Flaintiff appeals by right the circuit court’s opinion and order of February 9, 2012, granting summary disposition in favor of defendant and dismissing plaintiffs claims with prejudice. We affirm.
i
This case arises from the sale of a rare 1965 Dodge altered-wheelbase racecar (“the Dodge” or “the vehicle”), specially manufactured by Chrysler Corporation for drag racing and use as a promotional vehicle.
Defendant purchased the Dodge from Fengel in the early 1990s for $35,000. Fengel provided defendant with documentation concerning the vehicle’s history, alterations, and chain of title. In particular, Fengel provided defendant with the vehicle’s original 1965 certificate of title, bearing Dave Strickler’s name and address.
Defendant gathered parts and spent more than 10 years restoring the vehicle. Ted Smith, who assisted defendant in the restoration of the Dodge, testified that he and defendant relied on historical photographs, manuals, and other bulletins to guide them in the restoration process. He testified that the Dodge was meticulously restored, using as many original 1965 parts as possible. According to Ted Smith, the only reproduction parts used in the restoration were the left and right front floor panels. Ted Smith agreed that the vehicle had been restored to “Concours level” condition and that it was better than the original car. Despite the presence of the 1966/1967 Dodge Charger body that had been installed by McJury, Ted Smith believed that the restored Dodge represented “the real and authentic Strickler vehicle.”
Defendant testified that when he initially acquired the Dodge, it was “very rusty” and was “missing 90
Defendant worked with Edward Strzelecki to sell the Dodge after he had finished restoring it. In February 2007, Strzelecki sent letters to potential buyers offering the vehicle for sale and providing certain information concerning the vehicle’s history, restoration, and chain of title. In one of those letters, dated February 4, 2007, Strzelecki wrote to Nicholas Smith
Nicholas Smith considered Strzelecki to be a friend. Strzelecki gave him a binder containing extensive information and documentation pertaining to the Dodge. Among other things, the binder contained several historical photographs of the vehicle with its 1965 Dodge Coronet body, photographs of the vehicle with its subsequent 1966/1967 Dodge Charger body, documentation
“[W]hen it looked like the transaction might happen,” Nicholas Smith traveled to Michigan and went to the Chrysler Museum with Strzelecki to personally inspect the vehicle. He walked around the vehicle at the Chrysler Museum but remained “outside of the rails that protected the car from visitors.” According to Nicholas Smith, defendant represented “on more than one occasion” that “all of the original parts were used in the [restoration] project.”
As soon as plaintiff decided to purchase the Dodge, the parties entered into negotiations concerning the consideration to be paid. Plaintiff ultimately agreed to give defendant $600,000 in cash, plus two other classic automobiles in exchange: (1) a 1964 Dodge Coronet Hemi Super Stock valued at $278,000, and (2) a 1964 Ford Thunderbolt valued at $250,000. On March 29, 2007, the parties executed the following bill of sale
BILL OF SALE
Steve Atwell hereby agrees to sell and Bev Smith Ford agrees to purchase the Dave Strickler 1965 Dodge AWB[6 ] drag car, VIN W151191681. Seller represents this vehicle to be the real and authentic Strickler car, that he (Atwell) is the true owner of the car, and further that no liens or encumbrances exist against the vehicle.
*676 It is agreed that Smith will pay Atwell the sum of $600,000.00 (six hundred thousand dollars) plus two vehicles as described herein. Smith represents these two vehicles to be authentic and free of any liens or encumbrances.
1. 1964 Dodge Coronet Hemi Super Stock (color red), VIN 6142229092
2. 1964 Ford Thunderbolt (color white), VIN 4F41K230520.
Smith agrees to provide Atwell first opportunity to purchase the Strickler vehicle in the event Smith elects to re-sell it. Atwell likewise agrees to provide Smith first opportunity to repurchase the Thunderbolt and/or 64 Dodge. As part of this buy-sell agreement, the parties agree that the previous sale of the 1964 Dodge Hemi Super Stock (color black), V[IN] 6142227884 becomes final.
Atwell will be responsible for removing the Strickler car from the Chrysler Museum at a future date to be mutually agreed upon. Coincidently, the car will be delivered by Atwell to an agreed upon site and, at Atwell’s expense, brought to good mechanical and running condition.
It is hereby stated and understood that this transaction will not be valid until funds and titles have changed hands.
After plaintiff accepted delivery of the vehicle, Nicholas Smith altered the Dodge in certain respects according to his own preferences and took the vehicle to various car shows. At a classic car event in Ohio in July 2008, a car historian informed Nicholas Smith that the Dodge had a “donor body” and was not the “real” Strickler car. Nicholas Smith subsequently spoke with McJury, who informed him that Strickler’s original 1965 Dodge Coronet body had been discarded. Another expert, Mike Guffey, informed Nicholas Smith sometime in the fall of 2008 that the Dodge had relatively few original parts. Defendant testified that he could not recall whether or not he had told plaintiff that the vehicle had its original 1965 body.
[Plaintiff] has learned that the Strickler Car it purchased from you is in fact not the “real and authentic” vehicle driven by Dave Strickler in the 1960s, as you expressly represented and warranted during the sale and in the Contract. [Plaintiff] now knows that the vehicle was re-bodied and otherwise restored using predominantly non-original and reproduction parts. [Plaintiff] would never have purchased the Strickler Car if it knew the vehicle was not the “real and authentic” vehicle as promised.
As a result of your material misrepresentations regarding the authenticity and restoration of the Strickler Car, [plaintiff] has suffered and continues to suffer substantial damages.... Stated simply, you exploited the authenticity and restoration of the Strickler Car to fraudulently gain a profit from [plaintiff].
Your false misrepresentations and warranties regarding the restoration and authenticity of the Strickler Car are all actionable under the law ....
Attached please find the lawsuit which [plaintiff] intends to file against you.. ..
If you would like to discuss resolving this matter to avoid litigation prior to [plaintiff] filing this lawsuit, please contact us within ten (10) days after your receipt of this letter. If we do not hear from you within 10 days of your receipt of this letter, this lawsuit will immediately be filed against you.
On September 28, 2010, plaintiff commenced this action in the Oakland Circuit Court. Plaintiff alleged that it had discovered that the Dodge was reconstructed chiefly with replacement parts and, accordingly, that it was not “the real and authentic Strickler car” as
During discovery, defendant and Strzelecki admitted that they had used more than 200 replacement parts in the restoration of the Dodge. Strzelecki confirmed that the Dodge, as restored by defendant, did not have the original chemically milled body
Galen Govier, an expert on altered-wheelbase race-cars, inspected the Dodge. Govier opined that less than 15 percent of the original 1965 Dodge Coronet had been retained and that the body, engine, transmission, and rear axle were not “correct for a 1965 Dodge.” James Schild, an expert on classic automobile restoration, testified that the restored Dodge was a “ [reconstruction” and that it had been “re-bodied.” Because the vehicle had an entirely different body, Schild testified that “it cannot possibly be the real and authentic [Strickler] car . . . .”
William Stiles testified that he “built Dave Strickler’s altered wheelbase car” in 1965. Stiles asserted that he had refused to authenticate the restored Dodge because
On January 11, 2012, defendant moved for summary disposition pursuant to MCR 2.116(C)(10), asserting that there was no genuine issue of material fact for trial, that plaintiff had waived any claim concerning the vehicle’s authenticity by waiting too long to sue, and that plaintiff could not have reasonably relied on any misrepresentations by defendant as a matter of law. According to defendant, it was readily apparent at the time of purchase that the vehicle had been restored using certain replacement parts and did not have the original 1965 Dodge Coronet body. Defendant contended that Nicholas Smith, a sophisticated car collector, should have immediately noticed these alterations. Defendant also contended that plaintiff had a full and fair opportunity to inspect the vehicle or retain an expert to inspect the vehicle, but had failed to do so before purchasing it. Defendant argued that because plaintiff had waited until April 20,2010, to notify him of any alleged breach relating to the authenticity of the vehicle, plaintiff was barred from any remedy pursuant to MCL 440.2607(3)(a).
With respect to plaintiffs fraud claims, defendant argued that it was unreasonable as a matter of law for plaintiff to rely on any warranties or representations outside the four corners of the bill of sale. In addition, defendant argued that there could be no fraud in this
Following oral argument, the circuit court issued an opinion and order granting summary disposition in favor of defendant and dismissing plaintiffs claims with prejudice. The court ruled that it was beyond genuine factual dispute that plaintiff had waited too long to notify defendant of any alleged breach relating to the vehicle’s authenticity. Thus, the court concluded that any remedy for breach of contract was barred by MCL 440.2607(3)(a). With respect to plaintiffs fraud claims, the court ruled that plaintiff could not have justifiably relied on any alleged misrepresentations by defendant because it had for itself the means to discover the truth. Specifically, the court noted that defendant had provided plaintiff with a full and fair opportunity to inspect the Dodge prior to its sale, but that plaintiff had chosen not to inspect the vehicle. Further, the circuit court remarked that plaintiffs fraud claims were based entirely on economic injury, and related exclusively to the quality or character of the good sold. Thus, the court ruled, they were barred by the economic loss doctrine.
ii
We review de novo the circuit court’s grant or denial of a motion for summary disposition. Spiek v Dep’t of Transportation,
Whether the Uniform Commercial Code (UCC) applies in a particular case is a question of law that we review de novo. Heritage Resources, Inc v Caterpillar Fin Servs Corp,
In general, “[t]he question whether a [party] may be a merchant as that term is used in the U.C.C. is a question of law for the courts to decide by applying the U.C.C. definition of merchant to the facts in the case.” Milwaukee Co v Northrop Data Systems, Inc, 602 F2d 767, 771 (CA 7, 1979); see also Vince v Broome, 443 So 2d 23, 28 (Miss, 1983) (noting that “[t]he ultimate question of whether a person comes within the definition of merchant is a mixed question of law and fact”). But when there are no disputed material facts, the question whether a party is a merchant under the UCC should be decided on summary disposition as a matter of law. See Hammer v Thompson, 35 Kan App 2d 165, 184;
Whether a reasonable time has elapsed is generally a question for the trier of fact. Moore v First Security Cas
in
As a preliminary matter, we hold that defendant’s sale of the Dodge must be evaluated under article 2 of the Uniform Commercial Code (UCC), MCL 440.2101 et seq. An automobile is a “good” covered by the UCC, MCL 440.2105(1); see also Whitcraft v Wolfe,
Plaintiff contends that the UCC should not be applied in this case because the transaction was merely a sale to a private collector and was not “commercial” in nature. We disagree with this contention. It does not matter to our analysis that the Dodge was sold to a private collector or that the sale was not quintessentially commercial in nature. The UCC indisputably applies to transactions in goods, including rare or antique goods, between private collectors. See, e.g., Bander v Grossman,
IV
We also hold that plaintiff was not a “merchant” within the meaning of the UCC for purposes of the transaction at issue. A “merchant” is “a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.” MCL 440.2104(1).
V
Plaintiff argues that the circuit court erred by concluding that it was beyond genuine factual dispute that
In general, under article 2 of the UCC, a buyer may (1) accept goods, MCL 440.2606; MCL 440.2607, (2) reject goods, MCL 440.2602, or (3) revoke acceptance within a reasonable time if a nonconformity substantially impairs the value of the goods, MCL 440.2608.
MCL 440.2607(3)(a) provides that when a tender has been accepted “the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy[.]”
The particular breach of contract alleged by plaintiff in this case pertains to the authenticity of the Dodge. Specifically, plaintiff asserts that it discovered sometime in the summer or fall of 2008 that the Dodge was not “the real and authentic Strickler car” as represented by defendant in the bill of sale. Plaintiff repeatedly asserts that the vehicle’s replacement body and numerous replacement parts were difficult to detect and that this lengthened the time necessary to discover the alleged breach. But the documentary evidence presented in this case overwhelmingly establishes that the replacement body and parts would have been easily discoverable upon inspection of the vehicle. Indeed, plaintiff admits that it was given documents at the time of sale describing how McJury had replaced the vehicle’s body and enumerating the numerous replacements parts used during the vehicle’s restoration. Plaintiff also admits that defendant afforded it a full and fair opportunity to inspect the vehicle before the bill of sale was executed. There is simply no evidence to indicate that the vehicle’s alleged inauthenticity was latent or otherwise hidden from plaintiffs view.
We need not definitively resolve whether the vehicle was “the real and authentic Strickler car” as represented in the bill of sale because plaintiff had ample time and opportunity to discover the claimed inauthen-ticities. Even if the Dodge is not “the real and authentic Strickler car,” it was just as inauthentic at the time of purchase as it was when Nicholas Smith claims to have discovered the defects in the summer or fall of 2008. “Because of the static nature of authenticity,” plaintiff was no less capable of discovering the inauthenticities
The fact that plaintiff had a full and fair opportunity to inspect the Dodge prior to purchasing it, and an even greater opportunity to inspect the Dodge after purchasing it, necessarily shortened the allowable period for discovering any nonconformities or inauthenticities. See 2 Hawkland, Uniform Commercial Code Series, Sales, § 2-608:5, p 167. For purposes of UCC § 2-607(3)(a),
VI
We further conclude that the circuit court properly dismissed plaintiffs claims alleging fraud in the inducement, fraudulent misrepresentation, and silent fraud.
We acknowledge that the economic loss doctrine does not bar claims of fraud in the inducement when one party’s ability to negotiate fair terms and make an informed decision has been undermined by the other party’s fraudulent behavior. See id. at 372-373. However, “there can be no fraud where the means of knowledge regarding the truthfulness of the representation are available to the plaintiff and the degree of their utilization has not been prohibited by the defendant.” Webb v First of Mich Corp,
Affirmed. As the prevailing party, defendant may tax costs pursuant to MCR 7.219.
CAVANAGH and MARKEY, JJ., concurred with JANSEN, EJ.
Notes
It appears from the record that Chrysler built only 12 altered-wheelbase racecars in 1965. Under contract with Chrysler, the vehicles were actually converted and prepared by Detroit-area subcontractor Automotive Conversion Corporation.
McJury never reinstalled the vehicle’s original 1965 Dodge Coronet body. The original 1965 Dodge Coronet body was apparently discarded and has never been recovered.
It appears that Nicholas Smith is an officer of plaintiff Bev Smith, Inc. Nicholas Smith is a self-described collector of classic cars.
At oral argument before this Court, plaintiffs attorney asserted that, contrary to Strzelecki’s representation, the Chrysler Museum does not appraise or insure the vehicles that it displays.
Nicholas Smith signed the bill of sale on behalf of plaintiff.
“AWB” means “altered wheelbase.”
Plaintiff also claimed that defendant had breached the contractual right of first refusal by reselling the 1964 Ford Thunderbolt to a third party without first offering it to plaintiff or giving plaintiff notice of his intent to sell (count V). This claim is not at issue in the present appeal.
The original 1965 Dodge Coronet body was treated with acid to reduce the thickness and weight of the metal.
Michigan’s UCC was recently amended. This opinion cites the statutes in effect when the circuit court decided this case, including MCL 440.2104(1), amended effective July 1, 2013, by
Because plaintiff was not a merchant, the transaction at issue in this case was not “between merchants” as defined by MCL 440.2104(3).
“Although their legal effects are the same, rejection and revocation of acceptance differ in the circumstances under which each may he employed. Rejection occurs before the goods are accepted and is permitted where the tender fails ‘in any respect to conform to the contract.’ Revocation of acceptance, on the other hand, can take place only after the goods have been accepted and only where their ‘nonconformity substantially impairs [their] value to him (the buyer).’ ” 2 Hawkland, Uniform Commercial Code Series, Sales, § 2-608:2, p 124 (citations omitted).
“The burden is on the buyer to establish any breach with respect to the goods accepted.” MCL 440.2607(4).
MCL 440.1204(2) was amended effective July 1,2013, by
MCL 440.2607(3)(a).
We note that the timeliness of a buyer’s notice of breach under MCL 440.2607(3)(a) does not depend on a showing of prejudice to the seller. Eaton Corp v Magnavox Co,
The “reasonable time” allowed for revocation of acceptance under MCL 440.2608(2) is generally longer than the “reasonable time” allowed for notice of breach under MCL 440.2607(3)(a). See Official Comment 4 to UCC § 2-608 (noting that “the reasonable time period [for revocation of acceptance] should extend in most cases beyond the time in which notification of breach must be given, beyond the time for discovery of non-conformity after acceptance and beyond the time for rejection after tender”). Plaintiff does not specifically argue that it revoked its acceptance of the vehicle under MCL 440.2608. Lest there be any confusion, however, we conclude that because plaintiff could have discovered the Dodge’s replacement body and numerous replacement parts upon reasonable inspection, plaintiff would not have been entitled to revoke its acceptance of the vehicle after three years. See MCL 440.2608(2); see also MCL 440.2608(l)(b); Colonial Dodge, Inc v Miller,