COA upholds judgment in auction of towed car

The Indiana Court of Appeals affirmed summary judgment in favor of a father and daughter whose car was towed and later sold at auction, finding the towing company didn’t comply with the 15-day waiting period after placing notice in the newspaper before selling the car.

In Rick Gillespie, Dawn Gillespie and Rick's Towing and Maintenance, LLC v. Frank B. Niles and Kathryn Niles, No. 49A05-1102-CT-70, Rick and Dawn Gillespie’s company, Rick’s Towing and Maintenance, towed Kathryn Niles’ vehicle in December 2008. The car was still titled and registered to Kathryn’s father, Frank. Rick’s Towing sent notices to Frank, who lived at the same address as Kathryn, saying the Chevy Tahoe would be sold at public auction on Jan. 21, 2009, if it wasn’t claimed. On Jan. 6, the towing company contacted the Indianapolis Star about publishing notice of the sale, which ran Jan. 8. The vehicle was sold, and five days later the Nileses attempted to claim the car.

The Nileses sued for conversion, saying the Gillespies didn’t comply with the law regarding notice before selling a car at auction. The Gillespies filed a motion for summary judgment; the Nileses filed a cross-motion for summary judgment. The trial court ruled in favor of the Nileses and granted a judgment against the Gillespies instead of Rick’s Towing. The Nileses won $22,000 plus interest.

The Court of Appeals affirmed judgment for the Nileses, finding the defendants didn’t comply with the statutory requirements under Indiana Code 9-22-5-15 to enforce their lien by selling the Tahoe at auction. The statute dictates that the car couldn’t be sold before 15 days “after the date the advertisement required by subsection (d) has been placed or after notice required by subsection (e) has been sent, whichever is later.”

The Gillespies argued that they complied with the statute because they placed the ad with the newspaper 15 days before the sale by contacting the Indianapolis Star and it wasn’t their fault it didn’t run until two days later.

“The only reasonable interpretation of ‘placed’ in this context is that the advertisement had to be published at least fifteen days before the sale,” wrote Judge Michael Barnes. “The Defendants failed to wait the required fifteen days before selling the vehicle at the auction. As a result, the Defendants failed to meet the statutory requirements to auction the vehicle.”

The trial court did err by granting summary judgment against the Gillespies personally rather than against Rick’s Towing only. The Gillespies’ actions were performed as employees of the company and don’t demonstrate a basis for piercing the corporate veil, the appellate court held.