Cunningham v. Michael J. Auto Sales , 2021 Ohio 1390 ( 2021 )

[Cite as Cunningham v. Michael J. Auto Sales, 2021-Ohio-1390.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
MICHAEL CUNNINGHAM, : APPEAL NO. C-200087
TRIAL NO. 19CV-24641
Plaintiff-Appellee, :
vs. :
O P I N I O N.
MICHAEL J. AUTO SALES, :
Defendant-Appellant. :
Civil Appeal From: Hamilton County Municipal Court:
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: April 21, 2021
Bradley R. Hoyt, for Appellant,
Michael Cunningham, pro se.
OHIO FIRST DISTRICT COURT OF APPEALS
BOCK, Judge.
{¶1} Defendant-appellant Michael J. Auto Sales (“Auto Sales”) appeals the
trial court’s judgment, which determined that Auto Sales sold a vehicle to plaintiff-
appellee Michael Cunningham with prior knowledge of the vehicle’s faulty
transmission and failed to disclose the defect. For the reasons stated herein, we
affirm.
I. Facts and Procedure
A. The Vehicle
{¶2} In February 2019, Auto Sales purchased a 2008 Ford Edge (“the
vehicle”) from an auction. About a month later, Cunningham purchased the vehicle
from Auto Sales for $5,851.12. The purchase agreement, signed by both parties,
contained a section entitled “WARRANTY INFORMATION.” It stated, in part:
Unless Seller provides a written warranty, or enters into a service
contract within 90 days from the date of this contract, this vehicle is
being sold “AS IS – WITH ALL FAULTS” and Seller makes no
warranties, express or implied, on the vehicle, and there will be no
implied warranties of merchantability or of fitness for a particular
purpose * * * .
{¶3} Cunningham made a $3,600 down payment and financed the
remainder. Cunningham later made a $250 payment and a $280 payment.
{¶4} Approximately one month after purchase, Cunningham began to
experience problems with the vehicle. Cunningham testified that while he was
stopped in the vehicle at a traffic light, it felt like someone had hit him, but there
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were no cars nearby. Between mid-April and mid-May 2019, Cunningham returned
the vehicle to Auto Sales for repairs.
{¶5} Auto Sales performed tests on the vehicle and determined that the
solenoid—the computer that “tells the transmission what to do”—needed to be
replaced. Auto Sales offered to make the repairs if Cunningham paid for the parts.
Cunningham paid an additional $450 for parts to repair the transmission. The
vehicle remained in Auto Sales’ possession for several months with little or no
progress on repairs. The parties could have had the vehicle towed to a Ford
dealership for further inspection, but neither party wished to pay for the tow.
{¶6} Due to the problems with the vehicle, Cunningham’s girlfriend Felicia
Linville lost her job. Auto Sales hired Linville in exchange for it paying for parts to
repair the vehicle.
{¶7} Linville testified that at some point after she had been employed with
Auto Sales, she suspected that Auto Sales had cheated Cunningham by failing to
disclose defects. Linville testified that she had accessed Auto Sales’ business
computer and found a note referring to Cunningham’s account stating “BAD TRANS
AS IS W/CONDITIONS.” Linville took photographs of that page and two other pages
from Auto Sales’ computer that involved Cunningham’s vehicle.
{¶8} Cunningham refused to make any further payments for repairs or for
the vehicle loan. In August 2019, Auto Sales issued a notice of repossession.
Cunningham sued in small-claims court to recover the amounts that he had spent on
and invested in the vehicle.
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B. The Trial
{¶9} At trial, Cunningham offered Linville’s photographs, which
purportedly captured information involving the sale and financing of the vehicle.
Auto Sales objected to the admission of the photographs, but the magistrate
admitted them. The three pictures referenced “stock number B34556,” which
corresponded to the last digits of the VIN number on Cunningham’s vehicle. The first
photo showed “BAD TRANS AS IS W/CONDITIONS.” The next two reflected
Cunningham’s payment history on the vehicle.
{¶10} Auto Sales denied knowledge of any transmission defects and asserted
that the photographs did not reflect any software utilized by its business. But Auto
Sales admitted that the financial information contained on the second and third
photographs accurately reflected the financial transactions between the parties.
Further, it admitted that this financial information is maintained on Auto Sales’
computer. Auto Sales argued that Linville made up the information.
C. Magistrate’s Decision
{¶11} The magistrate found that the “as is” provision in the purchase
agreement did not bar a fraud claim. He determined that Cunningham had provided
competent, credible evidence that Auto Sales knew, or should have known, that the
vehicle had a faulty transmission and that Auto Sales failed to disclose that fact to
Cunningham before the sale. The magistrate rendered a decision in favor of
Cunningham in the amount of $4,400.
{¶12} Auto Sales objected to the magistrate’s decision. The magistrate issued
findings of fact and conclusions of law.
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{¶13} The trial court filed two judgment entries, one of which overruled Auto
Sales’ objections, adopted the magistrate’s decision, and rendered judgment in favor
of Cunningham, awarding him $4,400. The other entry, which was attached to Auto
Sales’ brief, overruled the objections and adopted the magistrate’s decision, but
failed to include the court’s own judgment.
{¶14} Auto Sales timely appealed.
II. Standard of Review
{¶15} In its sole assignment of error, Auto Sales asserts that the trial court
erred by not granting its objection to the magistrate’s decision and by adopting the
decision. When reviewing a trial court’s ruling on objections to a magistrate’s
decision, appellate courts must determine whether the trial court abused its
discretion. Kevin Eye v. Sal’s Heating & Cooling, Inc., 8th Dist. Cuyahoga No.
109212, 2020-Ohio-6737, ¶ 22. A trial court does not abuse its discretion unless its
decision was “unreasonable, arbitrary or unconscionable.” Blakemore v. Blakemore,
5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
III. Law
{¶16} “As-is” clauses do not overcome a buyer’s ability to justifiably rely on a
seller’s representation involving defects. Shannon v. Fischer, 12th Dist. Clermont No.
CA2020-05-022, 2020-Ohio-5567, ¶ 22 (summary judgment was inappropriate
when some evidence suggested that sellers knew of a defect in a home). “[A] buyer
can maintain a fraud claim against a used car dealer even if the vehicle is sold ‘as is’ if
the dealer should have known of defects in the vehicle.” Perkins v. Land Rover, 7th
Dist. Mahoning No. 03 MA 33, 2003-Ohio-6722, ¶ 2.
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{¶17} Small-claims proceedings are intended to be informal. Weltin v.
Collins, 6th Dist. Sandusky No. S-19-019, 2020-Ohio-296, ¶ 16. As such, the Ohio
Rules of Evidence do not apply to hearings in small claims court. Cleveland Bar
Assn. v. Pearlman, 106 Ohio St.3d 136, 2005-Ohio-4107, 832 N.E.2d 1193, ¶ 15.
{¶18} Because the Ohio Rules of Evidence are not applicable to small-claims
proceedings, “the reliability, credibility, and admissibility of evidence are determined
by the trial court.” Karnofel v. Girard Police Dept., 11th Dist. Trumbull No. 2004-T-
0145, 2005-Ohio-6154, ¶ 18.
IV. Analysis
{¶19} There is no dispute that the vehicle was purchased “as is” and that the
vehicle was defective. The issue before the trial court was whether Auto Sales knew,
or should have known, that the vehicle’s transmission was defective prior to the sale.
{¶20} As proof of Auto Sales’ prior knowledge of the defective transmission,
Cunningham and his witness, Linville, submitted photographs of Auto Sales’
computer screen, which depicted records related to Cunningham’s account. Linville
testified that she took the photographs while she was employed by Auto Sales. Auto
Sales testified that Linville had access to the business computer.
{¶21} Small-claims matters are designed to be simplified. As such, the rules
of evidence do not apply. Thus, the photographs were properly entered into the
record.
{¶22} The trial court determined that Cunningham’s evidence proved his
claim. The evidence showed that Linville had direct access to Auto Sales’ business
records and discovered a note in Cunningham’s account stating “BAD TRANS AS IS
W/CONDITIONS.” The photographs contained Cunningham’s name, an account
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number that corresponded to the VIN number of the vehicle, and the dates and
amounts of payments that he made on the vehicle. Although Auto Sales denied the
authenticity of the photographs, the magistrate chose to believe that the photographs
were authentic. The magistrate was in the best position to judge the credibility of the
witnesses.
{¶23} While an “as is” clause in a purchase agreement will typically bar
claims of implied warranty, it does not bar all future claims if the seller knew, or
should have known, of a defect in the product. Perkins v. Land Rover, 7th Dist.
Mahoning No. 03 MA 33, 2003-Ohio-6722, ¶ 2. The evidence showed that Auto Sales
knew or should have known that there was a defect with the vehicle’s transmission
and failed to disclose that fact to Cunningham.
{¶24} The trial court did not err in ruling in Cunningham’s favor.
V. Conclusion
{¶25} The trial court did not abuse its discretion by admitting Cunningham’s
exhibits and finding in favor of Cunningham. The record supports Cunningham’s
claim that Auto Sales failed to disclose the defect prior to selling the vehicle to
Cunningham. Auto Sales’ sole assignment of error is overruled and the judgment of
the trial court is affirmed.
Judgment Affirmed.
BERGERON, P.J., and WINKLER, J., concur.
Please note:
The court has recorded its entry on the date of the release of this opinion
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