Miller v. William Chevrolet/GEO, Inc.
326 Ill. App. 3d 642, 260 Ill. Dec. 735, 762 N.E.2d 1 (2001)
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Rule of Law:
Misrepresenting a used rental car's history as "executive driven" can constitute fraud, and the resulting diminished value of the vehicle is a legally cognizable injury, even if the car functions properly. Under the Illinois Consumer Fraud Act, a seller has a duty to disclose a known material fact like prior rental use, and a buyer's failure to discover the truth does not bar their claim.
Facts:
- In late February 1998, Otha Miller visited a William Chevrolet dealership to purchase a used car.
- A salesperson told Miller that a 1997 Nissan Altima was "executive driven" and a "great car."
- Miller understood "executive driven" to mean the car had been well-cared-for by high-ranking employees of either Nissan or the dealership.
- In reality, the vehicle was a former rental car that William Chevrolet had purchased from Enterprise Leasing Corporation.
- Relying on the "executive driven" representation, Miller agreed to buy the car and signed a sales contract on February 27, 1998.
- Nearly a month later, on March 25, 1998, Miller signed the back of the car's certificate of title, the front of which listed Enterprise as the original owner.
- Miller has driven the car since the purchase without experiencing any serious mechanical malfunctions.
Procedural Posture:
- Otha Miller sued William Chevrolet/GEO, Inc., and HFC Auto Credit Corp. in the Cook County circuit court, which is a trial court.
- The trial court dismissed Miller's original complaint without prejudice.
- The case proceeded to arbitration, which resulted in an award for the defendants.
- Miller, as plaintiff, rejected the arbitration award and filed an amended complaint.
- William Chevrolet filed a motion for summary judgment on the amended complaint.
- The trial court granted summary judgment in favor of both defendants, finding that Miller had not suffered a legally cognizable injury.
- Miller, as appellant, appealed the summary judgment order to the Appellate Court of Illinois.
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Issue:
Does a car dealership's alleged misrepresentation that a used rental vehicle was "executive driven" support claims for common law fraud and statutory consumer fraud where the only alleged injury is the diminished value of the vehicle?
Opinions:
Majority - Justice Gordon
Yes, a car dealership's alleged misrepresentation can support claims for fraud even when the only claimed injury is the vehicle's diminished value. For the common law fraud claim, the statement "executive driven" can be considered a false statement of material fact rather than mere "puffing," as it suggests a specific, factual history. A buyer's reliance can be reasonable even if they later sign a document revealing the truth, especially when the sales contract was signed before the document was presented. Most importantly, diminished value is a legally cognizable injury, even if the product has not malfunctioned, consistent with precedent allowing claims for loss of resale value due to a known defect or misstated condition. The claim under the Illinois Consumer Fraud and Deceptive Business Practices Act is even stronger, as the Act eliminates the common law requirements of justifiable reliance and intent to deceive. Furthermore, while no common law duty to disclose the rental history existed in this arms-length transaction, the Act imposes a statutory duty on sellers to disclose known material facts, making the failure to reveal the car's rental history an actionable omission.
Analysis:
This case solidifies the "diminished value" theory of damages in Illinois fraud law, confirming that a consumer suffers a legally cognizable injury when a product's value is less than represented, even if the product functions perfectly. It clarifies the line between non-actionable puffery and actionable statements of fact regarding a product's history or attributes. The decision also underscores the protective breadth of the Illinois Consumer Fraud Act, which imposes affirmative disclosure duties on sellers and removes traditional common law hurdles for plaintiffs, such as justifiable reliance.
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