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Kruse, Inc. v. Hogan

United States District Court, N.D. Indiana, Fort Wayne Division

January 22, 2015

KRUSE, INC., Plaintiff,
v.
RODNEY HOGAN and PLAYTIME PLAYGROUND EQUIPMENT, Defendants. RODNEY HOGAN, Counterclaimant,
v.
KRUSE, INC., Counter-Defendant. RODNEY HOGAN, Third Party Plaintiff,
v.
BUNKER LAKES DEALERSHIP, INC., and DEAN KRUSE Defendants.

OPINION AND ORDER

JON E. DeGUILIO, District Judge.

This case arises from several disputes regarding vehicles previously auctioned or sold by entities related to Dean Kruse.[1] Kruse, Inc., sued Rodney Hogan and Playtime Playground Equipment, Inc., in Indiana state court, alleging that the defendants had failed to pay for certain automobiles purchased at auction. [DE 1.] After the case was removed to this Court, Mr. Hogan filed a counterclaim against Kruse, Inc., arguing that Kruse, Inc., had breached an agreement by selling Mr. Hogan's vehicles below reserve prices. [DE 14.] Mr. Hogan also filed a third-party complaint against Mr. Kruse and Bunker Lakes Dealership, Inc., relating to the sale of a recreational vehicle which Mr. Hogan claims he paid for but never received. [ Id. ] The progress of this case was delayed by a purported settlement by the parties, which depended upon the sale of the RV at issue in the third-party complaint. The case was stayed to effectuate a sale of the RV, but that sale was never accomplished. The stay was lifted and, after the attorneys for the Kruse entities withdrew and no new attorney appeared in the time allotted by the Court, default was entered against Kruse, Inc. [DE 88.]

Now before the Court is a motion for summary judgment filed by Mr. Hogan. [DE 97, 98.] The motion addresses only one portion of the claim against Mr. Kruse and Bunker Lakes Dealership regarding the purported sale of the RV, namely that the retention of the RV by the Kruse entities constitutes criminal conversion. The Kruse entities have not responded to the motion and the time to do so has passed. As a result, the Court may consider the facts contained in the motion "undisputed for the purposes of the motion" and may "grant summary judgment if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it." Fed.R.Civ.P. 56(e).

For the reasons stated below, even in light of the failure to respond to the motion, the Court finds that Mr. Hogan has not shown he is entitled to summary judgment. Accordingly, the motion for summary judgment is DENIED.

I. Background

As an initial matter, the Court notes that Mr. Hogan appears to have a misunderstanding regarding the status of the claims stated in his third-party complaint. Specifically, in his memorandum in support of his motion for summary judgment, Mr. Hogan incorrectly states "Hogan has obtained a default judgment against Kruse on this conversion claim." [DE 98 at 3.] No entry of default or default judgment has been entered against any defendant on the claims in the third-party complaint; no default judgment has been entered against any defendant, period. In light of this misunderstanding, and for the benefit of the parties, the Court outlines the current status of the claims pending in this litigation.

As noted above, the case contains three operative pleadings: an initial complaint (brought by Kruse, Inc., against Mr. Hogan and Playtime Playground Equipment) [DE 1], a counterclaim (brought by Mr. Hogan against Kruse, Inc.) [DE 14], and a third-party complaint (brought by Mr. Hogan against Mr. Kruse and Bunker Lakes Dealership) [DE 14]. An entry of default, not a default judgment, has been entered against only one party in this case-Kruse, Inc.-based on that corporate entity's failure to appear through counsel. [DE 86, 87.] The Court would also have been justified in entering default against Bunker Lakes Dealership, based on that corporate entity's failure to appear by counsel, but did not do so at that time. Mr. Kruse, in his personal capacity, was warned that further failure to participate in the litigation could warrant the entry of default [ see DE 86 at 1-2], but new counsel has since appeared and does appear to be engaging in the litigation as required. So, no default has been entered against Mr. Kruse on any claim.

Additionally, so that the parties are clear, the entry of default against Kruse, Inc., operates only as a default on the claims contained in Mr. Hogan's counterclaim. Rule 55 allows entry of default against "a party against whom a judgment for affirmative relief is sought." Fed.R.Civ.P. 55(a) (emphasis added). Kruse, Inc., meets that definition with respect to Mr. Hogan's counterclaim, but not with respect to its own claim contained in the initial complaint. Accordingly, the Court considers Kruse, Inc.'s, claim against Mr. Hogan and Playtime Playground Equipment to remain pending.

With that background, the Court turns to the pending motion, which addresses only the non-defaulted claim of criminal conversion against Mr. Kruse and Bunker Lakes Dealership, relating to the RV at issue in the third-party complaint.

II. Facts

In light of the failure of the Kruse entities to respond to the motion for summary judgment, the Court treats the following facts as undisputed for the purposes of this motion. In 2009, Mr. Hogan purchased a 1998 40-foot Prevost Liberty Mirage recreational vehicle from either Mr. Kruse or Bunker Lakes (the motion is unclear). Mr. Hogan paid $250, 000, which was remitted by cashier's check payable to Mr. Kruse. [DE 98-3.]

Mr. Kruse has refused to provide the RV to Mr. Hogan. Mr. Kruse testified at deposition that the RV is currently being stored in a facility under Mr. Kruse's control in DeKalb County, Indiana. [DE 98-1 at 1.] At one point, a sheriff came to pick up the RV, but declined to do so once Mr. Kruse showed that he had "a lien and a UCC filed with the Secretary of State on it for the amount of money he owed." [ Id. at 2.] Mr. Kruse testified that he instructed his "people to keep the bus" in light of other money allegedly owed by Mr. Hogan to Mr. Kruse. [ Id. ]

III. Standard of Review

On summary judgment, the burden is on the moving party to demonstrate that there "is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). That means that the Court must construe all facts in the light most favorable to the nonmoving party, making every legitimate inference and resolving every doubt in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Kerri v. Bd. of Trs. of Purdue Univ., 458 F.3d 620, 628 (7th Cir. 2006). Summary judgment is not a tool to decide legitimately contested issues, ...


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