Ford dealership not liable for what it didn't know, appellate court rules

Steve Korris Jun. 9, 2011, 4:17pm


MOUNT VERNON – Truck buyers Adam and Lindsey Dawson can't sue Jack Schmitt Ford for failing to tell them what the dealer didn't know, Fifth District appeals judges ruled on May 27.

They affirmed St. Clair County Circuit Judge Vincent Lopinot, who found no evidence the dealer knew Ford Motor Company had repurchased the truck four years earlier.

Justice Thomas Welch wrote, "Illinois courts have held that a defendant cannot be held liable under the Consumer Fraud Act for failing to disclose information of which it was not aware."

"Holding a defendant liable for failing to disclose information unknown to it would transform innocent, unknowing omissions into actionable deception," he wrote.

In 2007, Jack Schmitt Ford sold the Dawsons a 2003 Ford Excursion.

The Dawsons took it to Auffenberg Jeep for possible trade in 2008, and a Carfax report showed Ford repurchased it in 2003 because it didn't conform to its warranty.

Lindsey next took the Excursion to Auffenberg Ford, where employees found a sticker on the driver's side door panel with Ford's buyback statement.

The Dawsons returned to Jack Schmitt Ford, and the dealer offered to pay book value for the Excursion.

The Dawsons turned it down because the dealer wouldn't assume their loan.

They sued Jack Schmitt Ford, alleging it violated state consumer fraud law.

They claimed the dealer knew or should have known Ford bought back the Excursion, or that it was willfully ignorant.

Jack Schmitt Ford answered that a disclosure statement must follow a repurchased vehicle only through one retail sale after the buyback, and that the Dawsons weren't the first buyers.

At a hearing, Adam Dawson testified that he wouldn't have bought it if the dealer had checked a box on the title application for "other branded title."

Jack Schmitt Ford general manager Angie Schmitt testified that the dealer bought the truck from Menard Auto Sales, with no knowledge of the buyback.

She said Jack Schmitt Ford reviews a seller's title but doesn't investigate its history.

"The title given to Jack Schmitt from Menard had not been branded, and nothing on the title indicated that Ford had repurchased the Excursion," Welch wrote.

Rodney Menard of Menard Auto Sales testified that he doesn't investigate title histories.

He and Angie Schmitt both declared Carfax reports unreliable.

Two mechanics swore they worked on the truck but didn't see the sticker.

Lopinot granted summary judgment to Jack Schmitt Ford, and the Dawsons appealed.

They claimed the dealer misrepresented the title by leaving blank the "other branded" box.

That made no sense to Welch, who found the complaint didn't mention the title application.

"We agree that the mere mention of therm 'misrepresentation' in the complaint does not demonstrate that the Dawsons sufficiently pled an affirmative misrepresentation," he wrote.

"The fact that the Excursion was a buyback is true and undisputed," he wrote.

"Accordingly, if the Dawsons were alleging an affirmative misrepresentation, they would have argued in their complaint that Jack Schmitt misrepresented to them that the Excursion had a clean title or had not been repurchased by Ford," he wrote.

He wrote that the Secretary of State instructs sellers to check "other branded" if a title includes buyback or lemon branding from another state.

"The Secretary of State does not reference stickers, multiple titles, or the vehicle's full title history," he wrote.

"Rather, the Secretary directs the seller to rely on the title presented to it," he wrote.

Justices Stephen Spomer and James Donovan concurred.

Deanna Litzenburg represented Jack Schmitt Ford.

Eric Kaczander represented the Dawsons.

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Ford Motor Company
1 American Rd
Dearborn, MI 48126

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