Chrysler Corp. v. Reeves

• Decision Date: 22 May 1980
• Docket Number: No. 3-477A107,3-477A107
• Parties: CHRYSLER CORPORATION, Appellant (Defendant Below), v. Edward REEVES, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 1147

404 N.E.2d 1147

CHRYSLER CORPORATION, Appellant (Defendant Below), v. Edward REEVES, Appellee (Plaintiff Below).

No. 3-477A107.

Court of Appeals of Indiana, Fourth District.

May 22, 1980.

Joel C. Levy, Thomas J. Hall, Singleton, Levy & Crist, Highland, for appellant.

Stephen H. Meyer and William J. McIlwain, Chudom & Meyer, Schererville, for appellee.

YOUNG, Judge.

The judge of the Newton Circuit Court has delivered judgment on the issue of liability against the Chrysler Corporation and in favor of Edward Reeves as a penalty for Chrysler's violation of discovery orders in a suit by Reeves against Chrysler and its dealer for breach of contract and damages an action arising out of the sale of a used car. Whether a contract was breached or damages due was disputed. If we affirm, the sole issue remaining for trial is what damages are due Reeves.

Suit was filed September 12, 1973, and the amended complaint answered by Chrysler January 17, 1974. In October 1974 Reeves filed a number of interrogatories to be answered by Chrysler one of which, number 29, asked that the Corporation tell Reeves the number of complaints by customers to Chrysler during 1971 and 1972 concerning ignition and electrical wiring difficulties of 1972 model year Chrysler automobiles. The question asked Chrysler to provide (a) the date of the complaint; (b) the precise nature of each complaint; (c) the names and addresses of the persons making the complaint and; (d) the precise nature of the action taken by Chrysler in response to each complaint. Chrysler objected to the question on the grounds of irrelevancy.

After a hearing before the trial judge, Chrysler's objection was overruled and the interrogatory was ordered to be answered. However, the trial judge told Chrysler that if responding to the inquiry proved too burdensome, he would reconsider his ruling. In Chrysler's view, it was thought to be too burdensome. Thus Chrysler, under our rules, filed a motion for a protective order seeking to limit discovery and its duty to respond to the question reporting that in order to find the facts sought by the interrogatory it would be necessary to examine each of 1,062,380 claims made regarding 1972 models to determine whether the claim concerned either (1) ignition difficulties or (2) electrical wire malfunction. Such research according to Chrysler would involve total man hours in a range of 44,523 and 88,505. At a wage rate of $6.95 per hour, the cost of such research was estimated to be between a low of $294,283 and a high of $555,556. This estimate did not include the cost of paper or computer time. These facts, although probably peculiar to Chrysler's knowledge, were undisputed. (Reeves' complaint contains a prayer for $7500 compensatory and $10,000 punitive damages.) Chrysler argued that such a search was burdensome and oppressive and if ordered, Reeves should pay the cost in advance. The motion for protective order was overruled. Chrysler asked the trial judge to reconsider overruling its motion for protective order. The trial judge took the matter under advisement. While the matter was under advisement, Chrysler filed an affidavit of its manager of warranty registration which, in substance, recited the above facts under oath. Again, the truth of the facts contained in the affidavit was not disputed by Reeves.

After considering the matter from September 17, 1975, until October 22, 1975, the trial court overruled Chrysler's motion to reconsider and ordered the interrogatory answered with the statement "the court does not require a complete computer runout as counsel contemplates; a simple statement of counsel for defendant Chrysler Corporation, based upon reasonable certainty, or information and belief will suffice." (Our emphasis.) Whether this was intended to modify the interrogatory or was a judicial aside is unclear to us, and must have been unclear to Chrysler, also. There is nothing in the record to indicate what counsel may have contemplated in this respect. Nonetheless, Chrysler answered the interrogatory responding that its search of its records involved a random selection of warranty repair orders on 1972 Chrysler vehicles. It attached copies of 12 separate warranty orders gleaned from its search. The orders were derived from a microfilm history file and copied.

Reeves, unsatisfied, filed his Motion for Default or Sanctions asking that Chrysler be held in contempt and that it be penalized for violating orders of the trial court regarding the discovery procedure. Arguments on the Motion for Default and for Sanctions was held on March 22, 1976. On March 29, 1976, the trial court ruled that Chrysler had indeed violated the rules of discovery entering a default judgment against Chrysler on the issue of the liability alleged in Reeves' suit and for attorney's fees in the sum of $500. The remaining issue of damages was reserved for trial by jury.

Chrysler initiated the appellate process by filing a Motion to Correct Errors dated June 25, 1976. The trial court overruled this motion stating that "it (the trial court) had made every effort to assist the parties but that Chrysler after being advised that a random sampling would be acceptable failed to inform the court or counsel for the plaintiff what method of sampling was made by the company." No where in the record can we find this judicial direction. (This is the first mention by the trial court on the record that a random sample would suffice.) The trial court also stated that "to date no information was given to the (trial) court or the plaintiff as to how the samples were taken." (Our emphasis.) Again the record is silent regarding any order of the trial court in this regard. In response, Chrysler filed a second Motion to Correct Errors attaching the affidavit of its manager of Service Systems and Operations to the effect that he had supervised the "vehicle history file" for the period in question. He further stated that the computer printout of labor operations for wiring and ignition complaints consisted of 10,000 pages listing 228,000 electrical, 49,000 wiring and 17,000 ignition complaints. This search selected a random sample of one warranty repair order for every 25,000 claims.

The trial court overruled this second Motion to Correct Errors with the comment that the information presented in the affidavit "might have prevented the trial court's adverse ruling upon Chrysler's first Motion to Correct Errors, but subsequent filing of the information does not cure the original defect." (Our emphasis.) Again, the meaning and logic of this statement escapes us. Now having information before him that Chrysler's so-called non-compliance was explained, it would seem to remedy the earlier default. What the "original defect" was is unclear. Was it in not furnishing the data sought by number 29? or the "simple statement of counsel based upon reasonable information and belief?" From the overruling of this Motion to Correct Errors Chrysler initiated the appeal process.

Chrysler followed the normal appellate procedure for appealing from a final judgment. Reeves filed a Motion to Dismiss or Affirm and a brief in support of that motion at the same time its brief on the merits was filed. The Motion to Dismiss or Affirm argued that the order entering the partial default judgment was interlocutory citing Schenkel v. Citizens State Bank, (1967) 140 Ind.App. 558, 224 N.E.2d 319. The Court of Appeals denied Reeves' Motion to Dismiss or Affirm and suspended consideration of the appeal so that the trial court could "finalize" its judgment against Chrysler Corporation as provided in Trial Rule 54(B). Reeves petitioned for a rehearing on the denial of its Motion to Dismiss or Affirm. The Petition for Rehearing was denied and mention is made of the filing of a petition seeking transfer. The Clerk of the Supreme Court has no record of such filing and therefore we assume that that petition was not filed. The trial court "finalized" its judgment in compliance with the order of the Court of Appeals and Chrysler thereafter filed a third Motion to Correct Errors (as directed by the Court of Appeals) which was overruled the same day. This appeal is from the overruling of that motion to correct errors. ¹

Chrysler comes to us appealing that (1) the imposition of the sanction of default on the issue of liability was contrary to law; (2) the trial court erred in entering sanctions for failure of Chrysler to comply with the trial court's orders to answer the interrogatory for the reason that the interrogatory is irrelevant; and that the trial court erred in requiring Chrysler to answer an interrogatory that by its terms was oppressive and required Chrysler to engage in burdensome and expensive research into its own business records in order to give an answer; (3) the trial court erred in its finding that Chrysler failed to make a good faith effort to comply with its orders regarding the interrogatory; (4) the trial court erred in awarding attorney's fees; (5) the trial court erred in finding that Chrysler failed to comply with its order for the reason that the order was ambiguous, contradictory and impossible to comprehend; (6) the trial court erred in finding that Chrysler failed to inform the trial court or counsel for plaintiff what method of sampling was selected.

The judgment of the trial court is contrary to law in that there was no violation of the rules of discovery in this instance that would warrant the imposition of sanctions. As first posed, interrogatory 29 was a plain request for information from Chrysler from its company records. The subsequent comments of the trial court created an ambiguity which so detracted from the contents of the interrogatory as to make it contradictory and impossible to comprehend. Chrysler answered the interrogatory by a random sample a method apparently directed by the trial court and then was told the answer was incomplete because no method of...