2022 Ohio 3489
Ohio Ct. App.2022Background
- Banks bought a 2001 Mitsubishi Galant from Shark Auto Sales on 8/19/21 for $1,470 (total $1,600.24 with fees) and signed an "as is — No dealer warranty" form.
- Salesperson allowed a test drive and told Banks she could have the car inspected; Banks declined to obtain a pre-purchase inspection.
- After purchase a repair shop informed Banks the rear frame was rotted and the car was unsafe. Banks submitted the shop’s statement that the "REAR FRAME IS ROTTED OUT."
- A magistrate found Shark breached a duty to inspect and warned purchasers, concluded the frame defect substantially impaired value, and allowed Banks to revoke acceptance, awarding $1,600.
- The municipal court overruled defendant’s objections; Shark appealed. The appellate court reversed, holding revocation improper because the sale was "as is" and the dealer’s inspection duty arose in tort, not contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Banks could revoke an "as is" used-car sale after discovering a latent, dangerous frame defect and the dealer’s alleged failure to inspect | Dealer failed to exercise duty to inspect/warn about dangerous defects; nonconformity substantially impaired value so revocation under R.C. 1302.66 is proper | Sale was contractually "as is" and disclaimed implied warranties; Thrash/Stamper impose a tort duty to inspect but do not create a contract-based right to rescind; buyer had opportunity to inspect | Reversed: revocation not allowed. Thrash/Stamper are tort precedents; "as is" sale excludes implied warranties and precludes revocation under the UCC absent bases allowed by R.C. 1302.66 |
Key Cases Cited
- Thrash v. U-Drive-It Co., 110 N.E.2d 419 (Ohio 1953) (establishes dealer negligence duty to inspect and warn about dangerous latent defects in tort)
- Stamper v. Parr-Ruckman Home Town Motor Sales, Inc., 265 N.E.2d 785 (Ohio 1971) (reaffirms Thrash duty to warn applies even when vehicle sold "as is" in tort context)
- Mussivand v. David, 544 N.E.2d 265 (Ohio 1989) (clarifies that duty in negligence is a question of law for the court)
- Schneider v. Miller, 597 N.E.2d 175 (Ohio App. 1991) (refused revocation for an "as is" sale where buyer had opportunity to inspect and no warranty assurances induced acceptance)
- Kaye v. Buehrle, 457 N.E.2d 373 (Ohio App. 1983) (when buyer contractually agrees to accept property "as is," seller relieved of duty to disclose)
- Sellers v. Marrow Auto Sales, 706 N.E.2d 837 (Ohio App. 1997) (used motor vehicles are "goods" governed by the UCC)