Ferrise v. Spitzer Motors of Mansfield

2013 Ohio 4388

• Court: Ohio Court of Appeals
• Decided: September 27, 2013
• Docket: 13CA19
• Status: Published

Opinion

[Cite as Ferrise v. Spitzer Motors of Mansfield, 2013-Ohio-4388.]

COURT OF APPEALS RICHLAND COUNTY, OHIO FIFTH APPELLATE DISTRICT

JOSEPH J. FERRISE : JUDGES: : : Hon. Sheila G. Farmer, P.J. Plaintiff-Appellant : Hon. John W. Wise, J. : Hon. Patricia A. Delaney, J. -vs- : : Case No. 13CA19 : SPITZER MOTORS OF MANSFIELD : AND ALLY FINANCIAL, INC. : : : Defendants-Appellees : OPINION

CHARACTER OF PROCEEDING: Appeal from the Mansfield Municipal Court, Case No. 2011-CVE-997

JUDGMENT: AFFIRMED

DATE OF JUDGMENT ENTRY: September 27, 2013

APPEARANCES:

For Plaintiff-Appellant: For Defendants-Appellees:

GREGORY S. REICHENBACH ANTHONY B. GIARDINI P.O. Box 256 520 Broadway, 3rd Floor Bluffton, OH 45817 Lorain, OH 44052

MATTHEW G. BURG 323 Lakeside Ave., Suite 200 Cleveland, OH 44113 Richland County, Case No. 13CA19 2

Delaney, J.

{¶1} Plaintiff-Appellant Joseph J. Ferrise appeals the January 28, 2013

judgment entry of the Mansfield Municipal Court.

FACTS AND PROCEDURAL HISTORY

{¶2} In October 2010, Plaintiff-Appellant Joseph Ferrise sought to replace his

existing car with a pre-owned Dodge Magnum. Ferrise does not own a computer, but

he borrowed a computer to do internet research on the availability of the vehicle.

{¶3} In September 2010, a private owner traded in a 2007 Dodge Magnum to

Defendant-Appellee Spitzer Motors of Mansfield, Inc., located in Mansfield, Ohio. When

Spitzer Motors took the vehicle in trade, the Dodge Magnum had approximately 75,000

miles on the odometer. The private owner owned the 2007 Dodge Magnum from

December 2007 to September 2010 and put 50,000 miles on the vehicle.

{¶4} On September 21, 2010, Spitzer Motors ran a Carfax report on the 2007

Dodge Magnum. Spitzer Motors contracts with Carfax to provide vehicle service and

history reports to Spitzer Motors and its customers for the used vehicles for sale by

Spitzer Motors. Spitzer Motors includes a Carfax report in its vehicle sales files for

review by its customers. Customers can also access a free Carfax report on Spitzer’s

website for used vehicles for sale. As to the Dodge Magnum, the Carfax report lists a

first owner of the Dodge Magnum as “Rental.” Prior to the second private owner of the

vehicle, the Dodge Magnum was owned by Rental Car Finance Corp. The vehicle was

owned by Rental Car Finance Corp. from January 18, 2007 to September 2007 and it

was driven for 25,000 miles. Richland County, Case No. 13CA19 3

{¶5} Ferrise saw the 2007 Dodge Magnum on Spitzer’s lot and he decided to

test drive the vehicle. During Ferrise’s first test drive of the Dodge Magnum, Ferrise

asked the Spitzer salesperson about the history of the vehicle. The salesperson said

the vehicle had a “clean Carfax.” Ferrise understood a “clean Carfax” to mean there

was nothing on the Carfax, such as that the car was wrecked. Ferrise did not ask to

see the Carfax report himself.

{¶6} On November 12, 2010, Ferrise purchased the Dodge Magnum for

$11,000. Ferrise and Spitzer Motors signed a Pre-Owned Vehicle Buyer’s Agreement.

The Pre-Owned Vehicle Buyer’s Agreement is a form that includes a box to check

whether the used vehicle is a rental. Spitzer Motors did not check the box to mark the

Dodge Magnum was previously a rental vehicle. Ferris also signed a Retail Installment

Sale Contract. Spitzer Motors assigned its interest in the Retail Installment Sale

Contract to Defendant-Appellee Ally Financial, Inc. At the conclusion of the transaction,

Spitzer Motors provided Ferrise with a folder containing the sales contract documents,

including a copy of the September 21, 2010 Carfax report. Ferrise did not look at the

Carfax report or the sales documents.

{¶7} A few days after the purchase, Ferrise’s neighbor asked to look at the

Carfax report. Ferrise’s neighbor noticed the Carfax report listed the car as previously

owned by a rental car company.

{¶8} Ferrise made $1,500 in payments under the installment contract. In April

2011, Ferrise stopped making payments pursuant to the installment sale contract.

Ferrise did not stop driving the Dodge Magnum, however; he has put approximately

16,000 miles on the car since his purchase of the vehicle. Ferrise has not had any Richland County, Case No. 13CA19 4

problems with the car since its purchase. He has only done regular maintenance on the

car, such as oil changes.

{¶9} On April 19, 2011, Ferrise filed a complaint in the Mansfield Municipal

Court against Spitzer Motors and Ally Financial. The complaint sought declaratory relief

and rescission of the purchase contract for a used vehicle under the Consumer Sales

Practices Act, and alleged fraudulent misrepresentation by Spitzer, and that Ally

Financial was derivatively liable by written agreement and as the holder of a consumer

contract. The basis of Ferrise’s claims was Spitzer Motors’ failure to notify Ferrise the

Dodge Magnum was previously owned by a rental car company. Ferrise alleged he

would not have purchased the Dodge Magnum if he had known it was previously used

as a rental car. Ally Financial filed a counterclaim against Ferrise for the balance of the

installment contract.

{¶10} The parties filed cross-motions for summary judgment. The trial court

denied the motions. A bench trial was held before the magistrate on April 24, 2012.

The magistrate filed his findings of fact and conclusions of law on May 8, 2012,

recommending judgment in favor of Spitzer Motors and Ally Financial. The magistrate

found that while the evidence showed the Dodge Magnum was owned by Rental Car

Finance Corp., Ferrise did not present any evidence the car was used as a rental

vehicle or Spitzer Motors had any knowledge the car was used as a rental vehicle as

defined by the Ohio Administrative Code. Ferrise filed objections to the decision. On

January 28, 2013, the trial court adopted the magistrate’s decision and entered

judgment.

{¶11} It is from this decision Ferrise now appeals. Richland County, Case No. 13CA19 5

ASSIGNMENTS OF ERROR

{¶12} Ferrise raises two Assignments of Error:

{¶13} “I. THE TRIAL COURT ERRED BY DENYING PLAINTIFF-APPELLANT’S

MOTION FOR SUMMARY JUDGMENT.

{¶14} “II. THE TRIAL COURT ERRED BY DETERMINING THAT THE WEIGHT

OF THE EVIDENCED AT TRIAL SUPPORTED ENTERING JUDGMENT IN FAVOR OF

DEFENDANTS-APPELLEES AND AGAINST PLAINTIFF-APPELLANT ON PLAINTIFF-

APPELLANT’S CLAIM UNDER THE CONSUMER SALES PRACTICES ACT AND

DEFENDANTS-APPELLEES’ COUNTERCLAIMS.”

ANALYSIS

II.

{¶15} We will first address Ferrise’s second Assignment of Error because it is

dispositive of the appeal. Ferrise argues in his second Assignment of Error the trial

court’s decision to grant judgment in favor of Spitzer Motors and Ally Financial was

against the manifest weight of the evidence. We disagree.

{¶16} As an appellate court, we neither weigh the evidence nor judge the

credibility of the witnesses. Our role is to determine whether there is relevant,

competent, and credible evidence upon which the fact finder could base its judgment.

Cross Truck v. Jeffries, 5th Dist. Stark No. CA–5758, 1982 WL 2911 (February 10,

1982). In Eastley v. Volkman, 132 Ohio St.3d 328, 972 N.E.2d 517, 2012–Ohio–2179,

the Ohio Supreme Court reiterated its “manifest weight” standard for civil cases taken

from State v. Thompkins, 78 Ohio St.3d 380, 678 N.E.2d 541 (1997). According to

Thompkins: “Weight of the evidence concerns ‘the inclination of the greater amount of Richland County, Case No. 13CA19 6

credible evidence, offered in a trial, to support one side of the issue rather than the

other. It indicates clearly to the jury that the party having the burden of proof will be

entitled to their verdict, if, on weighing the evidence in their minds, they shall find the

greater amount of credible evidence sustains the issue which is to be established before

them. Weight is not a question of mathematics, but depends on its effect in inducing

belief.” (Emphasis sic.) Id. at 387, 678 N.E.2d 541, quoting Black's Law Dictionary (6th

Ed.1990) at 1594. The Ohio Supreme Court also reiterated: “ ‘[I]n determining whether

the judgment below is manifestly against the weight of the evidence, every reasonable

intendment and every reasonable presumption must be made in favor of the judgment

and the finding of facts. * * *.’ “ Eastley at 334, 972 N.E.2d 517, quoting Seasons Coal

Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 80, 461 N.E.2d 1273 (1984), fn. 3, quoting 5

Ohio Jurisprudence 3d, Appellate Review, Section 603, at 191–192 (1978).

{¶17} Ferrise brought his action against Spitzer Motors and Ally Financial based

on violations of the Consumer Sales Practices Act, R.C. Chapter 1345 (“CSPA”) and

common law fraud.

CSPA

{¶18} R.C. 1345.02(A) sets forth the general prohibition against unfair or

deceptive acts or practices:

No supplier shall commit an unfair or deceptive act or practice in

connection with a consumer transaction. Such an unfair or deceptive act

or practice by a supplier violates this section whether it occurs before,

during, or after the transaction. Richland County, Case No. 13CA19 7

In this case, the parties stipulated Spitzer Motors is a “supplier” and Ferrise is a

“consumer.” R.C. 1345.01(C), (D).

{¶19} R.C. 1345.02(B) contains a non-exhaustive list of specific acts that

constitute deceptive acts or practices:

Without limiting the scope of division (A) of this section, the act or practice

of a supplier in representing any of the following is deceptive:

(1) That the subject of a consumer transaction has sponsorship, approval,

performance characteristics, accessories, uses, or benefits that it does not

have;

(2) That the subject of a consumer transaction is of a particular standard,

quality, grade, style, prescription, or model, if it is not;

(3) That the subject of a consumer transaction is new, or unused, if it is

not;

(4) That the subject of a consumer transaction is available to the

consumer for a reason that does not exist;

(5) That the subject of a consumer transaction has been supplied in

accordance with a previous representation, if it has not, except that the act

of a supplier in furnishing similar merchandise of equal or greater value as

a good faith substitute does not violate this section;

(6) That the subject of a consumer transaction will be supplied in greater

quantity than the supplier intends;

(7) That replacement or repair is needed, if it is not;

(8) That a specific price advantage exists, if it does not; Richland County, Case No. 13CA19 8

(9) That the supplier has a sponsorship, approval, or affiliation that the

supplier does not have;

(10) That a consumer transaction involves or does not involve a warranty,

a disclaimer of warranties or other rights, remedies, or obligations if the

representation is false.

{¶20} Because the CSPA “is a remedial law which is designed to compensate

for traditional consumer remedies,” a court must liberally construe it. Davis v. Byers

Volvo, 4th Dist. Pike No. 11CA817, 2012-Ohio-882, ¶ 26 citing Einhorn v. Ford Motor

Co., 48 Ohio St.3d 27, 29, 548 N.E.2d 933 (1990).

{¶21} The Ohio Administrative Code also sets forth rules for the advertisement

and sale of motor vehicles and what can be considered a deceptive and unfair act.

Relevant to the issues in the present case, Ohio Adm.Code 109:4-3-16(B) states:

(B) It shall be a deceptive and unfair act or practice for a dealer,

manufacturer, advertising association, or advertising group, in connection

with the advertisement or sale of a motor vehicle, to:

***

(3) Use any statement, layout, or illustration in any advertisement or sales

presentation which could create in the mind of a reasonable consumer a

false impression as to any material aspect of said advertised or offered

vehicle, or to convey or permit an erroneous impression as to which

vehicles are offered for sale at which prices;

*** Richland County, Case No. 13CA19 9

(15) Fail to disclose prior to the dealer’s requiring signature by the

consumer on any document for the purchase or lease of the vehicle, the

fact that said vehicle has been previously used as a demonstrator, factory

official vehicle or rental vehicle. The above disclosure is required when

such is known by the dealer.

{¶22} “Rental vehicle” is defined by Ohio Adm.Code 109:4-3-16(A)(10) as, “* * *

a motor vehicle which has been operated for hire by an entity which is engaged in the

business of renting vehicles, and includes daily rentals of dealers.”

{¶23} With the above statutory and administrative regulations as our guide, we

consider the evidence presented in this case to determine whether the decision of the

trial court was supported by the evidence. Ferrise presented three pieces of evidence

to establish the prior ownership history of the 2007 Dodge Magnum.

{¶24} First, Ferrise introduced stipulated Exhibit 1-B, the Carfax report. The

Carfax report stated “Owner 1” purchased the Dodge Magnum in 2007 and listed

“Rental” as the type of owner. The Carfax glossary defines “rental” as a vehicle

“registered by a rental agency.” The Carfax reports the estimated length of ownership

by Owner 1 was from January 18, 2007 to September 12, 2007, with the last reported

odometer reading as 25,036. The Carfax report states, “CARFAX DEPENDS ON ITS

SOURCES FOR THE ACCURACY AND RELIABILITY OF ITS INFORMATION,

THEREFORE, NO RESPONSIBILITY IS ASSUMED BY CARFAX OR ITS AGENTS

FOR ERROR OR OMISSIONS IN THIS REPORT. CARFAX FURTHER EXPRESSLY

DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED Richland County, Case No. 13CA19 10

WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR

PURPOSE.”

{¶25} Second, Ferrise introduced the Certificate of Title issued for the Dodge

Magnum on February 24, 2007. It lists the owner as “Rental Car Finance Corp.” located

in Indianapolis, Indiana.

{¶26} Third, Ferrise relies on the testimony of Michael Gremmer, Spitzer Motors’

finance director. On cross-examination, Gremmer testifies that as of the date of the

bench trial, Gremmer knew the Dodge Magnum was a rental car. (T. 115). On direct

examination, Gremmer testifies at the time of the sale, he did not know the Dodge

Magnum was a rental because he did not review the Carfax report. (T. 110).

{¶27} Ohio Adm.Code 109:4-3-16(B)(3) states it is an unfair and deceptive

practice for a dealer to “[f]ail to disclose prior to the dealer’s requiring signature by the

consumer on any document for the purchase or lease of the vehicle, the fact that said

vehicle has been previously used as a demonstrator, factory official vehicle or rental

vehicle. The above disclosure is required when such is known by the dealer.”

(Emphasis added.) Ohio Adm.Code further defines a rental vehicle as “a motor vehicle

which has been operated for hire by an entity which is engaged in the business of

renting vehicles, and includes daily rentals of dealers.” (Emphasis added.) The trial

court held Ferrise established Rental Car Finance Corp. was a prior owner of the Dodge

Magnum. The trial court held, however, Ferrise failed to present credible evidence the

Dodge Magnum was previously used or operated as a rental vehicle. Ferrise did not

present evidence as to the use of the Dodge Magnum while owned by Rental Car

Finance Corp. The record established in this case supports the trial court’s conclusion. Richland County, Case No. 13CA19 11

{¶28} Ferrise next argues Spitzer Motors violated Ohio Adm.Code 109:4-3-

16(B)(3) by using false statements in its sales presentation to create in the mind of

Ferrise, the reasonable consumer, a false impression as to any material aspect of the

offered vehicle. Ferrise states by saying the Dodge Magnum had a “clean Carfax” and

by failing to check the box marked “rental” on the Buyer’s Agreement, Spitzer Motors

created a false impression as to a material aspect of the Dodge Magnum – that it was

previously used as a rental vehicle. As stated above, there was no evidence presented

the car was used as a rental vehicle, other than it was owned by Rental Car Finance

Corp. As to a false impression, when Ferrise testified when he was told the Carfax was

“clean,” he understood the meaning of a “clean Carfax” to be that the Dodge Magnum

had not been in an accident. The Dodge Magnum had not been in an accident.

{¶29} Ferrise relies heavily on Ohio Adm.Code 109:4-3-16 to establish his case

under the CSPA. The evidence in the case fails to meet the standards in the Code as

to whether the Dodge Magnum was previously used as a rental vehicle, so as to be a

deceptive and unfair act by Spitzer Motors.

Common Law Fraud

{¶30} Ferrise also brought a common law claim of fraudulent misrepresentation.

To prove a common law claim of fraud, a plaintiff must establish the following elements:

(1) a representation or, where there is a duty to disclose, concealment of a fact, (2)

which is material to the transaction at hand, (2) made falsely, with knowledge of its

falsity, or with such utter disregard and recklessness as to whether it is true or false that

knowledge may be inferred, (4) with the intent of misleading another into relying upon it,

(5) justifiable reliance upon the representation or concealment, and (6) a resulting injury Richland County, Case No. 13CA19 12

proximately caused by the reliance. Burr v. Stark County Board of Commissioners, 23

Ohio St.3d 69, 491 N.E.2d 1101 (1986), paragraph two of the syllabus.

{¶31} The elements of fraud must be established by clear and convincing

evidence. Clear and convincing evidence is that measure or degree of proof that will

produce in the mind of the trier of facts a firm belief or conviction as to the allegations

sought to be established. Cross v. Ledford, 161 Ohio St. 469, 120 N.E.2d 118 (1954).

The burden to prove fraud rests upon the party alleging the fraud. First Discount Corp.

v. Daken, 75 Ohio App. 33, 60 N.E.2d 711 (1st Dist.1944), paragraph seven of the

syllabus.

{¶32} The magistrate’s decision concluded Ferrise failed to prove Spitzer Motors

committed fraud. (Magistrate’s Decision, May 8, 2012, Conclusion of Law 8.) Ferrise

does not assign as error in his appellate brief the trial court’s decision as to common law

fraud. As such, we will not address the issue of common law fraud pursuant to App.R.

16.

{¶33} The decision of the trial court as to Ferrise’s claim under the CSPA was

supported by competent and credible evidence. The Ohio Supreme Court held, “‘[I]n

determining whether the judgment below is manifestly against the weight of the

evidence, every reasonable intendment and every reasonable presumption must be

made in favor of the judgment and the finding of facts. * * *.’“ Eastley at 334, 972

N.E.2d 517. Ferrise’s second Assignment of Error is overruled.

I.

{¶34} Ferrise argues in his first Assignment of Error the trial court erred in

denying his motion for summary judgment. Based on our conclusion as to the second Richland County, Case No. 13CA19 13

Assignment of Error, we find no error for the trial court to find a genuine issue of

material fact for trial.

{¶35} Ferrise’s first Assignment of Error is overruled.

CONCLUSION

{¶36} The first and second Assignments of Error of Plaintiff-Appellant Joseph J.

Ferrise are overruled.

{¶37} The judgment of the Mansfield Municipal Court is affirmed.

By: Delaney, J.,

Farmer, P.J. and

Wise, J., concur.

HON. PATRICIA A. DELANEY

HON. SHEILA G. FARMER

HON. JOHN W. WISE