BROWN, Judge.
Somerville Auto Transport Service, Inc., and Robert Souza (together, "Somerville") appeal the trial court's orders placing the cause of action on the active docket and granting summary judgment in favor of Automotive Finance Corporation ("AFC"). Sommerville raises two issues, which we revise and restate as:
We affirm.
Somerville operated an auto dealership in Somerville, Massachusetts. AFC was in the business of lending money to auto dealers to allow the dealer to acquire automobiles at auction for resale to the dealers' customers.
On October 30, 2008, AFC filed a complaint alleging under Count I that Somerville was in breach of contract by failing to repay its indebtedness pursuant to the terms of the Agreement; under Count II that Souza was personally liable for the indebtedness of Somerville under the Guaranty; and under Count III that Somerville and Souza committed fraud. AFC requested judgment under Counts I and II in the principal amount of $89,233.87 together with default interest, floorplan fees, late fees, attorney fees, and costs of collection. According to the chronological case summary ("CCS"), on April 13, 2009, Somerville filed a motion for stay of proceedings pending final adjudication of a related federal action, and on June 1, 2009, AFC filed a response in opposition to Somerville's motion. The court denied the motion for stay on June 2, 2009.
On June 7, 2010, the trial court sua sponte issued notice to the parties that the cause was scheduled for hearing under Trial Rule 41(E) on June 28, 2010. On June 25, 2010, AFC filed a motion to vacate the hearing.
On May 2, 2011, the court sua sponte issued a notice to the parties that the cause would be dismissed under Trial Rule 41(E) at a hearing on June 27, 2011, unless sufficient cause was shown; however the court did not hold the scheduled hearing.
On June 28, 2011, the trial court entered an order stating:
Id. at 31.
On July 6, 2011, the court sua sponte entered a CCS entry which provided:
Id. at 3.
On July 12, 2011, Somerville filed a Verified Motion to Reconsider and Vacate Order Reinstating This Case arguing that the July 6, 2011 order was void because "Indiana decisional authority and Rule 41(F) are clear that a Trial Rule 41(E) dismissal, with prejudice, can only be granted upon a showing by [AFC] satisfying Trial Rule 60(B)." Id. at 35. Somerville's motion also stated that, "[a]lthough not directly relevant to this Motion, it should be noted that the Court's reliance on AFC's response to Rule 41(E) notice to reinstate this case may be mistaken" and that "Somerville has not had an opportunity to respond substantively to AFC's assertion that this case is `active'...." Id. at 38.
On July 25, 2011, AFC filed a Verified Response to Somerville's Motion to Reconsider arguing in part that the court had the authority to enter the July 6, 2011 order under Trial Rule 60(A) because the "June 28, 2011 order appears to have been based on an oversight or omission — namely the Court's mistaken belief that AFC did not appear at the appointed date and time to show cause why the case should remain active" and "once the Court learned that the assumption on which it based its June 28 order was incorrect, it entered a corrective order reinstating the case." Id. at 43. AFC also argued that
Somerville filed a reply on July 27, 2011, arguing that motions under Trial Rule 60(A) are not to be used for purposes of correcting errors of substance, that the order dismissing the case cannot be described as one which is clerical in nature, and that a dismissal with prejudice may be set aside only in accordance with the provisions of Trial Rule 60(B) as required by Trial Rule 41(F). Somerville also argued that "[w]hen a court orders a hearing and notice of the hearing is sent to the plaintiff, the hearing requirement of Trial Rule 41(E) is satisfied, regardless of whether the plaintiff or his counsel attends the hearing." Id. at 52.
On September 7, 2011, the court held a hearing on the motion to reconsider. At the hearing, the court stated:
Transcript at 30-32, 34. The court took the matter under advisement.
On September 9, 2011, the court issued an order denying Somerville's motion to reconsider stating in part:
Appellants' Appendix at 12. The court also rescheduled a hearing under Trial Rule 41(E) for October 27, 2011. Following that hearing, the court took the matter under advisement, and on October 31, 2011, set the cause for trial.
On November 1, 2012, AFC filed a motion for partial summary judgment with respect to Counts I and II of the complaint together with designated evidence and a brief in support of the motion. On December 12, 2012, Somerville filed a brief and designation of materials in opposition to AFC's summary judgment motion. On January 10, 2013, AFC filed a reply. Following a hearing, the court entered an order on February 5, 2013, finding that AFC is entitled to partial summary judgment against Somerville and Souza. Somerville filed a motion to reconsider the ruling, and after a hearing the court denied the motion.
On May 14, 2013, AFC filed a motion to voluntarily dismiss Count III of the complaint and for entry of judgment on Counts I and II. On June 3, 2013, the court entered a Final Judgment in favor of AFC and against Somerville and Souza in the principal amount of $89,331.63, plus pre-judgment interest in the amount of $90,757.69 through May 14, 2013, plus pre-judgment interest at the rate of $23.57 per day from that date through the date of judgment. The court later issued an order that Somerville pay AFC attorney fees in the amount of $51,446.45.
The first issue is whether the trial court abused its discretion in sua sponte placing the cause of action on the active docket on July 6, 2011, after it had dismissed the action on its own motion on June 28, 2011, pursuant to Ind. Trial Rule 41(E). Trial Rule 41(E) provides in part:
Trial Rule 41(F) provides: "For good cause shown and within a reasonable time the court may set aside a dismissal without prejudice. A dismissal with prejudice may be set aside by the court for the grounds and in accordance with the provisions of Rule 60(B)."
Ind. Trial Rule 60(A) provides:
Trial Rule 60(B) provides in part that "[o]n motion and upon such terms as are just the court may relieve a party or his legal representative from a judgment, including a judgment by default, for the following reasons: (1) mistake, surprise, or excusable neglect, ... (6) the judgment is void ...," or "(8) any reason justifying relief from the operation of the judgment, other than those reasons set forth in subparagraphs (1), (2), (3), and (4)." A movant filing a motion for reasons under Trial Rule 60(B)(1) and (8) must allege a meritorious claim or defense. Trial Rule 60(B).
Somerville asserts that the trial court erroneously reinstated the case because Trial Rule 41(F) requires a Trial Rule 60(B) motion before reinstating a case dismissed with prejudice, and AFC did not file a Trial Rule 60(B) motion. Somerville argues that Trial Rule 60(A) cannot provide relief from a dismissal with prejudice because the dismissal was not a clerical mistake or clerical or mechanical in nature and that motions under the rule are not to be used for purposes of correcting errors of substance. Somerville also contends that the fact that a hearing was not conducted is not a basis for reinstatement because the court had ordered a hearing.
AFC maintains that the case was properly reinstated after being mistakenly dismissed. Specifically, AFC argues that Trial Rule 41(F) does not limit a trial court's authority to take corrective action under Trial Rule 60(A), that where there is an error arising from oversight the court has the authority to correct the record pursuant to Trial Rule 60(A), that the court's failure to hold a hearing under Trial Rule 41(E) rendered the dismissal order void, and that the case would have been reinstated under Trial Rules 60(B)(1) and (6) and thus any error in reinstating under Trial Rule 60(A) was harmless.
In its reply brief, Somerville asserts that AFC's argument that the dismissal order is void due to the lack of an actual hearing fails because AFC was accorded all of the due process rights to which it was entitled, namely, notice and an opportunity to be heard.
We review the court's order for an abuse of discretion. Baker & Daniels, LLP v. Coachmen Indus., Inc., 924 N.E.2d 130, 136 (Ind.Ct.App.2010) ("A trial court's decision to reinstate a case pursuant to Trial Rule 41(F) is reviewed for an abuse of discretion...."), trans. denied; Thomas v. Thomas, 674 N.E.2d 23, 25 (Ind.Ct.App. 1996) (stating standard of review related to grant of motion for relief under Trial Rule 60(A)), reh'g denied, trans. denied. The trial court abuses its discretion when the judgment is clearly against the logic and effect of the facts and circumstances, as well as the reasonable inferences to be drawn therefrom. Thomas, 674 N.E.2d at 25. We must affirm if there is any legal ground in the record supporting the judgment, even if the trial court provides erroneous reasons for its ruling. Id.; see Estate of Lee ex rel. McGarrah v. Lee & Urbahns Co., 876 N.E.2d 361, 367 (Ind.Ct. App.2007) (noting "we will affirm the ruling if it is sustainable on any legal basis in the record, even though this was not the reason enunciated by the trial court").
The trial court did not conduct a hearing as contemplated by Ind. Trial Rule 41(E) prior to entering its June 28, 2011 order dismissing the case. Rule 41(E) provides that "the court, on motion of a
Somerville points to two of this court's opinions stating that the hearing requirement in Trial Rule 41(E) is satisfied when the trial court orders a hearing. See Appellants' Brief at 16; Appellants' Reply Brief at 5 (citing Metcalf v. Estate of Hastings, 726 N.E.2d 372, 374 (Ind.Ct.App. 2000) (stating that, when the court orders a hearing and notice of the hearing date is sent to the plaintiff, the hearing requirement of Rule 41(E) is satisfied), trans. denied, and Ind. Dep't of Natural Resources v. Ritz, 945 N.E.2d 209, 212, 213 n. 3 (Ind.Ct.App.2011) (noting the statement in Metcalf above in a footnote but also observing in reciting the facts that, with respect to the cause subject to dismissal for failure to prosecute under Trial Rule 41(E), the trial court conducted a hearing prior to entering a dismissal of the cause), reh'g denied, trans. denied). In Metcalf, the court scheduled a telephonic hearing under Trial Rule 41(E), the plaintiff's counsel was unable to reach a telephone until after the scheduled time of the hearing, and the court later dismissed the action. Metcalf, 726 N.E.2d at 373. On appeal, the plaintiff argued the court erred by dismissing the case without holding a hearing, and this court stated that "when the court orders a hearing and notice of the hearing date is sent to the plaintiff, the hearing requirement of T.R. 41(E) is satisfied, regardless of whether the plaintiff or his counsel attends the hearing," noted that the plaintiff's counsel did not participate in the hearing and made no effort to reschedule the hearing and that the court had entered the dismissal sixty days after the scheduled hearing, and held that the plaintiff had an opportunity to respond "sufficient to satisfy the hearing requirement
The hearing requirement of Trial Rule 41(E) was not satisfied here where the parties appeared by counsel for the hearing to present arguments but the court did not hear their arguments. AFC filed its Response to Rule 41(E) Notice on the same day as the scheduled hearing arguing the case should not be dismissed. Contrary to Somerville's argument, AFC did not have an opportunity to be heard prior to the entry of the court's order of dismissal. Under these circumstances and in the light of the requirements of Trial Rule 41(E) as interpreted by our Courts, the trial court was required to hold a hearing under Trial Rule 41(E) prior to dismissing the cause of action. The trial court acknowledged this and stated that it had dismissed the case based upon the mistaken belief that AFC did not appear at the appointed date and time to show cause why the case should remain active and that the hearing should have been held. We agree with the trial court that the hearing requirement of Trial Rule 41(E) was not satisfied prior the entry of dismissal, and this supports the trial court's conclusion that the June 28, 2011 entry of dismissal was erroneous.
We next address the court's order placing the cause of action back on the active docket. While the court's July 6, 2011 order reinstating the case did not specifically provide the legal grounds for the reinstatement, the court's September 9, 2011 ruling on Somerville's motion to reconsider cited Ind. Trial Rule 60(A) and found there were several oversights or omissions plaguing the June 28, 2011 dismissal order. In reviewing the court's decision, we will affirm on any basis supported by the record even if the reason is different than the one enunciated by the trial court. See Estate of Lee, 876 N.E.2d at 367; Thomas, 674 N.E.2d at 25. With this tenet in mind, we turn to the court's decision to reinstate the cause of action.
The language of Trial Rule 60(A) permits a court on its own initiative to correct "clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission" at "any time before the Notice of Completion of Clerk's Record is filed under Appellate Rule 8." This Court has said that, in the context of Trial Rule 60(A), "clerical error" has been defined as "a mistake by a clerk, counsel, judge, or printer that is not a result of judicial function and cannot reasonably be attributed to the exercise of judicial consideration or discretion." KeyBank Nat'l Ass'n v. Michael, 770 N.E.2d 369, 375 (Ind.Ct.App. 2002), trans. denied. "The purpose of T.R. 60(A) is to recognize that in the case of clearly demonstrable mechanical errors the interests of fairness outweigh the interests of finality which attend the prior adjudication. On the other hand, where the `mistake' is one of substance the finality principle controls." Rosentrater v. Rosentrater, 708 N.E.2d 628, 631 (Ind.Ct. App.1999) (emphasis added) (quoting Sarna, 530 N.E.2d at 115) (internal quotation marks omitted). In other words, if the error is purely mechanical, the trial court retains the authority, by virtue of Rule 60(A), to modify its erroneous order. If the error is substantive, a Trial Rule 60(A) motion may not be used to correct it.
We observe that, while the dismissal order here is not the result of a typographical
Further, we view dismissals with disfavor, and dismissals are considered extreme remedies that should be granted only under limited circumstances. Turner v. Franklin Cnty. Four Wheelers Inc., 889 N.E.2d 903, 905 (Ind.Ct.App.2008). The sanction of dismissal under Rule 41(E) without first holding a hearing would be an extreme penalty, especially where the party's counsel appeared for the hearing and filed a Response to Rule 41(E) Notice on the day of the scheduled hearing. We also observe that Ind.Code § 33-23-2-4 provides: "All courts retain power and control over their judgments for ninety (90) days after rendering the judgments in the same manner and under the same conditions as they retained power and control during the term of court in which the judgments were rendered." The trial court's order setting aside the order of dismissal in this case was entered eight days after its entry of the order of dismissal, and the court's authority under Ind.Code § 33-23-2-4 was not limited by or inconsistent with its obligations under Trial Rule 60.
In light of the breakdown in communications between the court, its staff, and counsel representing the parties, the fact that the hearing requirement of Trial Rule 41(E) was not satisfied prior to the entry of dismissal, the trial court's subsequent statements that it would not have dismissed the case without first holding a hearing had it been aware that counsel for the parties were present for the hearing, and our preference for deciding cases on their merits, we cannot say that the trial court abused its discretion in setting aside the order of dismissal on the basis of Trial Rule 60(A), and consistent with Ind.Code § 33-23-2-4.
The next issue is whether the trial court erred in entering summary judgment in favor of AFC and against Sommerville. Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Mangold ex rel. Mangold v. Ind. Dep't of Natural Resources, 756 N.E.2d 970, 973 (Ind.2001). All facts and reasonable inferences drawn from those facts are construed in favor of the nonmovant. Mangold, 756 N.E.2d at 973. Our review of a summary judgment motion is limited to those materials designated to the trial court. Id. In reviewing a trial court's ruling on a motion for summary judgment, we may affirm on any grounds supported by the Indiana Trial Rule 56 materials. Catt v. Bd. of Commr's of Knox Cnty., 779 N.E.2d 1, 3 (Ind.2002). The entry of specific findings and conclusions does not alter the nature of a summary judgment which is a judgment entered when there are no genuine issues of material fact to be resolved. Rice v. Strunk,
Somerville asserts that the court erroneously granted summary judgment because there is a question of fact as to whether Merenciano's actions reasonably put AFC on notice that his actions were unauthorized. Somerville argues that, even assuming the court properly determined that the agency letter manifested Somerville's intent to appoint Merenciano as its agent to buy vehicles and access its AFC credit line to do so, the designated facts show that subsequent transactions did or should have given rise to a reasonable belief that Merenciano was not acting for the benefit of Somerville. In support of its argument, Somerville points to the facts that, when AFC conducted a field audit, it dealt solely with Merenciano at his dealership at a different address than Somerville's dealership, that AFC did not visit Somerville's dealership during the year in which the transactions in question occurred, that AFC increased Somerville's credit limit in order to accommodate Merenciano's transactions without first obtaining Somerville's authorization and allowed Merenciano to exceed that credit limit, and that AFC accepted checks from Merenciano that came from accounts that Somerville never disclosed to AFC during the application process.
AFC maintains that it reasonably believed that Somerville's agent had the authority to bind Somerville and thus that the court did not err in granting summary judgment in favor of AFC. AFC argues that Souza executed an agency letter which expressly authorized Merenciano to act as its agent during the time purchases at issue in this case occurred. AFC further argues that the evidence does not show that AFC knew or should have known that Somerville resided at only one address or used only one bank account and does not show that AFC was aware or was informed that Somerville conducted business from only one location or had only one appropriate address. AFC's position is that there was no limitation as to the place, address, or bank account Merenciano was required to use when conducting business on behalf of Somerville.
In its reply brief, Somerville argues that "[t]he only way AFC's argument works is if this Court construes the Agency Letter as virtually unlimited in the authority it bestows on Merenciano and at the same time absolves AFC of any duty to question Merenciano's actions" when these actions were clearly "not to buy and sell automobiles on Somerville's behalf." Appellants' Reply Brief at 8.
The Indiana Supreme Court has described apparent authority as follows:
Gallant Ins. Co. v. Isaac, 751 N.E.2d 672, 676-677 (Ind.2001) (quoting Pepkowski v. Life of Ind. Ins. Co., 535 N.E.2d 1164, 1166-1167 (Ind.1989)) (internal citations omitted). The "manifestations" need not
The designated evidence includes the October 2002 Agreement and Souza's guaranty and shows that Somerville could request advances against a line of credit under the Agreement to finance its purchase of automobiles for resale. The Agreement includes various provisions regarding financing including applicable interest rates, floorplan fees, processes to request and conditions to advances, repayment of Somerville's obligations,
The designated evidence also includes a Representation Authorization Letter executed by Souza on behalf of Somerville, dated February 24, 2006, stating that Merenciano was "authorized to buy and sell automobiles for [Somerville] and, in connection therewith, to execute company checks or drafts and any other necessary instruments or documents on behalf of said dealership at any Subscribing Customer[
In his affidavit, Souza stated that it was his understanding that, by executing the Representative Authorization Letter, he "granted access to [] Merenciano under [his] Dealership ID with Auction ACCESS to certain vehicle auctions" and that "[i]t was never [his] understanding and intention that by executing the [letter that he] authorized [] Merenciano access to Somerville's floor plan financing with AFC." Id. at 103-104. Souza stated that he was aware that Merenciano operated a used car dealership by the name of "Mega Auto
Souza also stated that Somerville's financial institution was Citizens Bank, that three checks signed by Merenciano made payable to AFC were from an account at Winter Hill Bank, and that each of those checks were returned for insufficient funds. Souza also stated that Somerville's credit line was initially $50,000 and that the credit line was increased to $100,000 in 2003 and $150,000 in 2005. Somerville designated evidence that each of these increases were authorized by an Aggregate Advance Limit Amendment to the Agreement signed by Souza on behalf of Somerville. Souza stated in his affidavit that, "sometime after September 13, 2006, Somerville's credit line was increased from $150,000 to $200,000" and that "[n]either Somerville nor I authorized any increase in Somerville's credit line with AFC, beyond the $150,000 I approved on October 5, 2005." Id. at 106-107. Souza also stated that he learned in early 2007 from a manager at AFC the extent of the unauthorized obligations incurred on Somerville's floor plan with AFC, that he told AFC that he believed Somerville was not obligated to pay for debt incurred by Merenciano without his knowledge or consent, and that he reported Merenciano's unauthorized use of Somerville's line of credit to the police.
We find that AFC demonstrated that it reasonably believed Merenciano possessed the authority to act as an agent of Somerville for the purpose of purchasing vehicles using the financing available to Somerville under the Agreement. As evidenced by the February 24, 2006 Representation Authorization Letter, Somerville authorized Merenciano to buy and sell automobiles on its behalf and to execute any necessary documents in order to do so, and the authorization was revoked in February 2007. Somerville entered the Agreement in order to obtain a line of credit to purchase vehicles, and the designated evidence does not establish that Somerville's agents including Merenciano were not permitted, or that AFC was aware that Somerville's agents were not permitted, to use the available financing to purchase vehicles. The facts that the address of Merenciano's dealership was different than the address identified by Somerville as its place of business or as its address for purposes of notice, and that checks signed by Merenciano were from an account at a bank other than the bank identified by Somerville as its financial institution, do not establish that AFC should have reasonably known that Merenciano lacked the authority to purchase vehicles using the financing available under the Agreement, as a borrower may have more than one location or bank account.
Based upon the record, we conclude that AFC demonstrated that it reasonably believed
For the foregoing reasons, we affirm the trial court's orders placing the cause of action on the active docket and granting summary judgment in favor of AFC.
Affirmed.
BARNES, J., and ROBB, J., concur.
In the statement of facts in its brief, AFC states that its counsel did in fact appear for the hearing on June 27, 2011 to show cause why the case should not be dismissed for inactivity, that court staff advised that the judge was not available to conduct the scheduled hearing and instructed counsel to submit a written notice of AFC's desire to keep the case on the court's active docket, and that AFC complied and filed and served its written response to the court's Trial Rule 41(E) notice that same day. These statements are consistent with AFC's June 27, 2011 Response to Rule 41(E) Notice and its July 25, 2011 response to Somerville's motion to reconsider in which it stated in part: "AFC complied, and filed (and served) its written response to the Court's Rule 41(E) notice that same day. Apparently counsel for [Somerville] also appeared on the morning of June 27 and submitted (but did not serve counsel for AFC) a proposed order dismissing the case with prejudice." Appellants' Appendix at 41.
