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.