Gerdon Auto Sales, Inc. and William L. Gerdon, Appellants-Plaintiffs,
John Jones Chrysler Dodge Jeep Ram, a/k/a John Jones Automotive Group and John Jones Chrysler City, Inc., Appellees-Defendants.
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.
Attorneys for Appellee J. David Agnew George W. Gesenhues,
Jr. Lorch Naville Ward LLC New Albany, Indiana
of the Case
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'
and Procedural History
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.
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.
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
1. [Gerdon] being able to convey clear and marketable title
to the Real Estate, as established by a title insurance
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.
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.
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 ...