Williams v. Toyota of Jefferson, Inc.

• Decision Date: 09 March 1987
• Docket Number: Civ. A. No. 84-5346.
• Citation: 655 F. Supp. 1081
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: Barry M. WILLIAMS v. TOYOTA OF JEFFERSON, INC. Gulfport Auto Auction, Inc. Gene H. Simmons, Inc. formerly Tim's Trading Post, Inc.

655 F. Supp. 1081

Barry M. WILLIAMS v. TOYOTA OF JEFFERSON, INC. Gulfport Auto Auction, Inc. Gene H. Simmons, Inc. formerly Tim's Trading Post, Inc.

Civ. A. No. 84-5346.

United States District Court, E.D. Louisiana.

March 9, 1987.

John V. Seago, Covington, La., for plaintiff.

Fernand F. Willoz, III, New Orleans, La., for Toyota of Jefferson, Inc.

Linda A. Liljedahl, New Orleans, La., for Gulfport Auto Auction, Inc.

Kenneth F. Sarana, Hammond, La., for Gene H. Simmons, Inc.

FINDINGS AND CONCLUSIONS

LIVAUDAIS, District Judge.

On July 26, 1983, Barry M. Williams, then aged 19, went through one of the learning experiences to which life subjects the young as they pass into adulthood. He bought a used car. As a result, he has sued the automobile dealer from whom he purchased the vehicle, Toyota of Jefferson, Inc. (Toyota of Jefferson); the dealership from which Toyota of Jefferson acquired the vehicle, Tim's Trading Post (Tim's); and an automobile auction service that handled the transfer from Tim's to Toyota of Jefferson, Gulfport Auto Auction, Inc. (Gulfport), for odometer violations under provisions of the Motor Vehicle Information and Cost Savings Act (the Act), 15 U.S.C. § 1981 et seq. An additional claim for violation of the Act with respect to a second vehicle has been brought against Toyota of Jefferson alone, along with pendent state law claims in redhibition and for unfair trade practices. This Court has jurisdiction under 28 U.S.C. § 1331.

The following facts are entered on the basis of the stipulations of the parties and the evidence presented during a non-jury trial.

The Toyota Vehicle

On or about July 26, 1983, Toyota of Jefferson sold to Barry M. Williams a 1980 Toyota Tercel for $4,100.00. At that time, and at all times pertinent to this action, Toyota of Jefferson was engaged in the business of buying and selling used automobiles. On the bill of sale, Toyota of Jefferson, through its agent, Bruce Cox, noted that the mileage on the vehicle was 34,367 miles. The automobile dealership was familiar with odometer disclosure statements, for it required the plaintiff to complete one concerning the car that he was trading in. However, Toyota of Jefferson failed to furnish Williams with such a statement, or a title document, or the prior bills of sale on the car, at the time of the transfer.

The subject vehicle had been purchased for resale by Toyota of Jefferson from Tim's on July 19, 1983. According to testimony of Bruce Cox, the odometer disclosure statement furnished by Tim's agent, Rick Kitchens, to him as agent of Toyota of Jefferson, did not contain a mileage figure at the time of the transfer. It indicated, furthermore, that the odometer reading should not be relied upon as registering the actual mileage. Some time subsequent to the transfer, the blank left for the mileage figure was filled in with the word "unknown", but Bruce Cox denied completing the form himself.

The title document introduced at trial indicated that before it was sold to Tim's, the Toyota Tercel had had two prior owners. The first, George Robinson, III had sold the car on June 23, 1983, certifying on his disclosure statement an odometer reading of 66,072 miles. Robinson's vendee, Adams Toyota of Baton Rouge, then transferred the vehicle to Tim's on July 5, 1983; the odometer mileage statement supplied by Adams Toyota certified an odometer reading of 66,124 miles. Sometime between the sale by Adams Toyota to Tim's on July 5 and the sale by Toyota of Jefferson to Barry Williams on July 26, the odometer on the Tercel was "rolled back". Although the actual mileage on the car at the time of the transfer to the plaintiff cannot be determined, the evidence indicates that it was at least 66,124 miles rather than the 34,367 miles read from the odometer and represented on the bill of sale from Toyota of Jefferson as the mileage on the car. According to the testimony of John T. M. Baldwin, an expert on automobile values, mileage of 66,124 rather than 34,367 on a 1980 Toyota Tercel would reduce the value of the car at the time of purchase by $1500.00. Barry Williams professed satisfaction with the car, which he totalled in a one-car accident.

The BMW Vehicle

On or about January 28, 1984, Barry M. Williams agreed to purchase from Toyota of Jefferson a 1975 model BMW 2002 for $3,565.51. He signed a Retail Purchase Order which stated that the mileage on the car was 54,124 miles. Although Williams paid for the car on January 30, 1984, he did not receive a bill of sale until February 11, 1984. That document repeated the mileage information on the purchase order: 54,124 miles. Once again, Toyota of Jefferson failed to furnish an odometer disclosure statement to the plaintiff at the time of the sale. Moreover, Williams testified that during the time that he used the car, the odometer reading remained constant at 54,124 miles. The odometer on the BMW was inoperable and incapable of recording mileage at the time of its transfer to Barry Williams.

Toyota of Jefferson had at least constructive, if not actual knowledge that the odometer was non-functional, and that it could not be relied upon to reflect the actual miles that the car had been driven. Toyota of Jefferson and its affiliated company, Toyota Westbank/Tri-Parish Auto Sales, Inc., had had possession of the BMW for more than six months prior to the sale to Williams. During that time, Toyota Westbank had performed extensive repairs upon the vehicle, as evidenced by the repair orders dated September 8 and October 3, 1983.

At the time of the sale to Williams, the non-functional odometer was the least of the BMW's problems. Among the other vices besetting the unfortunate vehicle were a leaking head gasket, a warped cylinder head, a deteriorated radiator which broke into four pieces shortly after purchase, a bent frame, broken motor mounts, and a wrinkled firewall, indicating, according to the expert testimony of C. Douglas Johnson, Jr., a professional repairman of foreign cars, that the car had been wrecked. From salt deposits at various locations throughout the engine and chassis, he concluded that the car had been submerged in water. As a result, the vehicle, immediately after purchase, could not be driven for more than a very short distance without stopping to add water. Ultimately, it could not be driven at all. It is not difficult to credit the plaintiff's testimony that he would not have purchased the car had he known of these defects; because of them, he got less than three weeks' use out of the BMW.

Toyota of Jefferson had at least constructive, if not actual knowledge of the latent defects of the BMW. As we have noted above, Toyota Westbank, an affiliate of Toyota of Jefferson, had performed extensive repairs on the car during the six months preceding the sale. Mr. Johnson, in his expert testimony, established that any experienced mechanic who looked at the oil in the BMW would have known that water was leaking into it. Yet Toyota of Jefferson either did not investigate and discover the blown head gasket, or did, and concealed the defect from the plaintiff. Toyota of Jefferson did not present at trial any evidence that an intervening cause had produced these defects after the sale.

The plaintiff tendered the BMW to Toyota of Jefferson for repairs in mid-March, 1984. From that time until June 21, 1984, the car sat on the defendant's lot; the dealership had ample opportunity to repair it, but either could not or would not. On June 21, 1984, Barry Williams had the car towed away for attempted repairs by Mr. Johnson and by A-1 Radiator of Covington. These attempts, which cost the plaintiff $814.20, were unsuccessful, owing to the seriousness of the defects in the BMW. Therefore, Mr. Williams sought recission of the sale for redhibitory vices in the thing sold, and tendered the vehicle back to Toyota of Jefferson. Toyota of Jefferson has refused the tender. The BMW has since become a fixture in the Williams' back yard, while Barry Williams, according to his uncontroverted testimony, continues to pay on the promissory note for a loan of $3,565.51 at 18% interest per annum, which he obtained on January 31, 1984 and used to finance the car.

The Complaint Under the Act

The Motor Vehicle Information and Cost Savings Act, 15 U.S.C. § 1981 et seq., was passed by Congress "to establish certain safeguards for the protection of purchasers with respect to the sale of motor vehicles having altered or reset odometers." To effectuate this goal, § 1988 of the Act empowered the Secretary of Transportation to prescribe rules requiring the disclosure of actual mileage. Toyota of Jefferson, in its conduct with respect to both of the vehicles purchased by Barry Williams, disregarded these rules.

The Odometer Disclosure Regulations, 49 CFR §§ 580.1-580.7, require that a transferor of a vehicle furnish a written statement to the transferee before executing a transfer of ownership document. Besides supplying such information as names, addresses, date of transfer, vehicle identity, and odometer reading, the statement must certify that, to the best of the transferor's knowledge, the odometer reading reflects the actual miles that the vehicle has been driven, and that the transferor has no knowledge that anyone has altered, set back, or disconnected the odometer. 49 CFR §- 580.4(a)-(c). Toyota of Jefferson provided Mr. Williams with nothing even approximating this statement for either vehicle, though its agents were clearly aware that it was required, for the plaintiff had to complete one in order to trade in a Monte Carlo for the Toyota Tercel. Thus, the defendant violated § 1988(b) of the Act, which provides, "No transferor shall violate any rule prescribed under this section or give a false statement to a transferee in making any disclosure required by such a rule". In addition, in acquiring the 1980 Toyota vehicle for resale, Toyota of Jefferson accepted a written disclosure statement...