Seller of bum ’Vette online pays in court

mike_israel

Amphicar Forum Admin
Staff member
Saw this in today's Hemming's newsletter. Anyone who has used ebay for a while has likely encountered misrepresented vehicles or items (I think back to the POS Citroen I once bought). Looks like the courts are starting to hold sellers liable who misrepresent vehicles on line.

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Seller of bum ’Vette online pays in court
Lyle Real of O’Fallon, Missouri, thought he knew what he was getting when he purchased a 1970 Corvette on eBay in 2002 from a seller in Montville, New Jersey. Lyle isn’t a novice car collector, and the $13,651 he paid for a base 300hp Corvette described as in “good condition,” with accompanying photographs, was a believable deal.

But according to the opinion published by the New Jersey State Supreme Court on April 8, 2009, “Upon receipt of the car, however, plaintiff realized the condition of the vehicle was not as advertised, and he filed suit against (name withheld to protect the guilty), individually, and (ditto) a company owned by (defendant), alleging breach of contract, common law fraud, negligent misrepresentation, violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -166, and fraudulent inducement. In their answer, defendants denied all liability.”

How bad was the car? The description stated:

1970 Corvette Convertable [sic]. Matching numbers, One owner Car, 350/300HP 4 speed, Good Frame, New exhuast [sic] system, Power steering, Soft top is good. New Carpet. Runs Strong, Original rallys, Original radio/cassette. Title is original from 06/24 1970.

Vehicle Condition Needs door hinge pins, Radiator support, original interior is ok but seats are a little worn. Painted once now has a few chips. Windshield has a small crack in the lower left corner.

But according to the decision, when Lyle got it home, it was not a “one-owner car,” and: He brought it to Dan Hughes, a mechanic at Just Corvettes, for an “assessment” and “a safety inspection.” When Hughes “put the car on the lift to start the safety inspection,” he discovered the frame, which was advertised as “good,” was “rusted nearly in half,” rendering the car unsafe and unlicensable in Missouri. Further inspection of the car showed the soft top, which was also advertised as “good,” was in poor condition (“someone had stapled it with metal staples to hold it together”), the driver’s seat was “ripped in numerous places,” “the driver’s seat frame was broken, and the radio/cassette, which was advertised as “original,” was an aftermarket item.

The issue at the heart of the case was whether the transaction was protected under the CFA. Lyle won a judgment in trial court in 2005 “that dismissed the complaint against [company], but awarded plaintiff treble damages of $25,953, counsel fees of $29,950, and costs of $6,544.81 under the CFA.” He appealed, in part because of the $40,000-plus he’d spent on a restoration; and in part because the earlier judgment ruled that [defendant] wasn’t a dealer. “On appeal, defendant claims the trial court erred in finding “a casual seller of automobiles over the Internet” is “a merchant or dealer pursuant to the Consumer Fraud Act.” In addition, defendant contends the trial court erred in denying his motion to dismiss plaintiff’s consumer fraud claim at the close of plaintiff's case in chief, as was required by Rule 4:37-2(b). “We are constrained to agree.”

This judgment reversed the 2005 decision and awarded Lyle $8,651 (the difference in value between the car he bought, and the car he thought he was buying) — the matter now goes to trial to determine the damages to which Lyle is entitled. We’ll see if they cover either the costs of the restoration, or his time and heartache. But it does send a clear message: You don’t have to be a dealer to be held accountable for fraud. Had the seller acted in what we’ll call “honorable ignorance,” this would not have been a matter for a high court. However, the court found [defendant] deliberately misrepresented the car, thus making him liable to prosecution under the CFA, rather than civil remediation. Expect to see this judgment cited in many cases to come.
- By David Traver Adolphus
 

chasgould

New Member
Very interesting decision, but I do have some observations and some real concerns. The 25K figure probably represents treble damages times the 8K figure that represents the difference between the described car and the received car. The 16K legal fees is high but probably realistic if it went to trial, and 6.5K of expenses is also probably realistic for experts and trial preparation. However, there is no rationale whatsoever for any court to award damages in the amount of restoration expenses for a number of reasons. First, the car was not represented, or sold, as a restored car, so the buyer is not entitiled to a restored car, or the actual cost of restoration. Second, once the buyer realizes that what he got is not what was represented, he has an obligation to mitigate his damages, and connot simply embark on a total restoration, and expect the seller to pay for that. The court should rightfully award a refund of the purchase price in exchange for the return of the car (not likley as the courts do not typically require people to perfirm actions), or alternatively award, the actual cost to repair the car to the described condition (Courts prefer to award damages). The treble damages rightfully apply to that amount of money which represents the difference between the value of described car and received car, which was 8K.
Chas


Saw this in today's Hemming's newsletter. Anyone who has used ebay for a while has likely encountered misrepresented vehicles or items (I think back to the POS Citroen I once bought). Looks like the courts are starting to hold sellers liable who misrepresent vehicles on line.

============================================
Seller of bum ’Vette online pays in court
Lyle Real of O’Fallon, Missouri, thought he knew what he was getting when he purchased a 1970 Corvette on eBay in 2002 from a seller in Montville, New Jersey. Lyle isn’t a novice car collector, and the $13,651 he paid for a base 300hp Corvette described as in “good condition,” with accompanying photographs, was a believable deal.

But according to the opinion published by the New Jersey State Supreme Court on April 8, 2009, “Upon receipt of the car, however, plaintiff realized the condition of the vehicle was not as advertised, and he filed suit against (name withheld to protect the guilty), individually, and (ditto) a company owned by (defendant), alleging breach of contract, common law fraud, negligent misrepresentation, violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -166, and fraudulent inducement. In their answer, defendants denied all liability.”

How bad was the car? The description stated:

1970 Corvette Convertable [sic]. Matching numbers, One owner Car, 350/300HP 4 speed, Good Frame, New exhuast [sic] system, Power steering, Soft top is good. New Carpet. Runs Strong, Original rallys, Original radio/cassette. Title is original from 06/24 1970.

Vehicle Condition Needs door hinge pins, Radiator support, original interior is ok but seats are a little worn. Painted once now has a few chips. Windshield has a small crack in the lower left corner.

But according to the decision, when Lyle got it home, it was not a “one-owner car,” and: He brought it to Dan Hughes, a mechanic at Just Corvettes, for an “assessment” and “a safety inspection.” When Hughes “put the car on the lift to start the safety inspection,” he discovered the frame, which was advertised as “good,” was “rusted nearly in half,” rendering the car unsafe and unlicensable in Missouri. Further inspection of the car showed the soft top, which was also advertised as “good,” was in poor condition (“someone had stapled it with metal staples to hold it together”), the driver’s seat was “ripped in numerous places,” “the driver’s seat frame was broken, and the radio/cassette, which was advertised as “original,” was an aftermarket item.

The issue at the heart of the case was whether the transaction was protected under the CFA. Lyle won a judgment in trial court in 2005 “that dismissed the complaint against [company], but awarded plaintiff treble damages of $25,953, counsel fees of $29,950, and costs of $6,544.81 under the CFA.” He appealed, in part because of the $40,000-plus he’d spent on a restoration; and in part because the earlier judgment ruled that [defendant] wasn’t a dealer. “On appeal, defendant claims the trial court erred in finding “a casual seller of automobiles over the Internet” is “a merchant or dealer pursuant to the Consumer Fraud Act.” In addition, defendant contends the trial court erred in denying his motion to dismiss plaintiff’s consumer fraud claim at the close of plaintiff's case in chief, as was required by Rule 4:37-2(b). “We are constrained to agree.”

This judgment reversed the 2005 decision and awarded Lyle $8,651 (the difference in value between the car he bought, and the car he thought he was buying) — the matter now goes to trial to determine the damages to which Lyle is entitled. We’ll see if they cover either the costs of the restoration, or his time and heartache. But it does send a clear message: You don’t have to be a dealer to be held accountable for fraud. Had the seller acted in what we’ll call “honorable ignorance,” this would not have been a matter for a high court. However, the court found [defendant] deliberately misrepresented the car, thus making him liable to prosecution under the CFA, rather than civil remediation. Expect to see this judgment cited in many cases to come.
- By David Traver Adolphus
 
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