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Somerville Auto Transp. Serv., Inc. v. Auto. Fin. Corp.

Court of Appeals of Indiana

July 2, 2014


APPEAL FROM THE MARION SUPERIOR COURT. The Honorable Michael D. Keele, Judge. Cause No. 49D07-0810-CC-049340.


ATTORNEY FOR APPELLEE: TRACY N. BETZ, Taft Stettinius & Hollister LLP, Indianapolis, Indiana.

BARNES, J., and ROBB, J., concur.

Page 956


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:

I. Whether the court abused its discretion in placing the cause of action on the active docket; and
II. Whether the court erred in entering summary judgment in favor of AFC and against Somerville.

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.

Page 957

In October 2002, Somerville and AFC executed a Demand Promissory Note and Security Agreement (the " Agreement" ). Pursuant to the Agreement, Somerville could request advances against a line of credit to finance its purchase of automobiles for resale. Also, in October 2002, Souza, the principal of Somerville, executed an Unconditional and Continuing Personal Guaranty which provided he was personally liable for Somerville's indebtedness to AFC. On February 24, 2006, on behalf of Somerville, Souza executed a Representation Authorization Letter stating in part that Robson Merenciano was authorized to buy and sell automobiles for Somerville and to execute company checks or drafts and any other necessary instruments or documents. AFC made advances to Merenciano against Somerville's line of credit for the purchase of certain automobiles between September 2006 and February 2007, and Somerville did not timely repay AFC with respect to the amounts advanced for the purchase of these automobiles. On February 20, 2007, Somerville executed a Representation Removal Letter stating Merenciano was no longer authorized to conduct business on behalf of Somerville.


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.

Trial Rule 41(E) Proceedings

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.[1]

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.[2]

Page 958

On June 27, 2011, AFC filed a Response to Rule 41(E) Notice which stated that it had appeared by counsel in open court on June 27, 2011 to show cause why the lawsuit should not be dismissed for inactivity and that it was submitting in writing its response to the court's notice " as follows: AFC submits that this matter has not been inactive, and requests that this matter remain pending because AFC has been conducting discovery as it prepares for trial. Indeed, AFC is presently awaiting [Somerville's] responses to its pending interrogatories and requests for production of documents." Appellants' Appendix at 33.

On June 28, 2011, the trial court entered an order stating:

This Cause having come before the Court on its own motion pursuant to Indiana Trial Rule 41(E), all parties having been given due ...

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