CPO = New, Perfect?

Maybe Not

Could we make this stuff up? The plaintiff thinks that “certified pre-owned” means “new,” is handed a CARFAX report by the dealer that shows two accidents for the car, but relies on a salesman’s assertion that the car has been in only one wreck and drives the car 80,000 miles before suing the dealer.

Jennifer Brown bought a certified pre-owned (CPO) 2003 Jeep Liberty with approximately 64,000 miles on it from CincyAutos, Inc. in May 2007. Brown thought that certified pre-owned meant that all of the parts under the hood were new. Some people also believe that the moon is made of green cheese.

Brown asserted that the salesman told her the Jeep had been in only one minor fender bender. In fact, a Carfax report provided to Brown prior to signing the sale documents disclosed that the Jeep had been in two accidents and sustained severe damage in one of them. That’s what folks in the detective business refer to as “a clue.”

The Jeep came with two limited warranties. Brown experienced multiple problems with the Jeep and each time, with one exception, took the Jeep into CincyAutos for repair. CincyAutos repaired the Jeep under the limited warranties at no charge to Brown.

Brown alleged that CincyAutos failed to repair the Jeep when it broke down on the side of a highway, but Brown presented no evidence that she attempted to have the Jeep repaired after that incident and continued to drive the Jeep until it had over 80,000 miles on it.

Brown sued CincyAutos for various breach of contract and breach of warranty claims under state and federal law. CincyAutos moved for summary judgment.

The U.S. District Court for the Southern District of Ohio granted CincyAutos’ motion in part and denied it in part. The court granted CincyAutos’ motion with respect to Brown’s breach of warranty claims because the evidence showed that CincyAutos repaired the defects in a reasonable amount of time, other similar cars experienced the same defects, no single defect had to be repaired more than once, and Brown continued to drive the Jeep, negating her assertion that she lost confidence in the reliability and integrity of the Jeep.

The court also granted CincyAutos’ motion with respect to Brown’s claim for unfair and deceptive acts and practices. The court found that Brown presented no evidence to support her allegation that representatives of CincyAutos promised to replace the Jeep. The court found that Brown’s misunderstanding of the term “certified pre-owned” did not render CincyAutos’ representation deceptive; the evidence showed that the car was, in fact, certified pre-owned.

The court also found that the salesman’s representation that the car was only in one minor accident could not be deceptive because Brown received a Carfax report to the contrary and therefore could not have reasonably relied on the salesman’s statements.

The court granted CincyAutos’ motion with respect to Brown’s claim that it was deceptive for CincyAutos to represent that the Jeep came with a warranty. The evidence showed that the Jeep came with two warranties and that Brown did not pay for any repairs.

The court granted CincyAutos’ motion with respect to Brown’s claim that CincyAutos unconscionably took advantage of her inability to understand the language of the agreement as a first-time car buyer. Brown admitted in her deposition that she had purchased a car once before and was not a first-time car buyer. Further, the court found that Brown had no physical or mental infirmity that prevented her from understanding the contract.

The court also granted summary judgment with respect to Brown’s claim that the arbitration clause in the contract violated public policy, finding nothing in Ohio law that prohibited arbitration clauses in consumer sales contracts. Wow! CincyAutos is on a roll here!

Well, on a roll, but not quite out of the woods. The court denied CincyAutos’ motion with respect to the Federal Trade Commission’s used car window sticker rule because CincyAutos’ bona fide error defense presented a factual issue concerning CincyAutos’ procedures.

The court also denied CincyAutos’ motion with respect to Brown’s claim that CincyAutos failed to provide her with repair documentation in violation of Ohio law. Finally, the court denied CincyAutos’ motion with respect to Brown’s claims that CincyAutos failed to tell her that warranty parts would not be returned to her and for failing to return a battery to her, as those claims presented factual issues.

All in all, not a bad day for CincyAutos. It managed to avoid a number of pretty serious claims, and made some very helpful law for dealers in the process.

Vol. 6, Issue 12