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Krause v. Eugene Dodge Inc.

May 17, 1973


Appeal from Circuit Court, Lane County. Douglas R. Spencer, Judge.

Derrick E. McGavic, Eugene, argued the cause for appellant. With him on the briefs were Gildea, Speer & McGavic, P.C., Eugene.

Lawrence F. Cooley, Eugene, argued the cause and filed the brief for respondents.

In Banc. Tongue, J.


This is an action for damages for alleged fraud by an automobile dealer in the sale as a "new car" of an automobile which had been driven 5,869 miles. Defendant appeals from a judgment based upon a jury verdict awarding plaintiff $250 in general damages and $6,000 in punitive damages. We affirm.

Defendant's primary contention in this hotly contested case is that its motions for nonsuit and directed verdict should have been granted for lack of "clear and convincing" evidence, as required in an action for fraud. It thus becomes necessary to review the record.

Because of direct conflicts in the testimony it must be kept in mind the function of this court in such a case is to determine whether there was sufficient evidence to support the jury verdict and that for this purpose the evidence must be viewed in the light most favorable to the plaintiffs and all conflicts in the evidence must be resolved in favor of the plaintiffs. This is because, after the verdict, the plaintiff is entitled to the benefit of all favorable evidence, as well as all favorable inferences which may be reasonably drawn from such evidence. See Cronn v. Fisher, 245 Or 407, 416, 422 P2d 276 (1966). Accordingly, and also because it is ordinarily the exclusive function of the jury to pass upon the credibility of witnesses, we must include for the purposes of this review, reference to all evidence which tends to support the jury verdict in favor of the plaintiffs despite the fact that some testimony

may have been given by witnesses whose credibility was impeached and despite the fact that considerable testimony to the contrary was offered by defendant.

1. Summary of evidence.

a. Inquiry about mileage on odometer -- "reading" of odometer by salesman as "500 -- some miles."

In September 1970, plaintiff Clairene Krause and her son, plaintiff Chester Crane, went to defendant's establishment looking for a car for the son, who was then 20 years of age and had just returned from service in the Army. They talked to a salesman named Ken Williams, who showed them a 1970 Dodge Challenger automobile on defendant's new car lot. This car, unlike most domestic automobiles, had a separate "trip" odometer, which showed both miles and tenths of miles. There was also a separate odometer which showed total mileage, but did not show tenths of miles, as shown on the odometers of most domestic cars. That odometer then showed 5,869 miles.

Mrs. Krause and her son took the car for a test drive and upon returning it she and her son asked Mr. Williams "about the mileage." Mrs. Krause testified, "[t]o me, I read it as 500 -- something and I asked him how a new car had so many miles." She and her son testified that Mr. Williams "looked in" and "read off five-hundred -- some miles" and said "[n]ot really; the car had been on the lot several months" and "that wasn't very many miles for as long as the car had been there being test-driven," but that this "was a new car, just driven by people wanting to test it."

Mr. Crane testified that all the odometers that he had seen did not have a separate "trip" odometer,

but had "all the digits on one line, including the tenth" of a mile and that he asked Mr. Williams about the separate "trip" odometer and was told that it was a "foreign speedometer" he didn't know how to "read," but that he would have someone else "explain" the odometer to them. Mr. Crane also testified that in response to their inquiry about the mileage on the car they were never told that "there [were] 5,869 miles on that car."

b. Signing of "Buyer's Order" in blank -- prior sale of car and repossession.

Mrs. Krause and Mr. Crane then went "inside" with Mr. Williams to discuss a price. The car had no "sticker" with a price and they were told by Mr. Williams that this was because the 1971 models were then "on the floor." According to plaintiffs, Mr. Williams said that he thought the "sticker" price was "in the four thousand bracket" and "offered it to us for thirty-nine hundred." Mr. Crane thought that was "a little steep" and offered $3,700 for the car and that price was then agreed upon. Plaintiffs were not told that the same car had previously been sold for $3,575 to another purchaser in return for a bad check and the car had been driven to Illinois where it was recovered and driven back to Eugene, where it was "cleaned up" and put on the "new car lot" for sale as a "new car."

Mrs. Krause and Mr. Crane testified that Mr. Williams then brought in "some papers" and discussed the down payment and "financing." She testified that Mr. Williams then gave them a "rough estimate" of the payment "figures" and told her that "if we just signed the papers and take the car home and they would complete the paper work later"; that Mr. Williams

then "indicated" where she was "supposed to sign" by marking "X's" on a "buyer's order"; that she did not read the contract, but placed her signature at each of those "X's"; that the contract was not then "filled in," but was "in blank" and that they then took the car home, after leaving a check for the down payment. Plaintiffs were not given a copy of the "buyer's order" at that time.

Mrs. Krause also testified that her husband (the stepfather of her son) also signed the "buyer's order" that night "after he got off from work" and that "one of the fellows came to the window and put the papers out and he just signed his name and left." That signature appears at the bottom of the "buyer's order" as a "co-buyer," while Mrs. Krause signed as the "buyer." Mr. Krause was also named as a plaintiff, but did not testify.

c. Return of car for repairs -- discovery of actual mileage on odometer.

Mr. Crane testified that later he took the car in for minor repairs and inquired again about the odometer because on the "trip" odometer "the whole row would move at once, like 111 would go to 222" and because he had difficulty reading the "last digit" of the separate odometer showing total mileage. He testified that in response to these inquiries "they kept telling me it wasn't working" and that he was finally told by defendant's sales manager that they would order a new speedometer.

Meanwhile, Mrs. Krause drove the car to California and testified that before doing so she wanted written evidence that they owned the car which they did not then have. Mrs. Krause testified that for this

reason Mr. Crane went down and asked for a copy of the "contract" and was then given a copy of the "buyer's order" which was not "really read" at that time, but was only "glanced at" and put in the glove compartment of the car during that trip and later was put in her "file box."

Mrs. Krause testified that she first learned that the car had over 5,000 miles "on it" when purchased, instead of 500 -- some miles, some three months later when her son took the car in for further repairs and was told that the "12 months or 12,000 miles" warranty on the car had expired.

d. " Notation" of mileage on "Buyer's Order" -- conflict of testimony.

The copy of the "vehicle buyer's order," as delivered by defendant to Mr. Crane, included the following notation in handwriting:

"This unit has been licensed and driven 5869 miles prior to the date of this sale.

"X Clairene Krause"

That signature was one of three by Mrs. Krause on that document, each preceded by an "X".

Mrs. Krause testified, however, that this notation was not on the document when she placed her signature at that "X," as directed by Mr. Williams, and that she was "positive" that the order was in "blank" when she signed it. After lengthy cross-examination, she admitted that in her deposition she stated that she did not remember whether it was blank, but testified that to the best of her knowledge it was blank and that this statement was true. In her deposition she stated elsewhere that the notation about mileage was not on the

document when she signed it. She also said in response to a question on cross-examination, that she was not "accusing" defendant of altering anything, but that she was "confused" by the questions on cross-examination. Subsequently, she testified that "I remember a lot about it, that it was blank." In response to further questions on cross-examination she also testified both that she could not remember and that she believed that document was blank when she signed it. On redirect examination she said that this was still her testimony.

Her son, Mr. Crane, testified that he was present when she placed her signature on that document; that he "looked at those papers"; that he did not see a statement that the car had been driven 5,869 miles and "there wasn't nothing like that at all" on the "buyer's order" at that time. On cross-examination he admitted that he did not actually "read" the "buyer's order" and that it could have been "partially filled out," but that he did not think that it was filled out, at least "completely," but could not be sure if it was "partially filled out." He also said that he watched Mr. Williams "fill out papers" and "fill it out" and that Mr. Williams had been running back and forth to the manager's office and "writing everything down," but that he did not know "if it was this he was filling out" and that Mr. Williams was writing down figures on "scratch paper." He also testified that Mr. Williams "told us to go ahead and take the car that night and he'd have the rest of the paper work for my stepfather to sign. He said, 'it's ours,' so we wrote him out a check then" for the down payment, which Mr. Williams said that he had to have at that time.

Defendant's witnesses also testified that the "buyer's order" was not "filled out" by Mr. Williams. They testified, however, that ...

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