Harris v. M & S Toyota, Inc.

• Decision Date: 11 January 1991
• Citation: 575 So.2d 74
• Parties: Scott HARRIS and Celine Harris v. M & S TOYOTA, INC., d/b/a Toyota City. M & S TOYOTA, INC. v. Scott HARRIS and Celine Harris. 89-404, 89-414.
• Court: Alabama Supreme Court

Page 74

575 So.2d 74

Scott HARRIS and Celine Harris v. M & S TOYOTA, INC., d/b/a Toyota City.

M & S TOYOTA, INC. v. Scott HARRIS and Celine Harris.

89-404, 89-414.

Supreme Court of Alabama.

Jan. 11, 1991.

James J. Bushnell, Jr., Rives & Peterson, Birmingham, for appellants/cross-appellees.

Richard A. Meelheim, Vowell & Meelheim, Birmingham, for appellee/cross-appellant.

ON APPLICATION FOR REHEARING

HORNSBY, Chief Justice.

This Court's opinion issued September 28, 1990, is withdrawn, and the following is substituted therefor:

Scott and Celine Harris, the purchasers of a used car, sued M & S Toyota, Inc. ("Toyota City"), on a fraud claim and obtained a jury verdict. The trial court granted Toyota City's motion for a new trial on the ground that the court had erroneously allowed the Harrises to present evidence regarding an earlier transaction between Toyota City and another customer. The Harrises appeal this grant of a new trial. Toyota City cross-appeals, contending that the trial court should have granted its motion for judgment notwithstanding the verdict. We affirm the denial of Toyota City's motion for judgment notwithstanding the verdict, and we affirm the grant of a new trial.

Facts

Scott and Celine Harris, husband and wife, purchased a used automobile from Toyota City on September 19, 1985. Toyota City had purchased that car two days earlier at an automobile auction in Orlando, Florida. Toyota City's purchase receipt, which it received upon purchasing the auctioned car, explicitly states that the driver's door of the car had been painted and that there were 17,655 miles registered on the car's odometer. No other disclosures were made on that receipt.

The Harrises testified that prior to their purchase of the car from Toyota City, a salesman and the general sales manager of Toyota City orally told them that the used car had never been involved in an accident. The Harrises further stated that that oral representation regarding the condition of the used car induced them to purchase it. Approximately four months after the purchase of the used car, Mr. Harris was involved in an automobile collision that resulted in the total destruction of the car.

After that collision, the car was towed to an automobile repair shop and inspected by the shop's repairman for damage assessment. The inspection revealed the presence of "bondo," a paste commonly used by automobile repairmen to cover imperfections on the surface of a car normally resulting from dents. The presence of the bondo indicated that the car had been damaged and repaired before the Harrises' purchase, despite what they said they had been told about the car by Toyota City through its agents.

On March 7, 1986, the Harrises filed a complaint against Toyota City, seeking compensatory and punitive damages for fraud in the sale of the car. Toyota City denied that it committed any fraud. The case came to trial on August 22, 1989. During that trial, Toyota City argued that it was entitled to a directed verdict because, it said, the oral misrepresentations offered by the Harrises to prove reliance were contradicted by the terms of a written sales contract and were therefore inadmissible by operation of the parol evidence rule. ¹ Following the trial court's denial of Toyota City's motion for directed verdict and after the conclusion of all the evidence, the jury rendered a verdict in favor of the Harrises and against Toyota City in the amount of $502,500.00.

On September 1, 1989, Toyota City filed a motion for judgment notwithstanding the verdict, reasserting its arguments made in support of its motion for directed verdict. In the alternative, Toyota City argued that it was entitled to a new trial because, it said, the trial judge had erroneously permitted the Harrises to introduce evidence regarding the settlement of a fraud complaint filed against Toyota City two years earlier. Following a hearing on the motions, the trial court set aside the judgment and granted Toyota City's motion for a new trial.

On November 14, 1989, the Harrises filed a motion to amend the order granting a new trial, which the trial court granted by amending its earlier order. The Harrises asked the trial judge to declare in his amended order his reason for granting Toyota City's motion for new trial. In the order, the trial judge stated the following:

"The Court having set aside the judgment in this case in an order dated 10-23-89, amends that order by adding the following grounds for the Court's granting the Defendant a new trial.

"The Court allowed into evidence the ... testimony of Ms. Annette Catlin.

"The Court granted Defendant M & S Toyota Inc.'s motion for new trial because the Court failed to give the jury a limiting instruction concerning the money paid to Ms. Catlin by the Defendant.

"The Court believes the failure to give a limiting instruction was error and warrants granting the Defendant a new trial.

"Done this the 22[nd] day of November, 1989.

"s/Wayne Thorn, Circuit Judge"

On November 29, 1989, Toyota City's motion for JNOV was denied by operation of law, Rule 59.1, A.R.Civ.P. The Harrises appealed from the order granting Toyota City's motion for new trial, and Toyota City cross-appealed from the order denying its motion for JNOV.

Judgment Notwithstanding the Verdict

To determine whether the trial court properly denied Toyota City's motion for JNOV requires us to consider whether the Harrises produced sufficient evidence to show that Toyota City fraudulently induced them to purchase the car.

We note that this action was pending on June 11, 1987; therefore, the "substantial evidence" rule, Ala.Code 1975, § 12-21-12, does not apply, and the applicable standard of review is the "scintilla of evidence" rule, which was explained in Hammond v. City of Gadsden, 493 So.2d 1374, 1376 (Ala.1986), as follows:

"A motion for directed verdict or JNOV is tested against the scintilla rule, which requires that a question go to the jury 'if the evidence or any reasonable inference arising therefrom, furnishes a mere gleam, glimmer, spark, the least particle, the smallest trace, or a scintilla in support of the theory of the complaint.' Alabama Power Co. v. Taylor, 293 Ala. 484, 306 So.2d 236 (1975). In reviewing a trial court's ruling on these motions, the appellate court, guided by the standard of the scintilla rule, determines whether there was sufficient evidence below to produce a conflict warranting jury consideration. Baker v. Chastain, 389 So.2d 932 (Ala.1980). Like the trial court, the appellate court must view all the evidence in a light most favorable to the non-moving party. Ritch v. Waldrop, 428 So.2d 1 (Ala.1982)."

We now consider whether there was sufficient evidence produced at trial to allow the jury to infer that the Harrises were fraudulently induced to purchase a used car from Toyota City. The essential elements of a fraud claim were recently set forth by this Court in Ramsay Health Care, Inc. v. Follmer, 560 So.2d 746, 749 (Ala.1990):

"The essential elements of a fraud claim are: (1) misrepresentation of a material fact; (2) made willfully to deceive, or recklessly without knowledge; (3) which was justifiably relied upon by the plaintiff under the circumstances; and (4) which caused damage as a proximate consequence. Bowman v. McElrath Poultry Co., 468 So.2d 879 (Ala.1985)." ²

Because of the application of the "scintilla rule," our duty is to determine whether the Harrises produced a scintilla of evidence at trial on each of the elements of their fraud claim so as to warrant jury consideration. Most of the testimony produced at the trial was conflicting. The Harrises consistently testified that Toyota City's salesman and general sales manager told them that the used car that they were about to purchase had never been involved in an accident--a representation that the Harrises testified was a major factor in their decision to purchase the car.

In opposition, Toyota City consistently took the position during the trial that neither its salesman nor its general sales manager ever made such a representation to the Harrises. Toyota City argued that the sales contract the Harrises signed expressly stated that no representations were ever made to the Harrises regarding the condition of the used car. Toyota City asserted at trial, and now asserts on appeal, that the alleged representations made by its agents to the Harrises were inadmissible in evidence to prove "reliance" because of the language in the sales contract and the application of the parol evidence rule.

This case certainly presents more than a scintilla of evidence that the documents in question were signed as a result of representations by Toyota City that the vehicle had never been previously damaged. There was also evidence in the record that the forms in question were not read by the plaintiffs and were signed in a perfunctory manner as passed over by Toyota City's agents. The jury could reasonably infer from this evidence that the documents, including the document containing the "as is" language, were executed simply as forms necessary to complete the purchase and were signed because the plaintiffs had already been assured that the car had not been wrecked.

Our law on the admissibility of fraudulent representations that are employed to obtain assent to a written contract has been stated as follows:

"On the issues of whether a contract is void, voidable or reformable because of illegality, fraud, mistake or any other reason and whether the parties assented to a particular writing as the complete and accurate integration of their contract, there is no parol evidence rule to be applied. On these issues no relevant evidence, parol or otherwise, is excluded. No written document is sufficient, standing alone, to determine any one of them, however long and detailed it may be. No one of the issues can be determined by mere inspection of the written document. See 3 A. Corbin Contracts, §...