      ATTORNEYS FOR APPELLANT
      Mario Garcia                                                               FILED
      Terry Tolliver                                                        May 28 2020, 5:38 am
      Brattain Minnix Garcia
                                                                                 CLERK
      Indianapolis, Indiana                                                  Indiana Supreme Court
                                                                                Court of Appeals
                                                                                  and Tax Court



                                                  IN THE
            COURT OF APPEALS OF INDIANA

      Universal Auto, LLC, d/b/a                                 May 28, 2020
      James Myers,                                               Court of Appeals Case No.
      Appellant-Defendant/Counterclaimant,                       19A-PL-1225
                                                                 Appeal from the Marion Superior
                v.                                               Court
                                                                 The Honorable David J. Dreyer,
      Cory Murray,                                               Judge
      Appellee-Plaintiff/Counterdefendant                        Trial Court Cause No.
                                                                 49D10-1809-PL-36457



      Crone, Judge.


                                               Case Summary
[1]   Cory Murray purchased a used vehicle “as is” from Universal Auto, LLC

      d/b/a James Myers (Universal). 1 He signed an installment contract and also



      1
          Universal operates as an LLC, and Myers was improperly captioned as “d/b/a” below.


      Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020                               Page 1 of 10
      purchased a service agreement. He experienced mechanical problems shortly

      after his purchase and took his vehicle for service as instructed by Universal.

      Claiming that he had defaulted on the installment contract, Universal

      repossessed the vehicle before Murray’s first payment was due. Murray filed a

      contract action for damages, and Universal counterclaimed for damages and

      attorney’s fees. The trial court entered judgment in Murray’s favor on both his

      contract claim and Universal’s counterclaim. Universal now appeals, asserting

      that Murray defaulted on the sales contract and that it disclaimed all warranties

      and was not a party to the service agreement. We affirm the trial court’s

      judgment in all respects.


                                  Facts and Procedural History
[2]   On February 17, 2018, Murray entered into an installment contract with

      Universal to purchase a vehicle “as is” for $17,599.50. Murray made a down

      payment of $3539. Universal’s James Myers arranged a financing agreement

      with a third-party lender, Credit Acceptance Corporation, pursuant to which

      Murray was obligated to make monthly payments of $337.93 beginning on

      March 17, 2018. The parties executed a “Right to Repossess,” giving Universal

      a right to repossess the vehicle upon default and affording Murray ten days

      within which to redeem the repossessed vehicle. Defendant’s Ex. C. Murray

      and Universal (by Myers) both signed a document titled, “Wynn’s Plus Vehicle

      Service Contract/Application.” Plaintiff’s Ex. 13. The installment contract

      and bill of sale each list as a line item, “Service Contract: [$]1,535.00.”

      Plaintiff’s Exs. 1, 2.

      Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020          Page 2 of 10
[3]   Just hours after Murray purchased the vehicle, its engine began knocking and

      smoking. Murray called Universal, and Myers instructed him to take the

      vehicle to Indiana Auto Body & Service (Indiana Auto) for repairs and told him

      that Universal would cover the cost of the engine repair. Two days later, as

      Murray was driving his vehicle to Indiana Auto for the repair, the engine

      completely failed, and he had the vehicle towed. Indiana Auto replaced the

      engine, and Universal arranged payment. A few days after Murray got his

      vehicle back, he experienced trouble with the starter and took the vehicle to

      Indiana Auto. Murray personally paid the $200 charge for a new starter. A

      couple days later, the engine malfunctioned again, and Myers instructed

      Murray to have the vehicle serviced at Indiana Auto, which he did.

      Meanwhile, Universal stopped/withdrew its payment to Indiana Auto for the

      initial engine repair. When Murray attempted to pick up his vehicle, Indiana

      Auto employees informed him that they could not release it to him because it

      was subject to a mechanic’s lien due to nonpayment for the initial repair. Tr.

      Vol. 2 at 43. Murray phoned Myers, who reminded him that he still had to

      make payments on the vehicle to avoid being in breach of the sales contract.


[4]   In a letter dated March 7, 2018, Universal informed Murray that it had

      repossessed his vehicle and would resell it if he did not exercise his right to

      redeem it by paying the full contract balance of $15,720 within ten days.

      Plaintiff’s Ex. 6. In a notice dated that same day, Credit Acceptance notified

      Murray that it had reassigned his installment contract to Universal, closed his

      account, and canceled his vehicle service contract. Plaintiff’s Ex. 12.


      Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020           Page 3 of 10
[5]   On March 12, 2018, Murray filed a small claims action against Universal

      seeking the return of his down payment as well as damages for the repair of his

      starter, towing charges, and pain and suffering in the form of lost wages. On

      September 12, 2018, the action was transferred to the trial court’s plenary

      docket, and Universal filed a counterclaim seeking damages associated with

      Murray’s alleged default, repossession and cleaning costs, and attorney’s fees.

      At the February 2019 bench trial, both parties alleged breach of contract.

      Murray argued that Universal breached the service contract, and Universal

      argued that Murray owed damages for allegedly defaulting on the installment

      sales contract. The trial court issued a two-page order that included the

      following finding:


              Plaintiff purchased auto from Defendant “as is,” and separately
              entered into a service contract/warranty with Defendant. When
              the auto failed to operate, repairs were not made or paid by
              Defendant. Plaintiff lost $3,733.00 in purchase payments,
              $146.00 in towing charges, $200.00 for a repair, and $150.00 in
              lost wages.


      Appealed Order at 1. Based on this finding, the trial court concluded that

      Universal “breached the service contract/warranty contract by failing to repair”

      the vehicle and entered judgment in Murray’s favor for $4229. Id. at 2. The

      court summarily ruled against Universal on its counterclaim. Universal filed a

      motion to correct error, which was deemed denied. Universal now appeals.

      Additional facts will be provided as necessary.




      Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020        Page 4 of 10
                                      Discussion and Decision

       Section 1 – Universal has failed to establish prima facie error
                       concerning its counterclaim.
[6]   We first address Universal’s counterclaim, which seeks damages for Murray’s

      alleged default for nonpayment on the installment contract. Because Universal

      did not prevail on its counterclaim below, it appeals from a negative judgment.

      A negative judgment is a judgment entered against the party who bore the

      burden of proof at trial. Wilson v. Huff, 60 N.E.3d 294, 298 (Ind. Ct. App.

      2016). We will not reverse a negative judgment unless it is contrary to law. Id.

      On review, we consider the evidence and reasonable inferences in the light most

      favorable to the appellee. Id. “A party appealing a negative judgment must

      show that the evidence points unerringly to a conclusion different than that

      reached by the trial court.” Id. (citation omitted).


[7]   Murray has failed to file an appellee’s brief. When an appellee fails to submit a

      brief, we will not undertake the burden of developing his arguments. Meisberger

      v. Bishop, 15 N.E.3d 653, 656 (Ind. Ct. App. 2014). Rather, we apply a less

      stringent standard of review and will reverse if the appellant establishes prima

      facie error. Id. Prima facie error is error “at first sight, on first appearance, or

      on the face of it.” Solms v. Solms, 982 N.E.2d 1, 2 (Ind. Ct. App. 2012).


[8]   Universal specifically asserts that Murray “refused to complete his first payment

      on the [vehicle] and was considered to be in default.” See Appellant’s Br. at 8

      (citing Tr. Vol. 2 at 66). The cited portion of the trial transcript does not


      Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020            Page 5 of 10
      support this assertion. Rather, it concerns the introduction of Plaintiff’s Exhibit

      12, a discharge of lien form dated March 7, 2018, followed by questions to

      Universal’s manager Heather Padilla concerning the meaning and effect of such

      a form. Padilla explained that the creditor sends the form to the dealer so that

      the dealer can get the certificate of title back in the dealer’s name for resale.

      When asked why Universal paid off Murray’s account with Credit Acceptance,

      Padilla replied, “Because he defaulted on his contract and did not complete his

      first payment.” Tr. Vol. 2 at 66. The record does not support this claim. The

      installment sales contract specifies that Murray’s payment schedule will be

      “MONTHLY beginning March 17, 2018,” and the payment due notice from

      Credit Acceptance, dated March 5, 2018, lists Murray’s past due amount as

      “$0.00” and his current payment due date as “03/17/2018.” Plaintiff’s Exs. 2,

      15. Both the repossession letter and the discharge of lien form are dated March

      7, 2018, and both are based on an alleged default by Murray. Thus, instead of

      having to make a standard monthly payment on March 17, Murray was now

      facing the resale of his vehicle if he could not come up with $15,720 by March

      17.


[9]   In short, Murray had not defaulted on the sales contract when Universal

      repossessed his vehicle. One simply cannot be in default for nonpayment of a

      monthly bill that has not yet come due. Universal has failed to carry its burden

      of demonstrating prima facie error concerning its counterclaim.




      Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020            Page 6 of 10
           Section 2 – Universal has failed to demonstrate prima facie
                   error concerning Murray’s contract claim.
[10]   We now address Universal’s arguments concerning Murray’s contract claim.

       Universal contends that it disclaimed all warranties 2 and did not owe Murray

       any contractual duty to service his vehicle. Interpretation and construction of

       contract provisions are questions of law. Brill v. Regent Commc’ns, Inc., 12

       N.E.3d 299, 306 (Ind. Ct. App. 2014), trans. denied. We review each contract as

       a whole, ascertaining the parties’ intent and making every attempt to construe

       the contract’s language “so as not to render any words, phrases, or terms

       ineffective or meaningless.” Id. (quoting Fischer v. Heymann, 943 N.E.2d 896,

       900 (Ind. Ct. App. 2011), trans. denied).


[11]   Here, the bill of sale reads in pertinent part, “Unless Seller … enters into a service

       contract within 90 days of this contract, this vehicle is being sold “AS IS –

       WITH ALL FAULTS.” Plaintiff’s Ex. 1 (emphasis added). The installment

       contract includes nearly identical language. Plaintiff’s Ex. 2 (“Unless we … enter

       into a service contract within 90 days from the date of this contract, we make no

       warranties … on this vehicle”) (emphasis added). This language expressly




       2
         With respect to the disclaimer of warranties, Universal included the clear, conspicuous, and technical
       language necessary to disclaim implied warranties by stating that the vehicle was being sold “as is,” without
       any warranties, and Murray opted not to have the vehicle inspected by a mechanic of his own choosing. Ind.
       Code § 26-1-2-316. Below, Murray did not focus his argument on the efficacy of the as-is language but rather
       on the service contract. We limit our discussion accordingly.

       Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020                                 Page 7 of 10
       indicates that the existence of an enforceable service agreement will act as an

       exception to the “as-is” disclaimer of warranties.


[12]   Universal maintains that the trial court erred in finding that it owed a

       contractual duty to Murray concerning any repairs. It relies on language in the

       delivery receipt, signed by Murray, acknowledging that the “vehicle is in

       acceptable working order,” that he “release[d] the dealership from all

       responsibility … for future repairs needed or claims that may arise with the

       vehicle,” that he had “been given the opportunity to test drive and research all

       information related to the vehicle,” and “that it is FULLY my responsibility to

       maintain the vehicle at MY expense and I do not hold the dealer responsible in

       any manner to provide any service.” Plaintiff’s Ex. 5. We agree that the

       language is unambiguous, but it must be read in conjunction with the other

       documents executed as part of the sale. See Merrill v. Knauf Fiber Glass GmbH,

       771 N.E.2d 1258, 1268 (Ind. Ct. App. 2002) (where contract comprised four

       documents, court harmonized the documents to ascertain parties’ intent), trans.

       denied. This includes the installment contract and bill of sale, with their

       references to circumstances in which Universal enters into a service agreement.

       Plaintiff’s Exs. 1, 2.


[13]   Universal claims that it was never a party to a service agreement with Murray.

       The service agreement at issue is the Wynn’s Plus Service Contract, which was

       signed by Murray and by Myers on behalf of Universal as the “Selling Dealer.”

       Plaintiff’s Ex. 13. Signature notwithstanding, Universal points us to contract

       language defining “You, Your, Yours and I” as the customer, Murray, and

       Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020           Page 8 of 10
       “Administrator, Our, Us, and We” as Wynn’s Extended Care, Inc. Id. Based

       on this language, Universal submits that the only parties to the contract were

       Murray and Wynn’s Extended Care. However, the contract also states, “This

       Contract is not valid unless signed by You [Murray] and an authorized

       representative of the Selling Dealer.” Id. at 5. This means that the contract

       could not have been formed without the signature of Universal’s representative.

       Moreover, Universal facilitated the collection of the $1535 fee from Murray.

       See Plaintiff’s Exs. 1, 2 (retail installment contract and bill of sale, both listing as

       line item $1535 paid for “Service Contract”).


[14]   Moreover, Universal played a key role in dictating where Murray obtained

       service under the contact, essentially funneling him to its own preferred

       mechanic. Murray testified that it was Myers who directed him to take the

       vehicle “to Indiana Auto, which is where they get their cars fixed,” and assured

       him that Universal would pay for it. Tr. Vol. 2 at 16. It was Universal’s

       withdrawal of its payment to Indiana Auto that precipitated the placement of a

       mechanic’s lien on the vehicle. In short, Universal facilitated the formation, fee

       collection, and execution of the service contract, and its withdrawal of payment

       to the repair shop of its own choosing was the catalyst for the mechanic’s lien

       that ultimately resulted in the denial of the vehicle to Murray. This level of

       control, coupled with Myers’s signature, supports the trial court’s conclusion

       that Universal was a party to the service contract.


[15]   Given Universal’s level of control, we are unpersuaded by its arguments

       concerning Murray’s alleged failure to honor certain technical prerequisites for

       Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020              Page 9 of 10
       coverage under the service contract, e.g., calling certain phone numbers to

       determine whether a repair or breakdown is covered, notifying the repair facility

       concerning the service contract, and paying a $100 deductible. See Appellant’s

       Br. at 13-14 (citing Plaintiff’s Ex. 13). Murray simply did what Myers

       instructed him to do, which included taking the vehicle to the repair shop with

       whom Universal ordinarily dealt. If anything, Universal induced any de

       minimis breaches that Murray may have committed.


[16]   Finally, with respect to the amount of the damage award, Universal does not

       specifically challenge the award of towing fees as consequential damages.

       Universal does challenge as contrary to law Murray’s request for $150 for pain

       and suffering. See Plaintiff’s Ex. 9 (ledger with line-item breakdown of

       Murray’s asserted damages). The trial court addressed this line item during the

       trial, and Murray clarified that it was for lost wages during the weeks when his

       vehicle was in and out of the repair shop. In its written order, the trial court

       identified this portion of the damages as “$150.00 in lost wages.” Appealed

       Order at 1. Lost wages may or may not be recoverable in a contract action, but

       Universal has not established that they are not recoverable here. The trial court

       did not err in including this in the damage award. We therefore affirm the trial

       court’s judgment for $4229 in favor of Murray.


[17]   Affirmed.


       May, J., and Pyle, J., concur.




       Court of Appeals of Indiana | Opinion 19A-PL-1225 | May 28, 2020          Page 10 of 10
