Marrale v. Gwinnett Place Ford, No. A04A2341.

• Decision Date: 20 January 2005
• Docket Number: No. A04A2341.
• Citation: 609 S.E.2d 659,271 Ga. App. 303
• Parties: MARRALE v. GWINNETT PLACE FORD.
• Court: Georgia Court of Appeals

271 Ga. App. 303

609 S.E.2d 659

271 Ga.App. 303

MARRALE v. GWINNETT PLACE FORD.

No. A04A2341.

Court of Appeals of Georgia.

January 20, 2005.

Amy Budow, Shireen Hormozdi, Krohn & Moss, Ltd., Atlanta, Scott Cohen, Krohn & Moss, Ltd., Chicago, IL, for Appellant.

C. Bauman, Clayton, for Appellee.

BARNES, Judge.

William Marrale appeals the grant of summary judgment to Gwinnett Place Ford on his claims of fraud and violation of the Fair Business Practices Act ("FBPA") arising from his purchase of a used automobile.

1. In this State,

[t]he standards applicable to motions for summary judgment are announced in Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). When a trial court rules on a motion for summary judgment, the opposing party should be given the benefit of all reasonable doubt, and the court should construe the evidence and all inferences and conclusions therefrom most favorably toward the party opposing the motion. On appeal of the grant or denial of a motion for summary judgment, this court conducts a de novo review of the law and the evidence.

Overton Apparel v. Russell Corp., 264 Ga.App. 306, 307(1), 590 S.E.2d 260 (2003).

Construing the evidence with all inferences and conclusions therefrom most favorably toward Marrale as the party opposing the motion for summary judgment, the record shows that Marrale purchased the automobile from Gwinnett Place Ford at a tent sale. The salesman who sold him the car said that it had never been in an accident and was a cream puff. After examining the car and finding no obvious defects, Marrale took the car for a test drive. He then purchased the car "as is," except that the salesman wrote down on the "as is form" "balance of factory warranty." Sometime later, after taking the car in for repairs to the car's front end, Marrale was informed that there would be no factory warranty on the car because it had been in a collision before he bought it.

When this dispute could not be resolved between the parties, Marrale filed a complaint against Gwinnett Place Ford alleging causes of action for violation of the FBPA and common law fraud. Marrale's complaint alleged that he purchased the used car from Gwinnett Place Ford after its agent falsely represented to him, with the intent to deceive, that the car had not been in an accident and was still under manufacturer's warranty. Marrale further alleged that he had reasonably relied upon the salesman's representations and if he had known that these representations were false, he would not have purchased the car.

After filing an answer denying liability, Gwinnett Place Ford moved for summary judgment contending that a merger clause in the sales contract barred the fraud claim and that the FBPA did not apply to the sale of this car because it was a private transaction. The affidavits submitted in support of the motion denied knowledge that the car had been in a collision, but did not deny that the salesman made the representation about the car's condition. Instead, Gwinnett Place Ford contended that the salesman did not misrepresent the condition of the car because he did not know the car had been in an accident. Subsequently, the trial court granted this motion, and this appeal followed.

2. The necessary elements of a fraud claim are "that the misrepresentation or falsehood was knowingly made, that it related to a material fact, that its purpose was to deceive another and induce him to act, that he did act upon it and that he was injured as a result." Day v. Randolph, 159 Ga.App. 474, 475, 283 S.E.2d 687 (1981). Pretermitting whether Marrale could establish these elements, this case is controlled by our decision in Owens v. Union City Chrysler-Plymouth, 210 Ga.App. 378, 436 S.E.2d 94 (1993). "`The presence of a merger clause in the underlying contract is determinative if the defrauded party has not rescinded but has elected to affirm the contract.' (Punctuation omitted.) Nexus Services v. Manning Tronics, 201 Ga.App. 255, 410 S.E.2d 810 (1991)." Id. at 379, 436 S.E.2d 94.

Marrale's contract with Gwinnett Place Ford contains such a clause, and, although he alleges that he attempted to rescind the contract, this allegation is not supported by the record. The only evidence even suggesting that Marrale attempted rescission is a visit his wife made to Gwinnett Place Ford after she learned the car had been in an accident and Marrale's several phone calls attempting unsuccessfully to talk to a representative of Gwinnett Place Ford. In neither of these instances, however, does the record show that Marrale or his wife said anything indicating that they wished to repudiate the contract. Further, Marrale continued to use the car after learning that the car had been involved in the accident.

Where a party who is entitled to rescind a contract on ground of fraud or false representations, and who has full knowledge of the material circumstances of the case, freely and advisedly does anything which amounts to a recognition of the transaction, or acts in a manner inconsistent with a repudiation of the contract, such conduct amounts to acquiescence, and, though originally impeachable, the contract becomes unimpeachable in equity. If a party to a contract seeks to avoid it on the ground of fraud or mistake, he must, upon discovery of the facts, at once announce his purpose and adhere to it. Otherwise he can not avoid or rescind such contract.

Id. at 380, 436 S.E.2d 94. Given his failure to attempt to rescind the contract and his continued use of the car with knowledge that it had been in a collision, Marrale's reliance on Crews v. Cisco Bros. Ford-Mercury, 201 Ga.App. 589, 411 S.E.2d 518 (1991), is misplaced. Crews v. Cisco Bros. focuses on whether buyers were required to tender or return the benefits received under the contract to effect a rescission, and not whether the buyers sought sufficiently to repudiate the contract. Indeed, Crews v. Cisco Bros. is silent on this point. Nevertheless, OCGA § 13-4-60 requires that a party seeking rescission "promptly, upon discovery of the fraud, restore or offer to restore to the other party whatever he has received by virtue of the contract if it is of any value." (Emphasis supplied.) Although in most cases a jury question is presented on whether a buyer acted promptly to rescind the contract, Newton v. Burks, 139 Ga.App. 617, 618(3), 229 S.E.2d 94 (1976), the Code section requires some action to do so. Here there was none. In fact, Marrale did not include a count for rescission in his complaint. As Crews v. Cisco Bros. holds, in proper circumstances the continued retention of the car might not be significant; here Marrale's continued use cannot be disregarded because he continued to use the car without seeking to repudiate the contract.

Marrale's contention that, regardless of whether he rescinded the contract, the merger clause in the contract would not bar his fraud claim is not supported by the record. The front of the contract states:

The FRONT & BACK of this order comprise the entire agreement between Gwinnett Plance (sic) and buyer affecting this purchase and no other agreement, representation, or understanding of any nature concerning the same has been made or entered into between Gwinnett Place and buyer, and this order may not be rescinded or modified except in writing signed by Gwinnett Place and buyer. Buyer certifies that he or she has read, understands and agrees to all conditions on the front and back of this agreement.

The back page of the form then states:

Any used motor vehicle sold to Purchaser by Dealer under this Order is sold at the time of delivery by Dealer without any guarantee or warranty, expressed or implied, including any implied warranty of merchantability or fitness for a particular purpose, as to its condition or the condition of any part thereof except as may be otherwise specifically provided in writing on the face of this Order or in a separate writing furnished to Purchaser by Dealer. Language disclaiming implied warranties of merchantability or fitness for a particular purpose on the vehicle subject to this Order does not apply when a service contract is sold within 90 days of the vehicle's date of sale in which the Dealer is legally liable under the service contract.

(Emphasis supplied.) As these clauses exclude representations about the condition of the vehicle, the trial court did not err by granting summary judgment on Marrale's fraud claim.

3. A different result is required, however, on Marrale's FBPA claim. The Georgia

Fair Business Practices Act is intended to protect consumers and legitimate business enterprises from unfair or deceptive practices in the conduct of any trade or commerce. The FBPA forbids and declares unlawful any unfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce. The stated intent of the FBPA is to protect the public from acts and practices which are injurious to consumers, not to provide an additional remedy for private wrongs which do not and could not affect the consuming public generally. Thus, the scope of the FBPA is limited to acts in the conduct of consumer transactions and consumer acts or practices in trade or commerce. Our code defines a "consumer transaction" as the sale, purchase, lease, or rental of goods, services, or property, real or personal, primarily for personal, family, or household purposes, defines "consumer acts or practices" as acts or practices intended to encourage consumer transactions, and defines "trade" and "commerce" as the advertising, distribution, sale, lease, or offering for distribution, sale, or lease of any goods, services, or any property, tangible or intangible, real, personal, or mixed, or any other article, commodity, or thing of value wherever situate and shall include any trade or commerce directly or indirectly affecting the people of the state. The FBPA,

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