Court Opinion

ID: 3021268
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:24:28.327781+00
Date Added: 2024-06-11T11:47:26.481921
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                 No. 97-3527/3529
                                  ___________

Melissa R. Bird,                        *
                                        *
         Appellee/Cross-Appellant,      *
                                        *
      v.                                * Appeals from the United
                                        * States District Court
John Chezik Homerun, Inc.; NKC          * for the Western District
Motors, Inc.,                           * of Missouri
                                        *
         Appellant/Cross-Appellees.     *
                                   ___________

                              Submitted: June 8, 1998
                                  Filed: August 21, 1998
                                  ___________

Before RICHARD S. ARNOLD and MORRIS SHEPPARD ARNOLD, Circuit
      Judges, and PANNER1, District Judge
                               ___________

OWEN M. PANNER, District Judge.
        Defendant John Chezik Homerun, Inc., dba John Chezik Honda ("Chezik"),
appeals from a judgment in favor of plaintiff Melissa Bird ("Bird") on her claim for
common law fraud. The jury awarded Bird $6,900 in actual damages and $35,000 in
punitive damages. Bird cross-appeals the trial court's denial of her motion for a new
trial, or for entry of judgment as a matter of law, on her claim for violation of the

      1
       The Honorable Owen M. Panner, United States District Judge for the District
of Oregon, sitting by designation.
Missouri Merchandising Practices Act, Mo.Rev.Stat. §§ 407.010-407.1020
("Merchandising Practices Act"). The jury found that Chezik had committed multiple
violations of the Merchandising Practices Act, but awarded Bird no damages on that
claim. Bird also cross-appeals the trial court's refusal to give her proposed instruction
on actual damages. We affirm in part and reverse in part.

                                   BACKGROUND
       Bird bought a late-model used car from Chezik. Chezik's salesman told Bird that
"the only thing wrong with the car is that the pop can holder is broken." The salesman
also told Bird that it was a one-owner vehicle which was traded in because the original
owner was upgrading to a newer vehicle. None of that was true. Bird subsequently
learned that the car not only had multiple prior owners but had been totaled in a head-
on collision. A salvage company purchased the wreck and sold it to a dealer, who then
patched it up and sold it at a wholesale auction where it was purchased by Chezik.

       At trial, Chezik denied any knowledge of the car's tainted past. However, the
jury heard testimony that the damage was poorly repaired and would have been readily
apparent to an experienced mechanic or car salesman. Chezik's manager, who
participated in the sale, had been in the used car business for over two decades and
frequently bought cars at the wholesale auction. The car was given a thorough
inspection by Chezik's mechanic before being placed on the lot for sale.

       Bird paid Chezik $7,671 for the car. She also paid $805 in fees and taxes to title
the car, and $ 2,544.94 to finance the car. There was expert testimony that the vehicle
would have been worth $8,725 if it had been as represented, but in its true condition
was worth only its salvage value of $1,800, a difference of $6,925.

      The jury found for Bird on Count I, common law fraud, and awarded actual
damages of $6,900 and punitive damages of $35,000. The jury returned a special
verdict which specifically found that Chezik "fraudulently misrepresent[ed]" that the

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car (a) "was a one-owner vehicle," (b) "had been traded in because its prior owner
wanted to upgrade his car," and (c) "had nothing wrong with it except a pop can
holder." The jury also found that Chezik "fraudulently conceal[ed] (represent[ed] by
silence) that the [car] had sustained prior wreck damage."

       On Count II, the jury returned a special verdict which found that Chezik had
violated the Merchandising Practices Act by "misrepresenting" that the car (a) "was a
one-owner vehicle," (b) "had been traded in because its prior owner wanted to upgrade
his car," and (c) "had nothing wrong with it except a pop can holder." The jury also
found that Chezik had violated the Merchandising Practices Act by "concealing
(representing by silence)" that the car "had sustained prior wreck damage." In addition,
the jury found that Chezik had violated the Merchandising Practices Act "with respect
to the charging of" a "'title, filing and document fee.'" However, the jury then found
that plaintiff had suffered no actual damages as a result of these misrepresentations.
The trial court refused to submit the issue of punitive damages to the jury on this count.

      Count III alleged breach of express and implied warranties and violation of the
Magnuson-Moss Act, 15 U.S.C. § 2310. The jury found for Chezik on this count and
Bird has not appealed.

      Both sides filed post-trial motions, which the trial court denied in a thorough 78-
page opinion.

                                     CHEZIK'S APPEAL
        Chezik's arguments were fully considered and rejected by the trial court, and
there is little that we can add to its detailed opinion. The evidence at trial was adequate
to support both the jury's verdict in favor of Bird and the award of punitive damages.
$35,000 in punitive damages was neither excessive under the circumstances nor
disproportionate to the amount of damages sustained. The trial court did not err by
admitting evidence of two other instances in which Chezik allegedly sold used cars to

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consumers without disclosing that the vehicles had been seriously damaged in a wreck.
This testimony was admissible to show that the sale to Bird was neither an isolated
incident nor inadvertent. Knowledge and intent were elements of the fraud claim and
also were relevant to Bird's prayer for punitive damages. The trial court considered
whether the incidents were sufficiently similar to be probative of the point for which
they were offered, and weighed the probative value of this evidence against the risk of
unfair prejudice or confusion. We decline to disturb the trial court's reasoned judgment.

       Chezik's final assignment of error is that the trial court should have excluded
testimony from the buyers of two other wrecked cars that Chezik sold because those
witnesses "were barred from [testifying] by their previous settlement of claims against
John Chezik Honda." Brief for Appellant at 8. We disagree. Even assuming that those
settlement agreements purported to prohibit the signatories from testifying in another
proceeding, those agreements were not binding upon Bird or the trial court, neither of
which was a party to those settlement agreements. See Baker v. General Motors
Corp., ___ U.S. ___, 118 S. Ct. 657 (1998).

                              BIRD'S CROSS-APPEAL
       On Count I, common law fraud, the jury specifically found that Chezik had made
certain misrepresentations and awarded Bird $6,900 in actual damages and $35,000 in
punitive damages. On Count II, the Merchandising Practices Act, the jury again found
that Chezik had made those same misrepresentations, plus one additional
misrepresentation. The jury also found --five different times-- that Chezik violated the
Merchandising Practices Act. Nevertheless, when asked to decide the amount of actual
damages that Bird sustained as a result of those violations, the jury responded "none."2

      2
          For purposes of this appeal, the principal difference between the two claims
is that the Merchandising Practices Act provides for statutory attorney fees, whereas
fees are not recoverable on the common law fraud claim.
                                           4
       Bird timely objected to the alleged inconsistency and requested that the jury be
sent back to resume its deliberations, thereby preserving this error for appeal. See
Polacco v. Curators of the Univ. of Missouri, 37 F3d 366, 369 n.2 (8th Cir. 1994).
The trial court concluded that the verdicts were not inconsistent. Accordingly, the
court denied Bird's request and discharged the jury.

        When possible, this court must harmonize inconsistent verdicts, viewing the case
in any reasonable way that makes the verdicts consistent. Anheuser-Busch, Inc. v.
John Labatt Ltd., 89 F.3d 1339, 1347 (8th Cir. 1996). However, we can find no
principled basis upon which to reconcile the jury's inconsistent findings. The jury
specifically found the same misrepresentations on both counts, the mode of calculating
damages was the same, and there is no variation in the essential elements of the two
counts that could account for this discrepancy. If the misrepresentations caused $6,900
in actual damages under Count I, then they must have caused that amount of actual
damages under Count II which also included one additional misrepresentation. Jury
Instruction No. 13, given by the trial court, correctly states that damage to the plaintiff
is a required element of a claim for violation of the Merchandising Practices Act. The
jury found, five different times, that Chezik violated that Act, yet also purported to find
that Bird had sustained no damages.

        The only plausible explanation for the jury's failure to award damages on Count
II is that the jury had already awarded Bird damages on Count I for essentially the same
conduct and did not want to award her the same damages twice.

      The jury did find against Bird on Count III, her claims for breach of express and
implied warranty and of the Magnuson-Moss Act. However, the jury was instructed
that it could not find for Bird on this claim unless the jury found that she had timely
given Chezik notice of the defects. There was testimony that she had not.
Accordingly, the adverse finding on Count III does not alter our conclusions regarding
Counts I and II.

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      We remand to the district court with instructions to enter judgment as a matter
of law for the plaintiff on Count II, with the amount of actual damages on that count
being the same as for Count I.

        Bird also assigns error to the jury instruction on actual damages, which the trial
court limited to the difference between the fair market value of the vehicle if it had been
as represented versus the vehicle's actual value. In Grabinski v. Blue Springs Ford
Sales, Inc., 136 F3d 565 (8th Cir 1998), decided while this appeal was pending, we
held under similar circumstances that the buyer "was also entitled to recover other
expenses of which there was evidence, including interest charges, repair costs, lost time
from work, excessive gasoline costs, towing charges, and other costs relating to
'problems arising from the fraudulent transactions.'" Id at 570 (construing Missouri
law).

       Grabinski allows a plaintiff to recover consequential damages, in addition to
benefit of the bargain damages, for expenses that are attributable to the fraud.
However, Grabinski does not permit recovery of expenses that would have been
incurred even if the vehicle had been as represented. There was testimony that Bird's
vehicle had to be aligned and frequently needed new tires. In theory, Bird could have
recovered those costs if the jury found that they resulted from the fraud, but she offered
no evidence from which the jury could have fixed those costs. Bird is not entitled to
recover the finance charges and taxes she paid to purchase the car, since she would
have incurred those costs even if the vehicle had been exactly as represented.
Accordingly, any error in the jury instructions was harmless.

                                    CONCLUSION
        We affirm the jury's verdict in favor of Bird on Count I (fraud) and the verdict
as to liability on Count II (Merchandising Practices Act). We reverse and remand to

                                            6
the district court for entry of judgment in Bird's favor on her claim for compensatory
damages on Count II, in the same amount as for Count I.

      Affirmed.

      A true copy.
            Attest:
                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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