301 Mich. App. 670
Mich. Ct. App.2013Background
- Product is a 1965 Dodge AWB drag car altered body; restored over more than a decade using donor parts and non-original 1966/1967 Charger body.
- Seller defendant purchased the car from Fengel in the early 1990s for $35,000, obtaining documentation and the original 1965 title; restoration aimed to create the authentic Strickler car.
- Plaintiff, Nicholas Smith on behalf of Bev Smith, Inc., contracted March 29, 2007 to buy the car for $600,000 cash plus two classic cars, with representations of authenticity.
- After purchase, plaintiff learned in 2008–2009 that the car was rebuilt with replacement parts and non-original body; experts concluded the car was not the real Strickler car.
- Plaintiff filed suit September 28, 2010 alleging breach of contract, fraud in the inducement, fraudulent misrepresentation, and silent fraud; circuit court granted summary disposition for defendant, dismissing claims with prejudice.
- Court held UCC applies to sale of goods (cars), plaintiff not a merchant, and notice of breach was not given within a reasonable time; fraud claims barred by economic loss doctrine and contract-based remedies; affirmed summary disposition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does UCC govern the sale of the car? | Plaintiff argues UCC applies to goods sale. | Defendant contends UCC applies; contract terms govern. | Yes, UCC applies. |
| Is plaintiff a merchant under UCC for this transaction? | Plaintiff is a serious collector of classic cars. | plaintiff not a merchant; purchase for pleasure. | Plaintiff not a merchant. |
| Was notice of breach within a reasonable time? | Notices given within a reasonable time after discovery. | Notices long after purchase; not reasonable. | No; notice not within reasonable time. |
| Are fraud claims barred by economic loss doctrine or contract-based remedies? | Fraud claims independent of contract; deception caused damages. | Fraud claims duplicative of contract; disclosure was within contract framework; economic loss doctrine bars. | Fraud claims barred; contractual remedies apply. |
Key Cases Cited
- Spiek v Dep’t of Transportation, 456 Mich 331 (Mich 1998) (de novo review of summary disposition; standard applies to undisputed material facts)
- Kennedy v Great Atlantic & Pacific Tea Co, 274 Mich App 710 (Mich App 2007) (summary disposition standards; material facts control)
- West v Gen Motors Corp, 469 Mich 177 (Mich 2003) (limits on reasonable reliance and factual dispute)
- Huron Tool & Engineering Co v Precision Consulting Servs, Inc, 209 Mich App 365 (Mich App 1995) (economic loss and fraud separation principles)
- Webb v First of Mich Corp, 195 Mich App 470 (Mich App 1992) (availability of knowledge and information to plaintiff; no fraud where means exist)
- Colonial Dodge, Inc v Miller, 420 Mich 452 (Mich 1984) (nonconformity and revocation of acceptance; time limits considerations)
- Moore v First Security Cas Co, 224 Mich App 370 (Mich App 1997) (reasonableness standard for timing and discovery)