Art Hill Ford, Inc. v. Callender

406 N.E.2d 340, 77 Ind. Dec. 21, 1980 Ind. App. LEXIS 1519
CourtIndiana Court of Appeals
DecidedJune 30, 1980
Docket3-879A217
StatusPublished
Cited by6 cases

This text of 406 N.E.2d 340 (Art Hill Ford, Inc. v. Callender) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Art Hill Ford, Inc. v. Callender, 406 N.E.2d 340, 77 Ind. Dec. 21, 1980 Ind. App. LEXIS 1519 (Ind. Ct. App. 1980).

Opinions

GARRARD, Presiding Judge.

Kenneth Callender and his mother Jeannette Callender brought this action against Art Hill Ford, Inc. and Ford Motor Company alleging breach of warranty and negligence. The jury returned a verdict against both defendants. Compensatory damages were assessed against Art Hill Ford in the amount of $2,411.00 and punitive damages were assessed in the amount of $7,000.00. Against Ford Motor Company compensatory damages were assessed in the amount of $4,822.00. The trial court entered judgment on the verdict as to Art Hill Ford.and, after a remittitur, entered judgment against Ford Motor Company for $2,411.00. [341]*341Ford tendered $2,439.00 (the judgment plus costs) to the Callenders and the trial court entered an order of satisfaction of the judgment on the compensatory damages as to both Art Hill Ford and Ford Motor Company.1

Art Hill Ford, on appeal, challenges the award of punitive damages. It contends that the evidence is insufficient to sustain the award.

Punitive damages have been held recoverable in contract actions where the evidence independently establishes the element of an intentional common law tort or where the elements of fraud, malice, gross negligence or oppression mingle in the controversy. In addition, it must be shown that the public interest will be served by the deterrent effect of the punitive damages. Hibschman Pontiac, Inc. v. Batchelor (1977), 266 Ind. 310, 362 N.E.2d 845; Vernon Fire & Casualty Ins. Co. v. Sharp (1976), 264 Ind. 599, 349 N.E.2d 173.

While a party establishing a breach of contract is entitled to compensatory damages, he must show more to recover punitive damages. He must show that the breaching party has committed a serious wrong tortious in nature. Hibschman, supra. An award of punitive damages cannot be sustained by a showing of mere negligence, mistake or delay. The conduct which will support such an award is conduct which can be classified as reprehensible in nature. Prudential Insurance Co. v. Executive Estates (1977), Ind.App., 369 N.E.2d 1117.

“Punitive damages are appropriate where there is evidence of an independent tort of a ‘reprehensible’ nature, where the record indicates a state of mind evidencing bad faith, or where the actor’s conduct has a quality that characterizes it as ‘reprehensible’ as where there is evidence of a consciousness of an intended or probable effect calculated to unlawfully injure the personal safety or property rights of others.”

First Federal Savings and Loan Assoc. v. Mudgett (1979), Ind.App., 397 N.E.2d 1002, 1008.

Our extensive review of the evidence in the case before us has failed to reveal evidence to sustain a finding of either the necessary independent tort or of a serious wrong tortious in nature.

The evidence in the light most favorable to the verdict reveals that Kenneth Callender purchased a 1976 Ford four-wheel drive pickup truck designed for off-road use from Art Hill Ford on April 20, 1976. Two days later, while driving off the road, the front axle broke. Due to the nature of the damage, Art Hill Ford had the vehicle inspected by a Ford Motor Company representative so that repair could be authorized under the warranty before work began. The representative inspected the truck and authorized the repair in the last week of April. After the work was authorized, the Callen-ders were told that the parts had to be ordered and would take 10 days to two weeks to arrive. In Mid-May, Kenneth contacted Art Hill Ford and was told that the parts had not arrived and were on back order. Art Hill Ford was contacted on a regular basis thereafter and each time the Callenders were told that the parts were still on back order. Kenneth was told on several occasions that the truck would be ready the “next week.” At the end of May, Mrs. Callender was told that the truck would definitely be repaired by the Fourth of July holiday weekend. On July 2, Kenneth was permitted to take the truck although the repair to the front axle was not yet completed since a part had not come in. Because the truck was not completely repaired, some restrictions were imposed on the use of the truck.

Art Hill Ford blamed the delay in fixing the truck on the difficulty in obtaining the necessary parts. The parts manager testified that the part was not in stock in any Ford parts depot in the United States and that a front axle was not a part that a dealer would normally have in stock. Further compounding the difficulty was the [342]*342fact that the incident occurred just prior to a new model year. The parts manager testified that he made numerous calls to Ford and other dealers around the country in order to locate the necessary parts.

Over the Fourth of July holiday, the Cal-lenders went on a trip to Benton Harbour, Michigan in the truck. On the way, Kenneth noticed a strange noise he later determined to be a problem with the transfer case. He returned the truck to Art Hill Ford on July 19th and was told that the truck would be repaired.

Kenneth, who had training in automotive repair, testified that the transfer case should have been inspected and repaired when the front axle was repaired. He stated that when the front housing of the axle breaks, the drive shaft will go back up in the transfer case causing damage. Art Hill Ford admittedly did not inspect or repair the transfer case when the axle was repaired. The testimony of Ford Motor Company witnesses, who also were qualified as experts, was that if the axle had broken under the circumstances as described by Kenneth, the transfer case would not have been damaged and there would be no reason to inspect it.

Repairs to the transfer case were not completed until October 18, 1976. Again the necessary parts were not normally kept in stock by a dealer. Nor were the parts available from any Ford parts depot in the United States. The parts manager at Art Hill Ford again had to call Ford Motor Company and other dealers several times attempting to obtain the various parts. Besides the difficulties encountered because of the change in the model year, further problems arose in September because of a strike at Ford Motor Company during which no parts could be delivered.

Mrs. Callender contacted the Ford MOtor Company’s customer service department located in Melrose Park, Illinois. This department was also unable to obtain the necessary parts to repair the truck. Eventually the major part necessary for repair was obtained by Melrose Park from a dealer in Oklahoma. After this part was delivered, Mrs. Callender was told by Art Hill Ford that the truck would be ready on September 24. However, Art Hill Ford subsequently discovered that additional parts were needed to complete the repair. These parts also had to be ordered causing an additional delay.

Kenneth testified that he knew that the repair was a major one and it was difficult to tell what was wrong until the unit was taken apart and put together again.

Kenneth testified that the salesmen he dealt with and the parts department were fair and cooperative.

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Art Hill Ford, Inc. v. Callender
406 N.E.2d 340 (Indiana Court of Appeals, 1980)

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Bluebook (online)
406 N.E.2d 340, 77 Ind. Dec. 21, 1980 Ind. App. LEXIS 1519, Counsel Stack Legal Research, https://law.counselstack.com/opinion/art-hill-ford-inc-v-callender-indctapp-1980.