Aldridge v. Billips

• Decision Date: 18 March 1987
• Docket Number: Civ. A. No. 85-0172-H.
• Citation: 656 F. Supp. 975
• Parties: William K. ALDRIDGE, Plaintiff, v. William Avis BILLIPS, et al., Defendants.
• Court: U.S. District Court — Western District of Virginia

656 F. Supp. 975

William K. ALDRIDGE, Plaintiff, v. William Avis BILLIPS, et al., Defendants.

Civ. A. No. 85-0172-H.

United States District Court, W.D. Virginia, Harrisonburg Division.

March 18, 1987.

COPYRIGHT MATERIAL OMITTED

Daniel Schorsch, Waynesboro, Va., for plaintiff.

Thomas C. Elder, Staunton, Va., for Brown.

W.F. Vellines, Jr., Vellines, Garrison, Cobbs, Goodwin & Glass, Staunton, Va., for Turnpike Ford, Inc.

William Avis Billips, pro se.

MEMORANDUM OPINION

MICHAEL, District Judge.

This is an action for odometer fraud, brought under the provisions of the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. §§ 1981-1991 (1982). Jurisdiction is proper under 15 U.S.C. § 1989. The plaintiff has also alleged a violation of Va. Code § 46.1-15.1 (1986), and seeks treble damages and attorney fees under Va.Code § 46.1-15.3 and 15 U.S.C. § 1989. The plaintiff, William K. Aldridge, has filed for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Of course, this court must assess the evidence submitted in the light most favorable to the party opposing the motion, United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962), and to give that party the benefit of all favorable legal theories invoked by the evidence so considered, Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir.1979). In this case the facts are not in dispute, except for the inferences to be drawn therefrom, since the defendants concede that they have left a "paper trail" that is incriminating.

The vehicle in question, a 1976 Ford pick-up truck, was originally owned by defendant William A. Billips, who had purchased it in 1979. The Virginia title to the truck, which was issued to Billips on November 9, 1979, stated on its face that the vehicle had 62,000 miles on it at the time the title was issued. On September 13, 1984, defendant Billips sold the truck to defendant Turnpike Ford, Inc., located in West Virginia, at which time he transferred the possession of the title to Turnpike Ford. At the time of the sale, defendant Billips did not designate Turnpike Ford as the transferee of the vehicle, but instead signed the transfer of ownership section of the Virginia automobile title in blank, leaving the rest of the information required by the title blank. At no time thereafter did Turnpike Ford complete the title as legally required. Some time during the week of September 13-18, 1984, defendant Larry D. Brown, d/b/a Auto Buying Service, gained possession of the truck. West Virginia odometer disclosure statements filled in over defendant Billips' signature as seller to Turnpike Ford on September 14, 1984, and made over the signature of the agent of Turnpike Ford as seller to Auto Buying Service on September 18, 1984, both list the odometer reading at time of transfer and the actual mileage as 47,778 miles. The federal odometer disclosure statements were filled out in the same manner. However, defendant Billips has subsequently certified in a state circuit court proceeding that the actual mileage of the truck at the time of its transfer to Turnpike Ford was approximately 146,500 miles. On January 14, 1985, when Brown applied for a new Virginia title he certified that the mileage on the vehicle was 66,211 miles. However, Brown also inserted into the Virginia assignment of title by registered owner form over the signature of Billips that as of November 1, 1984, the mileage was also 66,211 miles and that the purchaser was Auto Buying Service. On May 18, 1985, Brown sold the truck to the plaintiff, at a price of $4,250, at which time Brown certified on the bill of sale that the odometer reading on the truck was 68,478 miles. At the time of sale, Brown allegedly represented to the plaintiff that he had used the truck "around home", which allegation has not been refuted by Brown. The plaintiff's complaint presents other allegations of fraud and relates various mechanical difficulties that he has experienced with the truck, but for the purposes of this review, such allegations will not be considered as they are properly questions of fact to be decided by a jury, as they are in dispute. Similarly, this court cannot decide the issue of actual odometer tampering under Va. Code § 46.1-15.1, this issue requiring jury determination.

Under the requirements of 15 U.S.C. § 1988 (1982) and 49 C.F.R. §§ 580.1, et. seq., it is clear that sellers of motor vehicles are required to provide written disclosure to the buyer of the cumulative mileage registered on the odometer or that the actual mileage is unknown, if the odometer reading is known to be different from the number of miles the vehicle has actually traveled. If in the exercise of reasonable care the seller should have known that the odometer has turned over, the transferor must disclose this fact to the purchaser. Nieto v. Pence, 578 F.2d 640 (5th Cir.1978). In Nieto the court held that intent to defraud may be found where a 10-year old pick-up truck had an odometer reading of 14,736 miles, and the dealer who had been in the auto business approximately twelve years admitted he would be suspicious of such a low reading. This court would be reluctant to hold, as a matter of law, that the defendants should have known that a 9-year old truck with 47,778 miles indicated a suspiciously low mileage. However, with the exercise of minimal care, the defendants' could have discovered that the odometer reading they were certifying was false, had they inspected Billips' title which showed a mileage of 62,000 miles in 1979.

If the transferor has a reason to know by the exercise of reasonable care that the odometer has turned over and he does not inform the purchaser, the majority of cases hold that intent to defraud may be inferred from that violation of the Act and regulations. Jones v. Fenton Ford, 427 F.Supp. 1328 (D.Conn.1977); Stier v. Park Pontiac, Inc., 391 F.Supp. 397 (S.D.W.Va.1975); Delay v. Hearn Ford, 373 F.Supp. 791 (D.S.C. 1974). See also Ryan v. Edwards, 592 F.2d 756 (4th Cir.1979), in which the court held that merely marking mileage as unknown constitutes a violation when the seller has no reason to believe the odometer has functioned improperly except for "turning over". The court found a duty to identify the cumulative mileage as 100,000 plus the number actually appearing on the odometer. The court also held that constructive knowledge, recklessness, or even gross negligence in determining and disclosing actual mileage may be sufficient to support a finding of intent to defraud, remanding that issue to the district court for determination by a jury.

In fact, as the court in Jones indicates, intent to defraud may be found despite the fact that actual knowledge of violation of § 1988 has not been proven. The court stated,

Civil liability may be imposed where it is proved that a defendant's statements were made recklessly or carelessly, without knowledge of their truth or falsity, or without reasonable grounds for belief in their truth, especially in a case where (1) the defendant was under a duty to have the knowledge in question, (2) a relation of trust or expert reliance existed, (3) a statement was made to induce a business arrangement, or (4) the knowledge or information in question was within the special province of the defendant. Such conditions being met, it does not matter whether or not the declarant actually believed the statement (or statements) in question to be true.

Id. at 1334 (citations omitted).

A majority of courts have found an intent to defraud when the transferor "recklessly disregarded" obvious indications that a mileage disclosure was false. Tulsa v. Omaha Auto Auction, Inc., 712 F.2d 1248 (8th Cir.1983); Nieto v. Pence, 578 F.2d 640 (5th Cir.1978); Kantorczyk v. New Stanton Auto Auction, Inc., 433 F.Supp. 889 (W.D.Pa.1977); Huryta v. Diers Motor Co., 426 F.Supp. 1176 (D.Neb. 1977). Mere reliance on the odometer reading, in the face of other readily ascertainable information from the title and the condition of the truck constitutes a reckless disregard that rises to the level of intent to defraud, as a matter of law. Kantorcyzk, supra; Tusa, supra. To make affirmative claims about mileage without knowledge is either intentionally deceitful or reckless, and therefore in violation of 15 U.S.C. § 1989. Jones v. Fenton Ford, supra.

The legislative history of the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. § 1988(a)(2) (1982), speaks primarily of odometers that have been tampered with or altered. Where a vehicle has traveled in excess of the mechanical limits of the odometer, Congress evidently intended that the seller should enter the total estimated mileage on the odometer form. See Sen.Rep. No. 413, October 28, 1971; 92nd Cong. 2nd Sess., 1972 U.S.Code Cong. & Admin.News, pp. 3960, 3971. The statute and the applicable regulation provide that if the transferor knows the odometer reading to be different from the number of miles the vehicle has actually traveled, the transferor must disclose that the actual mileage is unknown. 49 C.F.R. § 580.4(c). While this court must accept the defendants' allegations that they relied on the actual reading on the truck's odometer, for purposes of this motion, the practice of preparing odometer statements simply on the basis of the odometer reading and then failing to disclose that the actual mileage is unknown demonstrates a reckless disregard for the basic purposes of the Act as well as its specific requirements. An increasing body of case law makes clear that such recklessness rises to the level of fraudulent intent, and the...