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First District Rules Auto Dealer Committed Fraud By Misrepresenting Car’s History

 

A statement that a car has not been involved in an accident and “it’s fine” can constitute common-law fraud and a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, the First District Court of Appeal has ruled. In Hanson-Suminski v. Rohrman Midwest Motors, Inc., 1-07-0755 (Nov. 7, 2008), a customer successfully sued after she discovered that her used car had been in an accident, even though the dealer who sold it to her had told her it was not. The appeals court rejected the dealership’s arguments that both the decision and the financial award were erroneous.

The plaintiff, Traci Hanson-Suminski, bought a used 2002 Honda Civic from defendant Arlington Acura in Palatine, Ill. On the test drive, she asked the salesman if the car had been in an accident, to which he replied “No, it’s fine.” She did not take the car to an independent mechanic or get a Carfax sheet, nor did the salesman advise her that she could do so. She discovered that the car had indeed been in a rollover accident causing “moderate or severe” damage the following year, when she tried to trade it in. At trial, witnesses testified that the car had a “green light” at the auction where the dealership bought it, indicating no title problems, but that a car in good condition should have been more expensive. The plaintiff prevailed on her common-law fraud claim at a jury trial and on her Consumer Fraud Act claim at a bench trial. To avoid an illegal double recovery, the judge ruled that the Consumer Fraud Act claim would be satisfied with the jury’s common-law fraud verdict.

On appeal, the defendant argued that the plaintiff should not have prevailed on her Consumer Fraud Act claim, in part because she failed to show that fraud could have been avoided with reasonable prudence, and because the salesman’s statement was mere “puffery.” In its opinion, the appeals court cited Harkala v. Wildwood Reality, Inc., 200 Ill. App. 3d 447, 453 (1990), to show that the plaintiff had no obligation to double-check the salesman’s statement that the car had not been in an accident. Furthermore, it said, a car’s accident history is not a matter of public knowledge, as that case required. “Puffery” is a legal term for exaggerations used in advertising, which no reasonable person would believe. Because it was reasonable to believe the salesman was not lying, and it is not reasonable to think that car salespeople always claim cars are accident-free, the court said, it dismissed the puffery claim as without merit.

The defendant also appealed as to damages, arguing that the amount of damages was excessive because it was based on “optimal retail value” of the car rather than the price the plaintiff actually paid. The court disagreed, pointing to caselaw saying that absolute certainty of an item’s value is not required in consumer fraud damages awards; there must only be adequate basis for the award in the record. The defendant then argued that the Consumer Fraud Act award was barred by the common-law fraud award and the doctrine of election of remedies — which says that a plaintiff who makes two inconsistent legal claims for the same injury must choose which remedy to rely on, or the second is waived. However, the appeals court noted that both fraud claims were part of the same action and that in fact one claim was satisfied by the judgment of the other, so election of remedies did not apply.

DiTommaso-Lubin has an active practice in auto dealer and RV dealer fraud, including consumer fraud class actions. If you believe you’re a victim of deceptive practices by an auto dealer or have bought a “lemon,” please contact our Chicago class action and consumer attorneys today to learn about your rights and the legal remedies available to you.