Calimlim v. Foreign Car Center, Inc.

• Decision Date: 19 June 1984
• Citation: 467 N.E.2d 443,392 Mass. 228
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Loreto A. CALIMLIM et al. 1 v. FOREIGN CAR CENTER, INC.

Page 443

467 N.E.2d 443

392 Mass. 228

Loreto A. CALIMLIM et al. ¹ v. FOREIGN CAR CENTER, INC.

Supreme Judicial Court of Massachusetts Middlesex.

Argued Feb. 9, 1984.

Decided June 19, 1984.

George E. Richardson, Boston, for defendant.

Michael J. Conley, Wakefield, for plaintiffs.

Before HENNESSEY, C.J., and WILKINS, ABRAMS, NOLAN and LYNCH, JJ.

NOLAN, Justice.

The defendant, Foreign Car Center, Inc., appeals from a decision of the Appellate Division of the District Court Department, Northern District. The Appellate Division found no error in the trial judge's determination that Foreign Car Center was liable in damages for breaches of warranties and for violation of G.L. c. 93A (Consumer Protection Act) in connection with the sale of a used automobile, and ordered the report dismissed.

The facts and proceedings below may be summarized as follows. Loreto and Norma Calimlim, husband and wife, desired to purchase an automobile for her use in commuting to her place of employment. Having seen Foreign Car Center's March 9, 1979, advertisement in the Boston Globe newspaper for a $2,000 Volkswagen, the plaintiffs went to Foreign Car Center in Peabody and deposited $50 toward the purchase of the Volkswagen. On March 16, a Foreign Car Center salesman told the couple that the Volkswagen was not as yet repaired, and showed them a 1976 Saab, instead. The salesman, as well as Foreign Car Center's president and treasurer, told the plaintiffs that the Saab was in good condition. Earlier, the president and treasurer personally examined the Saab to evaluate its condition. Foreign Car Center had purchased it for $2,950 from another dealer. The car's wholesale value was then approximately $4,250.

That same day, the plaintiffs signed a contract for the purchase of the Saab for $3,595, and issued a check to Foreign Car Center for $1,950 which, together with the $50 Volkswagen deposit, was to be applied toward the purchase price. The motor vehicle purchase contract contained language that the vehicle was "warranted to be safe and merchantable and to pass the Massachusetts [vehicle] safety inspection program at the time of delivery" to the buyer. Moreover, it recited the following language, which is required by 940 Code Mass.Regs. 5.04(2)(g) (1978): "Attention purchaser. All vehicles are warranted as a matter of state law. They must be fit to be driven safely on the roads and must remain in good running condition for a reasonable period of time. If you have significant problems with this vehicle or if it will not pass inspection, you should notify the dealer immediately. He may be required to fix the car or refund your money. This warranty is in addition to any other warranty given by the dealer." ² Further language in the contract indicated the purchaser's assent to permit a shop designated by the seller to perform repair work, free of charge to the purchaser, to enable the vehicle to pass inspection should it fail to do so within eight days of delivery. The seller agreed to pay all costs and attorneys' fees incurred by the buyer in connection with the buyer's enforcement of contract rights. The contract also provided for cancellation by the purchaser and refund at any time until the purchaser received a copy of the contract signed by an authorized dealer's representative. Finally, the contract states that it was entered into in accordance with the Attorney General's regulations concerning G.L. c. 93A.

Three days after signing the contract, the plaintiffs returned to Foreign Car Center, seeking to rescind the agreement. Foreign Car Center's president and treasurer refused to refund their $2,000, and insisted upon seeing a letter from the credit union which the plaintiffs said had rejected their application for financing. Later that day, the plaintiffs returned to Foreign Car Center, gave Foreign Car Center a check for $1,595, representing the balance of the purchase price, and took ownership of the Saab.

Driving the car home, the plaintiffs were not happy with the Saab's performance. Three days later, they took the car to another dealer. The second dealer found the Saab's brakes to be defective and in great need of repair. The car needed a tune-up and its power steering mechanism leaked. The plaintiffs authorized the second dealer to repair the brakes and perform the tune-up.

Within the next month, when they returned to have the power steering repaired at Foreign Car Center, the plaintiffs presented Foreign Car Center a receipted bill for $735, representing the cost of the brake repairs and tune-up performed by the second dealer. This was the first occasion on which notice of any defects was given to Foreign Car Center. Foreign Car Center's president and treasurer denied responsibility for the brake and tune-up bill, but agreed to repair the power steering, provided that the plaintiffs paid half the cost.

Work on the power steering was completed one month later, largely owing to the plaintiffs' initiative in locating parts from another dealer. Foreign Car Center had asserted that the parts could be obtained only in Europe. The plaintiffs then regained possession of the Saab, which had been in Foreign Car Center's possession during the entire quest for parts. The plaintiffs stopped payment on the check for $184.98 which they had given to Foreign Car Center to cover half the cost of the power steering repairs.

Repair work which cost $2,500 was performed within the next three months. The plaintiffs made no further contact with Foreign Car Center until they sent their c. 93A demand letter in October, 1979. In response, as settlement, Foreign Car Center offered not to collect the amount it asserted the plaintiffs owed for steering repairs, payment for which, as noted above the plaintiffs had tendered by a check on which they later stopped payment.

Subsequently, a complaint was filed in which the plaintiffs relied on theories of breaches of express and implied warranties, and of violations of G.L. c. 93A, including Foreign Car Center's alleged bad faith refusal to accede to their demand for relief. At trial, Foreign Car Center requested certain findings of fact and rulings of law, which the judge denied. The judge correctly noted that he was under no obligation to make findings and rulings. Mass.Dist./Mun.Cts.R.Civ.P. 52(a) (1975). However, the judge did make findings of fact consistent with the synopsis above, including a finding that the Saab's faulty brakes rendered the car "very dangerous" at the time the plaintiffs went to the second car dealer. He found that Foreign Car Center knew the Saab was not in good condition when it was sold to the plaintiffs. The bill for $735, to repair the brakes and to tune up the Saab, was found to be reasonable. The judge concluded that Foreign Car Center committed an unfair or deceptive act or practice by selling the Saab with defective brakes, with leaky power steering, and with need of a tune-up.

Further, the judge found that the sale by Foreign Car Center was a willfully or knowingly unfair or deceptive act, and that Foreign Car Center's refusal to offer reasonable relief on demand was in bad faith with knowledge or reason to know the act complained of violated G.L. c. 93A. He found Foreign Car Center to have violated its warranty of fitness and its implied warranty of merchantability. He found for the plaintiffs on all three counts of their complaint, in the amount of $735 for breach of the warranty of fitness; $735 for breach of the implied warranty of merchantability; $2,205 for violation of G.L. c. 93A, and attorneys' fees and costs in the amount of $1,750.

Foreign Car Center moved for a new trial on the grounds that the judge's findings were against the weight of the evidence and that the damages were excessive. Along with its motion for a new trial, Foreign Car Center submitted additional requests for findings of fact and rulings of law. ³ Within the text of the new requested findings are references to a theory of defense theretofore not mentioned by Foreign Car Center: that the plaintiffs, having failed to give the defendant timely and adequate notice of the Saab's defects, caused prejudice to Foreign Car Center by denying it an opportunity to comply with the terms of its warranty. The judge denied the motion for a new trial, and judgment entered in accordance with his findings.

The Appellate Division found no error in the denial of certain of Foreign Car Center's initial requested findings, there being sufficient evidence to support a finding for the plaintiffs on the issues of the merchantability and fitness of the Saab. ⁴ Further, the Appellate Division affirmed the trial judge's conclusion that Foreign Car Center's offer of settlement was not reasonable in relation to the injury suffered, inasmuch as the tender was forgiveness of a doubtful debt in an amount far less than the plaintiffs' reasonable expenditures in repairing the car. Additionally, the Appellate Division found no abuse of discretion in denying Foreign Car Center's motion for a new trial. Neither did it consider the damages awarded to be excessive. Finally, the Appellate Division perceived that Foreign Car Center's second request for findings of fact and rulings of law framed issues of law which were inappropriate on a motion for new trial, because they might have been, but were not, raised during trial.

On appeal, Foreign Car Center argues that the plaintiffs are foreclosed from recovery on any theory because of their failure to give Foreign Car Center timely notice concerning their difficulties with the Saab; that the plaintiffs' damage, if any, was not caused by Foreign Car Center's breach of warranty; that Foreign Car Center's...