MOTOR VEHICLE DEALER BOARD v. Joey L. MORGAN. Joey L. Morgan, v. Motor Vehicle Dealer Board.
Record Nos. 3220-01-4, 3245-01-4.
Court of Appeals of Virginia, Alexandria.
Aug. 20, 2002.
568 S.E.2d 378
Affirmed.
Stephen L. Swann, Arlington, for Joey L. Morgan.
WILLIS, Judge.
The Motor Vehicle Dealer Board (“Board“) contends that the trial court erred: (1) in ruling that the Board improperly excluded from recovery under the Motor Vehicle Transaction Recovery Fund (“Fund“) payment of attorney‘s fees and court costs that were awarded in an underlying judgment, and (2) in ruling that the Board improperly reduced the actual damages portion of the underlying judgment.
Joey Morgan contends on cross-appeal that the trial court erred in denying him attorney‘s fees pursuant to
I. BACKGROUND
In September 1998, Joey Morgan purchased a car from Aquia Motors, Inc. (“Aquia“). The purchase price was $5,120. Aquia represented that the car was in good condition and had been inspected for safety and emissions. Aquia further represented that it had available and could transfer to Morgan clear title to the car.
Shortly after the purchase, Morgan began experiencing mechanical problems involving the engine, brakes, cooling system, and suspension. He also discovered that the frame was bent and needed repair. Aquia failed to provide registration. Morgan attempted to return the vehicle, but Aquia refused to take it back and assigned the financing documents to Mercury Finance, which subsequently repossessed the car.
In August 1999, Morgan initiated a lawsuit against Aquia on four grounds: (1) fraud; (2) violation of the Consumer Protection Act,
Morgan filed with the Board a claim under the Motor Vehicle Transaction Recovery Fund,
| Actual damages: | $9,668.48 |
| Expert witness fees: | $ 350.00 |
| Attorney‘s fees: | $7,285.00 |
| Court costs: | $ 156.00 |
Recognizing that the maximum recoverable amount allowed by statute was $15,000, he reduced the net amount of his claim to $15,000.3
On June 7, 2000, the Board notified Morgan that his claim provided insufficient information as to how the court had determined “actual damages” and requested additional information. Morgan provided the following breakdown:
| Purchase price of warranty: | $5,286.10 |
| Finance charges: | $ 547.37 |
| Repair costs: | $2,500.00 |
| Loss of use/rental costs: | $1,020.00 |
| Loss of wages: | $ 315.00 |
The Board concluded that the full amount of Morgan‘s judgment was not compensable. It awarded him $5,120, the
Morgan appealed the Board‘s decision to the trial court pursuant to the Administrative Process Act,
II. PAYMENT OF ACTUAL DAMAGES, COURT COSTS, AND ATTORNEY‘S FEES
The Motor Vehicle Transaction Recovery Fund Act provides, in pertinent part:
Whenever any person is awarded a final judgment . . . for (i) any loss or damage in connection with the purchase or lease of a motor vehicle by reason of any fraud practiced on him or fraudulent representation made to him by a licensed or registered motor vehicle dealer or one of dealer‘s salespersons . . . or (ii) any loss or damage by reason of the violation by a dealer or salesperson of any of the provisions of this chapter in connection with the purchase of a motor
vehicle . . . the judgment creditor may file a verified claim with the Board, requesting payment from the Fund of the amount unpaid on the judgment.
If the judgment debt is not fully satisfied . . . the Board shall make payment from the Fund subject to the other limitations contained in this article.
Excluded from the amount of any unpaid final judgment on which a claim against the Fund is based shall be any sums representing interest, or punitive or exemplary damages.
Considering Morgan‘s claim against the Fund, the Board reviewed the underlying judgment. It held that it was not satisfied that his judgment against Aquia was based solely on the grounds of fraud. It “carefully examined each item that was included in the calculation of ‘actual damages‘” and decided that some of those items related to routine ownership and maintenance. Thus, it reduced the element of actual damages to $5,120, the purchase price of the car. In so doing, the Board exceeded its authority.
Morgan‘s lawsuit against Aquia was couched in terms of fraud, violation of the Consumer Protection Act, and breach of express and implied warranties. His case was tried and judgment was rendered based on findings of “fraud,” “fraudulent representations,” and “violations of the Motor Vehicle Act.” The court that rendered the judgment tried Morgan‘s allegations. It assessed his actual damages as resulting from the proven fraudulent conduct of Aquia. The Board had no authority to retry those issues. Its duty was limited to satisfaction of the judgment, subject to the statutory limit.
III. ATTORNEY‘S FEES PURSUANT TO CODE § 9-6.14:21
Morgan contends that the trial court erred in denying his request for attorney‘s fees and costs, pursuant to
The Administrative Process Act outlines the criteria for obtaining attorney‘s fees when a party contests an agency action.
A. In any civil case brought under Article 5 (§ 2.2-4025 et seq.) of this chapter or §§ 2.2-4002, 2.2-4006, 2.2-4011, or § 2.2-4018, in which any person contests any agency action, such person shall be entitled to recover from that agency . . . reasonable costs and attorneys’ fees if such person substantially prevails on the merits of the case and the agency‘s position is not substantially justified, unless special circumstances would make an award unjust.
The trial court noted that the Board had adhered to its long-standing practice and belief that the Fund could not
While the Board‘s position on compensability of a judgment for attorney‘s fees and costs was rejected by the trial court and is rejected by us, that position was substantially plausible and was based on the Board‘s long-standing practice, which had never been tested in court. The same is true of the Board‘s review of Morgan‘s “actual damages.” Consequently, Morgan is not entitled to attorney‘s fees for the proceedings in the trial court.
The judgment of the trial court is affirmed.
Affirmed.