Austin v. Stokes-Craven Holding Corp., Opinion No. 26784 (S.C. 3/8/2010)

Decision Date08 March 2010
Docket NumberOpinion No. 26784.
PartiesDonald C. Austin, Respondent/Appellant, v. Stokes-Craven Holding Corp., d/b/a Stokes Craven Ford, Appellant/Respondent.
CourtUnited States State Supreme Court of South Carolina

Page 1

Donald C. Austin, Respondent/Appellant,
v.
Stokes-Craven Holding Corp., d/b/a Stokes Craven Ford, Appellant/Respondent.
Opinion No. 26784.
Supreme Court of South Carolina.
Heard June 11, 2009.
Filed March 8, 2010.

Appeal From Clarendon County John C. Hayes, III, Circuit Court Judge

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

Scott L. Robinson, of Johnson & Robinson, of Manning, Stephen L. Brown, Russell G. Hines and Edward D. Buckley, all of Young, Clement Rivers, of Charleston, for Appellant-Respondent.

Brooks R. Fudenberg, of Mt. Pleasant, and C. Steven Moskos, of Charleston, for Respondent-Appellant.

JUSTICE BEATTY:


Donald C. Austin (Austin) filed suit against Stokes-Craven Holding Corporation d/b/a Stokes-Craven Ford (Stokes-Craven), an automobile dealership, after he experienced problems with his used vehicle and discovered the vehicle had sustained extensive damage prior to the sale. A jury found in favor of Austin and awarded him $26,371.10 in actual damages and $216,600 in punitive damages.

Stokes-Craven challenges the verdict alleging the trial judge committed several errors which warrant a new trial. In his appeal, Austin contends the trial judge erred in requiring him to elect between his verdict for common law fraud and the violation of the South Carolina Dealer's Act.1 Additionally, Austin claims the trial judge erred in declining to award him prejudgment interest. This Court certified this case from the Court of Appeals pursuant to Rule 204(b), SCACR. We affirm in part, reverse in part, and remand for entry of judgment consistent with our decision.

FACTUAL/PROCEDURAL HISTORY

On December 1, 1999, Gary Bailey purchased for $32,000 a 2000 Ford F-250 Super Duty Lariat 4X4, extended cab, eight-cylinder, turbo-diesel truck from Stokes-Craven, a Manning automobile dealership. Because Bailey maintained a business relationship with Kenny Craven (Kenny), the brother and employee of one of the owners of Stokes-Craven, Bailey dealt solely with him.

After the purchase, Bailey and his son, Kerry, used the truck primarily for their construction business. On the night of September 28, 2001, Kerry was involved in a single-vehicle accident during which "something broke in the front end, the truck flipped over, spun around the road, and slammed into a guardrail." As a result of this accident, the truck, which had logged approximately 30,000 miles, underwent repairs from October 1, 2001 to March 27, 2002. According to Bailey, his insurance company paid William Norton, an owner of the Norton and Richardson Body Shop, $20,309.38 to repair the vehicle.

After the repairs were completed, Bailey continued to drive the truck until he noticed an oil leak in the front axle. Because he needed a dependable truck for his business operation, Bailey made the decision to trade in the truck and purchase a new one from Stokes-Craven. In April 2002, Bailey contacted Kenny Craven and asked him to locate another truck. During this conversation, Bailey informed Kenny that his original truck had been "wrecked" and repaired by Norton and Richardson's Body Shop, a body shop for which Kenny knew had a good reputation. Bailey also told Kenny of the oil leak in the front axle.

On April 17, 2002, Bailey traded in his old truck for $28,714.50 and purchased a new truck from Stokes-Craven. At the time of the trade in, the truck had an odometer reading of approximately 57,000 miles.

On June 1, 2002, Austin and his girlfriend went to the Stokes-Craven dealership in search of a truck. After circling the dealership lot, Austin focused his attention on the truck that had been traded in by Bailey. Because this truck appeared to meet Austin's desired specifications, he used his training as a mechanic to examine the outside and the underside. When he emerged from underneath the vehicle, Austin was met by William Frierson, a salesman for Stokes-Craven. Austin then asked Frierson a series of questions about the vehicle including the truck's warranty, whether the truck had been "wrecked," and information regarding the prior owner. According to Austin, Frierson informed him the warranty was a "5-year, 100,000 miles powertrain warranty." Austin also claimed Frierson denied that the truck had been "wrecked." In terms of the prior owner, Frierson indicated it was someone who operated a construction company in Summerville. When Austin inquired whether this previous owner was Bud Knight, someone whom Austin knew had the reputation of taking "immaculate" care of his vehicles, Frierson apparently responded "Yeah, I believe that is his truck." Austin was never shown the title to the truck.

Ultimately, Austin agreed to purchase the truck for $26,371.10. During the process of signing the purchase agreement, Austin questioned one of the forms indicating that he was buying the truck "as is." According to Austin, Frierson indicated this was a formality and that the truck had a "5-year, 100,000 mile powertrain warranty." Austin also claimed the finance manager confirmed the existence of the warranty and "talked [him] out of" purchasing an extended warranty.

Although the truck operated without incident initially, Austin discovered an oil leak in August 2002. Upon discovering the leak, Austin contacted another Ford dealership located near his residence in Moncks Corner to see if the rear-seal leak could be repaired under warranty. This dealership informed Austin that the repair was not covered by the truck's warranty and that he should contact Stokes-Craven regarding the repair.

According to Austin, he spoke with "Jim," an assistant service manager at Stokes-Craven, who told him that the repair was under warranty. When Austin inquired further about the warranty, Jim told him that he would check on it and call him with an answer. Subsequently, Jim informed Austin that the repair was not covered by the warranty and advised him to contact Dennis Craven, one of the owners of Stokes-Craven.

The next day, Austin called Dennis and explained the problem. Because he was unfamiliar with the specifics of Austin's purchase, Dennis spoke with his staff and called Austin several days later. According to Austin, Dennis told him that his staff denied they had represented that the truck was covered under a five-year, 100,000 mile power train warranty. Dennis, however, offered to fix the leak with the stipulation that any additional repairs would have to be paid by Austin. Hearing this response, Austin asked to return the truck for the purchase price and rejected Dennis's offer to "trade [him] out of the truck." When Dennis denied his request, Austin indicated that he was not satisfied with this offer but still intended to have the oil leak fixed by Stokes-Craven. Following this conversation, Austin scheduled the repair for September 13, 2002.

Prior to his scheduled appointment, Austin discovered a warranty book in the truck which indicated that the truck was only covered by a five-year, 100,000 mile warranty limited to the engine. Austin also discovered that the truck had been registered to Gary Bailey and had sustained extensive damage prior to his purchase. Austin inadvertently discovered the "wreck" damage when he came in contact with William Norton, the owner of the repair shop where Bailey had taken the vehicle following his son's accident. During this discussion, Norton gave Austin the list of repairs made to the truck.

On September 13, 2002, Austin brought his truck to Stokes-Craven for the scheduled repair. After he dropped off his truck, Austin met with Dennis Craven and Barry Thornall, a used car manager at Stokes-Craven. Austin again requested that he be allowed to return the truck for the purchase price given his new discoveries regarding the prior ownership, the "wreck" damage, and the lack of a power train warranty. During the course of the conversation, Austin found out that Thornall, a neighbor of Bailey's, most likely was aware of the truck's history. Several minutes later, Dennis produced a "Buyer's Guide" document purportedly containing Austin's signature which stated that the truck was covered by a warranty "up to 100,000 on diesel engine." Austin denied that he had signed the document and informed Dennis and Thornall that he had not received this document at the time of purchase.

Austin returned to Stokes-Craven approximately a week later to retrieve his truck which had been repaired. Austin then met with Dennis Craven to discuss the situation with his truck. During this meeting, Austin again denied he had signed the warranty document and requested the return of the purchase price in exchange for the truck. In response, Dennis compared the signed document with Austin's driver's license and then denied Austin's request.

On March 15, 2004, Austin filed suit against Stokes-Craven alleging the following causes of action: revocation of acceptance, breach of contract, negligence, constructive fraud, common law fraud, violation of the South Carolina Motor Vehicle Dealer's Act (the "Dealer's Act"), violation of the South Carolina Unfair Trade Practices Act (UTPA), and violation of the Federal Odometer Act.2 Based on these claims, Austin sought actual damages, punitive damages, prejudgment interest, and attorney's fees and costs. Stokes-Craven answered and denied each of Austin's allegations.

At the conclusion of a three-day trial, the jury found in favor of Austin and awarded damages on the following causes of action: (1) negligence with an award of $26,371.10 actual damages and $144,000 punitive damages; (2) fraud with an award of $26,371.10 actual damages and $216,600 punitive damages; (3) constructive fraud with an award of $26,371.10 actual damages; and (4) a violation of the Dealer's Act with an award of $26,371.10 actual damages. The jury also found Stokes-Craven had violated the Federal Odometer Act. Additionally, the jury found in favor of Stokes-Craven regarding Austin's claim under the UTPA.3

Subsequently, both...

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