Jerry Alderman Ford Sales, Inc. v. Bailey

291 N.E.2d 92, 154 Ind. App. 632, 12 U.C.C. Rep. Serv. (West) 47, 1972 Ind. App. LEXIS 944
CourtIndiana Court of Appeals
DecidedDecember 27, 1972
Docket871A148
StatusPublished
Cited by78 cases

This text of 291 N.E.2d 92 (Jerry Alderman Ford Sales, Inc. v. Bailey) 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
Jerry Alderman Ford Sales, Inc. v. Bailey, 291 N.E.2d 92, 154 Ind. App. 632, 12 U.C.C. Rep. Serv. (West) 47, 1972 Ind. App. LEXIS 944 (Ind. Ct. App. 1972).

Opinions

Sullivan, J.

This appeal involves judgments in amounts of $52,500 and $477.72 in favor of Mrs. Bailey (plaintiffappellee) and Central Indiana Truck Equipment Corp. (Central) (defendant-appellee), respectively, against Jerry Alderman Ford Sales, Inc. (Alderman) (defendant-appellant) -1 The case arose out of the sale by Alderman of a 1967 [636]*636Ford triaxle dump truck to Mrs. Bailey and subsequent repairs made to said truck by Central.

Mrs. Bailey alleged in her original complaint that following repeated steering difficulty, she delivered her truck to Alderman for repairs; that Alderman delivered the truck to Central for the repairs; that after the repairs were made both Alderman and Central refused to deliver the truck to Mrs. Bailey; that as a result Mrs. Bailey lost the use of the truck and suffered lost income in the amount' of $6500; that because of the aggravated circumstances Mrs. Bailey was entitled, in addition to actual damages, $50,000 punitive damages.

Central filed a cross-complaint against Mrs. Bailey and Alderman for $477.72, the value of repairs to the truck, and further cross-claimed against Alderman for any sums adjudged against it in Mrs. Bailey’s favor. Alderman, in turn, cross-claimed against Central for all sums that might be adjudged against it in favor of Mrs. Bailey.

One day prior to trial Mrs. Bailey moved to amend her complaint to increase her actual damage figure from $6500 to $35,000. Alderman opposed this with a motion for continuance. The trial court did not rule on the motion to amend until the parties at trial had rested, at which time the motion was sustained. The jury returned a verdict for Mrs. Bailey and against Alderman for $35,000 actual damages and $17,500 punitive damages and $477.72 for Central on its cross-complaint against Alderman.

EVIDENCE OF MALICE OR OPPRESSIVE CONDUCT NOT PRECLUDED BY FAILURE TO PLEAD FRAUD WITH SPECIFICITY

The principal thrust of appellant’s argument involves an interpretation of Indiana Rule TR. 9(B) which reads as follows:

“In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be specifically averred. [637]*637Malice, intent, knowledge, and other conditions of mind may be averred generally.”

It is Alderman’s contention that because fraud was not specifically pleaded as required by TR. 9(B), it was error for the trial court to permit Mrs. Bailey to introduce evidence of “alleged fraud” in the sale of the truck. The main question before us is whether the lawsuit below sounded in “fraud” as contemplated by said Rule or whether it merely involved circumstances of malice or oppressive conduct so as to fall outside the “specificity” requirements of the Rule.

Mrs. Bailey’s complaint insofar as pertinent to the Rule 9(B) issue alleged:

“2. That the defendants, and each of them, in failing to return said truck to its owner after demand being made were guilty of negligence, malice and oppressive conduct toward the plaintiff.
“3. That because of the aggravated circumstances the plaintiff is entitled to exemplary damages from the defendants, and each of them, in the amount of Fifty Thousand ($50,000.00) Dollars.”

It is Bailey’s vigorous contention that the evidence of record, which Alderman claims constitutes a change in the theory of the action to one of “fraud”, is evidence which merely shows appellant’s malice and oppressive conduct so as to entitle her to punitive damages,

Although the case of Murphy Auto Sales, Inc. v. Coomer (1953), 123 Ind. App. 717, 718, 112 N.E.2d 589 does in fact involve allegations of fraud as opposed to some other conduct of a tortious nature done with malice or an oppressive state of mind, the opinion does set forth the relevant law of Indiana concerning the conditions under which punitive damages may be awarded:

“Punitive or exemplary damages do not rest upon any ground of abstract or theoretical justice but upon the basis of an established public policy which seeks to promote the public safety and to punish through the medium of a civil proceeding a fraudulent wrong[638]*638doer, and where malice, gross fraud and oppressive conduct is shown punitive damages are allowable to deter other wrongdoers from offending in a like manner.”

It may be observed that it is quite possible for a single act to constitute not only actionable fraud, if such fraud were alleged, but to constitute as well, evidence of a malicious or fraudulent state of mind on the part of defendant so as to authorize the award to plaintiff of punitive damages pursuant to a complaint for contract rescission and damages (Murphy Auto Sales, Inc., supra) or as here, a complaint for damages for conversion or for breach of a contract of bailment. The pleader retains certain options and alternatives in such situations for as noted in Murphy Auto Sales, Inc., supra, quoting from 25 C.J.S., Damages § 120:

“Where the acts constituting a breach of contract also amount to a cause of action in tort, there may be a recovery of exemplary damages upon proper allegations and proof. As sometimes stated, exemplary damages are recoverable for a tort committed in connection with, but independently of, the breach of contract, where the essentials of an award of such damages are otherwise present, the allowance of such damages being for the tort and not for the breach of contract. In order to permit a recovery, however, the breach must be attended by some intentional wrong, insult, abuse, or gross negligence which amounts to an independent tort.”

Compare Standard Land Corporation of Ind. v. Bogardus (1972), 154 Ind. App. 283, 289 N.E.2d 803, decided by the First District.

It must also be noted that an act committed with a fraudulent state of mind may be such as to subject the actor to liability for punitive damages yet such act may not constitute actionable fraud. In other words “fraud” which under Rule 9(B) must be specifically alleged contains many more essential elements than the state of mind described by the words “with fraudulent intent” (E. I. Du[639]*639Pont DeNemours & Co. v. Dupont Textile Mills, Inc., (M.D. Pa. 1939) 26 F. Supp. 236) or “willful and malicious misrepresentations” (Nagel v. Prescott & Co. (N.D. Ohio 1964) 36 FRD 445), or as here “malice and oppressive conduct toward plaintiff”. See Love v. Comml. Casualty Ins. Co. (S.D. Miss. 1939) 26 F. Supp. 481). Quite obviously, the last such allegations fall short of alleging actionable fraud. In the case before us the allegation is very simply that the conduct of defendants with respect to the denial to plaintiff of her truck was malicious and oppressive. Such allegation is clearly one of a state of mind, and is sufficient in its generality.

Our analysis derives support from a principal treatise on Federal Procedure.2

“The rule recognizes that any attempt to require specificity in pleading a condition of mind would be unworkable and undesirable.

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Bluebook (online)
291 N.E.2d 92, 154 Ind. App. 632, 12 U.C.C. Rep. Serv. (West) 47, 1972 Ind. App. LEXIS 944, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jerry-alderman-ford-sales-inc-v-bailey-indctapp-1972.