Garcia v. Medved Chevrolet Inc.

• Decision Date: 31 October 2011
• Docket Number: No. 09SC1080.,09SC1080.
• Citation: 263 P.3d 92
• Parties: Trina GARCIA, individually and on behalf of all persons similarly situated, Petitionerv.MEDVED CHEVROLET, INC., d/b/a Medved Cadillac, Inc., d/b/a Medved Cadillac Oldsmobile, Inc., d/b/a Medved Chevrolet–GEO, Inc., d/b/a Medved Oldsmobile, Inc. and d/b/a Medved Craig Chevrolet, Inc.; Medved Chevrolet South, Inc., d/b/a Medved Hummer South; Castle Rock Ford–Mercury, Inc., d/b/a Medved Ford Lincoln Mercury, Inc. and d/b/a Medved Brutyn Ford Lincoln Mercury, Inc.; Medved Buick Pontiac GMC, Inc.; Lakewood Chrysler–Plymouth, Inc., d/b/a Medved Chrysler Jeep, Inc.; Medved Chrysler Jeep Dodge South, Inc.; Medved Chrysler Jeep Dodge, Inc.; Medved Pontiac Buick GMC, Inc.; Medved Suzuki North, Inc.; Medved Suzuki South, Inc.; and John Medved, individually, Respondents.
• Court: Colorado Supreme Court

263 P.3d 92

Trina GARCIA, individually and on behalf of all persons similarly situated, Petitioner

v.MEDVED CHEVROLET, INC., d/b/a Medved Cadillac, Inc., d/b/a Medved Cadillac Oldsmobile, Inc., d/b/a Medved Chevrolet–GEO, Inc., d/b/a Medved Oldsmobile, Inc. and d/b/a Medved Craig Chevrolet, Inc.; Medved Chevrolet South, Inc., d/b/a Medved Hummer South; Castle Rock Ford–Mercury, Inc., d/b/a Medved Ford Lincoln Mercury, Inc. and d/b/a Medved Brutyn Ford Lincoln Mercury, Inc.; Medved Buick Pontiac GMC, Inc.; Lakewood Chrysler–Plymouth, Inc., d/b/a Medved Chrysler Jeep, Inc.; Medved Chrysler Jeep Dodge South, Inc.; Medved Chrysler Jeep Dodge, Inc.; Medved Pontiac Buick GMC, Inc.; Medved Suzuki North, Inc.; Medved Suzuki South, Inc.; and John Medved, individually, Respondents.

No. 09SC1080.

Supreme Court of Colorado, En Banc.

Oct. 31, 2011.

Friesen Lamb, LLP, Daniel E. Friesen, Denver, Colorado, Attorneys for Petitioner.Reilly Pozner LLP, Daniel M. Reilly, Eric Fisher, Caleb Durling, Laurie Jaeckel, Denver, Colorado, Holley, Albertson & Polk P.C., Dennis B. Polk, Golden, Colorado, Attorneys for Respondents.Hill & Robbins, P.C., Robert F. Hill, John H. Evans, Nathan P. Flynn, Denver, Colorado, McFarland Law Offices, Thomas D. McFarland, Golden, Colorado, Attorneys for Amicus Curiae The Colorado Trial Lawyers Association.Kelly Garnsey Hubbell & Lass, LLC, William E. Walters, III, Denver Colorado, Attorneys for Colorado Automobile Dealers Association.

Mountain States Legal Foundation, Joel M. Spector, Lakewood, Colorado, Deborah J. La Fetra, Sacramento, California, Attorneys for Amicus Curiae Pacific Legal Foundation.Justice MARTINEZ delivered the Opinion of the Court.

Consumers brought a class action against ten automobile dealerships operating under the Medved name,¹ and John Medved individually, alleging violations of the Colorado Consumer Protection Act (“CCPA”). Plaintiffs alleged that Medved's sales documents failed to disclose the price and existence of various dealer-added aftermarket products, thereby causing an injury to Plaintiffs who paid for those products. Plaintiffs sought certification of two classes: one which included customers who paid for dealer-added products that were never installed and another which included customers who were unaware of the dealer-added products due to Medved's deceptive sales documents.

Class certification turns on whether Plaintiffs can establish the causation and injury elements of their CCPA claims on a class-wide basis, thereby obviating the need to analyze the face-to-face interactions inherent in each automobile sale. Consistent with our decision in BP America Production Co. v. Patterson, we hold that the causation and injury elements of a CCPA claim may be inferred from circumstantial evidence common to a class. Crucially though, the defendant has the opportunity to rebut any such class-wide inferences with individual evidence. A trial court must therefore rigorously analyze all the evidence presented to determine whether class-wide inferences are appropriate.

In the instant case, the trial court determined that Plaintiffs could prove the causation and injury elements of their CCPA claims with circumstantial evidence common to both Classes, namely, the standard documents and records utilized by Medved in selling automobiles. The trial court explained that class-wide inferences of causation and injury were appropriate because Plaintiffs were not relying on the face-to-face interactions inherent in each vehicle sale. As a result, the trial court did not consider whether the individual evidence presented by Medved rebutted the class-wide inferences of causation and injury crucial to the certification of both classes.

We agree with the court of appeals that the trial court erred by not rigorously analyzing the evidence presented by Medved. If the evidence presented by Medved regarding the face-to-face transactions inherent in vehicle sales rebutted Plaintiffs' allegation that each Plaintiff actually relied on Medved's sales documents in paying for dealer-added products, Plaintiffs would be unable to resort to class-wide inferences to establish the elements of causation and injury. We thus affirm the court of appeals' order remanding the case to the trial court to rigorously analyze the individual evidence and determine to its satisfaction whether Plaintiffs can establish class-wide theories of causation and injury.

I. Facts and Procedure

Plaintiffs brought a class action against ten automobile dealerships operating under the Medved name and John Medved individually. They alleged violations of the CCPA due to Medved's failure to disclose the price of various dealer-added aftermarket products. They moved for certification of two classes: (I) consumers who purchased a vehicle from defendants between April 8, 2003 and June 26, 2009 and were charged for dealer-added products that were never installed (“Class I”); and (II) consumers who purchased a vehicle between April 8, 2003 and June 26, 2009 and were charged for dealer-added products that were installed but not disclosed in writing (“Class II”).

Plaintiffs alleged that Medved's standard practice was to automatically add a charge to a new vehicle's price for dealer-added products that would be installed at a later time. These add-ons consisted of such items as pin striping, clear bra,² and truck bed liners. Plaintiffs also claimed that the standard practice at Medved dealerships was to create a Repair Order documenting the installation of dealer-added products at the dealership. In cases where pin striping was applied by a third-party vendor, a standard Purchase Order was created to order the vendor-supplied service. Both Repair and Purchase Orders were tracked through the use of a computer system. Thus, Plaintiffs claimed, if there was neither a Repair Order nor a Purchase Order for a dealer-added product purchased by a customer, it reasonably could be assumed that the dealer-added product was never in fact installed. Because there were no service records for a large percentage of sales, Plaintiffs alleged that Medved never actually installed the dealer-added products for which it charged consumers. These consumers comprise Class I.

Plaintiffs also alleged that even when a dealer-added product was installed, it was without the knowledge and consent of the consumer. In support of this allegation, Plaintiffs submitted the standard forms used by Medved in retail installment sales, including a Buyers Order, an Addendum sticker, and a Monroney sticker. These forms, Plaintiffs claimed, only disclosed the price of the dealer-added products through an obscure cross-reference in the standard Buyers Order, presented to consumers in a large stack of closing documents. Plaintiffs claimed that these confusing forms violated the CCPA because they lacked “clear and unambiguous” language disclosing the add-ons as required by the statute. The trial court agreed, ruling on cross-motions for summary judgment that Medved's disclosures of dealer-added products were deceptive and did not comply with the CCPA as a matter of law. Consumers presented with these deceptive forms comprise Class II.

Medved, in turn, presented various arguments opposing certification of either Class. Medved primarily argued that it would be necessary to analyze each individual sales transaction to determine whether Medved's deceptive sales documents caused an injury to Plaintiffs.³ As such, Medved argued that Plaintiffs could not rely on class-wide inferences of causation or injury to establish their CCPA claims. Absent such theories, Medved argued that individual issues would predominate over questions common to either Class.

To support this argument, Medved submitted evidence regarding the individual interactions inherent in a typical automobile sale at a Medved dealership. Patrick Nieto, a sales manager for the Medved dealerships located in Wheat Ridge, submitted an affidavit describing the typical face-to-face transactions that take place between a prospective consumer and a Medved sales representative. He explained that consumers arrive at the dealership and are free to visually inspect the cars on the lot. Consumers are then approached by a Medved sales representative and have the opportunity to inquire about anything with respect to a particular vehicle. At some point, the parties discuss the selling price of the vehicle. According to Nieto, this negotiation can take a number of different paths, including discussions regarding the MSRP as listed on the Monroney sticker, discounts the dealership can offer, and whether the customer is interested in purchasing a warranty or other vehicle protection packages. The existence, origin, and/or price of dealer-added products, if any, might or might not be a topic of discussion between the sales representative and the customer.

Nieto also described the last phase of a typical sale, a meeting between the consumer and the Finance and Insurance Department. At this meeting, Nieto explained, the consumer is provided with a Buyer Order which explicitly states that the information on the window of the car is part of the contract. Accordingly, the consumer would be provided with the vehicle's Monroney and Addendum stickers to take with them to the closing. Nieto thus explained that it would be necessary to analyze each individual sales transaction to determine whether the consumer knew about the price and existence of dealer-added products, if any.

Medved also submitted an affidavit from Virginia Johnson, the Administrative Service Manager and Warranty Manager for Medved. She individually analyzed a number of transactions to determine whether Medved had installed dealer-added products paid for by consumers. She explained that dealer-added products were in fact installed in numerous cases despite the absence of a Repair or Purchase Order. Thus, in her view, it would be improper to assume that dealer-added...