Ward v. W. Cnty. Motor Co., SC 92675.

• Court: United States State Supreme Court of Missouri
• Citation: 403 S.W.3d 82
• Docket Number: No. SC 92675.,SC 92675.
• Parties: Tara L. WARD, et al., Appellants, v. WEST COUNTY MOTOR COMPANY, INC., d/b/a West County BMW, Respondent.
• Decision Date: 28 May 2013

403 S.W.3d 82

Tara L. WARD, et al., Appellants,
v.
WEST COUNTY MOTOR COMPANY, INC., d/b/a West County BMW, Respondent.

No. SC 92675.

Supreme Court of Missouri,
En Banc.

April 9, 2013.
Modified on Court's Own Motion May 28, 2013.

[403 S.W.3d 83]

Mitchell B. Stoddard of Consumer Law Advocates in St. Louis, Douglas M. Ommen, Missouri Attorney General Chris Koster and Brian T. Bear of the attorney general's office in Jefferson City, for Appellants.

Bryan M. Kaemmerer and Brian E. McGovern of McCarthy, Leonard, Kaemmerer LC in St. Louis, for Respondent.

RICHARD B. TEITELMAN, Chief Justice.

Tara L. Ward, Kamal Yassin, Mona Yassin, Matthew F. Toole, Curt S. Zargan, and Larry L. LaBarge (plaintiffs) appeal the judgment of the trial court granting West County Motor Company, Inc. d/b/a West County BMW's (West County) motion to dismiss their claim for violation of the Missouri Merchandising Practices Act. The judgment is affirmed in part and reversed in part.

I. BACKGROUND

Each plaintiff paid a deposit to West County to secure the purchase of a vehicle. Each plaintiff signed a vehicle buyer's order providing that “ALL DEPOSITS ARE NON REFUNDABLE.” All plaintiffs, except LaBarge, allege that West County told them that their deposits were refundable if the purchase was not completed. When plaintiffs decided not to purchase

[403 S.W.3d 84]

their vehicles, they were told their deposits would not be refunded. Plaintiffs filed suit against West County for violation of the Missouri Merchandising Practices Act (“MMPA”), section 407.010 et seq.,¹ and for conversion.

Plaintiffs alleged that West County engaged in unfair practices in violation of the MMPA by failing to give them a rescission period as required by section 365.070. They also alleged that West County violated the MMPA by:

1. Converting funds or property paid by plaintiffs when it failed to apply them to the purchase or lease of a motor vehicle;

2. Failing to act in good faith when it refused to make like-kind refunds of deposits after the sale or lease had been terminated, and before plaintiffs had taken delivery of a motor vehicle; and

3. Using a liquidated-damages clause in its contracts that was really a disguised penalty provision.

The trial court sustained West County's motion to dismiss the MMPA claims for failure to state a claim upon which relief could be granted. The plaintiffs voluntarily dismissed their common law conversion claim in Count II so they could appeal the judgment.

II. ANALYSIS A. Standard of Review

The standard of review for a trial court's grant of a motion to dismiss is de novo. Lynch v. Lynch, 260 S.W.3d 834, 836 (Mo. banc 2008). When this Court reviews the dismissal of a petition for failure to state a claim, the facts contained in the petition are assumed true and construed in favor of the plaintiffs. Id. If the petition sets forth any set of facts that, if proven, would entitle the plaintiffs to relief, then the petition states a claim. Id.

B. The MMPA

The MMPA supplements the common law definition of fraud. State ex rel. Koster v. Professional Debt Management, LLC, 351 S.W.3d 668, 671 (Mo.App.2011). The MMPA creates an individual cause of action under the MMPA for any person “who purchases or leases merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 407.020.” Section 407.025.1. Section 407.020 provides that it is unlawful to use any deceptive or unfair practices “in connection with the sale or advertisement of any merchandise in trade or commerce.” The transaction at issue in this case falls within the ambit of the MMPA.

The MMPA is drafted broadly and there is no specific definition of deceptive practices contained in the statute. State ex rel. Koster, 351 S.W.3d at 672. However, 15 CSR § 60–8.020, promulgated in conjunction with the MMPA, defines “unfair practice” as a practice that either: “1. Offends any public policy as it has been established by the Constitution, statutes or common law of this state, or by the Federal Trade Commission, or its interpretive decisions; or 2. Is unethical, oppressive or unscrupulous and...