Selling Damaged Cars: Consumer Fraud

Cases and examples:

In Grabinski v. Blue Springs Ford, 136 F.Supp. 565, 568 (8thCir. 1998), the Court of appeals upheld a $210,000 punitive damage award where the jury awarded $7,835 in compensatory damages. In Grabinski, the plaintiff action was based on the following misstatements of material fact: 1) The car was very nice; 2) the car was driving fine; 3) the car only needed a clean up and standard service; 4) the car was in excellent condition, had had one owner and had never been wrecked. The court determined that the jury had a reasonable basis to conclude that the dealer, defendant, should have been aware of the condition of the vehicle, which had been seriously damaged by a prior owner. Id at 569.

In Chezik Homerun v. NKC Motors, 153 F.3d. 1014 (8thCir. 1998), the Court of Appeals upheld a jury verdict for $6,900 in compensatory damages and $35,000 in punitive damages. The jury had determined that the defendant had violated the applicable Consumer Fraud Statute by misrepresenting 1) the car was a one-owner car; 2) the car had been traded in because the prior owner wanted an upgrade; 3) the car had nothing wrong except a pop can holder. The jury also found the defendant had violated the Act by concealing (representing by silence) that the car had sustained prior wreck damage.

In Parrott v. Carr Chevrolet, 965 P.2d. 440, 447 (Or.App. 1998) the jury awarded $11,496 in compensatory damages and $1,000,000 in punitive damages. The Trial Court reduced the punitive damage award to $50,000, which was increased to $300,000 by the Appellate Court. In Parrott the plaintiff alleged that the defendant 1) falsely claimed the car was equipped with proper emission controls; 2) falsely represented the car had been driven 100,608 miles; 3) Was with defaced or missing VIN numbers in violation of Oregon law; 4) Was without disclosing that the emission control equipment had been removed; and 5) Was selling the vehicle without disclosing it had previous out-of-state damage. Plaintiff’s expert testified that any minimally trained dealership employee would have recognized the apparent problems with the subject car, which was a Suburban. Id at 445.