Kenworth of Indianapolis, Inc. v. Seventy-Seven Limited, Convey All, LLC, Keller Trucking, Inc. (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: March 24, 2016
• Docket: 49A02-1504-PL-249
• Status: Published

Opinion

MEMORANDUM DECISION FILED Pursuant to Ind. Appellate Rule 65(D), Mar 24 2016, 8:20 am

this Memorandum Decision shall not be CLERK Indiana Supreme Court regarded as precedent or cited before any Court of Appeals and Tax Court court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE David T. Schaefer Scott A. Benkie Anthony M. Zelli Benkie & Crawford Dinsmore & Shohl LLP Indianapolis, Indiana Louisville, Kentucky Rodney V. Taylor Hilary A. Barnes Christopher & Taylor Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

Kenworth of Indianapolis, Inc., March 24, 2016 Kenworth of Indianapolis, Inc. Court of Appeals Case No. d/b/a ITC Acceptance 49A02-1504-PL-249 Company, and Paccar Inc., Appeal from the Marion Superior Appellants-Defendants, Court The Honorable Cynthia Ayers, v. Judge Trial Court Cause No. Seventy-Seven Limited, Convey 49D04-1010-PL-43362 All, LLC, Keller Trucking, Inc., K&K Aggregate, Inc., Huber Transport, LLC, Triple H Trucking, LLC, and Custom Hauling, Inc. Appellees-Plaintiff.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 1 of 10 Altice, Judge.

Case Summary

[1] Kenworth of Indianapolis, Inc. (Kenworth)1 and Paccar Inc. (Paccar)2

(collectively, the Defendants) raised a statute of limitations defense in their third

motion for summary judgment. During a subsequent status hearing, Seventy-

Seven Limited, Convey All, LLC, Keller Trucking, Inc., K&K Aggregate, Inc.,

Huber Transport, LLC, Triple H Trucking, LLC, and Custom Hauling, Inc.

(collectively, the Plaintiffs), argued that the Defendants had waived the statute

of limitations defense by not raising it in response to what the Plaintiffs

characterize as their cross-motion for summary judgment found in their

response to the Defendants’ first motion for summary judgment. The trial court

agreed with the Plaintiffs, concluding that the Defendants had waived the

defense. The Defendants present one issue for our review: Did the trial court

properly conclude that the Defendants waived their limitations defense?

[2] We reverse and remand.

Facts & Procedural History

1 Kenworth is a local dealer of Kenworth trucks. 2 Paccar is the parent company of Kenworth Truck Company.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 2 of 10 [3] This case involves a fleet of heavy-duty trucks manufactured by Paccar and sold

by Kenworth to the Plaintiffs.3 The Plaintiffs took delivery of the trucks

beginning in late 2005 and continuing into early 2006. For each truck, the

respective buyer signed a limited warranty agreement, which provided, in

pertinent part, for a one-year limitation period from the accrual of a cause of

action to file a claim against the Defendants.4

[4] Immediately after delivery of the first set of trucks, several of the buyers

complained to Kenworth that the trucks vibrated excessively while idling or at

specified RPMs. Kenworth contacted Paccar, who then consulted with the

manufacturers of the engine, transmission, and engine mounts, to resolve the

vibration problem. In September 2006 the decision was made to install

modified engine mounts. The new mounts initially reduced the vibration to

acceptable levels, but the problem reoccurred in 2007. In 2008, the Defendants

installed a different engine mount that they believed would be more durable.

Again, the vibration was initially reduced to acceptable levels. By the end of

2008, the vibration problem was reoccurring in several of the trucks. At that

point, Paccar provided the Plaintiffs with an extended warranty for a period of

3 Plaintiffs were among a group of thirteen trucking companies that together ordered forty-nine identically configured trucks from Kenworth. These companies had independently been buying Kenworth trucks for years, but decided to coordinate truck orders to obtain discount pricing. 4 The default provision under the Uniform Commercial Code is that an action for breach of any contract for sale must be commenced within four years after the cause of action accrues. Ind. Code § 26-1-2-725(1). This provision further provides: “By the original agreement the parties may reduce the period of limitation to not less than one (1) year, but may not extend it.” Id.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 3 of 10 4 years or 250,000 miles, whichever came first. The warranty also included free

engine mount replacements for as long as the Plaintiffs owned the trucks.

[5] On October 4, 2010, the Plaintiffs filed a complaint alleging breach of express

and implied warranties, breach of contract, and constructive fraud. The

Plaintiffs also sought rescission of the contract. The Plaintiffs amended their

complaint in 2011 to add claims of estoppel and a claim of a valid rejection of

non-conforming goods under the UCC. A third amended complaint was filed

in 2013.5 The Defendants filed an answer to the initial complaint and the

amended complaints and in each asserted the expiration of the statute of

limitations as an affirmative defense.

[6] On June 3, 2013, the Defendants jointly filed a motion for summary judgment

with regard to the Plaintiffs’ claims for breach of warranty, incidental and

consequential damages, and rescission of the contract based upon revocation of

acceptance. On August 20, 2013, the Plaintiffs filed “Plaintiffs’ Response in

Opposition to Defendants’ (Paccar, Inc. and Kenworth of Indianapolis, Inc.)

Joint Motion for Summary Judgment.” Appellants’ Appendix at 117. The trial

court held a summary judgment hearing on August 28, 2013. The Defendants

presented their arguments and then in their response, the Plaintiffs stated that

they were “asking for summary judgment on those points . . . as a cross

motion.” Transcript of August 28, 2013 Hearing at 33. The Defendants

5 This pleading is not included in the record on appeal.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 4 of 10 responded, asserting that the Plaintiffs had not filed a motion for summary

judgment and at the very least, they were entitled to notice and an opportunity

to be heard if indeed the Plaintiffs were moving for summary judgment. To

show that they had filed a cross-motion, the Plaintiffs pointed to the last

sentence of their response brief, which states, “Plaintiffs respectfully submit that

Plaintiffs’ Cross-Motion for Summary Judgment as to the Breach of Contract,

Breach of Warranty, and Constructive Fraud be granted.” Id. at 163. On

October 24, 2013, the trial court entered an order denying the Defendants’

motion for summary judgment and the Plaintiffs’ cross-motion for summary

judgment. The Defendants requested that the trial court certify this order for

interlocutory appeal, which request the trial court denied.

[7] The Defendants filed a third motion for summary judgment 6 on August 18,

2014. In this motion, the Defendants asserted a statute of limitations defense.

During a status conference on August 26, 2014, the Plaintiffs argued that the

Defendants had waived their limitations defense by not raising it in response to

their cross-motion for summary judgment, which they claimed was included in

their response to the Defendants’ first motion for summary judgment. On

September 18, 2014, both sides filed briefs in support of their respective

positions regarding the issue of waiver of the limitations defense. On

September 25, 2014, the trial court issued an order denying, in part, the

6 According to an entry in the chronological case summary, the Defendants filed a second motion for summary judgment with respect to a claim of actual fraud on January 22, 2014. A second CCS entry indicates that this motion was granted after a hearing.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 5 of 10 Defendants’ third motion for summary judgment, finding that the Defendants

had waived their limitations defense.7 The Defendants filed a motion to correct

error, which the trial court denied after a hearing. Upon the Defendants’

request, the trial court certified the partial summary judgment order for

interlocutory appeal. This court accepted jurisdiction.

Discussion & Decision

[8] The narrow issue before us is whether the trial court properly determined that

the Defendants had waived their statute of limitations defense. The Defendants

assert that no waiver can occur unless the Plaintiffs actually filed a motion for

summary judgment, thereby putting them on notice and affording them an

opportunity to respond. The Plaintiffs assert that they filed a cross-motion for

summary judgment by requesting such in the last sentence of their response to

the Defendants’ first motion for summary judgment. The trial court sided with

the Plaintiffs and expressly denied the Plaintiffs’ cross-motion for summary

judgment.

[9] Our Supreme Court has recently addressed an issue similar to that presented

here. In a petition for rehearing in WellPoint, Inc. v. Nat’l Union Fire Ins. Co. of

Pittsburgh, PA, 38 N.E.3d 981, 983-84 (Ind. 2015), our Supreme Court was

presented with the scenario where the defendant sought summary judgment and

7 On October 31, 2014, the trial court held another hearing to consider the remaining arguments raised in the Defendants’ third motion for summary judgment.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 6 of 10 raised some but not all of its affirmative defenses. The Court noted the

defendant’s success on many of its claims would have established its non-

liability as to one or more counts of the complaint. Id. at 984. The denial of the

defendant’s summary judgment motion, however, would not have disposed of

the entire issue of liability. Id. The Court held that in this instance the general

waiver rule was inapplicable. Id. The Court’s explanation is thus:

For waiver of a contention to occur, it must be “placed in issue by the movant.” When, as here, the defendant moves for summary judgment and the plaintiff is the non-moving party, the defendant has no duty to raise all of its affirmative defenses unless another moving party “has first addressed and presented evidence on that element.” In the absence of a duty to raise one or more affirmative defenses, a defendant’s failure to do so cannot constitute waiver. This principle is also consistent with the unequivocal limitation in Trial Rule 56(B) precluding courts from granting summary judgment for a non-moving party except as to issues raised by the motion.

WellPoint, Inc., 38 N.E.3d at 984 (citations omitted).

[10] As in WellPoint, here, the Defendants moved for summary judgment and the

Plaintiffs were the non-moving party. With their motion the Defendants

defined the scope of the issues to be addressed and were under no obligation to

raise all of their affirmative defenses, including their limitations defense. The

trial court was likewise limited to addressing only those issues presented by the

Defendants as the moving party. See id.; T.R. 56(B). The Defendants did not

raise the statute of limitations defense in their motion. In the absence of a

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 7 of 10 motion for summary judgment filed by the Plaintiffs as to the issue of liability,

the Defendants were under no obligation to present their limitations defense.

[11] We now address whether the Defendants’ duty to present their limitations

defense was triggered by the Plaintiffs’ response to the Defendants’ first

summary judgment motion. As our Supreme Court has before acknowledged,

there is a line of cases “holding that a party is required to assert affirmative

defenses in response to a motion for summary judgment that would dispose of

the case or a motion for partial summary judgment that would establish

liability.” Reiswerg v. Statom, 926 N.E.2d 26, 31 (Ind. 2010). The Defendants

do not dispute this rule of law, but rather argue that the Plaintiffs never filed a

motion for summary judgment so as to trigger the Defendants’ duty to raise

their limitations defense.

[12] In arguing that their response constituted a cross-motion for summary

judgment, the Plaintiffs direct us to the opening paragraph, which provides that

the pleading is their response to Defendants’ “Joint Motion for Summary

Judgment Motion for Summary Judgment.” Appellants’ Appendix at 117. In

their brief on appeal, the Plaintiffs misrepresent this sentence as containing the

word “and” between the references to a motion for summary judgment and

assert that such is a clear reference to their filing of a cross-motion for summary

judgment. See Appellees’ Brief at 12. The word “and” does not appear in the

actual document. It therefore cannot be read as urged by Plaintiffs as a clear

request for summary judgment in their favor.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 8 of 10 [13] The Plaintiffs also point to the last sentence of their response in which they

explicitly request that the court grant their “Cross-Motion for Summary

Judgment.” Appellants’ Appendix at 163. Indiana Trial Rule 56(C) requires the

party seeking summary judgment to serve the motion and any supporting

affidavits in accordance with Ind. Trial Rule 5. The adverse party then has

thirty days after service to serve a response and any opposing affidavits. Id.

“When a party moves for summary judgment on the issue of liability, the non-

movant is thereby placed on notice that all arguments and evidence opposing a

finding of liability must be presented to properly resolve that issue.” Reiswerg,

926 N.E.2d at 32 (quoting Pantry, Inc. v. Stop-N-Go Foods, Inc., 796 F.Supp.

1164, 1167 (S.D. Ind. 1992)).

[14] Hiding a request that the trial court grant a cross-motion for summary judgment

in the last sentence of a response brief is not a proper motion for summary

judgment and does not adequately put a party on notice. For this same reason,

we disagree with any contention that the Plaintiffs’ reference to their purported

cross-motion for summary judgment during the hearing on Defendants’ first

motion for summary judgment was sufficient to trigger the Defendants’ duty to

raise their limitations defense. We agree with the Defendants that the Plaintiffs

did not file a cross-motion for summary judgment.

[15] To be sure, the Plaintiffs response was just that—a response. The Plaintiffs’

references throughout their response that they were entitled to summary

judgment or that certain claims should be resolved in their favor “[a]s a matter

of law” are likewise responses to the claims raised in Defendants’ summary

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 9 of 10 judgment motion. See, e.g., Appellants’ Appendix at 159, 162. Such responses are

not evidence that the Plaintiffs’ were seeking summary judgment outside the

scope of claims raised by the Defendants. Absent a proper motion for summary

judgment seeking to establish liability, the Defendants’ duty to present their

limitations defense was not triggered.

[16] As noted above, in defining the scope of the issues, the Defendants did not raise

the statute of limitations defense. That issue was therefore not before the court.

Thus, the trial court’s determination that the Defendants waived their

limitations defense was erroneous. We therefore reverse the trial court’s grant

of partial summary judgment in favor of the Plaintiffs on the issue of waiver of

the Defendants limitations defense.

[17] Judgment reversed and remanded.

[18] Robb, J., concur in result without opinion.

[19] Barnes, J., concur.

Court of Appeals of Indiana | Memorandum Decision 49A02-1504-PL-249 | March 24, 2016 Page 10 of 10