Opinion ID: 1698470
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Heading: Claims Against Stephenson Chevrolet

Text: Dodd asserts first that Stephenson Chevrolet fraudulently misrepresented that the 1990 Camaro was a new car, or, alternatively, that Stephenson Chevrolet fraudulently concealed that it was not new. Dodd argues, therefore, that the trial court erred in entering the summary judgment in favor of Stephenson Chevrolet because, Dodd says, he presented substantial evidence that, although it had not been previously sold, the Camaro was not new. Section 6-5-101, Alabama Code 1975, provides a cause of action for misrepresentations of material fact: Misrepresentations of a material fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party, or if made by mistake and innocently and acted on by the opposite party, constitute legal fraud. (Emphasis added.) We note that under § 6-5-101 legal fraud includes misrepresentations of material fact made by mistake and innocently, as well as those made either willfully to deceive, or recklessly without knowledge. Young v. Serra Volkswagen, Inc., 579 So.2d 1337, 1339 & n. 3 (Ala.1991). Because we find no evidence that Stephenson Chevrolet made any misrepresentation willfully or with reckless disregard of the truth, we address Dodd's argument that Stephenson Chevrolet innocently or mistakenly misrepresented that the Camaro was new. To recover under a claim of innocent misrepresentation, a plaintiff must prove (1) that there was a false representation; (2) that it concerned a material fact; (3) that the plaintiff reasonably or justifiably relied on the material misrepresentation; and (4) that the plaintiff was damaged as a proximate result of the reliance. Mahoney v. Forsman, 437 So.2d 1030 (Ala.1983). Stephenson Chevrolet argues that in the circumstances of this case it cannot be liable because it made no misrepresentation of fact. Moreover, Stephenson Chevrolet contends, no evidence indicates that it knew of the alleged defects in the Camaro or that it even had an opportunity to discover them. In reply, Dodd argues that even if the dealership did not know of the defects or was unable to discover them while the Camaro was in its possession, Stephenson Chevrolet may nonetheless be liable for innocently misrepresenting that the Camaro was new. In support of this argument, Dodd refers to the reasonable expectation standard first enunciated in Mathis v. Jim Skinner Ford, Inc., 361 So.2d 113 (Ala.1978): Purchasers have a right to assume that new automobiles will perform in accordance with reasonable expectations and in accordance with implied representations inherent in marketing such products. Absent express representation, implied representations are not uncommon in the sale of new products, and reliance thereon may be shown by the totality of the circumstances and the underlying nature of the transaction itself. These concepts have long been recognized in actions based upon breach of an implied warranty and, under proper circumstances, may support a tort action for misrepresentation. 361 So.2d at 115; see also Ford Motor Co. v. Burkett, 494 So.2d 416 (Ala.1986); Larry Savage Chevrolet, Inc. v. Richards, 470 So.2d 1168 (Ala.1985); Boulevard Chrysler-Plymouth, Inc. v. Richardson, 374 So.2d 857, 859-60 (Ala.1979). Thus, under Mathis, implied representations may arise out of the mere sale of a new product, and such representations, if false, may support a claim of fraud. Burkett, 494 So.2d at 417. The trial court erred in entering the summary judgment as to the claim of innocent misrepresentation on the part of Stephenson Chevrolet. Drawing all relevant inferences in favor of Dodd, as the applicable standard of review requires, we conclude that, given the circumstances of this case, Dodd presented substantial evidence that Stephenson Chevrolet impliedly represented that the car was new and that Dodd relied on this implied representation when he bought the Camaro. Although no evidence indicates that Stephenson Chevrolet specifically told Dodd that the car he was buying was new, it is reasonably inferable from the undisputed facts and circumstances of the sale that when Dodd visited Stephenson Chevrolet on May 5, 1990, he was looking for a new 1990 Chevrolet Camaro R.S. and that Stephenson Chevrolet impliedly represented that it was selling him one. We also hold that Dodd's deposition testimony, the affidavit testimony of Dodd and Ray regarding the results of the paint test, and the affidavits of the automobile body repairmen Dan Sharp and Kenneth Davis constitute substantial evidence that the Camaro had been damaged before its sale to Dodd and was therefore not new. Except in rare circumstances, where a car has undergone repair or alteration so major that it is obviously not new or so minor that it undisputedly is new, the question of whether a car initially sold with repaired damage was new when it was sold is one of fact. Boulevard Chrysler-Plymouth, Inc., 374 So.2d at 857. The affidavits of the automobile body repairmen and the affidavits of Dodd and Ray concerning the results of the paint test constitute substantial evidence from that evidence a fair-minded person could reasonably infer that the Camaro had undergone more than minor repairs and adjustments before its sale to Dodd and thus that it was not new, in accordance with reasonable expectations. Id., at 859. Even though Dodd presented no evidence that Stephenson Chevrolet knew of any prior damage to the Camaro, Stephenson Chevrolet may be liable for innocent misrepresentation. Although knowledge of a falsehood or reckless disregard for the truth is an essential element of the tort of deceit, § 6-5-103, Alabama Code 1975, it is not an element of the tort of innocent misrepresentation. See Ex parte Lewis, 416 So.2d 410, 411-14 (Ala.1982) (Jones, J., concurring specially). In Hall Motor Co. v. Furman, 285 Ala. 499, 234 So.2d 37 (1970), this Court addressed this issue in substantially similar circumstances. In Hall, the plaintiff went to Hall Motor Company in Bessemer, Alabama, seeking a Plymouth station wagon of a certain type and color. Although the dealership did not have in stock what the plaintiff wanted, it located one at another dealership in Selma. The plaintiff drove with a sales representative to Selma to examine the car. Pleased with the station wagon, the plaintiff drove it back to Bessemer, where the parties completed the sale. After noticing defects in the car, the plaintiff had it inspected by two automobile mechanics, who informed him that the car had been damaged. The plaintiff brought an action against Hall Motor Company, alleging that the dealership had fraudulently misrepresented to him that the station wagon was a new automobile in good working condition. The evidence presented to the jury showed that the damage had occurred at the factory and that the dealership had been unaware of the damage when it sold the station wagon to the plaintiff. In holding that the trial court erred in permitting an award of punitive damages against the dealership when there was no evidence of any intent to deceive, the Court stated that the evidence was nonetheless sufficient to establish an innocent misrepresentation. Therefore, like the car dealership in Hall, Stephenson Chevrolet may be held liable for innocently misrepresenting that the car it sold to Dodd was new, even though it was unaware of any prior damage or major alteration. We now address Dodd's claim alleging suppression of a material fact by Stephenson Chevrolet. Section 6-5-102, Ala. Code 1975, provides: Suppression of a material fact which the party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case. One can be liable for suppression only of a fact of which one has knowledge. Cornelius v. Austin, 542 So.2d 1220, 1224 (Ala.1989); Cherokee Farms, Inc. v. Fireman's Fund Ins. Co., 526 So.2d 871, 875 (Ala.1988); Harrell v. Dodson, 398 So.2d 272, 276 (Ala.1981). Dodd introduced no evidence that Stephenson Chevrolet knew of the alleged defects. There is no evidence that Hembree Motors forwarded to Stephenson Chevrolet the delivery receipt stating Car has serious paint problems all over. Factory. The evidence is undisputed that Stephenson Chevrolet had possession of the Camaro for only two hours. Undisputed also is the fact that Stephenson Chevrolet did not even have time to clean the Camaro before Dodd took possession of it. A fair-minded person in the exercise of impartial judgment could not reasonably infer from Stephenson Chevrolet's mere possession of the Camaro for two hours that it knew of the alleged defects, much less that it knowingly concealed them with an intent to deceive. In fact, Dodd himself did not notice any problem with the paint until several days after the purchase, when he washed the car, and he did not notice the irregularity in the grooves until almost nine months after buying the car. Dodd has not submitted substantial evidence in support of his claim alleging suppression by Stephenson Chevrolet. The judgment is therefore due to be affirmed as to that claim. Dodd's complaint also alleged that Stephenson Chevrolet breached an express warranty, an implied warranty of merchantability, and an implied warranty of fitness for a particular purpose. Dodd, however, does not argue or cite authority for the reversal of the judgment as to these warranty claims. Therefore, we affirm the judgment as to these claims on the authority of Young v. Serra Volkswagen, Inc., 579 So.2d 1337 n. 2 (Ala.1991); Sea Calm Shipping Co., S.A. v. Cooks, 565 So.2d 212, 216 (Ala.1990); Henderson v. Alabama A & M Univ., 483 So.2d 392 (Ala.1986).