. Id. The Court held that in this instance the general
waiver rule was inapplicable. Id. The Court’s explanation is thus:
For waiver of a contention to occur, it must be “placed in issue
by the movant.” When, as here, the defendant moves for
summary judgment and the plaintiff is the non-moving party, the
defendant has no duty to raise all of its affirmative defenses
unless another moving party “has first addressed and presented
evidence on that element.” In the absence of a duty to raise one
or more affirmative defenses, a defendant’s failure to do so
cannot constitute waiver. This principle is also consistent with
the unequivocal limitation in Trial Rule 56(B) precluding courts
from granting summary judgment for a non-moving party except
as to issues raised by the motion.
WellPoint, Inc., 38 N.E.3d at 984 (citations omitted).
[10] As in WellPoint, here, the Defendants moved for summary judgment and the
Plaintiffs were the non-moving party. With their motion the Defendants
defined the scope of the issues to be addressed and were under no obligation to
raise all of their affirmative defenses, including their limitations defense. The
trial court was likewise limited to addressing only those issues presented by the
Defendants as the moving party. See id.; T.R. 56(B). The Defendants did not
raise the statute of limitations defense in their motion. In the absence of a
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 7 of 10
motion for summary judgment filed by the Plaintiffs as to the issue of liability,
the Defendants were under no obligation to present their limitations defense.
[11] We now address whether the Defendants’ duty to present their limitations
defense was triggered by the Plaintiffs’ response to the Defendants’ first
summary judgment motion. As our Supreme Court has before acknowledged,
there is a line of cases “holding that a party is required to assert affirmative
defenses in response to a motion for summary judgment that would dispose of
the case or a motion for partial summary judgment that would establish
liability.” Reiswerg v. Statom, 926 N.E.2d 26, 31 (Ind. 2010). The Defendants
do not dispute this rule of law, but rather argue that the Plaintiffs never filed a
motion for summary judgment so as to trigger the Defendants’ duty to raise
their limitations defense.
[12] In arguing that their response constituted a cross-motion for summary
judgment, the Plaintiffs direct us to the opening paragraph, which provides that
the pleading is their response to Defendants’ “Joint Motion for Summary
Judgment Motion for Summary Judgment.” Appellants’ Appendix at 117. In
their brief on appeal, the Plaintiffs misrepresent this sentence as containing the
word “and” between the references to a motion for summary judgment and
assert that such is a clear reference to their filing of a cross-motion for summary
judgment. See Appellees’ Brief at 12. The word “and” does not appear in the
actual document. It therefore cannot be read as urged by Plaintiffs as a clear
request for summary judgment in their favor.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 8 of 10
[13] The Plaintiffs also point to the last sentence of their response in which they
explicitly request that the court grant their “Cross-Motion for Summary
Judgment.” Appellants’ Appendix at 163. Indiana Trial Rule 56(C) requires the
party seeking summary judgment to serve the motion and any supporting
affidavits in accordance with Ind. Trial Rule 5. The adverse party then has
thirty days after service to serve a response and any opposing affidavits. Id.“When a party moves for summary judgment on the issue of liability, the non-
movant is thereby placed on notice that all arguments and evidence opposing a
finding of liability must be presented to properly resolve that issue.” Reiswerg,
926 N.E.2d at 32 (quoting Pantry, Inc. v. Stop-N-Go Foods, Inc., 796 F.Supp.
1164, 1167 (S.D. Ind. 1992)).
[14] Hiding a request that the trial court grant a cross-motion for summary judgment
in the last sentence of a response brief is not a proper motion for summary
judgment and does not adequately put a party on notice. For this same reason,
we disagree with any contention that the Plaintiffs’ reference to their purported
cross-motion for summary judgment during the hearing on Defendants’ first
motion for summary judgment was sufficient to trigger the Defendants’ duty to
raise their limitations defense. We agree with the Defendants that the Plaintiffs
did not file a cross-motion for summary judgment.
[15] To be sure, the Plaintiffs response was just that—a response. The Plaintiffs’
references throughout their response that they were entitled to summary
judgment or that certain claims should be resolved in their favor “[a]s a matter
of law” are likewise responses to the claims raised in Defendants’ summary
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 9 of 10
judgment motion. See, e.g., Appellants’ Appendix at 159, 162. Such responses are
not evidence that the Plaintiffs’ were seeking summary judgment outside the
scope of claims raised by the Defendants. Absent a proper motion for summary
judgment seeking to establish liability, the Defendants’ duty to present their
limitations defense was not triggered.
[16] As noted above, in defining the scope of the issues, the Defendants did not raise
the statute of limitations defense. That issue was therefore not before the court.
Thus, the trial court’s determination that the Defendants waived their
limitations defense was erroneous. We therefore reverse the trial court’s grant
of partial summary judgment in favor of the Plaintiffs on the issue of waiver of
the Defendants limitations defense.
[17] Judgment reversed and remanded.
[18] Robb, J., concur in result without opinion.
[19] Barnes, J., concur.
Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 10 of 10