Martin Chevrolet Sales, Inc. v. Dover

• Decision Date: 30 December 1986
• Docket Number: No. 4-485A91,4-485A91
• Citation: 501 N.E.2d 1122
• Parties: MARTIN CHEVROLET SALES, INC., Appellant, v. J. Fred DOVER, Appellee.
• Court: Indiana Appellate Court

Page 1122

501 N.E.2d 1122

MARTIN CHEVROLET SALES, INC., Appellant, v. J. Fred DOVER, Appellee.

No. 4-485A91.

Court of Appeals of Indiana Fourth District.

Dec. 30, 1986.

Timothy W. Woods and Mark J. Phillipoff, South Bend, for appellant.

John C. Hamilton, Parker & Jaicomo, South Bend, for appellee.

MILLER, Judge.

J. Fred Dover, purchaser of a 1980 Monte Carlo new demonstrator automobile, initially sued Martin Chevrolet Sales, Inc., the dealership-seller, and General Motors Corporation, the manufacturer, for fraud and breach of warranties after discovering the Monte Carlo had been damaged and repaired three times before its purchase. GMC settled before the trial for $200.00. The jury returned a general verdict for Dover and against Martin, awarding $2500.00 in compensatory damages and $500.00 in punitive damages. The trial court entered judgment and later granted Dover's request for attorney fees of $9,273.50 pursuant to IND.CODE 26-1-2-721 (attorney fees for fraud).

On appeal, Martin Chevrolet challenges the sufficiency of the evidence; the jury instructions and amount of punitive damages; Dover's witness' testimony on a single similar occurrence; the award of attorney fees; and, the trial court's refusal to reduce Dover's judgment by the amount received in settlement from former defendant GMC.

We affirm the judgment except for the award of punitive damages.

FACTS

Martin Chevrolet Sales, Inc., a car dealership with offices in Bremen, Indiana, received a 1980 Monte Carlo on October 10, 1979. A stock index card and new car packet were prepared, ¹ and the Monte Carlo was assigned stock number 5714. The list price was $7,890.69. On October 16, 1979, the Monte Carlo became a demonstrator and was given to a Martin salesman, Johansen, ² who drove and showed the car to customers.

The Monte Carlo sustained damage and was repaired three times between February and August 1980. First, Johansen had an accident and on February 11, 1980 Cecil Wilson, one of Martin's body shop employees, prepared an estimate for work on the car along the driver's side including the left quarter panel. The work was completed on February 15, 1980 and an invoice was prepared and sent to Martin's Used Car Manager, who charged Johansen $208.16 for the cost of repairs.

On February 18, 1980, Cecil Wilson prepared a second invoice for repairs of $42.90 to the Monte Carlo which was submitted to and paid by GMC under warranty.

On July 24, 1980, Cecil Wilson prepared a third invoice for repairs of $43.40 for the front fender and "rocker" of the Monte Carlo. This invoice was also submitted to and paid by GMC under warranty. Total repairs from all three invoices were $294.46 according to Martin's records.

Martin's standard operating procedure was to place the estimate and second copy of the invoice in the car packet. The original invoice was placed in a chronological cross-file. The third copy was retained in the warranty file if submitted to GMC, or thrown away. The final hard copy was placed in the employee's file for payroll purposes.

Martin had a sale on October 1, 1980 and Plaintiff Dover, a 21 year old who worked as a high speed cutter at a local box manufacturing plant, stopped in to look at the cars. A Martin salesman, Rick Anderson, showed Dover several cars including a new 1981 Monte Carlo, but Dover could not afford the 1981 model. Anderson then suggested he had a new demonstrator for sale, the 1980 Monte Carlo. Anderson described the 1980 Monte Carlo as a "show car" used by Martin employees to show particular car models to prospective buyers. The sticker price on the window was $7,890.69, several thousand dollars less than the 1981 model. Anderson told Dover the car had been driven 6,800 miles but that the mileage "didn't mean anything" and a new car warranty of 12,000 miles would be added to the 6,800 miles already on the 1980 Monte Carlo. Anderson also told Dover that the trade-in available on Dover's 1978 Chevette was no different on the 1980 than the 1981 model.

Fred Dover signed a purchase order for the 1980 Monte Carlo that evening. The form included boxes indicating the car as "new", "used", or "demo". Only the box marked "new" was checked on the copy of the purchase order Dover was given on October 1, 1980. Dover took the car home that night to show it to his wife. He observed no damage to the car. It looked to him like a new car.

The next day, October 1, 1980, he returned to Martin and agreed to buy the car. After credit approval, the sale was concluded in a series of papers including the purchase order, now with checks in both the "new" and "demo" boxes, a new vehicle pre-delivery checklist; and the security agreement. While preparing these papers, Anderson told Dover, "It is a new car". While Anderson had negotiated the sale, Joe Martin, President of Martin Chevrolet Sales, Inc., approved the sale and signed the security agreement which described the car as "1980 New Chevrolet Monte Carlo Landau". ³

At no time during the process by which Dover purchased the car did anyone tell him that the car had been repaired three times or that one of the repairs resulted from an accident involving one of the dealership's salespersons. Anderson stated at trial that, as of the sale in October 1980, he did not know Johansen had involved the car in an accident. Joe Martin testified that had he known of the damage, he would not have told Dover and, further, that he often sells demonstrator vehicles that have been damaged as new with no adjustment to the price. Anderson testified he did not inform buyers of damage and repaired new cars that the cars had been in wrecks because he had been "told by his supervisors not to give the consumer that kind of information".

Two months later, Dover noticed a scratch above the driver's door handle. He took the car to Max Virgil's body shop for repair. Virgil discovered the car had been wrecked from the driver's door to the left rear tail light. The top half of the door had been dented and fiberglass filler used Virgil estimated the retail cost to properly repair the damage he observed would be between $600 and $700. Martin's invoices showed an in-house total repair cost of $294.46. Apparently the in-house repair cost of the specific damage at issue here was $208.16.

on three-quarters of the door. The left quarter panel had a dozen holes drilled into it in order to insert pull rods which were used as part of the process of pulling the dents out. The left quarter panel was extensively damaged. The door paint varied where the repairs had been done, blending the car's original light beige to a darker brown. A sculptured contour on the left quarter panel stopped after one inch, whereas the contour on the right quarter panel extended nine inches. Virgil concluded the contour on the left side was missing because the entire area had been smashed.

Virgil explained the damage to Dover, who immediately contacted Anderson. Anderson denied knowing anything about a wreck. Dover went to Martin Chevrolet the next morning and met with Anderson and Joe Martin. Martin knew of the two warranty invoices totalling $86.30 in repairs but did not tell Dover and instead promised to check the dealership records after he returned from a two week vacation. Dover returned five or six times through January and February 1981. Martin told Dover he was unable to find any record of an accident to the 1980 Monte Carlo while in the dealership's possession.

Dover hired an attorney. Joe Martin continued to deny knowledge of any accident but eventually admitted repairs of $86.30. The first admission of pre-sale damage was on February 18, 1982. Although Joe Martin asserted he had unsuccessfully searched all files except the hard copy file for repair invoices on the Monte Carlo, the original invoice was produced at trial. No explanation was presented as to how or when or by whom the missing invoice or estimate that preceded it were discovered.

Dover sued Martin Chevrolet and General Motors Corporation on two theories, fraud and breach of warranties. GMC settled for $200.00 before trial. After a two day trial, the jury returned a verdict for Dover and against Martin for $2500.00 in compensatory damages and $500.00 in punitive damages. The trial court entered judgment on the jury's verdict and later granted Dover's request for attorney fees of $9,273.50 pursuant to I.C. 26-1-2-721.

Issues

Martin Chevrolet presents the following issues for review on appeal:

I. Whether the jury verdict was supported by sufficient evidence upon all necessary elements of Dover's claim of fraud. ⁴

II. Whether the trial court erred in instructing the jury on punitive damages.

III. Whether the trial court erred in awarding attorneys fees pursuant to I.C. 26-11-2-721 or whether the amount of fees was supported by the evidence.

IV. Whether the trial court erred in denying Martin Chevrolet's Motion for Mistrial after the court allowed the testimony of a single allegedly similar occurrence by Dover's witness.

V. Whether the trial court erred in refusing to modify Dover's judgment by the $200.00 he received in settlement from former defendant GMC.

DECISION

I. Sufficiency of the Evidence

In reviewing the sufficiency of the evidence in a civil case, we will decide whether there is substantial evidence of probative value supporting the trial court's judgment. We neither weigh the evidence nor judge the credibility of witnesses but will consider only the evidence most favorable to the judgment along with all reasonable inferences to be drawn therefrom. Martin v. Roberts (1984), Ind., 464 N.E.2d 896; Master Abrasives Corp. v. Williams (1984), Ind.App., 469 N.E.2d 1196.

Martin Chevrolet argues that Dover failed to present adequate evidence of two of the elements of fraud, misrepresentation and justifiable reliance. The dealer maintains that a "new car" is one which has not been sold or titled to its first purchaser and which receives the benefits of a "new...