Opinion
09-P-954
11-18-2011
NEIL ROSSMAN v. HERB CHAMBERS COMMONWEALTH AVENUE, INC.
NOTICE: Decisions issued by the Appeals Court pursuant to its rule 1:28 are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Neil Rossman brought suit in Superior Court against the defendant car dealer, Herb Chambers Commonwealth Avenue, Inc., doing business as Herb Chambers Porsche (HCP), asserting various claims related to the lease of a 2001 Porsche C4 coupe from a second dealer, Bay State Motorsports (Bay State), who is not a party to this dispute. A jury found for Rossman on his claim of fraudulent misrepresentation and awarded him $42,000 in damages. The trial judge denied HCP's motion for judgment notwithstanding the verdict (judgment n.o.v.), but found for HCP on Rossman's claims of G. L. c. 93A and G. L. c. 93B violations. Both parties filed notices of appeal. We reverse the judgment on the count alleging fraudulent misrepresentation because HCP's motion for judgment n.o.v. should have been allowed. We affirm the remainder of the judgment.
The jury found for HCP on Rossman's claims of breach of warranty and negligent misrepresentation.
Discussion. 1. HCP's appeal. HCP argues, as it did below, that it made no misrepresentation of fact to Rossman and also that it owed him no duty of disclosure in circumstances where HCP was a stranger to the ultimate transaction that occurred between Rossman and Bay State. Ever mindful of our obligation to 'view circumspectly any encroachment of the jury's function,' New England Acceptance Corp. v. American Mfrs. Mut. Ins. Co., 373 Mass. 594, 596 (1977), we nevertheless agree with HCP. This is one of those instances in which an order for the entry of judgment n.o.v. should have been entered.
We review the denial of a defendant's motion for judgment n.o.v. to determine whether 'anywhere in the evidence, from whatever source derived, any combination of circumstances could be found from which a reasonable inference could be drawn in favor of the plaintiff.' Kuwaiti Danish Computer Co. v. Digital Equip. Corp., 438 Mass. 459, 467 (2003), quoting from Poirier v. Plymouth, 374 Mass. 206, 212 (1978). See Cahaly v. Benistar Property Exch. Trust Co., 451 Mass. 343, 350 (2008). To sustain a claim for fraudulent misrepresentation, Rossman had the burden at trial to demonstrate that HCP 'made a false representation of a material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff relied upon the representation as true and acted upon it to [his] damage.' Masingill v. EMC Corp., 449 Mass. 532, 540 (2007), quoting from Kilroy v. Barron, 326 Mass. 464, 465 (1950). See Barrett Assocs., Inc. v. Aronson, 346 Mass. 150, 152 (1963); Danca v. Taunton Sav. Bank, 385 Mass. 1, 8 (1982). Where, as here, the claim of fraud is premised on a failure to disclose the history and condition of the vehicle at issue, Rossman had to prove, among other things, that HCP had a duty to disclose. See Wolf v. Prudential-Bache Sec., Inc., 41 Mass. App. Ct. 474, 476-477 (1996), citing Restatement (Second) of Torts § 551 (1977). A duty to disclose arises in very limited situations described in the Restatement and pertains to a business transaction between the parties. We conclude that the duties set forth in the Restatement do not apply in this case because the vehicle was leased from a third party, not HCP.
The pertinent facts, viewed in Rossman's favor, are as follows. Seeing an ad in the newspaper for a 'brand new' Porsche placed by HCP, Rossman went to the showroom and spoke to a sales person, who represented the car as 'flawless' and new. In fact, the car had been driven for a brief period as a 'demo,' and had been involved in an accident, repaired, and placed back on the showroom floor. Uncontroverted testimony revealed that, under industry practice, any car, even those involved in accidents and repaired, could be sold as 'new' provided the car had not yet been titled or registered.
At trial, Rossman acknowledged that the sales representative disclosed the mileage to Rossman, but not that the car had been involved in an accident, although the sales person stated that he would have done so had the transaction approached finality, as was HCP's practice. Rossman indicated that he was interested in leasing the car, but left the showroom without a test drive or further discussion when he learned that the lease payments would be more than $1,000 per month. Two subsequent contacts, by phone and letter, were unsuccessful in eliciting further interest from Rossman.
Rossman later did some comparison shopping. He eventually approached Bay State and at some point told that dealer that he liked the Porsche at HCP, and asked the dealer if it would lease that particular car to him for less than $1,000. Bay State then purchased the car 'as is' from HCP, sight unseen, and leased it to Rossman for less than $1,000 per month. HCP did not know that Bay State was purchasing the car for Rossman or that Rossman was in any way involved in the transaction. Rossman took possession, but soon became dissatisfied on certain items, most notably a 'whistling noise' that evaded repair efforts. In the course of these repairs, Rossman learned that the car had been involved in an accident before he leased it. Rossman demanded satisfaction from HCP, but HCP's responses were not satisfactory to Rossman. This suit followed.
Even drawing reasonable inferences in favor of Rossman, we conclude that as matter of law HCP owed no duty to disclose the history or condition of the car in these circumstances. As no transaction involving the Porsche resulted between Rossman and HCP, HCP cannot be held liable for any failure to disclose the history or condition of the Porsche during the brief period that Rossman spent looking over the car in its showroom. Under Restatement (Second) of Torts § 551, a contemplated transaction between the parties is a prerequisite to a duty to disclose, and the duty must be discharged before the consummation of the transaction. Wolf v. Prudential-Bache Sec. Inc., 41 Mass. App. Ct. at 476-477. When Rossman visited HCP, he was in the showroom for about twenty minutes, during which time he talked with a sales representative, sat in the vehicle, and discussed vehicle options. The representative told Rossman that the vehicle had over 300 miles on it. Rossman did not test drive the vehicle, when he presumably could have discovered obvious defects, such as the 'whistling noise,' and given the HCP sales person an opportunity to explain or otherwise make more complete disclosures. Although Rossman looked over some leasing options, he did not find an option within his price range and left HCP without attempting further negotiations. At no time during Rossman's visit to HPC did he state that he would return to buy the car himself or engage in a transaction with a third party to acquire the car. Even after this visit, Rossman did not communicate any further interest in leasing the car, although a sales representative called and wrote to him to pursue the matter.
It was the third party dealer who, at Rossman's urging, independently contacted HCP and arranged to acquire the Porsche several days after Rossman had visited the HCP showroom. The purchase agreement was a typical dealer agreement allowing for the transfer of ownership without any warranties. Additionally, it is undisputed that Rossman did not inform HCP that he was working with Bay State to acquire the car until long after the leasing agreement between Rossman and Bay State had been executed. On these facts, particularly where HCP dealt directly, although briefly, with Rossman about the Porsche initially but did not participate in the last stages leading to a final transaction, when such disclosures would ordinarily occur, the jury could only conclude that the discussion between Rossman and HCP about the Porsche had not sufficiently progressed to trigger a duty to disclose the car's condition or history. Contrast Maxwell v. Ratcliffe, 356 Mass. 560, 562-563 (1969) (real estate agent failed to disclose defect with basement prior to sale of a house to the plaintiffs); Nota Constr. Corp. v. Keyes Assocs., Inc., 45 Mass. App. Ct. 15, 18-19 (1998) (architectural firm had a duty to disclose subsurface defects in property before the subcontractor placed a bid for work on the project). Nor did HCP participate in the ultimate transaction between Rossman and Bay State. See, e.g., Wade v. Ford Motor Co., 341 Mass. 596, 597 (1961) (in action brought by purchasers of used cars against car manufacturer, court held that manufacturer had no duty to disclose as it was 'a stranger to the transactions between [the car dealership] and the plaintiffs').
Nor can we say that any duty to disclose arose in connection with HCP's interactions with Bay State. At no time during the acquisition of the car from HCP did Bay State indicate that it was purchasing the car based on representations HCP originally made to Rossman. In its request for an invoice for the vehicle, Bay State merely indicated that it was 'leasing the vehicle to an end user.' At least four or five days elapsed from the time Rossman visited HCP and the time that Bay State inquired about the vehicle, and ten days had passed by the time Bay State purchased the vehicle.
In his brief, Rossman refers to Bay State as its 'go-between' or 'agent.' However, neither party raised the issue below that Bay State may have been acting as an agent for an undisclosed principal (Rossman). Therefore, any argument that a misrepresentation to Bay State was a misrepresentation to Rossman by way of agency law is waived and we do not comment on its merits. See Boston Water & Sewer Commn. v. Commonwealth, 64 Mass. App. Ct. 611, 618 (2005).
Consequently, HCP was entitled to judgment n.o.v. on count II (fraudulent misrepresentation) because Rossman failed to put forth evidence that HCP either made an affirmative misstatement or otherwise had a duty to disclose in the circumstances presented.
In his brief, Rossman points to statements by the sales representative that the vehicle was 'flawless' as a fraudulent affirmative statement by HCP. This representation on its own falls into the category of mere puffery. See, e.g., Stolzoff v. Waste Sys. Intl., Inc., 58 Mass. App. Ct. 747, 760 (2003), citing Kuwaiti Danish Computer Co. v. Digital Equip. Corp., 438 Mass. at 468- 469. Statements of the superlative quality or condition of items for sale are customarily deemed mere 'puffing' or 'seller's talk' and are not actionable. See Kabatchnick v. Hanover-Elm Bldg. Corp., 328 Mass. 341, 344 (1952); Hannon v. Original Gunite Aquatech Pools, Inc., 385 Mass. 813, 823 (1982). See also Rosenbush v. Learned, 242 Mass. 297, 300 (1922) ('prime elegant merchandise' in 'first-class condition' held seller's talk). Here, there is also testimony that Rossman understood flawless to refer to the appearance, style, paint, and color of the car.
Because we conclude that judgment should enter in favor of HCP on count II of the complaint, we need not address HCP's arguments concerning the type and amount of damages.
2. Rossman's G. L. c. 93A claim. Rossman argues that the trial judge erred in finding for HCP on his G. L. c. 93A count. When reviewing a trial judge's conclusion that particular conduct was or was not unfair or deceptive under c. 93A as a mixed question of law and fact, we 'review the judge's subsidiary findings of fact under the clearly erroneous standard, while reviewing de novo his ultimate conclusion of law.' Zabin v. Picciotto, 73 Mass. App. Ct. 141, 170 (2008). See R.W. Granger & Sons, Inc. v. J & S Insulation, Inc., 435 Mass. 66, 73 (2001).
Rossman did not timely pay a docket fee for his cross appeal. We deny his motion to pay the fee and to docket his appeal late, as he has failed to show sufficient cause for the tardiness. See Mass.R.A.P. 10(a), as amended, 435 Mass. 1601 (2001). Although Rossman therefore has no appeal before us, we choose to comment on the merits of his attempted appeal nonetheless. We note that he does not raise arguments regarding his claims of breach of warranty, negligent misrepresentation, or violation of G. L. c. 93B, and so we confine our discussion to G. L. c. 93A.
Rossman does not specifically take issue with the judge's ruling that 940 Code Mass. Regs. § 3.04 (1993) (regarding deceptive pricing) and id. § 3.05 (regarding general misrepresentations) are inapplicable to the alleged unfair or deceptive conduct. To the extent Rossman argues this point, it is without merit. The judge's ruling is a reasonable application of the law to the facts as found by the judge.
General Laws c. 93A, § 2, prohibits ''unfair or deceptive acts or practices in the conduct of any trade or commerce.' An action is 'unfair' if it is '(1) within the penumbra of a common law, statutory, or other established concept of unfairness; [or] (2) immoral, unethical, oppressive, or unscrupulous" (citations omitted). Gossels v. Fleet Natl. Bank, 453 Mass. 366, 373 (2009). 'The unfairness of an act or practice is determined from all the circumstances.' Herman v. Admit One Ticket Agency LLC, 454 Mass. 611, 616 (2009). Rossman argues that the judge's findings were at odds with the 'force of Rossman's compelling evidence.' However, these arguments merely go to the weight of the evidence. Here, the judge correctly stated the requirements for a c. 93A claim, made subsidiary findings supported by the evidence, and concluded that HCP's conduct was not unfair or deceptive. In making this determination, the judge appropriately noted that Rossman did not enter into a lease with HCP at the time of his visit. Nor did he test drive the vehicle, ask any questions about it, inquire about the mileage, negotiate the proposed lease figures, or give any indication that he might arrange to lease the vehicle using a third party. There was no error.
Conclusion. The order denying the defendant's motion for judgment n.o.v. on count II of the complaint (fraudulent misrepresentation) is reversed and the judgment shall be modified to reflect a dismissal in favor of the defendant on that count. The judgment is otherwise affirmed.
So ordered.
By the Court (Rapoza, C.J., McHugh & Graham, JJ.),