Court Opinion

ID: 4445773
Source: CourtListenerOpinion
Date Created: 2019-10-10 15:03:28.2038+00
Date Added: 2024-06-11T14:25:20.714156
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                                 FILED
regarded as precedent or cited before any
                                                                                  Oct 10 2019, 5:36 am
court except for the purpose of establishing
the defense of res judicata, collateral                                               CLERK
                                                                                  Indiana Supreme Court
estoppel, or the law of the case.                                                    Court of Appeals
                                                                                       and Tax Court

ATTORNEYS FOR APPELLANTS                                     ATTORNEY FOR APPELLEES
Ann C. Coriden                                               Bruce B. Paul
Timothy P. Coriden                                           Stites & Harbison, PLLC
Coriden Glover, LLC                                          Jeffersonville, Indiana
Columbus, Indiana

                                             IN THE
     COURT OF APPEALS OF INDIANA

Paula Hercamp, Kyle Hercamp,                                 October 10, 2019
and Matthew Hercamp,                                         Court of Appeals Case No.
Appellants-Plaintiffs,                                       18A-CT-2958
                                                             Appeal from the
         v.                                                  Jackson Superior Court
                                                             The Honorable
Justin M. Pyle, State Farm                                   AmyMarie Travis, Judge
Mutual Automobile Insurance                                  Trial Court Cause No.
Company,1 Enterprise Leasing                                 36D01-1708-CT-30
Company of Indianapolis, LLC,
and EAN Holdings, LLC,
Appellees-Defendants.

1
 Justin M. Pyle and State Farm Mutual Automobile Insurance Company are not participating in this appeal,
but because they are parties of record in the trial court, they are parties on appeal. See Ind. Appellate Rule
17(A).

Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019                      Page 1 of 11
      Kirsch, Judge.

[1]   Paula Hercamp (“Paula”), Kyle Hercamp (“Kyle”), and Matthew Hercamp

      (“Matthew”) (collectively, “the Hercamps”) appeal the trial court’s separate

      entries of summary judgment for EAN Holdings, LLC (“EAN”) and Enterprise

      Leasing Company of Indianapolis, LLC (“Enterprise”), and raise two issues,

      which we consolidate and restate as: whether the trial court erred in granting

      summary judgment to both EAN and Enterprise.

[2]   We affirm.

                                 Facts and Procedural History
[3]   In the early hours of August 5, 2015, Justin M. Pyle (“Pyle”) became

      intoxicated, drove his car, and crashed it off the road. Appellants’ App. Vol. II at

      128. At 7:00 a.m., the accident was investigated by Matthew Schalliol, Chief of

      Police for Walkerton, Indiana (“Chief Schalliol”), who smelled a “strong odor

      of alcoholic type beverage emanating from Pyle’s person.” Id. Pyle admitted to

      Chief Schalliol that he had been drinking and was not sure if he was too

      intoxicated to drive. Id.

[4]   About four and one-half hours later, at 11:32 a.m., Pyle went to a Plymouth,

      Indiana Enterprise store to rent a Nissan Altima (“the Altima”), which EAN

      Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019   Page 2 of 11
      had leased to Enterprise as a vehicle to rent to customers. Id. at 100-04.2 Pyle

      did not appear to be intoxicated, presented a valid driver’s license to the

      Enterprise employee who waited on him, and signed the rental agreement. Id.

      at 88, 101. The next day, on August 6, 2015, Pyle was driving the Altima in

      Jackson County when he collided with a 2004 Chevrolet Avalanche (“the

      Avalanche”), which Paula was driving and in which Kyle rode as a passenger;

      Matthew owned the Avalanche. Id. at 23, 27. Both Paula and Kyle were hurt.

      Id. at 28, 31, 34.

[5]   On August 4, 2017, the Hercamps filed a complaint against EAN, Pyle, and

      State Farm Automobile Insurance Company,3 arguing, as to EAN, that it

      negligently entrusted the Altima to Pyle. Id. at 17-25. On September 12, 2017,

      the Hercamps filed an amended complaint, which added Enterprise as a

      defendant, and likewise alleged that Enterprise had negligently entrusted the

      Altima to Pyle. Id. at 26-37. On February 16, 2018, EAN and Enterprise filed

      separate motions for summary judgment, but both made the same argument,

      i.e., that even if Pyle was drunk when Enterprise entrusted the Altima to Pyle,

      neither EAN nor Enterprise had actual knowledge that Pyle was intoxicated at

      the very moment that Enterprise rented the car to Pyle, thus entitling them to

      summary judgment. Id. at 76-107. In support, both EAN and Enterprise

      2
       The record contains conflicting information about whether EAN or Enterprise actually owned the Altima.
      Appellants’ App. Vol. II at 106 and 61, 88, 75, 104. However, as we explain later, this issue of fact is not
      material to our resolution of the Hercamps’ appeal.
      3
          State Farm insured the Avalanche. Id. at 22, 33.

      Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019                 Page 3 of 11
designated, inter alia: 1) the rental agreement; and 2) Pyle’s response to requests

for admission, in which he stated that he presented a valid driver’s license to the

Enterprise employee who waited on him and that he was not intoxicated when

he rented the Altima. Id. at 85, 88, 101, 104. On April 16, 2018, in response to

both motions for summary judgment, the Hercamps argued, in part, that there

were material issues of fact regarding knowledge of Pyle’s intoxication at the

time he rented the Altima because he appeared to be intoxicated four and one-

half hours earlier. Id. at 108-44. In support, the Hercamps designated evidence

showing that in the hours preceding Pyle’s renting of the Altima: 1) Pyle had

been drinking and crashed his car; 2) when Chief Schalliol investigated the

accident around 7:00 a.m., four and one-half hours before Pyle rented the

Altima, Chief Schalliol smelled the “strong odor” of alcohol emanating from

Pyle; 3) Pyle acknowledged he may have been too intoxicated to drive; and 4)

Pyle presented Chief Schalliol with paperwork outlining complaints from Pyle’s

coworkers about his irrational behavior. Id. The Hercamps also designated

evidence showing that in the six weeks preceding the accident: 1) Pyle had

exhibited a pattern of erratic behavior and was cited for several driving-related

offenses; and 2) that behavior resulted in the removal of firearms from Pyle’s

home and the issuance of a protective order against Pyle. Id. at 127-38. On

June 6, 2018, both EAN and Enterprise filed replies in support of their motions

for summary judgment. Id. at 145-61. On November 12, 2018, the trial court

granted both EAN’s and Enterprise’s motions for summary judgment, found

there was no just reason for delay, and entered judgment on the issues disposed

Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019   Page 4 of 11
of by its summary judgment rulings. Id. at 13-16; see Ind. Trial Rule 56(C). The

Hercamps now appeal.

                               Discussion and Decision
        We review summary judgment de novo, applying the same
        standard as the trial court: Drawing all reasonable inferences in
        favor of . . . the non-moving parties, summary judgment is
        appropriate if the designated evidentiary matter shows that there
        is no genuine issue as to any material fact and that the moving
        party is entitled to judgment as a matter of law. A fact is material
        if its resolution would affect the outcome of the case, and an
        issue is genuine if a trier of fact is required to resolve the parties’
        differing accounts of the truth, or if the undisputed material facts
        support conflicting reasonable inferences.

        The initial burden is on the summary-judgment movant to
        demonstrate the absence of any genuine issue of fact as to a
        determinative issue, at which point the burden shifts to the non-
        movant to come forward with contrary evidence showing an
        issue for the trier of fact. And although the non-moving party
        has the burden on appeal of persuading us that the grant of
        summary judgment was erroneous, we carefully assess the trial
        court’s decision to ensure that he was not improperly denied his
        day in court.

Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014) (internal citations and

quotations omitted). We may affirm a grant of summary judgment upon any

theory supported by the designated evidence. Miller v. Danz, 36 N.E.3d 455,

456 (Ind. 2015). “A defendant in a negligence action may obtain summary

judgment by demonstrating that the undisputed material facts negate at least

Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019   Page 5 of 11
      one element of the plaintiff’s claim.” Frohardt v. Bassett, 788 N.E.2d 462, 467

      (Ind. Ct. App. 2003), trans. denied.

[6]   As to negligent entrustment, a plaintiff:

              must demonstrate that another: (1) entrusted her car; (2) to an
              incapacitated person or one who is incapable of using due care;
              (3) with actual and specific knowledge that the person is
              incapacitated or incapable of using due care at the time of the
              entrustment; (4) proximate cause; and (5) damages.

      Bailey v. State Farm Mut. Auto. Ins. Co., 881 N.E.2d 996, 1001 (Ind. Ct. App.

      2008) (internal quotations omitted) (emphasis added); see also Johnson v. Owens,

      639 N.E.2d 1016, 1022 (Ind. Ct. App. 1994), trans. denied; Stocker v. Cataldi, 489
N.E.2d 144, 145 (Ind. Ct. App. 1986), trans. denied. A person who is

      intoxicated can be considered incompetent to drive safely. Sutton v. Sanders, 556
N.E.2d 1362, 1365 (Ind. Ct. App. 1990). Evidence about what the entrusting

      person or entity should have known is not dispositive. Ellsworth v. Ludwig, 140
Ind. App. 437, 441, 223 N.E.2d 764, 766 (1967), trans. denied; Stocker, 489

      N.E.2d at 145-46. “[I]n order to recover against the owner-bailor of a car, the

      borrower-bailee must be drunk at the very moment of the entrustment, and the bailor

      must have actual and immediate knowledge of this fact.” Ellsworth, 223 N.E.2d at

      765 (emphasis added). Thus, to incur liability, EAN and Enterprise must have

      had actual and immediate knowledge that Pyle was incompetent to drive at the

      very moment Enterprise entrusted the Altima to him. See id.; see also Frohardt,

      788 N.E.2d at 470.

      Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019   Page 6 of 11
[7]   The actual knowledge requirement in auto-related negligent entrustment claims

      was established by our Supreme Court in Fisher v. Fletcher, 191 Ind. 529, 133
N.E. 834 (1922). Fisher held that where a person borrows or rents a vehicle

      from another, a bailor-bailee relationship is created. Id. at 835. Generally, a

      bailor is not responsible for injuries to a third party caused by the bailee’s

      negligence. Id. However, an exception to this rule exists when “the bailor has

      [e]ntrusted a dangerous article to one whom he knows to be unfamiliar with its

      dangerous quality, uninstructed in its use, or incompetent to use due care.” Id.

      In Fisher, Frank Clemens (“Clemens”) was a chauffeur for Stoughton Fletcher

      (“Fletcher”). Fletcher often allowed Clemens to borrow the vehicle Clemens

      drove as a chauffeur for his personal use even though Fletcher knew “Clemens

      was in the habit of drinking to excess, and of becoming intoxicated when he

      was released from his regular work.” Id. at 834. One evening, Clemens

      borrowed the vehicle, and while driving under the influence of alcohol, he

      crashed into Fisher, who was travelling in a horse-drawn carriage. Id. at 835.

      In suing Fletcher, Fisher argued that Fletcher negligently entrusted the vehicle

      to Clemens because Fletcher knew that Clemens was a “wild and reckless

      driver” because while working for Fletcher, Clemens had been involved in

      several car accidents and had been fined and convicted for driving-related

      offenses. Id. at 834-35. Nonetheless, the Supreme Court held that Fletcher

      could not be liable for negligent entrustment because Fisher had only alleged

      that Clemens “was in the habit of becoming intoxicated,” not that Fletcher

      knew Clemens was intoxicated at the time Fletcher entrusted the vehicle to

      Clemens. Id. at 836.

      Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019   Page 7 of 11
[8]   In Ellsworth, we applied Fisher’s actual-knowledge requirement. Ellsworth, 223

      N.E.2d at 765. Ellsworth, employed as a truck driver, was “well known in the

      community for his ability to consume alcoholic beverages.” Id. One day,

      Ellsworth sought and obtained permission from his employer to borrow his

      employer’s truck. Id. Ellsworth was later in an accident, and the officer who

      investigated the accident testified that Ellsworth was drunk. Id. However, we

      held that there was no evidence that Ellsworth’s employer had actual

      knowledge that Ellsworth was drunk when the employer entrusted the truck to

      Ellsworth, so the trial court did not err in granting the employer’s motion for a

      new trial. Id. at 766.

[9]   Applying Fisher and Ellsworth, we assume without deciding that Pyle was

      intoxicated when he rented the car from Enterprise. Nonetheless, we conclude

      that both EAN’s and Enterprise’s designated evidence demonstrated the

      absence of any genuine issue of material fact as to their actual knowledge about

      Pyle’s alleged intoxication at the very moment Enterprise rented the Altima to

      Pyle. In his response to the requests for admissions, Pyle stated that he was not

      intoxicated when he rented the Altima and that he presented a valid driver’s

      license to the Enterprise employee who rented the Altima to him. Appellants’

      App. Vol. II at 85, 101.4 Thus, the designated evidence demonstrated a lack of

      4
       The Hercamps argue that although Pyle’s admissions are relevant, they are not conclusive of Enterprise’s
      and EAN’s knowledge because admissions apply to and bind only the answering party. See, e.g., Gen. Motors
      Corp., Chevrolet Motor Div. v. Aetna Cas. & Sur. Co., 573 N.E.2d 885, 890 (Ind. 1991). However, the cited cases
      apply this prohibition where the admission impugns a co-defendant, not a plaintiff. See e.g., Shoup v. Mladick,
      537 N.E.2d 552, 553 (Ind. Ct. App. 1989). Therefore, Pyle’s admissions were binding as to the Hercamps.

      Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019                   Page 8 of 11
       material issue of fact as to whether EAN or Enterprise had immediate and

       actual knowledge of Pyle’s alleged intoxication when Pyle rented the Altima

       from Enterprise. Therefore, the burden shifted to the Hercamps to come

       forward with contrary evidence showing an issue for the trier of fact. See

       Hughley, 15 N.E.3d at 1003.

[10]   The Hercamps try to meet this burden by citing evidence nearly identical to

       facts in both Fisher and Ellsworth that did not create a material issue of fact

       about whether the party who entrusted the vehicle to another had actual

       knowledge at the moment of the entrustment that the person borrowing the

       vehicle was intoxicated. See Fisher, 133 N.E. at 836; Ellsworth, 233 N.E.2d at

       765. The Hercamps designated evidence showing that in the six weeks

       preceding the accident: 1) Pyle had exhibited a pattern of erratic behavior and

       was cited for several driving-related offenses; and 2) this behavior resulted in the

       removal of firearms from Pyle’s home and the issuance of a protective order

       against Pyle. Appellants’ App. Vol. II at 127-38. The Hercamps also designated

       evidence showing that in the hours preceding Pyle’s renting of the Altima: 1)

       Pyle had been drinking and crashed his car; 2) when Chief Schalliol

       investigated the accident around 7:00 a.m., four and one-half hours before Pyle

       rented the Altima, Chief Schalliol smelled the “strong odor” of alcohol

       emanating Pyle; 3) Pyle acknowledged to Chief Schalliol that he may have been

       The Hercamps were free to discover and designate evidence to create material issues of fact about EAN’s and
       Enterprise’s actual knowledge about Pyle’s intoxication but failed to do so.

       Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019               Page 9 of 11
       too intoxicated to drive; and 4) Pyle presented Chief Schalliol with paperwork

       outlining complaints from Pyle’s coworkers about his irrational behavior. Id.

[11]   The Hercamps’ designated evidence does not meet their burden to show a

       material issue of fact about EAN’s and Enterprise’s actual knowledge that Pyle

       was intoxicated at the moment he rented the Altima from Enterprise. See

       Hughley, 15 N.E.3d at 1003; Ellsworth, 223 N.E.2d at 766. Both Fisher and

       Ellsworth make clear that a person’s past behavior -- such as a habit of

       drunkenness, motor vehicle accidents, and traffic offenses -- do not, as a matter

       of law, show that the party entrusting a vehicle to another person had actual

       knowledge at the moment of the entrustment that the other person was

       intoxicated or otherwise unfit to drive. See Fisher, 133 N.E. at 835-36; Ellsworth,

       223 N.E.2d at 766-67. Facts regarding Pyle’s past behavior is precisely the kind

       of evidence the Hercamps highlight to show material issues of fact. They cite

       Pyle’s behavior as far back as six weeks before Pyle rented the Altima,

       including driving offenses and erratic behavior. They also cite evidence

       showing that Pyle was intoxicated four and one-half hours before he rented the

       Altima.

[12]   Such evidence does not create a material issue of fact that Enterprise had actual

       knowledge at the very moment it rented the Altima to Pyle that Pyle was

       intoxicated. See Ellsworth, 223 N.E.2d at 765. EAN’s and Enterprise’s

       designated evidence showed the absence of a genuine issue of material fact, that

       such a showing shifted the burden to the Hercamps to come forward with

       contrary evidence showing a material issue of fact, and that the Hercamps failed

       Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019   Page 10 of 11
       to meet that burden. See Hughley, 15 N.E.3d at 1003. Thus, both EAN and

       Enterprise demonstrated that the undisputed material facts negated at least one

       element of the Hercamps’ negligent entrustment claim, entitling both EAN and

       Enterprise to summary judgment. See Frohardt, 788 N.E.2d at 467. Therefore,

       the trial court did not err in granting EAN’s and Enterprise’s motions for

       summary judgment.5 See Stocker, 489 N.E.2d at 145 (mother’s knowledge of

       son’s occasional marijuana use did not create material issue of fact about

       whether she had actual knowledge her son was intoxicated at the moment she

       entrusted her vehicle to him); Johnson, 639 N.E.2d at 1022 (affirming entry of

       summary judgment where no material issue of fact about whether seller of car

       knew, at the time of the sale, that the purchaser of the car did not have a valid

       driver’s license).

[13]   Affirmed.6

       Vaidik, C.J., and Altice, J., concur.

       5
        The Hercamps ask us to discard Fisher’s actual-knowledge requirement and, in its stead, apply a test that
       would require negligent-entrustment plaintiffs, when suing a for-profit entity, to show only that the entrusting
       party should have known that the other person was intoxicated or otherwise impaired. Appellants’ Br. at 16, 19.
       We leave that issue for the Indiana Supreme Court and the Indiana General Assembly.
       6
         Since we find that EAN and Enterprise were entitled to summary judgment because they demonstrated that
       the undisputed material facts negated one element of the Hercamps’ negligent entrustment claim – actual
       knowledge of Pyle’s intoxication at the very moment Enterprise rented the Altima to Pyle - we need not
       address the Hercamps’ argument that summary judgment is inappropriate because there is a material issue of
       fact about whether EAN or Enterprise owned the Altima.. See Frohardt, 788 N.E.2d at 467.

       Court of Appeals of Indiana | Memorandum Decision 18A-CT-2958 | October 10, 2019                  Page 11 of 11