Adam Boots v. D. Young Chevrolet, LLC d/b/a Penske Chevrolet, and Capital One Auto Finance, Inc. , 93 N.E.3d 793 ( 2018 )

FILED
Feb 01 2018, 7:54 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES
Robert E. Duff Donn H. Wray
Fishers, Indiana Stoll Keenon Ogden PLLC
Indianapolis, Indiana
Amicus Curiae Automobile Dealers
Association of Indiana, Inc.
Ronald C. Smith
Jeffrey B. Halbert
Joel T. Nagle
Bose McKinney & Evans, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Adam Boots, February 1, 2018
Appellant-Plaintiff, Court of Appeals Case No.
29A04-1708-PL-1948
v. Appeal from the Hamilton
Superior Court
D. Young Chevrolet, LLC d/b/a The Honorable William J. Hughes,
Penske Chevrolet, and Capital Judge
One Auto Finance, Inc., Trial Court Cause No.
Appellees-Defendants. 29D03-1609-PL-8347
Riley, Judge.
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 1 of 15
STATEMENT OF THE CASE
[1] Appellant-Plaintiff, Adam Boots (Boots), appeals the trial court’s summary
judgment in favor of Appellees-Defendants, D. Young Chevrolet, LLC d/b/a
Penske Chevrolet (Penske Chevrolet), and Capital One Auto Finance, Inc.
(Capital One), on Boots’ fraud claim and claim under the Indiana Buyback
Vehicle Disclosure Law. 1
[2] We reverse and remand for further proceedings.
ISSUES
[3] Boots presents us with two issues on appeal, which we restate as:
(1) Whether the trial court erred in granting summary judgment on Boots’
claim under the Indiana Buyback Vehicle Disclosure Law, and
(2) Whether the trial court erred in issuing summary judgment on Boots’
fraud claim.
FACTS AND PROCEDURAL HISTORY
[4] In June of 2015, Boots, who lived in Kensington, Maryland, became interested
in the purchase of a Chevrolet Corvette. After researching the retail prices of
Corvettes advertised online, he became interested in a black 2005 Corvette,
advertised for sale online by Penske Chevrolet, an automobile dealership
1
We acknowledge that the Automobile Dealers Association of Indiana appeared as Amicus Curiae in
support of Penske Chevrolet and filed its own brief on appeal.
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 2 of 15
located in Indianapolis, Indiana. Boots contacted Penske Chevrolet by email
and communicated with Paul Fiene (Fiene), a salesperson employed by Penske
Chevrolet. Over the next several days, Boots and Fiene had extensive email
and telephone conversations about the history and condition of the Corvette.
They tentatively agreed on a “good price for the year, mileage and options of
this Corvette—which is why [Boots] was interested in it—but it was not so low
that it signaled to [him] that something was amiss.” (Appellant’s App. p. 79).
[5] On June 6, 2015, Boots travelled from Maryland to Indiana. When he arrived
at Penske Chevrolet, Boots conducted a test drive and inspected the Corvette.
The Corvette “did not exhibit any defects” or “significant problems.”
(Appellant’s App. p. 79). Boots agreed to purchase the Corvette and insisted on
the price previously negotiated. Fiene reluctantly agreed, “saying in a good-
natured way that by insisting on that price [Boots] was taking away all his
commission.” (Appellant’s App. p. 79). The two shook hands and Fiene told
Boots that “from one veteran to another[], I will take care of you.” (Appellant’s
App. p. 79). Boots was then escorted into the office of a finance employee to
review the purchase paperwork.
[6] While Boots was signing the documents, Fiene entered the office carrying the
Corvette’s Carfax vehicle history report. Pointing to a particular section on the
report, Fiene told Boots that shortly after the vehicle was new, it became a
manufacturer buyback. Fiene indicated that even though the car had a “lemon”
history, the vehicle had been repaired and everything “was fine now.”
(Appellant’s App. p. 80). Fiene wanted Boots to sign a document related to the
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 3 of 15
lemon history. Boots stopped signing the paperwork and inquired whether the
Corvette “had a rebuilt title.” (Appellant’s App. p. 80). Boots “believed that
the value of the Corvette would not be substantially impaired unless it had a
branded certificate of title.” (Appellant’s App. p. 80). Fiene “responded that it
did not and that everything with the certificate of title was fine.” (Appellant’s
App. p. 80). When Boots asked Fiene to put that in writing, Fiene replied that
he would have to “ask his boss.” (Appellant’s App. p. 80).
[7] Shortly thereafter, Fiene returned and gave Boots a ‘WE OWE’ form, signed by
Fiene, which included the statement “[a]s per request we are stating that the
State of Indiana did not brand the title to this 2005 Corvette.” (Appellant’s
App. p. 82). With this assurance, Boots agreed to continue with the purchase
and signed the remaining paperwork. In August 2016, Boots intended to trade
in the Corvette and learned at the dealership in his home state, who had
consulted the vehicle’s Carfax history, that the Indiana certificate of title had a
buyback vehicle brand.
[8] On September 23, 2016, Boots filed a Complaint against Penske Chevrolet and
Capital One, 2 alleging common law fraud arising out of the purchase of a motor
vehicle, a violation of Indiana’s Buyback Vehicle Disclosure Law, and for
breach of the implied warranty of title under the Magnuson-Moss Warranty
2
Boots’ claim against Capital One is based on liability it contractually assumed as assignee and holder of the
Retail Installment Agreement entered into between Penske Chevrolet and Boots. Because Capital One’s
liability is derivative of Penske Chevrolet’s liability, both parties will be assumed as one for purposes of this
opinion.
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 4 of 15
Act. 3 On March 22, 2017, Penske Chevrolet filed a motion for summary
judgment on Boots’ allegations. On May 24, 2017, Boots responded in
opposition to Penske Chevrolet’s motion for summary judgment and filed his
own motion for partial summary judgment on the liability elements of his
claims against Penske Chevrolet. On July 25, 2017, the trial court conducted a
hearing on the motions. Thereafter, on August 1, 2017, the trial court
summarily granted judgment on Penske Chevrolet’s motion and denied Boots’
motion for partial summary judgment.
[9] Boots now appeals. Additional facts will be provided as necessary.
DISCUSSION AND DECISION
Standard of Review
[10] In reviewing a trial court’s ruling on summary judgment, this court stands in the
shoes of the trial court, applying the same standards in deciding whether to
affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,
891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we
must determine whether there is a genuine issue of material fact and whether
the trial court has correctly applied the law. Id. at 607-08. In doing so, we
consider all of the designated evidence in the light most favorable to the non-
moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if
3
Boots has abandoned his claim pursuant to the Magnuson-Moss Warranty Act on appeal.
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 5 of 15
it helps to prove or disprove an essential element of the plaintiff’s cause of
action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an
opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins.
Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant
of summary judgment has the burden of persuading this court that the trial
court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607.
When the defendant is the moving party, the defendant must show that the
undisputed facts negate at least one element of the plaintiff’s cause of action or
that the defendant has a factually unchallenged affirmative defense that bars the
plaintiff’s claim. Id. Accordingly, the grant of summary judgment must be
reversed if the record discloses an incorrect application of the law to the facts.
Id.[11] We observe that, in the present case, the trial court did not enter findings of fact
and conclusions of law in support of its judgment. Special findings are not
required in summary judgment proceedings and are not binding on appeal.
AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48 (Ind. Ct.
App. 2004). However, such findings offer this court valuable insight into the
trial court’s rationale for its review and facilitate appellate review. Id. The fact
that parties filed cross-motions for summary judgment does not alter our
standard of review. Ind. Farmers Mut. Ins. Group, 727 N.E.2d at 15.
II. Indiana’s Buyback Vehicle Disclosure Law
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 6 of 15
[12] As an issue of first impression, Boots relies on the explicit provisions of
Indiana’s Buyback Vehicle Disclosure Law to contend that the statute applies to
any sale of a buyback vehicle, regardless whether it is an initial sale after
repurchase by the manufacturer or any resale thereafter. Accordingly, he posits
that the trial court erred by limiting the application of the statute to the initial
resale of the vehicle only.
[13] To decide this issue, it is necessary to interpret the Buyback Vehicle Disclosure
Law, encapsulated in Indiana Code chapter 24-5-13.5. Where, as here, the
relevant facts are not in dispute and the interpretation of a statute is at issue,
such statutory interpretation presents a pure question of law for which summary
judgment disposition is appropriate. Clem v. Watts, 27 N.E.3d 789, 791 (Ind.
Ct. App. 2015). When construing statutes, our primary goal is to determine
and give effect to the intent of the legislature. Moryl v. Ransone, 4 N.E.3d 1133,
1137 (Ind. 2014). When a statute is clear and unambiguous, we apply words
and phrases in their plain, ordinary and usual sense. Anderson v. Gaudin, 42
N.E.3d 82, 85 (Ind. 2015). When a statute is susceptible to more than one
interpretation, it is deemed ambiguous and thus open to judicial construction.
Id. When faced with an ambiguous statute, we examine the statute as a whole,
reading its sections together so that no part is rendered meaningless if it can be
harmonized with the remainder of the statute. Id. We do not presume that the
Legislature intended language used in a statute to be applied illogically or bring
about an unjust or absurd result. Id.Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 7 of 15
[14] The Buyback Vehicle Disclosure Law is part of Indiana’s overarching Motor
Vehicle Protection Act, which has as its underlying purpose to give buyers safe
and dependable automobiles and to induce manufacturers to improve the
quality of their products and service. See Harold Greenberg, The Indiana Motor
Vehicle Protection Act of 1988: The Real Thing for Sweetening the Lemon or Merely a
Weak Artificial Sweetener, 22 Ind. L. Rev. 57 (1989). Pursuant to the express
terms of the statute, the Indiana Buyback Vehicle Disclosure Law applies to
“[a]ll motor vehicles that are sold, leased, transferred, or replaced by a dealer or
manufacturer in Indiana.” Ind. Code § 24-5-13.5-1. More specifically, a
buyback vehicle, also known as a ‘lemon,’ is defined, in pertinent part, as “a
motor vehicle that has been replaced or repurchased by a manufacturer or a
nonresident manufacturer’s agent or an authorized dealer,” and that suffers
from nonconformities or defects pursuant to I.C. § 24-5-13-8. I.C. § 24-5-13.5-3.
A buyback vehicle may not be resold in Indiana unless the following conditions
have been met:
(1) The manufacturer provides the same express warranty the
manufacturer provided to the original purchaser, except that
the term of the warranty need only last for twelve thousand
(12,000) miles or twelve months after the date of resale.
(2) The following disclosure language must be conspicuously
contained in a contract for the sale or lease of a buyback
vehicle to a consumer or contained in a form affixed to the
contract:
“IMPORTANT
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 8 of 15
This vehicle was previously sold as new. It was subsequently
returned to the manufacturer or authorized dealer in exchange
for a replacement vehicle or a refund because it did not
conform to the manufacturer’s express warranty and the
nonconformity was not cured within a reasonable time as
provided by Indiana law.”
(3) The manufacturer provides the dealer a separate document
with a written statement identifying the vehicle conditions
that formed the basis for the previous owner’s or lessee’s
dissatisfaction and the steps taken to deal with that
dissatisfaction in 10-point all capital type.
I.C. § 24-5-13.5-10. Prior to “reselling a buyback vehicle in Indiana, a dealer
must provide the buyer the express warranty required by section 10(1) 4 of this
chapter and the written statement of disclosure required by section 10(3) of this
chapter and obtain the buyer’s acknowledgment of this disclosure at the time of
sale or lease as evidenced by the buyer’s signature on the statement of
disclosure.” I.C. § 24-5-13.5-11. Consistent with Indiana law, the face of a
certificate of title of a buyback vehicle must be branded with the statement
“Manufacturer Buyback – Disclosure on File.” I.C. § 9-17-3-3.5.
4
We acknowledge Penske Chevrolet’s argument that Boots omitted to raise the issue of the express warranty
until his reply brief on summary judgment. However, in his Complaint, Boots generally argued that Penske
Chevrolet “violated the Indiana Buyback Vehicle Disclosure Law” and during the proceedings Penske
Chevrolet conceded to not having provided Boots with the express warranty. See, e.g., Transcript p. 6 (“And
we did fail to provide it.”).
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 9 of 15
[15] Referencing a statement on the Attorney General’s website, 5 Penske Chevrolet,
supported by Amicus, now attempts to create an ambiguity by interjecting a
requirement in the statutory language that the written disclosure and extended
warranty only apply the first time a dealer sells a buyback vehicle after it was
refurbished by the manufacturer. However, we cannot read into the statute
something that is simply not there. Nowhere in the statutory language did the
Legislature include a limiting provision for the statute’s applicability; rather, the
statute plainly governs all buyback vehicles that “are sold, leased, transferred, or
replaced by a dealer or manufacturer in Indiana” regardless whether this
involves a first resale or the tenth. I.C. § 24-5-13.5-1; See State v. Oddi-Smith, 878
N.E.2d 1245, 1248 (Ind. 2008) (“The best evidence of legislative intent is the
language of the statute itself[.]”). As such, the Legislature unambiguously
ordered that after a buyback vehicle has been corrected by the manufacturer, it
“may not be resold” unless the dealer provides the extended warranty and
discloses the vehicle’s condition to the buyer with the written statement.
5
The Attorney General’s statement reads, in pertinent part, as follows:
The manufacturer is required to obtain a new title with a brand or stamp: “Manufacturer
Buyback-Disclosure On File.” This stamp or brand should remain on the vehicle’s title for
the life of the vehicle. The first time a dealer sells a replaced or repurchased lemon, the
dealer must provide the buyer with:
- Written notice, at the time of sale, that the vehicle was repurchased or replaced under the
Lemon Law, and
- A 12-month or 12,000 mile manufacturer’s warranty.
http://www.in.gov/attorneygeneral/2544.htm (last visited Jan. 18, 2018) (emphasis added).
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 10 of 15
Accordingly, as Penske Chevrolet admitted to not having provided Boots with
the disclosure statement and extended warranty, Penske Chevrolet violated the
statute.
[16] In an effort to avoid a reversal of the trial court’s decision, Penske Chevrolet
alleges that “Boots knew the Corvette was a Lemon Law buyback before he
decided to purchase it.” (Appellee’s Br. p. 13). In support, Penske Chevrolet
points to Boots’ Complaint, in which Boots concedes that after he arrived in
Indiana and had agreed to purchase the Corvette, “Penske [Chevrolet] then
orally advised [Boots] that the Corvette had previously been a lemon buyback.”
(Appellant’s App. p. 8). However, knowledge by the buyer is not an avenue to
avoid the application of the statute as the statutory requirements of the written
disclosure statement and extended warranty are imposed on the dealer
regardless of the buyer’s prior knowledge. Therefore, we reverse the trial
court’s entry of summary judgment for Penske Chevrolet on the issue of the
Buyback Vehicle Disclosure Law and enter summary judgment for Boots.
III. Fraud
[17] Next, Boots contends that his uncontroverted designated evidence establishes
that Penske Chevrolet committed fraud during the sale of the Corvette.
Pointing to the ‘We Owe’ form, Boots claims that “Penske Chevrolet gave
Boots knowingly false information in order to complete the sale,” as it “knew
that the sale may not go through if it did not assure [Boots] that the title was
clean.” (Appellant’s Br. pp. 15-16).
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 11 of 15
[18] As noted by our supreme court, the elements of common law fraud are “(1) a
material misrepresentation of past or existing fact which (2) was untrue, (3) was
made with knowledge or in reckless ignorance of its falsity, (4) was made with
the intent to deceive, (5) was rightfully relied upon by the complaining party,
and (6) which proximately caused the injury or damage complained of.”
Kesling v. Huber Nissan, Inc., 997 N.E.2d 327, 335 (Ind. 2013). “Fraud is not
limited only to affirmative representations; the failure to disclose all material
facts can also constitute actionable fraud. Id. In particular, “[w]hen a buyer
makes inquiries about the condition, qualities, or characteristics of property,”
the seller must “fully declare any and all problems associated with the subject of
the inquiry,” or else risk liability for fraud. Id. (citing Lawson v. Hale, 902
N.E.2d 267, 275 (Ind. Ct. App. 2009)).
[19] Those settled principles are enough for Boots’ fraud claim to survive summary
judgment. The uncontroverted designated evidence reflects that while Boots
had started signing the paperwork, leading to the purchase of the Corvette,
Fiene approached Boots with the Carfax report and informed him that “shortly
after it was new the vehicle became a manufacturer buyback. It was then fixed,
he said, and everything with the vehicle was fine now.” (Appellant’s App. p.
80). At that point Boots stopped signing the paperwork and inquired whether
the Corvette had a rebuilt title. Fiene responded that “everything with the
certificate of title was fine.” (Appellant’s App. p. 80). After Fiene presented
Boots the ‘WE OWE’ form which included the statement that “the State of
Indiana did not brand the title to this 2005 Corvette,” Boots was assured that
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 12 of 15
the value of the Corvette would not be substantially impaired and continued to
sign the purchase documents. (Appellant’s App. p. 82). More than a year later,
Boots discovered that the Corvette’s title was branded as a buyback.
[20] Similarly, there is evidence to support an inference that Fiene knew his
statements to be false, but made them anyway with intent to deceive Boots.
Fiene had the Carfax report in his hand and was consulting it when informing
Boots that the Corvette had a “lemon history.” (Appellant’s App. p. 80). That
same Carfax report was used more than a year later by a dealership to advise
Boots that the title to his Corvette was branded. Furthermore, even though
Boots specifically inquired after the condition of the vehicle’s title, Fiene
assured him that it was “fine.” (Appellant’s App. p. 80). While, admittedly
Boots asked whether the Corvette’s title had been “rebuilt,” Fiene’s omission to
inform Boots of the buyback brand on the certificate of title runs afoul of the
related duty to “fully declare any and all problems associated with the subject
of” a buyer’s inquiry “about the condition, qualities or characteristics of
property.” Lawson, 902 N.E.2d at 275.
[21] Referencing the in pari delicto theory, Penske Chevrolet contends that Boots
“sought to obtain a certificate of title devoid of the required buyback brand,
presumably in order to benefit himself at the expense of the next down-stream
purchaser.” (Appellee’s Br. p. 18). “So irrespective of the ‘We Owe’ document
given to Boots, he can maintain no claim under color of its assurances, which
were contrary to law at his request.” (Appellee’s Br. p. 19).
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 13 of 15
[22] The doctrine known by the Latin phrase in pari delicto literally means ‘of equal
fault.’ Theye v. Bates, 337 N.E.2d 837, 844 (Ind. Ct. App. 1975), reh’g denied. It
is characterized as “[p]laintiffs who are truly in pari delicto are those who have
themselves violated the law in cooperation with the defendant.” Id. In other
words, “where the wrong of both parties is equal, the position of the defendant
is stronger.” Id. This maxim, applicable to the law of contracts, signifies that
neither court of equity nor one of law will provide a remedy where such a
situation is presented. Id.The existence or nonexistence of confidential relations between
the parties in fault is an important element in determining
whether they are in pari delicto. There are numerous cases in
which conveyances were set aside, notwithstanding the illegality
of the original transaction, where it was deemed that, because of
fraud, duress, oppression, imposition, or undue influence, one
party was more guilty than the other in inducing the act. When a
relation of trust or confidence exists, . . ., and the party in whom
trust is reposed has obtained a benefit, the burden will be upon
him to show that the transaction was fair and proper; and relief
will not be denied the one least at fault if he has been led into the
illegal transaction because of ignorance and reliance upon and
trust in the other.
Novak v. Nowak, 25 N.E.2d 993, 994 (Ind. 1940).
[23] Penske Chevrolet did not present this court with any designated evidence
indicating a cooperation between Boots and Fiene to construct an illegal
transaction, let alone evidence from which such cooperation can be inferred.
Rather, the evidence suggests that Boots only sought assurances about the
condition of the title. Fiene told him it was fine. Boots asked to have that
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 14 of 15
documented in writing and Fiene obliged. Boots never requested a title devoid
of the Buyback brand, nor did he ask to change the title. Instead, because he
stopped signing the paperwork, it can be inferred that Boots would have walked
away from the sale if he had been told the title was branded, as it would have
“significantly impair[ed] [the Corvette’s] value.” (Appellant’s App. p. 80).
Because of Fiene’s assurance, Boots was deprived of the opportunity to make
the informed decision of whether to purchase a Corvette with a branded
certificate of title. Accordingly, as there is no genuine issue of material fact that
Penske Chevrolet committed fraud in the sale of the Corvette, we reverse the
trial court’s entry of summary judgment for Penske Chevrolet on Boots’ fraud
claim and enter summary judgment in favor of Boots as a matter of law.
CONCLUSION
[24] Based on the foregoing, we hold that the trial court erred by granting summary
judgement to Penske Chevrolet on Boots’ statutory and fraud claims. We
reverse the trial court’s entry of summary judgment and enter summary
judgment in favor of Boots as a matter of law.
[25] Reversed and remanded for further proceedings.
[26] Baker, J. and Brown, J. concur
Court of Appeals of Indiana | Opinion 29A04-1708-PL-1948 | February 1, 2018 Page 15 of 15