Dealership Wins Mileage Case

By Shelley B. Fowler August 25, 2020
The Jaguar sold by Elite Auto had number of kilometers driven instead of miles on the bill of sale The Jaguar sold by Elite Auto had number of kilometers driven instead of miles on the bill of sale

A recent odometer law case is atypical in that the car buyer alleged that the dealership that sold him the car overstated the car's mileage, meaning that he ended up with a car with fewer miles than he had been told. In most circumstances, a car buyer would be thrilled to learn that the car he bought had been driven fewer miles than he thought. After all, you usually pay more money for a car with fewer miles. In the end, the dealership won, but not because an overstatement of a car's mileage is not a law violation.

Here's what happened in this unusual case.

Elite Auto Credit, Inc., bought a used Jaguar from another dealership through the auction company Manheim Chicago of Matteson. Manheim stated in documents that the Jaguar had an odometer reading of around 156,000 miles. However, the car's odometer actually read 156,029 kilometers, which is only about 96,952 miles, and the certificate of title that Manheim provided to Elite stated that the car had 96,940 miles.

Elite Auto Credit
Elite Auto Credit won the FOA claim lawsuit 

John Tamburo bought the Jaguar from Elite for $5,266, including taxes and fees. The bill of sale and the odometer statement indicated that the car had 156,028 miles, based on information from Manheim and from AutoCheck.com, not from the Jaguar's odometer. The buyer's guide that Tamburo signed stated that the car had no warranty.

After spending over $4,000 on repairs within a few months after the purchase, Tamburo contacted Elite to demand that, pursuant to Illinois law's implied warranty for vehicles with less than 150,000 miles, Elite pay for some of the repairs. Elite responded that because the odometer exceeded 150,000 miles, it was not required to cover any repairs.

Tamburo sued Elite for violating the Federal Odometer Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. Elite moved for summary judgment.

The U.S. District Court for the Northern District of Illinois noted that in order to establish a violation of the FOA, the buyer must show that the seller provided an inaccurate odometer reading with the intent to defraud. In this case, Tamburo alleged that Elite overstated the mileage in order to avoid the Illinois statutory warranty for cars with mileage under 150,000. The court found that Elite received an overstated mileage number from Manheim and that Elite's employees relied on that number rather than verifying it against the car's odometer. The court noted that the failure to check the odometer may have been negligent, but there was no evidence that Elite acted with intent to defraud Tamburo. Therefore, the court granted summary judgment to Elite on the FOA claim.

Lesson learned : Double check the odometer

Next, the court addressed Tamburo's ICFA claim for failing to provide an implied warranty of merchantability, telling him that the car had no warranties, using an outdated buyer's guide on the car's window, and failing to repair the mechanical defects he discovered. Because the court granted summary judgment on the federal law claim, the statute of limitations had not run on the ICFA claim, the court had not invested substantial resources into the ICFA claim, and the resolution of the ICFA claim was not absolutely clear, the court concluded that it was appropriate to decline to exercise jurisdiction over the state law claim and to dismiss the claim without prejudice to Tamburo's right to refile the claim in state court.

What is there to learn from this case? Overstating a car's mileage can be just as wrong as understating a car's mileage, especially, as in this case, where state law provides fewer protections to buyers of cars with mileage above a certain threshold. Make sure your employees understand that relying on any document to determine a car's mileage is less than perfect. An actual look at the odometer, including whether the odometer reflects miles versus kilometers, should be mandatory.

 

Shelley B. Fowler is a Managing Editor at CounselorLibrary.com, LLC.

CounselorLibrary.com, LLC, provides articles on its website written by attorneys with Hudson Cook, LLP, and by other authors, for information purposes only. CounselorLibrary.com, LLC, and Hudson Cook, LLP, do not warrant the accuracy or completeness of the articles, and have no duty to correct or update information contained on the CounselorLibrary.com website. The views and opinions contained in the articles do not constitute the views and opinions of CounselorLibrary.com, LLC, or Hudson Cook, LLP. Such articles do not constitute legal advice from such authors or from Hudson Cook, LLP, or CounselorLibrary.com, LLC. For legal advice on a matter, one should seek the advice of legal counsel.

 

 

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Last modified on Tuesday, 25 August 2020 19:32

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