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FRANCESCONI v. KARDON CHEVROLET

December 27, 1988

ALBERT R. FRANCESCONI, Plaintiff,
v.
KARDON CHEVROLET, INC., Defendant



The opinion of the court was delivered by: FISHER

 This action was instituted by plaintiff, Albert R. Francesconi, who alleges that he was injured as a result of certain fraudulent conduct by the defendant during the negotiation of a lease for a 1985 Isuzu Impulse automobile (the "Isuzu"). The complaint alleges two separate grounds for relief. The first count alleges that the defendant, Kardon Chevrolet, Inc., failed to comply with the odometer tampering and disclosure requirements of the Motor Vehicle Information and Cost Savings Act of 1972 (the "Odometer Act"), 15 U.S.C. §§ 1981 et seq. The second count alleges a violation of the New Jersey Consumer Fraud Act. The matter is now before the court on defendant's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.

 The facts which underlie this dispute are as follows. Defendant is an automobile dealership located at Route 38, Mount Holly, New Jersey. On October 10, 1985, defendant, acting as a leasing agent for the General Motors Acceptance Corporation ("GMAC"), *fn1" entered into an agreement with plaintiff for the lease of a 1985 Isuzu Impulse. The vehicle's odometer registered approximately 317 miles. During the transaction, plaintiff was given and signed an odometer mileage statement which represented the mileage on the Isuzu to be 317 miles. No allegation is made that the odometer was tampered with or that it did not accurately register the true mileage on the car.

 Plaintiff does allege, however, that during the negotiations, defendant, through its agents, orally represented the mileage on the Isuzu to be only 31.8 miles. Plaintiff further alleges that the defendant made these false representations with the intent to defraud plaintiff and that plaintiff relied on defendant's representations in executing the lease agreement. According to plaintiff, despite having commented on the mileage (that it was, in fact, 318 miles) during a test drive of the Isuzu and having signed the odometer mileage statement at the dealership, he did not become aware that the actual mileage on the car was 317 miles until he came across the statement while reviewing the lease documents at home that evening. *fn2" After this discovery, plaintiff attempted to return the Isuzu, but defendant refused to accept the vehicle.

 Shortly thereafter, GMAC, the owner and lessor of the Isuzu, agreed to a recision of the lease agreement and took possession of the vehicle without demanding any payments from plaintiff. It is an undisputed fact that plaintiff was not required to make any payments under the lease agreement. Nevertheless, plaintiff filed this lawsuit against the defendant, alleging a violation of 15 U.S.C. §§ 1981 et seq. (the federal odometer statute), as well as the New Jersey Consumer Fraud Act. As damages, plaintiff alleges a loss of income for one-half day amounting to $ 250.00, and $ 1,350.00 in legal fees incurred during the dispute with GMAC over the return of the Isuzu.

 Plaintiff does not contend that the odometer in the Isuzu was tampered with in any way or that the odometer registered an inaccurate amount of mileage for this car; instead, plaintiff bases his claims on the oral misrepresentations which, he alleges, were made to him during the negotiation of the lease agreement. Defendant moves the court to dismiss the complaint on summary judgment based on its assertion that these facts do not support a claim based on a violation of the federal odometer statute, since a required element -- odometer tampering -- is not present and because the minor difference in the mileage belies any intent to defraud, another essential element. Plaintiff argues, however, that a finding of odometer tampering is not essential; instead, under plaintiff's analysis of the case law interpreting 15 U.S.C. §§ 1981 et seq., oral misrepresentations are sufficient for the imposition of civil liability. Moreover, plaintiff argues that "intent to defraud" is a question of fact, which must be resolved by the trier of fact, thus precluding summary judgment.

 Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56; Brown v. Hilton, 492 F. Supp. 771, 774 (D.N.J. 1980). The burden of showing that no genuine issue of material fact exists rests initially on the moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977). This "burden . . . may be discharged by 'showing . . . that there is an absence of evidence to support the nonmoving party's case.'" Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Nonetheless, in deciding a motion for summary judgment, the facts and inferences therefrom are construed in a light most favorable to the nonmoving party. Pollock v. American Telephone & Telegraph Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).

 The Federal Odometer Act

 This case presents a novel question of law for the court. The dispositive issue -- whether the Odometer Act imposes civil liability on the lessor of a motor vehicle based on oral misstatements concerning the mileage on that automobile when there is no evidence that the vehicle's odometer has been tampered with or is inaccurate in the number of miles registered -- has never been addressed by this court. *fn3" After a thorough examination of the congressional purpose in enacting the Odometer Act, its language and the relevant case law interpreting the scope of the statute, the court concludes that it does not.

 The intent of Congress in enacting the federal Odometer Act clearly was to prohibit tampering with the odometers of motor vehicles and to provide safeguards for the protection of consumers purchasing motor vehicles. Clayton v. McCary, 426 F. Supp. 248, 255 (D. Ohio 1976). This twofold purpose was expressly set forth in the first section of subchapter IV of the Motor Vehicle Information and Cost Savings Act which provides, in relevant part:

 
The Congress hereby finds that purchasers, when buying motor vehicles, rely heavily on the odometer reading as an accurate reflection of the mileage actually traveled by the vehicle; . . . It is therefore the purpose of this subchapter to prohibit tampering with odometers on motor vehicles and to establish certain safeguards for the protection of purchasers with respect to the sale of motor vehicles having altered or changed odometers.

 15 U.S.C. § 1981 (1982) (emphasis added).

 To that end, Congress promulgated several sections which explicitly prohibit tampering with odometers, *fn4" and in addition, imposed certain disclosure requirements on the "transferor" of a motor vehicle. Those sections which deal specifically with the act of tampering or changing the amount of mileage are not pertinent to the disposition of this action. Plaintiff has never asserted that the odometer in the Isuzu was tampered with either during defendant's ownership or prior thereto. Defendant argues, however, that these provisions indicate that Congress intended that some form of tampering be present before a violation can occur. In light of the disclosure requirements set forth later in the Act, the court finds defendant's reading of the statute to be too narrow.

 Section 1988(a) of the Odometer Act requires that the following disclosures be made when ownership of a ...


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