Sperro LLC d/b/a Sperro Towing and Recovery, Fenner & Associates LLC, Brian Fenner, and AMI Asset Management, Inc. and Indiana Bureau of Motor Vehicles v. Ford Motor Credit Company LLC
2016 Ind. App. LEXIS 416
Ind. Ct. App.2016Background
- Sperro LLC (Fenner) operated a business transporting and storing vehicles; it solicited consumers (often bankruptcy clients) to surrender financed vehicles under Transporting and Storage Authorization Agreements (TSAAs) and towed them to Sperro’s Indianapolis storage yards.
- FMCC held perfected first-priority liens on several financed vehicles (by title notation); borrowers had defaulted under retail installment contracts with FMCC.
- Sperro issued notices of lien and published purported lien-sale notices in the Hendricks County Flyer, then sold multiple vehicles to AMI, Sperro-related entities, or Fenner-associated buyers; some sales occurred sooner than statutory notice periods and in a newspaper not circulating in Marion County.
- FMCC sent stop-title requests to the BMV and demanded return of the vehicles; BMV increased scrutiny and rejected many title transfers arising from Sperro’s auctions.
- FMCC sued for conversion, replevin, tortious interference, and conspiracy and sought prejudgment possession and a preliminary injunction; the trial court granted prejudgment possession to FMCC and enjoined Appellants from selling or taking possession of FMCC‑encumbered vehicles.
Issues
| Issue | FMCC’s Argument | Sperro/Fenner’s Argument | Held |
|---|---|---|---|
| Whether Sperro’s lien-sales complied with Indiana Code § 9-22-6-2 (timing) | Sperro failed to wait 30 days after possession before advertising and 15 days after notice before sale; sales therefore invalid | Advertisements within 30 days complied because statute permits advertising “not later than 30 days” | Court: statute requires waiting 30 days before advertising; sales violated timing rules — sales invalid |
| Whether Sperro’s advertisements complied with § 9-22-6-2(d) (place of business/newspaper) | Ads in Hendricks County Flyer did not qualify for a mechanic located in Indianapolis; place of business is Marion County | Sperro’s principal office (P.O. Box in Camby/Hendricks County) is its place of business | Court: P.O. Box was mailing address only; Sperro’s place of business was Indianapolis; Hendricks Flyer insufficient — sales invalid |
| Whether FMCC was entitled to prejudgment possession of vehicles (replevin standard) | FMCC has perfected first liens and a reasonable probability of superior right to possession given invalid lien sales | Sperro contends it held valid possessory liens and sales; challenges statutory interpretation and factual inferences | Court: FMCC entitled to prejudgment possession because Appellants failed to comply with possessory-lien statute and FMCC’s liens are superior |
| Whether preliminary injunction (broad surrender and prohibition on possession) was proper based on tortious interference | Sperro and Fenner knowingly induced breaches by accepting TSAA surrenders that violated installment contracts; FMCC showed likelihood of success and irreparable harm | Appellants argued inducement was speculative and borrowers didn’t testify; claimed good-faith belief in FMCC abandonment | Court: Fenner’s repossession experience and business model supported finding of knowledge/reckless disregard; injunction appropriate and affirmed |
Key Cases Cited
- United Farm Family Mut. Ins. Co. v. Michalski, 814 N.E.2d 1060 (Ind. Ct. App. 2004) (replevin standard and elements)
- Orndorff v. Ind. Bureau of Motor Vehicles, 982 N.E.2d 312 (Ind. Ct. App. 2012) (standard of review for findings and conclusions)
- Apple Glen Crossing, LLC v. Trademark Retail, Inc., 784 N.E.2d 484 (Ind. 2003) (factors for preliminary injunction)
- Banks v. Jamison, 12 N.E.3d 968 (Ind. Ct. App. 2014) (purpose and nature of possessory mechanic’s lien)
- Gangloff Indus., Inc. v. Generic Fin. & Leasing, Corp., 907 N.E.2d 1059 (Ind. Ct. App. 2009) (perfecting possessory lien by retention of possession)
- Jones v. Harner, 684 N.E.2d 560 (Ind. Ct. App. 1997) (distinguishing possessory and nonpossessory mechanic’s lien rules)