Bender v. Southtowne Motors of Newnan II, Inc.

• Decision Date: 15 November 2016
• Docket Number: A16A0784
• Citation: 339 Ga.App. 439,793 S.E.2d 618
• Parties: BENDER et al. v. SOUTHTOWNE MOTORS OF NEWNAN II, INC. et al.
• Court: Georgia Court of Appeals

339 Ga.App. 439

793 S.E.2d 618

BENDER et al.

v.SOUTHTOWNE MOTORS OF NEWNAN II, INC. et al.

A16A0784

Court of Appeals of Georgia.

November 15, 2016

T. Michael Flinn, Carrollton, for Appellant.

Joseph Robb Cruser, Kathleen Marie Hurley, Norcross, Jeremy Thomas McCullough, John Gregory McCullough, Atlanta, for Appellee.

McMillian, Judge.

This case involves issues of first impression concerning the application of the Georgia Lemon Law, OCGA § 10-1-780 et seq., which is designed to protect certain purchasers of "nonconforming"¹ motor vehicles, sometimes referred to as "lemons" or "lemon vehicles." Alleging that Southtowne Motors of Newnan II, Inc. ("Southtowne") violated the Georgia Lemon Law when it sold them a 2010 Hyundai Genesis without disclosing that it had been reacquired by the manufacturer because of defects, plaintiffs/appellants Lindsey and Cory Bender ("plaintiffs" or "Benders") filed suit against Southtowne and Ally Financial ("Ally")² (collectively "defendants" or "appellees") stating claims for, among other things, rescission, revocation of acceptance, fraud and deceit, and violation of the Georgia Fair Business Practices Act of 1975 ("FBPA"), OCGA § 10-1-390 et seq. The trial court granted summary judgment to the defendants on all the Benders' claims, and the Benders filed this appeal.³

Viewing the evidence in the light most favorable to the Benders as the nonmoving party on summary judgment,⁴ the record shows that the Benders went to Southtowne to look at cars on January 15, 2012, and became interested in a Hyundai Genesis. They told the salesman, Buck Bush, that they liked a particular Genesis they saw on the lot, but that it was out of their price range; they also were informed that someone else was already in the process of purchasing the vehicle. Bush told them about another Genesis he thought might interest them that had recently been delivered to the dealership, and he brought the vehicle from the back of the lot where it was parked for the Benders to see. The Benders took the Genesis for a test drive, and after they drove the vehicle, they looked under the hood and made a cursory examination of the vehicle. The Benders did not detect any problems with the vehicle but asked to see a Carfax report. Bush told them he had seen the Carfax and that it was clean, but Bush did not provide them with the written report, and the Benders did not make any further requests to see it. The Benders did, however, continue to express concern that this Genesis was also out of their price range, and Buck assured them "he could do a super deal" because it was a lease turn-in, telling them they were "very, very lucky because this is a once in a lifetime [deal]."

The Benders decided to purchase the vehicle and were taken to another Southtowne employee who was responsible for handling the financing and other paperwork. Among the papers they were asked to sign was a form titled "Illinois Resale Disclosure Statement" ("Illinois Disclosure Form"), which stated that the Genesis had been repurchased by the manufacturer, Hyundai Motor America ("HMA") "pursuant to consumer warranty laws due to [certain listed] defect(s)/ nonconformit(ies)."⁵ The Benders testified they briefly reviewed the form and admitted they knew when they signed it that the Genesis had been repurchased by the manufacturer because of the stated defects.⁶

Lindsey also acknowledged that she asked if the defects had been repaired, and the Benders accepted the assurances that the defects had been remedied.

Approximately a week to a week and a half later, Bush called Lindsey and told her that they needed to execute an additional "loan document." Cory went to the dealership, where Bush met him in the parking lot with a form he said was needed to complete the loan. Cory testified that Bush told him that he had filled in the form because he knew Cory was in a rush, and that Bush never took his hand off the form while he was signing it. Cory testified that he signed the form without reading it, and it was not until later that he learned the form he signed was the "Georgia Lemon Law Notice for Reacquired Vehicles" ("Georgia Lemon Law Form"), which had been backdated to the date of purchase of the Genesis.⁷

Almost eight months later, over Labor Day weekend, Cory Bender went to a Lexus dealership to look at a vehicle he was interested in buying. He told the Lexus salesman he wanted to trade in the Genesis to buy the Lexus, but after making an inquiry, a Lexus manager told him that the Genesis had a "branded"⁸ title and that the Lexus dealership did not accept trades of branded title vehicles. Cory said this was the first time he knew that the title to the Genesis was branded and the first time anyone had explained to him the meaning of a branded title.

Cory left the Lexus dealership, and both Lindsey and he went immediately to Southtowne to inquire about the branded title. Lindsey testified that she first spoke to Bush, who told her he did not know the title was branded. The paperwork pertaining to the sale of the vehicle was shown to the Benders, including the Illinois Disclosure Form they signed at the time of purchase and the Georgia Lemon Law Notice Cory signed a few weeks later, but Southtowne did not produce the title to the vehicle.⁹ The Benders subsequently retained an attorney, and on October 24, 2012, their attorney sent a letter to Southtowne seeking rescission of the purchase and a refund of the purchase price, following which they would return the vehicle to the dealer. Southtowne did not agree to the terms stated in the letter, and the Benders filed this lawsuit.

1. We turn first to the Benders' claims that Southtowne violated the Georgia Lemon Law and the Georgia FBPA by failing to make the disclosures required by OCGA § 10-1-790 (a) of the Georgia Lemon Law statute. Because there is a dearth of authority on the Georgia Lemon Law, we start by setting out the statutory framework.

The Georgia Lemon Law, which became effective January 1, 2009,¹⁰ was passed by the General Assembly "to create a procedure for expeditious resolution of complaints and disputes concerning nonconforming new motor vehicles, to provide a method for notifying consumers of their rights under this article, ... to ensure that consumers receive information, documents, and service necessary to enable them to exercise their rights under this article [,] to encourage manufacturers to take all steps necessary to correct nonconformities in new motor vehicles and to create the proper blend of private and public remedies necessary to enforce this article." OCGA § 10-1-781. In addition to the statutory provisions enacted to effectuate these goals, OCGA § 10-1-795 authorizes the "Attorney General¹¹ to promulgate rules and regulations and establish procedures necessary to carry into effect, implement, and enforce the provisions of this article," and the pertinent rules and regulatory provisions are compiled at Ga. Comp. R. & Regs., r. 122-23-.01 et seq.

The statute protects two distinct classes of motor vehicle purchasers: (1) consumers¹² who buy new motor vehicles in this state¹³ that are discovered to be nonconforming, see OCGA §§ 10-1-782 (15), (17) ; 10-1-784; 10-1-785; 10-1-787, and (2) purchasers of vehicles that have been reacquired by the manufacturer under the provisions of the Georgia Lemon Law or a similar statute of another state and are being re-sold in Georgia by the manufacturer, a new car dealer, or other transferor. OCGA § 10-1-790 (a).

The Georgia Lemon Law's general enforcement provisions are contained in OCGA § 10-1-793, which makes violations of the Georgia Lemon Law "an unfair and deceptive act or practice in the conduct of consumer transactions under ... the [FBPA]." Importantly, however, the Attorney General is tasked with primary responsibility for enforcement of the statute, and except as provided in subsection (a) of Code Section 10-1-790, [the Georgia Lemon Law] shall not be enforceable through private action under Code Section 10-1-399 [of the FBPA]." In other words, under the plain language of the statute, only violators of OCGA § 10-1-790 (a) are subject to a private claim under the FBPA. Accordingly, to maintain their FBPA claim under the Georgia Lemon Law, the Benders must show that Southtowne failed to comply with OCGA § 10-1-790 (a) when it sold them the Genesis. OCGA § 10-1-790 (a) provides:

(a) No manufacturer, its authorized agent, new motor vehicle dealer, or other transferor shall knowingly resell, either at wholesale or retail, lease, transfer a title, or otherwise transfer a reacquired vehicle, including a vehicle reacquired under a similar statute of any other state,^{[14 ]}unless the vehicle is being sold for scrap and the manufacturer has notified the Attorney General of the proposed sale or:

(1) The fact of the reacquisition and nature of any alleged nonconformity are clearly and conspicuously disclosed in writing to the prospective transferee, lessee, or buyer; and

(2) The manufacturer warrants to correct such nonconformity for a term of one year or 12,000 miles, whichever occurs first.

A knowing violation of this subsection shall constitute an unfair or deceptive act or practice in the conduct of consumer transactions under Part 2 of Article 15 of Chapter 1 of Title 10 and will subject the violator to an action by a consumer under Code Section 10-1-399.

(Emphasis supplied.)

Relying on this Court's opinion in Walker v. Southtowne Motors of Newnan II, Inc. , 330 Ga. App. XXVIII (Case No. A14A0964, decided Nov. 21, 2014) (unpublished), the trial court found that Southtowne was not required to comply with OCGA § 10-1-790 (a) when it sold the car to the Benders because it was sold as a used car and thus did not fit the definition of a "reacquired" vehicle within the meaning of the Georgia Lemon Law.¹⁵ At the outset, we note that the trial court's reliance on our unpublished opinion was misplaced. Such an "unreported opinion is lacking in value as precedent and is not...