By Nicole Killoran
Gregory v. Poulin Auto
Sales, 2012 VT
28 (mem.)
Today’s case explains why that special greasy sensation you
get when you purchase a vehicle from a used car lot may just be that new consumer
fraud smell.
The subject of our dispute is a 2001 Audi which has a tawdry
past. We have seen this car before: in
2010, the SCOV held
that the Dealer, Poulin Auto Sales, was strictly liable for the representations
it made at sale and remanded Plaintiff’s case to the trial court to calculate
damages under Plaintiff’s consumer fraud claim.
On remand, the trial court considered cross-motions for
summary judgment. Plaintiff asserted that
the prior owner had verbally advised Dealer’s auctioneer of the vehicle’s
checkered history as a rebuilt salvage, and the parties agreed that Dealer had
mistakenly certified a clear title and an inaccurate odometer reading without
doing its due diligence. The trial court
again found in favor of Plaintiff, and Dealer appealed.
On appeal, Dealer asked the SCOV to consider several
defenses: whether Dealer’s purported lack of knowledge about these defects
relieved it from Plaintiff’s consumer fraud claim, and whether the trial court
erred in not considering evidence that Plaintiff bought the vehicle “as
is.”
In a grand “we do what we want on de novo review” move, the
SCOV decides to instead determine afresh whether Dealer’s misrepresentations
regarding the odometer and the clear title make out a case for consumer fraud.
Under the Vermont Consumer Fraud Act, a consumer must show
first that the seller’s practices and methods were likely to mislead, second
that the consumer behaved rationally in interpreting this behavior, and third
that the misleading practices were “material”—likely to affect a consumer’s
decision whether to purchase.
On the first point, the SCOV finds the Dealer’s failure to
disclose that it was not actually certifying the odometer reading or clear
title to be misleading. Dealer’s
plaintive cries of innocent intent in this transaction fall on deaf ears: good
faith and lack of knowledge are no defense to a consumer fraud claim.
On the second point, the SCOV finds that Plaintiff did not
behave irrationally in taking Dealer at its word and not conducting his own
research. The burden of due diligence
sits squarely on the shoulders of the seller, and Plaintiff’s reasonable
reliance on Dealer’s misrepresentations nullify any duty Plaintiff may have had to
do his own due diligence.
On the third point, the SCOV finds, unsurprisingly, that the
clarity of a vehicle’s title and the accuracy of its odometer reading are
issues sufficiently material to affect a consumer’s decision whether to purchase. Finding the elements of a consumer fraud
claim satisfied, the SCOV concludes that the trial court appropriately found in
favor of Plaintiff.
Finally, the SCOV addresses Dealer’s last gasp of a defense:
the fact that the paperwork accompanying the auction sale warned Plaintiff that
he was purchasing the vehicle “as is” without recourse should he discover a
defect after the sale. On this question,
the Court considers merely whether the trial court abused its discretion in
refusing to consider this evidence.
Demonstrating the importance of including material evidence
in one’s summary judgment pleadings, the SCOV scolds Dealer for not presenting
these documents during either of its summary judgment motions in 2008 and 2010,
but rather saving them for their final motion for reconsideration. In a footnote the SCOV ribs Dealer for
“seeking relief from its own actions” while claiming innocence and “extraordinary
circumstances,” and finds that the trial court appropriately excluded the
evidence.
A rather sad footnote to this case advises the reader that
Plaintiff, Crawford Gregory, did not live to see the happy ending of his
consumer fraud claim: he passed away during the first appeal, and his estate
carried the torch to victory. Just
remember folks: the next time that dealer tells you you’re getting a heck of a
deal, check the odometer and carfax.com before you shake on it and drive it
home.
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