Stepp v. Duffy

• Decision Date: 07 August 1995
• Docket Number: No. 49A02-9410-CV-00589,49A02-9410-CV-00589
• Citation: 654 N.E.2d 767
• Parties: Mark STEPP, Anita Stepp, Agreeable Motors, Inc., Appellants, v. Beverly DUFFY, Kenneth Duffy, Appellees.
• Court: Indiana Appellate Court

Page 767

654 N.E.2d 767

Mark STEPP, Anita Stepp, Agreeable Motors, Inc., Appellants, v. Beverly DUFFY, Kenneth Duffy, Appellees.

No. 49A02-9410-CV-00589.

Court of Appeals of Indiana.

Aug. 7, 1995.

Rehearing Denied Oct. 24, 1995.

James C. Spencer, Indianapolis, for appellants.

Steven R. Hofer, John H. Kenney, Indianapolis, for appellees.

OPINION

FRIEDLANDER, Judge.

Mark Stepp, Anita Stepp and Agreeable Motors, Inc. (Agreeable) appeal the trial court's judgment entered in favor of Beverly and Kenneth Duffy [the Duffys] which determined that the Stepps and Agreeable were jointly and severally liable to the Duffys for violating the Motor Vehicle Information and Cost Savings Act. ¹ [Hereinafter referred to as the Federal Odometer Act].

We affirm the judgment but remand this cause to the trial court for recalculation of damages.

The facts most favorable to the judgment are that on April 20, 1992, the Duffys purchased a 1988 Buick LeSabre from Agreeable, an automobile dealership in Indianapolis. Mark and Anita were the principal shareholders of Agreeable. The Buick was a four-door model, and the odometer indicated a reading of 75,054 miles at the time of purchase. Duffy paid a total of $5,750 for the vehicle, including sales tax. Agreeable had purchased the Buick for $4,100 at an auction and Mark signed the purchase contract which listed the mileage as 114,326.

Kenneth and Mark were acquainted, as Kenneth had previously worked with Mark's father for nineteen years at a different car lot. Before purchasing the car, Mark informed Kenneth that it was a nice vehicle and that he had been driving it for a couple of months as his personal automobile. Kenneth informed Mark that he wanted a low-mileage automobile, and Mark explained that the Buick had 75,000 miles on it because it was previously driven by an executive who primarily traveled on interstates.

Kenneth purchased the Buick after Mark permitted him to test-drive the vehicle over the weekend. Kenneth borrowed the money to purchase the car from a credit union and made a lump-sum payment to Agreeable. Prior to receiving title, Kenneth painted the car and put two new tires on it, spending $317.

Agreeable presented title to the Duffys which was dated May 7, 1992. Anita signed on behalf of Agreeable as Secretary of the corporation, and the odometer statement provided in relevant part as follows:

"We swear or affirm that the information entered on this form is correct. We understand that a false statement may constitute the crime of perjury.... I certify to the best of my knowledge that the odometer reading is the actual mileage of the vehicle unless one of the following statements is checked.... [Nothing checked]. Mileage (no tenths) 75,054."

Record at 130.

The title indicated that Doug DeWitt had sold the vehicle to Agreeable. The date of that sale was listed as February 13, 1992, with a mileage of 74,326. Kenneth contacted DeWitt because he was interested in the vehicle's maintenance history. DeWitt told Kenneth that the Buick had approximately 114,000 miles on it at the time he traded it at another Indianapolis car dealership. Kenneth immediately contacted Mark, and according to Kenneth's testimony, the following conversation ensued:

"So Mark says, 'Well, have your talked to anybody about this?' And I said, 'No.' He said, 'Have you contacted an attorney?' I said, 'No.' I said, 'Why?' He says, 'Well, because I've done this.' I said, 'You've done what?' He says, 'Well, I changed the speedometer.' Or, no, excuse me, he said--let me make sure. He said, 'Kenny I've done this.' And I said, 'Well, Mark, why didn't you tell me so?' He said, 'Well, because you would not have bought the car or you would have been mad at me.' "

Record at 134-35.

DeWitt testified that he purchased the car new in 1988 and had put nearly 115,000 miles on it. The speedometer was functioning at all times, and DeWitt received $3500 for the Buick when he traded it in 1992. DeWitt also testified that he did not sign the certificate of title which was presented to the Duffys; nor did he execute a power of attorney on behalf of any of the defendants. Anita knew that DeWitt did not sign the power of attorney she used to obtain a duplicate certificate of title. As indicated above, the title verified that the Buick had only 75,054 miles and that DeWitt sold the car directly to Agreeable.

Anita testified that she prepared the contract for the Duffys. She drove the Buick every day for over a month as a personal vehicle, and noticed that the speedometer had broken during that time. Anita testified that she did not know whether the odometer had also broken and would not have noticed how many miles she drove the car prior to the sale. Anita's routine procedure in completing certificates of title was to have someone else look at the vehicle and tell her the mileage without checking it herself. Anita testified that she did, however, personally record the mileage from the Buick.

The Duffys filed a complaint for damages on November 20, 1992, against the Stepps and Agreeable alleging fraud, a violation of the Federal Odometer Act, ² and a violation of the Indiana Deceptive Consumer Sales Act. ³ Following a bench trial on April 29, 1994, judgment was entered for the Duffys as follows:

"This cause came before the court for trial on April 29, 1994, all parties appearing personally and by counsel. This Court had personal jurisdiction over the parties by virtue of the filing of the complaint and service of summons herein; and further had subject matter jurisdiction over the issues raised herein. Evidence submitted and heard. Cause continued for the submission of evidence as to attorney's fees, which hearing was had on June 7, 1994.

Comes now the court and, having been duly advised in the premises, finds judgment for the plaintiffs and against the defendants jointly and severally under the Motor Vehicle Information and Cost Savings Act [15 U.S.C. § 1981 et seq.] which judgment is broken down as follows:

1. Statutory treble damages in favor of the plaintiffs in the amount of Seven Thousand Six Hundred Fifty Dollars ($7650.00).

2. Statutory attorney fees in the amount of Seven Thousand One Hundred Ninety-Four Dollars and Fifty-Four Cents ($7,194.54) to the plaintiffs' attorneys, Steven R. Hofer and John H. Kennedy.

3. Court costs in the amount of Fifty-five Dollars ($55.00).

WHEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that the plaintiffs recover of and from the defendants jointly and severally in the total sum of $14,844.55 on their complaint; the costs of this action are to be assessed against the defendants."

Record at 96-97.

The Stepps and Agreeable appeal and present the following issues which we have consolidated:

1. Did the trial court err in finding that the Stepps and Agreeable violated the Federal Odometer Act with intent to defraud?

2. Did the trial court err in finding Mark and Anita Stepp individually liable for damages?

3. Did the trial court err in finding Anita Stepp personally liable?

4. Did the trial court err in awarding damages to the Duffys?

5. Did the trial court err in awarding attorney fees to the Duffys?

1.

When determining whether sufficient evidence was presented to support the trial court's judgment, this court neither weighs the evidence nor judges the credibility of witnesses. Don Medow Motors, Inc. v. Grauman (1983), Ind.App., 446 N.E.2d 651; Riverside Ins. Co. v. Pedigo (1982), Ind.App., 430 N.E.2d 796. We will consider only that evidence and reasonable inferences therefrom most favorable to the verdict, and will affirm if the verdict is supported by substantial evidence of probative value. Don Medow, supra; Royer v. Pryor (1981), Ind.App., 427 N.E.2d 1112.

We begin our discussion with the relevant portions of the Federal Odometer Act:

" § 1983. Devices causing odometer to register other than true mileage driven prohibited.

No person shall advertise for sale, sell, use, or install, or cause to be installed, any device which causes an odometer to register any mileage other than the true mileage driven. For purposes of this section, the true mileage driven by the vehicle is that mileage driven by the vehicle as registered by the odometer within the manufacturer's designed tolerance.

§ 1984. Change of mileage indicated on odometer prohibited.

No person shall disconnect, reset, or alter or cause to be disconnected, reset, or altered, the odometer of any motor vehicle with intent to change the number of miles indicated thereon.

§ 1985. Operation of motor vehicle with knowledge of disconnected or nonfunctional odometer prohibited.

No person shall, with intent to defraud, operate a motor vehicle on any street or highway knowing that the odometer of such vehicle is disconnected or nonfunctional.

§ 1986. Conspiracy to violate odometer requirements.

No person shall conspire with any other person to violate section 1983, 1984, 1985, 1987, or 1988 of this title.

§ 1989(a). Civil actions to enforce liability for violations of odometer requirements; amount of damages; jurisdiction; period of limitation.

(a) Any person who, with intent to defraud, violates any requirement imposed under this title shall be liable in an amount equal to the sum of

(1) three times the amount of actual damages sustained or $1,500, whichever is the greater; and

(2) in the case of any successful action to enforce the foregoing liability, the costs of the action together with reasonable attorney fees as determined by the court."

Since 1972, the federal law has been designed to prohibit tampering with odometers on motor vehicles and to compensate persons victimized by the tampering. The language quoted above in the Federal Odometer Act demonstrates that diligence is required on behalf of the seller of an automobile to accurately disclose the reading on an odometer. There is an affirmative duty on automobile dealers to discover defects. Haynes v. Manning, 917 F.2d 450 (10th Cir.1990). The seller is...