Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any               Oct 29 2014, 9:33 am
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT:                        ATTORNEY FOR APPELLEE:

DAVID L. TAYLOR                                 MARK K. DUDLEY
ANDREW T. PADGETT                               Howard Deley & Dudley, LLP
Taylor Law Firm, P.C.                           Anderson, Indiana
Indianapolis, Indiana


                              IN THE
                    COURT OF APPEALS OF INDIANA

AUTO-OWNERS INSURANCE COMPANY,                  )
                                                )
       Appellant/Plaintiff,                     )
                                                )
              vs.                               )       No. 18A05-1403-PL-107
                                                )
EDWARD FOSTER,                                  )
                                                )
       Appellee/Defendant.                      )


                    APPEAL FROM THE DELAWARE CIRCUIT COURT
                        The Honorable Kimberly S. Dowling, Judge
                             Cause No. 18C02-1005-PL-11


                                     October 29, 2014

               MEMORANDUM DECISION - NOT FOR PUBLICATION

BRADFORD, Judge
                                   CASE SUMMARY

       In 2009, a Honda Accord driven by Garrett Gaddis struck and seriously injured

Appellee-Defendant Edward Foster, who was riding a bicycle. Approximately a month

before, Garrett had executed a bill of sale for the Accord from Bill Gaddis Chrysler

Dodge (“the Dealership”) and took possession of the Accord. Garrett was issued a

temporary license plate for the Accord and purchased the Accord through his father, Scott

Gaddis, who worked for the Dealership at the time. Scott was to pay for the Accord from

his employee account over time, and Garrett was to pay Scott back. At the time of the

sale, Garrett paid Scott $200.00 toward the $500.00 purchase price. At the time of the

accident, Garrett was driving the Accord without permission after Scott had taken the

keys as a disciplinary measure. Following the accident, Scott took the Accord from

Garrett and had the Dealership sell it at auction, and the Dealership retained the proceeds.

       In this insurance coverage case, Appellant-Plaintiff Auto-Owners Insurance

Company appeals from the trial court’s judgment that it has a duty to defend and

indemnify the Dealership because the dealership actually owned the Accord at the time of

the accident and that Garrett was driving it with the Dealership’s implied permission.

Because we conclude that the trial court’s conclusions that the Dealership owned the

Accord at the time of the accident and that Garrett was permissively driving it, we affirm.

                       FACTS AND PROCEDURAL HISTORY

       In late 2008 and early 2009, the Dealership in Muncie was owned by Bill Gaddis

and employed, among others, Bill’s sons Steve and Scott as manager and a salesman,

respectively. Scott resided with his son Garrett in a house next to the Dealership. On

                                             2
December 15, 2008, Garrett and the Dealership executed a bill of sale for a 1996 Honda

Accord for a total price of $500.00, plus tax. The Dealership issued a temporary paper

license plate to Garrett for the Accord. Garrett made a down payment of approximately

$200.00 cash to Scott, who put the Accord on his employee account, through which the

Accord would be paid for by paycheck deductions over time. The arrangement between

Scott and Garrett was that Garrett was to repay Scott the balance, also over time.

Dealership records do not indicate that the Accord was ever put on Scott’s account or that

the Dealership paid sales tax.

       At the time, Auto-Owners provided coverage to the Dealership pursuant to a

Garage Liability Policy (“the Policy”) with policy terms from December 1, 2008, to

December 1, 2009. (Policy 1). Pursuant to the terms of the Policy, Auto-Owners “will

… pay damages for bodily injury and property damage for which the insured becomes

legally responsible because of or arising out of … An auto or farm implement …

Owned by you[.]” Exhibit Vol. p. 335. The Policy also provided the following:

       SECTION III – WHO IS AN INSURED
       ….
       B.  With respect to any auto or farm implement as described under
           SECTION II – COVERAGE, COVERAGE A – BODILY
           INJURY AND PROPERTY DAMAGE LIABILITY, 1.
           COVERAGE, b. Bodily Injury and Property Damage Liability,
           only
       1.  You.
       2.  Your garage customers.
       3.  Any other person or organization using an auto or farm implement
           with your permission.

Exhibit Vol. pp. 350-51.



                                            3
       At some point before January 29, 2009, Scott took the keys to the Accord away

from Garrett as a disciplinary measure. The Accord was parked on the Dealership’s lot.

On January 29, 2009, Garrett, who had found the hidden keys, was driving the Accord

without permission when he struck and seriously injured Foster, who was riding a

bicycle. Following the accident, Scott took the Accord away from Garrett and had Steve

sell it at auction for $1465.00, with the Dealership retaining all of the proceeds.

       On May 26, 2009, Foster filed suit against Garrett, alleging negligence. On May

17, 2010, Auto-Owners filed a suit for declaratory judgment against Foster, Garrett, and

the Dealership seeking a judgment that it had no duty to defend or indemnify Garrett

pursuant to the Policy or a separate Commercial General Liability policy.1 On May 25,

2011, Auto-Owners moved for summary judgment, which motion the trial court denied

on September 22, 2011. The matter was certified for interlocutory appeal. On August

29, 2012, this court issued its published opinion, in which we held, inter alia, that

genuine issues of material fact existed regarding (1) whether Garrett or the Dealership

owned the Accord at the time of the accident and (2) if the Dealership owned the Accord,

whether Garrett was a permissive driver. See Auto-Owners Ins. Co. v. Bill Gaddis

Chrysler Dodge, Inc., 973 N.E.2d 1179, 1184-85 (Ind. Ct. App. 2012), trans. denied.

       On December 9, 2013, trial was held to the bench on the questions of who owned

the Accord at the time of the accident and whether, if owned by the Dealership, Garrett

was driving it with permission. On February 18, 2014, the trial court issued its judgment,


       1
        At some point, the parties agreed that there was no coverage available pursuant to the
Commercial General Liability policy.


                                              4
in which it found that (1) the dealership owned the Accord at the time of the accident and

(2) Garrett was driving the Accord with the Dealership’s implied permission. The trial

court’s judgment reads as follows:

                                      JUDGMENT

             Comes now the Court, and the Plaintiff having appeared by
      Representative Darrin Earley and by counsel, and Defendant Edward Foster
      having appeared by counsel on the 9th day of December, 2013 for trial.
      Evidence was heard and concluded and counsel was given until December
      23, 2013 to present trial briefs. Trial briefs have been received from both
      counsel, and the Court took this matter under advisement. The Court now
      being duly and sufficiently advised, finds as follows:
         1.     Bill Gaddis Chrysler Dodge, Inc. ([the Dealership]) and Garrett
                Gaddis were both previously disposed of in this case.
         2.     Edward Foster remains as the sole Defendant in this cause.
         3.     Auto-Owners Insurance Company (Auto-Owners) issued a
                Garage Liability Policy to Bill Gaddis Chrysler Dodge, Inc.
         4.     Garrett Gaddis, at the time of this accident, lived with his father,
                Scott Gaddis.
         5.     Scott Gaddis, at or near the time of this accident, was a salesman
                at Gaddis.
         6.     Garrett Gaddis’ grandfather, Bill Gaddis, owned Bill Gaddis
                Chrysler Dodge, Inc.
         7.     On January 29, 2009, Garrett Gaddis was driving a 1996 Honda
                Accord and caused an accident with Defendant Edward Foster.
         8.     Plaintiff, Auto-Owners filed their Complaint for Declaratory
                Judgment against [the Dealership], Garrett Gaddis and Edward
                Foster.
         9.     The ultimate issues in this case are who owned the 1996 Honda
                Accord (Honda) that Garrett Gaddis was driving at the time of
                the accident, and, if [the Dealership] owned the car, did [the
                Dealership] give Garrett Gaddis permission to drive it.
         10.    The Court will address the ownership question first.
         11.    This is not a clear cut issue. There are facts that support both
                sides of the ownership issue.
         12.    Auto-Owners, Bill Gaddis, Scott Gaddis, Garrett Gaddis, and
                Steve Gaddis (Bill’s other son and the minority owner of [the
                Dealership]) all take the position that Garrett owned the Honda at
                the time of the accident.
         13.    Garrett went through his father, Scott, to purchase the Honda.

                                            5
14.   Family members, including Scott Gaddis, had accounts with the
      dealership through which they purchased vehicles, and had
      repairs done to their vehicles.
15.   Defendant’s Exhibit B is the account statement for Scott Gaddis.
      That exhibit shows no record of Scott Gaddis purchasing the
      Honda.
16.   Scott was supposed to obtain the permission of either Bill or
      Steve to purchase the Honda on his account, however he did not
      obtain anyone’s permission for the purchase.
17.   Plaintiff’s Exhibit 5, however, is a bill of sale from [the
      Dealership] to Garrett Gaddis for the Honda. That document was
      dated December 15, 2008, and is for the sum of Five Hundred
      Thirty Five ($535.00) dollars.
18.   There was some dispute as to how much Garrett had paid toward
      the Honda, but the Court finds most credible that Garrett had
      given his father the sum of Two Hundred ($200.00) dollars
      towards the purchase of the Honda, and was to continue paying
      payments to his father, who then was to pay the money to [the
      Dealership].
19.   Garrett had, at times, parked the Honda on the lot of [the
      Dealership], which was located next door to his father’s
      residence.
20.   Garrett had also used other [Dealership] cars for his job as a
      pizza delivery driver. Although Garrett alleges that he did not
      have permission to use those cars, he clearly had access to the
      keys to those cars and it happened on multiple occasions.
21.   [The Dealership] did not stop Garrett from using the cars for
      pizza delivery.
22.   Steve Gaddis discovered cars missing on multiple occasions, and
      he would retrieve the car from Garrett. On one occasion he
      found Garrett actually driving one of the cars. [The Dealership]
      never made a police report.
23.   Once Garrett started driving the Honda, his behavior was
      unacceptable to his father. He was missing school, spending
      most of his time with his girlfriend, and not coming home.
24.   Scott then took the car and keys away from Garrett and parked
      the car back on the [Dealership] lot. In taking such action, Scott
      was acting as Garrett’s father, not as an agent of the dealership.
25.   Garrett took the car and keys to the car on January 29, 2009, and
      drove the Honda when he collided with Edward Foster.
26.   Subsequent to the accident, the Honda was taken to an auto
      auction and sold for One Thousand Four Hundred Sixty five
      ($1,465.00) dollars and that money was paid to [the Dealership].

                                 6
      Neither Garrett nor his father was given any of that money, even
      though Garrett allegedly owed the dealership only three hundred
      thirty five ($335.00) dollars toward the balance of the purchase
      price.
27.   The Court heard no credible evidence that [the Dealership] paid
      the sales tax to the State of Indiana on the Honda.
28.   [The Dealership] did, however, provide a copy of the Temporary
      Plate Log (Plaintiff’s exhibit 6) showing that a temporary plate
      was issued to Garrett Gaddis on 12/15/08 for the Honda.
29.   The title to the Honda, however, (Defendant’s exhibit F) never
      lists Garrett Gaddis as an owner. The title provides that Bill
      Gaddis Chrysler Plymouth sold the vehicle to Bud’s Auto Sales
      on February 2009.
30.   The Court is left to piece these puzzle pieces together.
31.   The Court finds most credible the evidence that [the Dealership]
      still owned the 1996 Honda. In drawing that conclusion, the
      Court relies on the title of the vehicle which never shows Garrett
      Gaddis as an owner of the car, the [Dealership] account statement
      in Scott Gaddis’ name which never shows that he made
      arrangements for the sale of the Honda to Garrett and the
      proceeds check of One thousand four hundred sixty-nine
      ($1469.00) [sic] dollars being paid to [the Dealership] with no
      amount being paid to Garrett or his father. The Court finds that
      the overall picture of this case is that Garrett Gaddis was a
      spoiled grandchild, and that the adults involved here, Bill, Steve
      and Scott all indulged Garrett and his misbehavior instead of
      setting strict boundaries with him. Once the accident happened,
      [the Dealership] cooperated with the insurance company and
      covered up their bad acts.
32.   The Court now turns to the question of permission to drive the
      car.
33.   Steve knew that Garrett was reckless and purportedly did
      everything he could to keep Garrett off of the property. Steve
      knew that Garrett had used multiple cars off of the lot. [The
      Dealership] never did anything to lock the keys up from Garrett,
      which, in effect, allowed him to continue using the cars.
34.   By allowing Garrett to get away with “borrowing” cars off of the
      lot to drive for work, play or whatever his purposes, [the
      Dealership] gave Garrett their implied permission to drive their
      cars.
35.   Garrett didn’t “believe” he needed to get permission to drive the
      Honda because he says that he owned the car. The Court does
      not believe that Garrett owned it, but does believe that Garrett

                                 7
                didn’t think he needed anyone’s permission, based upon his past
                behavior.
       Wherefore, the Court finds that Plaintiff’s Motion for Declaratory
       Judgment should be and is DENIED. Costs vs. Plaintiff.

Appellant’s App. pp. 16-18. The parties are in agreement that the effect of the trial

court’s denial of Auto-Owners’s motion for declaratory judgment is entry of judgment in

favor of Foster.

                            DISCUSSION AND DECISION

      Whether the Trial Court Erred in Entering Judgment in Favor of Foster

       There is no dispute that if Garrett owned the Accord at the time of the accident,

there is no coverage.    Auto-Owners contends that the trial court’s finding that the

Dealership owned the Accord on January 29, 2009, is clearly erroneous. The trial court

entered findings of fact and conclusions of law pursuant to Indiana Trial Rule 52.

       When a court has made special findings of fact, an appellate court reviews
       sufficiency of the evidence using a two-step process. “First, it must
       determine whether the evidence supports the trial court’s findings of fact;
       second, it must determine whether those findings of fact support the trial
       court’s conclusions of law.” Estate of Reasor v. Putnam County, 635
       N.E.2d 153, 158 (Ind. 1994) (citation omitted). Findings will only be set
       aside if they are clearly erroneous. Id. “Findings are clearly erroneous only
       when the record contains no facts to support them either directly or by
       inference.” Id. (citation omitted). A judgment is clearly erroneous if it
       applies the wrong legal standard to properly found facts. State v. Van
       Cleave, 674 N.E.2d 1293, 1296 (Ind. 1996), reh’g granted in part, 681
       N.E.2d 181 (Ind. 1997). In order to determine that a finding or conclusion
       is clearly erroneous, an appellate court’s review of the evidence must leave
       it with the firm conviction that a mistake has been made. Id. at 1295.

Yanoff v. Muncy, 688 N.E.2d 1259, 1262 (Ind. 1997).

                   I. Whether the Trial Court Erred in Concluding
                       that the Dealership Owned the Accord


                                            8
       Auto-Owners contends that the trial court’s conclusion that the Dealership owned

the Accord at the time of the accident is contrary to law.

               In insurance coverage cases, where an automobile dealer sells a
       vehicle but has not yet transferred the certificate of title to the buyer,
       ownership of a newly-purchased vehicle is established when the evidence
       shows that the parties have completed the sale transaction. Ellis v. Weger
       (1990), Ind. App., 550 N.E.2d 1347, 1351; Royal Indemnity Insurance Co.
       v. Shue (1962), 134 Ind. App. 322, 327, 182 N.E.2d 796, 799, trans. denied.
       Our courts have recognized several indicia of ownership of an automobile
       which are considered evidence of a completed sale, including: (1) whether
       the parties have executed the sales contract; (2) whether the buyer has
       remitted a down payment; (3) whether the sale was conditioned upon
       financing and whether financing was obtained; (4) whether the vehicle
       bears an interim license plate; and (5) whether title has passed from the
       seller to the buyer. See Haskell v. Peterson Pontiac GMC Trucks (1993),
       Ind. App., 609 N.E.2d 1160, 1164; Weger v. Lawrence (1991), Ind. App.,
       575 N.E.2d 659, 662, trans. denied; Pekin Insurance Co. v. Charlie Rowe
       Chevrolet, Inc. (1990), Ind. App., 556 N.E.2d 1367, 1370; Ellis v. Weger,
       550 N.E.2d at 1352.

O’Donnell v. Am. Employers Ins. Co., 622 N.E.2d 570, 573 (Ind. Ct. App. 1993)

(footnote omitted).

       We conclude that, despite the execution of a bill of sale and the issuance of a

temporary plate, the trial court’s determination that the Dealership still owned the Accord

is not clearly erroneous. The trial court cited three facts to support its conclusion that the

Dealership owned the Accord at the time of the accident: (1) title was never transferred

to Garrett, (2) the Dealership’s records regarding Scott’s employee account do not reflect

the sale, and (3) the money from the auction was retained by the Dealership, not Garrett.

We further note the trial court’s findings that (1) there was no credible evidence that the

Dealership paid sales tax for the Accord, (2) Garrett occasionally parked the Accord at




                                              9
the Dealership, and (3) Scott parked the Accord at the Dealership after confiscating its

keys from Garrett.

       Most compelling is the fact that the Dealership took possession of the Accord after

the accident, sold it at auction, and retained all of the proceeds, even though they far

exceeded the balance supposedly owed by Garrett. Had the Accord belonged to Garrett

(as far as the Dealership was concerned), the excess would have been returned to Garrett.

The circumstances surrounding the Accord’s sale strongly imply that the Dealership

never really abandoned its ownership interest. Add to this the facts that there is no

evidence that the Dealership paid sales tax on the Accord, did not record the purported

sale on certain internal documents, allowed Garrett and Scott to park the Accord on

Dealership property, and never transferred title, and the evidence as a whole supports the

trial court’s judgment.

       We acknowledge Indiana precedent holding that, at least in some cases, the failure

to immediately transfer title does not preclude a completed sale. In both Ellis, 550

N.E.2d at 1352, and Shue, 134 Ind. App. at 322, 182 N.E.2d at 796, we concluded that

there was a completed sale despite no transfer of title. Those cases, however, do not

control here. In Ellis, the purchaser was involved in an accident fewer than seven hours

after leaving the dealer with his car, before there was a reasonable opportunity to transfer

title. Ellis, 550 N.E.2d at 1348. In Shue, transfer of title to the car was delayed because

the previous owners were in the midst of a divorce, and the dealership had tried to contact

the owner to transfer title but was unsuccessful. Shue, 134 Ind. App. at 325, 182 N.E.2d

at 798. Here, in contrast, there is no good reason offered for why transfer of title to

                                            10
Garrett should have been delayed for over a month. In essence, Auto-Owners is asking

this court to reweigh the credibility of the evidence, which we will not do. See Yanoff,

688 N.E.2d at 1262. Under the circumstances of this case, we conclude that the record

supports the trial court’s determination that the Dealership retained ownership of the

Accord.

          II. Whether the Trial Court Erred in Concluding that Garrett was
                Driving the Accord with the Dealership’s Permission

       Auto-Owners also contends that the trial court’s conclusion that Garrett had

permission to drive the Accord is clearly erroneous. Again, we must disagree. The

Dealership’s history of allowing Garrett access to its vehicles supports a reasonable

conclusion that he was driving the Accord with permission. Garrett had borrowed cars

from the Dealership several times, but no police report had ever been filed. In addition,

the Dealership never did anything to restrict Garrett’s access to the keys to its cars,

which, as the trial court found, allowed him to keep driving them. Although Garrett

testified that he never received explicit permission to borrow cars from the Dealership,

we conclude that such was not necessary. Garrett’s pattern of unchecked behavior would

lead a reasonable person to conclude that such behavior was, at the very least, tolerated.

Auto-Owners points to testimony from Steve that he did everything he could to keep

Garrett off of the Dealership’s property, but the trial court was free to disregard this

evidence, and did. Again, Auto-Owners is asking us to reweigh the evidence, which we

will not do. See id. The trial court’s finding that Garrett had permission to drive the

Accord at the time of the accident is not clearly erroneous.


                                            11
      We affirm the judgment of the trial court.

BARNES, J., and BROWN, J., concur.




                                           12
