Owens v. Samkle Automotive Inc., No. 04-15337.

• Decision Date: 23 September 2005
• Docket Number: No. 04-15337.
• Citation: 425 F.3d 1318
• Parties: Glendale OWENS, Plaintiff-Appellant, v. SAMKLE AUTOMOTIVE INCORPORATED, d.b.a. Marlin Mazda, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

425 F.3d 1318

Glendale OWENS, Plaintiff-Appellant, v. SAMKLE AUTOMOTIVE INCORPORATED, d.b.a. Marlin Mazda, Defendant-Appellee.

No. 04-15337.

United States Court of Appeals, Eleventh Circuit.

September 23, 2005.

Richard J. Rubin, Santa Fe, NM, Robert W. Murphy, Ft. Lauderdale, FL, for Owens.

Kenneth R. Drake, DeMahy, Labrador & Drake, P.A., Coral Gables, FL, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BARKETT and MARCUS, Circuit Judges, and GEORGE^*, District Judge.

PER CURIAM:

Glendale Owens appeals the dismissal of her amended complaint alleging that Samkle Automotive violated the federal Vehicle Information and Cost Savings Act (the "Odometer Act" or the "Act"), 49 U.S.C. § 32701 et seq.¹ Title 49, section 32710(a) of the United States Code permits a private party to recover treble damages or $1,500, whichever is greater, from "[a] person who violates [the Odometer Act] or a regulation prescribed or order issued under [the Odometer Act], with intent to defraud[.]" 49 U.S.C. § 32710(a) (2000). The parties do not dispute that Owens properly alleged that Samkle violated the Odometer Act, and that it did so with the intent to defraud her. However, Owens did not allege that Samkle intended to defraud her specifically with respect to the vehicle's mileage, a fact the district court found fatal to her Odometer Act claim. The district court held that "recovery under the Odometer Act is permissible only when a plaintiff can allege and prove intent to defraud with the respect to a vehicle's mileage."

Owens argues that the plain language of § 32710(a) contains no such restriction, and an allegation of intent to defraud in connection with an Odometer Act violation sufficiently states a claim under that subsection. We agree, and accordingly REVERSE and REMAND this case to the district court for further proceedings.

I. BACKGROUND²

Owens' amended complaint alleges the following facts. Samkle operates a car dealership in Miami, Florida, known as "Marlin Mazda," from which Owens sought to purchase a used car. Salespersons at the dealership showed her a 2002 Mazda 626, and told her that the vehicle was in "excellent" condition. Based on this representation, Owens bought the car.

At the time of sale, the dealership required Owens to sign a battery of forms — a power of attorney, an odometer disclosure statement, a motor vehicle reassignment supplement, and an application for certificate of title (collectively, the "Transfer Forms") — but not the car's original title, as required by the Odometer Act. See 49 U.S.C. § 32705(a) (2000); 49 C.F.R. § 580.5 (2000). The Transfer Forms were not the official, secured forms issued by the State of Florida as required by the Odometer Act, see 49 C.F.R. § 580.4 (2000), and did not contain certain mandatory disclosures. See id. § 580.5. By having Owens sign the Transfer Forms, Marlin Mazda transferred ownership of the car to Owens without ever showing her the car's original title.

Owens alleges that the dealership used the Transfer Forms, and not the original title, to transfer ownership of the car, because it sought to conceal what the title would have revealed — that the car was previously a short-term rental vehicle owned by Hertz. She alleges that she would not have bought the car at $25,858.00 had she known it had been a Hertz rental vehicle.

II. DISCUSSION

We review a district court's grant of a motion to dismiss de novo, taking as true the facts as they are alleged in the complaint. Sosa v. Chase Manhattan Mortgage Corp., 348 F.3d 979, 983 (11th Cir.2003).

The Odometer Act allows private parties to recover money damages from those that violate its provisions with the intent to defraud: "A person that violates this chapter or a regulation prescribed or order issued under this chapter, with intent to defraud, is liable for 3 times the actual damages or $1,500, whichever is greater." 49 U.S.C. § 32710(a) (2005). There is no dispute that Owens has properly alleged violations of the Odometer Act. The complaint alleges that Marlin Mazda, with the intent to defraud Owens, violated a "regulation prescribed... under" the Odometer Act. Specifically, Owens alleged the violation of 49 C.F.R. § 580.5(c), which provides that "[i]n connection with the transfer of ownership of a motor vehicle, each transferor shall disclose the mileage to the transferee in writing on the title ...." (emphasis added). The Act defines "title" as "the certificate of title or other document issued by the State indicating ownership." 49 U.S.C. § 32702(7). Thus, the complaint alleged all of the necessary elements required for a private cause of action pursuant to this statute: (1) that the defendant violated the Act or its regulations, (2) with intent to defraud.

Samkle argues that although it may have acted "with intent to defraud" Ms. Owens when it concealed the title from her, the complaint still fails to state a cause of action because the fraud referenced in the statute can only relate to the vehicle's mileage. However, to accept this argument would violate the first canon of statutory construction, which requires that courts give effect to the plain and unambiguous language of a statute. "As in any case of statutory construction, our analysis begins with the `language of the statute.' And where the statutory language provides a clear answer, it ends there as well." Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999) (quoting Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992)). In other words, courts must "presume that Congress said what it meant and meant what it said." Harry v. Marchant, 291 F.3d 767, 770 (11th Cir.2002).

On its face, this statute's meaning is direct, clear and unambiguous. No language limits the meaning of the clause "with intent to defraud." Absent any such limitation, the statute's meaning is clear — if you violate the Odometer Act, and you do so with the intent to defraud your victim in any respect relating to the Odometer Act or the regulations passed pursuant to it, you are liable. Thus, the statute's plain language does not admit to the district court's limiting construction, which reads words into the statute that do not exist. United States v. Fisher, 289 F.3d 1329, 1338 (11th Cir.2002) ("If the statute's meaning is plain and unambiguous, there is no need for further inquiry. The plain language is presumed to express congressional intent and will control a court's interpretation.").³ To augment the statutory language with an additional element, never mentioned by Congress, that the fraud must be "with respect to the vehicle's mileage" violates the cardinal rule of statutory construction.⁴

We do note, however, that a plain-language reading is also consistent with the general principle that the Odometer Act is remedial legislation that should be "broadly construed to effectuate its purpose," Ryan v. Edwards, 592 F.2d 756, 760 (4th Cir.1979) (construing the predecessor to § 32710(a)), and a plain reading is not inconsistent with the Act's stated purposes.⁵ Title 49, section 32701 of the United States Code ("Findings and purposes") indicates that the Odometer Act, as its title suggests, is aimed at preventing odometer tampering and odometer fraud:

(a) Findings. Congress finds that—

(1) buyers of motor vehicles rely heavily on the odometer reading as an index of the condition and value of a vehicle;

(2) buyers are entitled to rely on the odometer reading as an accurate indication of the mileage of the vehicle;

(3) an accurate indication of the mileage assists a buyer in deciding on the safety and reliability of the vehicle; and

(4) motor vehicles move in, or affect, interstate and foreign commerce.

(b) Purposes. The purposes of this chapter are—

(1) to prohibit tampering with motor vehicle odometers; and

(2) to provide safeguards to protect purchasers in the sale of motor vehicles with altered or reset odometers.

49 U.S.C. § 32701 (2000).

Consistent with these purposes and findings, Congress established a remedial scheme that not only punished violators, but deterred would-be violators through a complex regulatory system that made even sophisticated odometer fraud difficult to attempt unnoticed. The regulations include, as one would expect, a flat prohibition on odometer tampering. 49 U.S.C. § 32703 (2000). However, Congress also mandated standardized disclosure requirements and record-keeping procedures formulated to provide consumers with transparent information about a vehicle's background, to ease investigation and prosecution of violators, and to prevent would-be violators from taking advantage of titling and registration loopholes to perpetrate odometer fraud. See, e.g., 49 U.S.C. § 32705 (2000) (setting forth disclosure requirements for transferring ownership of a motor vehicle); 49 C.F.R. § 580.1 et seq. (2004) (specifying, among other things, the content of odometer information disclosures and record keeping procedures, and requiring titles and power of attorney forms to be printed using a secure printing process); see also 49 U.S.C. § 32706 (2000) (conferring investigatory authority and the power to require car dealers or distributors to keep records of motor vehicle sales available for inspection by the Secretary of Transportation).

In particular, the disclosure and title regulations that Samkle allegedly violated aim in part to thwart "title laundering," a practice unscrupulous sellers employ to falsify the mileage listed on a car's title to conform with an altered odometer reading:

Title laundering is a scheme commonly used by dealers involved in odometer fraud. The main purpose of title laundering is to get a low mileage title from a State motor vehicle titling office in exchange for a high mileage title. The most basic form of title laundering is to simply alter the high odometer reading on the...