Court Rules in Favor of Dealer in Fraud Claim

By Shelley B. Fowler November 09, 2023

When a car buyer is unhappy with his or her purchase—for whatever reason—one of the claims the buyer may, and commonly will, assert in a lawsuit is that the dealership engaged in fraud. As you will see from the facts of a recent case, a fraud claim can be difficult to prove.

Weens Simon, a Connecticut resident, bought a used BMW from Baker Motor Company of Charleston, Inc., the owner of nine South Carolina dealerships, in July 2021. Baker Motor had advertised the BMW online as having had a safety inspection by a certified technician. Simon did not physically inspect the BMW before the purchase, but he received a CARFAX report from Baker Motor stating that the car had been in no major accidents. Baker Motor provided Simon with a temporary registration for the car and allegedly promised to take the steps necessary to register the car in Connecticut.

After the car broke down twice during Simon’s first few months of ownership, he learned from a BMW service technician that, among other problems with the car, the muffler was not factory-provided and was installed incorrectly, the engine’s serial number did not correspond with the car’s vehicle identification number, and the car’s brake lines were severely damaged. Simon demanded that Baker Motor either repair the defects or buy back the car. It also came to Simon’s attention that the car was not registered as promised.

After Baker Motor refused to make repairs or buy the car back, Simon sued in August 2022, alleging various violations of South Carolina law. Baker Motor moved to dismiss four of the claims in the complaint—revocation of acceptance, fraud, violation of the South Carolina Regulation of Motor Vehicle Manufacturers, Distributors, and Dealers Chapter, and violation of the South Carolina Unfair Trade Practices Act.

Simon opposed the motion only as to the fraud claim. The U.S. District Court for the District of South Carolina granted the motion, finding that Simon did not state a claim for fraud, which is subject to a heightened pleading standard, including the pleading of facts related to the “‘time, place, speaker, and contents of the allegedly false acts or statements’“ that amounted to fraud.

Simon alleged that Baker Motor’s false representations fell into two categories—false statements regarding the condition of the car in both the CARFAX report and the online advertisement and false statements regarding its ability to register the car in Connecticut.

Addressing the representations regarding the condition of the car first, the court determined that the CARFAX report “is not actionable because it cannot be attributed to Baker Motor for purposes of determining whether there was fraud.” The court relied on the fact that Simon did “not allege that Baker Motor contributed to the report or otherwise adopted it or represented it to be true.” Turning to the ad, the court found that, despite the defects Simon discovered with the car, there was no evidence that the representation about the safety inspection was false, and the court was unwilling to conclude that the defects that Simon complained about should have been discovered through a safety inspection.

As for the statements about registering the car, the court found that Simon alleged that Baker Motor promised to take the steps necessary to register the car in Connecticut at the time of the purchase and then continued to assure him that it was taking those steps, even though he learned that the car would be unable to pass an emissions test and inspection necessary to be registered in Connecticut, and it was still not registered more than one year after the purchase date. However, the court found that Baker Motor’s statements did not meet the heightened pleading standard for fraud, including when, where, in what manner, and by whom the statements about registering the car were made.

Even though Simon did not succeed on his fraud claim, there were other claims in the complaint that Baker Motor did not seek to dismiss, including negligence and breach of contract. Simon could possibly still succeed in proving those claims, which are not subject to a heightened pleading standard. Had Simon alleged more facts in his complaint, such as that the defects found in his car should have been discovered by a safety inspection conducted by a certified technician, had he attached a copy of the ad he relied on, or had he pled when, where, by whom, and in what manner Baker Motor made representations about the actions it was taking to register the car in Connecticut, he might have had more luck on his fraud claim.

Even though Baker Motor won this round, this case should serve as an example for dealerships about the importance of refraining from making representations about the quality or condition of any vehicle or actions it is taking with regard to a vehicle that it cannot support. Fraud may be hard to prove, but it is not impossible. 


Shelley B. Fowler is a managing editor at, LLC. 

© 2020, all rights reserved. Based on an article from Spot Delivery..” 

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Last modified on Thursday, 07 December 2023 14:17