Budget Car Sales v. Stott

• Decision Date: 20 September 1995
• Docket Number: No. 11A04-9403-CV-114,11A04-9403-CV-114
• Citation: 656 N.E.2d 261
• Parties: BUDGET CAR SALES, Appellant (Defendant Below), v. Ralph STOTT, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 261

656 N.E.2d 261

BUDGET CAR SALES, Appellant (Defendant Below), v. Ralph STOTT, Appellee (Plaintiff Below).

No. 11A04-9403-CV-114.

Court of Appeals of Indiana.

Sept. 20, 1995.

Transfer Denied March 12, 1996.

G. Max Rettig, Indianapolis, for Appellant.

Max E. Goodwin, Mann, Chaney, Johnson, Goodwin & Williams, Terre Haute, for Appellee.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Budget Car Sales appeals the jury's judgment for Ralph Stott in his action against Budget for fraud and its award to Stott of punitive damages. We affirm in part, reverse in part and remand.

ISSUES

1. Whether the award of punitive damages was erroneous.

2. Whether a remark of Stott's counsel in his closing statement requires reversal for a new trial.

3. Whether evidence was improperly admitted, warranting a new trial.

FACTS

On Saturday, April 2, 1988, sixty-six year old Ralph Stott, his sixty-two year old wife, and their daughter Christina were driven to the Terre Haute lot of Budget Car Sales by Christina's husband Anthony. Budget salesman Arsalan Sayyah offered to help them. The Stotts looked at a 1986 Chevrolet Cavalier. The car bore no indication of its price. Because Budget advertised a minimum $3,500 trade-in, the Stotts sought to verify that that applied. Sayyah repeatedly informed them the $3,500 trade-in did not apply to the Cavalier. ¹ Mr. Stott was on disability, suffered from scleroderma (which Mrs. Stott described as "a disease from plastic") and black lung disease, and he had been advised not to drive because of his medication. Anthony took the Stotts for a test drive in the Cavalier. Mr. Stott told Sayyah that if he bought the car, new tires would have to be provided.

Mr. and Mrs. Stott went into the Budget office with Sayyah. Mr. Stott signed an "Offer to Purchase" prepared by Sayyah, which specified "4 new tires," "$5800 trade diff," and the trade-in of his unseen but described 1977 Plymouth Volare. (R. 724). The offer was accepted and approved by the lot manager, Paul Clay. Stott's offer to purchase also said "payments of $150 @ mo.," so Clay had Sayyah fill out a credit application with Mr. Stott. The Stotts provided the personal information, credit references and details of their automobile insurance coverage for Sayyah to write on the form. Mr. Stott signed the application. Next Sayyah completed a "Special Conditions of Sale" form, stating "4 new tires" and "no warranty," which Mr. Stott signed. (R. 746). Sayyah also witnessed Mr. Stott sign a statement verifying disclosure that the vehicle was "As Is-No Warranty." (R. 743, 749).

The Stotts then met with Janice Crowley, Budget's "finance and insurance manager." (R. 880). Crowley would elicit necessary information from car buyers, input the specifics provided into a computer, print the resulting documents, and then obtain necessary customer signatures. Crowley prepared the Used Vehicle Purchase Contract, showing the "amount to be financed by purchaser" as $6,768.95; Mr. Stott signed it. (R. 900, 279). Crowley prepared a "Retail Sales Contract, Security Agreement and Truth In Lending Disclosure" for financing on the $6,768.95; Mr. Stott signed it. Both the Purchase Contract and the Retail Sales Contract included $899 for a service contract in the total price calculation. ² Crowley gave Mr. Stott a warranty certificate for his service contract, indicating "deluxe" coverage for the "earlier of 36 months or 36,000 miles." (R. 925). This was the "less expensive" option available. (R. 928). Mrs. Stott tendered a check, signed with Mr. Stott's name, for $290. The Stotts left Budget with the 1986 Cavalier and copies of their paperwork. Mr. Stott's credit application was faxed to the bank and approved that same day.

The Stotts did not realize Mr. Stott had bought the car until that evening when they read the documents Mr. Stott had signed. They thought Mr. Stott had merely completed forms applying for a loan and that they had three days in which to consider, within which they could return the car. Budget was closed when they tried to call, not opening again until Monday morning. On Monday Mr. Stott's granddaughters took him, with the Cavalier and the Volare, to the Budget lot. They departed with only the Cavalier.

Two days later Mr. and Mrs. Stott consulted an attorney. The attorney wrote a letter to manager Clay at the Budget lot, stating his belief that Mr. Stott "was under a mental incompetency when he entered into this contract and the contract is void" and suggesting Budget agree to accept the Cavalier "in return for recission [sic] of the contract." (R. 424). Budget declined, responding that "[t]here is absolutely no evidence that Mr. Stott was not fully competent and aware of his acts on the day of sale." (R. 427).

On June 8, 1989, Ralph Stott filed a complaint alleging fraud on the part of Budget. Trial was held over five days near the end of 1993. Mr. Stott, Mrs. Stott and Christina testified, but Anthony did not, as his whereabouts were unknown. Since 1988 Mr. Stott had suffered a stroke and major deterioration of his eyesight. His testimony reveals his frequent inability to remember details of the April 1988 visit to the car lot. However, both Mrs. Stott and Christina denied he was subject to confusion or lack of comprehension on that day. Mr. Stott said he did not read the documents he signed, but he was not prevented from doing so. There was no testimony from Mr. Stott, Mrs. Stott or Christina that Sayyah, or any other Budget personnel, quoted them a specific price for the Cavalier; all three did say Sayyah told them a service warranty could be obtained for $300. An advertisement in the local paper indicated the Cavalier was specially priced at $4,995 on April 2nd, the day of purchase. According to Sayyah's and Clay's undisputed testimony, Mr. Stott made the offer of $5,800, subject to certain conditions, for the car. Both Sayyah and Clay testified they were unaware during the Stott visit that the car was specially priced in the ad and said Mr. Stott would have paid more for the car had they applied the advertised price. The jury returned a verdict for Mr. Stott and against Budget, assessing $4,041.22 compensatory damages and $150,000 punitive damages. Budget filed a Motion to Correct Errors, which was overruled by the trial court.

DISCUSSION AND DECISION

At the outset, we note that Budget's appeal propounds four issues. Two of those issues challenge the award of punitive damages. By only challenging the punitive damages awarded, Budget's appeal bears the implicit concession that the compensatory damages awarded are not unreasonable. Further, Budget states that:

[a]lthough Budget does not agree with the jury's apparent finding that Budget misrepresented the various terms of the transaction Budget acknowledges, as it must, that viewing the evidence most favorable to the prevailing party, the record can be said to support a conclusion that the misrepresentations did occur. Therefore, Budget does not challenge this aspect of the jury's verdict.

Budget's Brief at 45. An issue not argued in an appellant's brief is deemed waived. See, e.g., Foster v. State (1974), 262 Ind. 567, 320 N.E.2d 745; Harris Builders, Inc. v. Kopp (1974), 160 Ind.App. 354, 311 N.E.2d 841; see, also, Ind.Appellate Rule 8.3. Accordingly, review as to the sufficiency of the evidence to support the award of compensatory damages has been waived.

1. Punitive Damages

Budget asserts that the "jury's award of punitive damages of $150,000, or any amount, was patently excessive and contrary to law in light of the facts of this case." Budget's Brief at 26 (emphasis in original).

In reviewing a punitive damages judgment, we consider only the probative evidence and reasonable inferences supporting it, without weighing evidence or assessing witness credibility; we affirm if a reasonable trier of fact could find such damages proven by clear and convincing evidence. Bud Wolf Chevrolet, Inc. v. Robertson (1988), Ind., 519 N.E.2d 135, 137. Justice Prentice's analysis of punitive damages in a tort action in Orkin Exterminating Co., Inc. v. Traina (1986), Ind., 486 N.E.2d 1019, is a helpful starting point. Punitive damages are distinguished as those "designed to punish the wrongdoer and to dissuade him and others from similar conduct in the future." Orkin at 1022. Because they are awarded "in addition to" damages which compensate for the specific injury, the injured party "has already been awarded all that he is entitled to as a matter of law." Id. Therefore, the additional damages awarded are "a windfall, and in making that decision all thoughts of benefiting the injured party should be laid aside and the sole issues are whether or not the Defendant's conduct was so obdurate that he should be punished for the benefit of the general public." Id. Thus, the "evidentiary requirement" from Travelers Indemnity Co. v. Armstrong, (1982), Ind., 442 N.E.2d 349, 362, demands any reasonable "hypothesis that the tortious conduct was the result of a mistake of law or fact, honest error of judgment, overzealousness, mere negligence or other such noniniquitous human failing" be excluded. Orkin at 1023 (citations omitted). The evidentiary requirement was restated in Erie Ins. Co. v. Hickman (1993), Ind., 622 N.E.2d 515, 520: showing by:

clear and convincing evidence that the defendant 'acted with malice, fraud, gross negligence, or oppressiveness which was not the result of a mistake of fact or law, honest error or judgment, overzealousness, mere negligence, or other human failing.' (Citation omitted). Thus, the mere finding by a preponderance of the evidence that the insurer committed the tort will not, standing alone, justify the imposition of punitive damages.

To review Budget's conduct against the standard, we look first to the pleadings and court instructions to identify the gravamen of the fraud litigated. According to our Trial Rules, a party must specifically aver the circumstances...