Tracy v. Morell
| Decision Date | 19 May 2011 |
| Docket Number | No. 59A01–1009–PL–488.,59A01–1009–PL–488. |
| Citation | 948 N.E.2d 855 |
| Parties | James S. TRACY, Appellant–Plaintiff,v.Steve MORELL and Pauline M. Morell, Appellees–Defendants. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Larry W. Medlock, Medlock Law Office, Paoli, IN, Attorney for Appellant.
James S. Tracy filed a complaint against Steve Morell 1 alleging fraud in the sale of a farm tractor with an altered identification number. Morell filed a counterclaim alleging that Tracy was in default on the promissory note Tracy had given in payment for the tractor. Following a bench trial, the trial court dismissed Tracy's complaint with prejudice for failing to meet his burden of proof. And the trial court concluded that Tracy owed Morell a balance of $4000 on his note as alleged in Morell's counterclaim. On appeal, Tracy contends that the trial court erred when it dismissed his complaint and concluded that he owed a balance on the note. We determine that there was ample evidence in the record for a judgment on the merits and no reason in fact or in law why the complaint should have been dismissed. We also determine that the trial court did not err when it held that Tracy failed to meet his burden of proof on his fraud claim. But we conclude that the contract for sale of the tractor is unenforceable because there was a mutual mistake of fact between the parties and the contract violates public policy. Thus, we hold that Tracy has no further obligation on the note. Further, we hold that Tracy is entitled to a rescission of the contract for sale of the tractor and to a money judgment in the amount he has paid on the note together with interest.
We affirm in part, reverse in part, and remand with instructions.
In 2002, Morell sold Tracy a used Ford New Holland tractor for $12,500. Tracy signed a promissory note in which he agreed to pay Morell $500 down and $500 per month with no interest until the note was paid in full. Tracy initially made monthly payments totaling $8,500, but stopped making payments in June 2003.
In September 2003, the State charged Morell with four counts of receiving stolen property, namely, tractors and other farm equipment. After Tracy heard about the charges, he contacted the Orange County Sheriff's Department and asked that the Department investigate whether the tractor he had purchased from Morell was stolen property. Accordingly, Detective Lieutenant Michael Dixon, with the assistance of the Indiana State Police, inspected Tracy's tractor and found that its identification number 2 had been altered. Detective Dixon impounded Tracy's tractor pending further investigation.
Morell ultimately pleaded guilty to four counts of receiving stolen property, as Class D felonies. At least one of the items that Morell admitted to having stolen had a missing identification number, and another of the stolen items displayed an identification number that belonged to another machine. Detective Dixon suspected that the tractor Morell had sold to Tracy was also stolen because of the altered identification number. But Detective Dixon's efforts to confirm that suspicion were inconclusive. A man whose Ford New Holland tractor had been stolen came to look at Tracy's tractor to see if he could identify it, but he was unable to determine whether it was his because of a lack of identifying marks. And, after Detective Dixon learned that the cost would be prohibitive to dismantle the tractor to find the valid identification number located inside the engine, he and the prosecuting attorney abandoned the investigation.
On December 11, 2003, Tracy filed a complaint against Morell alleging fraud. In particular, Tracy asserted that Morell knowingly misrepresented that he owned the tractor when he sold it to Tracy and that the tractor had been seized by law enforcement officials as stolen property. Tracy sought treble damages and attorney's fees under the Crime Victim's Relief Act. See Ind.Code § 34–24–3–1. Morell filed a counterclaim alleging that Tracy had defaulted on the promissory note and seeking the unpaid balance of $4000, attorney's fees, and court costs.
The trial court held a bench trial on June 21, 2010.3 Kelly Minton, Orange County Prosecuting Attorney, testified regarding Morell's convictions. And Minton testified that he and Detective Dixon “obviously” suspected that Morell had stolen the tractor he sold to Tracy, but that Minton decided not to expend the resources necessary to prove theft. Transcript at 14. Detective Dixon also testified that he strongly suspected that Morell had stolen the tractor. And he testified that a technician from the Indiana State Police Auto Theft Squad had discovered that the identification number on Tracy's tractor had been “ground out and filled in with putty” and painted over. Id. at 28. The technician “tried to [use] acid to bring the numbers back, but it was ground too deep and they couldn't be recovered.” Id. at 28–29. Detective Dixon then testified regarding how difficult it would have been to ascertain the tractor's identification number:
After talking with a New Holland dealer, they advised that the tractor would have to be torn apart, the engine taken apart, and the numbers taken from the engine, and then contact the manufacturer in Japan to see which dealer the tractor was sold to. And that would've just been cost prohibitive.Id. at 30.
Finally, Morell testified in relevant part as follows:
Transcript at 43–47 (emphases added).
In its judgment entry, the trial court made the following relevant findings of fact:
3. Mr. Tracy suspected there may have been some illegal activities and that the Morells did not own the tractor;
4. Tracy informed the Orange County Sheriff who oversaw the investigation. There were no proven irregularities and there was no evidence of a crime found. The Prosecuting Attorney of Orange County released the impound and declined to file any criminal charges against the Morells;
5. Tracy has made no effort to take possession of the tractor, an implement that...
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