ROYAL AUTO SALES, LLC v. JUMANDA PRICE
NO. 2021-CA-0731-MR
Commonwealth of Kentucky Court of Appeals
MARCH 25, 2022
RENDERED: MARCH 25, 2022; 10:00 A.M. NOT TO BE PUBLISHED
OPINION
AFFIRMING
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BEFORE: COMBS, LAMBERT, AND K. THOMPSON, JUDGES.
COMBS, JUDGE: This case involves a claim of a violation of Kentucky‘s Consumer Protection Act. Royal Auto Sales, LLC (Royal), appeals the judgment1
The evidence introduced at trial -- without objection -- showed the following sequence of events. On April 25, 2017, Royal Auto Sales in Louisville sold Price a 2016 Nissan Altima. She entered into a retail installment sales contract requiring principal payment of $17,448.40 and a total pаyment, including interest, of $24,283.90.
A few months earlier, the Altima, originally part of Hertz Corporation‘s rental fleet, had been involved in a collision in Lexington, Kentucky. Following the crash, David Rose of Property Damage Appraisers, Inc., was hired by Hertz to assess the damage to the vehicle. Rose observed that the sidе curtain and seat airbags had deployed during the collision. He concluded that replacement was required for both driver-side doors, inner door frame, and front quarter-panel. He testified that a new airbag system (including airbags, modules, and sensors) would also have to be installed. He explained that used or reconditioned airbag
Salaheddin Kurdi, owner of Royal Auto Sales, acquired the damaged vehicle at auction. The Altima was in the condition as shown in Rose‘s photographs when Kurdi purchased it two weeks after the collision. Kurdi explained that he repaired the vehicle at a cost of $1,861.00. The repairs were itemized on trial exhibit P. These repairs did not include a cost for the replacement of the car‘s airbag system. Kurdi admitted that he did not disclose to Price that the vehicle had been in a collision or that any repairs had been made. He denied knowing that he had аny disclosure obligations pursuant to the requirements of
When the vehiclе‘s warning system illuminated several months later to indicate a mechanical problem, Price took it to a local Nissan dealership for diagnostic testing. She learned that the vehicle needed $8,000.00 in repairs, and she was convinced that the vehicle was unsafe to drive. However, she was
Pricе could not afford to make the necessary repairs to the vehicle. In her testimony, she indicated that when she purchased the vehicle, Price did not know that the airbags had been deployed; she did not know whether the airbags and airbag system had been properly replaced; she did not know that the vehicle had been repaired; and she would not have purchased the vehicle if she had known the extent of the damage that it sustained in the collision. Price is concerned for her safety and that of her passengers when she drives the car. The vehicle history report, introduced as a trial exhibit, shоwed that the vehicle had been designated a total loss following the wreck in Lexington.
In April 2019, Price filed a civil action against Royal Auto Sales. She alleged that Royal violated provisions of Kentucky‘s Consumer Protection Act.3 After a period of discovery, a bench trial was conducted on March 19, 2021. The trial court entered its findings of fact, conclusions of law, and judgment against Royal Auto Sales on April 14, 2021.
“Royal Auto Sales, LLC,” filed a timely notice of аppeal. In its notice of appeal, Royal Auto Sales asserted that “[t]his was a frivolous case, seeking to strong arm a small business man over a technicality.”
In her brief to this Court, Price noted that Royal Motor Sales had consistently misidentified itself throughout the appellate proceedings. Pricе did not contend that the misidentification was sufficient cause to dismiss the appeal. Without comment, Royal Motor Sales corrected the error in the caption of its reply brief. Treating this correction as a concession by Royal Motor Sales that the error was merely clerical, we shall address the appeal on its merits. See McBrearty v. Kentucky Community and Tech. College System, 262 S.W.3d 205 (Ky. App. 2008); Sparkman v. Consol Energy, Inc., 470 S.W.3d 321 (Ky. 2015); Flick v. Estate of Wittich, 396 S.W.3d 816 (Ky. 2013).
Royal first argues that the circuit court erred by admitting hearsay testimony at trial. However, as Price correctly notes, Royal has failed to include statements with reference to the record indicating how and when the alleged errors were preserved for appeal as required by the provisions of
Royal next contends that the trial court erred by concluding that it engaged willfully in an unfair or misleading act when it sold the car to Price. Citing the decision of the Supreme Court of Kentucky in Capitol Cadillac Olds, Inc. v. Roberts, 813 S.W.2d 287 (Ky. 1991), it nоtes that Kentucky‘s Consumer Protection Act does not apply to the simply incompetent performance of contractual duties. Royal argues that the trial court “overstepped its judicial limits by making a guess” about the costs of replacing the vehicle‘s airbag system and contends that liability could be imposed only where the court found by clear and convincing evidence that it had perpetrated a fraud against Price. We disagree.
Kentucky‘s Consumer Protection Act provides a remedy for a consumer who becomes a purchaser of goods as a result of an unlawful trade act and who consequently suffers an ascertainable loss of money. The Act allows the consumer to sue the seller for damages. Craig & Bishop, Inc. v. Piles, 247 S.W.3d 897 (Ky. 2008). The Act‘s provisions require some evidence of “unfair, false, misleading, or deceptive acts or practices[.]”
The provisions of
Salaheddin Kurdi of Royal Motor Sales conсeded that he was fully aware of all the damages to the Nissan Altima purchased at auction, and he admitted that he never disclosed to Price that the car had been repaired. He admitted that the vehicle‘s airbag system had been deployed so as to require replacement. However, Kurdi denied knowing that he had an obligation to disclose repairs exceeding $2,000.00, explaining that he had been able to repair the vehicle for just $1,861.00. Notably, the itemized list of repairs made to the Altima did not include a cost for the replacement of the car‘s airbag system. Kurdi falsely claimed and testifiеd that he had replaced the Altima‘s airbags, but he indicated that he had not found the receipt for them or an invoice for the labor performed.
From the evidence presented, the trial court found that if Kurdi had, in fact, replaced the car‘s airbag system as required, the total repairs would have
The trial court found the testimony of Price and David Rose to be credible. It found Kurdi‘s testimony to be unreliable. From the evidence, it could reasonably infer that Royal had engaged in unfair, false, misleading, or deceptive trade practices causing Price to suffer an ascertainable loss. Evidence can be sufficient to find a violation of the provisions of the Consumer Protection Act even where it would not have supported a judgment based upon common law fraud. See Craig & Bishop, Inc., 247 S.W.3d 897. In light of the broad protections provided to consumers by Kentucky‘s Consumer Protection Act, there is no basis to disturb the court‘s conclusion that liability was clearly established in this case.
Royal next argues that the trial court erred by awarding Price punitive damages because there was no evidence to prove that it acted negligently or that its negligence showed a reckless disregard for Price‘s life or safety. In the alternative, Royal argues that an intent to deceive or injure consumers must be shown before punitive damages can be assessed.
The triаl court found that Kurdi had been a used car dealership owner/operator for more than a decade. His testimony indicating that he was unaware of his obligation to disclose to prospective buyers any repairs totaling more than $2,000.00 was found by the court not to be credible as follows:
The fact that significant expensive replacement components were left off the “Repair Cost Report,” which brings the total repair cost to just under the disclosure threshold, supports the Court‘s conclusion that Mr. Kurdi was aware of his duty and manipulated the Report to avoid having to comply with his duty. The Court finds thesе to be the type of reprehensible actions for which punitive damages are warranted.
Price showed at trial that Royal utilized an unfair act or deceitful practice against her and that the wrongful conduct caused her to suffer an undue hardship. An award of punitive damages is intended to serve аs a deterrent to
Finally, Royal argues that the trial court erred by awarding attorney‘s fees. It contends that the award is “improper because the entire case was built on rank hearsay and unsupported suppositions.” It asserts that the trial court should have determined that Price‘s claim was nothing more than a waste of judicial time and effort instead of finding -- as Royal Motor Sales frames it -- that she was “a poor innocent waif thrust into the foreboding jungle peopled by unscrupulous used car salesmen and their wily tricks.” Royal Motor Sales asserts that its counsel should be awarded fees for defending thе frivolous action.
Kentucky‘s Consumer Protection Act specifically authorizes an award of attorney‘s fees.
ALL CONCUR.
BRIEFS FOR APPELLANT:
Michael R. Slaughter
Thomas Haile
Westport, Kentucky
BRIEF FOR APPELLEE:
James Craig
Louisville, Kentucky