This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-153

 

Jessica Freeman,

Appellant,

 

vs.

 

A & J Auto MN, Inc.,

Respondent.

 

Filed September 16, 2003

Affirmed in part, reversed in part, and remanded

Stoneburner, Judge

 

Stearns County District Court

File No. C1-02-4782

 

Allen H. Gibas, Allen H. Gibas, P.A., Suite 320, 1422 West Lake Street, Minneapolis, MN 55408 (for appellant)

 

Paul A. Rajkowski, Joseph M. Bromeland, Rajkowski Hansmeier, Ltd., 11 Seventh Avenue North, Box 1433, St. Cloud, MN 56302 (for respondent)

 

 

            Considered and decided by Willis, Presiding Judge, Shumaker, Judge, and Stoneburner, Judge.

U N P U B L I S H E D   O P I N I O N

STONEBURNER, Judge

            Appellant Jessica Freeman challenges the district court’s grant of summary judgment to respondent A & J Auto MN, Inc., dismissing her claims of breach of warranty of title and violations of the consumer fraud statute.  We affirm the grant of summary judgment on the claim asserted under Minn. Stat. § 325F.6641, subd. 1 (2002), but because there are material fact questions about whether (1) A & J transferred salvage title to Freeman; (2) A & J’s employees’ statements were intended to mislead or misrepresent the vehicle’s status; and (3) Freeman has shown a legal nexus between the alleged violation of Minn. Stat. § 325F.69, subd. 1 (2002), and her claimed damages, we reverse summary judgment on Freeman’s claims under Minn. Stat. §§ 336.2-312 and 325F.69, subd. 1 (2002), and remand for trial on those claims.   

FACTS

            Respondent A & J Auto MN, Inc., bought a 1995 GMC Jimmy at an auction in Texas for $9,800.  A & J applied for Minnesota title and registration for this vehicle, representing to the state that the vehicle had a base value of $22,670.  The registration application submitted to the state by A & J contains under the heading “odometer statement and assignment by seller” the information that “to the best of my knowledge this vehicle has not sustained damage in excess of 70% of actual cash value.”  This statement was not signed by the seller.[1] 

            A & J received a Minnesota certificate of salvage title and Minnesota license plates for the vehicle.  According to A & J’s owner, Jason Miller, when the state issues a salvage title it also issues license plates and 12‑month tabs, which allows the vehicle to be driven and repaired, but the tabs cannot be renewed without an inspection as required by Minn. Stat. § 168A.152, subd. 1 (2002). 

            Appellant Jessica Freeman saw A & J’s Internet advertisement for this vehicle.  The advertisement stated, in part: “This unit runs & drives.  It had previous damage that was repaired.  Call and talk to Aaron or Jason for detailed description.  Price $9,500.”  Freeman contacted A & J about the car and spoke to Jason Miller.  Freeman went to A & J to inspect the car on two occasions.  She specifically noted that the vehicle had problems including a broken back window, missing toe hook, a crack on the roof,[2] cracked windshield, a missing airbag, missing molding inside and outside, problem with closing the rear door, and a missing luggage rack.  Freeman discussed these problems with Miller.  Freeman was also aware that the vehicle “pulled to the right,” based on what Miller told her and her own observation during a test drive. 

            Miller told Freeman that one of A & J’s employees had purchased the vehicle at an auto auction and represented that it was a stolen-and-recovered vehicle.  Miller told Freeman that the broken rear window was indicative of a vehicle that had been stolen, but that the vehicle possibly could have been involved in an accident because of the crack on the top.  Freeman was aware that the vehicle had a salvage title, but the record does not indicate when, or how, she first became aware of this fact.

            Freeman told Miller that her bank required that the vehicle be inspected before it could approve financing.  Miller arranged for an inspection with an auto body shop adjacent to A & J.  The auto body shop gave Freeman a slip of paper indicating the frame was “fine.”  This inspection apparently satisfied Freeman’s bank.  Freeman agreed to purchase the vehicle for $9,500.  Freeman understood that she was purchasing the vehicle “as is” with no warranties.  The purchase agreement contains a conspicuous red stamp that reads, “THIS IS A SALVAGE VEHICLE, WITH A SALVAGE TITLE.”  At the time of purchase, Freeman signed the certificate of title, which is also conspicuously stamped:  “SALVAGE TITLE Must Be Inspected.”  Jason Miller stated on the assignment of title that: “to the best of my knowledge this vehicle has not sustained damage in excess of 70% actual cash value.”  Freeman asserts that she never received title to the vehicle. [3]

            After Freeman purchased the car, she noted additional problems, such as a leaky window, a malfunctioning heater, and nonfunctioning power seats and door locks.  She had to replace the tires once and the rear axle twice.  She drove the car approximately 50,000 miles.  The problem that precipitated this lawsuit, however, occurred when the tabs that were on the car at the time of purchase expired, and Freeman attempted to get new license tabs.  At that time, she learned that the vehicle had been declared a “total loss” by Progressive Insurance Company because it had sustained damages in the amount of $21,351, in a rollover accident.  Freeman also learned that in order to register the vehicle she would have to produce repair receipts and original invoices for parts used in repair, and would have to have the vehicle inspected.  When Freeman contacted Miller for the repair receipts, she learned that the company that owned the vehicle at the time of repair had gone out of business.  Freeman alleges that Miller, to assist Freeman in registering the vehicle, provided a false affidavit for Freeman’s signature, asserting that the vehicle was stolen and recovered and therefore not in need of repair parts.  Freeman declined to sign the affidavit.  Freeman stopped making payments on her loan, gave the vehicle to the bank, and initiated this action alleging violation of the warranty-of-title provisions of Minn. Stat. § 336.2-312 (2002), and violation of the Consumer Fraud Act, Minn. Stat. § 325F.69 (2002). 

            After A & J moved for summary judgment, Freeman moved to amend her complaint and for partial summary judgment on the claim asserted in the amended complaint for violation of Minn. Stat. § 325F.6641 (2002), based on Miller’s alleged failure to orally inform Freeman that the vehicle had a salvage title and why it had a salvage title.  The district court found Miller’s motions procedurally barred as untimely, and without substantive merit. 

            The district court  granted A & J’s summary judgment motion, determining that there are no material fact questions, and that, as a matter of law, A & J did not breach the warranty-of-title provisions of Minn. Stat. § 336.2-312 or make any intentional misrepresentations under Minn. Stat. § 325F.69.  This appeal followed.

D E C I S I O N

            “On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district] courts erred in their application of the law.”  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990) (citation omitted).  Summary judgment should be granted when the pleadings and record show that there is no genuine issue of material fact and that one of the parties is entitled to a judgment as a matter of law.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  The reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted.  Id.  Statutory interpretation is subject to de novo review.  Sorenson v. St. Paul Ramsey Med. Ctr., 457 N.W. 2d 188, 190 (Minn. 1990).

1.         Warranty of Title

            Freeman argues that, because she has never received title to the vehicle, A & J breached the warranty-of-title provisions of Minn. Stat. § 336.2-312 (2002).

            Minn. Stat. § 336.2-312 provides, in relevant part:

(1) Subject to subsection (2) there is in a contract for sale a warranty by the seller that

(a) the title conveyed shall be good, and its transfer rightful; and

 

                        * * * *

 

(2) A warranty under subsection (1) will be excluded or modified only by specific language or by circumstances which give the buyer reason to know that the person selling does not claim to be the titleholder or to be selling only such right or title as the person selling or a third person may have.

 

A & J argues that Freeman’s claim that she did not receive title is raised for the first time on appeal.  We disagree.  Freeman testified at her deposition that she never received title to the vehicle, and nothing in the record refutes this testimony.  The district court relied on the provision of Minn. Stat. § 168A.152, subd. 1 (2002), permitting the holder of a salvage certificate of title to transfer ownership, to conclude that A & J only warranted transfer of salvage title.  The district court implicitly found that A & J transferred the salvage title that it had to Freeman and therefore did not breach Minn. Stat. § 336.2-312.  We agree with the district court that A & J only warranted that it was transferring salvage title and that Minn. Stat. § 336.2-312 does not include a warranty that a person will be able to register a vehicle with a salvage title without the statutorily required inspection.  But the record does not establish that Freeman received salvage title to the vehicle.  There is a material question of fact about whether A & J transferred title as warranted.  Based on the existing record, summary judgment on Freeman’s claim under Minn. Stat. § 336.2-312 is not appropriate.

2.         Misleading Statements under Consumer Fraud Act

            The act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived or damaged thereby, is enjoinable as provided herein.

 

Minn. Stat. § 325F.69, subd. 1 (2002).  Any person injured by a violation of Minn. Stat. § 325F.69, subd. 1, may bring a civil action and recover damages, reasonable attorney fees, and costs and disbursements, including costs of investigation.  Minn. Stat. § 8.31, subd. 3a (2002).  And the person claiming such injury need not plead that she relied on the defendant’s alleged misrepresentations to recover damages under Minn. Stat. § 8.31, subd. 3a, for violation of Minn. Stat. § 625F.69, subd. 1.  Group Health Plan, Inc. v. Phillip Morris, Inc., 621 N.W.2d 2, 13 (Minn. 2001).  But it is necessary to prove reliance in the form of some legal nexus between the injury and the wrongful conduct, to satisfy the causation requirement in an action for damages.  Id.

            The district court rejected Freeman’s claim under Minn. Stat. § 325F.69, subd. 1, because Freeman could not “point to a specific circumstance where [A & J] intentionally misled or deceived her.”[4]  But Minn. Stat. § 325F.69, subd. 1, does not require the making of an intentional misrepresentation.  Meyer v. Dygert, 156 F. Supp. 2d 1081, 1086 (D. Minn. 2001) (citing McNamara v. Nomeco Bldg. Specialties, Inc., 26 F. Supp. 2d 1168, 1171 (D. Minn. 1998), which lists cases in which negligent misrepresentations made in connection with the sale of merchandise were found actionable under the statute).  Summary judgment was found inappropriate in McNamara despite plaintiffs’ testimony that they did not believe that defendant was aware that his representations during a sale were false.  McNamara, 26 F. Supp. 2d at 1171.  The court in McNamara said: “[s]imply stated, one making representations in the sale of consumer goods can be held liable, even though he had no specific intent to falsely mislead the consumer.”  Id.  Therefore,  Miller’s statement that the vehicle appeared to have been stolen and recovered could constitute a misleading statement under the Consumer Fraud Act even if Miller did not intend to mislead Freeman, and the district court erred by interpreting the statute to require an intentional misrepresentation. 

            Freeman asserts that Miller’s statements were misleading and that Miller intended that Freeman rely on the implication that the title branding was attributable to the vehicle’s theft and recovery, rather than to significant physical damage.  Although the record is not well developed regarding the importance of this distinction, Freeman suggests that if the salvage-title status was due to the vehicle having been stolen and recovered, she would not have to document repairs or produce original receipts for parts used in repair, and would therefore be able to register the vehicle.  The allegedly fraudulent affidavit prepared by Jason Miller for Freeman’s signature which states, “Stolen & Recovered Vehicle! No Parts Needed,” supports Freeman’s explanation of the significance of the distinction between a vehicle that has salvage title because it was stolen and a vehicle that has salvage title because of significant damage.

            We conclude that there is a genuine issue of material fact about whether Miller’s statements were misleading and whether Miller intended Freeman to rely on the implication that the vehicle had salvage title because it had been stolen and recovered rather than because it sustained significant damage. 

            A & J argues that it is nonetheless entitled to summary judgment on Freeman’s  claims under Minn. Stat. § 325F.69, subd.1, because Freeman has not demonstrated that she reasonably relied on Miller’s statements.  But, as discussed above, Freeman did not have to plead reliance.  We conclude that there is a material fact question about whether there is a legal nexus between Freeman’s claimed damages and Miller’s alleged misstatements.  Freeman wanted to buy a car that she could drive.  Nothing in the existing record reflects that she knew that she would not be able to register the vehicle.  And, Freeman asserts that she has been unable to obtain even salvage title to the vehicle, which means she cannot even transfer ownership.  Because there are genuine issues of material fact that preclude summary judgment on Freeman’s claims under Minn. Stat. § 325F.69, subd. 1, the district court erred by granting A & J summary judgment on those claims.

3.         Title Branding Statute

            Freeman asserts that her claim under Minn. Stat. § 325F.6641 (2002), should not have been dismissed on summary judgment and that she should have been granted partial summary judgment on that claim.  We disagree.  The relevant part of the statute provides:

(a) If a motor vehicle has sustained damage by collision or other occurrence which exceeds 70 percent of its actual cash value immediately prior to sustaining damage, the seller must disclose that fact to the buyer, if the seller has actual knowledge of the damage.  The amount of damage is determined by the retail cost of repairing the vehicle based on a complete written retail repair estimate or invoice.

 

(b) * * * [T]he disclosure required by this section must be made orally by the dealer to the prospective buyer in the course of the sales presentation.

 

Minn. Stat. § 325F.6641, subd. 1.

            The district court rejected Freeman’s claims under this statute on procedural grounds as well as on the merits.  Under Minn. R. Civ. P. 56.03 and Minn. R. Gen. Pract. 115.03, Freeman’s motion for partial summary judgment was procedurally barred because it was untimely and A & J did not waive the timelines.  On the merits, the district court noted that Freeman has provided no evidence raising a question of fact about whether A & J had actual knowledge that the vehicle had been damaged by more than 70% of its actual cash value at the time of the sale.  Although some repaired damage was visible, nothing in the record suggests that A & J should have known the extent of the damage from what was visible.  Summary judgment is mandatory against a party who fails to establish an essential element of the claim because that failure renders all other facts immaterial.  Bebo v. Delander, 632 N.W.2d 732, 737 (Minn. App. 2001), review denied (Minn. Aug. 7, 2001).  Because Freeman failed to produce specific facts that raised a genuine issue for trial under Minn. Stat. § 325F.6641, subd. 1, the district court did not err by denying her motion to amend the complaint to add such a claim and by granting summary judgment to A & J, even if the claim had not been procedurally barred.  M.H. v. Caritas Family Servs., 475 N.W.2d 94, 99 (Minn. App. 1991) (stating amendment is properly denied where claims could not survive summary judgment), review granted (Minn. Nov. 13, 1991).

            Freeman’s request for attorney fees under Minn. Stat. § 8.31 (2002) is premature because she has not prevailed on her claim. 

            Affirmed in part, reversed in part, and remanded.

 



[1]  The signature line for the seller on this section of the application for title and registration says: “see title.”  The record copy of the title referenced shows that the subject vehicle had an Arizona salvage title when A & J made the purchase but most of the information on this copy is illegible and nothing legible on the title refers to damage.

[2] The crack was apparently in some “Bondo,” a material used for auto body repair.

[3] What appears to be the original Minnesota Certificate of Title with the completed assignment, signed by Jason Miller and Jessica Freeman, is in the record as Exhibit #2 to the deposition of Jason Miller.  It is not clear from the deposition which party produced this exhibit.

[4] Freeman argues that A & J’s attempt to “suborn perjury” by providing what Freeman claims is a forged document to assist Freeman in obtaining title to the vehicle constitutes an intentional misrepresentation.  The district court did not address this document and we agree with the arguments of A & J that this later action is not relevant to a determination of whether summary judgment is appropriate on Freeman’s consumer fraud claims.