Craig & Bishop, Inc. v. Piles, --- S.W.3d ----, 2008 WL 746496 (
Christy Piles and Charles Warner sued defendant Craig & Bishop, a used car dealer, under the Kentucky Consumer Protection Act (KCPA) and won a jury verdict. The relevant facts: Defendant advertised a 1997 Mustang for just under $5000. Warner and Piles (aged 19 and 20 respectively) went to the dealership, which copied their drivers’ licenses, ostensibly to check their eligibility for financing. After that, they were told the Mustang had been sold. They were then shown a 2000 Camaro for $14,000; when they expressed concerns about the price, the salesman said, “I guarantee I can get you into that car if you like it.” They couldn’t make a cash down payment, but could trade in Warner’s car, valued by the dealership at $1000. They told the salesman that they couldn’t afford more than $250 a month, at 8% interest, for no more than 5 years.
As it turned out, Warner had insufficient credit, so the loan was to be in Piles’ name only.
Plaintiffs drove the Camaro home after Warner signed the title of his car over to the dealership. Piles signed “a number of documents with seemingly conflicting terms,” including ones that referred to the sale as a cash transaction. The dealership asked her to sign a blank contract with financing terms to be filled in later, but she refused (good for her!). Over the next few days, the dealership tried to find financing for Piles, but couldn’t find anyone willing to lend the full amount. The dealership told Piles and Warner that they’d need to pay $3000 to make up the difference; they told the dealership that, as they’d said before, they couldn’t. Piles decided “she wanted out of the deal.” The dealership offered to finance the remaining $3000 itself, and eventually to knock $3000 off the price, but Piles refused. They tried to return the Camaro and reclaim Warner’s car twice over the next several days, but were told the keys were in a locked safe to which no one present had access, and the dealership threatened to call the police on them when the discussion turned heated.
Defendant’s sales manager eventually told plaintiffs that the car had been sold, and that they needed to pay the full $14,000 by the end of that day or suffer repossession. They returned the Camaro to the dealership, along with a (presumably nasty) letter from their lawyer. They then sued for conversion, violation of the KCPA, and common-law fraud.
The dealer appealed the verdict for plaintiffs, arguing that Piles and Warner weren’t entitled to the protection of the KCPA because they never completed a purchase, and the statute protects a person who “purchases or leases.” The Kentucky Supreme Court disagreed; the law is broad enough to cover people who (1) took the product, at least for a time, (2) following a period of negotiation, (3) after giving value in the form of the trade-in. The KCPA doesn’t require a binding contract.
The Supreme Court declined to reach the issue of whether the appeals court erred in vacating the common-law fraud verdict in plaintiffs’ favor, which that court did because it concluded that predictions of the future (here, whether Piles could obtain financing at desirable terms) couldn’t constitute common-law fraud, regardless of whether they actually deceived consumers. The court also declined to decide whether such predictions could violate the KCPA, since the issue was procedurally barred and plaintiffs had testified to a wide range of deceptive conduct, from the Mustang bait-and-switch to lies about the location of the trade-in car to threats of repossession if plaintiffs didn’t immediately pay in full. The court did comment: “Given [the] broad range of protection [under the KCPA], the argument that sellers could never be held liable on future predictions is suspect, especially where the future predictions might relate to the seller's own conduct or other events under the seller's control.” Once again, consumer protection law appears broader than common-law fraud; no surprise, since that was its point.
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