Jones v. Diamond Warranty Corp. ( 2011 )


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  • [Cite as Jones v. Diamond Warranty Corp., 
    2011-Ohio-6744
    .]
    COURT OF APPEALS
    STARK COUNTY, OHIO
    FIFTH APPELLATE DISTRICT
    ERIC JONES                                       :       JUDGES:
    :       Hon. William B. Hoffman, P.J.
    Plaintiff-Appellee                       :       Hon. Sheila G. Farmer, J.
    :       Hon. Julie A. Edwards, J.
    -vs-                                             :
    :
    DIAMOND WARRANTY CORP.                           :       Case No. 2011CA00044
    :
    Defendant-Appellant                      :       OPINION
    CHARACTER OF PROCEEDING:                                 Appeal from the Canton Municipal
    Court, Case No. 2010CVF0016
    JUDGMENT:                                                Affirmed
    DATE OF JUDGMENT:                                        December 27, 2011
    APPEARANCES:
    For Plaintiff-Appellee                                   For Defendant-Appellant
    RICHARD P. GIBBS                                         EMILY R. YODER
    1001 South Main Street                                   3737 Embassy Parkway
    North Canton, OH 44720                                   Suite 100
    P.O. Box 5521
    Akron, OH 44334
    Stark County, Case No. 2011CA00044                                                   2
    Farmer, J.
    {¶1}   On October 30, 2009, appellee, Eric Jones, purchased a 2002 GMC
    Yukon from Maxwell's Auto Sales, LLC. Appellee also purchased a used car warranty
    from appellant, Diamond Warranty Corporation. Approximately one month later, the
    vehicle's transmission failed and needed repair.      Appellee submitted the claim to
    appellant. Following a vehicle inspection, appellant determined the repairs were not
    covered under the warranty and denied the claim.
    {¶2}   On January 4, 2010, appellee filed a complaint against Maxwell's and
    appellant, claiming breach of contract and violations of the Consumer Sales Practices
    Act (hereinafter "CSPA"). A jury trial commenced on December 9, 2010. The jury
    found in favor of appellee, and awarded appellee $3,434.21 as against Maxwell's and
    $5,302.61 ($1,868.41 breach of warranty and $3,434.20 CSPA) as against appellant.
    {¶3}   Thereafter, appellee filed motions for attorney fees and treble damages. A
    hearing was held on January 28, 2011. By final judgment filed February 4, 2011, the
    trial court awarded appellee $15,000.00 as against Maxwell's and appellant, jointly and
    severally, for violations of the CSPA. The trial court also awarded appellee $40,837.50
    for attorney fees and $2,381.39 for expenses.
    {¶4}   Appellant filed an appeal and this matter is now before this court for
    consideration. Assignments of error are as follows:
    I
    {¶5}   "THE TRIAL COURT ERRED IN AWARDING PLAINTIFF/APPELLEE
    ATTORNEY FEES AND COSTS."
    Stark County, Case No. 2011CA00044                                                       3
    II
    {¶6}   "THE TRIAL COURT ERRED IN FINDING DEFENDANT/APPELLANT,
    DIAMOND WARRANTY CORP., AND DEFENDANT, MAXWELL'S AUTO SALES, LLC,
    JOINTLY AND SEVERALLY LIABLE."
    I
    {¶7}   Appellant claims the trial court erred in awarding appellee treble damages
    and attorney fees under R.C. 1345.09(F)(2). We disagree.
    {¶8}   In reaching its final judgment, the trial court relied on Civ.R. 49 (B) which
    states the following:
    {¶9}   "(B) General verdict accompanied by answer to interrogatories
    {¶10} "The court shall submit written interrogatories to the jury, together with
    appropriate forms for a general verdict, upon request of any party prior to the
    commencement of argument.***The interrogatories may be directed to one or more
    determinative issues whether issues of fact or mixed issues of fact and law.
    {¶11} "**
    {¶12} "When the general verdict and the answers are consistent, the appropriate
    judgment upon the verdict and answers shall be entered pursuant to Rule 58. When
    one or more of the answers is inconsistent with the general verdict, judgment may be
    entered pursuant to Rule 58 in accordance with the answers, notwithstanding the
    general verdict, or the court may return the jury for further consideration of its answers
    and verdict or may order a new trial."
    {¶13} As a primary step, we shall address the appropriateness of the trial court's
    use of Civ.R. 49(B).    We conclude, as did the trial court, that the initial step is to
    Stark County, Case No. 2011CA00044                                                         4
    determine if the interrogatories are clear and unambiguous. This was the only avenue
    available to the trial court, save a new trial, because during the reading of the verdict, no
    specific challenge was made thereby forestalling a return of the issue to the jury.
    {¶14} The issue of inconsistency centers on the general verdict rendered by the
    jury on Counts 1 and 2:
    {¶15} "We the jury, being duly sworn, find that the Plaintiff did prove that
    Defendant Diamond Warranty Corp. breached a contract with the Plaintiff and should be
    awarded damages in the amount of $1868.41.
    {¶16} "We the jury, being duly sworn, find that the Plaintiff did prove that
    Defendant Diamond Warranty Corp. committed a violation of the Consumers Sales
    Practices Act and should be awarded damages in the amount of $3434.20.
    Furthermore, we find that Defendant Diamond Warranty Corp. did make a bona fide
    error."
    {¶17} In answering Interrogatory Nos. 7 and 8, the jury found appellant
    committed unconscionable acts, i.e., lack of training of agents, vague guidelines, and
    lack of inspection guidelines. In Interrogatory No. 3, the jury found appellant did not
    commit an unfair or deceptive act. Parallel to this interrogatory was Interrogatory No. 10
    wherein the jury found appellant did not knowingly commit an unfair or deceptive act.
    Reading these interrogatories with the jury's general verdict on bona fide error,
    appellant argues the trebling of damages and attorney fees are not available under R.C.
    1345.11(A) which states the following:
    {¶18} "In any case arising under Chapter 1345. of the Revised Code, if a
    supplier shows by a preponderance of the evidence that a violation resulted from a
    Stark County, Case No. 2011CA00044                                                       5
    bona fide error notwithstanding the maintenance of procedures reasonably adopted to
    avoid the error, no civil penalties shall be imposed against the supplier under division
    (D) of section 1345.07 of the Revised Code, no party shall be awarded attorney's fees,
    and monetary recovery shall not exceed the amount of actual damages resulting from
    the violation."
    {¶19} However, as we noted, the jury found appellant committed unconscionable
    acts in Interrogatory No. 7. The trial court's jury instructions specifically separated out
    deceptive acts from unconscionable acts. Therefore, the jury properly considered two
    types of violations of R.C. Chapter 1345, finding unconscionable acts but no deceptive
    acts. To support this conclusion, Interrogatory Nos. 1 and 2 found Maxwell's Auto Sales
    committed an unfair or deceptive act, i.e., "[g]ood as factory warranty." Interrogatory
    Nos. 5 and 6 found unconscionable acts committed by Maxwell's, i.e., "[h]e was lead to
    believe it had a valid warranty."
    {¶20} A bona fide error is a mistake "made unintentionally; inadvertently; in good
    faith." Black's Law Dictionary (6 Ed.1990) 177.
    {¶21} It is interesting to note that in arguments to the jury, appellant did not
    delineate a bona fide error to meet the requirements of the exception, i.e., the
    "maintenance of procedures reasonably adopted to avoid the error."
    {¶22} Appellant's defense at trial was to argue via its witness, Ryan Curry, the
    vehicle inspector, that the subject warranty did not cover the transmission failure
    because it was a pre-existing condition and the vehicle had been modified. T. at 141-
    143. If the jury had found Mr. Curry's decision was the unconscionable act, it would
    Stark County, Case No. 2011CA00044                                                      6
    have clearly fit within the good faith exception because Mr. Curry was an independent
    contractor for appellant.
    {¶23} Appellant's witnesses testified Maxwell's employees and agents were
    properly trained, but the jury rejected the testimony in Interrogatory No. 8. In answering
    Interrogatory No. 10 on the issue of "unfair and deceptive act or practice" by appellant,
    the jury found it was not knowingly done. This answer was basically unnecessary given
    the jury's decision in Interrogatory No. 3 wherein the jury found appellant had not
    committed any unfair or deceptive acts.
    {¶24} We are left with no definitive response from the jury on whether appellant's
    unconscionable acts were knowingly done. Because the specific instances listed were
    acts of omission as well as commission, the requirement of the exception in R.C.
    1345.11 did not demonstrate "maintenance of procedures reasonably adopted to avoid
    the error." Further, we conclude the general verdict was totally inconsistent with the
    interrogatories.
    {¶25} It is incumbent upon a claim pursuant to R.C. Chapter 1345 to determine if
    the act found to be unconscionable was knowingly committed. See, R.C. 1345.09(F)(2).
    The Supreme Court of Ohio addressed this element in Einhorn v. Ford Motor Company
    (1990), 
    48 Ohio St.3d 27
    , 30, as follows:
    {¶26} "This legislative purpose is better safeguarded by finding that 'knowingly'
    committing an act or practice in violation of R.C. Chapter 1345 means that the supplier
    need only intentionally do the act that violates the Consumer Sales Practices Act. The
    supplier does not have to know that his conduct violates the law for the court to grant
    Stark County, Case No. 2011CA00044                                                            7
    attorney fees. This reasoning is found in cases such as Brooks v. Hurst Buick–Pontiac–
    Olds–GMC (1985), 
    23 Ohio App.3d 85
    , 23 OBR 150, 
    491 N.E.2d 345
    .
    {¶27} "We find that the plain meaning of R.C. 1345.09(F)(2) dictates the Brooks
    result and comports with the legislative intent. The language ' * * * knowingly committed
    an act or practice that violates this chapter' requires that for liability to attach, a supplier
    must have committed a deceptive or unconscionable act or practice. This conduct must
    violate the Consumer Sales Practices Act. The statutory language does not state that
    the supplier must act with the knowledge that his acts violate the law, as appellee
    contends.    'Knowingly' modifies 'committed an act or practice' and does not modify
    'violates this chapter.'
    {¶28} "To find otherwise would deny attorney fees to consumers even though
    the supplier might have blatantly violated the Consumer Sales Practices Act. Such a
    conclusion flies in the face of the common-law maxim that ignorance of the law is no
    excuse. Roberts & Martz, supra, at 957."
    {¶29} Therefore, the issue is whether the lack of training and inspection
    guidelines were intentional acts. By rejecting the testimony of Brady Bulger and Brian
    Pica on the issue of training by inference, the jury found appellant's acts to have been
    done pursuant to the Einhorn standard.
    {¶30} Having found the unconscionable acts were knowingly done, the next
    issue is how it jells with the good faith exception in R.C. 1345.11.               Clearly the
    "knowingly" unconscionable act does not fit with the good faith exception because the
    jury specifically rejected the training practices in the interrogatory.
    Stark County, Case No. 2011CA00044                                                       8
    {¶31} Upon review, we find the trial court did not err in awarding appellee treble
    damages and attorney fees.
    {¶32} Assignment of Error I is denied.
    II
    {¶33} Appellant claims the trial court erred in finding it was jointly and severally
    liable for the damages as the jury found it was responsible for less than fifty percent of
    the tortious conduct. We disagree.
    {¶34} Appellant argues R.C. 2307.22(A) does not apply sub judice because the
    action was a contract action, not a tort action. R.C.2307.22(A) states the following:
    {¶35} "(A) Subject to sections 2307.23 and 2307.24 and except as provided in
    division (B) of section 2307.70, division (B) of section 4507.07, section 4399.02, or
    another section of the Revised Code that expressly establishes joint and several tort
    liability for specified persons, joint and several tort liability shall be determined as
    follows:
    {¶36} "(1) In a tort action in which the trier of fact determines that two or more
    persons proximately caused the same injury or loss to person or property or the same
    wrongful death and in which the trier of fact determines that more than fifty per cent of
    the tortious conduct is attributable to one defendant, that defendant shall be jointly and
    severally liable in tort for all compensatory damages that represent economic loss.
    {¶37} "(2) If division (A)(1) of this section is applicable, each defendant who is
    determined by the trier of fact to be legally responsible for the same injury or loss to
    person or property or the same wrongful death and to whom fifty per cent or less of the
    tortious conduct is attributable shall be liable to the plaintiff only for that defendant's
    Stark County, Case No. 2011CA00044                                                       9
    proportionate share of the compensatory damages that represent economic loss. The
    proportionate share of a defendant shall be calculated by multiplying the total amount of
    the economic damages awarded to the plaintiff by the percentage of tortious conduct as
    determined pursuant to section 2307.23 of the Revised Code that is attributable to that
    defendant.
    {¶38} "(3) In a tort action in which the trier of fact determines that two or more
    persons proximately caused the same injury or loss to person or property or the same
    wrongful death and in which the trier of fact determines that fifty per cent or less of the
    tortious conduct is attributable to any defendant against whom an intentional tort claim
    has been alleged and established, that defendant shall be jointly and severally liable in
    tort for all compensatory damages that represent economic loss.
    {¶39} "(4) If division (A)(3) of this section is applicable, each defendant against
    whom an intentional tort claim has not been alleged and established, who is determined
    by the trier of fact to be legally responsible for the same injury or loss to person or
    property or the same wrongful death, and to whom fifty per cent or less of the tortious
    conduct is attributable shall be liable to the plaintiff only for that defendant's
    proportionate share of the compensatory damages that represent economic loss. The
    proportionate share of a defendant shall be calculated by multiplying the total amount of
    the economic damages awarded to the plaintiff by the percentage of tortious conduct as
    determined pursuant to section 2307.23 of the Revised Code that is attributable to that
    defendant."
    {¶40} In Interrogatory No. 43, the jury specifically found Maxwell's was an agent
    of appellant's. R.C. 2307.24(B) states the following:
    Stark County, Case No. 2011CA00044                                                       10
    {¶41} "Sections 2307.22 and 2307.23 of the Revised Code do not affect any
    other section of the Revised Code or the common law of this state to the extent that the
    other section or common law makes a principal, master, or other person vicariously
    liable for the tortious conduct of an agent, servant, or other person. For purposes of
    section 2307.22 of the Revised Code, a principal and agent, a master and servant, or
    other persons having a vicarious liability relationship shall constitute a single party when
    determining percentages of tortious conduct in a tort action in which vicarious liability is
    asserted."
    {¶42} We find R.C. 2307.24(B) controls in this case and the trial court's decision
    on joint and several liability was based upon the jury's consideration in Interrogatory No.
    43, as well as by implication in Interrogatory No. 8. Further, appellee's complaint is
    based on contract, warranty, and the Consumer Sales Practice Act.
    {¶43} Upon review, we find the trial court did not err in finding appellant was
    jointly and severally liable for the damages.
    {¶44} Assignment of Error II is denied.
    Stark County, Case No. 2011CA00044                                           11
    {¶45} The judgment of the Canton Municipal Court of Stark County, Ohio is
    hereby affirmed.
    By Farmer, J.
    Hoffman, P.J. and
    Edwards, J. concur.
    s/ Sheila G. Farmer_______________
    s/ William B. Hoffman______________
    s/ Julie A. Edwards____________
    JUDGES
    [Cite as Jones v. Diamond Warranty Corp., 
    2011-Ohio-6744
    .]
    IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
    FIFTH APPELLATE DISTRICT
    ERIC JONES                                           :
    :
    Plaintiff-Appellee                           :
    :
    -vs-                                                 :        JUDGMENT ENTRY
    :
    DIAMOND WARRANTY CORP.                               :
    :
    Defendant-Appellant                          :        CASE NO. 2011CA00044
    For the reasons stated in our accompanying Memorandum-Opinion, the
    judgment of the Canton Municipal Court of Stark County, Ohio is affirmed. Costs to
    appellant.
    s/ Sheila G. Farmer_______________
    s/ William B. Hoffman______________
    s/ Julie A. Edwards____________
    JUDGES
    

Document Info

Docket Number: 2011CA00044

Judges: Farmer

Filed Date: 12/27/2011

Precedential Status: Precedential

Modified Date: 10/30/2014