Horan v. Turnpike Ford, Inc.

• Decision Date: 19 July 1993
• Docket Number: No. 21420,21420
• Citation: 189 W.Va. 621,433 S.E.2d 559
• Court: West Virginia Supreme Court
• Parties: Marvin HORAN and Alice Horan, Plaintiffs Below, Appellees, v. TURNPIKE FORD, INC., Defendant Below, Appellant.

Page 559

433 S.E.2d 559

189 W.Va. 621

Marvin HORAN and Alice Horan, Plaintiffs Below, Appellees, v. TURNPIKE FORD, INC., Defendant Below, Appellant.

No. 21420.

Supreme Court of Appeals of West Virginia.

Submitted May 11, 1993.

Decided July 19, 1993.

Syllabus by the Court

1. "The essential elements in an action for fraud are: '(1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied upon it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied upon it.' Horton v. Tyree, 104 W.Va. 238, 242, 139 S.E. 737[, 738] (1927)." Syl. pt. 1, Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66 (1981).

2. "A party may only assign error to the giving of instructions if he objects thereto before arguments to the jury are begun stating distinctly the matter to which he objects and the grounds of his objection." Syl. pt. 1, Roberts v. Powell, 157 W.Va. 199, 207 S.E.2d 123 (1973).

3. " ' "In determining whether there is sufficient evidence to support a jury verdict the court should: (1) consider the evidence most favorable to the prevailing party; (2) assume that all conflicts in the evidence were resolved by the jury in favor of the prevailing party; (3) assume as proved all facts which the prevailing party's evidence tends to prove; and (4) give to the prevailing party the benefit of all favorable inferences which reasonably may be drawn from the facts proved." Syllabus Point 5, Orr v. Crowder, 173 W.Va. 335, 315 S.E.2d 593 (1984).' Syl. pt. 1, Pinnacle Mining v. Duncan Aircraft Sales, 182 W.Va. 307, 387 S.E.2d 542 (1989)." Syl. pt. 4, Pote v. Jarrell, 186 W.Va. 369, 412 S.E.2d 770 (1991).

4. "An instruction is proper if it is a correct statement of the law and if there is sufficient evidence offered at trial to support it." Syllabus point 5, Jenrett v. Smith, 173 W.Va. 325, 315 S.E.2d 583 (1983).

Charles E. Hurt and Victor A. Barone, Hurt & Barone, Charleston, for appellant.

Orton A. Jones, Hedges, Jones, Whittier & Hedges, Spencer, for appellees.

PER CURIAM:

This case is before this Court upon an appeal from the April 20, 1992, order of the Circuit Court of Kanawha County, West Virginia. The jury awarded the appellees, Marvin and Alice Horan, $5,000.00 in compensatory damages and $40,000.00 in punitive damages as a result of their purchasing a Ford Tempo automobile from the appellant, Turnpike Ford, Inc. The appellant asks that this Court reverse the decision of the circuit court. The appellant raises four issues on appeal: (1) the trial court erred in not granting the appellant's motions for directed verdict and judgment notwithstanding the verdict, because the appellees failed to prove fraud by clear and convincing evidence and damages proximately resulting from any act or omission of the appellant; (2) the trial court erred in not setting aside the award of punitive damages; (3) the trial court erred in not setting aside the compensatory damages as excessive and not warranted by the evidence; and (4) the trial court erred in giving certain jury instructions of the appellees. This Court has before it the petition for appeal, all matters of record and the briefs of counsel. For the reasons stated below, the judgment of the circuit court is affirmed.

I

On March 20, 1986, the appellees purchased the automobile from the appellant. The appellees negotiated the sale with Louis Morton, a used car salesman for the appellant and Mrs. Horan's cousin. Mr. Morton informed the appellees that the automobile was used by another salesman to drive to and from work. Thus, the appellees realized they were purchasing a demonstrator automobile with 7,766 miles on it. The parties agreed upon a final purchase price of $8,000.00.

Mr. Morton assured the appellees that they would have a demonstrator warranty on the vehicle. The purpose of a demonstrator warranty, as attested to by the appellant's owner, Alex Parsons, Jr., is to extend the new car warranty period to make up for the time and mileage utilized by a demonstrator vehicle prior to sale.

To complete the necessary paperwork, Mr. Morton directed the appellees to the appellant's business manager, Greg Childress. Mr. Childress testified that he told the appellees that the automobile would be covered by the remainder of the new car warranty.

Shortly after their purchase, the appellees noticed that the automobile began to experience mechanical problems. For example, Mr. Horan testified that the "accelerator was sticking," the tires "were slick" and a windshield wiper "was bad." Mr. Horan took the automobile back to the appellant for the necessary repairs but was informed that the warranty had expired. Mr. Horan drove the automobile home and called the Ford Motor Company office in Cincinnati, Ohio. Approximately twenty minutes later, the Ford representative from Cincinnati called Mr. Horan and advised him to take the automobile back to the appellant.

Mr. Horan returned the automobile to the appellant as advised, and he overheard the new car manager say to a service department employee, "Whatever this man needs on this car, you fix it without question." However, the automobile was not repaired to Mr. Horan's satisfaction, and as a result, the appellees never took the automobile back to the appellant, or any other Ford dealership, for repairs. Yet, throughout the period of time the appellees owned the automobile, they claim the automobile had various problems, such as: problems with the radiator cooling system, air conditioner, abnormal tire wear, as well as minor other problems.

In early or mid-1987, Mr. Horan discovered, in the automobile's glove box, insurance papers indicating that the automobile had been placed with the West Virginia University Foundation, Inc., in conjunction with the West Virginia University Athletic Department. Further investigation into the matter revealed that the appellant participated in what was known as the "Wheels Club." The club is actually an arrangement in which state auto dealerships furnish new automobiles to West Virginia University coaches. A coach may put up to 6,000 miles on an automobile before the automobile is put up for public sale by the respective dealer, at a reduced price and sold as a demonstrator. In return, the automobile dealers get free season tickets for basketball and football games, free parking, a luncheon before the games and their picture in the game program. It should be noted that neither Mr. Morton nor Mr. Childress was aware that the appellees' automobile had been used by a coach as part of the Wheels Club. Consequently, these two men were dismissed from this action.

While the West Virginia University Athletic Department had use of the automobile, an assistant football coach who was driving the automobile on January 25, 1985, became involved in a collision which resulted in $797.97 in damages. The payment for the repairs was authorized by Jerry Hurst, who was the general manager for the appellant at the time. Expert testimony by Jeff Steindler, a mechanical engineer, on behalf of the appellant, confirmed the fact that the repairs were properly done and there was no structural damage to the automobile. The appellees' expert witness, David Orringer, a forensic consultant in automobile mechanics, testified that there were two indicators that the automobile had been in a collision: visually, he noticed the mismatch of the paint, and structurally, he noticed that the automobile needed a front-end alignment.

In April of 1990, the appellees traded in the automobile and received approximately $1,200.00 for it. At the time of the trade-in, the automobile had approximately 91,000 miles on it. The fact that the appellees continued to use the automobile and put between 83,000 to 84,000 miles on it causes this Court some concern; however, the jury was made aware of this fact and still found for the appellees.

Mr. Orringer, the appellees' expert, testified that because the automobile had been in a collision, its value would be diminished by $300.00 to $500.00. However, Mr. Orringer also stated that the prior collision becomes more of a concern in terms of buyer perception rather than diminution of financial value. Mr. Steindler, the appellant's expert, testified that the repair work done in 1985 would have no effect on the value of the automobile at the time of the trade-in, in 1990.

In 1988, after the appellees had filed this action in March of 1987, the appellant made an offer of judgment ¹ whereby the appellant offered to rescind the sale and refund the full purchase price to the appellees. The offer of judgment was not accepted. Mr. Horan testified that he had never seen or been informed of the offer of judgment. The parties, however, stipulated that Richard Frum, the appellees' counsel of record when the offer was made, would testify that an offer was communicated to the appellees and it was not accepted. ²

On January 15, 1992, the jury found in favor of the appellees and awarded the appellees $5,000.00 in compensatory damages and $40,000.00 in punitive damages.

The appellant timely moved for a new trial, judgment notwithstanding the verdict and for remittitur of damages. On April 20, 1992, the trial court denied the appellant's motions and entered an order upholding the jury's verdict.

It is from the April 20, 1992, order that the appellant appeals to this Court.

II

The appellant's first contention is that the trial court erred in not granting the appellant's motions for directed verdict and judgment notwithstanding the verdict, because the appellees failed to prove fraud by clear and convincing evidence and damages proximately resulting from any act or omission of the appellant.

In syllabus point 1 of Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66 (1981), this Court enumerated the following elements of fraud:

The essential elements in an action for fraud are: '(1) that ...