Jones v. Fenton Ford, Inc.

• Citation: 427 F. Supp. 1328
• Decision Date: 08 March 1977
• Docket Number: Civ. No. H-75-146.
• Court: U.S. District Court — District of Connecticut
• Parties: Ronald H. JONES v. FENTON FORD, INC.

427 F. Supp. 1328

Ronald H. JONES v. FENTON FORD, INC.

Civ. No. H-75-146.

United States District Court, D. Connecticut.

March 8, 1977.

COPYRIGHT MATERIAL OMITTED

John I. Haymond, Hartford, Conn., for plaintiff.

John R. Fitzgerald, Howard, Kohn, Sprague & Fitzgerald, Hartford, Conn., for defendant.

MEMORANDUM OF DECISION

CLARIE, Chief Judge.

The plaintiff, Ronald H. Jones, brought this action under Subchapter IV of the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. §§ 1981-91,¹ seeking statutory punitive damages and such equitable relief as the Court may deem appropriate. He claims that the defendant corporation, Fenton Ford, Inc. (Fenton Ford), an automobile dealership located in Enfield, Connecticut, violated the provisions of this Act by selling him a 1970 Chevrolet Bel Air sedan, identification # 156690 T137103, without disclosing at the time of the sale that the vehicle's total mileage as reflected by the odometer was inaccurate, a fact which was then within the defendant's possession. While the defendant does not deny these basic facts, it asserts that the dealership's failure to inform the plaintiff of the inaccuracy of the odometer reading resulted from an innocent clerical error, and not from an "intent to defraud," which the statute requires. The defendant filed a counterclaim for the value of transmission repairs made on the subject automobile after its warranty had expired, plus storage and incidental service expenses.

The Court finds that the defendant sold the automobile to the plaintiff with a fraudulent intent sufficient to sustain liability under the statute. The defendant knew, or should have known, that the true mileage of the vehicle was indeterminate, and yet failed to so inform the plaintiff, as the statute requires. The contract of sale between the plaintiff and the defendant is rescinded, and damages are to be assessed in the total amount of $3521.70, plus $1200.00 in attorney's fees.

FACTS

The defendant purchased a four-door 1970 Chevrolet Bel Air sedan on or about April 15, 1974, as a trade-in from Henry Boulette, a resident of Enfield. At the time of this purchase, the car's odometer registered 28,619.9 miles, and this mileage was certified to in writing on an Odometer Mileage Statement (OM Statement) signed by Boulette.² (Plaintiff's Exhibit 2). Boulette testified that during the year in which he operated the car prior to selling it to the defendant the odometer and speedometer were "dead"; that is, both were entirely nonfunctioning. The recorded mileage was thus the same on the day Boulette sold the car as on the day he purchased it, approximately one year earlier.

At the time he sold the vehicle to Fenton Ford, Boulette made the fact of the odometer's defective condition known to the defendant's sales agent. This is confirmed by an "x" appearing in the box on the OM Statement, adjacent to the printed certification which reads:

"I further state that the actual mileage differs from the odometer reading for reasons other than odometer calibration error and that the actual mileage is unknown."

Boulette was granted a $997.00 trade-in allowance as consideration for his car (he testified that he had paid only $600.00 for it a year earlier).

Approximately seven months later, in November of 1974, the plaintiff came to the defendant's lot seeking a used car to be driven by his wife to and from her part-time job. After examining several other models not to their liking, the Joneses were shown the 1970 Bel Air, which was now priced at $1,895.00, sales tax excluded.³ The plaintiff specifically questioned the salesman concerning the accuracy of the mileage shown on the odometer, and he was informed that to the salesman's knowledge the mileage was correct.⁴ Mr. and Mrs. Jones testified that the salesman had told them that the car was "new on the lot and was going to be advertised as a special."

Based on the foregoing representations, in particular the representation as to low mileage, the Joneses purchased the 1970 Bel Air from Fenton Ford on November 27, 1974, at the asked-for price. The transaction was financed through an area bank. The OM Statement supplied to the Joneses by the dealership recited the current odometer reading (28,625 miles), but no check was placed in the box alongside the statement alerting the buyer to odometer irregularities. (Plaintiff's Exhibit 6). Thus, in purchasing the vehicle the Joneses were not put on notice in any way of the car's defective odometer. At the time of said purchase the odometer had been repaired and was functional, although Jones complained that the speedometer would not register speeds in excess of 45 miles per hour.⁵ The odometer had obviously been repaired during the period in which it was in the defendant's custody.

Almost immediately upon leaving the dealership, the plaintiff and his wife encountered mechanical difficulty with the automobile.⁶ Over the course of the ensuing month it became necessary to return the car for repairs on at least four occasions, and possibly on as many as six. In each instance, the necessary repairs were effected and the car was returned to the Joneses. Finally, somewhat more than a month after the date of purchase, the car's transmission failed as Mrs. Jones was driving home. The car was then towed to the defendant's lot, where it has since remained.

The plaintiff was informed on the occasion of this final breakdown that his 30-day warranty on the car had expired, and that he would therefore be required to pay the repair costs. The testimony is in conflict as to exactly what statements were made at this time. The defendant claims that the plaintiff orally agreed to have the repairs undertaken at his own expense. The plaintiff insists that, while he requested that the automobile should be repaired, he made it clear that he had no intention of undertaking any payment for such repairs.

About this time, the plaintiff met Henry Boulette, the prior owner of the automobile, who informed Jones of the defect in the odometer during the year in which he owned the car.⁷ The plaintiff testified that he thereupon returned to the dealership and demanded that the original sales transaction be rescinded. The defendant denies that the plaintiff ever made such a demand. Eventually, the plaintiff received an invoice for the transmission repairs, which he refused to pay. The defendant has not returned the automobile, claiming a lien for the transmission repairs, and now also seeks to charge the plaintiff for winterizing and storage.

The plaintiff claims that lost use of the 1970 Bel Air caused Mrs. Jones to quit her part-time job,⁸ and that on two occasions the family was forced to rent an automobile when their principal vehicle, a Ford Pinto, broke down and required repairs. This added expense would have been unnecessary, Jones asserts, if the Bel Air had been operational. Furthermore, Jones claims that he has been required by the financing bank to maintain fire, theft and collision coverage on the Bel Air while it has been on Fenton Ford's lot, and to continue the principal and interest payments on the installment note to the bank.

The defendant admits the essential facts of the plaintiff's case, but asserts that the dealership's failure to inform the plaintiff of the defective history of the car's odometer resulted from an innocent clerical error. Specifically, it is asserted that one Chris Lambert, an inexperienced office worker then employed by Fenton Ford, placed the original OM Statement signed by Henry Boulette in a folder pertaining to another automobile. Thus, when other employees subsequently referred to the file on the 1970 Bel Air, they were not put on notice that the car's mileage was indeterminate, and innocently represented that the mileage shown on the odometer was, to the best of their knowledge, correct. Chris Lambert did not testify at the trial.

The Court must decide on these facts whether or not an automobile dealership may be held liable under the Act — which requires an "intent to defraud" in a civil action for damages — if it has not been proved that the defendant acted with actual knowledge.

DISCUSSION OF THE LAW

(a) Liability

The reported cases do not decide the question of whether or not the "intent to defraud" requirement in § 409 of the Motor Vehicle Information and Cost Savings Act (MVICS Act), 15 U.S.C. § 1989(a), may be satisfied without a showing of actual knowledge.⁹ It has not been determined, that is, whether a plaintiff must prove knowing and wilful concealment of an odometer defect by a dealer in order to recover damages under the statute, or whether it is sufficient to show that the dealer or its agents should have known of a defect, and then either failed to discover it or to adequately alert the purchaser.

The defendant's argument relies primarily on statutory construction. Section 408 of the MVICS Act, 15 U.S.C. § 1988, requires auto dealers to alert purchasers of odometer irregularities. It is clear from the Senate Committee report that Congress intended to impose an affirmative duty upon dealers to detect such irregularities:

"The test of `knowingly' was incorporated in § 408 so that the auto dealer with expertise now would have an affirmative duty to mark `true mileage unknown' if, in the exercise of reasonable care, he would have reason to know that the mileage was more than that which the odometer had recorded or which the previous owner had certified." 1972 U.S.Code, Cong. & Adm.News, pp. 3960, 3971-72 (emphasis added).

A violation of § 408 may provide the basis for either (1) an injunction under § 410 of the MVICS Act, 15 U.S.C. § 1990, in an action brought by the Attorney General of the United States, or (2) for damages, in a private action filed under § 409 of the Act, 15 U.S.C. § 1989(a).

In the case of an action for damages under § 409, a plaintiff may not recover on the mere showing that a substantive requirement of the Act (e. g., the...