Carter v. Chrysler Corp.

• Decision Date: 06 November 1998
• Citation: 743 So.2d 456
• Parties: James CARTER and Suzanne Carter v. CHRYSLER CORPORATION and Chrysler Credit Corporation.
• Court: Alabama Court of Civil Appeals

743 So.2d 456

James CARTER and Suzanne Carter v. CHRYSLER CORPORATION and Chrysler Credit Corporation.

2970833.

Court of Civil Appeals of Alabama.

November 6, 1998.

Rehearing Denied January 29, 1999.

Certiorari Denied July 9, 1999.

M. Clay Ragsdale, Birmingham, for appellants.

James F. Walsh and William L. Waudby of Lange, Simpson, Robinson & Somerville, Birmingham, for appellees.

Alabama Supreme Court 1980781.

ROBERTSON, Presiding Judge.

On May 24, 1994, James Carter and Suzanne Carter sued Chrysler Corporation, Chrysler Credit Corporation, and various other defendants on claims of fraud, negligence, wantonness, and breach of warranty arising out of their purchase of a vehicle on April 2, 1993. After litigation and discovery, the trial court entered a summary judgment for Chrysler Corporation and Chrysler Credit Corporation¹ ("Chrysler") on September 19, 1997, by a notation on the case action summary sheet. At the time of its entry, the summary judgment was not a final appealable judgment because of the pendency of the Carters' claims against other defendants. After those claims were disposed of, the Carters filed a motion to alter, amend, or vacate the summary judgment; the trial court denied that motion on March 3, 1998.

The Carters appealed to the Supreme Court of Alabama. That court transferred the appeal to this court, pursuant to § 12-2-7, Ala.Code 1975.

On appeal, the Carters argue that the trial court erred by entering a summary judgment on their claim of fraud by suppression because, they say, a genuine issue of material fact exists concerning whether Chrysler had a duty to disclose that the vehicle they were purchasing had been repurchased by Chrysler under Alabama's "Lemon Law," §§ 8-20A-1 through 8-20A-6, Ala.Code 1975. The Carters also argue that the trial court erred in entering the summary judgment on their claims of negligence and wantonness.

In reviewing the disposition of a motion for a summary judgment, we utilize the same standard as the trial court used in determining "whether the evidence before [it] made out a genuine issue of material fact" and whether the movant was "entitled to a judgment as a matter of law." Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala.1988); Rule 56(c), Ala. R.Civ.P. When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989). Evidence is "substantial" if it is of "such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assur. Co. of Florida, 547 So.2d 870, 871 (Ala.1989). Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Hanners v. Balfour Guthrie, Inc., 564 So.2d 412 (Ala. 1990).

Viewed in a light most favorable to the Carters, the evidence suggests the following. The Carters purchased a 1991 Dodge Dakota truck in April 1993 from a Chrysler dealership in Birmingham. After the purchase, the Carters became aware of numerous mechanical problems with the truck. Attempts to repair these problems were unsatisfactory. They later discovered that the truck had been repurchased by Chrysler under § 8-20A-2, Ala.Code 1975. That statute is part of Alabama's "Lemon Law" providing for various consumer rights when a vehicle cannot be made to conform to the manufacturer's warranties; it provides that a vehicle that cannot be made to conform to its warranty may be repurchased by the manufacturer.

Section 8-20A-4 of the Lemon Law provides that the vehicle may not be resold in Alabama unless the manufacturer "brands the title." Branding the title means that all certificates of title to the vehicle subsequently issued by the Alabama Department of Revenue contain the notation "THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT CONFORM TO ITS WARRANTY." Although Chrysler had branded titles with respect to other vehicles repurchased under the Lemon Law, it did not brand the title of the truck that the Carters purchased because the procedures involved in branding the title through the Alabama Department of Revenue took approximately 90 days. Representatives of Chrysler testified that the value of vehicles generally decreased about $10 per day and that Chrysler did not want to incur the additional cost caused by the delay in branding the title. The evidence also indicates that after consulting the Alabama attorney general's office, Chrysler adopted a policy whereby it resold vehicles that it had repurchased under Alabama's Lemon Law in states that did not have lemon laws, so that it would not have to brand the titles.

The truck in question was sold and purchased by a series of owners and dealerships until it was eventually acquired by the Carters. After Chrysler repurchased the truck under the Alabama Lemon Law and repaired it, the truck was resold at an automobile auction in Moody, Alabama, to a Chrysler dealership. The dealership was provided with a written disclosure showing the nature of Chrysler's repurchase. The dealership sold the truck to an individual, again disclosing the nature of Chrysler's repurchase. That individual sold the truck to another individual, again with a disclosure about Chrysler's repurchase. However, the new purchaser then sold the truck to an automobile wholesaler with the notation "as is" and without any notice as to Chrysler's repurchase. The wholesaler sold the truck to the dealership that sold it to the Carters.

The record also indicates that Chrysler initially maintained computer records that allowed it to track vehicles that were repurchased under state lemon laws. These records were available to Chrysler dealerships that purchased Chrysler vehicles, and such records were available to the dealership that sold the truck to the Carters. However, Chrysler indicated that it had begun a policy of deleting the records showing lemon law repurchases by the time the Carters purchased their truck.

I. Fraudulent Suppression

The Carters first argue that the trial court erred in entering the summary judgment for Chrysler on their claim of fraud by suppression. A claim of fraudulent suppression is governed by Ala.Code 1975, § 6-5-102, which states:

"Suppression of a material fact which the party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case."

The elements of a claim of fraudulent suppression are generally stated as (1) a duty to disclose the facts, (2) concealment or nondisclosure of material facts by the defendant, (3) inducement of the plaintiff to act, and (4) action by the plaintiff to his injury. Wilson v. Brown, 496 So.2d 756, 759 (Ala.1986).

At the outset, we note that in their briefs to this court the parties address only the element of the duty to disclose. Based on a careful review of the evidence, we conclude that the record contains substantial evidence creating a genuine issue of material fact with respect to the other elements of suppression. Accordingly, we consider whether Chrysler had a duty to disclose the nature of its repurchase, to determine whether the trial court correctly entered the summary judgment for Chrysler on the Carters' claim of fraudulent suppression.

In State Farm, Fire & Cas. Co. v. Owen, 729 So.2d 834 (Ala.1998), our Supreme Court, overruling earlier cases, held that the determination whether one had had a duty to disclose is a question of law for the trial judge. Previously, the rule had been that whether one had had a duty to disclose was a question for the jury to decide, under the facts and circumstances of each particular case. Oxford Furn. Co. v. Drexel Heritage Furnishings, Inc., 984 F.2d 1118 (11th Cir.1993); Baker v. Bennett, 603 So.2d 928 (Ala.1992). As a consequence of this new legal rule, the Court in Owen overruled cases such as Bennett, supra, to the extent that those cases held that the determination of duty was a question of fact for the jury.

In framing the test to be applied to this new responsibility for the trial judge, however, the Court in Owen noted:

"Of course, the concept of duty does not exist in a vacuum. It requires a relationship between two or more parties, a relationship that can be shown only through a history of contacts, conversations, and circumstances. Determining whether there is a duty necessarily requires analyzing the factual background of the case. In that sense, whether a duty exists is a mixed question of law and fact."

Owen, supra, 729 So.2d at 839. After asserting that the requirement that the judge analyze facts did not make the question of duty a question of fact, the Court concluded that the trial judge must determine if "there is substantial evidence which if accepted by the jury would give rise to a duty to disclose as a matter of law." 729 So.2d at 841.

Referencing the factors first set out in Berkel & Co. Contractors, Inc. v. Providence Hospital, 454 So.2d 496 (Ala.1984), the Court in Owen also addressed the factors to be considered in determining whether one had had a legal duty to disclose:

"(1) the relationship of the parties; (2) the relative knowledge of the parties; (3) the value of the particular fact; (4) the plaintiff's opportunity to ascertain the fact; (5) the customs of the trade; and (6) other relevant circumstances."

729 So.2d at 842-43.

Chrysler's argument that it had no duty to disclose the circumstances of its repurchase of the truck is twofold. First, it argues that it had no duty to disclose any fact to the Carters because there was no contractual or confidential relationship between it and the Carters. Second, it argues...