Village Toyota Co., Inc. v. Stewart

• Decision Date: 06 May 1983
• Citation: 433 So.2d 1150
• Parties: VILLAGE TOYOTA COMPANY, INC. v. Alesa Mae STEWART and Jesse C. Stewart. 81-655.
• Court: Alabama Supreme Court

Page 1150

433 So.2d 1150

VILLAGE TOYOTA COMPANY, INC. v.Alesa Mae STEWART and Jesse C. Stewart.

81-655.

Supreme Court of Alabama.

May 6, 1983.

Rehearing Denied June 3, 1983.

Robert M. Harper of Harper & Meadows, Auburn, and William H. Mills of Redden, Mills & Clark, Birmingham, for appellant.

Ernest C. Hornsby of Hornsby & Schmitt, Tallahassee, for appellees.

PER CURIAM.

This is a tort action for fraudulent misrepresentation and suppression of a material fact which the defendant was under an obligation to communicate.This cause of action arose out of the sale of an automobile by Village Toyota Company, Inc.(defendant and appellant herein), to the plaintiffsAlesa Mae Stewart and her husband Jesse C. Stewart.The plaintiffs alleged that they were charged twice for an optional warranty.The jury found for the plaintiffs and awarded damages of $50,000.00.

In October 1980, the plaintiffs contacted a salesman for the defendant, an automobile dealer in Auburn, and told him they were interested in buying a Toyota.The salesman told the plaintiffs that the price for the car they were interested in was $5,400.00.On October 20, the plaintiffs went to the defendant dealership to look at the car and to discuss the purchase.The plaintiffs decided that they would purchase the car that had been described in the telephone conversation.The salesman told them that some additional accessories had been added to the car and that the total price as it now stood was $5,800.00.Plaintiffs indicated that they also wanted air conditioning and an AM-FM stereo radio.

At this time, plaintiffs were the owners of a 1976 Mercury.The salesman indicated he would allow $1,700.00 for the Mercury as a trade-in.Plaintiffs rejected this offer and the salesman inquired if plaintiffs would accept $2,300.00 for a trade-in, and the plaintiffs indicated that this would be acceptable.At that time the salesman began to fill out a buyer order form.The salesman indicated that the total price of the car with the air conditioning and radio requested would be $6,706.56.The salesman then asked if the plaintiff would like to purchase the "Tender Loving Care"(TLC) warranty package as an option at a cost of $217.00.Plaintiffs declined to buy the TLC package.The salesman then asked them to sign the order form indicating thereon that they did not want to buy the TLC package.The salesman then took the order form to the business manager, who rejected the proposed order but indicated that it would be acceptable to allow $2,200.00 for a trade-in on plaintiffs' car.At this point the salesman filled out another buyer order form, this time listing the trade-in value as $2,200.00.Plaintiffs again indicated that they did not want the TLC package.The business manager approved this transaction.

At trial the window sticker from the automobile was introduced.The first sticker shows a total price including the TLC option of $5,423.61 for the car.This is approximately the price that was quoted to the plaintiffs in the first telephone conversation with the defendant's salesman.In addition, this car was equipped with stripes, wheel molding, and door guards, bringing the price to $5,843.56.This is approximately the price that was quoted to the plaintiffs before they indicated they wanted air conditioning and an AM-FM stereo radio.

After all of these negotiations, plaintiffs were taken to the office of the business manager, where the business manager discussed the TLC warranty program in more detail with them, and subsequently the plaintiffs agreed to purchase the warranty.The business manager then filled out a document which showed an additional charge of $217.00 for TLC.The plaintiffs subsequently took their new car and left the dealership.They did not receive any of the documents other than the window sticker at the time they took the automobile home.

After receiving the documents in the mail, the plaintiffs concluded that they had been charged twice for the TLC option: once in the base sticker price and a second time by the business manager.Mr. Stewart, one of the plaintiffs, went to the defendant's place of business to inquire how much the air conditioning and the radio cost.The business manager indicated that he did not have that information; however, he said it appeared to him that the plaintiffs had not been charged twice for the TLC.The business manager told Stewart that the reason the $217.00 option for TLC, as reflected on the window sticker, was not subtracted from the original price was that he had allowed more than the true value of the Mercury as a trade-in allowance.The manager explained that the Mercury was not worth more than $1,800.00 or $1,900.00.

Mr. Stewart subsequently spoke with the salesman and inquired about the charges for the air conditioner and radio.The salesman told Stewart that that information was not available and he could not tell Stewart.Mr. Stewart also stated to the salesman that he thought he had been charged twice for the TLC.The salesman responded he was not charged twice; rather, he was allowed more than his used car trade-in was worth, which more than compensated for the $217.00 shown for the TLC option on the window sticker.He stated this was a tactic used by salesmen to make a deal.

The plaintiffs subsequently contacted a lawyer, who met with Don Riggins, the general manager of the defendant.Riggins indicated that he did not see anything wrong with the transaction.Plaintiffs subsequently filed this suit asking $217.00 compensatory and $75,000.00 punitive damages.Following a judgment in the lower court in favor of the plaintiffs, the defendant brought this appeal.

Defendant urges this Court to reverse the trial court on the basis that there was insufficient evidence to support a judgment for fraudulent misrepresentation under Code 1975, § 6-5-101.The elements of fraudulent misrepresentation under this code provision are: (1) a false representation, (2) concerning a material existing fact, (3) which is relied upon by the plaintiff, and (4) damage to the plaintiff as a result of the false representation.Earnest v. Pritchett-Moore, Inc., 401 So.2d 752(Ala.1981).

As to the first element, the plaintiffs' complaint alleged that the defendant"misrepresented to the plaintiffs that the sales price did not include a charge for an optional new car protection plan known as Tender Loving Care."The defendant maintains the salesman never explicitly told the plaintiffs that the sales price did not include the TLC package.Defendant maintains that the plaintiffs were given a total package price, including air conditioning and radio of $6,706.56.Further, defendant argues that the sticker price, which included TLC, should not be considered as forming part of the basis of this transaction.We cannot agree.

When the plaintiffs initially called the dealership, they were quoted the sticker price for this particular car, which included the TLC package.When they arrived at the dealership the sticker price was again the initial price quoted.Plaintiffs told the salesman that they did not want TLC added into the price of the Toyota.However neither the salesman, nor the business manager, subtracted the cost of TLC from the total sales price.

It appears to this Court that the sales price of $6,706.56 was reached by adding the following: 1. total distributor's suggested retail price (or sticker price, which included TLC) of $5,423.61, 2. additional options added by the dealer bringing the price to $5,843.56, 3. air conditioning, and 4.AM-FM stereo radio bringing the price to $6,706.56.Since the initial component, the sticker price, included a $217.00 charge for TLC, we find the defendant's arguments concerning a package price unconvincing.

We are further moved to this result by the admissions of the defendant's own sales manager and salesman, both of whom stated that the $217.00 charge on the window sticker was left in the total price because of an alleged over-allowance on the trade-in.They explicitly told the plaintiffsthey were receiving a $2,200.00 trade-in allowance; they implicitly indicated that there was no charge being made for TLC.If one of these is true, then necessarily the other is false.Thus there was sufficient evidence of a misrepresentation in this case.

The defendant also argues that the fraudulent misrepresentation must concern a material existing fact which supplies the inducement or motivation for plaintiffs' action.Defendant states that the amount of the trade-in allowance was the critical factor which induced the purchase, not the charge for the TLC package.

We cannot agree.The plaintiffs repeatedly indicated that they did not want the TLC package and it seems fair to presume that they would not have accepted the deal if they had been told they were paying for an option which, at that time, they did not want.Further, the charge for the TLC and the amount of the trade-in allowance, by defendant's own admissions, are inextricably bound together.Plaintiffs indicated they would not accept less than $2,200.00 as a trade-in.If, as defendant argues, the amount allowed for a trade-in was inflated because of the TLC overcharge, then it would be illogical to say plaintiff relied on only one and not the other.

Defendant also maintains that the plaintiffs were not damaged as a result of the misrepresentation.Again, we disagree.Initially, the plaintiffs signed an order form indicating they were not being given TLC although the sticker price included a charge for it.They later agreed to pay an additional $217.00 (over and above the "package price" of $6,706.56) in order to obtain this option.We are of the opinion that the jury could have found that the plaintiffs' actual damages as a result of this transaction were $217.00.

Finally, defendant argues that even if there was a material misrepresentation, the plaintiffs' reliance must have been reasonable under the...