Southern States Ford, Inc. v. Proctor

• Decision Date: 10 March 1989
• Citation: 541 So.2d 1081
• Parties: SOUTHERN STATES FORD, INC., and Kevin Starcher v. Margaret Ann PROCTOR. 87-331.
• Court: Alabama Supreme Court

Page 1081

541 So.2d 1081

SOUTHERN STATES FORD, INC., and Kevin Starcher v. Margaret Ann PROCTOR.

87-331.

Supreme Court of Alabama.

March 10, 1989.

Robert A. Huffaker of Rushton, Stakely, Johnston & Garrett, Montgomery, for appellants.

Eugene W. Reese of Reese & Addison, Montgomery, for appellee.

MADDOX, Justice.

This appeal involves a claim of misrepresentation in the sale price of an automobile. Plaintiff, Margaret Ann Proctor, bought a new 1986 Isuzu Trooper II vehicle from Southern States Ford, Inc. (hereinafter "Southern States"), and then sued Southern States and its salesman Kevin Starcher for allegedly making misrepresentations about certain charges added to the manufacturer's "sticker price" of the new vehicle. The jury awarded Proctor compensatory damages of $1,779.00 and punitive damages of $70,000.00 against both defendants, and the trial judge entered judgment accordingly. We affirm.

The evidence tends to show the following. On August 15, 1986, Proctor visited Southern States to inquire about the purchase of an Isuzu Trooper. Salesman Starcher showed Proctor the vehicle she ultimately bought, and the manufacturer's sticker on the vehicle showed the price to be $11,966.00. Even though there should have been an addendum sticker on the vehicle's window detailing the various additional dealer charges, there was no addendum sticker on this vehicle. Because the automobile had no air-conditioner, Proctor asked that one be added. In the office, Starcher put together a worksheet on the vehicle and listed the following items on the worksheet:

                "Basic Delivered Price of Unit  $11,966.00
                             "AMV                 389.00
                       "Protection Pkg            495.00
                                                ----------
                                                $12,850.00
                        "Air Condition            895.00
                                                ----------
                                                $13,745.00  "
                

Proctor asked about the charge for "AMV," and she testified that Starcher told her that AMV was a fee similar to taxes, tags, and title. Starcher denied that he gave this explanation. He testified that all he told her was that AMV was "adjusted market value." Defendants acknowledge that AMV is actually an additional dealer profit or markup.

After negotiations, Proctor agreed to buy the vehicle if the charges for the protection package and the air-conditioner were taken off. At that point, she signed the worksheet. She testified that she thought that she had agreed to pay only $12,355.00 for the vehicle. The worksheet reflects that the selling price was to be $13,150.00. See Appendix A. Proctor stated that she did not believe that the figure of $13,150.00 was on the worksheet at the time she signed it, and she also said that she was never given a copy of the worksheet.

Proctor was then taken to the finance office for the preparation of the final contract. She testified that she felt rushed in executing the documents and did not examine them. The "Retail Order and Invoice" indicates a "Basic Delivered Price of Unit" of $13,150.00. Added to that unit price are charges for "Borg-Warner" ($795.00), "Sales Tax" ($160.33), "License or Transfer Fee" ($3.00), and "Invoicing and Services" ($92.00), for a total price of $14,200.33. Proctor was given a "Total Credit" for her trade-in of $2.11; this "Total Credit" was figured by adding the used car allowance of $5,862.11 plus her cash payment of $2,358.41 and then subtracting the amount Proctor still owed on her trade-in. This left an unpaid balance of $14,198.22, which was to be financed for 60 months at $326.69 per month. See Appendix B. Proctor signed the Retail Order and Invoice and the "Alabama Vehicle Retail Installment Contract," which also indicated the amount financed to be $14,198.22. Nowhere on either of these documents was there a listing of the protection package and air-conditioner charges. Proctor took the vehicle and copies of the contracts home on the date of sale.

Southern States submitted Proctor's credit application to Union Bank & Trust Company, but Union Bank would not extend credit for the full amount and requested that an additional $1,500.00 of the purchase price be paid in cash rather than be financed. Southern States called Proctor and told her that she would have to pay an additional $1,500.00 in cash. She refused, and eventually Southern States agreed to guarantee to the financing institution $1,500.00 of the total amount financed.

Because of this problem with the financing, Southern States asked Proctor to come back to the dealership in order to execute a new set of contracts. Before she returned to the dealership, she had discussed the matter with an attorney friend, who counseled her not to sign any more papers. Nevertheless, on August 20, 1986, Proctor signed a new set of contracts. ¹ The new documents were apparently the same as those executed previously except that the name of the financing institution was changed from Union Bank to Ford Motor Credit Company.

The defendants argue that the trial court should have directed a verdict in their favor on the basis that Proctor's reliance on the misrepresentations of the salesman was unreasonable, as a matter of law. The scintilla rule, which was applicable in this case, requires that an issue in a civil case go to the jury if the evidence, or a reasonable inference therefrom, furnishes as much as a glimmer or trace in support of an issue. Alabama Farm Bureau Mut. Cas. Ins. Co. v. Haynes, 497 So.2d 82, 85 (Ala.1986). This Court stated in National Security Fire & Cas. Co. v. Vintson, 454 So.2d 942, 943-44 (Ala.1984):

"A directed verdict is proper only when there is a complete absence of proof on a material issue or where there are no disputed questions of fact on which reasonable people could differ. Ritch v. Waldrop, 428 So.2d 1 (Ala.1982). When a motion for directed verdict is requested, the entire evidence must be viewed in a light most favorable to the opposing party. Ott v. Fox, 362 So.2d 836 (Ala.1978)."

Defendants contend that there is no evidence that the plaintiff reasonably relied upon the alleged misrepresentations. Of course, reasonable reliance is a necessary element of a claim for misrepresentation.

"Because it is the policy of courts not only to discourage fraud but also to discourage negligence and inattention to one's own interests, the right of reliance comes with a concomitant duty on the part of the plaintiffs to exercise some measure of precaution to safeguard their interests. In order to recover for misrepresentation, the plaintiffs' reliance must, therefore, have been reasonable under the circumstances. If the circumstances are such that a reasonably prudent person who exercised ordinary care would have discovered the true facts, the plaintiffs should not recover."

Torres v. State Farm Fire & Cas. Co., 438 So.2d 757, 758-59 (Ala.1983).

Defendants rely heavily on the case of Traylor v. Bell, 518 So.2d 719 (Ala.1987). In Traylor, the plaintiff alleged that an automobile dealer had defrauded him by adding the cost of a protective package to what the plaintiff understood the sale price to be. Plaintiff signed a "retail buyer's order" that contained the higher figure and that did not itemize the charge for the protective package. However, the charge for this protective package was contained in a dealer's "add-on" sticker that was on the car window. In that case, the plaintiff never read the sales documents before he signed them, because he was a poor reader and had poor eyesight. This Court held that there had been no reasonable reliance on the part of the plaintiff.

Defendants in this case strongly urge that if the uneducated plaintiff in Traylor did not reasonably rely upon the alleged misrepresentations there, then the well-educated plaintiff in this case could not be found to have reasonably relied on the misrepresentations alleged to have been made here.

Plaintiff contends otherwise. She argues that the case of Village Toyota Co. v. Stewart, 433 So.2d 1150 (Ala.1983), is more analogous to the present case than is the Traylor case. In Village Toyota, the facts were as follows:

"The plaintiffs saw the sticker, which included a charge for TLC. They subsequently told the defendant's salesman they did not want this option; however, they did want air conditioning and a radio. The defendant then quoted a total price for the car, which should have reflected only the options the plaintiff[s] wished to purchase. There was no price breakdown given for any of these options. Therefore, under the evidence presented, the jury could have found that the plaintiffs were justified in thinking that defendant had subtracted the price of the TLC and added the price of the air conditioning and radio in arriving at the total price. Thus, the plaintiffs' reliance on the defendant's misrepresentation was reasonable under these circumstances."

433 So.2d at 1154-55.

We are of the opinion that the present case is more like Village Toyota than like Traylor. In Traylor, the cost of the protective package was added into the total price without the plaintiffs ever knowing about that charge at all, even though the cost of the protective package was clearly visible in an "add-on" sticker on the car. The plaintiff apparently never inquired about the protective package, and, had he examined the final price on the sales agreement or the "add-on" sticker, he would have noticed the difference due to that charge. Here, as in Village Toyota, the plaintiff did inquire about the various options and stated that she would pay for some but not for others. Also, the jury could have found that she was not given the worksheet, and neither of the contract documents contained a breakdown of which charges had been added to the price; as in Village Toyota, in this case the jury could have found that the plaintiff was justified in thinking that the defendants had correctly subtracted the price of the protection package...