Chamberlain v. Jim Fisher Motors, Inc.

• Jurisdiction: Oregon
• Parties: Linda C. CHAMBERLAIN, Respondent, v. JIM FISHER MOTORS, INC., an Oregon Corporation, dba Jim Fisher Datsun and Universal Underwriters Insurance Company, a Missouri Corporation, Appellants, v. William A. KNUTSON, Respondent.
• Citation: 282 Or. 229,578 P.2d 1225
• Court: Oregon Supreme Court
• Decision Date: 02 May 1978

Page 1225

578 P.2d 1225

282 Or. 229

Linda C. CHAMBERLAIN, Respondent, v. JIM FISHER MOTORS, INC., an Oregon Corporation, dba Jim

Fisher Datsun and Universal Underwriters Insurance

Company, a Missouri Corporation, Appellants, v. William A. KNUTSON, Respondent.

Supreme Court of Oregon,In Banc.

Argued and Submitted March 10, 1978.

Decided May 2, 1978.

Gary M. Bullock, Portland, argued the cause and filed the brief for appellants.

Charles P. Duffy, Portland, argued the cause for respondent Chamberlain. With him on the brief were Gary E. Rhoades and O'Donnell, Rhoades & Gerber, Portland.

John Spencer Stewart, Portland, argued the cause for respondent Knutson. With him on the brief were David R. Trachtenberg and Kobin & Meyer, Portland.

TONGUE, Justice.

This is an action by the purchaser of a used car against a used car dealer for damages resulting from the failure of the dealer to provide title to the car. The car was stolen, "stripped" and "totaled." Plaintiff's insurance company then refused to pay her claim for its loss because of her inability to produce a certificate of title to the car.

Prior to trial, the trial court entered a partial summary judgment on the issue of liability. At the conclusion of the testimony at the trial, the trial court directed a verdict in favor of plaintiff for compensatory damages in the sum of $1,724.09. Plaintiff's claim for punitive damages was submitted to the jury, which returned a verdict of $5,000 in punitive damages. The trial court also awarded attorney fees to the plaintiff in the sum of $2,500. Defendant appeals from the resulting judgment.

The facts.

On January 10, 1975, plaintiff stopped to look at a 1971 Maverick on the used car lot of defendant Jim Fisher Motors. Four days later, after obtaining a loan to finance its purchase, plaintiff purchased the car from defendant. At that time she asked when she would "get my plates." The car then had no license plates. She was told that "it would be anywhere from two to six weeks or something like that." Defendant did not then deliver to her a certificate of title to the car, but gave her a 60-day temporary registration "sticker" for the windshield.

In March, after not receiving "plates" for the car and when the temporary registration was about to expire, plaintiff went back to defendant and was told that "there had been a mix-up; that the title was lost in transit and that it would just take time to work out." She was then given another temporary registration. When that temporary registration was about to expire in June plaintiff was given a third temporary registration, with no explanation of the reason for the delay.

In July the car was stolen and "stripped," so as to be a total loss. Plaintiff's insurance company refused to pay her claim for its loss because she was unable to produce a certificate of title to the car. Its representative testified, however, that upon receipt of a certificate of title it would pay the claim.

Defendant's employees testified that they were not aware of the provisions of ORS 481.315(3) providing that an automobile dealer must "have in his possession a duly assigned certificate of title or bill of sale from (its) registered owner" upon the sale of a used car. They also testified that because legal titles were often held by lien holders and because of the delay of from four to six weeks in making arrangements for the transfer of automobile titles, it was common practice to buy and sell used cars subject to the subsequent delivery of certificates of title.

In addition, they testified that they acquired this used car two weeks prior to its sale to plaintiff; that when they acquired the car they were given a bill of sale by the person from whom they acquired the car (who apparently was not its registered owner); that the car then had an Oregon temporary license, which "would be indicative that the title had been processed as required * * * for transfer (of title)"; and that they were also told by the "customer" that "the title was in transit."

Defendant's employees also testified that they then attempted to secure title to the car and later offered to "rescind the deal" and give plaintiff her money back. Plaintiff denied that any such offer was made to her.

On September 22, 1975, plaintiff filed this action against defendant for the value of the car, punitive damages and attorney fees. As of that date title to the car had not been delivered to her by defendant. At the time of trial, however, on January 4, 1977, defendant produced title to the car and tendered it into court. That tender was rejected on objection by plaintiff.

The court did not err in granting partial summary judgment and directed verdict.

Defendant assigns as error the granting of "partial summary judgment" on the issue of liability. Defendant contends that this was improper because plaintiff's complaint seeks recovery under ORS 646.605 et seq., the Unlawful Trade Practices Act, based upon false representations to her by defendant "regarding the certificate of title"; that summary judgment is not possible under that act because in order to establish a violation of that statute based upon alleged misrepresentations it must be proved that defendant "knew or should have known" that such representations were false and that this is always a question of fact. ¹ It appears, however, that plaintiff's motion for summary judgment on liability was not based upon ORS 646.605 et seq., but was based on the contention that defendant did not have in its possession a "duly assigned certificate of title or bill of sale from the registered owner" of the car at the time of its sale to plaintiff, as required by ORS 481.315(3), and that ORS 481.310(2) provides for a right of action by "any person (who) suffers any loss by reason of the violation of any of the provisions of that statute." There was apparently "no genuine issue as to any material fact" on that question. It follows that the court did not err in entering such a "partial summary judgment."

Defendant also contends that the trial court erred in directing a verdict in favor of plaintiff for compensatory damages in the sum of $1,724.09 because plaintiff "was under a duty to minimize her damages by availing herself of resources available"; that defendant "should not be required to answer in damages for the car's loss when all the owner was required to do once title had been obtained was to submit a claim to her insurance company for payment of the car's value," and that all that the insurance company "required to pay plaintiff's claim was a clear certificate of title," which was tendered into court at the time of trial, but rejected by the trial court. In support of this contention defendant cites Blair v. United Finance Co., 235 Or. 89, 91, 383 P.2d 72 (1963).

In Blair, however, it was held by this court (at 91-92, 383 P.2d at 74) that:

" * * * If, at the time the liability-creating events occurred, Blair reasonably could have avoided all or a part of the damages, then he cannot look to United for indemnity for such damages as were reasonably avoidable. * * * " (Emphasis added)

In this case there was no evidence that at the time of plaintiff's claim to the insurance company for the loss of her car after it was stolen on July 1, 1975, she could have produced title to the car, as required by the insurance company for payment of her claim. On the contrary, there was evidence that plaintiff filed a claim with her insurance company and that her claim was rejected by it because of her inability to produce title to the car as a result of defendant's continued failure to secure and deliver to her the title to the car. It was not until the day of trial on January 4, 1977, that defendant produced title to the car and tendered it into court. Under these facts the doctrine of "avoidable consequences" had no proper application.

Defendant does not contend on this appeal that the value of the car at the time that it was stolen was less than $1,724.09, or that the trial court erred in directing a verdict in favor of plaintiff in that amount in the event that the rule of "avoidable consequences" is not properly applicable. It follows that the trial court did not err in granting plaintiff's motion for a directed verdict. ²

Punitive damages were not recoverable in this case.

Defendant assigns as error the giving of an instruction to the jury on punitive damages which defined "wanton misconduct," for the purposes of an award of punitive damages, as including both a "deliberate" and a "reckless" disregard of the rights of others. Defendant also assigns as error the denial of its "motion to strike punitive damages."

In support of these assignments of error defendant contends that in order for an award for punitive damages to be proper in this case there must have been a "deliberate and calculated effort to misrepresent the facts." Defendant also contends that regardless of the basis for plaintiff's claim, "there is no evidence under any standard for the award of punitive damages"; that there was no evidence that defendant wilfully violated ORS 481.315(3), requiring title to an automobile to be in the possession of an automobile dealer at the time of purchase or sale; ³ that, on the contrary, the evidence was that because of delays in securing certificates of the title from lien holders and because it usually takes from four to nine weeks to clear the transfer of title through the state Motor Vehicles Division, it was not uncommon in the industry to both purchase and sell used cars on promise of subsequent delivery of title; that this car, when acquired by defendant, had a temporary license sticker on its windshield and that defendant had a "bona fide bill of sale" from "the person who traded it to us" ; and that defendant subsequently called the dealer who had sold the car to that person and was told that "the title was coming." ⁴

Plaintiff contends that:

There was ample evidence at...