## Facts

- AutoXchange.com, Inc. (AutoXchange) operated as an automobile dealer and financed inventory through a floorplan arrangement with Automotive Finance Corporation (AFC), a secured creditor with an interest in AutoXchange’s vehicle inventory.
- Dreyer & Reinbold, Inc. (Dreyer) was an automobile retailer.
- In March 2001, Dreyer agreed to buy three vehicles from AutoXchange for $148,208.
- Dreyer dealt solely with Scott Ellingwood, AutoXchange’s corporate officer and minority shareholder, in negotiating and completing the transaction.
- Donald Tabor was AutoXchange’s president and majority shareholder.
- Ellingwood instructed Dreyer to pay the purchase price directly to AFC so Dreyer would receive free and clear title to the vehicles.
- AutoXchange later asserted Ellingwood’s instruction conflicted with AutoXchange’s internal procedure, which (according to AutoXchange) required Dreyer to pay AutoXchange rather than AFC.
- Dreyer paid AFC the full purchase price, and AFC credited the funds to AutoXchange’s floorplan account.
- In litigation involving AFC and AutoXchange’s floorplan obligations, AutoXchange and Tabor asserted third-party claims against Dreyer, alleging Dreyer failed to act in good faith and committed torts arising out of the direct payment to AFC, including fraud (and fraud by omission), tortious interference with contractual/business relations, and intentional infliction of emotional distress (IIED).
- Dreyer moved for partial summary judgment and filed a supplemental designation of evidence; AutoXchange and Tabor moved to strike portions of that designation.
- The trial court denied the motion to strike and granted partial summary judgment for Dreyer on the challenged third-party tort claims.
- AutoXchange and Tabor appealed to the Indiana Court of Appeals; AFC participated as an interested party.

## Issues

1. Whether the trial court erred in denying AutoXchange and Tabor’s motion to strike portions of Dreyer’s supplemental designation of evidence supporting summary judgment.
2. Whether the trial court erred in granting partial summary judgment for Dreyer on AutoXchange and Tabor’s tort claims (including fraud/fraud by omission, tortious interference, and IIED) arising from Dreyer’s payment to AFC at Ellingwood’s direction.

## Decision

- The court affirmed the denial of the motion to strike.
- The court held AFC, as a party of record in the trial court proceedings, was a proper participant on appeal.
- The court affirmed partial summary judgment for Dreyer on AutoXchange and Tabor’s tort claims.
- The court remanded for further proceedings on matters not resolved by the partial summary judgment.

## Legal Principles

- On summary judgment, designated materials must satisfy procedural and evidentiary requirements; a trial court may consider properly designated and authenticated evidence and may deny a motion to strike where the materials are acceptable under the rules.
- A corporation may be bound by the apparent authority of an officer it places in a role that reasonably signals authority to third parties; internal limits on the officer’s authority do not defeat apparent authority as to a third party without notice of those limits.
- Where a buyer deals exclusively with a corporate officer presented as the transaction’s representative, the buyer may reasonably rely on that officer’s directions about how to complete the sale, including where to send payment.
- Payment to a secured floorplan lender at the seller’s officer’s direction—made to secure clear title and credited to the seller’s account—does not, without more, support tort liability against the buyer.
- Fraud requires a material misrepresentation (or an omission where a duty to disclose exists), reliance, and resulting injury; when the seller’s officer arranged the payment method, the corporation generally cannot recast the transaction as deception by the buyer based on the corporation’s internal procedures.
- An agent’s knowledge acquired within the scope of agency is imputed to the principal, which can defeat claims framed as if the principal lacked knowledge of facts known to its own agent.
- Tortious interference requires intentional and unjustified interference with a contract or business relationship; conduct consistent with a reasonable understanding of the seller officer’s authority and undertaken for ordinary business reasons is not “improper” interference.
- IIED requires conduct so extreme and outrageous that it exceeds all bounds tolerated in a civilized community; routine commercial payment disputes and related litigation conduct do not meet that standard.

## Conclusion

The Indiana Court of Appeals affirmed the trial court’s denial of AutoXchange and Tabor’s motion to strike and upheld partial summary judgment for Dreyer because Dreyer reasonably relied on AutoXchange’s officer, paid the agreed purchase price directly to AutoXchange’s secured floorplan lender to obtain clear title, and the payment was credited to AutoXchange—leaving no triable basis for fraud (including omission), tortious interference, or IIED on the summary-judgment record.


AutoXchange.com v. Dreyer and Reinbold, Inc., 816 N.E.2d 40 (2004)