Purchaser of Defective Classic Car Can Sue North Carolina Auction Company for Fraud in Illinois

A purchaser of a classic 1973 Ford Bronco sued the car’s auctioneer in Illinois court. The purchaser alleged that the vendor committed fraud by misrepresenting the condition of the vehicle in its advertisements and during the auction. The circuit court dismissed the case for lack of personal jurisdiction. The Illinois Appellate Court reversed, finding that the vendor had sufficient contacts with Illinois when it solicited the business of the purchaser via advertisements, its website, and its communications over email and the phone.

In January 2018, John Dixon saw an advertisement posted by GAA Classic Cars, LLC on a car-related website. The advertisement listed a 1973 Ford Bronco for sale at auction. Dixon responded to the advertisement by sending an email to GAA requesting more information about the Bronco including how to bid for it. GAA responded with an email to Dixon, inviting Dixon to bid on the Bronco at the auction scheduled for March 2, 2018. GAA’s email told Dixon that he could participate via live simulcast bidding or on the telephone via phone bidding. GAA added that Dixon could find more information about the Bronco at GAA’s website. Dixon asked for pictures of the Bronco’s engine. GAA responded by email that it would send him pictures of the engine once GAA received the Bronco from its owner. GAA told Dixon that the auction price for the Bronco should run around $30,000.00 – $40,000.00.

Dixon spoke via phone with an agent of GAA on Feb. 6, 2018. The two discussed registration for the March auction, and the agent offered to email the forms that Dixon needed to return for participation in the auction. In a subsequent conversation, GAA re-affirmed the representations that it made in the advertisement, that the owner had the Bronco “Frame Off Restored in 2017” with “New Brakes & Tires” and the Bronco was “Garage Kept & Frequently Driven Since Restoration.” Dixon watched the live simulcast of the auction, where GAA once again affirmed its representations. He was ultimately the high bidder at $37,000.00.

Dixon received the Bronco two weeks later and immediately recognized that it had significant problems. Dixon had the Bronco towed to a mechanic well-versed in the repair, building, and restoration of 1973 Ford Broncos. The mechanic found that the vehicle had not been restored as advertised, was in mechanically and electrically unsafe condition, contained significant material defects that were purposefully hidden, had significant safety issues that were purposefully hidden, was inoperable, did not have new brakes, did not have an operable heating system, and contained an improperly modified engine as well as improperly modified electrical wiring.

In May 2018, Dixon sued GAA alleging negligent misrepresentation, fraudulent misrepresentation, deceptive practices, and fraudulent concealment. GAA filed a motion to dismiss arguing a lack of personal jurisdiction. The circuit court Granted GAA’s motion, finding that it lacked personal jurisdiction over GAA because GAA did not have sufficient contacts with the state of Illinois. Dixon then appealed.

The Illinois Appellate Court panel began by finding that GAA’s contacts with Dixon were sufficient to give the Illinois courts personal jurisdiction over GAA under the circumstances of the case. The panel stated that GAA’s advertisement and website, its emails, and its phone calls with Dixon in Illinois, when considered together, suffice to support a finding of personal jurisdiction. The panel noted that all of those communications allowed GAA to profit from its alleged fraud. The panel then rejected GAA’s argument that Dixon’s signature on the bidder registration form indicated his acceptance of litigation under the laws of North Carolina and in the North Carolina courts. The panel noted that the bidder registration form while referring to the acceptance of terms, did not specify what other document contained the terms and conditions that the signator was agreeing to. The panel stated that because the face of the bidder registration form did not clearly show an intent to incorporate a separate document, there was no incorporation. As the bidder registration form itself did not specify a forum of North Carolina, Dixon was not bound by that requirement. The panel reversed the decision of the circuit court and remanded the case for further proceedings.

You can review the Court’s opinion here.

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