Hughes v. Hertz Corp.

• Citation: 670 So.2d 882
• Parties: John F. HUGHES and Kathryn Hughes v. HERTZ CORPORATION, et al. 1941121.
• Decision Date: 17 November 1995
• Court: Supreme Court of Alabama

Page 882

670 So.2d 882

John F. HUGHES and Kathryn Hughes v. HERTZ CORPORATION, et al.

1941121.

Supreme Court of Alabama.

Nov. 17, 1995.

Appeal from Mobile Circuit Court (CV-93-4069); Ferrill D. McRae, Judge.

Vincent F. Kilborn III and Vincent F. Kilborn IV, for Kilborn, Roebuck & Kilborn, Mobile, for Appellants.

David A. Bagwell and Clifford C. Brady, of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, L.L.C., Mobile, for Appellees.

SHORES, Justice.

John F. Hughes and Kathryn Hughes, the plaintiffs, appeal from a summary judgment for the defendants, Hertz Corporation and two of its employees, in an action alleging fraud in the sale of a used automobile.

Sometime before May 2, 1990, Mr. Hughes visited a Hertz retail car sales lot, looking for a car to purchase. When Mr. Hughes visited the lot for the first time, he looked at the cars that were for sale. The record does not show that Mr. Hughes had any discussions with anyone from Hertz on his first visit to the lot.

Sometime later, Mr. Hughes returned to the Hertz sales lot. On this second visit, Mr. Hughes looked at a 1988 Nissan Stanza, which he ultimately purchased from Hertz, and he had a discussion with Danny Kyser, a sales agent, about the purchase of the Stanza. Mr. Hughes says that during their discussions Kyser described the Nissan Stanza as a "fine" car. Mr. Hughes had no other specific recollection of any discussion with Hertz personnel during this visit. During this second visit, Mr. Hughes took the car for a test drive.

On May 2, 1990, Mr. Hughes returned to the Hertz lot with his wife, Kathryn Hughes, to purchase the car. At this time, Mr. Hughes met with Kyser to negotiate the terms of the sale. At no time did Mr. Hughes ask whether the car had been damaged, nor was he told that the car had undergone previous repairs.

At the time of purchase, Hertz issued the Hugheses a Hertz 12-month/12,000-mile limited warranty; it was issued by William R. Wright, a salesman and manager at the Hertz dealership. This warranty provided that the power train assembly "shall be free of defects in material or workmanship under normal use and service by the purchaser." In addition to the Hertz limited warranty, the Hugheses purchased from Wright a two-year extended warranty providing "VIP Plus" coverage. That warranty provided that the Hugheses' vehicle "shall be free from defects in material and workmanship, under normal use and service." Each warranty provided that the agreement would be void if the purchasers violated the provisions of "paragraph 7" of the agreement, which stated, in pertinent part "b. This Warranty [Service Agreement] will become void if:

"(1) Any covered part of the Power Train Assembly [or part covered by the Service Agreement] has been repaired, altered or attended to by any person other than Hertz or its designee.

"....

"(3) The Vehicle has been misused, abused, or subject to neglect.

"(4) The Vehicle has been in an accident, fire, or other casualty."

From May 2, 1990, until September 1993, the Hugheses drove the 1988 Nissan Stanza without any problems. In September 1993, the car was involved in an accident and was taken to a repair shop. The repair shop employees informed the Hugheses of prior damage to the rear panel and frame.

In December 1993, the Hugheses sued Hertz, Kyser, and Wright, alleging fraud by misrepresentation, fraud by suppression, and deceit. The Hugheses amended their complaint to include claims for breach of express warranty under § 7-2-313, Ala.Code 1975, and breach of implied warranty under § 7-2-314. Hertz, Kyser, and Wright jointly moved for a summary judgment on the fraud claims. The trial court granted the defendants' motion and made the summary judgment final pursuant to Rule 54(b), Ala.R.Civ.P. The Hugheses appeal.

A summary judgment is proper and must be affirmed on appeal if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; McGarry v. Flournoy, 624 So.2d 1359 (Ala.1993); Gray v. Liberty Nat'l Life Ins. Co., 623 So.2d 1156 (Ala.1993); Fincher v. Robinson Brothers Lincoln-Mercury, Inc., 583 So.2d 256 (Ala.1991). We review a summary judgment by the "substantial evidence" rule. Under this rule, once the movant has made a prima facie showing that there is no genuine issue of material fact and that the movant is entitled to a judgment as a matter of law, the nonmovant must rebut this showing by presenting "substantial evidence" creating a genuine issue of material fact. "Substantial evidence" has been defined as "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870 (Ala.1989); Henson v. Celtic Life Ins. Co., 621 So.2d 1268 (Ala.1993); Ala.Code 1975, § 12-21-12(d). Reasonable doubts concerning the existence of a material fact must be resolved in favor of the nonmoving party. Henson; Hanners v. Balfour Guthrie, Inc., 564 So.2d 412 (Ala.1990).

To establish fraud by misrepresentation, the plaintiff must show 1) that the defendant made a misrepresentation; 2) that that misrepresentation concerned a material existing fact; 3) that the plaintiff relied on the misrepresentation; and 4) that the reliance was to the plaintiff's detriment. Ala.Code 1975, § 6-5-101; Mason v. Chrysler Corp., 653 So.2d 951 (Ala.1995); Crowder v. Memory Hill Gardens, Inc., 516 So.2d 602 (Ala.1987); McGowan v. Chrysler Corp., 631 So.2d 842 (Ala.1993); Under § 6-5-101, "legal fraud" includes misrepresentations of material fact made "by mistake and innocently," as well as misrepresentations made "willfully to deceive, or recklessly without knowledge." See Young v. Serra Volkswagen, Inc., 579 So.2d 1337 (Ala.1991).

The Hugheses base their misrepresentation claim, in part, on the statement by Kyser that the Stanza was a "fine" car. This Court has held that statements of opinion amounting to sales talk, or "puffery," are not statements concerning a material fact upon which one has a right to act and, therefore, will not support a fraud claim. Fincher v. Robinson Brothers Lincoln-Mercury, Inc., 583 So.2d 256, 259 (Ala.1991); Young v. Serra Volkswagen, Inc., 579 So.2d 1337 (Ala.1991); Mason v. Chrysler Corp., 653 So.2d 951 (Ala.1995); McGowan v. Chrysler Corp., 631 So.2d 842 (Ala.1993). Considering the evidence in this case in the light most favorable to the Hugheses, we conclude that the statement that the 1988 Nissan Stanza was a "fine" car was a statement of an opinion amounting to nothing more than sales talk or "puffery," not a misstatement concerning a material fact; therefore, it will not support a fraud claim.

Next, the Hugheses allege that Hertz, Kyser, and Wright committed fraud by selling them warranties that, they say, were knowingly or recklessly breached at the time of issuance or purchase. The Hugheses argue that both warranties issued by Hertz were void pursuant to § 7(b)(1) of each warranty because, they say, their car had been "repaired, altered or attended to by [a] person other than Hertz or its designee"; under § 7(b)(3) because, they say, "the vehicle [had] been misused, abused, or subject to neglect"; and under § 7(b)(4) because, they say "the vehicle [had] been in an accident, fire, or other casualty." In support of their argument, the Hugheses cite Tittle v. Steel City Oldsmobile GMC Truck, Inc., 544 So.2d 883 (Ala.1989), and Rhodes v. General Motors Corp., 621 So.2d 945 (Ala.1993).

In Tittle, the plaintiff purchased a 1981 Oldsmobile manufactured by General Motors Corporation. General Motors provided the plaintiff with a warranty under which Steel City, the Oldsmobile dealer from which the plaintiff purchased the car, was to repair and make adjustments for defects in material or workmanship that occurred during the first 12 months or the first 12,000 miles in which the car was in use. That warranty provided, "This warranty covers any repairs and needed adjustments to correct defects in material or workmanship." Tittle, 544 So.2d at 891. In addition to this warranty, Tittle purchased from General Motors Acceptance Corporation (GMAC), the company that financed the purchase or the car, a supplemental warranty that extended coverage of the original warranty to 36 months or 36,000 miles.

After the plaintiff accepted the automobile, he discovered numerous defects and repeatedly asked Steel City and GMAC to cure the problems. After several unsuccessful attempts to correct the difficulties with the vehicle, the plaintiff returned the car to the dealership and sued Steel City, GMAC, and General Motors, alleging breach of their respective express warranties and implied warranties of merchantability. The trial court entered a summary judgment in favor of the defendants.

On appeal, the plaintiff argued, in part, that the warranties provided him by General Motors and GMAC extended to the future performance of the automobile. This Court disagreed, holding that, rather than guaranteeing performance without malfunction during the term of the warranty, the warranty anticipated that failures would occur and that they would be corrected. Tittle, 544 So.2d at 891.

In Rhodes, the plaintiffs purchased a 1989 Chevrolet Cavalier automobile from the David Jones Chevrolet dealership. The car was manufactured and warranted by General Motors Corporation. Under the terms of the warranty, General Motors agreed to cover repairs to correct any defect in the materials or workmanship of the car for three years or 50,000 miles, whichever came first. After the Rhodeses purchased the automobile, they returned it to David Jones Chevrolet on three occasions for repairs. While David Jones Chevrolet had possession of the car after the third repair, Chrysler Credit Corporation repossessed it because of the Rhodeses' failure to make the scheduled payments. The Rhodeses sued, seeking...