Sharp v. Egler, 80-2650
| Decision Date | 25 August 1981 |
| Docket Number | No. 80-2650,80-2650 |
| Citation | 658 F.2d 480 |
| Parties | Carolyn J. SHARP, Plaintiff-Appellant, v. Calvin E. EGLER and Bill Hanka Auto Sales, Inc., d/b/a Clarksville Auto Mart, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
David V. Scott, New Albany, Ind., for plaintiff-appellant.
Richard T. Mullineaux, New Albany, Ind., for defendants-appellees.
Before SWYGERT, Senior Circuit Judge, BAUER, Circuit Judge, and NICHOLS, Judge. *
Plaintiff-appellant Carolyn J. Sharp appeals from an order of the United States District Court for the Southern District of Indiana, which dismissed upon summary judgment her personal injury action against defendants-appellees Calvin E. Egler and Bill Hanka Auto Sales, Inc., d/b/a Clarksville Auto Mart. We reverse the judgment of the district court.
This tort action arises out of a one-automobile collision that occurred on October 15, 1978 in New Albany, Indiana. At the time of the accident, Sharp was traveling as a passenger in the front seat of an automobile driven by Egler. Sharp, a resident of Kentucky, and Egler, a resident of Indiana, had been seeing each other socially for a few months prior to the accident. On the night of the accident, the two had been attending a party in Louisville, Kentucky. After spending several hours at the party, at which both drank alcohol the two left the party. Sharp and Egler differ as to what their plans were on leaving the party. Sharp stated that they were going to go downtown and then return to the party, as she was spending the night with her hosts. Egler stated that they planned to go to his parents' home in Indiana to spend the night.
Egler's recollection of the evening after leaving the party with Sharp was that they drove to downtown Louisville, stopped at a bar, had a drink, then left for his parents' home in Indiana around 4:00 a. m. Egler took his usual route back from Kentucky to Indiana. As the car traveled down Spring Street in New Albany, it left the traveled portion of the roadway, sideswiped a utility pole, and proceeded to run head-on into a tree. This portion of Spring Street was straight and level, and there were no physical obstructions to the view of the tree. Neither Egler nor Sharp remember the accident or the circumstances leading up to it, except that Egler does remember that just before the accident Sharp gave him a kiss.
The car was totally destroyed. Sharp and Egler were pinned inside the car, and both were severely injured in the crash. Sharp alleges that she sustained the following injuries: crushed and shattered facial bones, both jaws broken, a pelvic fracture, and a hip broken in three places. As of December 1979, her medical expenses were in excess of $13,000, and she has had additional surgery since that time. She has not been able to work since the accident.
In her original complaint filed on March 29, 1979, Sharp sought damages for the personal injuries, which totalled $750,000. The complaint alleged that defendant Egler had been negligent and ran the car into the tree causing her injuries. Sharp later amended her complaint to include Bill Hanka Auto Sales, Inc. (Hanka Auto Sales) as a party-defendant under the theory of respondeat superior. The amended complaint alleged that the car driven by Egler, a 1977 Trans Am Pontiac, was owned by defendant Hanka Auto Sales and that Egler as an employee of Hanka Auto Sales was acting within the course and scope of his employment while driving its car the night of the crash.
On November 15, 1979, Egler filed the first of two motions for summary judgment. In his first motion Egler argued that Indiana law and not Kentucky law should be applied, and that plaintiff's allegations of negligence were insufficient under the Indiana guest statute. 1 The district court agreed and dismissed Sharp's motion without prejudice for failure to state a claim upon which relief may be granted. Thereafter, plaintiff filed a second amended complaint against the defendants alleging that the accident was the result of Egler's wilful or wanton misconduct.
The defendants filed a second motion for summary judgment. This motion argued that defendant Hanka Auto Sales was not liable for the acts of Egler, as he was not acting as its agent or employee at the time of the accident, and also that there was no proof that the actions of Egler were wilful or wanton as required under the Indiana guest statute. Granting the defendants' motion on October 22, 1980, the district court found that Sharp was a "guest" passenger within the meaning of the Indiana guest statute, and that she was unable to present sufficient evidence to show that Egler's activities amounted to wanton or wilful misconduct as defined by the statute. The court also held that Hanka Auto Sales, Egler's employer, would not be liable for Egler's actions, if they were tortious, as Egler was not acting within the scope of his employment at the time of the accident.
Sharp has appealed from both summary judgments of the district court. She first contends that the district court in its order of March 4, 1980 wrongfully concluded that Indiana law, which has a guest statute, and not Kentucky law, which has no guest statute, is applicable. She concedes that if Indiana law is applicable, her cause of action falls within Indiana's guest statute. Sharp also contends that it was error for the district court to find that she had not offered sufficient proof of Egler's wanton or wilful misconduct and that Hanka Auto Sales was free of liability under the theory of respondeat superior.
We hold that Indiana law is the applicable law in this case and that Sharp's cause of action falls within the Indiana guest statute. In addition, we agree with the district court that Hanka Auto Sales is not liable under the theory of respondeat superior. We believe, however, that Sharp has shown sufficient evidence of Egler's alleged wilful or wanton misconduct that a jury could reasonably find her entitled to damages even under the guest statute.
The district court applied the most significant contacts choice of law rule in deciding whether to apply Indiana or Kentucky substantive law. 2 In so doing, the court relied on our decision in Watts v. Pioneer Corn Co., 342 F.2d 617 (7th Cir. 1965), in which we held Indiana's choice of law rule in the area of multistate torts to be the most significant contacts rule, even though prior to Watts every Indiana court had applied the rule of lex loci delicti, or "the place of the tort."
Although appellant only challenges the district court's choice of Indiana law and not the use of the most significant contacts rule, we note that there has been some confusion regarding Indiana's choice of law since our decision in Watts. Shortly after Watts, an Indiana appellate court did adopt the most significant contacts rule in a multistate tort case, Witherspoon v. Salm, 142 Ind.App. 655, 237 N.E.2d 116 (1968). Witherspoon was later reversed on other grounds, however, by the Supreme Court of Indiana, Witherspoon v. Salm, 251 Ind. 575, 243 N.E.2d 876 (1969). In reversing, the Indiana Supreme Court made the following disclaimer of the appellate court's choice of law holding: "Under our holding in this case, the question of what statute of limitations applies and which state's Indiana or Kentucky (sic), substantive law applies, are not involved in this case." Witherspoon, supra, at 878. This disclaimer resulted in confusion over the effect of the appellate court's decision in Witherspoon. One Indiana appellate court afforded no authority to the appellate court's decision to adopt the most significant contacts rule because of the Indiana Supreme Court's disclaimer. Horvath v. Davidson, 148 Ind.App. 203, 209, 264 N.E.2d 328, 337 (1970). Another Indiana appellate court, in a more recent opinion, completely ignored the Witherspoon decision, as it stated that Indiana has long followed the place of the tort rule in the area of multistate torts. 3 Maroon v. State Dept. of Mental Health, Ind.App., 411 N.E.2d 404 (1980).
Even after the Indiana Supreme Court's disclaimer in Witherspoon, this court has continued to apply Watts. Motteler v. J. A. Jones Constr. Co., 457 F.2d 917 (7th Cir. 1972). In Bowen v. United States, 570 F.2d 1131 (7th Cir. 1978), we noted that the district court's application of the place of the tort rule was contrary to our decision in Watts but that the result would be the same even if the most significant contacts rule had been applied.
This case is not, however, the one to decide what continuing validity, if any, Watts has, for whether we apply the most significant contacts rule or lex loci delicti, the district court was correct in applying Indiana law. If the place of the tort rule had been used, Indiana law would still apply, since it is uncontested that the accident occurred in New Albany, Indiana.
Despite Sharp's contentions to the contrary, the same result applies if the most significant contacts rule is used. She argues that the district court failed to perform the proper evaluation of the state contacts involved, because it simply added up the "Indiana contacts without analyzing their relationship to the issue involved in the policies and interests of the states involved." 4 She cites the appellate court decision in Witherspoon, supra, p. 124, which declared,
Neither should the mere numerical contacts with one state be balanced with those of another state. Each contact should be evaluated in light of collateral policy considerations and the particular state interests surrounding the rule of law.
Sharp is correct that the application of the most significant contacts rule involves more than simply adding up of contacts, but the district court did more than that here. In making its ruling, the court stated,
This court finds that Indiana substantive law applies in this case. It is undisputed that Egler is a resident of...
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