Xchange Motors, Inc. v. Impson

2024 IL App (3d) 240133-U
Appellate Court of Illinois·Decided December 3, 2024·No. 3-24-0133·Unpublished

Opinion

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

2024 IL App (3d) 240133-U

Order filed December 3, 2024

IN THE

APPELLATE COURT OF ILLINOIS THIRD DISTRICT

2024

XCHANGE MOTORS, INC., an Illinois ) Appeal from the Circuit Court Corporation, ) of the 18th Judicial Circuit, ) Du Page County, Illinois, Plaintiff-Appellant/Cross Appellee, )

) Appeal No. 3-24-0133

v. ) Circuit No. 23-LM-41 )

) Honorable

JESSICA IMPSON, ) Kenneth L. Popejoy, ) Judge, Presiding.

Defendant-Appellee/Cross Appellant. )

JUSTICE ALBRECHT delivered the judgment of the court.

Justices Hettel and Davenport concurred in the judgment.

ORDER

¶1 Held: The circuit court did not err in confirming the arbitration award when no gross mistake of law or fact appears on the face of the arbitration award.

¶2 Xchange Motors, Inc. (Xchange) appeals from the Du Page County circuit court’s denial of its motion to modify or vacate the arbitration award entered against it. On appeal, it argues that the circuit court erred in denying its motion and in confirming the arbitration award because the arbitrator’s ruling was incorrect. We affirm.

¶3 I. BACKGROUND

¶4 This matter stems from Jessica Impson’s purchase of a 2008 modified Subaru from Xchange. The parties proceeded to arbitration over an alleged defect and Impson’s claim that Xchange breached its implied warranty of merchantability. After a hearing, the arbitrator found that both parties had violated certain statutory requirements and ordered Xchange to arrange for the Subaru’s towing for an inspection, to provide an estimate for its repair, and to repair the vehicle at its own expense. She also awarded Impson attorney fees in a later order.

¶5 A. The Arbitration Hearing

¶6 Regarding the facts leading to arbitration, no transcripts or filings with the arbitrator have been provided to this court other than Impson’s petition for attorney fees and the arbitrator’s award and order granting attorney fees. Although no record has been provided from these proceedings, the arbitrator made several findings of fact in her award and provided a summary of the testimony elicited at the hearing.

¶7 At the hearing, Impson testified that she found the vehicle at issue online before going to Xchange’s location and speaking with staff on site. The staff member she spoke to at the location told her that Xchange purchased the vehicle at an auction. He also informed her that Xchange had inspected the vehicle prior to listing it for sale, and no issues were revealed at the inspection. After test driving it, Impson paid for the vehicle in cash on March 12, 2021. Impson did not perform an independent inspection of the vehicle prior to the sale.

¶8 On March 23, 2021, the vehicle broke down, and Impson towed it to a Subaru dealership in Elgin, Illinois. She stated that she immediately called Xchange when the vehicle broke down and that she later provided Xchange with a written repair estimate. The estimate detailed that the vehicle required a new engine, and it would cost approximately $10,000 to repair it. At the

arbitration hearing, Impson produced the estimate, but it was not entered into evidence as she did not provide sufficient foundation for it and had not brought an expert witness to the hearing to testify regarding the defects in the engine or the accuracy of the estimate. Impson further testified that after bringing the estimate to Xchange, it refused to pay for the repair, stating that she purchased the vehicle “as is,” therefore, it was not responsible for any problems she had after purchase. Impson could not recall if Xchange offered to inspect or repair the vehicle itself if she allowed it to be inspected by a repair shop of its choosing.

¶9 It was established that Impson’s son had driven the vehicle for less than 500 miles before the engine malfunctioned. This evidence was provided in the form of a photograph of the odometer Impson produced during her testimony, which the arbitrator admitted over Xchange’s objections.

¶ 10 On cross examination, Impson stated that when she purchased the vehicle, she did see the words “as is” on the Buyers Guide form and understood what that meant. She did not remember whether she asked Xchange what modifications were done to the vehicle at the time of purchase. She stated she did not have the vehicle inspected prior to purchasing it, and Xchange did not tell her she could have one. She did not ask for an inspection because she trusted Xchange’s statement that it had been inspected before being listed for sale. A review of the emails between Impson and Xchange revealed that she requested Xchange pay $10,000 for the repairs or else fully refund her for the vehicle.

¶ 11 Sefer Morina, a co-owner and Xchange’s general manager, also testified at the hearing. The arbitrator noted that Morina claimed he was familiar with the situation, though he was not the person who sold the vehicle to Impson. However, Morina testified that he initially responded to the emails Impson sent when she first found the vehicle online. Additionally, he claimed that

when Impson came in with her estimate for the repair, she caused a scene and was rude to the employees.

¶ 12 Morina testified that Xchange’s position for claiming that it had no liability was because the vehicle was sold “as is.” When asked if the sales documents contained the required language contained in section 2L(j)(3) of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act), Morina could not recall. 815 ILCS 505/2L(j)(3) (West 2022). He stated that the “WE OWE/YOU OWE” form did not contain the language, and the paperwork did not declare any particular defect related to the vehicle. There were no documented communications regarding what modifications were made to the vehicle, nor was there anything in writing indicating that Xchange had offered to inspect or repair the vehicle once Impson contacted it about the vehicle breaking down. Morina stated that the initial offer to inspect and repair came during Impson’s in-person visit, and the position that Xchange was not liable for repairs came after Impson refused the offer to have it inspected by a shop of Xchange’s choosing.

¶ 13 Xchange produced an expert witness who testified that he inspected the vehicle prior to Xchange listing it for sale. He stated that the vehicle had been rebuilt and heavily modified but was in good condition. He had found no defects in the engine at that time. On cross-examination, he stated that he was not surprised the engine blew, because it was a Subaru that had been heavily modified. He also had not been able to tell if there were any internal problems with the engine because that would have required him to dismantle the engine completely. The average buyer would not have been able to tell if there were internal issues with the engine because those problems would not have been found during a routine inspection.

¶ 14 In issuing an award, the arbitrator made several findings. First, she found that section 2L of the Consumer Fraud Act applied here because Impson provided sufficient evidence to prove

that a defect occurred and that she contacted Xchange within 15 days and that less than 500 miles had been driven when the defect revealed itself. Id. § 2L(c).

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