United States District Court, W.D. Arkansas, Fayetteville Division
OPINION AND ORDER
HOLMES, III CHIEF U.S. DISTRICT JUDGE.
the Court are cross-motions for summary judgment. Defendant
Silverstar Automotive, Inc. filed a motion (Doc. 22) for
summary judgment on all claims, as well as a statement of
facts (Doc. 23) and a brief (Doc. 24) in support of its
motion. Plaintiff Hamid Adeli filed a response (Doc. 30) in
opposition, and a statement of facts (Doc. 31) in support of
his response. Defendant filed a reply (Doc. 40). Separately,
Plaintiff filed a motion (Doc. 25) for partial summary
judgment, a brief (Doc. 26) in support, and a statement of
facts (Doc. 27) in support of his motion. Plaintiff's
motion for partial summary judgment is limited to
Defendant's liability under the Arkansas Deceptive Trade
Practices Act (ADTPA), and only with respect to
Defendant's failure to disclose a leaky exhaust manifold.
Defendant filed a response (Doc. 32) in opposition, a
response to Plaintiff's statement of undisputed facts
(Doc. 33), a statement of facts (Doc. 34), and a brief (Doc.
35) in support of his response. Plaintiff filed a reply (Doc.
39). For the reasons set forth below, Defendant's motion
for summary judgment will be granted in part and denied in
part, and Plaintiff's motion for partial summary judgment
will be denied.
November 7, 2016, Plaintiff Hamid Adeli contacted Defendant
Mercedes-Benz of Northwest Arkansas to inquire about a used
2007 Ferrari F430. The parties engaged in back and forth
discussions which ultimately culminated in Plaintiff's
purchase of the Ferrari on November 17, 2016.
to the sale, Defendant engaged Boardwalk Ferrari
(“Boardwalk”) to conduct a pre-purchase
inspection (PPI) of the car. Boardwalk provided Defendant
with a list of “recommended services.” Defendant
approved some repairs, but declined others, including an
“exhaust header” repair. On the list of
“recommended services, ” Boardwalk marked that
the “exhaust header” repair had been declined.
Defendant's employee, Michael Slone, testified that
Boardwalk personnel stated that the exhaust headers did not
need immediate repair, and that he later drove the car from
his house in Fayetteville, Arkansas to Defendant's sales
lot in Bentonville, Arkansas without any issue. Boardwalk
provided Defendant with an itemized receipt of the repairs it
made to the Ferrari. The receipt did not mention any declined
repairs. A Boardwalk employee testified that the only
documentation generally provided to customers is the itemized
receipt of services.
the inspection but before the sale to Plaintiff, a
prospective customer from California inquired about the
Ferrari. Defendant provided both Boardwalk's itemized
receipt and list of “recommended services” to the
prospective customer. The prospective customer did not
purchase the Ferrari, stating he did not believe it would
meet California's strict emissions requirements.
Additionally, the prospective purchaser notified the
Defendant that individuals on a Ferrari forum described the
exhaust header issue as a potential safety problem.
phone and text message negotiations and discussions with
Plaintiff, Defendant's employees described the Ferrari as
being in “turnkey, excellent condition.” They
also said a PPI had been performed, and all necessary repairs
had been completed, except for an issue with the car's
Tire Pressure Monitoring System. They did not mention the
exhaust headers. In one text message negotiation with
Plaintiff, Defendant's employee purportedly quoted the
Ferrari's owner as having said, “[i]f all the
service was not completed, I would do [$]90k but I did the
service and pre buy because it was the right thing to
do.” (Doc. 31-1, p. 2). As a part of that string of
text message negotiations, Plaintiff ultimately decided to
purchase the car and provided his bank account number and
routing number. (Doc. 31-1, p. 2).
the documents related to the transaction were an invoice
(Doc. 22-2); an odometer disclosure statement (Doc. 22-3); a
check (Doc. 22-4); a notice that Arkansas has no
“cooling off” or cancellation period for used car
purchases (Doc. 22-5); and a Buyer's Guide acknowledging
the car was to be purchased “as is.” (Doc. 22-6).
Given the car's price, Plaintiff was not surprised that
the car was being sold “as is.” Plaintiff and his
wife both signed the Buyer's Guide, the odometer
disclosure statement, the invoice, and the notice. The
invoice included a provision stating, “the dealership
hereby expressly disclaims all warranties, either express or
implied.” (Doc. 22-2, p. 1).
after taking possession of the car, Plaintiff began to smell
gasoline emitting from the car. The odor was so strong that
it seeped from Plaintiff's garage into his home.
Plaintiff had the car towed to a mechanic to diagnose the
issue. The mechanic made numerous repairs, including one to a
leaky exhaust manifold. Plaintiff contacted Defendant after
he discovered these issues, and Defendant assured Plaintiff
that “anything that would be a concern to someone
buying a 10 year old used vehicle” had been fixed.
(Doc. 31-2). Plaintiff alleges that most of these issues,
including the exhaust manifold, would have been discovered
during a routine PPI. Plaintiff also alleges that the leaky
exhaust manifold is an obvious safety issue that should have
been disclosed prior to purchase.
filed an action in Virginia district court alleging breach of
warranty, fraud, and violations of Virginia and Arkansas
consumer protection laws for damages he suffered as a result
of repairs he claims he was forced to make. The Virginia
action was dismissed on jurisdictional grounds, and Plaintiff
subsequently filed suit in this Court.
Standard of Review
motion for summary judgment, the burden is on the movant to
show that there is no genuine dispute of material fact and
that the movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56. The same standard applies to cross-motions
for summary judgment, with each party's motion reviewed
in its own right and the parties “entitled to the
benefit of all inferences favorable to them which might
reasonably be drawn from the record.” Wermager v.
Cormorant Twp. Bd., 716 F.2d 1211, 1214 (8th Cir. 1983).
Once the movant has met its burden, the nonmovant must
present specific facts showing a genuine dispute of material
fact exists for trial. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). In order
for there to be a genuine dispute of material fact, the
evidence must be “such that a reasonable jury could
return a verdict for the nonmoving party.” Allison
v. Flexway Trucking, Inc., 28 F.3d 64, 66 (8th Cir.
1994) (quoting Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)).
Defendant's Motion for Summary Judgment
moves for summary judgment with respect to all of
Plaintiff's claims. Defendant argues that only Arkansas
law should apply to Plaintiff's fraud and consumer
protection claims. Defendant's motion will be granted on
the issue of the parties' choice of law dispute, and
whether Plaintiff has a claim under the Virginia Consumer
Protection Act. In light of Plaintiff's concession (Doc.
30, p. 11), judgment for Defendant will also be granted on
Plaintiff's breach of implied warranty claims.
Defendant's motion will be denied with respect to the
breach of express warranty, fraud, and ADTPA claims.
Choice of Law and Virginia Consumer Protection Act
parties disagree about what law should apply to
Plaintiff's fraud and consumer protection claims.
Plaintiff argues that Arkansas law should apply to any
pre-purchase misrepresentations and Virginia law should apply
to any post-purchase misrepresentations, and that
pre-purchase and post-purchase misrepresentations give rise
to separate claims. Defendant contends that only Arkansas law
should apply, and Plaintiff's claims are limited to
alleged misrepresentations occurring before the sale.
extent Plaintiff attempts to assert separate fraud or
consumer protection claims on the basis of post-purchase
misrepresentations, no such claims can proceed. Whichever
state's law applies, an essential element of fraud and
consumer protection claims premised on misrepresentation is
Plaintiff's reliance on the misrepresentation. See
Apex Oil Co., Inc. v. Jones Stephens Corp., 881 F.3d
658, 662-63 (8th Cir. 2018) (holding Arkansas law would
require reliance under ADTPA to show that misrepresentation
was cause of Plaintiff's injury); Born v. Hosto &
Buchan, PLLC, 372 S.W.3d 324, 333 (Ark. 2010) (listing
justifiable reliance as an element of fraud); Owens v.
DRS Automotive Fantomworks, Inc., 764 S.E.2d 256, 260-61
(Va. 2014) (explaining reliance on misrepresentation is
necessary to prevail on common law fraud claims and to
satisfy causation element under Virginia Consumer Protection
Act). Plaintiff points to no instance of reliance on the
alleged post-purchase misrepresentations. Rather, those
representations are identical to the pre-purchase
representations that Plaintiff argues induced him to buy the
Ferrari. They are merely a continuation or ratification of