Bob Travis d/b/a Travis Company v. Nathan Ferguson d/b/a Northside Auto Sales ( 2017 )

05/03/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
March 22, 2017 Session
BOB TRAVIS D/B/A TRAVIS COMPANY v. NATHAN FERGUSON D/B/A
NORTHSIDE AUTO SALES
Appeal from the Circuit Court for Davidson County
No. 15C-3761 Kelvin D. Jones, Judge
___________________________________
No. M2016-00833-COA-R3-CV
___________________________________
Appellant purchased a vehicle, owned by Appellee, from an auto auction company. After
the purchase, Appellant discovered that the vehicle’s engine was defective, a fact that
was not disclosed prior to sale. Appellant sought rescission of the purchase against
Appellee but did not name the auto auction company as a defendant. Because the
rescission and warranty of merchantability statutes, Tenn. Code Ann. §§ 47-2-608 and
47-2-314 require privity of contract between the buyer and the seller, and because the
automobile auction statute, Tenn. Code Ann. § 62-19-128 clearly identifies the auction
company as the seller of the vehicle, we conclude that Appellant did not have a cause of
action for rescission against Appellee. Affirmed and remanded.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Affirmed and Remanded
KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J., joined.
Robert D. Travis, Lebanon, Tennessee, appellant, pro se.
Nathan Ferguson, Nashville, Tennessee, appellee, pro se.
MEMORANDUM OPINION1
1
Rule 10 of the Rules of the Court of Appeals of Tennessee provides:
This Court, with the concurrence of all judges participating in the case, may affirm,
reverse or modify the actions of the trial court by memorandum opinion when a formal
opinion would have no precedential value. When a case is decided by memorandum
The vehicle at issue in this case is a 2006 Toyota Tundra. Appellee Nathan
Ferguson purchased the vehicle from Clean Cars, LLC, on December 31, 2014.2 At the
time Mr. Ferguson purchased the vehicle, it had been vandalized and had no tires or rims.
Mr. Ferguson had the vehicle towed directly to Auto Auctions, Inc. so that it could be
sold. On March 12, 2015, Auto Auctions auctioned the vehicle, which had been
designated as a “no run” vehicle, meaning that it had a bad transmission, locked motor,
missing keys, bad fuel pump or other such problems. Auto Auctions’ practice is to
disclose a vehicle’s problems, in writing, on the windshields of the vehicles it sells.
Appellant Robert D. Travis testified that, prior to his purchase of the vehicle, he spoke
with Mr. Ferguson on the lot, and Mr. Ferguson did not disclose any defects with the
vehicle except for the missing tires. The vehicle had no defect noted on the windshield.
Mr. Travis acknowledged the lack of wheels and also attempted to start the vehicle, but
the engine would not start. The record contains a “Buyer’s Guide,” indicating that the
vehicle was sold “AS IS—NO WARRANTY,” but Mr. Travis disputes the lack of
warranty, citing the implied warranty of merchantability, see infra.
Mr. Travis was the successful bidder and purchased the vehicle at the auction for
$5,280.00. After purchasing the vehicle and fitting it with wheels, Mr. Travis had it
taken to Affordable Auto Care. On March 27, 2015, Chris Warf, the owner of Affordable
Auto Care, notified Mr. Travis that the vehicle would not start “because of cut and
unconnected wires hidden under the dash.” After reconnecting the wires, Mr. Warf
advised Mr. Travis that the truck had a substantial “knock” in the engine such that the
engine would need to be replaced. Mr. Travis made an immediate demand on Mr.
Ferguson to rescind the transaction and refund the purchase price of $5,280.00. Mr.
Ferguson refused.
On May 1, 2015, Mr. Travis filed suit against Mr. Ferguson in general sessions
court, seeking to rescind his purchase of the 2006 Toyota Tundra. By order of September
28, 2015, the general sessions court held that Mr. Travis had not met his burden of proof
and dismissed his complaint. Mr. Travis appealed to the circuit court. By order of March
11, 2016, the trial court dismissed Mr. Travis’ complaint. Mr. Travis appeals.
II. Issues
Mr. Travis raises the following issues for review, as stated in his brief:
1. Whether Appellant may revoke acceptance for the purchase of a vehicle
pursuant to T.C.A. 47-2-608 even though Appellee is relying on
opinion it shall be designated “MEMORANDUM OPINION”, shall not be published, and
shall not be cited or relied on for any reason in any unrelated case.
2
Mr. Ferguson does business as Northside Auto Sales.
-2-
disclaimers of warranty pursuant to T.C.A. 47-2-314, et. seq.
2. Whether Appellee had a legal duty to Appellant to disclose the fact that
the truck had a knock in the engine.
3. Whether the evidence is contrary to the trial court’s findings of fact and
conclusions of law.
4. Whether Appellant is entitled to damages and if so, in what amount.
III. Standard of Review
Because this case was tried by the court sitting without a jury, we review the trial
court’s findings of fact de novo with a presumption of correctness, unless the evidence
preponderates against those findings. McGarity v. Jerrolds, 429 S.W.3d 562, 566 (Tenn.
Ct. App. 2013); Wood v. Starko, 197 S.W.3d 255, 257 (Tenn. Ct. App. 2006). For the
evidence to preponderate against a trial court’s finding of fact, the weight of the evidence
must “demonstrate... that a finding of fact other than the one found by the trial court is
more probably true.” Williams v. City of Burns, 465 S.W.3d 96, 108 (Tenn. 2015); The
Realty Shop, Inc. v. R.R. Westminster Holding, Inc., 7 S.W.3d 581, 596 (Tenn. Ct. App.
1999). This Court conducts a de novo review of the trial court’s resolutions of question of
law, with no presumption of correctness. Kelly v. Kelly, 445 S.W.3d 685, 691-92 (Tenn.
2014); Armbrister v. Armbrister, 414 S.W.3d 685, 692 (Tenn. 2013).
To the extent that Appellant’s issues require statutory interpretation, we note that,
when interpreting statutes, courts are to “give effect to the legislative intent without
unduly restricting or expanding a statute's coverage beyond its intended scope.” Owens v.
State, 908 S.W.2d 923, 926 (Tenn.1995). When reading “statutory language that is clear
and unambiguous, we must apply its plain meaning in its normal and accepted use,
without a forced interpretation that would limit or expand the statute’s application.”
Eastman Chemical Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). “[W]e presume
that every word in a statute has meaning and purpose and should be given full effect if
the obvious intention of the General Assembly is not violated by doing so.” Lind v.
Beaman Dodge, 356 S.W.3d 889, 895 (Tenn.2011). “When a statute is clear, we apply
the plain meaning without complicating the task.” Id. “Our obligation is simply to
enforce the written language.” Id.IV. Analysis
Mr. Travis seeks rescission of his purchase of the vehicle under Tennessee Code
Annotated Section 47-2-608, which provides, in relevant part:
-3-
(1) The buyer may revoke his acceptance of a lot or commercial unit whose
nonconformity substantially impairs its value to him if he has accepted it:
***
(b) without discovery of such nonconformity if his acceptance was
reasonably induced either by the difficulty of discovery before acceptance
or by the seller’s assurances.
Tenn. Code Ann. § 47-2-608 (emphasis added). Mr. Travis’ rescission claim is based on
his assertion that the vehicle’s condition violated the implied warranty of merchantability,
as set out in Tennessee Code Annotated Section 47-2-314:
(1) Unless excluded or modified (§ 47-2-316), a warranty that the goods
shall be merchantable is implied in a contract for their sale if the seller is a
merchant with respect to goods of that kind. . . .
Tenn. Code Ann. § 47-2-314 (emphasis added). Importantly, Tennessee Code Annotated
Section 47-2-314 requires privity of contract between the buyer and the seller. As
discussed in the annotations to the statute:
The rule requiring privity of contract between the parties is still an essential
element of implied warranty in Tennessee except in cases where the
product involved is in a defective condition unreasonably dangerous to the
user or to the property.
Tenn. Code Ann. § 47-2-314, n. 9 (citing Leach v. Wiles, 58 Tenn. App. 286, 429 S.W.2d
823 (1968)). The question, then, is whether Mr. Travis was in privity of contract with
Mr. Ferguson so as to seek rescission of the contract of sale against Mr. Ferguson. The
question is complicated by the fact that Mr. Travis purchased the vehicle at auction and
not directly from Mr. Ferguson. The trial court specifically held that Tennessee Code
Annotated Section 62-19-128 applies. This statute provides, in relevant part, that:
(c) Prior to a motor vehicle being subject to a public automobile auction,
the public automobile auctioneer shall verify that the motor vehicle has a
clean and unencumbered title, by obtaining a valid motor vehicle title
history from the department of revenue or if the motor vehicle is registered
in a state other than this state, the appropriate titling agency in the other
state.
***
(f) The public automobile auctioneer shall take possession of and retain title
-4-
to each motor vehicle offered for sale at the auction. If the sale is finalized
on a motor vehicle, the owner of the vehicle shall sign the title over to the
public automobile auctioneer, who shall then sign the title over to and
deliver the title to the buyer on the date of the sale. If a sale of the vehicle is
not made, then the unsigned title shall be returned to the owner of the
vehicle who offered the vehicle for sale at the auction. At all times, the
public automobile auction shall be deemed the seller of the motor
vehicle with the same duties and responsibilities as other licensed
motor vehicle dealers.
Tenn. Code Ann. § 62-19-128 (emphasis added). We agree with the trial court that the
foregoing statute is applicable insofar as it defines the automobile auction as the seller of
the vehicle. Tennessee Code Annotated Section 47-2-608 and the warranty of
merchantability statutes, on which Mr. Travis relies, contemplate an action against the
“seller” of the product, see supra. Under the plain language of Tennessee Code
Annotated Section 62-19-128, i.e., “At all times, the public automobile auction shall be
deemed the seller of the motor vehicle . . . ,” we conclude that Auto Auctions was the
seller of the vehicle. Accordingly, Mr. Travis was in privity of contract with Auto
Auction and not with Mr. Ferguson. Therefore, the proper defendant in Mr. Travis’
rescission action was Auto Auctions. Having no privity of contract with Mr. Ferguson,
and having decided not to name Auto Auctions as a party-defendant, there is nothing for
Mr. Travis to rescind against Mr. Ferguson. Mr. Travis argues that it was Mr. Ferguson’s
misrepresentations or omissions that led to the defective sale; however, in the absence of
privity between these parties, what Mr. Ferguson said or did not say, to Mr. Travis,
regarding the vehicle is not relevant. Concerning the allegation that Mr. Ferguson failed
to fully disclose the vehicle’s condition to Auto Auctions so that Auto Auctions, in turn,
could disclose the engine problem to the buyer, Mr. Ferguson’s failure to disclose
information to Auto Auctions does not create privity between Mr. Ferguson and Mr.
Travis. Having determined that, in the absence of privity of contract, Mr. Travis does not
have a rescission claim against Mr. Ferguson, we pretermit Mr. Travis’ remaining issues.
V. Conclusion
For the foregoing reasons, we affirm the trial court’s order. The case is remanded
for such further proceedings as may be necessary and are consistent with this opinion.
Costs of the appeal are assessed against the Appellant, Robert D. Travis and his surety,
for all of which execution may issue if necessary.
_________________________________
KENNY ARMSTRONG, JUDGE
-5-