Locascio v. Imports Unlimited, Inc.

• Decision Date: 12 March 2004
• Docket Number: No. CIV.A. 3:02CV299(SRU).,CIV.A. 3:02CV299(SRU).
• Citation: 309 F.Supp.2d 267
• Court: U.S. District Court — District of Connecticut
• Parties: Beth LOCASCIO, Plaintiff, v. IMPORTS UNLIMITED, INC., Defendant.

Page 267

309 F.Supp.2d 267

Beth LOCASCIO, Plaintiff, v. IMPORTS UNLIMITED, INC., Defendant.

No. CIV.A. 3:02CV299(SRU).

United States District Court, D. Connecticut.

March 12, 2004.

Bernard T. Kennedy, Michael W. Kennedy, Kennedy & Kennedy LLC, Branford, CT, for Plaintiff.

Robert E. Ghent, Waterbury, CT, for Defendant.

MEMORANDUM OF DECISION AND ORDER

UNDERHILL, District Judge.

Beth Locascio ("Locascio") sued Imports Unlimited, Inc. ("IUI") alleging that IUI's sale to her of a Jeep Cherokee violated the federal Motor Vehicle and Cost Saving Act ("the Odometer Act") and the Connecticut State Unfair Trade Practices Act ("CUTPA"). The case was tried before the court, without a jury, on March 1, 2004. This decision constitutes the court's findings of fact and conclusions of law under rule 52(a) of the Federal Rules of Civil Procedure. Judgment will enter for the defendant on the Odometer Act claim and for the plaintiff on the CUTPA claim. Plaintiff is awarded nominal damages in the amount of $10.00 and reasonable attorneys' fees.

Jurisdiction

The court has federal question jurisdiction over the Odometer Act claim pursuant to 49 U.S.C. § 32710 and 28 U.S.C. § 1331. Supplemental jurisdiction over the CUTPA claim is appropriate under 28 U.S.C. § 1367.

Findings of Fact

During a one-day bench trial, both parties presented evidence, primarily consisting of testimony by Locascio and the owner of IUI, Michael Caro. Based on the testimony and on my review of all the evidence, I make the following findings of fact.

Defendant IUI is a specialty used car dealership. It is primarily in the business of buying and reselling "theft recoveries" — vehicles that were stolen from their owners and later recovered by the owner's insurance company. The insurance companies obtain title to these vehicles as the result of payment of an insurance claim. The vehicle at the center of this litigation — a 1997 Jeep Grand Cherokee — is one such recovered vehicle. When IUI first purchased the Jeep, it had — on account of its "theft recovery" status — been designated by the insurance company as a "constructive total loss" and its certificate of title was branded "rebuilt."¹

At some point prior to coming into the insurance company's possession, the Jeep had been owned by a company called Golden Key Lease, Inc. ("Golden Key"). No evidence was offered at trial to embellish this bare fact. Specifically, there was no evidence tending to show what kind of business Golden Key was engaged in or how Golden Key used the Jeep.

In early 2000, Locascio came to IUI looking to purchase a Jeep Cherokee for her daughter. She also visited several other dealers and discovered that IUI's price was several thousand dollars below that of other dealers selling similar vehicles. She asked the IUI salesman about the history of the vehicle and was told that IUI was selling the Jeep on behalf of its previous owner, who was in need of ready cash. Locascio also inquired about the vehicle's title and was told that there was a five-percent chance that the vehicle had a "rebuilt title," i.e., a title branded "rebuilt."

Locascio testified that she believed a title branded "rebuilt" meant the vehicle had been physically destroyed and rebuilt, and she was willing to risk the five-percent chance that this had occurred.

After gathering the necessary funds, Locascio purchased the vehicle from IUI for $15,900.² The sale papers given to Locascio included a "Purchase Order" that stated, among other things:

An insurance company has deemed this vehicle a constructive total loss due to theft recovery. May have rebuilt title. This vehicle was not totaled due to damages.

Locascio signed the Purchase Order directly below these words. The Purchase Order also contained a section stating: "This motor vehicle being purchased is a previous rental/lease vehicle." The box next to this section was not checked and the space for the purchaser's initials was left blank. As part of the sale, IUI provided Locascio with an "Odometer Disclosure Form," which stated the correct mileage of the vehicle, but did not disclose that the vehicle had a branded title.

Locascio was never given the Jeep's certificate of title. This was not, however, because IUI did not have the certificate. On the contrary, Caro — the owner of IUI — admitted that, at the time of the sale, IUI was in possession of a certificate of title for the vehicle, but chose not to give it to Locascio. That title was branded "rebuilt."

Caro further testified that it was IUI's practice never to provide customers with titles that were branded "rebuilt," but instead to include language in the purchase order similar to the language in the document provided to Locascio — language indicating that "this vehicle may have a rebuilt title." Approximately 75 to 80 percent of IUI's business is in vehicles with titles that have been branded "rebuilt."

Locascio was not informed that the vehicle was previously owned by Golden Key. Caro testified that IUI had performed no research into the history of the Jeep and so did not know that the Jeep had previously been owned by Golden Key. Caro further testified that, in general, IUI did not research the history of the vehicles it sold beyond whatever information was provided to it by the previous owner.

Shortly after her purchase of the vehicle, Locascio moved to Florida. She soon began to experience problems with the Jeep and consequently decided to purchase a different vehicle. She hoped to trade in the Jeep as part of the new purchase. In attempting this, she discovered that dealers either would not take the Jeep or would only pay its scrap value, a few thousand dollars. The reason for this, she was told, was because the Jeep's title was branded "rebuilt."

Locascio testified that, had she known the Jeep's title was branded "rebuilt," she would not have purchased it and, if she had, would have paid no more than eight or nine thousand dollars.

Discussion

Locascio claims that IUI's failure to provide her with the Jeep's title violated the Odometer Act and CUTPA. She further claims that the failure to disclose that the vehicle was previously a commercial lease vehicle constitutes an additional CUTPA violation. She seeks treble damages and attorneys' fees under the Odometer Act. She seeks actual damages, punitive damages and attorneys' fees under CUTPA.

Odometer Act Claim

The Odometer Act imposes on car dealers various requirements intended to ensure that automobile consumers are provided with accurate statements of a car's mileage. See 49 U.S.C. § 32705 ("disclosure requirements"). Pursuant to the Odometer Act, the Secretary of Transportation has imposed the requirement that, among other things, a dealer must, upon sale of a motor vehicle, include on the title a statement of the vehicle's current mileage. 49 C.F.R. § 580.5(c) ("the transferor shall disclose the mileage on the title, and not on a reassignment document"). The regulations also provide that the mileage disclosure may be made on a supplemental form in cases where a title certificate is not available or where there is no room on the certificate. 49 C.F.R. § 580.5(g).

Failure to provide a purchaser with a copy of the certificate of title, when such title is available, technically violates the Odometer Act. If the title certificate is not provided to the purchaser, the appropriate mileage is necessarily not disclosed to the purchaser on the title certificate, as required by the Act. It makes no difference that the accurate mileage may be disclosed on a separate form because, absent one of the excusing circumstances in the regulations, the mileage must be disclosed on the title certificate.

In order for a civil plaintiff to recover damages under the Odometer Act, she must prove (a) a violation of the act, (b) made with intent to defraud. 49 U.S.C. § 32710(a). Locascio has shown that IUI committed a technical violation of the Odometer Act by failing to provide a copy of the certificate of title with the appropriate disclosure. The only question is whether she has shown that this was done with the intent to defraud.

Locascio makes the creative — though not novel — argument that this second prong — "intent to defraud" — is satisfied simply by demonstrating that the defendant had a general intent to defraud her with regard the state of the Jeep's title. I disagree.

Some courts have reached the conclusion urged by Locascio. See, e.g., Salmeron v. Highlands Ford Sales, Inc., 223 F.Supp.2d 1238 (D.N.M.2002) (withholding of title concealed that car was previously a rental car); Yazzie v. Amigo Chevrolet, Inc., 189 F.Supp.2d 1245 (D.N.M.2001) (withholding of title concealed information about truck's prior use). These courts held that a general intent to defraud satisfies the Odometer Act's requirements.

More commonly, however, courts have held that the Odometer Act was only meant to cover fraud related to a vehicle's mileage. See, e.g., Mayberry v. Ememessay Inc., 201 F.Supp.2d 687 (W.D.Va.2002); Ransom v. Rohr-Gurnee Volkswagen, Inc., 2001 WL 1241297 (N.D.Ill. Oct.15, 2001); Michael v. Ferris Auto Sales, 650 F.Supp. 975 (D.Del.1987). I find these courts' reasoning persuasive.

The Odometer Act makes clear that Congress' intent in passing the Act was to prevent consumers from being defrauded about the mileage of vehicles they were looking to purchase. See 49 U.S.C. § 32701. It is most in keeping with Congressional intent, therefore, to read the "intent to defraud" requirement of the Odometer Act as requiring an intent to defraud with respect to the vehicle's mileage and not an intent to defraud with respect to any possible aspect of the sale of the vehicle. A contrary holding would ascribe to Congress the unlikely, and unsupported, intent of allowing the Odometer Act to serve as a vehicle for plaintiffs to bring numerous state-law claims into federal court, simply because the claims concern defects in an automobile's certificate of...