Rawson v. Conover

Decision Date09 March 2001
Docket NumberNo. 990935.,990935.
Citation20 P.3d 876,2001 UT 24
CourtUtah Supreme Court
PartiesJames K. RAWSON, trustee, and Rebecca R. Rawson, trustee, Plaintiffs and Petitioners, v. Kim Edward CONOVER and Karen Jane Conover, dba K & K Sales; K & K Sales, Inc., a corporation; Paul W. Clark; and Old Republic Surety Co., a corporation, Defendants and Respondents.

Ray G. Martineau, Anthony R. Martineau, Salt Lake City, and Leslie W. Slaugh, Provo, for plaintiffs.

T. Richard Davis, Salt Lake City, for defendants.

On Certiorari to the Utah Court of Appeals

RUSSON, Associate Chief Justice:

¶ 1 On writ of certiorari, James and Rebecca Rawson seek review of the Utah Court of Appeals' memorandum decision affirming Judge Brian's and Judge Iwasaki's grants of summary judgment in favor of Kim and Karen Conover, Paul Clark, K & K Sales, Inc. ("K & K Sales"), and Old Republic Surety Co. ("Old Republic") (collectively, "defendants"). We affirm.


¶ 2 K & K Sales was a licensed motor vehicle dealership owned by Kim and Karen Conover and bonded by Old Republic. Paul Clark is a friend of the Conovers. In October 1992, Clark attended an auto auction with Kim Conover. Clark claimed he was interested in purchasing a family vehicle at the auction. However, because only licensed auto dealers are allowed to participate in the auto auctions, Kim Conover, as K & K Sales, purchased a salvaged 1989 Ford Aerostar van (the "van") for Clark. At the time of the sale, Kim Conover and Clark were told the van had suffered structural damage in an accident. Clark claimed he intended to have the van repaired and restored for use by his wife and family, and Kim Conover estimated that the repairs could be fairly easily performed.

¶ 3 Over the ten months following the purchase of the van, Clark contracted with various parts and repair shops to restore the vehicle. He claimed that he neither supervised nor performed any of the repairs himself though he did pay for all parts and service performed. During this period, title to the van remained in the name of K & K Sales; however, Kim Conover claimed that he did not supervise, perform, or inspect any of the repairs on the van except to replace the windshield.

¶ 4 Clark claimed that after the van was substantially repaired, his wife test drove it, but finding it too long to maneuver, she did not want to keep it. Therefore, Clark put an ad in the newspaper to find a buyer for the van and listed his home phone number as the contact.

¶ 5 In July 1993, the Rawsons saw the newspaper ad and called Clark. They arranged to see the van and went to Clark's home. The Rawsons test drove the van with Clark riding along. The Rawsons said that Clark told them the van had been in an accident and was salvaged; the front end had been damaged, so it had been rebuilt. The Rawsons told Clark they had five children and it was important to them that they have a safe vehicle. They claimed that Clark told them the van had been "properly repaired" and because he had intended to use the van for his wife and family, he felt it was safe. Clark also showed the Rawsons an itemized list of the costs for the repairs done on the van.

¶ 6 In addition, Clark agreed to allow the Rawsons to have their own mechanic inspect the van as long as Clark accompanied the vehicle. However, the Rawsons declined to do so. They stated in their depositions that they did not look at or ask to look at any part of the van that had been rebuilt. They did, however, request that Clark have it safety inspected, which he did.

¶ 7 A few days after first looking at the van, in early August 1993, the Rawsons called Clark and agreed to purchase it. They met Clark at the Department of Motor Vehicles in Rose Park to effectuate the sale. It was at that time that Clark explained to the Rawsons that the van was actually registered to K & K Sales. Therefore, Clark explained, Kim Conover, as K & K Sales, had signed the registration over to the Rawsons, and there were a few documents Clark wanted the Rawsons to sign.

¶ 8 The registration, which James Rawson claimed he read before signing, indicated that the van was "Rebuilt" and had a "Utah Salvage Title." James Rawson also signed a K & K sales agreement at the time of purchase that stated the van was used and a rebuilt salvage. The pertinent terms on the back of the sales agreement stated:

1. Purchaser warrants that he has inspected the vehicle to his satisfaction and purchases the vehicle "AS IS." If purchaser has not inspected the vehicle, he waives his right to do so.
. . . .
6. The vehicle covered by this agreement may be a rebuilt or restored vehicle as defined by U.C.A. § 41-1-36.5(1)(a) and § 41-1-36.6(9). Purchaser acknowledges that this has been disclosed and that purchaser has seen the previous title or salvage certificate.
. . . .
10. Purchaser agrees to secure all necessary inspections to facilitate licensing and restoration of the vehicle. Purchaser agrees to indemnify and hold harmless K & K from any damages that may arise from the failure of purchaser to secure inspections. The vehicle is sold "AS IS" and purchaser is solely responsible for obtaining necessary inspections.
. . . .
19. No agreement, verbal or otherwise, not contained in writing in this agreement on this document will be recognized.

James Rawson stated in his deposition that even though he only glanced at the terms and conditions when he signed the sales agreement, he did understand he was purchasing a vehicle without a warranty in "as is" condition.

¶ 9 Finally, as part of the purchase, James Rawson signed a document entitled "Buyers Guide." On the front of the document in very large bolded type were the words "AS IS — NO WARRANTY." The box next to this statement had been checked. At the top of this document was the statement "IMPORTANT: Spoken promises are difficult to enforce. Ask the dealer to put all promises in writing. Keep this form." Further down, the words "Vehicle is a rebuilt salvage title" were handwritten. The second page of this document listed several major defects that could occur in used motor vehicles, and at the bottom was the statement "Important: The information on this form is part of any contract to buy this vehicle. Removal of this label before consumer purchase (except for purpose of test-driving) is a violation of federal law (16 C.F.R. 455)." James Rawson stated in his deposition that even though he did not read the document closely before signing it, he did notice that there was no warranty and that the vehicle was being sold "as is."

¶ 10 James Rawson agreed in his deposition that Kim Conover, individually or as K & K Sales, made no oral representations at all concerning the condition of the van and no written representations aside from the documents discussed above. In fact, at no time before the sale did the Rawsons meet or talk to Kim Conover or visit the premises of K & K Sales. Furthermore, when asked in his deposition whether he considered any verbal statement by Clark to be a warranty concerning the vehicle, James Rawson replied, "No."

¶ 11 After signing all the documents and paying the registration, sales tax, and purchase price, the Rawsons took possession of the van. Thereafter, they drove the van without incident until they were involved in an accident in December 1993. There are no allegations that any defect in the van caused the accident.

¶ 12 After the Rawsons' accident, the Rawsons' insurance company estimated the repairs and authorized their completion. The Rawsons then authorized their mechanic shop to perform the repairs. However, once the mechanics proceeded with the repairs, they claimed they could not get the parts to fit, and therefore, they completely disassembled the inside of the van. At that point, the mechanics discovered what they believed to be extensive damage remaining from the first accident, prior to Clark's purchase of the van at the auto auction. They then refused to make all the repairs they believed to be necessary for the amount that had been estimated by the insurance company, and they refused to be responsible for repairing the vehicle without performing all the additional repairs. The mechanics claimed that the repairs from the first accident had not been performed to industry standards and that the van was not safe. ¶ 13 The mechanic shop claimed it notified the insurance company that the necessary repairs would be $2000 to $4000 more than originally estimated. The insurance company allegedly refused to pay for the prior damage and therefore declared the van to be totaled.

¶ 14 In March 1994, the Rawsons filed a complaint against defendants in third district court, claiming intent to defraud, tortious misrepresentations, deceptive and unconscionable acts and practices, breach of covenants of good faith and fair dealing, punitive damages, equitable estoppel, surety liability, and breach of express and implied warranties. Defendants denied the charges.

¶ 15 In September 1995, the court, on its own motion, ordered the parties to show cause why the case should not be dismissed for failure to prosecute. The parties appeared, and a nonjury trial was scheduled. However, on the date set for trial, May 2, 1996, the parties stipulated to strike the trial and proceed on cross-motions for summary judgment.

¶ 16 Defendants' motion for summary judgment argued that the Rawsons had failed to allege or specify any actions that served as violations of any of the statutes or regulations claimed by the Rawsons. In opposition to defendants' motion,...

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