Court of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 1 of 10 A TTORNEY S FOR A PPELLANT Mario Garcia Terry Tolliver Brattain Minnix Garcia Indianapolis, Indiana



### IN THE 

# COURT OF APPEALS OF INDIANA

Universal Auto , LLC , d/b/a James Myers , Appellant

- Defendant / Counter claimant ,
v. 

### Cory Murray , Appellee

- Plaintiff /Counte rdefendant May 28, 2020 Court of Appeals Ca se No. 19A

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- 1225 Appeal from the Marion Superior Court The Honorable David J. Dreyer, Judge Trial Court Cause No. 49D10

- 1809

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- 36457

Crone , Judge
. 

### Case Summary

[1] Cory Murray purchased a used vehicle “as is” from Universal Auto, LLC d/b/a James Myers (Universal). 1 He signed an installment contract and also

1 Universal operates as an LLC, and Myers was improperly captioned as “d/b/a” below.Court of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 2 of 10 purchased a service agreement. He experienced mechanical problems shortly after his purchase and took his ve hicle for service as instructed by Universal

. Claiming that he had defaulted on the installment contract, Universal repossessed the vehicle before Murray’s first payment was due

. Murray filed a

contract action for damages , and Universal counterclaim ed for damages and attorney’s fees

. T he trial court entered judgment in Murray ’s favor on both his contract claim and Universal’s counterclaim. Universal now appeals, asserting that Murray defaulted on the sales contract and that it disclaime d all warranties and was not a party to the service agreement

. W e affirm the trial court’s judgment in all respects

. 

### Facts and Procedural History

[2] On February 17, 2018, Murray entered into an installment contract with Universal to purchase a vehicle “as is ” for $17,599.50

. Murray made a down payment of $ 3 539

. Universal’s James Myers arranged a financing agreement with a third

- party lender , Credit Acceptance Corporation, pursuant to which Murray was obligated to make monthly payments of $ 337.93 beginning on March 17, 2018. The parties executed a “Right to Repossess ,” giving Universal

a r ight to repossess the vehicle upon default and affording Murray ten days within which to redeem the repossessed vehicle

. Defendant’s Ex. C. Murray and Univers al (by Myers) both signed a document titled , “Wynn’s Plus Vehicle Service Contract/Application

. ” Plaintiff’s Ex. 13

. T he i nstallment c ontract and b ill of s ale each list as a line item, “Service Contract: [$]1,535.00.” Plaintiff’s Ex s . 1 , 2

.Court of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 3 of 10 [3] Just hours after Murray purchase d the vehicle, its engine began knocking and smoking

. Murray called Universal , and Myers instruct ed him to take the vehicle to Indiana Auto Body & Service (Indiana Auto) for repairs and told him that Universal would cover the cost of the engine repair

. Two days later , as Murray was driving his vehicle to Indiana Auto for the repair , the engine completely failed , and h e had the vehicle towed

. Indiana Auto replaced the engine , and Universal arranged payment

. A few days aft er Murray got his vehicle back , he experienced trouble with the starter and took the vehicle to Indiana Auto . Murray perso nally paid the $200 charge for a new starter

. A couple days later, the engine malfunctioned again, and Myers instru cted Murray to ha ve the vehicle serviced at Indiana Auto , which he did

. Meanwhile, Universal st opped /withdrew its payment to Indiana Auto for the initial engine repair

. When Murray attempted to pick up his vehicle, Indiana Auto employees informed him that they could not releas e it to him because it was subject to a mechanic’s lien due to nonpayment for the initial repair

. Tr. Vol . 2 at 43. Murray phoned Myers, who reminded him tha t he still had to make payments on the vehicle to avoid being in breach of the sales contract

.

[4] In a letter dated March 7, 2018, Universal informed Murray that it had
repossess ed his vehicle and would resell it if he did not exercise his right to redeem it by paying the full contract balance of $15, 720 within ten days

. Plaintiff’s Ex. 6. In a notice dated that same day , Credit Acceptance notified Murray that it had reassigned his installment contract to Universal , closed his

account , and canceled his vehicle service contract. Plaintiff’s Ex. 12.Court of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 4 of 10 [5] On March 12, 2018, M urray filed a small claims action against Universal seeking the return of his down payment as well as damages for the repair of his

starter , towing charge s , and pain and suffering in the form of lost wages

. O n September 12, 2018, t he action was transferred to the trial court’s plenary docket , and Universal filed a counterclaim seeking damages associated with Murray’s alleged default, repossession and cle a ning costs, and attorney’s fees. At the February 2019 bench trial, both parties alleged breach of contract

. Murray argu ed that Universal breached the service contract , and Universal
argu ed that Murray owe d damages for alleged ly default ing on the installment sales contract

. The trial court issued a two

- page order that included the following finding:
Plaintiff purchased aut o from Defendant “as is,” and separ at ely entered into a service contract/warranty with Defendant. When the auto failed to operate, repairs were not made or paid by Defendant. Plaintiff lost $3,733.00 in purchase payments, $ 146 .00 in towing charges, $200. 00 for a repair, and $150.00 in lost wa ges.
Appealed Order at 1. Based on this finding, the trial court concluded that Universal “ breached the service contract /warranty contract by failing to repair ” the vehicle and entered judgment in Murray ’s favor for $4229

. Id . at 2. The

court summarily ruled against Universal on its counterclaim. Universal filed a motion to correct error, which was deemed denied. Universal now appeals. Additional facts will be provided as necessary.Court of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 5 of 10 

### Discussion and Decision Se ction 1

– Universal has failed to establish prima facie error concerning its counterclaim
.
[6] We first address Universal’s counterclaim, which seeks damages for Murray ’s alleged default for nonpayment on the installment contract. Because Universal did not prevail on its counterclaim below, it appeals from a negative judgment

. A negative judgment is a judgment entered against the party who bore the burden of proof at trial. Wilson v. Huff , 60 N.E.3d 294, 298 (Ind. Ct. App. 2016)

. We will not reverse a negative judgment unless it is contrary to law. Id

. On review, w e consider the evidence and reasonable inferences in the light most favorable to the appellee. Id

. “ A party appealing a negative judgment must show tha t the evidence points unerringly to a conclusion different than that reached by the trial court.” Id

. (citation omitted).

[7] Murray has failed to fil e an appellee’s brief. When an appellee fails to submit a brief, we will not undertake the burden of developing his arguments. Meisberger v. Bishop , 15 N.E.3d 653, 656 (Ind. Ct. App. 2014) . Rather, we apply a less stringent standard of review and will reverse if the appellant establishes prima facie error. Id

. Prima facie error is error “at first sight, on first appearance, or on the face of it.” Solms v. Solms , 982 N.E.2d 1, 2 (Ind. Ct. App. 2012)

.

[8] Universal specifically asserts that Murray “refused to complete his first payment on the [vehicle] and was considered to be in default.” See Appellant’s Br. at 8 (citing Tr. Vol. 2 at 66). The cited portion of the trial transcript does notCourt of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 6 of 10 support this assertion. Rather, it concerns the introduc tion of Plaintiff’s Exhibit 12, a d ischarge of l ien form dated March 7, 2018, followed by questions to Universal’s manager Heather Padilla concerning the meaning and effect of such a form. Padilla explained that the creditor sends the form to the dealer s o that the dealer can get the certificate of title back in the dealer’s name for resale. When asked why Universal paid off Murray’s account with Credit Acceptance, Padilla replied, “Because he defaulted on his contract and did not complete his first payme nt.” Tr. Vol. 2 at 66. The record does not support this claim. T he installment sales contract s pecifies that Murray’s payment schedule will be “MONTHLY beginning March 17, 2018 , ” and t he p ayment d ue n otice from Credit Acceptance, dated March 5, 2018, lists M urray’s past due amount as

“ $0.00 ” and his current payment due date as “ 03/17/2018.” Plaintiff’s Ex s . 2 , 15. Both the repossession letter and the d ischarge of l ien form are dated March 7, 2018 , and both are based on an alleged default by Murray

. Thus, instead of having to make a s tandard monthly payment on March 17, Murray was now facing the resale of his vehicle if he could not come up with $ 15,720 by March 17.

[9] In s hort , Murray had not defaulted on the sales contract when Universal repossessed his vehicle. One simply cannot be in default for nonpayment of a monthly bill that has not yet come due. Universal has failed to carry its burden of demonstrating prima facie error concerning its counterclaim.Court of Appeals of Indiana | Opinion 19A

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### Section 2

– Universal has failed to demonstrate prima facie error concerning Murray’s contract claim.

[10] We now address Universal ’s arguments concerning Murray’s contract claim. Universal contends that it disclaimed all warran ties 2 and did not owe Murray

a ny contractual duty to service his vehicle. Interpretation and construction of contract provisions are questions of law. Brill v. Regent Commc’ns, Inc. , 12 N.E.3d 299, 306 (Ind. Ct. App. 2014) , trans. denied

. We review each contract as a whole, ascertaining the parties ’ intent and making every attempt to construe the contract ’ s language “so as not to render any words, phrases, or terms ineffective or meaningless.” Id

. (quot ing Fischer v. Heymann , 943 N.E.2d 896, 900 (Ind. Ct. App. 2011), trans. denied ).

[11] Here, the b ill of s ale reads in pertinent part, “ Unless Seller ... ent ers into a service

contract within 90 days of this contract, this vehicle is being sold “AS IS

– WITH ALL FAULTS.” Plaintiff’s Ex. 1 (emphasis added) . The i nstallment

c ontract includes nearly identical language. Plaintiff’s Ex. 2 (“ Unless we ... enter
int o a service contract within 90 days from the date of this contract, we make no warranties ... on this vehicle”) (emphasis added). This language expressly

2 With respect to the disclaimer of warranties, Universal included the clear, conspicuous , and technical language necessary to disclaim implied warranties by stating that the vehicle was being sold “as is,” without any warranties , and Murray opted not to have the vehicle inspec ted by a mechanic of his own choosing

. Ind. Code § 26

- 1

- 2

- 316

. Below, Murray did not focus his argument on the efficacy of the as - is language but rather on the service contract

. We limit our discussion accordingly.Court of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 8 of 10 indicates that the existence of a n enforceable service agreement will act as an exception to the “ as - is ” disclaimer of warranties

.

[12] Universal maintains that the trial court erred in finding that it owed a contractual duty to Murray concerning any repairs

. It relies on language in the d elivery r eceipt , signed by Murray, acknowledging that the “vehicle is in acceptable working order,” that he “release[d] the dealership from all responsibility ... for future repairs needed or claims that may arise with the vehicle,” that he had “been given the opportunity to test drive and research all information related t o the vehicle,” and “that it is FULLY my responsibility to maintain the vehicle at MY expense and I do not hold the dealer responsible in any manner to provide any service.” Plaintiff’s Ex. 5. We agree that the language is unambiguous, but it must be rea d in conjunction with the other documents executed as part of the sale. See Merrill v. Knauf Fiber Glass GmbH , 771 N.E. 2d 1258, 1268 (Ind. Ct. App. 2002) (where contract comprised four documents, court harmonized the documents to ascertain parties’ intent), trans. de nied

. This includes the installment contract and bill of sale, with their references to circumstances in which Universal enter s into a service agreement. Plaintiff’s Exs. 1, 2.

[13] Universal claims that it was never a party to a service agreement with Murray. The service agreem ent at issue is the Wynn’s Plus Service Contract , which was signed by Murray and by Myers on behalf of Universal as the “ Selling Dealer

. ” Plaintiff’s Ex. 13. Signature notwithstanding , Universal points us to contract language defining “You, You r , Yours a nd I ” as the customer, Murray , andCourt of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 9 of 10 “Administrator, Our, Us, and We” as Wynn’s Extended Care, Inc. Id

. Based on this language, Universal submits that the only parties to the contract were Murray and Wynn’s Extended Care. However, the contract also states, “This Contract is not valid unless signed by You [Murray] and an authorized representative of the Sell ing Dealer.” Id . at 5 . This means that t he contract

c ould not have been formed without the signature of Universal’s representative. Moreover, Universal facilitated the collect ion of the $1535 fee from Murray. See Plaintiff’s Exs. 1, 2 ( r etail i nstallme nt c ontract and b ill of s ale, both listing as line item $1535 paid for “Service Contract”).

[14] Moreover, Universal played a key role in dictating where Murray obtained service under the contact, essentially funneling him to its own preferred mechanic. Murr ay testified that it was Myers who directed him to take the vehicle “to Indiana Auto, which is where they get their cars fixed,” and assured him that Universal would pay for it. Tr. Vol. 2 at 16 . It was Universal’s withdrawal of its payment to Indiana Au to that precipitated the placement of a mechanic’s lien on the vehicle

. In short, Universal facilitated the formation, fee collection, and execution of the service contract , and its withdrawal of payment

to the repair shop of its own cho osing was the catalyst for the mechanic’s lien that ultimately resulted in the denial of the vehicle to Murray

. This level of control , coupled with Myers’s signature, supports the trial court’s conclusion that Universal was a party to the service contract.

[15] Given Unive rsal’s level of control , we are unpersuaded by its arguments concerning Murray ’s alleged fail ure to honor certain tech nical prerequisites forCourt of Appeals of Indiana | Opinion 19A

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- 1225 | May 28, 2020 Page 10 of 10 coverage under the service contract , e.g., calling certain phone numbers to determine whether a repair or breakdow n is covered , notifying the repair facility concerning the service contract, and paying a $100 deductible. See Appellant’s Br. at 13

- 14 (citing Plaintiff’s Ex. 13). Murray simply d id what Myers instructed him to do , which included taking the vehicle to the repair shop with whom Universal ordinarily dealt

. If anything, Universal induced any de minimis breaches that Murray may have committed

.

[16] Finally, with respect to the amount of the damage award, U n iv ersal d oes not specifically challenge the award of towing fees as consequential damages. Universal does challenge as contrary to law Murray’s request for $150 for pain and suffering. See Plaintiff’s Ex. 9 (ledger with line

- item breakdown of Murray’s asserted damag es). The trial court addressed this line item during the trial, and Murray clarified that it was for lost wages during the weeks when his vehicle was in and out of the repair shop. In its written order, the trial court identified this portion of the dama ges as “$150.00 in lost wages.” Appealed Order at 1. Lost wages may or may not be recoverable in a contract action , but Universal has not established that they are not recoverable here. The trial court did not err in including this in the damage award. We therefore affirm the trial court’s judgment for $4229 in favor of Murray

.

[17] Affirmed.
May, J., and Pyle, J., concur.