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Gerdon Auto Sales, Inc. v. John Jones Chrysler Dodge Jeep Ram

Court of Appeals of Indiana

March 15, 2018

Gerdon Auto Sales, Inc. and William L. Gerdon, Appellants-Plaintiffs,
v.
John Jones Chrysler Dodge Jeep Ram, a/k/a John Jones Automotive Group and John Jones Chrysler City, Inc., Appellees-Defendants.

         Appeal from the Harrison Circuit Court The Honorable John T. Evans, Judge Trial Court Cause No. 31C01-1502-CT-7

          Attorney for Appellant James M. Gary Weber Rose, P.S.C. Louisville, Kentucky

          Attorneys for Appellee J. David Agnew George W. Gesenhues, Jr. Lorch Naville Ward LLC New Albany, Indiana

          NAJAM, JUDGE.

         Statement of the Case

         [¶1] Gerdon Auto Sales, Inc. and William L. Gerdon (collectively "Gerdon") appeal the trial court's grant of summary judgment for John Jones Chrysler Dodge Jeep Ram, a/k/a John Jones Automotive Group, and John Jones Chrysler City, Inc. (collectively "Jones") on Gerdon's complaint, which alleged that Jones had breached its contract with Gerdon, that it had breached its duty of good faith and fair dealing, and that Gerdon had sustained damages from those breaches. Gerdon presents six issues for our review, which we restate as the following three issues:

1. Whether the trial court erred when it granted summary judgment for Jones on Gerdon's breach of contract claim.
2. Whether Gerdon's claim that Jones breached its duty of good faith and fair dealing was subject to a two-year or ten-year statute of limitations.
3. Whether William has standing to enforce the parties' contract.

         [¶2] We affirm.

         Facts and Procedural History

         [¶3] On September 16, 2011, Gerdon and Jones entered into an Asset Purchase Agreement (the "Contract"). Under the Contract, Gerdon agreed to sell and Jones agreed to purchase "real estate, new and used vehicles, fixed assets, special tools, equipment, fixtures, auto parts[, ] and good will." Appellants' App. Vol. II at 21. Among other things, the Contract described the assets to be sold, the purchase price of those assets, contingencies, and an obligation that Jones employ William.

         [¶4] The section of the Contract titled "Purchase and Sale" consisted of five subsections and described the assets to be sold and their purchase price. One subsection described the real estate and included a purchase price of $800, 000. Another subsection described the fixed assets, good will, special tools, and equipment ("other assets") and provided for a purchase price of $200, 000.

         [¶5] The Contract contained a section on contingencies, which stated as follows:

[Jones'] obligation to purchase is contingent upon the following conditions being met, or waived, by the Closing Date:
1. [Gerdon] being able to convey clear and marketable title to the Real Estate, as established by a title insurance commitment.
2. Obtaining authorization from Chrysler Corporation for the transfer of the subject dealership.
3. [Jones] being able to obtain conventional commercial financing for this transaction.
4. [Jones] being able to establish a floor plan arrangement with Ally Financial.

Id. at 22. The Contract also contained a provision that Jones "shall employ William L. Gerdon for twelve (12) months for a monthly salary of Three Thousand Dollars ($3, 000.00)." Id. at 22-23. William signed the Contract on behalf of Gerdon in his official capacity as president of the corporation. He did not sign the contract in a personal capacity.

         [¶6] Jones sought financing in the amount of $800, 000 from First Savings Bank sometime shortly after the parties signed the Contract. On or around November 29, 2011, the bank determined that it wanted an environmental assessment to be done on the real estate. As such, the bank had not approved the loan application as of that date.

         [¶7] The Contract provided for a closing date of December 1, 2011, unless the parties "mutually agreed, in writing" to a different date. Id. at 22. On December 19, the parties signed an agreement that extended the closing date to December 20 "due to circumstances involving Chrysler Corporation's approval of and necessary involvement with" the Contract. Id. at 113. Further, both parties believed that it was "in their best interests" to extend the closing date. Id. However, the environmental assessment had not yet been completed on the real estate and Jones had not yet obtained financing for the loan. Nonetheless, on ...


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