Opinion
AP-22-08
01-13-2023
KAREN AND RONALD WHITE, Plaintiffs/Appellees v. REAL DEAL AUTO SALES AND SERVICE, LLC., Defendant/Appellant
ORDER
Harold Stewart, II Justice, Superior Court
The matter before the court is Appellant Real Deal Auto Sales and Service, LLC's ("Real Deal") appeal of a District Court (Driscoll, J.) decision awarding $6,000 to appellees related to the sale of an automobile sold by Real Deal. For the following reasons, the decision of the District Court must be vacated and judgment entered for Real Deal.
Background
The following facts could be drawn from the record before the District Court.
On March 31, 2021, Ronald White and Karen White ("the Whites") entered into a contract to purchase a 2011 Volvo XC90 (the "Volvo") from Real Deal. (Pl.'s Ex. 1.) The contract provided a warranty disclaimer which stated that the "vehicle includes a warranty of inspectability only." (Id.) The warranty disclaimer specifically disclaims that unless the seller provides a separate written warranty or service contract, the vehicle is being sold "AS IS - WITH ALL FAULTS" and that there are no implied warranties of merchantability or of fitness for a particular purpose. (Id.) No other warranties were provided.
The check engine light came on while the Whites were driving the Volvo home from the Real Deal, after roughly 30 minutes of driving. (Tr. 8:15-16.) The next morning, the Whites returned to Real Deal where salesman Kevin Gosselin used a diagnostic code reader to determine the code that had triggered the check engine light. (Tr. 8; 16-19.) The diagnostic code reader indicated a code P0420, which indicates a potential problem with the catalytic converter. (Tr. 8:18-20; Tr. 69:8-18.) Mr. Gosselin told the Whites that he did not believe that the problem was with the catalytic converter, reset the check engine light, and told them to return if the light came on again. (Tr. 8:20-25, 9:1-3.) Mr. Gosselin stated that he believed the problem might be with the spark plugs, and if the check engine light came on again, he would replace them. (Tr. 9:1-3.)
Mr. Gosselin is also the sole member of Real Deal.
The check engine light came on once again after the Whites left Real Deal for the second time. (Tr. 9:1-3.) The Whites were concerned with Mr. Gosselin minimizing the significance of the code, so they decided against returning to him and sought a second opinion. (Tr. 9:19-20.) The Whites took the Volvo to two mechanics, Raymond Service Center on April 21, 2021, and Portland Volvo on April 26,2021. (Tr. 9:21-23.) Both mechanics told the Whites to stop using the Volvo, as they believed continued use risked damaging the engine. (Tr, 10:3-13.) The Whites took the Volvo to a third mechanic at Lou's Exhaust on May 6, 2021, who agreed with the assessment of the other two mechanics. (Tr. 10:13-20.)
A mechanic at Portland Volvo, Joel Hall, told the Whites that the catalytic converters would have to be replaced, a repair that Portland Volvo estimated would cost $8,000. (Tr. 11:12.) Mr. Hall also informed the Whites that their vehicle would not pass inspection in Cumberland County in its current state. (Tr. 11:9-l 1.) Finally, Mr. Hall discovered that the Volvo had been tampered with. "Spacers" had been installed in the sensors to prevent them from going off. (Tr. 11:18-20.)
Once the Whites had this information, they asked Mr. Gosselin to either repair the Volvo or allow them to return it for a full refund. Mr. Gosselin refused to accept the Volvo or spend the money to make the necessary repairs. Tr. (12: 1-3.) The Whites fried complaints with the Bureau of Motor Vehicles, Maine State Police, and the Office of the Attorney General. (Tr. 12: 18-19.)
On May 18, 2021, inspectors from the Maine State Police inspected the Volvo. The inspectors found the spacers in the exhaust system, but noted that in a non-emissions inspection, the exhaust system would not have been an inspectable item. (Tr. 32: 20-25, 33:1.) The inspectors did not remove the inspection sticker from the inspection conducted in Androscoggin County, because such inspections do not require an emissions inspection. (Tr 33: 1-2.) Vehicles required to be registered in Cumberland County, on the other hand, must undergo an "enhanced inspection," which the parties agree the Volvo would not have passed with these defects. 29-A M.R.S. § 1751(2-A).
The parties communicated once more around June 5, 2021. Mr. Gosselin contacted the Whites, requesting that they bring the car to his own mechanics for inspection. (Tr. 13:7-9.) According to the Whites, Mr. Gosselin retracted his offer on June 7, 2021. (Tr. 13:12-15.) The Whites took the Volvo to be repaired by Automotive Everything, LLC, which replaced numerous components in the exhaust system, including two catalytic converters. (Pl.'s Ex. 7.) The repairs cost the Whites $6,078.43 in total.
Real Deal claims that the Whites were the ones who failed to follow through on appointments, but it does not cite to any evidence in the record that would support this claim.
The Whites filed a Small Claims action in the Androscoggin County District court seeking $6,000, the maximum award possible in the Small Claims docket. After a hearing, the District Court entered judgment in favor of the Whites. Neither party requested written findings of fact and law, and none were issued. Real Deal timely appealed the judgment to the Superior Court, pursuant to M.R.S.C.P. 11.
The District Court is not required to issue written findings of fact or law in a Small Claims action. M.R. Civ. P. 52(a); Wv. Ze/g/jtow,2019ME 8,¶ 13,200 A.3d259.
Standard
"Small claims proceedings are a creature of statute, established by the Legislature with jurisdiction given to the District Court for the purpose of providing a simple, speedy and informal court procedure for the resolution of small claims." Ring v. Leighton, 2019 ME 8, ¶ 11, 200 A.3d 259 (quotation omitted). Small claims proceedings are an alternative way to expediently resolve a claim of less than $6,000, exclusive of interests and costs, that does not involve title to real estate. 14 M.R.S. §§ 7481-7482. "Small claims proceedings are governed by separate, succinct procedural rules" promulgated by the Law Court. Midland Funding LLC v. Walton, 2017 ME 24, ¶ 16,155 A.3d 864.
A party aggrieved by the District Court's judgment in a Small Claims action may appeal to Superior Court. M.R.S.C.P. 11. If a defendant appeals, they may seek a jury trial de novo on issues triable by right by including a written demand for a jury trial with supporting affidavits. M.R.S.C.P. 11(d)(2). If the defendant does not so request, the appeal is on questions of law only. Id. The scope of the Superior Court's review is thus limited and specific in character. Taylor v. Walker, 2017 ME 218, ¶ 5,173 A.3d 539.
Discussion
Real Deal's argument on appeal is straightforward. The parties agree that the Volvo was sold with a warranty of inspectability only, and that it passed inspection in Androscoggin County, where it was sold. The Whites argue that the Volvo must be able to pass the enhanced inspection required for vehicles that must be registered in Cumberland County to satisfy the requirements of the warranty. The Whites also raised the Maine Unfair Trade Practices Act and the Uniform Commercial Code during the hearing before the District Court.
Warranty of Inspectability
Maine Law, under the Used Car Information Act, requires that a dealer selling used motor vehicles must issue a warranty that the vehicle has been inspected by a licensed inspection mechanic and either meets inspection requirements under 29-A M.R.S. § 1751 or discloses the points requiring repair. 10 M.R.S. § 1474(1). This warranty cannot be waived. 10 M.R.S. § 1474(2). In this case, where the Volvo was sold as is, the warranty of inspectability is the only warranty on the vehicle. The warranty of inspectability is violated when a dealer sells a vehicle with a valid inspection certificate but does not meet state inspection standards at the time it is sold. 10M.R.S. § 1474(1)(A).
There are limited exclusions to this warranty requirement, such as when a vehicle is being sold for scrap and the contract specifically contains the words "This vehicle is sold for parts or scrap and not for transportation." 10 M.R.S. § 1472. No exclusions are relevant to this case.
29-A M.R.S § 1751(1) requires motor vehicles required to be registered in Maine to be inspected annually. § 1751(2) lists the required items for inspection, which does not include the onboard diagnostic system. Under § 1751(2-A), "a motor vehicle that is required to be registered in Cumberland County and that is subject to inspection pursuant to subsection 1 must have an annual enhanced inspection," which, among other things, requires the vehicle to not have any active diagnostic codes. All evidence in the record indicates that at the time the Volvo was sold, it passed inspection under standards applicable to vehicles required to be registered in Androscoggin County, but there is ample evidence in the record to conclude that the Volvo would not have passed the enhanced inspection mandated for vehicles required to be registered in Cumberland County.
Once the Whites purchased the Volvo from Real Deal, they would have to register it in Cumberland County. 29-A M.R.S. § 401(2). This would require the Whites to have the Volvo undergo an enhanced inspection, which it would have failed. However, at the time the Volvo was sold, it was not a vehicle required to be registered in Cumberland County and therefore did not need to be able to pass an enhanced inspection to satisfy the warranty of inspectability.
The undisputed fact that the Volvo would have passed inspection in Androscoggin County is dispositive of any claims under the warranty of inspectability. To the extent that the District Court found that Real Deal breached the warranty of inspectability, this was error.
Maine Unfair Trade Practices Act
Real Deal argues for the fust time on appeal that it was a Due Process violation for the District Court to hear any claims under the Maine Unfair Trade Practices Act or the Uniform Commercial Code because Real Deal was not notified in the notice of claim that these statutes would be raised. The court need not address this argument, as it was not raised before the District Court. See Metcalf v, State Tax Assessor, 2013 ME 62, ¶ 20 n. 14,70 A.3 d 261.
As for the Maine Unfair Trade Practices Act (UTPA), the Whites only raised the statute as a possible source for damages for the Volvo failing to pass inspection. Mrs. White stated during the hearing her understanding that "If your car could not pass inspection when it was sold to you then you are entitled to free repairs. If free repairs are refused, then the Unfair Trade Practice Act can require return of your money." (Tr. 22:21-24.) This is a clear reference to 10 M.R.S. § 1476 and 1477(1). §1476(3)(B) provides that if a dealer fails to make repairs for defects covered by their warranties, the buyer may, as one possible remedy, "recover damages in an amount equal to the differences between the fair market value of the motor vehicle in its actual condition at the time the dealer fails to perform his obligations under the warranty and the fair market value of the motor vehicle had it been as warranted." § 1477 provides that violations of the Used Car Information Act are violations of the UTPA, 5 M.R.S. §§ 205-A-214.
Real Deal did not breach the warranty of inspectability. § 1476 and § 1477 do not create a cause of action unless a dealer breaches a warranty. To the extent that the Whites intended to argue that Real Deal engaged in a deceptive trade practice by failing to disclose the spacers in the exhaust system or the defects in the catalytic converter, there is no evidence in the record that Real Deal was aware of these defects during the sale.
Uniform Commercial Code
The Whites also invoked the Uniform Commercial Code's ("UCC") right to reject merchandise that does not conform to the contract at the hearing before the District Court, arguing that the defect with the catalytic converter gave them a right to reject the Volvo for a full refund. See 11 M.R.S. § 2-601(1) (buyer may reject the whole delivery of goods if they fail to conform to the contract). The District Court did not order the remedy available under this section, which would have been rescission of the contract, a return of the Volvo, and a refund of the purchase price, so this could not have been the basis for finding for the Whites. 11 M.R.S. § 2-711 (buyer who rejects goods may recover amount of purchase price that has been paid). Regardless, this provision of the UCC is not relevant to the case, as goods must not conform to the contract to be considered defective under the UCC. While the Volvo would have breached the warranty of merchantability if one had been given, the contract expressly disclaims all warranties except for the warranty of inspectability. Real Deal did not breach this very limited warranty, and so the Volvo was not defective under the contract.
The entry is
The judgment of the District Court is hereby VACATED. Remanded for an entry of judgment, consistent with this decision, for Real Deal Auto Sales and Service, LLC.
The Clerk is directed to enter this order into the docket by reference pursuant to M.R.Civ.P. 79(a).