Title: Jensvold v. Town & Country Motors, Inc.

State: vermont

Issuer: Vermont Supreme Court

Document:

JENSVOLD_V_TOWN_AND_COUNTRY_MOTORS.93-186; 162 Vt. 580; 649 A.2d 1037


[Filed:  14-Oct-1994]

 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports. Readers
 are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109
 State Street, Montpelier, Vermont 05609- 0801 of any errors in order that
 corrections may be made before this opinion goes to press. 


                              No. 93-186


 Chris Jensvold and Fred Abraham           Supreme Court
 d/b/a Brook Auto
                                            On Appeal from
        v.                                  Washington Superior Court

 Town & Country Motors, Inc.,               March Term, 1994
 Charles S. Breckenridge

 Stephen B. Martin, J.
 
 Stephen S. Blodgett of Blodgett, Watts & Volk, Burlington, for
 plaintiffs-appellees 
 
 Leighton C. Detora of Valsangiacomo, Detora & McQuesten, P.C., Barre, for
 defendant- appellant 
 
 
 
 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
 
 
 
 
 Johnson, J.   This case involves the sale of a used car by Town & Country
 Motors to Chris Jensvold and Fred Abraham doing business as Brook Auto, an
 automobile wholesaler. After the purchase, plaintiffs discovered the car was
 "clipped," which means it was made up of parts of two vehicles welded together
 to form one vehicle after each of the composite vehicles had suffered damage. 
 The car consisted of the front of one Audi welded to the back of another. The
 parties appeal from both the trial court judgment for the buyers and the
 damages award. 

 

 Seller argues that the court erroneously found it liable for damages to the
 buyers for fraud and breach of the implied warranty of merchantability.  9A
 V.S.A.  2-314 (implied warranty of merchantability). Buyers argue the court
 should have found seller liable for damages under the Salvage Title Act, 23
 V.S.A.  2093.  We affirm in part, reverse in part, and remand for
 redetermination of damages. 

 On December 27, 1988, Town & Country sold Jensvold, on behalf of Brook Auto, a
  used Audi for $4,500.  Town & Country had taken the Audi as a trade-in from a
 third-party, who told Town & Country that the vehicle was clipped but that the
 title was "clean" in that it did not indicate that the car was salvaged or
 clipped.  Although Town & Country knew the vehicle was clipped, it did not
 disclose the fact to Jensvold.  After looking over the vehicle, Jensvold
 purchased it "as is." 
 
 When Jensvold purchased the car it had visible body damage from an accident
 that had occurred after the car was clipped.  Jensvold repaired the damage for
 $1,300 and began marketing the car.  In January 1989, a prospective
 purchaser's mechanic discovered a dent in the floor and a seam between the two
 halves.  The prospect declined to purchase the car and explained why.  In
 response, Jensvold called the Motor Vehicle Department to check the title's
 status and confirmed that the title was clean. 
 
 In April 1989, Jensvold took the Audi to a dealer to have it shown to
 prospective purchasers.  This dealer informed Jensvold that the Audi was, in
 fact, clipped.  Jensvold then took the car back to Town & Country and demanded
 an immediate refund of the purchase price along with the cost of his repairs. 
 At that time, Jensvold had driven the car 7,000 miles.  The trial court found
 that Jensvold, "not obtaining satisfaction," left Town & Country and took the

 

 car with him.  On May 4, 1989, Jensvold's lawyer wrote a letter to Town &
 Country stating that Jensvold was revoking his acceptance of the car, and that
 Jensvold would return it to Town & Country at a place and time that was
 mutually convenient.  Jensvold's lawyer also stated that unless arrangements
 were made in ten days, Jensvold would, at his election, either return the
 vehicle and tender title to it, or take such action as was deemed appropriate.
 Town & Country did not agree to take the Audi back.  Jensvold stopped
 marketing the car, but used it personally, driving it an additional 20,000
 miles. 
 
 The trial court found that Town & Country had misrepresented the condition of
 the car, breached the implied warranty of merchantability, misrepresented the
 odometer reading, and failed to comply with 23 V.S.A.  2093(b), which
 requires the seller of any salvaged, rebuilt, or totaled vehicle to disclose
 that fact to the purchaser.  The trial court concluded, however, that buyers
 were not entitled to a refund of the purchase price pursuant to 23 V.S.A. 
 2093(c) because they elected to keep the automobile rather than return it. 
 The court awarded plaintiffs damages consisting of the difference between the
 purchase price paid and the actual value of the vehicle in its clipped
 condition, plus the cost of repair, lost profits, and costs. 

                                 I.

 It is first necessary to determine whether there is a basis of liability on
 any of the disputed grounds -- violation of the Salvage Title Act, fraud, and
 breach of warranty of merchantability. (FN1) We will then address the parties'
 arguments regarding damages. 

 

                                 A.

 Vermont's Salvage Title Act requires "[a]ny person who sells . . . or offers
 for sale . . . any interest in a salvaged, salvaged and rebuilt or totaled
 vehicle [to] disclose the fact that the vehicle has been salvaged, salvaged
 and rebuilt or totaled to a prospective purchaser both orally and in writing
 before a sale, trade or transfer is made."  23 V.S.A.  2093(b).  If a seller
 fails to comply with the notice requirements of the Salvage Title Act, "the
 seller [is] required, at the option of the buyer, to refund to the buyer the
 purchase price, including taxes, license fees and similar governmental
 charges."  Id.  2093(c).  The statute imposes strict liability for violation
 if the buyer opts for a refund. 

 The trial court held that while defendant had violated the Salvage Title Act,
 plaintiffs were not entitled to recover the purchase price under that statute
 because plaintiffs elected to keep the vehicle rather than return it.  The
 court's conclusion that plaintiffs elected to keep the car cannot be
 reconciled with the findings and must be reversed.  Dartmouth Savings Bank v.
 F.O.S. Assocs., 145 Vt. 62, 66,