Opinion ID: 1299986
Heading Depth: 3
Heading Rank: 3

Heading: Federal Odometer Act

Text: Stokes-Craven contends the trial judge erred in failing to grant its motion for a directed verdict or JNOV as to Austin's claim under the Federal Odometer Act. Initially, Stokes-Craven asserts there was no technical violation of the Federal Odometer Act because: (1) the truck was not titled in Stokes-Craven's name, and (2) the odometer disclosure was properly made on a document used to reassign the truck's title to Austin. Even if its failure to disclose the odometer reading to Austin constituted a violation of the Act, Stokes-Craven claims this violation was not sufficient to support a recoverable claim given there was no specific intent to defraud Austin with respect to the truck's mileage. As a preliminary matter, we question whether Stokes-Craven's first argument was properly preserved for this Court's review. At trial, Stokes-Craven's counsel appears to admit that the truck was titled in Stokes-Craven's name at the time Austin purchased the vehicle. Secondly, Frierson, the Stokes-Craven salesman involved in Austin's purchase, admitted that he had never shown a title to a customer in his twenty-five years of experience. Thus, any argument regarding the lack of title in Stokes-Craven's name or its failure to disclose the title to Austin would not be preserved for appellate review. See TNS Mills, Inc. v. South Carolina Dep't of Revenue, 331 S.C. 611, 617, 503 S.E.2d 471, 474 (1998) (An issue conceded in a lower court may not be argued on appeal.). However, even if Stokes-Craven's failure to disclose the truck title to Austin constituted a violation of the Act, [5] we find Austin did not prove Stokes-Craven violated the Act with the requisite intent to defraud. The Federal Odometer Act (the Act) provides for a private cause of action where a defendant violates the Act with intent to defraud. 49 U.S.C.A. § 32710. [6] Thus, the question becomes whether Austin proved Stokes-Craven violated the Act with the requisite intent to defraud. To satisfy this burden, Stokes-Craven claims Austin was required to establish that it violated the Act with a specific intent to defraud regarding the truck's mileage. In contrast, Austin construes the Act broadly and believes that a general intent to defraud is sufficient to satisfy this element in a civil action. In order to answer this question, we believe a review of the legislative history of the Act is instructive. The purpose of this Act has been explained as follows: In passing the Odometer Act, and its predecessor, Congress sought (1) to prohibit tampering with motor vehicle odometers; and (2) to provide safeguards to protect purchasers in the sale of motor vehicles with altered or reset odometers. 49 U.S.C. § 32701(b). To accomplish these express goals, the Act imposes various requirements on persons transferring motor vehicles. In addition to flat prohibitions on tampering with odometers, a transferor of a motor vehicle [must] give the transferee a written disclosure (A) of the cumulative mileage registered by the odometer; or (B) that the mileage is unknown if the transferor knows that the mileage registered by the odometer is incorrect. 49 U.S.C. § 32705(a)(1). Transferors are prohibited from making false statements in these disclosures. See 49 U.S.C. § 32705(a)(2). Furthermore, Congress provided for criminal and civil penalties for violations of the Act, including a private civil action. See 49 U.S.C. §§ 32709-32710. Section 32710 states: A person that violates this chapter or a regulation prescribed or order issued under this chapter, with intent to defraud, is liable for 3 times the actual damages or $1,500, whichever is greater. 49 U.S.C. § 32710(a). Based on a Congressional delegation of authority in § 32705, the National Highway Traffic Safety Administration (NHTSA) promulgated regulations which provide the way in which information is disclosed and retained under the Act. 49 U.S.C. § 32705. The scope of these regulations is limited to rules requiring transferors . . . of motor vehicles to make written disclosure to transferees . . . concerning the odometer mileage and its accuracy as directed by [the Act]. 49 C.F.R. § 580.1. Further, the purpose of the regulations is to provide purchasers of motor vehicles with odometer information to assist them in determining a vehicle's condition and value by making the disclosure of a vehicle's mileage a condition of title. . . . 49 C.F.R. § 580.2. Accordingly, each title, at the time it is issued to the transferee, must contain the mileage disclosed by the transferor when ownership of the vehicle was transferred. . . . 49 C.F.R. § 580.5(a). Additionally, transferors are required to disclose the mileage to the transferee in writing on the title. See 49 C.F.R. § 580.5(c). Nabors v. Auto Sports Unlimited, Inc., 475 F.Supp.2d 646, 649-50 (E.D.Mich.2007). With respect to the question of whether the intent to defraud requirement for a civil action involves a specific intent to defraud as to mileage of the vehicle or a general intent to defraud, [t]here is a split of authority on this issue, with the vast majority of courts concluding that the intent to defraud for the purposes of the Odometer Act is a specific intent to defraud as to mileage. Nabors, 475 F.Supp.2d at 650; see Ioffe v. Skokie Motor Sales, Inc., 414 F.3d 708, 711 (7th Cir.2005) (analyzing the Federal Odometer Act and concluding [s]ection 32710 does not create a private right of action for all violations of the Act and regulations that are accompanied by any `intent to defraud.' Rather, where a plaintiff alleges a violation of 49 C.F.R. § 580.5(c), he must prove intent to defraud as to a vehicle mileage.); see generally Ann K. Wooster, Annotation, Validity, Construction, and Application of Odometer Requirement Provisions of Motor Vehicle Information and Cost Savings Act (49 U.S.C.A. §§ 32701 to 32711), 198 A.L.R. Fed. 255 (2004 & Supp.2009) (analyzing cases involving the Federal Odometer Act and discussing requisite elements including the intent to defraud). Applying the foregoing to the facts of the instant case, we hold the trial judge erred in failing to grant Stokes-Craven's motion for a directed verdict or post-trial motion for JNOV. At trial, Austin's counsel conceded the claim under the Act did not arise out of a dispute regarding the mileage. Significantly, Austin never asserted that Stokes-Craven misrepresented the mileage of the truck or tampered with its odometer. Instead, Austin's claim under the Act was essentially based on Stokes-Craven's failure to disclose the title to the truck prior to Austin's purchase. Throughout the trial, Austin maintained that he would not have purchased the truck had he seen the title listing Bailey, not Bud Knight, as the previous owner. Had he been aware that Bailey was the previous owner, Austin claimed he would have been able to discover the extensive wreck damage. In view of this evidence and Austin's arguments, we find his claim under the Act failed as a matter of law because he did not establish that Stokes-Craven's violation of the Act was coupled with a specific intent to defraud him regarding the truck's mileage. Thus, we find the trial judge should have granted Stokes-Craven's motions for a directed verdict or JNOV with respect to this cause of action. See Bodine v. Graco, Inc., 533 F.3d 1145 (9th Cir.2008) (holding purchaser of used vehicle failed to state a claim under the Act when she alleged that the vehicle's sellers violated the Act by deliberately withholding the vehicle's title to conceal that the vehicle had been severely damaged in an earlier collision given the absence of the requisite allegation that the sellers intended to defraud her as to the vehicle's mileage); Nabors, 475 F.Supp.2d at 653-54 (finding used automobile dealer was entitled to summary judgment on purchaser's claim under the Act where purchaser failed to present evidence indicating the dealer intended to defraud purchaser as to the vehicle's mileage even though there was evidence that purchaser may not have been notified that the vehicle was salvaged or that dealer may have used fabricated documents for the purposes of the lawsuit); Ioffe, 414 F.3d at 713-14 (recognizing that the Odometer Act is concerned specifically with fraud related to the vehicle's mileage rather than with all types of fraud that might involve the withholding of a vehicle's title). Accordingly, we reverse the trial judge's award of $1,500 in actual damages and $4,500 in attorney's fees to Austin under this cause of action.