Rogers Motors of Hermiston LLC v. Bartlett LLC, 2:17-CV-00338-SMJ
| Decision Date | 29 January 2018 |
| Docket Number | No. 2:17-CV-00338-SMJ,2:17-CV-00338-SMJ |
| Court | U.S. District Court — District of Washington |
| Parties | ROGERS MOTORS OF HERMISTON LLC, an Oregon limited liability company, Plaintiff, v. BARTLETT LLC, a Washington limited liability company, and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, a Connecticut corporation, Defendants. |
Rogers Motors purchased a 2007 Toyota Tundra (the Tundra) from Bartlett LLC (Bartlett) at an auction in 2014. Rogers Motors then sold the Tundra to a consumer. Several months later, the consumer discovered the odometer had not been registering miles since it was purchased at the auction. Rogers Motors brought this action against Bartlett alleging, among other things, violation of the Motor Vehicle Information and Cost Savings Act (Odometer Act), 49 U.S.C. §§ 32701-11, and Washington's Consumer Protection Act (CPA), Wash. Rev. Code § 19.86 et. seq. Rogers Motors alleges that Bartlett tampered with the Tundra's odometer, operated the Tundra with knowledge the odometer was dysfunctional, and fraudulently provided an inaccurate odometer statement at the time of sale.
Bartlett moves for summary judgment on Rogers Motors's Odometer Act claims. ECF No. 41. By separate motion, Bartlett also moves for summary judgment on Rogers Motors's CPA claims. ECF No. 53. On January 23, 2018, the Court held a hearing on the motions for summary judgment and denied both motions. The Court also denied Bartlett's motion to compel, ECF No. 56. This Order memorializes and supplements the Court's oral ruling.
Doug Bartlett is the sole owner of Bartlett LLC (Bartlett), a wholesale auto importer located in Spokane, Washington. In 2007, Bartlett, acting through an intermediary known as Northern Imports LLC (Northern Imports), purchased a 2007 Toyota Tundra. Bartlett purchased the Tundra from Omar Hajar, the truck's registered owner in Canada. ECF No. 41-2 at 2. When Bartlett purchased the Tundra, the odometer registered 137,213, the equivalent of 85,720 miles. ECF No. 41-2.
Before taking possession of the Tundra, Bartlett paid Northern Imports to convert the odometer from kilometers to miles. ECF No. 41 at 2. Northern Imports does not perform conversions itself, but works with outside vendors. ECF No. 50 at 47. Northern Imports removed the odometer cluster from the Tundra and sent it toKelowna Instruments for conversion. Id. at 48. Kelowna Instruments declined to do the work, telling Northern Imports that the odometer "had been opened and they weren't going to touch it." Id. Northern Imports relayed this information to Mr. Bartlett, and Mr. Bartlett told Northern Imports to find a different vendor to complete the work. Id. at 49.
Northern Imports next sent the odometer to Tacoma Speedometer. Id. at 50. Tacoma Speedometer declined to convert the odometer due to signs of tampering. Id. Tacoma Speedometer sent the cluster back to Northern Imports in a box. Northern Imports again relayed this information to Bartlett, who again instructed Northern Imports to send the odometer to another vendor. Id. at 51.
Without opening the box from Tacoma Speedometer, Northern Imports next shipped the cluster to C&R Motors. ECF No. 50 at 51. When Richard MacKay, the owner of C&R Motors opened the box, he discovered it contained a note stating, ECF No. 52 at 7. McKay called Northern Imports regarding the note in the box and expressed his concerns in working on the odometer. Id. at 2. MacKay spoke to James Sandmire, the individual performing the odometer conversion. ECF No. 51 at 2. Sandmire agreed to convert the odometer but would not repair the odometer or warranty the work. Id. McKay relayed this information to Northern Imports. ECF No. 52 at 3. When MacKayreturned the odometer, he included the note and marked the invoice as "special." Id.
After taking possession of the Tundra, Northern Imports employees and Mr. Bartlett drove the Tundra an unspecified number of miles. ECF No. 59 at 8 ().
April 1, 2015, Bartlett sold the Tundra to Rogers Motors. ECF No. 50 at 82. Bartlett sold the Tundra through Manheim Auto Auctions, a company that hosts automobile auctions in Western Washington. Id. Pursuant to a contractual agreement, Manheim Auctions has Doug Bartlett's Power of Attorney on file, and Manheim fills out all paperwork when cars are bought at auction, including odometer disclosure statements. ECF No. 41-2 at 2. At the time of the purchase, the odometer shows the vehicle's mileage as 85,720 miles. ECF No. 41-1 at 3.
Later that month, Rogers Motors sold the vehicle to a consumer. ECF No. 50 at 82. Several months later, the consumer contacted Rogers Motors to report that the odometer still read 85,720 miles, the same mileage listed on the date Rogers Motors bought the vehicle from Bartlett at auction. Bartlett repurchased the Tundra. ECF No. 59 at 2. It was later determined that the odometer was missing a few bytes of code causing it not to accumulate miles accurately. ECF No. 50 at 27.
Summary judgment is appropriate if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Once a party has moved for summary judgment, the opposing party must point to specific facts establishing that there is a genuine dispute for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the nonmoving party fails to make such a showing for any of the elements essential to its case for which it bears the burden of proof, the trial court should grant the summary judgment motion. Id. at 322. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (internal citation omitted).
When considering a motion for summary judgment, the Court does not weigh the evidence or assess credibility; instead, "the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Sgt. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "In short, what is required to defeat summary judgment is simply evidence 'such that a reasonable juror drawing all inferences in favor of the respondent could returna verdict in the respondent's favor.'" Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (quoting Reza v. Pearce, 806 F.3d 497, 505 (9th Cir. 2015)).
Under 49 U.S.C. § 32703(3), a person may not, with intent to defraud, operate a motor vehicle on a street, road, or highway if the person knows that the odometer of the vehicle is disconnected or not operating. Bartlett contends that this statute's intent requirement requires Rogers Motors to show that Bartlett had actual knowledge of the odometer defects. Without evidence that Bartlett had actual knowledge of the defects, Bartlett argues, Rogers Motors cannot show that Bartlett acted with intent to defraud. Bartlett's argument fails for two, related reasons. First, a defendant may be liable under the Odometer Act even if he or she lacked actual knowledge if he or she acted with reckless disregard for the truth. Second, the question of intent is an issue of fact ordinarily reserved for the jury, and Rogers Motors has produced evidence which, taken in the light most favorable to its claims, could support the conclusion that Bartlett acted with intent.
As an initial matter, the Court must determine the intent required to trigger civil liability for violations of the Odometer Act. 49 U.S.C. § 32710 allows a civilaction against "[a] person who violates this chapter, with intent to defraud . . . ." Bartlett argues that intent under the Odometer Act requires the plaintiff to show the defendant had actual knowledge of the odometer defects. Rogers Motors argues that actual knowledge is unnecessary because a dealer of used cars may be held liable in the absence of actual knowledge if he reasonably should have known that the odometer reading was incorrect. The interpretation advanced by Rogers Motors is consistent with that of the majority of courts interpreting this statute. Accordingly, the Court finds that Rogers Motors's interpretation governs.
The question of whether the transferor of an automobile may be held liable under the Odometer Act despite the fact that he lacked actual knowledge of the odometer defect is one of first impression in this district and in the Ninth Circuit. However, the circuit courts that have addressed this issue have unanimously concluded that intent under the statute does not require actual knowledge. Suiter v. Mitchell Motor Coach Sales, Inc., 151 F.3d 1275, 1282 (10th Cir. 1983); Tusa v. Omaha Auto. Auction Inc., 712 F.2d 1248, 1253 (8th Cir. 1983); Ryan v. Edwards, 592 F.2d 756, 762 (4th Cir. 1979); Nieto v. Pence, 578 F.2d 640, 642 (5th Cir. 1978). Courts appear "willing to infer an intent to defraud where the seller exhibited gross negligence or a reckless disregard for the truth." Tusa, 712 F.2d at 1253. Thus, under the majority view, a dealer of used cars may be held liable in the absence ofactual knowledge if he reasonably should have known that the odometer reading was incorrect.
Bartlett argues that the Ninth Circuit's decision in Bodine v. Graco Inc., 533 F.3d 1145 (9th Cir. 2...
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