Court Opinion

ID: 9470923
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:20:37.447851+00
Date Added: 2024-06-11T17:42:11.175461
License: Public Domain

GODBOLD, Chief Judge,
dissenting:
The statute and the regulations required Mack Trucks to furnish a written statement containing two pieces of information. First, it was required to state the odometer reading at the time of transfer. Second, if Mack knew that the actual mileage of the vehicle differed from the odometer reading, it was required to state that the mileage was “unknown.”1
The troublesome problems in this case are twofold: (1) what information is sufficient to trigger “knowledge” by the transferor that odometer mileage and actual mileage are different (thus requiring him to state that the mileage is “unknown”)? (2) when a transferor possesses such “knowledge” and fails to state that the mileage is “unknown,” what evidence is sufficient to permit an inference that he acted with intent to defraud?
In some circumstances the transferor can know, in the sense of actual knowledge, that there is a discrepancy between odometer and true mileage. The transferor himself may have altered the odometer (there is no evidence that this occurred in the present case), or he can have actual knowledge that it was altered. The previous owner may have told him that the vehicle has traveled more miles than the odometer shows. More often the evidence of the fact of a discrepancy is necessarily circumstantial. Here the circumstantial evidence was that the odometer showed 47,945 while the documents of title received by Mack Trucks from the trustee in bankruptcy showed 92,-104 miles. This was sufficient circumstantial evidence of discrepancy to trigger the requirement that the mileage be certified as “unknown.”
In Nieto v. Pence, 578 F.2d 640 (5th Cir. 1978), the court dealt with the same two problems that exist in this case, as described above. The district court had made two findings: that the transferor had no actual knowledge of a discrepancy and that the transferor had no intent to defraud. The court sent the case back to the district court to be reconsidered on both grounds. The transferor, a used car dealer, had no actual knowledge that the odometer reading differed from the actual mileage. He acknowledged that a reading of 14,000 miles on a ten-year-old pickup truck was suspicious. The Fifth Circuit held that the dealer had a duty to disclose that the actual mileage was unknown if, in the exercise of reasonable care, he would have had reason to know that the actual mileage was more than that on the odometer. The facts in the present case, tending to show that Mack Trucks, in the exercise of reasonable care, had reason to conclude that a discrepancy existed, are stronger than in Nieto. In that case the previous owner had certified the odometer mileage of 14,200. In the present case the information given by the prior owner said, in effect, that the odometer reading was wrong.
If the knowledge required to trigger the statement that the actual mileage is unknown were knowledge that the odometer is in fact incorrect, the certification requirement would be virtually meaningless. The certification of “unknown” mileage is designed to put the purchaser on notice so that he can make an advised decision. He may wish to go ahead with the purchase, or inquire further, or refuse to buy a vehicle whose mileage is unknown. But he is entitled to have the transferor give him the notice — “mileage unknown” — which tells him that the dealer knows or reasonably *1356should know that the odometer reading may depart from reality.
Was there sufficient evidence that a discrepancy existed? The district court did not address this in specific terms. It found that the evidence did not show that the odometer reading was incorrect or that the odometer had been tampered with. These findings, of course, do not dispose of the question of whether Mack had sufficient notice of a possible discrepancy that it was required to certify mileage as unknown. But the court implied that the evidence of a discrepancy was sufficient, because it referred to “the discrepancy in the mileage readings.” I would treat this issue of the existence of a discrepancy as decided by the district court and not clearly erroneous. Or, if we think the finding is not certain enough, we should remand for a finding. While I am not certain, I think the opinion of this court does not disagree with the district judge or with me on this point.
We do disagree on the second problem that we must address, the sufficiency of the evidence to permit an inference that Mack Trucks acted with intent to defraud. All that the district court held was that “no intent to defraud was shown to have occasioned the discrepancy in the mileage readings.” (emphasis added). This is not the full range of intent to defraud that is involved. If Mack Trucks occasioned the discrepancy, it is obvious that fraudulent intent could be inferred. But that is not all. The discrepancy may have been occasioned by neutral or unknown reasons and for neutral or unknown motives — indeed, that is what seems likely to have happened. The question then is whether an intent to defraud may be inferred from the existence of a discrepancy that is “known” in the statutory sense, plus a failure to certify. In its second holding the Nieto court held:
If a transferor reasonably should have known that a vehicle’s odometer reading was incorrect, although he did not know to a certainty the transferee would be defrauded, a court may infer that he understood the risks of such an occurrence.
578 F.2d at 642. The district court perceived that Mack Trucks would be guilty of fraud if it caused the discrepancy. It did not perceive, refer to, or address the possibility that Mack could be guilty of fraud if the discrepancy arose from neutral or unknown reasons. The majority opinion neither recognizes nor addresses this issue. Whether an inference of fraud should be drawn is for the district court. The plaintiff is entitled to have a ruling by the district court on this issue.
I would vacate the decision of the district court and remand for reconsideration under Nieto.

. Often a vendor would not know what the actual mileage was but might know that the actual mileage differed from the odometer reading. Thus, the requirement of stating that the mileage is “unknown” makes sense.