Kantorczyk v. New Stanton Auto Auction, Inc., Civ. A. No. 76-722 and 76-1319.

• Citation: 433 F. Supp. 889
• Decision Date: 07 May 1977
• Docket Number: Civ. A. No. 76-722 and 76-1319.
• Parties: Stanley KANTORCZYK, Plaintiff, v. NEW STANTON AUTO AUCTION, INC., a corporation, and W. J. Reynolds, Individually and doing business as Reynolds Cars, Defendants. W. J. REYNOLDS, trading and doing business as Reynolds Cars, Plaintiff, v. NEW STANTON AUTO AUCTION, INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

433 F. Supp. 889

Stanley KANTORCZYK, Plaintiff, v. NEW STANTON AUTO AUCTION, INC., a corporation, and W. J. Reynolds, Individually and doing business as Reynolds Cars, Defendants.

W. J. REYNOLDS, trading and doing business as Reynolds Cars, Plaintiff, v. NEW STANTON AUTO AUCTION, INC., Defendant.

Civ. A. Nos. 76-722 and 76-1319.

United States District Court, W. D. Pennsylvania.

May 7, 1977.

Saul Davis, Pittsburgh, for Stanley Kantorczyk.

John W. Pollins, III, Greensburg, Pa., for W. J. Reynolds and Reynolds Cars.

Morley M. Azorsky, California, Pa., for New Stanton Auto Auction, Inc.

OPINION

MARSH, District Judge.

In May, 1976, Stanley Kantorczyk brought suit against New Stanton Auto Auction, Inc., and against W. J. Reynolds, individually and doing business as Reynolds Cars. Nearly five months later, Reynolds brought suit against New Stanton.

Both suits were brought pursuant to the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. § 1989(b), and both actions involve a 1971 Plymouth station wagon which Reynolds purchased at the New Stanton auction and which Reynolds later sold to Kantorczyk. There is no allegation or evidence that the vehicle's odometer ever malfunctioned or that it had been altered or reset. It was alleged, however, that the vehicle had been driven more than 100,000 miles and that therefore the odometer registered 100,000 miles less than the vehicle's actual mileage.

Kantorczyk seeks awards of $1,500 plus costs and attorney fees against each defendant. Reynolds claims compensatory and punitive damages against New Stanton, or in the alternative an award of $1,500, whichever is greater, plus costs and attorney fees.

The cases were consolidated for trial. The trial before the court and an advisory jury began on April 18, 1977, and lasted for three days. The jury rendered a special verdict answering five questions submitted by the court (See Appendix).

After consideration of all the evidence¹ the court makes the following findings of fact.

FINDINGS OF FACT

1. Stanley Kantorczyk is a resident of Allegheny County, Pennsylvania. New Stanton Auto Auction, Inc., a Pennsylvania corporation with its principal place of business in Westmoreland County, Pennsylvania, is engaged in the business of conducting an auction as a means of bringing together automobile dealers for the sale of used cars. W. J. Reynolds is engaged in the business of buying and selling automobiles under the business name of Reynolds Cars in Westmoreland County, Pennsylvania.

2. On May 27, 1975, Reynolds sold a 1971 Plymouth station wagon to Stanley Kantorczyk for $1,495. Prior to the sale, Kantorczyk had visited Reynolds' car lot twice and Reynolds had allowed Kantorczyk to take the station wagon home for a weekend.

3. At the time of the sale, Reynolds delivered to Kantorczyk an Odometer Mileage Statement certifying inter alia that the odometer reading was 50,006 miles, and leaving blank the provisions on the form for "total accumulative miles (if over 100,000)" and "true mileage unknown" (Exhibit No. 1).

4. At the time of sale, Reynolds did not know that the actual mileage on the 1971 Plymouth was in excess of the 50,006 miles then shown on the odometer. Specifically, Reynolds did not know that the actual mileage on the Plymouth was 150,006 miles at the time he sold the Plymouth to Kantorczyk.

5. Reynolds had purchased the 1971 Plymouth for $585 (plus a $10 auction fee) on July 25, 1974 at an auction conducted by defendant New Stanton.

6. At the time of purchase, Reynolds found the interior of the car to be in excellent condition and the car's body to be in good condition. Reynolds believed the average price for such a car to be about $1,200, and he had been prepared to bid as high as $900 or $1,000 for the car.

7. New Stanton had received the vehicle from Gary Auto Lease, Inc., of Morristown, New Jersey, which had leased the vehicle to Pennsylvania Electric Company. The Certificate of Title shows an assignment of title for the 1971 Plymouth from Gary Auto Lease, Inc., to New Stanton (Exhibit No. 5).

8. New Stanton's practice was to collect $10 from the seller and $10 from the buyer for each transaction at the auction. Subsequent to the sale to Reynolds, New Stanton sent a check for $575 to Gary Auto Lease, Inc.

9. An odometer disclosure statement from Gary Auto Lease, Inc., was in the possession of New Stanton at the time of the auction on July 25, 1974 (See Pretrial Stipulations 9, 10; Civil Action No. 76-1319). Generally the odometer statement and title certificate arrived at New Stanton attached by a paper clip.

10. The odometer disclosure statement executed by Gary Auto Lease, Inc., on July 9, 1974, stated that the odometer reading on the 1971 Plymouth was 48,036 with true mileage of 148,036. There is no checkmark in the space which is to be checked if the odometer reading is known to differ from the actual mileage. The odometer statement is not signed by either Gary Auto Lease, Inc. or by New Stanton.²

11. The Odometer Disclosure Statement executed by Gary Auto Lease, Inc. was not given to Reynolds before or after the sale. The mileage as represented on that statement (148,036) was not revealed by New Stanton at the time of the auction.

12. New Stanton did deliver to Reynolds a Certificate of Mileage (Exhibit No. 2) dated July 25, 1974 and signed by Dyke Orr, president of New Stanton, certifying "I am the owner of a certain 1971 Plymouth" and stating that "the speedometer showed a total mileage of 48,186 miles."

13. In preparing odometer statements for New Stanton customers it was the practice in July, 1974 for New Stanton employees to use the mileage information from the auction sales slip. The mileage information on the sales slip was taken directly from the vehicle's odometer.

14. After Reynolds purchased the Plymouth at the auction, Reynolds and his employees operated the vehicle for approximately 1,800 miles before it was sold to Kantorczyk.

15. After Kantorczyk purchased the Plymouth from Reynolds, Kantorczyk drove the station wagon more than 18,000 miles in approximately 14 months. During this period, Kantorczyk spent an estimated $500 on various repairs to the vehicle. Also during this period, the station wagon was damaged in an accident, but the accident damage was never repaired.

16. On May 27, 1976, Kantorczyk filed this action against New Stanton and Reynolds alleging violations of the Motor Vehicle Information and Cost Savings Act (Civil Action No. 76-722).

17. In early August, 1976, Kantorczyk sold the Plymouth for $150 by delivering the vehicle to John Burnsworth, owner of J & E Auto Company, and by executing a blank assignment of the Certificate of Title, contrary to the instructions on the title form. Kantorczyk told Burnsworth that the actual mileage on the car was 168,000. Kantorczyk did not deliver an Odometer Disclosure Statement to Burnsworth or to Dale Provins who apparently purchased the Plymouth on August 12, 1976. The Certificate of Title lists the mileage as 70,000 at the time of the assignment from Kantorczyk to Provins.

18. On October 20, 1976, Reynolds brought his suit against New Stanton (Civil Action No. 76-1319).

19. At the trial, Lou A. Fazio, who has operated a used car auction for 18 years, testified that it is very difficult to determine a car's mileage accurately without looking at the odometer. He testified that on the basis of his experience a three-year-old vehicle could have been driven 100,000 miles more than that shown on the odometer and yet be in such condition that an expert would not be able to tell that the car had travelled the additional miles. This testimony was not contradicted.

DISCUSSION

The legislative history of the Motor Vehicle Information and Cost Savings Act speaks primarily of odometers which have been tampered with or altered. Where a vehicle has travelled in excess of the mechanical limits of the odometer, Congress evidently intended that the seller should enter the total estimated cumulative mileage on the odometer form.³ The statute and the applicable regulation provide that if a transferor knows the odometer reading to be different from the number of miles the vehicle has actually travelled, the transferor must disclose that the actual mileage is unknown. See 15 U.S.C. § 1988(a)(2); 49 C.F.R. § 580.4(c).

Plaintiff Kantorczyk produced no evidence to prove that Reynolds knew or should have known that the automobile had travelled more than 100,000 miles. In fact, our recollection of the testimony is that there was no evidence to show that on May 27, 1975 Reynolds knew any more about the actual mileage of the car than did his customer, Kantorczyk. We believe the jury was correct in concluding that Reynolds did not know that the actual mileage was in excess of 50,006 and that Reynolds did not intend to defraud Kantorczyk.

This court also believes that the jury was correct in finding fraudulent intent on the part of New Stanton.

New Stanton has argued that its practice was not to purchase cars but simply to auction the cars while acting as an agent for the lease company. However, in view of the strong documentary evidence which indicates that ownership of this particular motor vehicle was in fact transferred to New Stanton (See Certificate of Title, Exhibit No. 5), this argument must be rejected. New Stanton was a transferor within the meaning of the Act.

Had Kantorczyk convincingly proven his allegation that New Stanton had actual knowledge of the vehicle's true mileage at the time New Stanton prepared the odometer statement which was given to Reynolds, we would be faced with a situation very similar to that in Rider Oldsmobile, Inc. v. Wright, 415 F.Supp. 258 (M.D.Pa.1976).⁴ However, the testimony of New Stanton's witnesses indicates that the procedures at the auction in July, 1974 were such that the New Stanton employee who prepared the odometer statement for Reynolds never saw the odometer statement from the...