Parrott v. Carr Chevrolet, Inc.

• Citation: 331 Or. 537,17 P.3d 473,331 Ore. 537
• Decision Date: 11 January 2001
• Docket Number: No. CC C93-0873CV; CA A88512; SC S45916, No. S45917
• Parties: Mark PARROTT, Petitioner on Review, and Charles Forshey, Plaintiff, v. CARR CHEVROLET, INC., an Oregon corporation, Respondent on Review. Mark Parrott, Respondent on Review, and Charles Forshey, Plaintiff, v. Carr Chevrolet, Inc., an Oregon corporation, Petitioner on Review.
• Court: Oregon Supreme Court

17 P.3d 473

331 Or. 537

331 Ore. 537

Mark PARROTT, Petitioner on Review, and Charles Forshey, Plaintiff, v. CARR CHEVROLET, INC., an Oregon corporation, Respondent on Review.

Mark Parrott, Respondent on Review, and Charles Forshey, Plaintiff, v. Carr Chevrolet, Inc., an Oregon corporation, Petitioner on Review.

Nos. (CC C93-0873CV; CA A88512; SC S45916, S45917)

Supreme Court of Oregon.

Argued and Submitted September 8, 1999.

Decided January 11, 2001.

Kathryn H. Clarke, Portland, argued the cause for petitioner-cross respondent on review Parrott. With her on the briefs were Maureen Leonard and Michael C. Baxter, Portland.

Barbee B. Lyon, of Tonkon Torp LLP, Portland, argued the cause and filed the briefs for respondent-cross petitioner on review Carr Chevrolet, Inc.

Megan A. Flynn and Kevin Keaney, Portland, and James S. Coon, of Swanson, Thomas & Coon, Portland, filed briefs on behalf of amicus curiae Oregon Trial Lawyers Association.

Craig A. Nichols, of Nichols & Associates, Portland, filed a brief on behalf of amicus curiae Oregon Automobile Dealers Association.

Before CARSON, Chief Justice, and DURHAM, KULONGOSKI, and LEESON, Justices.²

KULONGOSKI, J.

Parrott (plaintiff)³ brought this civil action against Carr Chevrolet, Inc. (defendant), arising from defendant's sale of a used 1983 Chevrolet Suburban to plaintiff. Plaintiff alleged, inter alia, that defendant had violated certain provisions of the Unlawful Trade Practices Act (UTPA), ORS 646.608(1)(e), (g), and (t).⁴ The jury returned a verdict in plaintiff's favor and awarded $11,496 in compensatory damages and $1 million in punitive damages. After the verdict, defendant filed motions for a judgment notwithstanding the verdict (JNOV) under Oregon Rule of Civil Procedure (ORCP) 63 or, in the alternative, for a new trial under ORCP 63 C and ORCP 64. One of the grounds that defendant asserted in support of its motion for a new trial was that the jury's punitive damages award was excessive. Although the trial court denied defendant's JNOV and new-trial motions, it ruled that the punitive damages award was excessive and reduced it to $50,000. The trial court then entered judgment for plaintiff in the amount of $11,496 in actual damages and $50,000 in punitive damages. The trial court also rejected plaintiff's attorney fees request for $55,468.75, awarding, instead, fees of $15,000. Both plaintiff and defendant appealed.

On appeal, plaintiff assigned error to the trial court's reduction of the punitive damages award from $1 million to $50,000 and to the trial court's rejection of plaintiff's attorney fees request. Defendant cross-appealed, contending, generally, that plaintiff had failed to state a claim under the UTPA, that the trial court had erred in awarding any punitive damages, and that the trial court's $50,000 punitive damages award was excessive. The Court of Appeals affirmed on defendant's cross-appeal. On plaintiff's appeal, it reversed the trial court's reduction of the jury's punitive damages award and remanded with instructions to enter judgment allowing defendant's motion for new trial unless plaintiff filed a remittitur of punitive damages in the amount of $300,000. Parrott v. Carr Chevrolet, Inc., 156 Or.App. 257, 965 P.2d 440 (1998).⁵ Both parties petitioned for review, challenging the Court of Appeals' analysis in its review of the punitive damages award and whether the punitive damages award was unconstitutionally excessive.⁶ We allowed both petitions.

The primary issue on review is the appropriate standard for post-verdict judicial review of a punitive damages award in Oregon in light of BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996). For the reasons that follow, we hold that the rational juror inquiry in Oberg v. Honda Motor Co., 320 Or. 544, 888 P.2d 8, cert. den. 517 U.S. 1219, 116 S.Ct. 1847, 134 L.Ed.2d 948 (1996) (Oberg (state)),⁷ remains the standard of post-verdict judicial review of punitive damages in Oregon for excessiveness under the federal constitution and that Gore's set of nonexclusive guideposts are factors that the reviewing court should consider as part of the Oberg (state) review. Applying the Oberg (state) standard and the Gore guideposts to the record before the jury in this proceeding, we hold that the jury's $1 million award of punitive damages is within the range that a rational juror would be entitled to award.

The following facts are taken from the record. We view the evidence, and the reasonable inferences to be drawn therefrom, in the light most favorable to plaintiff, the party in whose favor the jury returned the verdict. Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or. 487, 490, 982 P.2d 1117 (1999).

Defendant operated a budget lot for used vehicles advertised as "quality checked used cars." The vehicles on that lot were sold "as is" and had been driven at least 100,000 miles. In December 1992, defendant acquired a 1983 Suburban as a trade-in from Myers. Defendant sent the Suburban to the budget lot, priced at $5,995. Two weeks after defendant had acquired the Suburban, plaintiff went to defendant's budget lot in search of a three-quarter ton truck. A salesperson directed him to the Suburban. After examining the Suburban, plaintiff noticed that someone had polished, cleaned and serviced it, and that the radiator, batteries, tires, and upholstery looked new. The engine was painted blue, and plaintiff assumed that it had been replaced. He commented: "It looks like quite a lot of recent work was done on this vehicle," to which the salesperson replied, "[y]eah." Plaintiff also noticed that the Suburban's air cleaner was missing, but the salesperson assured him that defendant would replace it.

The following week, plaintiff purchased the Suburban. After trading in his two vehicles as a down payment toward the purchase price of the Suburban, plaintiff signed a credit agreement through defendant for the balance of the Suburban's purchase price, $2,892.17. Plaintiff also signed the sales documents to complete the transaction, which included a "Special Disclaimers and Conditions" form and a "Buyer's Order."

Included in the Special Disclaimers and Conditions form was a section stating that the dealership visually had inspected the vehicle and that there were no apparent deficiencies in the installation of emission control devices. When plaintiff pointed out that that statement was inconsistent with the missing air cleaner, defendant gave him a "we owe" statement for that missing piece of equipment. The Buyer's Order, in contrast, included a typewritten section stating that the dealership had not inspected the vehicle and had no knowledge of the vehicle's condition, the accuracy of the odometer, or Department of Environmental Quality (DEQ) certification. After he had completed all the paperwork, plaintiff drove the Suburban home.

Shortly thereafter, plaintiff discovered multiple problems with the Suburban, including several missing pieces of emission control equipment, not only the air cleaner.⁸ Through his own investigation, plaintiff also discovered that it was impossible to bring the Suburban into DEQ compliance because of the missing equipment and a difference in age between the Suburban and its engine. Plaintiff noticed that the Vehicle Identification Number (VIN) located on the door, which should have matched with the VIN in the glove box, had been removed. He also noticed that there were white lines between the numbers on the odometer. Plaintiff conducted his own title search and learned through the Department of Transportation, Driver and Motor Vehicle Services (DMV), that the Suburban previously had been damaged in California and that it had a "title brand," which meant that the Suburban's title had a notation indicating that it had been damaged severely, totaled, or stolen. Once plaintiff's insurer learned about the branded title, it no longer would provide comprehensive insurance for the Suburban.

When plaintiff complained to defendant, defendant's employees told plaintiff that repair was his problem because he had purchased the Suburban "as is." They also told him that the Suburban's engine did not require DEQ equipment and that, regardless of that fact, he should not worry about DEQ compliance, because the registration was valid for another two years. At one point, a salesperson told plaintiff that defendant would replace the engine, but with junkyard parts. Ultimately, negotiations between plaintiff and defendant for a replacement vehicle failed when one of defendant's salespeople yelled at plaintiff, telling him that the Suburban was "unfixable" and that he would have to "learn to live with it" unless he agreed to a refund of $3,100—an amount equivalent to his down payment but that did not include reimbursement for the value of his trade-ins or his loan and insurance fees. Negotiations between plaintiff and defendant's attorney for rescission of the transaction also failed.

As a result, plaintiff filed this action against defendant, alleging, among other things, that defendant had violated the UTPA by willfully selling the Suburban:

"1) Falsely claiming it was equipped with proper emission controls;

"2) Falsely representing it had been driven 100,608 miles;

"3) With defaced or missing VIN numbers in violation of Oregon law;

"4) Without disclosing that the emission control equipment had been removed; and

"5) Selling the vehicle without disclosing it had previous out of state damage."

At trial, plaintiff proved that defendant had known about the condition of the Suburban when defendant sold it to plaintiff. When defendant had acquired the Suburban as a trade-in from Myers, Myers had provided defendant with a temporary registration form as proof of ownership. It was clear from examining Myers's temporary registration form that someone had altered it in an attempt to conceal that it had expired. Plaintiff's experts testified that no...