M&M Auto Sales v. Old Republic Surety Company v. Brooks Road Auto Mart, LLC et al.

This is an action to recover on a surety bond. The plaintiff automobile wholesaler sold vehicles to the third-party defendant automobile retailer. The retailer gave thewholesaler the certificates of title for the vehicles as security, pending the retailer’s payment in full for the vehicles. Subsequently, the retailer sold the vehicles to third parties, but did not pay the wholesaler. The wholesaler, therefore, retained the certificates of title. Consequently, the retailer was unable to transfer the certificates of title to the third-party purchasers when they bought the vehicles. Later, in a separate lawsuit, the wholesaler obtained a judgment against the retailer for breach of contract. The wholesaler then filed the instant lawsuit against the defendant surety company on the retailer’s automobile dealership surety bond, claiming that it was damaged by the retailer’s failure to transfer the certificates of title to the purchasers of the vehicles. The surety company filed a third-party complaint against the retailer, asserting that the retailer was required to indemnify the surety company for its attorney’s fees expended in defending the underlying lawsuit. The surety company filed a motion for summary judgment. The trial court granted summary judgment in favor of the surety company against both the wholesaler and the retailer. The wholesaler and the retailer now appeal. We affirm.