Raatz v. Dealer Trade Incorporated
2:16-cv-00170
D. Ariz.Jun 8, 2017Background
- Plaintiffs (Tom & Marcine Raatz and TMR LLC) purchased a used 2010 Infiniti QX56 from Dealer Trade Inc. (Luxury Motorsports) in August 2015; the Retail Buyer’s Order (RBO) stated the odometer read 35,648 miles and the vehicle was sold “AS IS.”
- Plaintiffs drove the vehicle to Iowa; an Infiniti dealer’s service record showed an earlier 2011 service with 46,731 miles, revealing the odometer reading was false.
- Plaintiffs contacted Dealer Trade seeking a refund; Dealer Trade did not respond, and Plaintiffs paid off their loan after the vehicle’s value fell.
- Plaintiffs sued asserting breach of contract (and earlier had asserted an Odometer Act claim which they later dismissed); the parties filed cross-motions for summary judgment on the contract/warranty claim.
- The parties do not dispute (for summary judgment): Dealer Trade represented mileage as ~35,648, Plaintiffs relied on that representation and would not have bought the vehicle if they knew the true mileage.
- The only disputed factual issue remaining for trial is the measure of damages (vehicle value at time of sale), as experts disagree on valuation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint adequately pleaded a breach of express warranty | Complaint alleges seller represented mileage in the contract and Plaintiffs relied on it — this pleads warranty | Complaint pleads breach of contract only and did not expressly plead a separate breach-of-warranty count | Court: complaint adequately alleges breach of warranty (warranty claims arise from contract allegations) |
| Whether Dealer Trade’s mileage statement created an express warranty | Mileage statement was an affirmation of fact relating to the goods and was a basis of the bargain | A mileage affirmation does not necessarily create a warranty, esp. if dealer lacked ability/knowledge to verify odometer | Court: representation satisfied the four UCC elements; express warranty was created even if dealer lacked knowledge |
| Whether the RBO’s “AS IS / disclaimers” bar the express warranty | Express warranties cannot be disclaimed by fine-print boilerplate inconsistent with the express statement | RBO disclaimed all express and implied warranties in the fine print | Court: disclaimer is ineffective/inconsistent with the specific mileage affirmation and A.R.S./UCC principles; express warranty survives |
| Entitlement to summary judgment on damages | Plaintiffs: established breach and seek damages under UCC measure | Defendant: disputes valuation and contends Plaintiffs lack evidence of falsity/value | Court: liability on breach found for Plaintiffs; damages are disputed (expert disagreement) so summary judgment denied on damages; trial set for damages |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and movant burden)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (genuine dispute standard for summary judgment)
- Chaurasia v. Gen. Motors Corp., 126 P.3d 165 (express warranties treated as contract claims under Arizona law)
- Lofts at Fillmore Condo. Ass’n v. Reliance Commercial Const., Inc., 190 P.3d 733 (warranty claims sound in contract)
- Woodward v. Chirco Constr. Co., Inc., 687 P.2d 1269 (breach of implied warranty arises from contract)
- Prishwalko v. Bob Thomas Ford, Inc., 636 A.2d 1383 (innocent misrepresentations creating express warranty are actionable under a statute analogous to Arizona’s)
- Roberts v. Robert V. Rohrman, Inc., 909 F. Supp. 545 (district court discussion that affirmations of fact may not always create warranties depending on context)