Opinion ID: 1876871
Heading Depth: 1
Heading Rank: 3

Heading: analysis

Text: The Court of Appeals vacated the jury's verdict on the common-law fraud claim, stating that a common-law fraud claim was not viable because the alleged misrepresentations concerned predictions of future events, namely Piles obtaining financing at desirable terms. We express no opinion on this issue, however. We note that the trial court's instructions to the jury allowed the same damages for loss of use and inconvenience under either Instruction Nos. 6 [KCPA violations] or 7 [fraud.] [2] Sonny Bishop Cars did not object to the form of these instructions. Because we find, as discussed below, that the jury's verdict on KCPA violations was proper, we decline to address the common-law fraud issue as unnecessary to the resolution of this case.
Sonny Bishop Cars argues that Piles and Warner did not really purchase the Camaro, so they were ineligible to bring an action for KCPA violations under KRS 367.220(1), which provides, in pertinent part, that: Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by KRS 367.170, may bring an action under the Rules of Civil Procedure in the Circuit Court in which the seller or lessor resides or has his principal place of business or is doing business, or in the Circuit Court in which the purchaser or lessee of goods or services resides, or where the transaction in question occurred, to recover actual damages. (Emphasis added.) The word purchase is not defined in the KCPA. [3] But even if we accept the definition of purchase reflected in Kentucky's version of the Uniform Commercial Code, [4] as Sonny Bishop Cars posits, we conclude that Piles and Warner were eligible to bring an action as purchasers [5] under the facts of this case. This definition of purchase appears in KRS 355.1-201(2)(ac): Purchase means taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property[.] Under the facts of this case, Piles and Warner took the Camaro, at least for a time, following a period of negotiation [6] and after giving value by signing over title to the Nissan. At the very least, Piles and Warner had an equitable interest in the Camaro equal to the value of the Nissan. So we conclude that a purchase was made at least for purposes of the KCPA, which is designed to provide broad protection to consumers victimized by unlawful and deceptive trade practices. We reject Sonny Bishop Cars's argument that there could be no purchase without a binding contract. Although the jury did not explicitly make a finding on whether or not a binding contract existed, [7] we will accept for the sake of argument that the jury did not find a binding contract in light of (1) its verdict in favor of Piles and Warner on Sonny Bishop Cars's breach of contract claim and (2) its verdict in favor of Piles and Warner on their conversion claim (because Sonny Bishop Cars could not legally sell the Nissan trade-in without a binding contract in place). But the absence of a finding of a valid contract is not fatal to a claim for unfair trade practices under the KCPA as it would be to a breach of contract claim. Nothing in the KCPA  particularly KRS 367.170 and KRS 367.220  explicitly requires that a binding contract be reached for a purchaser damaged by unlawful trade practices to have a private right of action. Rather, because Piles and Warner qualified as purchasers under the KCPA, they were entitled to sue for any damages resulting from unfair trade practices by Sonny Bishop Cars under KRS 367.220. Even though a binding contract was at least arguably not established, [8] we nonetheless hold that Piles and Warner qualified as purchasers [9] to bring an action for KCPA violations. Thus, we affirm the Court of Appeals on this issue. [10]
Next, Sonny Bishop Cars argues that the Court of Appeals erred in determining that liability for future promises  such as financing guarantees  is possible under the KCPA. Both parties state that this issue was not raised before the trial court. It was raised for the first time in the Court of Appeals' decision. Because this issue was not preserved for review in the trial court, it was not properly before the Court of Appeals. And because Piles and Warner testified to a broad range of deceptive conduct beyond Summitt's financing guarantees and because the jury instructions did not ask the jury to identify which particular acts it found to constitute unfair trade practices under the KCPA, we need not address this question other than to state that we hold that if the jury believed Piles and Warner's testimony, as it evidently did, liability under the KCPA was established in light of the broad protection the KCPA provides to consumers according to its stated purposes and our case law. [11] Given this broad range of protection, the argument that sellers could never be held liable on future predictions is suspect, especially where the future predictions might relate to the seller's own conduct or other events under the seller's control. Nevertheless, we make no holding on this specific issue because this case does not require us to determine whether such liability for future predictions is ever possible under the KCPA and because the issue was not argued to the trial court. Piles and Warner correctly argue that a number of events about which they testified did not involve future predictions that could support liability under the KCPA. For example, KCPA liability could arise from a possible bait and switch tactic involving the advertised Mustang, the selling of the Nissan before the financing was approved, the questionable stories, lies about the location of the Nissan, and the threats of repossessing the Camaro if Piles and Warner did not come up with the full price in cash. This testimony was adequate to support the verdict on KCPA violations regardless of whether the evidence supported a verdict of common-law fraud. KRS 367.220(1) states that actual damages may be awarded when a purchaser suffers some sort of damage as a result of an unlawful trade practice as defined by KRS 367.170. KRS 367.170(1) defines unlawful trade practices as [u]nfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce[.] As our predecessor court stated in Dare to Be Great, Inc. v. Com. ex rel. Hancock, [12] [w]e are of the opinion that the words false, misleading and deceptive have meanings which are generally well understood by those who want to understand them. [13] Certainly, Piles's and Warner's testimony could have led the jury reasonably to infer that Sonny Bishop Cars had engaged in false, misleading, or deceptive trade practices (as these terms are commonly understood) leading to actual losses suffered by Piles and Warner. So we find no reason to disturb the jury's verdict on KCPA violations, and we affirm that part of the Court of Appeals' opinion that upheld the KCPA verdict.
Sonny Bishop Cars argues that the trial court committed reversible error by instructing the jury that it could award punitive damages [i]f you find for Ms. Piles and Mr. Warner under any of these instructions and award them a sum of money[.] It contends that the fraud and KCPA claims were not properly before the jury and that [t]o allow damages to be assessed for reasons not properly before the jury, whether fraud, [KCPA] or both, is fundamentally unfair and prejudicial. But, as previously mentioned, we find that the KCPA claim was properly before the jury; and, thus, we have found it unnecessary to reach the fraud issue. Sonny Bishop Cars also contends that there is no way to tell whether the punitive damages award was based solely on the conversion (which it does not appeal herein) or was based all or in part on fraud or on KCPA violations. However, Sonny Bishop Cars fails to cite to the record to show where it requested that the punitive damage instruction ask the jury to indicate on which specific verdict it was basing its punitive damages award. So this issue is not preserved for our review. The KCPA expressly provides that punitive damages may be awarded in appropriate cases. [14] And our case law has made clear that punitive damages may be awarded for conversion if the defendant's conduct is especially reprehensible. [15] So we find no error in the trial court's instructing the jury on punitive damages.
Sonny Bishop Cars argues that the $50,000 punitive damage award assessed by the jury was grossly excessive under the circumstances: The facts reveal that other than the loss of the trade-in vehicle, neither Piles nor Warner suffered any pecuniary loss. The jury awarded $2,000.00 as the value of the vehicle, and further awarded Mr. Warner $2,100.00 for loss of use of the vehicle. It also made an award to both Piles and Warner for inconvenience[,] which the Court of Appeals set aside as duplicative of the award for loss of use. However, as we discuss below, the Court of Appeals erred in setting aside the award for inconvenience as duplicative of the award for loss of use. [I]t is the primary function of the trial judge to determine whether, at `first blush' and in accordance with the criteria set forth in CR 59.01(d), (e), and (f), the verdict is excessive. [16] The trial court denied Sonny Bishop Cars's motion to alter, amend, or vacate and, thus, apparently decided that the punitive damages award did not appear excessive at first blush. On appellate review, even applying the de novo standard of review that we have noted is required by the United States Supreme Court for reviewing punitive damage awards, [17] we find no reason to disturb the $50,000 punitive damages award made in this case. Applying the factors established by United States Supreme Court precedent for determining whether punitive damage awards are unconstitutionally excessive, [18] the $50,000 award of punitive damages passes muster. The degree of reprehensibility of the conduct at issue was significant. The difference between compensatory damages ($8,600) and punitive damages ($50,000) awarded was also significant (punitive damages about six times total compensatory damages) but not ridiculous. [19] Furthermore, compensatory damages could have been much higher if the facts had been slightly different (such as a converted trade-in of much higher value); and other possible civil or criminal penalties could have been imposed if allegations had been sufficiently proven for those types of hearings (i.e., beyond reasonable doubt for criminal offenses such as theft), including loss of the license to sell motor vehicles for false advertising, defrauding buyers, or other grounds pursuant to KRS 190.040. Thus, nothing in these factors suggests the punitive damages award is excessive. All in all, it appears that the amount of the punitive damages award was rationally imposed by the jury to serve the deterrent effect for which punitive damages were designed, especially in consumer protection cases such as this where the economic harm suffered is relatively small. [20]
On their cross-appeal, Piles and Warner argue that the Court of Appeals erred in vacating their inconvenience awards ($3,000 to Warner and $1,500 to Piles) as duplicative of the $2,100 award to Warner for loss of use of the Nissan from July 14, 2003 (the night the Camaro was returned), until January 17, 2004 (when he bought a new vehicle). We agree. Clearly, the inconvenience award was not duplicative of the loss of use award. No loss of use award was permitted for Piles. [21] Thus, without an inconvenience award to her, Piles would stand to recover no compensatory damages at all, despite testimony that she had to miss work and suffered difficulties at her job caused by constant telephoning and trips to the dealership. Furthermore, the trial court clearly delineated that the loss of use award was for Warner's loss of use of the Nissan from July 14, 2003 (the day they returned the Camaro and Warner was, therefore, left without any vehicle), until January 17, 2004 (when he bought another, substantially less expensive, vehicle). Thus, the inconvenience award can reasonably be interpreted as for Piles and Warner's inconvenience before July 14, 2003  namely, the trouble they went through trying to return the Camaro on several occasions. Piles and Warner testified to having to miss work, and Piles testified to difficulties at work related to absences and constant telephoning. Warner also testified that he was deprived of transportation (both before and after July 14) and had to depend on others for transportation. Thus, the inconvenience damages were awarded for real injuries with significant monetary ramifications with evidence to support such damages separate from the loss of use of a vehicle by Warner from the period after the Camaro was returned. We note that the statute permits the trial court to award actual damages. BLACK'S LAW DICTIONARY (8th ed.2004) defines actual damages as [a]n amount awarded to a complainant to compensate for a proven injury or loss; damages that repay actual losses. Because separate losses for inconvenience were proven, there was no reason to disturb this damage award as duplicative of the damages awarded for Warner's loss of use of a vehicle from the time the Camaro was returned until he obtained a new vehicle. Thus, we find no error in the award of inconvenience damages; and we reverse that portion of the Court of Appeals' decision on the cross-appeal.