Poole v. Nev. Auto Dealership Invs., LLC

• Decision Date: 05 September 2019
• Docket Number: No. 74808-COA,74808-COA
• Citation: 449 P.3d 479
• Parties: Derrick POOLE, Appellant, v. NEVADA AUTO DEALERSHIP INVESTMENTS, LLC, a Nevada Limited Liability Company, d/b/a Sahara Chrysler; and Corepointe Insurance Company, Respondents.
• Court: Nevada Court of Appeals

449 P.3d 479

Derrick POOLE, Appellant,

v.NEVADA AUTO DEALERSHIP INVESTMENTS, LLC, a Nevada Limited Liability Company, d/b/a Sahara Chrysler; and Corepointe Insurance Company, Respondents.

No. 74808-COA

Court of Appeals of Nevada.

FILED SEPTEMBER 05, 2019

Law Offices of George O. West III and George O. West III. Las Vegas; Law Offices of Craig B. Friedberg and Craig B. Friedberg, Las Vegas, for Appellant.

Moran Brandon Bendavid Moran and Jeffery A. Bendavid and Stephanie J. Smith, Las Vegas, for Respondents.

BEFORE GIBBONS, C.J., TAO and BULLA, JJ.

OPINION

By the Court, GIBBONS, C.J.:

This appeal arises from a deceptive trade practices action. Appellant Derrick Poole sued respondents Nevada Auto Dealership Investments, LLC, and its surety company, Corepointe Insurance Company, under the Nevada Deceptive Trade Practices Act (NDTPA) and NRS 41.600 (consumer fraud). Poole alleged that Nevada Auto knowingly | failed to disclose material facts about a truck that it sold to him and misrepresented the truck’s condition. The district court granted summary judgment for respondents on each of Poole’s claims.

In this opinion, we consider the meaning of "knowingly" and "material fact" under the NDTPA. These terms appear frequently throughout the NDTPA but remain undefined under the Act. We conclude that "knowingly" means that the defendant is aware that the facts exist that constitute the act or omission, and that a fact is "material’ if either (a) a reasonable person would attach importance to its existence or nonexistence in determining a choice of action in the transaction in question: or (b) the defendant knows or has reason to know that the consumer regards or is likely to regard the matter as important in determining a choice of action, although a reasonable person may not so regard it. Using these definitions, we conclude that Poole presented sufficient evidence to raise genuine issues of material fact¹ under each of his claims, and thus that the district court erred in granting summary judgment. We therefore reverse the district court's order granting summary judgment and remand this matter to the district court for further proceedings consistent with this opinion.

BACKGROUND

Poole purchased a certified pre-owned (CPO) Dodge truck from Nevada Auto. Nevada Auto advertises that "CPO vehicles must pass a stringent certification process that guarantees only the finest late model vehicles get certified." The truck’s previous owner had been in an accident and repaired the truck before selling it to Nevada Auto. The previous owner’s insurer, Allstate, prepared an Allstate Collision Estimate (ACE) listing each replaced or repaired part. The ACE listed damage to the truck’s frame, and a "reconditioned" replacement for a damaged wheel Despite its knowledge of the damage that the ACE described, Nevada Auto certified the truck as a CPO vehicle.

Poole test-drove the truck with a Nevada Auto salesperson who told him that the truck had been in a "minor" collision. When Poole asked about the extent of the damage from the collision, the salesperson repeated that it was only minor and explained that Nevada Auto would not sell the truck were the collision significant. Nevada Auto also disclosed the collision by providing a Carfax report to Poole. The Carfax report did not reveal the frame damage, the reconditioned wheel, or the cost of repairs, and Nevada Auto did not disclose to Poole the ACE’s contents or even its existence. Two years later, Poole learned the extent of the damage when he tried to refinance the loan on the truck. The lender explained to Poole that it had declined his loan application because it discovered that the collision had damaged the truck’s frame and significantly reduced its value.

Poole sued Nevada Auto and Corepointe,² alleging violations of several deceptive trade practice statutes under the NDTPA, codified in NRS Chapter 598, and seeking equitable relief for consumer fraud under NRS 41.600. Respondents moved for summary judgment, arguing that no genuine issues of material fact existed under Poole’s deceptive trade practices claims. After a hearing on the motion, the district court granted summary judgment, concluding that each of Poole’s deceptive trade practices claims failed, and thus that his equitable claims likewise failed.

ANALYSIS

Poole appeals, arguing that the district court erred by determining that no genuine issue of material fact existed as to whether Nevada Auto knowingly {1) failed to disclose a material fact under NRS 598.0923(2) ; (2) misrepresented the truck’s certification under NRS 598.0915(2) or its certified standard, quality, or grade under NRS 598.0915(7) ; (3) made a false representation under NRS 598.0915(15) ; or (4) misrepresented the truck’s mechanical condition under the Federal Trade Commission Act (FTCA), 16 C.F.R. § 455.1(a)(1) (2018), in violation of NRS 598.0923(3). Respondents answer that no genuine issue of material fact remains because Nevada Auto disclosed all material facts, properly certified the truck, and in any case, did not "inten[d] to knowingly defraud" Poole.

As Poole notes, however, the NDTPA does not define "knowingly" or "material," and the district court did not define them in granting summary judgment. The Nevada Supreme Court, too, has not addressed either NDTPA term, and respondents offer little guidance. Because the application of these terms is essential in this case and in many other deceptive trade practices actions, we take this opportunity to address each term’s meaning under the NDTPA.

"We review questions of statutory meaning de novo." Knickmeyer v. State, 133 Nev. 675, 679, 408 P.3d 161, 166 (Ct. App. 2017). The primary goal of interpreting statutes is to effectuate the Legislature's intent. Cromer v. Wilson, 126 Nev. 106, 109, 225 P.3d 788, 790 (2010). We interpret clear and unambiguous statutes based on their plain meaning. Id. When a statute "is susceptible to more than one natural or honest interpretation, it is ambiguous, and the plain meaning rule has no application," State, Dep’t of Bus. & Indus. v. Granite Constr. Co., 118 Nev. 83, 87, 40 P.3d 423, 426 (2002). "[W]hen a statute is ambiguous, we consult other sources, such as legislative history, reason, and policy to identify and give effect to the Legislature’s intent." In re CityCenter Constr. & Lien Master Litig., 129 Nev. 669, 673-74, 310 P.3d 574, 578 (2013). "When a legislature adopts language that has a particular meaning or history, rules of statutory construction also indicate that a court may presume that the legislature intended the language to have meaning consistent with previous interpretations of the language." Beazer Homes Nev., Inc. v. Eighth Judicial Dist. Court , 120 Nev. 575, 580-81, 97 P.3d 1132, 1135-36 (2004).

The meaning of "knowingly " under the NDTPA

Respondents argue that Poole presented no evidence that Nevada Auto "inten[ded] to knowingly defraud" him. Poole replies that he did present such evidence, but that under the NDTPA, "knowingly" means only general intent—not intent to deceive, but mere knowledge of the facts that constitute the act or omission.

Poole directs this court to several civil and criminal Nevada statutes that define "knowingly" in similar contexts, two of which predate the NDTPA’s passage in 1973. For example, NRS Chapter 624, which addresses licensing and discipline of contractors, provides in NRS 624.024. codified in 2003, that

"Knowingly" imports a knowledge that the facts exist [that] constitute the act or omission, and does not require knowledge of the prohibition against the act or omission. Knowledge of any particular fact may be inferred from the knowledge of such other facts as should put an ordinarily prudent person upon inquiry.

Each of the statutes defines "knowingly" in nearly identical language and requires no more than general intent. See also NRS 193.017 (addressing crimes and punishments, and first codified in 1912); NRS 208.055 (addressing correctional institutions and aid to victims of crime, and first codified in 1912); NRS 281A.115 (addressing ethics in government, and first codified in 2009); Bolden v. State, 121 Nev. 908, 923, 124 P.3d 191, 201 (2005) ("General intent is ‘the intent to do that which the law prohibits.’ " (quoting Black’s Law Dictionary 810 (6th ed. 1990))), receded from on other grounds by Cortinas v. State , 124 Nev. 1013, 1026-27, 195 P.3d 315, 324 (2008).

The above definition of "knowingly" best effectuates the Legislature’s intent under the NDTPA. The Legislature has used "knowingly" as a term of art and defined it consistently elsewhere in the Nevada Revised Statutes, and thus presumably intended to use it consistently under the NDTPA. See NAIW v. Nev. Self-Insurers Ass’n, 126 Nev. 74, 84, 225 P.3d 1265, 1271 (2010) ("We presume that the legislature enact[s a new] statute with full knowledge of existing statutes relating to the same subject."); cf. Beazer , 120 Nev. at 587, 97 P.3d at 1139-40 ("Generally, when a legislature uses a term of art in a statute, it does so with full knowledge of how that term has been interpreted in the past, and it is presumed that the legislature intended it to be interpreted in the same fashion."); see also State v. Hagan, 387 So. 2d 943, 945 (Fla. 1980) ("In the absence of a statutory definition, resort may be had to case law or related statutory provisions [that] define the term ...."); Nelson v. Transamerica Ins . Servs., 441 Mich. 508, 495 N.W.2d 370, 373 n.18 (1992) ("The Legislature is presumed to be aware of existing statutes."). Each of those statutes in which the Legislature has defined "knowingly" is part of a statutory scheme with a purpose similar to that of a consumer protection act—protecting and assisting the public. See , e.g., NRS 624.005 ("[T]he provisions of this chapter ... are intended to ... protect the health, safety and welfare of the public."); NRS 217.010 ("[T]he policy of this State [is] to provide assistance to ... victims of violent crimes...