Poulin v. Ford Motor Co.

• Decision Date: 16 May 1986
• Docket Number: No. 83-287,83-287
• Citation: 147 Vt. 120,513 A.2d 1168
• Parties: Stephen G. POULIN v. FORD MOTOR COMPANY and Hayes Ford, Inc.
• Court: Vermont Supreme Court

Page 1168

513 A.2d 1168

147 Vt. 120

Stephen G. POULIN v. FORD MOTOR COMPANY and Hayes Ford, Inc.

No. 83-287.

Supreme Court of Vermont.

May 16, 1986.

Gregory P. Howe, Newport, and Michael Rose, on brief, St. Albans, for plaintiff-appellee.

Ritchie E. Berger of Dinse, Allen & Erdmann, Burlington, for defendants-appellants.

Before HILL, PECK, GIBSON and HAYES, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.

PECK, Justice.

The plaintiff brought an action against defendants Hayes Ford and Ford Motor Company, alleging that they illegally induced him to buy a 1979 Ford Mustang "Pace Car" by indicating that the car was a limited-production model which would increase in value. The complaint alleged violations of express and implied warranties, intentional misrepresentation and violation of the Consumer Fraud Act, 9 V.S.A. § 2453. After trial, the jury awarded the plaintiff $40,000. Defendants appeal the judgment on the verdict, the denial of a motion for a new trial, and the denial of a motion to set aside the verdict. We affirm.

In May, 1979, plaintiff, an owner of a lumber business, approached John Hayes, owner of defendant Hayes Ford, Inc., and expressed some interest in purchasing a 1979 Ford Mustang "Pace Car." The car was an exact replica of the one used to pace the field at the 1979 Indianapolis 500 motor car race. The plaintiff's interest stemmed from his knowledge that the 1978 Corvette Pace Car had increased in value, according to the evidence, from $14,000 to approximately $28,000.

After a test drive, the plaintiff met with Hayes and a representative of defendant Ford Motor Company. He expressed a continuing interest in the vehicle but also indicated that personal financial difficulties might preclude the purchase. According to the plaintiff, the representative of defendant Ford Motor Company told plaintiff that the pace car is "going to be a very lucrative type of car ... as a collector's item ... [W]e are stopping production as of the Indianapolis 500." Further, testimony indicated that the defendants told plaintiff the 1979 pace car was a limited edition with only about 2,800 issued, or less than one car per dealer. Defendants told plaintiff the car would increase in value similarly to the Corvette version of the pace car. Based on these representations, plaintiff purchased the car.

About one month later, plaintiff contacted Hayes and expressed his concerns about seeing "quite a few" pace cars on the road. Defendant Hayes Ford indicated to plaintiff that Ford had "flooded the market" with the cars, that Ford was still producing them and that Hayes Ford had, in fact, acquired another pace car. Plaintiff also learned that a Ford dealer in Swanton, Vermont, was offering rebates on two of the cars, asking only $7,400 for each.

After failing in his attempts to get Hayes Ford to buy back the pace car, plaintiff brought an action against the named defendants. The counts specified that: (1) defendants breached an express warranty that the vehicle was a "limited production car;" (2) defendants breached an implied warranty of fitness for a particular purpose in that defendants knew plaintiff, in purchasing the car, relied upon statements regarding its expected increase in value and that the warranted increase never occurred; (3) defendants defrauded plaintiff; and (4) defendants' actions constituted unfair and deceptive acts and practices in violation of 9 V.S.A. § 2453.

After both sides presented their cases, the trial judge, over defendants' objection, charged the jury on plaintiff's consumer fraud claim as well as the other claims. The jury found defendants liable, and awarded him $40,000. The amount of this award indicates the jury's verdict was rendered pursuant to the exemplary damage provision in the Consumer Fraud Act. 9 V.S.A. § 2461(b). Defendants moved the court to grant a new trial and to set aside the verdict. The court denied defendants' motions and issued judgment for plaintiff. Defendants appealed the order denying their motions and appealed the judgment. ¹

The defendants first argue that the trial court committed reversible error in submitting the consumer fraud count to the jury. They contend (1) that the plaintiff was not a consumer, and (2) that there was insufficient evidence of consumer fraud presented at trial. In reviewing the denial of a directed verdict motion, this Court "must view the evidence in the light most favorable to the nonmoving party, excluding any modifying evidence." Senesac v. Associates in Obstetrics & Gynecology, 141 Vt. 310, 312, 449 A.2d 900, 902 (1982).

The Consumer Fraud Act prohibits "unfair or deceptive acts or practices in commerce." 9 V.S.A. § 2453(a). For the Act to apply, the plaintiff must be a consumer as defined by the Act: "any person who purchases ... merchandise or services not for resale in the ordinary course of his trade or business but for his use or benefit...." ² 9 V.S.A. § 2451 a. Defendants argue that plaintiff was not a consumer because he purchased the pace car as an investment, and because he stated he bought and sold cars. Plaintiff's expectation that the car would appreciate in value does not prohibit him from being a consumer. The issue is whether the plaintiff bought the car to resell in the ordinary course of his business. The plaintiff testified that he bought the car for his personal benefit and that although he had sold cars bought as investments, he was not a used car dealer. Based on this testimony, the jury could conclude that the plaintiff was a consumer under the Act.

The defendants' next argument is that there was insufficient evidence presented at trial to allow the claim of unfair or deceptive acts or practices to go to the jury. Although this Court has considered what constitutes unfair acts and practices, Christie v. Dalmig, Inc., 136 Vt. 597, 600-01, 396 A.2d 1385, 1387-88 (1979), we have not addressed what constitutes deceptive acts or practices under 9 V.S.A. § 2453(a).

In this case, the trial court charged the jury on common law fraud, ³ apparently concluding that it was synonymous with consumer fraud. However, state statutes similar to our Consumer Fraud Act are recognized as providing a much broader right than common law fraud. See Dunlap v. Jimmy GMC of Tucson, Inc., 136 Ariz. 338, 343-44, 666 P.2d 83, 89 (App.1983); Heller v. Silverbranch Construction Corp., 376 Mass. 621, 626, 382 N.E.2d 1065, 1069-70 (1978).

Our Consumer Fraud Act requires courts construing Vermont's consumer fraud law to "be guided by the construction of similar terms contained in section 5(a)(1) of the Federal Trade Commission Act as from time to time amended by the Federal Trade Commission and the courts of the United States." 9 V.S.A. § 2453(b).

Many federal courts have held that a misrepresentation which has the tendency and capacity to mislead consumers is a deceptive act or practice under federal law. See, e.g., American Home Products Corp. v. FTC, 695 F.2d 681, 686 (3d Cir.1982); Trans World Accounts, Inc. v. FTC, 594 F.2d 212, 214 (9th Cir.1979); FTC v. Sterling Drug, Inc., 317 F.2d 669, 674 (2d Cir.1963); see also the discussion in FTC v. Colgate-Palmolive Co., 380 U.S. 374, 384-90, 85 S.Ct. 1035, 1042-45, 13 L.Ed.2d 904 (1965). Similarly, a number of courts in states with statutes similar to Vermont's Consumer Fraud Act have also adopted this definition of deception. See, e.g., Williams v. Bruno Appliance & Furniture Mart, Inc., 62 Ill.App.3d 219, 222, 19 Ill.Dec. 537, 539, 379 N.E.2d 52, 54 (1978); Spradling v. Williams, 566 S.W.2d 561, 562-63 (Tex.1978) (citation omitted); see also Leafter & Lipson, Consumer Actions Against Unfair or Deceptive Acts or Practices: The Private Uses of Federal Trade Commission Jurisprudence, 48 Geo.Wash.L.Rev., 521, 535-36 (1980).

Recently, the Federal Trade Commission (FTC) stated that "a deception case requires a showing of three elements: (1) there must be a representation, practice, or omission likely to mislead consumers; (2) the consumers must be interpreting the message reasonably under the circumstances; and (3) the misleading effects must be 'material,' that is, likely to affect consumers' conduct or decision with regard to a product." International Harvester Co., 3 Trade Reg.Rep. (CCH) p 22,217 p. 23,174, 23,178 (Dec. 21, 1984).

It is unnecessary to determine which standard should be adopted for purposes of this case under our Act, because in light of the facts presented here, both standards are satisfied. The evidence indicated that the defendants told the plaintiff the pace car was a limited edition; that production was stopping immediately; that only 2,800 cars would be produced; and that the car would increase in value by $4,000 or $5,000 in several months. Furthermore, there was evidence that one defendant later told the plaintiff that Ford had flooded the market with the cars and that Ford was still producing them. Other evidence revealed that at least one dealer was offering $1,600 rebates on the cars and that the price of the car had dropped from $9,000 to between $5,000 and $7,500. Given this evidence, we conclude that there was sufficient evidence of deceptive acts or practices to go to the jury. Because we find sufficient support for a finding of deception, we do not consider whether the acts were unfair.

The defendants further attack the trial court's charge on consumer fraud as erroneous because (1) it failed to describe what constitutes unfair or deceptive acts or practices, and (2) it directed the jury to apply the preponderance-of-the-evidence standard of proof rather than that of clear and convincing evidence. See Hughes v. Holt, 140 Vt. 38, 41, 435 A.2d 687, 689 (1981). The record reveals no objection by the defendants as to the burden of proof or the text of the instructions themselves. Issues not objected to below will not be considered upon appellate review. Collette v. Bousley, 141 Vt. 373, 374, 449 A.2d 936, 937 (1982). Furthermore, as noted...