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Southside Automotive of Anderson, Inc. v. Smith

Court of Appeals of Indiana

December 7, 2018

Southside Automotive of Anderson, Inc., and David Amadio, Appellants-Defendants,
v.
Celeste Smith and Byron Swain, Appellees-Plaintiffs

          Appeal from the Madison Circuit Court The Honorable Thomas L. Clem, Judge Trial Court Cause No. 48C05-1709-SC-3029

          Attorney for Appellants Ralph E. Sipes Anderson, Indiana

          Attorney for Appellees Paul J. Podlejski Anderson, Indiana

          BAKER, JUDGE.

         [¶1] Southside Automotive of Anderson, Inc. (Southside), and David Amadio appeal the trial court's denial of their motion to set aside a default judgment for Celeste Smith and Byron Swain. Finding that the default judgment should have been set aside, we reverse and remand for further proceedings.[1]

         Facts

         [¶2] In late May 2017, Smith and Swain went to Southside to look for a car. They became very interested in a 2007 BMW 530xi. The two spoke with Amadio, the president of the company, about the car's condition. Amadio claimed that "the car was in mint condition . . . a rare find . . . [and] it appeared to be in good shape." Tr. Vol. II p. 11. Relying upon Amadio's advice, on June 2, 2017, Smith and Swain purchased the BMW "as-is" for $7, 490 with all fees included. Smith and Swain agreed to pay $4, 000 immediately as a down payment and to return on June 5, 2017, to pay an additional $2, 500. Thereafter, they would pay the remaining $990 in two monthly installments of $495.

         [¶3] One day later, immediately after picking up the BMW, Smith and Swain started having problems with it. The car started "knocking" and "backfiring" quite loudly, id. at 13, so Smith called Amadio to inform him about the issues. Amadio assured Smith that he had an excellent mechanic who would fix any minor problems the car might have. The two dropped the car off at Southside to have it fixed.

         [¶4] Smith and Swain did not hear from Amadio for another three weeks before they called him again. Amadio said the repairs were not complete and that he would need more time. Finally, after nearly three months, on August 28, 2017, Smith and Swain picked up the car. The next day, the two experienced even more problems. The BMW "almost caught fire," "it began smoking," and "the [check] engine light came on." Id. at 17. On September 1, 2017, Smith and Swain took the car to Resf Motors, a BMW certified service center, to get a proper diagnosis. Resf Motors informed the couple that the necessary repairs would cost $1, 927. Amadio refused to cover those costs.

         [¶5] On September 13, 2017, Smith and Swain filed a small claims suit against Southside and Amadio, arguing that they sold a car they falsely claimed to be in "mint condition," appellants' app. vol. II p. 22; that it took Southside and Amadio almost three months to make repairs; that Smith and Swain were without a vehicle for that entire time; and that even after making repairs, the car continued to malfunction. Smith and Swain sought $6, 700 in damages and $107 in court costs. A hearing was set for September 29, 2017.

         [¶6] After receiving notice of this suit, on September 20, 2017, Amadio went to the Madison Circuit Court and asked the court reporter if he or Southside needed legal counsel for the September 29, 2017, hearing. She said, "You don't have to worry about that. He doesn't operate that way. If you need an attorney, he will tell you." Id. at 16. The fact that the court reporter made this statement is not challenged, and the trial court made no finding to the contrary. The next day, Southside and Amadio filed a counterclaim, denying Smith and Swain's small claims allegations and arguing that the two had failed to pay the remaining purchase price ($3, 490) or to return the BMW to Southside.[2]

         [¶7] At the September 29, 2017, hearing, Smith and Swain appeared pro se and Amadio appeared pro se and on behalf of Southside. Though Amadio is the president of Southside, Southside technically failed to appear at the hearing because it was not represented by an attorney. So, while Amadio appeared and spoke for himself, he was not permitted to appear and speak on behalf of Southside. The trial court admonished Amadio, who is not an attorney, for attempting to represent Southside without a law license:

Okay. Do you know that it's illegal for you to be here today ...

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