Rivera Castillo v. Autokirey, Inc.

• Decision Date: 11 August 2004
• Docket Number: No. 03-1806.,03-1806.
• Citation: 379 F.3d 4
• Parties: Margarita RIVERA CASTILLO, Carlos T. Ravelo Guerrero, and Conjugal Partnership Ravelo-Rivera, Plaintiffs, Appellees, v. AUTOKIREY, INC. d/b/a Autocentro Toyota, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

379 F.3d 4

Margarita RIVERA CASTILLO, Carlos T. Ravelo Guerrero, and Conjugal Partnership Ravelo-Rivera, Plaintiffs, Appellees, v. AUTOKIREY, INC. d/b/a Autocentro Toyota, Defendant, Appellant.

No. 03-1806.

United States Court of Appeals, First Circuit.

Heard March 3, 2004.

Decided August 11, 2004.

Appeal from the United States District Court for the District of Puerto Rico, Jose Antonio Fuste, J.

COPYRIGHT MATERIAL OMITTED

Aníbal Lugo Miranda, with whom Lugo Miranda Law Offices was on brief, for appellant.

Rafael A. Oliveras López de Victoria, for appellees.

Before TORRUELLA, Circuit Judge, COFFIN, Senior Circuit Judge, and LIPEZ, Circuit Judge.

LIPEZ, Circuit Judge.

This appeal challenges a jury verdict against an auto dealer for violations of the Motor Vehicle Information and Cost Savings Act, 49 U.S.C. §§ 32701-711 (1994 & Supp. 1 2001) (the "Odometer Act") and Puerto Rico's General Tort Statute, 31 P.R. Laws Ann. § 5141 ("Article 1802"). The defendant, Autocentro Toyota ("Autocentro"), asks us to vacate the jury verdict in favor of the two plaintiffs (wife and husband when they bought the car in question) and enter a judgment in its favor. In the alternative, Autocentro seeks either a new trial or an adjustment of the damages awarded by the jury.

These claims for relief might have more force if defendant had protected itself with the required motions and objections at trial. For the most part, though, it did not. However, we do find that the damages award to plaintiff Margarita Rivera Castillo ("Rivera") is not supported by the record. Therefore, we must vacate Rivera's damages award and remand to the district court for a determination of the appropriate award on remittitur (or for a new trial if Rivera declines to accept the remitted amount). We leave the award to Carlos Ravelo Guerrero ("Ravelo") undisturbed on appeal.

I.

The plaintiffs purchased a Toyota Tercel from Autocentro in October 1999 for $13,000 (or, when the cost of financing was considered, $18,789). Apparently, the defendant disclosed to plaintiffs that the car had been previously titled, though not to whom. However, Autocentro also represented to plaintiffs that the car had never been used. Indeed, when plaintiffs purchased the car, the odometer registered less than ten miles.

According to plaintiffs, the car developed various rattles and mechanical problems soon after they purchased it. Suspicious that their newly purchased car might not be so new, plaintiffs investigated the car's title history. That investigation revealed that the Tercel was imported by the distributor Toyota de Puerto Rico, then "consigned, delivered, and/or sold" to Autocentro Toyota, the defendant, who then sold the car to Cabrera Car Rental.¹ Eventually, Cabrera Car Rental sold the car back to Autocentro. Having determined that the prior owner was a car rental agency, plaintiffs' suspicions were heightened, and they retained a master mechanic to inspect the car. The mechanic concluded that the car's odometer might have been altered.

Plaintiffs filed suit in federal court, alleging violations of both Article 1802 of the law of Puerto Rico, which states in pertinent part that "[a] person who by an act or omission causes damage to another through fault or negligence shall be obliged to repair the damage so done," 31 P.R. Laws Ann. § 5141, ² and the federal Odometer Act, which states inter alia that "[a] person may not ... disconnect, reset, alter, or have disconnected, reset, or altered, an odometer of a motor vehicle intending to change the mileage registered by the odometer." 49 U.S.C. § 32703(2). In considering the Odometer Act, originally passed in 1972, Congress found that although seventeen states at the time had enacted legislation to prohibit altering odometers,

States without such legislation have found this practice on the increase, especially when a neighboring State has an odometer law. Odometers are turned back in States without odometer laws and then cars are marketed at inflated values in States with such laws. Thus, State odometer laws are easily circumvented and people in a State with such a law suffer because of this practice.

S.Rep. No. 92-413 (1971), reprinted in 1972 U.S.C.C.A.N. 3960, 3962. On this background, Congress found that federal action on the issue was desirable and passed the Odometer Act to "establish a national policy against odometer tampering and prevent consumers from being victimized by such abuses." Id.

After plaintiffs filed their Odometer Act and Article 1802 claims in federal court, and pre-trial motion practice and discovery were completed, the case was tried before a jury for three days. According to the testimony of plaintiffs' witness Kenneth Cabrera, president and owner of the eponymous car rental concern, the car sat on the lot unrented for approximately two and a half months, and it was driven only once to be filled up with gasoline. Because demand for rental cars was low, Cabrera resold the car to Autocentro, returning physical custody of the car in mid-July. In an apparent surprise to all the parties, Cabrera also testified that the publicly registered invoice from his company to Autocentro was forged in December 1999, two months after plaintiffs bought the car, though it was not clear whether Autocentro, Toyota Credit de Puerto Rico, or some other entity was responsible for the forgery. In any event, Cabrera did not dispute that he resold the car to Autocentro, returned possession of the car to Autocentro in mid-July, and was paid the agreed upon price.

For approximately three months, from mid-July until plaintiffs purchased the car in October, Autocentro had the Tercel in its possession. While it was not uncommon for some cars to remain on the sale lot for that period of time or even longer, the evidence indicated that Toyota Tercels were among the most popular and quick-selling cars in Puerto Rico — in fact, the best-selling car on defendant's lot. Therefore, it was somewhat unusual, or, in the eyes of plaintiffs, highly suspect, that an available Tercel would remain unsold and unused for that length of time.

Plaintiffs also offered the testimony of a master mechanic, Jose Maldonado, regarding the alleged odometer tampering. The parties disagree as to the precise nature of Maldonado's testimony and his antecedent knowledge of the car's repair history prior to his inspection. Although he could not say that the odometer definitely had been altered, Maldonado did testify that it was his opinion that the car had been sold with an altered odometer, based on (1) the condition of the nuts and bolts in the transmission and odometer area, (2) the car having been purchased with less than ten miles on the odometer, (3) the car appearing to have "a lot more mileage" on it than was registered on the odometer at the time of the inspection, and (4) his understanding that the area of the car around the transmission and odometer had not previously been repaired.

Finally, plaintiffs called an expert witness to testify regarding plaintiffs' economic losses caused by the problems with the car. According to the expert witness, who based his conclusions on information provided by Ravelo, the damages were as follows: $145 for repairs that would not have been incurred if the car was new; $4,532 that plaintiffs paid in excess of the actual value of the car; $1,000 in job-related taxi fares Ravelo incurred because of the unavailability of the car; $14,400 in lost income because Ravelo, a freelance court interpreter who charged $60 per hour, lost 240 working hours due to this case and a related administrative complaint; and $156 in simple interest at 6%.

Other than to elicit testimony that the expert based his calculations on numbers provided by plaintiffs, Autocentro did not counter the expert's testimony regarding damages. Also, defendant did not introduce a mechanic of its own to testify that the odometer had not been altered. Autocentro put on two witnesses who were employed by Autocentro during the relevant time period: Richard Lee San, the finance manager who sold plaintiffs the car, and Jose Roberto Ramirez Suriel, the general manager. Lee testified about the details surrounding plaintiffs' purchase of the car, including detailed testimony about the documents that were part of the transaction. Additionally, he testified that he informed plaintiffs that the car previously had been registered to a company, which he did not identify to plaintiffs, and that the company had not used the car and "had been compelled to sell it again." Ramirez testified about the business relationship between Cabrera Car Rental and Autocentro, the history of their dealings related to the plaintiffs' Tercel, and the inspection procedures Autocentro uses upon receipt of a car into inventory. Ramirez also testified that Autocentro did not alter the odometer of the car.

After the close of evidence, the jury returned a unanimous verdict for plaintiffs under the Odometer Act and Article 1802. The jury awarded Rivera and Ravelo $20,000 each in damages.³ According to the jury verdict form, the jury found that Autocentro "intentionally defrauded plaintiffs regarding the reading of the odometer in the Toyota Tercel." As a result, the district court trebled the award pursuant to 42 U.S.C. § 32710(a), which provides that "[a] person that violates this [Act], with intent to defraud, is liable for 3 times the actual damages or $1,500, whichever is greater." After the district court entered judgment for plaintiffs, the defendant filed a post-trial motion for judgment as a matter of law and a motion for new trial or remittitur, both of which were denied. Defendant now appeals from the jury verdict the award of damages, and the district court's denial of defendant's post-trial motions for relief.

II.

Autocentro advances three claims of error on appeal. First, it argues that the district court erred in declining to grant defendant's post-trial motion...