Gary a Watson v. Champs Auto Sales Inc
355394
| Mich. Ct. App. | Mar 10, 2022Background
- In May 2018 plaintiff bought a 2013 Jaguar from Champs Auto Sales "as is" and separately purchased a service contract from Cornerstone United, Inc.
- A dealership recommended cooling-system service after purchase; plaintiff declined. In July 2018 the engine failed and the dealer said the engine needed replacement; Cornerstone asserted the failure resulted from the unperformed cooling service and offered limited payment (water-pump cost), not full engine replacement.
- Plaintiff sued Champs and Cornerstone for revocation of acceptance, negligent/innocent misrepresentation, MCPA violations, and fraud; Cornerstone later settled and was dismissed with prejudice.
- Plaintiff moved to amend his complaint to clarify claims against Champs; the trial court denied the motion as untimely and prejudicial because discovery had closed, and granted Champs summary disposition under MCR 2.116(C)(10), dismissing all claims.
- On appeal the Court of Appeals held the trial court abused discretion in denying leave to amend for the stated reasons but that amendment would be futile, and it affirmed dismissal of all claims on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Denial of motion to amend complaint | Amendment merely clarified MCPA and other claims against Champs and should be allowed | Amendment was untimely and prejudicial because discovery closed | Denial was an abuse of discretion but reversal unnecessary because amendment would have been futile |
| Revocation of acceptance under MCL 440.2608 | Plaintiff revoked acceptance after discovering the engine defect and sought rescission/refund | Vehicle was sold 'as is'; no warranty so no nonconformity to contract | Dismissed: 'as is' sale means buyer assumed quality risk; no nonconformity for revocation |
| Negligent misrepresentation | Salesperson misrepresented scope of Cornerstone service contract causing plaintiff to rely | Plaintiff was told Cornerstone provided the contract, received brochure and contract materials, but did not read them; reliance was not justified | Dismissed: plaintiff’s reliance was unjustified given the available contract materials and knowledge that Cornerstone was the provider |
| MCPA claims (various subsections) | Salesperson’s statements created gross discrepancy and failed to disclose material facts about coverage | Plaintiff received Cornerstone brochure and contract; no specific false assurances; general statements not actionable; plaintiff didn’t read contract | Dismissed: no genuine issue of material fact on alleged MCPA violations; general statements plus undisputed brochure foreclose reasonable reliance or omission claims |
| Fraud | Salesperson knowingly or recklessly misrepresented that all repairs would be covered | No evidence salesperson knew/acted recklessly; plaintiff could have read contract/brochure; reliance was unreasonable | Dismissed: fraud requires knowingly false representation and reasonable reliance, both lacking here |
Key Cases Cited
- Ormsby v. Capital Welding, Inc., 471 Mich. 45 (Mich. 2004) (trial-court decisions on leave to amend reviewed for abuse of discretion)
- Cole v. Ladbroke Racing Mich., Inc., 241 Mich. App. 1 (Mich. Ct. App. 2000) (reasons a trial court may deny leave to amend)
- Yudashkin v. Holden, 247 Mich. App. 642 (Mich. Ct. App. 2001) (opportunity to amend when summary disposition is granted unless futile)
- Maiden v. Rozwood, 461 Mich. 109 (Mich. 1999) (standards and evidence considered on MCR 2.116(C)(10) motions)
- Davis v. LaFontaine Motors, Inc., 271 Mich. App. 68 (Mich. Ct. App. 2006) (sale 'as is' allocates risk to buyer; no nonconformity for revocation)
- Fejedelem v. Kasco, 269 Mich. App. 499 (Mich. Ct. App. 2006) (elements and reliance principles for negligent misrepresentation)
- Titan Ins. Co. v. Hyten, 491 Mich. 547 (Mich. 2012) (elements of actionable fraud and requirement of reasonable reliance)