Houston Independent Automobile Dealers Association November 2015 Issue: Be a Quality Dealer | Página 11

damage or repair history for the car. The purchase contract stated that the car was sold "as is" with no warranties except for the balance of any factory warranty. When the car arrived, the buyer found extensive body and engine damage. The seller refused to repair the car, so the buyer sued for breach of contract, intentional misrepresentation, negligent misrepresentation, breach of express and implied warranties, unfair, false, misleading or deceptive acts and practices, and breach of a seller's statutory duty to disclose damage to the car. The trial court granted the seller summary judgment. The appellate court affirmed the trial court's decision to dismiss the claims for breach of contract, breach of express and implied warranties, and negligent misrepresentation, but reversed the trial court's decision to dismiss the claims for intentional misrepresentation and for failing to disclose pre-existing damage to the car. The appellate court found that the buyer could not sue for breach of contract, breach of an express warranty, or breach of an implied warranty even if he could prove the seller knew the car was damaged or defective because an "as is" clause in a sale contract shifts the risk of damage or defects in the goods from the seller to the buyer. The appellate court also found that the buyer could not sue for negligent misrepresentation. An "as is" clause makes the buyer solely responsible for inspecting the car and determining the condition of the car, so the buyer is not justified in relying on any statements the seller makes about the goods’ condition. The appellate court decided that the buyer could make a claim for fraud. A seller may not use an "as is" clause in a contract to shield itself from a claim that it fraudulently induced the buyer to enter into the contract. The appellate court also found that the buyer could bring a claim that the seller violated Kentucky law, which requires a damage disclosure to a buyer if the seller has direct knowledge of the damage, the damage resulted in repairs or repair estimates that cost more than $1,000, and the damage occurred while the car was in the seller's possession and prior to delivery to a purchaser. The buyer alleged that the seller knew the car had undergone more than $1,000 in repairs for collision damage. The seller knew that the auctioneer made $612 worth of repairs and that some warranty work had also been completed. The appellate court disagreed with the seller's claim that the Kentucky statute does not require a seller to include the cost of warranty repairs in the $1,000 threshold, finding that a seller must include the value of warranty repairs completed while the car is in the seller's possession toward the $1,000 threshold. See Evans v. JNT, Inc., 2015 Ky. App. LEXIS 124 (Ky. App. August 21, 2015). Garnishing Wages in the Peach State? A federal trial court has ruled that Georgia's postjudgment garnishment statute is unconstitutional. See Strickland v. Alexander, 2015 U.S. Dist, LEXIS 121958 (N.D. Ga. September 8, 2015). So there’s this month’s roundup! Stay legal, and we’ll see you next month. ___ Tom ([email protected]) and Nikki ([email protected]) are partners in the law firm of Hudson Cook, LLP. Tom has written several books and is the publisher of Spot Delivery®, a monthly legal newsletter for auto dealers. He is Editor in Chief of CARLAW®, a monthly report of legal developments for the auto finance and leasing industry. Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery. For information, visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2015, all rights reserved. Single publication rights only, to the Association. (10/15). HC# 4834-9578-6537.