Harden v. Gregory Motors

• Decision Date: 08 September 1983
• Citation: 697 P.2d 283
• Parties: William W. HARDEN and Karen L. Harden, husband and wife, Appellants (Plaintiffs), v. GREGORY MOTORS, Appellee (Defendant), Wayne Hudson, d/b/a Wyoming Auto Wholesalers, added per Amended Complaint
• Court: Wyoming Supreme Court

Page 283

697 P.2d 283

William W. HARDEN and Karen L. Harden, husband and wife, Appellants (Plaintiffs), v. GREGORY MOTORS, Appellee (Defendant) Wayne Hudson, d/b/a Wyoming Auto Wholesalers, added per Amended Complaint 9/8/83; James Huffman; and Alan Gregory, (Defendants).

No. 84-119.

Supreme Court of Wyoming.

March 5, 1985.

William W. Harden, Casper, for appellants (plaintiffs).

Donald E. Chapin, Casper, for appellee (defendant).

Before THOMAS, C.J., ROONEY, BROWN and CARDINE, JJ., and ARTHUR T. HANSCUM, District Judge.

ARTHUR T. HANSCUM, District Judge.

This appeal is from a summary judgment against appellants, William and Karen Harden, in a transaction involving their purchase of a vehicle. Appellants' immediate transferor had tampered with the odometer reading on the vehicle. Appellants were granted summary judgment against their immediate transferor from which no appeal has been taken. A summary judgment was, however, granted against appellants in favor of appellee, Gregory Motors, an automobile dealership in the chain of title to the vehicle, but not the immediate transferor to appellants. It is from this summary judgment absolving the appellee-dealership from liability that this appeal is taken.

We will reverse.

INTRODUCTION

This is a unique case in this jurisdiction. The civil action in the District Court was commenced by appellants with the filing of a complaint under the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. §§ 1981-1991 (referred to herein as MVICS). This federal legislation was enacted to prohibit tampering with odometers on motor vehicles, and to compensate persons victimized by such tampering. MVICS imposes civil liability on persons who violate the provisions of the law and offers civil remedies for victims in the form of treble damages, costs and attorney's fees. In order to apply this law to the facts of this case, it is necessary to trace the chain of title to the vehicle purchased by appellants and to review the odometer mileage statements required by MVICS which were signed by transferors along the chain of title.

FACTS

On December 3, 1982, appellants contacted Ray Sutton, a mechanic employed by appellee, Gregory Motors. Appellants expressed an interest in obtaining a low mileage, late model Jeep Wagoneer. Sutton informed appellants that he knew of such a vehicle and arranged for appellants to see the vehicle later in the day. Appellants arrived at Gregory Motors' place of business and contacted Sutton who introduced appellants to one Wayne Hudson. Hudson was an independent automobile wholesaler who conducted business under the name "Wyoming Auto Wholesalers." He also had served previously as Gregory Motors' sales manager. Hudson directed appellants to a grey, 1980 Jeep Wagoneer which was parked on Gregory Motors' sales lot. Appellants inspected the vehicle and observed that it had approximately 36,000 miles showing on the odometer. After a test drive and an inspection by Sutton, appellants agreed to purchase the vehicle for the sum of $6,000.00.

It was agreed that appellants would return the next day to permit Sutton to perform some minor repair work. The agreement was to be finalized and delivery to be taken by appellants on the next day, December 3, 1982.

Events transpired rather quickly on December 3, 1982. As the day commenced, title to the vehicle was vested in Gregory Motors which had received title and possession of the vehicle from Precision Motors on or about November 26, 1982. Then, three transfers of title occurred:

(1) Gregory Motors, by its sales manager, Alan Gregory, transferred title to the vehicle to one James Huffman. ¹ Title was filed at 11:54 a.m.

(2) Huffman transferred title to Hudson. Title was filed at 12:31 p.m.

(3) Hudson transferred title to appellants in exchange for a cashier's check in the sum of $6,000.00. Title was filed at 3:58 p.m.

When Gregory Motors acquired title, a statement was signed by Precision Motors stating a mileage of approximately 96,500 miles, which accurately represented the reading on the odometer and the number of miles the vehicle had been driven. Sometime during Gregory Motors' possession and ownership, and prior to appellants' initial inspection of the vehicle on December 2, 1982, Hudson rolled back the odometer to read just under 37,000 miles. ²

At the time Gregory Motors transferred title to Huffman, Alan Gregory signed an odometer mileage statement which certified that the odometer on the vehicle "now reads 96,475 miles." ³ Obviously, because of Hudson's intervention, it did not.

No one from Gregory Motors went out to the vehicle and actually observed the odometer reading at the time the odometer mileage statement was signed. For some reason, too, the transferee on the statement was listed as Wyoming Auto Wholesalers instead of Huffman, the transferee on the title. ⁴ No odometer mileage was given by Huffman to Hudson. Finally, Hudson signed an odometer statement on the prescribed form in which he certified to appellants that the odometer reading on the vehicle "now reads 36,859 miles." And it did--that certification was truthful. Unfortunately, he checked other boxes which departed from the truth such that a summary judgment was properly awarded against him.

Subsequently, the Federal Bureau of Investigation notified appellants that the odometer on the vehicle had been rolled back. Suit was brought under MVICS and summary judgments were entered. It is against the backdrop of MVICS that the propriety of the summary judgment in favor of Gregory Motors must be evaluated.

THE LAW OF SUMMARY JUDGMENT

It is unnecessary to extensively review the duty of an appellate court on review of summary judgments. This court has recently had the occasion to consider the law of summary judgment in various factual contexts. In Blackmore v. Davis Oil Company, Wyo., 671 P.2d 334, 336 (1983), the court outlined the requisite elements which must be considered on review:

"The moving party is entitled to summary judgment when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Rule 56(c), W.R.C.P.; Lafferty v. Nickel, Wyo., 663 P.2d 168 (1983). Furthermore, the party moving for summary judgment has the burden of showing that there is no genuine issue of material fact. Timmons v. Reed, Wyo., 569 P.2d 112, 121 (1977). A material fact is one with legal significance which would affect the outcome of litigation. Thus,

' * * * a determination, as to whether or not a fact is material, depends greatly upon the principle of law to be applied.' Timmons v. Reed, supra, 569 P.2d at 117."

In this action the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. §§ 1981-1991, is the principle of law to be applied to the material facts of this case. MVICS affords a civil action to purchasers to enforce liability for violations of the requirements of the law and provides a specific remedy for damages to the aggrieved purchaser. 15 U.S.C. § 1989(a). The action may be brought in any United States district court or "in any other court of competent jurisdiction...." 15 U.S.C. § 1989. It has been held that state courts of general jurisdiction have the power to entertain suits and award damages for violations of the MVICS. Christianson v Lease Associates, Inc., 87 Wis.2d 123, 273 N.W.2d 776 (1978) and Vogt v. Nelson, 69 Wis.2d 125, 230 N.W.2d 123 (1975).

MVICS defines a number of violations for which civil actions may be brought to enforce liability to recover damages.

It provides:

"No person shall disconnect, reset, or alter or cause to be disconnected, reset, or altered, the odometer of any motor vehicle with intent to change the number of miles indicated thereon." 15 U.S.C. § 1984.

and further,

"No person shall conspire with any other person to violate section ... 1984 ...." 15 U.S.C. § 1986.

MVICS also provides for rules governing persons who transfer vehicles:

"No transferor shall violate any rule prescribed under this section or give a false statement to a transferee in making any disclosure required by such rule." 15 U.S.C. § 1988(b).

MVICS's remedy provision requires a showing of "intent to defraud." 15 U.S.C. § 1989(a). Accordingly, the element of intent is a requisite showing by the person who seeks recovery. It has been ruled that intent to defraud an ultimate purchaser under the MVICS is a factual determination. Ryan v. Edwards, 592 F.2d 756 (4th Cir.1979). Furthermore in Jones v. Fenton Ford, Inc., 427 F.Supp. 1328 (D.C.Conn.1977), the court held that "intent to defraud" did not require a showing of actual knowledge. Rather, the intent to defraud requirement could be satisfied by a showing that the representation regarding the mileage on the odometer was made with reckless disregard of the truth.

Similarly, in Nieto v. Pence, 578 F.2d 640, 642 (5th Cir.1978), the court stated:

"... [A] transferor who lacked actual knowledge [of accuracy of odometer reading] may still be found to have intended to defraud and thus may be civilly liable for a failure to disclose that a vehicle's actual mileage is unknown. A transferor may not close his eyes to the truth. If a transferor reasonably should have known that a vehicle's odometer reading was incorrect, although he did not know to a certainty the transferee would be defrauded, a court may infer that he understood the risk of such an occurrence." (Footnote omitted.)

In Jones v. Fenton Ford, Inc., supra, 427 F.Supp. at 1336, the defendant defended on the basis of his certification on the odometer mileage statement that to the best of his knowledge the odometer was correct. The court ruled that such a statement was:

"... false and misleading, and that these representations were made with actual knowledge of their falsity, or with such reckless disregard of the truth as to satisfy the 'intent to defraud' requirement in § 409 MVICS Act, 15 U.S.C. § 1989(a). This leaves only the question of damages to consider."

In this...