Thomas Auto Co., Inc. v. Craft, 88-200
| Decision Date | 23 January 1989 |
| Docket Number | No. 88-200,88-200 |
| Citation | 297 Ark. 492,763 S.W.2d 651 |
| Parties | , 8 UCC Rep.Serv.2d 29 THOMAS AUTO CO., INC., Appellant, v. James E. CRAFT and, Alice R. Craft, Appellees. |
| Court | Arkansas Supreme Court |
Michael G. Smith, Little Rock, for appellant.
Sandra Tucker Partridge, Benton, James Swindoll, Little Rock, for appellees.
The appellees, James E. and Alice R. Craft, found defects in a car they purchased from the appellant, Thomas Auto Co., Inc. (Thomas). They returned the car and revoked their acceptance of it. Thomas refused to refund the purchase price. In their original and first amended complaints, the Crafts sought restitution of the purchase price plus incidental and consequential damages and, alternatively, damages for breach of warranty. They further amended their complaint to add a claim for damages for deceit. The trial court instructed the jury on both restitution based on revocation of acceptance and damages for misrepresentation. The jury awarded both as well as punitive damages. The primary issue presented concerns whether a rescinding party may obtain damages for misrepresentation in addition to restitution of the purchase price. We hold that the claimant may not have both a restitutionary award and compensatory damages for deceit. We also conclude that if the Crafts are ultimately awarded restitution of the purchase price plus incidental and consequential damages, rather than damages for deceit, punitive damages may be awarded if the tort of deceit has been proven.
The Crafts contracted with Thomas to purchase a new Chrysler New Yorker automobile on August 30, 1986. The Crafts thought they were purchasing a new car, and, although there was no evidence that the car had been owned by any other purchaser from the dealer, it was clear that the car had been damaged and Thomas knew it but did not reveal the damages to the Crafts.
The Crafts first discovered a defect in the car's vinyl roof. Thomas attempted unsuccessfully to fix it, but ultimately ordered a new vinyl roof for the car. Then the Crafts discovered that the hood of the car had been repainted and there were dents on it elsewhere. They became completely dissatisfied with the car. They negotiated with Thomas to return the car, but Thomas refused to return the purchase price. The Crafts notified Thomas on December 16, 1986, of their revocation of acceptance. The car was returned to Thomas on December 30, 1986.
A salesman for Thomas testified that the hood of the car was repainted in the Thomas shop and that it was not uncommon for Thomas to decline to inform a purchaser of a purportedly new car that it had been damaged prior to the sale. Thomas presented evidence that new cars are sometimes defective when received by the dealer and that they are sometimes damaged while on the dealer's lot awaiting sale. No evidence was presented to show that the car was not new, in the sense that it had been previously purchased from the dealer or driven extensively by anyone other than the Crafts.
In instruction number ten, which was read to the jury, it was stated that
If you [the jury] decide for James E. and Alice R. Craft against Thomas ... on the question of damages with respect to the misrepresentation ... you must fix the amount of money which will reasonably and fairly and adequately compensate the Crafts for ...: The difference in the fair market value of the automobile as it is and as it was represented to be at the time of the sale.
Instruction number eleven was, in pertinent part, as follows: "If you decide for [the Crafts] ... on the question of revocation of acceptance, you must then fix the amount of money which would refund the payment made plus the trade-in allowance on the automobile traded in by [the Crafts] ... plus incidental and consequential damages incurred...."
Instruction twelve permitted the jury to return punitive damages if they found Thomas knew or should have known its conduct, presumably that contemplated in instruction number ten, would result in injury to the Crafts and acted with malice or in reckless disregard of the consequences from which malice might be inferred.
After voicing his objection to instruction number ten on the ground that there was insufficient evidence to support the claim of misrepresentation, counsel for Thomas said:
And for the additional reason that Court's Instruction Number 11 is presenting to the jury the option of additionally finding that the plaintiffs are entitled to revocation of acceptance, and therefore the three instructions together, 9, 10, and 11 in effect would authorize the jury to find that revocation was proper in this case and therefore, the plaintiffs were entitled to be made whole as they were on the date of the sale, and in addition, be allowed an additional sum for an alleged misrepresentation about whether or not the vehicle was new or not, when there's no evidence to show that it was anything other than a new vehicle.
* * *
* * *
Object to the form of instruction that permits the jury to find both compensatory damages for revocation of acceptance for misrepresentation and I object to the jury form that permits them to find punitive damages.
The verdict form, as executed by the jury, was as follows:
Thomas moved for a new trial on the basis that it was error to give both the restitution instruction based on rescission and the damages instruction based on affirmance and the allegation of deceit, and that the result had been a double recovery.
The objection
The Crafts contend the objection made to the instructions was not sufficiently specific and that it was only an objection stating there was insufficient evidence to show the car was anything other than a new car as it had been represented.
The objection was not only specific, it was right on the point which is being argued on appeal. Although counsel for Thomas threw in a remark about the insufficiency of the evidence to prove deceit, that did not detract from his making the exact point that the jurors should not be allowed to award both restitution and damages for deceit, as that would amount to a double recovery.
If the instructions, taken together, were erroneous because they failed to tell the jury that restitution and damages could only be awarded in the alternative, the objection was sufficient to inform the trial court of the problem. An objection to an erroneous instruction is sufficient if it is timely and states a valid reason. Ark.R.Civ.P. 51; Tandy Corp. v. Bone,...
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