Opinion
C.A. No.: N14A-12-010 FSS
11-16-2015
DANIEL O'NEILL, Appellant, v. CARMAN DODGE, INC., Appellee.
ORDER
Upon Appeal from the Court of Common Pleas - AFFIRMED.
1. This is an intermediate appeal by a car buyer who unsuccessfully sued the dealer for misrepresentation and related claims because, admittedly, the dealer marketed a used Jeep Wrangler X Sport as a Jeep Sahara.
2. After trial, the court-below issued a written decision finding, based on its view of the evidence, including witness credibility, that the dealer made an honest mistake. The dealer bought the Jeep at auction, never noticing that the seller had mislabeled the sticker. Moreover, the trial court found the mislabeling was open and obvious. Had Plaintiff looked harder, there was nothing preventing his discovering he was buying a Sport rather than a Sahara.
3. The court-below absolved Defendant from liability for fraudulent misrepresentation, breach of express or implied warranty, violation of the Consumer Fraud Act, and federal Magnuson-Moss Warranty Act violations. Nevertheless, the court awarded $500 to compensate Plaintiff for the difference in value between a Sport and a Sahara. In light of the Complaint, the basis for the court's damages award is unclear. It appears to be grounded in unplead contract and restitution law claims. Nevertheless, Defendant does not challenge the award.
6 Del. C. §2-316(2), (3).
Id. at §2513(a).
4. The lynchpin of the appeal is Plaintiff's contention that as a matter of law, Defendant's honest mistake is not a defense to fraudulent misrepresentation, breach of warranty, and the federal or State consumer fraud laws.
See Brandywine Volkswagen, Ltd. v. State Dept. of Cmty. Aff. & Econ. Dev., 312 A.2d 632, 634 (Del. 1973) (holding dealership liable for salesman's unwitting misrepresentation that odometer correctly represented car's mileage).
5. As to misrepresentation, Plaintiff initially concedes:
One of the necessary elements in a fraud action at law is that the person who makes a false statement knew it to be false or made it with reckless indifference to the truth.Plaintiff then argues:
A person is chargeable with a false statement if made under such circumstances as to raise
a presumption of his knowledge the statement is false.Plaintiff also argues a salesman's fraudulent statement is attributable to his dealership.
6. Those legal points are accurate, but the presumption of knowledge is rebuttable. So, Plaintiff offers an elaborate review of the evidence to show that the trial court's finding an honest mistake was wrong, despite the trial court's having believed Defendant's witnesses when they swore they did not realize the Jeep was not a Sahara. That finding is unassailable now. Thus, Plaintiff failed to establish a necessary element of a fraud case: a known or reckless untruth with intent to induce or mislead. Finally as to misrepresentation, Plaintiff's reliance on the misrepresentation does not trump the fact the misrepresentation was unwitting.
See Compl. ¶¶ 8, 10, 12.
7. The same analysis largely applies to Plaintiff's challenges to the verdict on Plaintiff's warranty claims. Although the dealership misrepresented the Jeep's model, the signed paperwork boldly disclaims any express warranty. The Jeep was sold "AS IS." Moreover, there was no implied warranty of merchantability as to the model designation.
8. As to Plaintiff's claim under Consumer Fraud Act, the trial court has conflated the Act's scienter requirement with common law misrepresentation. The Act protects "consumers against fraudulent and deceptive merchandising practices." In Brandywine Volkswagen, Ltd., the lead case explaining the Act, a dealer blindly relied on a car's odometer reading. When the car buyer asked a salesman about the mileage, instead of checking the car's ownership records, the salesman simply, but incorrectly, assured the buyer that the odometer was correct. The dealer did not intend to misrepresent the mileage, as the salesman did not know about the odometer problem. Nevertheless, Brandywine Volkswagen, Ltd. held that the dealer was on inquiry notice. That was because not "intend[ing] to make an untrue statement is not a valid defense since [the dealer] was chargeable with the information it had received."
Brandywine Volkswagen, Ltd., 312 A.2d at 633.
In re Brandywine Volkswagen, Ltd., 306 A.2d 24 (Del. Super. 1973), aff'd Brandywine Volkswagen, Ltd. v. State Dept. of Cmty. Aff. & Econ. Dev., 312 A.2d 632, 633 (Del. 1973).
Id. at 28.
Id.
9. Accordingly, this court held that because the salesman made statements about the mileage, the statements were incorrect, and the dealer possessed material from which the correct mileage information could have been ascertained, the dealer was liable under the Act. In affirming, the Delaware Supreme Court held that "it was [the dealer]'s duty to disclose to the customer what it knew. It neither investigated nor did it disclose."
Id. at 29.
Brandywine Volkswagen, Ltd., 312 A.2d at 634. --------
10. Here, the dealer, relying on a third party's say-so that the Jeep was a specific model, failed to investigate. Then, through the window sticker, Buyer's Guide, or salesman, made a statement to the buyer intending that he rely on it. In this claim's context, the fact that the sticker was publicly displayed and was inaccurate creates a presumption of intent. Moreover, even assuming that a statement was not made with the intent, the trial court found that the dealer was on inquiry notice: "Carman admits that its failure to check the window sticker and Buyer's Guide applied by Dealer Specialities, Inc. is an error of judgment." Accordingly, the dealer is potentially liable under the Act.
11. Although it appears the dealer is liable for the misrepresentation, the trial court's finding that the dealer unwittingly made the misrepresentation precludes punitive damages. Moreover, in light of the trial court's ordinary damage calculation, $500, there is no reason to revisit that. Accordingly, any error by the trial court is harmless, and its decision is affirmed.
For the foregoing reasons, the Final Decision and Order, dated December 23, 2014, is AFFIRMED.
IT IS SO ORDERED. Date: November 16, 2015
/s/ Fred S. Silverman
Judge cc: Prothonotary (Civil)
Joseph J. Longobardi, III, Esquire
Jared T. Green, Esquire