Owens v. DRS Automotive FantomWorks, Inc. ( 2014 )

PRESENT: Kinser, C.J., Lemons, Millette, Mims, McClanahan,
and Powell, JJ., and Russell, S.J.
RICHARD L. OWENS, SR., ET AL.
OPINION BY
v. Record No. 140171 SENIOR JUSTICE CHARLES S. RUSSELL
October 31, 2014
DRS AUTOMOTIVE FANTOMWORKS, INC.,
ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK
John E. Clarkson, Judge
This appeal arises out of a dispute concerning the repair
and renovation of an antique automobile. It requires us to
decide whether the plaintiffs' evidence was sufficient to
support their allegations of both common law fraud and
violations of the Virginia Consumer Protection Act ("VCPA"),
Code § 59.1-196, et seq.
Facts and Proceedings
In July 2012, Virginia Beach residents Richard L. Owens,
Sr. and his wife Cynthia M. Owens (the plaintiffs) shipped to
Virginia a 1960 Ford Thunderbird they purchased in Rhode Island
for $11,500. The car needed extensive repairs and restoration.
Mr. Owens testified that he just wanted "something to ride to
the golf course once in a while."
The plaintiffs selected DRS Automotive Fantomworks, Inc., a
business in Norfolk, and its owner, Daniel R. Short (the
defendants), to do the work. Before either party had made any
detailed inspection of the car, Mr. Owens told Mr. Short that he
wanted DRS to install a reliable fuel-injected engine, a modern
suspension, and new brakes. Mr. Short could not quote an exact
price without a detailed inspection of the car. Nevertheless,
he gave Mr. Owens a list of repairs he recommended and estimated
that, assuming there were no surprises upon a detailed
inspection and no changes in the proposed work, the project
could be completed for no more than $40,000. Mr. Owens agreed
to proceed. By a check signed by Mrs. Owens, the plaintiffs
paid the defendants $15,000 as an initial deposit. They made a
second $15,000 payment after replacement parts had been
purchased. The parties never entered into a written contract.
Mr. Short advised the plaintiffs that the most economical
way to find a replacement engine would be to purchase a "donor
car" that contained a compatible engine with low mileage. Such
a "donor car" could sometimes be purchased at auction at a low
price and could provide many other replacement parts at much
lower cost than parts purchased at retail. The plaintiffs
testified, and the defendants denied, that Mr. Short told them
that such a donor car could be purchased at auction for "a few
thousand dollars" which they believed meant $2,000 to $3,000.
The defendants located a 2001 Ford Crown Victoria Police
Interceptor (the Interceptor) for sale by Lieutenant Alexander
Theiss, USN, whose home was just "a couple [of] blocks down the
street" from the defendants' place of business. The car had
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been damaged in an accident but its engine and drivetrain were
intact. Mr. Short considered the engine and drivetrain to be
compatible with the plaintiffs' Thunderbird.
Lieutenant Theiss had advertised the Interceptor on the
Internet for $2,000, but Mr. Short denied that he had ever seen
the advertisement. Instead, Mr. Short testified that the
Interceptor had come to his attention because someone gave him
Lt. Theiss' telephone number. Lieutenant Theiss had placed a
"for sale" sign in the Interceptor's window, containing his
telephone number but not an asking price.
After some negotiations and a test drive, Mr. Short and Lt.
Theiss agreed on a price of $6,000 for the Interceptor. On
July 13, 2012, Mr. Short gave Lt. Theiss $4,000 in cash and Lt.
Theiss gave him a handwritten bill of sale, reciting a $6,000
purchase price. They agreed that when the $2,000 balance was
paid, the Interceptor would be delivered to Mr. Short. A few
days later, Mr. Short gave Lt. Theiss a check for $2,000 and
took possession of the Interceptor.
The Interceptor had been titled in Florida. A copy of the
Florida certificate of title was introduced in evidence, showing
a sale of the Interceptor from Alexander Charles Theiss to Dan
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Short on July 13, 2012 for a price of $6,000. Both parties
signed the recorded transfer at the bottom of the certificate. 1
Mr. Short had given the plaintiffs a written notice of the
terms upon which the defendants conducted their business. One
of these conditions was that a 25% markup would be charged for
all required parts that were to be purchased for the work. The
plaintiffs made no objection to these terms. After purchasing
the Interceptor, Mr. Short gave Mr. Owens a list of anticipated
costs for parts and labor to complete the contemplated work. It
estimated a total cost to the plaintiffs as $38,093.48. The
cost for the purchase of the Interceptor, including the markup,
was stated as $7,200. The defendants later amended this item to
$7,500.
After receiving this list, Mr. Owens delivered the
plaintiffs' second check for $15,000 to Mr. Short. During the
next two months, Mr. Owens made frequent visits to DRS shop to
discuss the continuing work and made a number of requests for
additional work. As late as September 11, 2012, he sent an
email to Mr. Short requesting that he "add to your to-do list" a
1
The check, the bill of sale, and the certificate of title were
all introduced in evidence during the plaintiffs' case. Because
the plaintiffs called both Lt. Theiss and Mr. Short as witnesses
for the plaintiffs at trial, the facts recited above were all
before the court when it considered a motion to strike the
plaintiffs' evidence.
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series of additional items, including rust repair, interior
fabrics, finish, and design. During this time, the plaintiffs
made no objection to the $6,000 price paid for the Interceptor.
The apparently amicable dealings between the parties came
to an abrupt end when Mrs. Owens, who was an attorney, wrote a
letter to Mr. Short dated September 22, 2012 on her professional
letterhead. The letter stated that she was acting on behalf of
Mr. Owens and herself. It demanded extensive documentation of
all costs for parts and labor; identification, with contact
information, for all suppliers; and other information pertinent
to the project. The letter threatened litigation if these
demands were not fully complied with within five days.
Mr. Short said he was "stunned" by the letter. He
responded in writing that the defendants would suspend work on
the project until the issues between the parties were resolved.
He offered the plaintiffs two opportunities to have the vehicle
inspected by a representative of their choice and to have both
the Thunderbird and the Interceptor removed from the defendants'
premises. The plaintiffs made no response and filed this action
in the circuit court, alleging breach of contract, violation of
the VCPA, fraud and detinue. 2
2
The detinue count claimed a right to recover the Thunderbird
and the Interceptor. Counsel agreed on an arrangement to return
5
The case proceeded to a three-day jury trial. At the
conclusion of the plaintiffs' case, the defendants moved the
court to strike the plaintiffs' evidence as to all counts. The
court granted the motion as to the fraud and VCPA counts and
overruled it as to the count for breach of contract. The
defense presented its evidence and the defendants' motion to
strike was renewed. The court denied the motion and instructed
the jury as to the count for breach of contract. The jury
returned a verdict for the defendants and the court entered
judgment on the verdict. We awarded the plaintiffs an appeal.
Analysis
The plaintiffs assign three errors: (1) that the court
erred in striking the evidence based on a finding that two
witnesses were "believable" and "credible," thus usurping the
function of the jury; (2) that the court erred in striking the
evidence on the VCPA claim by ruling that a VCPA claim requires
proof of fraud; and (3) that the court erred by striking the
VCPA claim because the evidence was sufficient to support a
judgment for the plaintiffs for violations of the VCPA.
The first and second assignments of error present questions
of law. On appeal, we review such questions de novo. Davis v.
County of Fairfax, 282 Va. 23, 28, 710 S.E.2d 466, 468 (2011).
these items to the plaintiffs. The detinue count was dismissed
in the circuit court and is not involved in this appeal.
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When reviewing the evidence upon a defendant's motion to
strike the plaintiff's evidence, the duty of the court is to
accept as true all the evidence favorable to the plaintiff as
well as any reasonable inference a jury might draw therefrom.
Austin v. Shoney's, Inc., 254 Va. 134, 138, 486 S.E.2d 285, 287
(1997). We therefore examine the state of the evidence before
the court at the close of the plaintiffs' case. The crucial
issue at that stage was whether the defendants had paid $6,000
for the Interceptor as they contended, or a lesser price, as the
plaintiffs contended. A price of $6,000, with the agreed 25%
markup, would have justified the $7,500 item for which the
plaintiffs were billed; any lesser price actually paid by the
defendants would have made the $7,500 amount an overcharge
obtained by deception.
The only witnesses who had any knowledge of the transaction
were Mr. Short and Lt. Theiss. Both testified that the purchase
paid for the Interceptor was $6,000. The only documentary
evidence on that point consisted of the bill of sale and the
Florida title. Both showed a sales price of $6,000. No
evidence was presented of any lesser or different price.
As noted, both witnesses were called by the plaintiff.
When a defendant is called as an adverse witness
the plaintiff is not bound by such of his testimony
as is in conflict with evidence introduced by the
plaintiff; but the plaintiff is bound by so much of
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the testimony of the defendant as is clear,
reasonable and uncontradicted.
Weddle v. Draper, 204 Va. 319, 322, 130 S.E.2d 462, 465 (1963)
(emphasis added).
Mr. Short's testimony as to the price of the Interceptor
was uncontradicted and the plaintiffs are bound by it.
Lieutenant Theiss was also called as a witness for the
plaintiffs. Although plaintiffs' counsel attempted to cross-
examine him to attack his credibility, the court was never asked
to declare him an adverse witness 3 and repeatedly sustained
objections to leading questions. The plaintiffs are therefore
bound by his uncontradicted testimony. See Clarke v. Cosby, 154
Va. 267, 271, 153 S.E. 727, 728 (1930).
When considering the motion to strike the plaintiffs'
evidence, the court had to determine whether there was an issue
of fact in dispute. Here, the jury had evidence before it that
a $6,000 price had been paid for the Interceptor and a complete
absence of evidence that any other price had been paid.
3
See, e.g., Va. R. Evid. 2:611(c) (providing that "[l]eading
questions should not be used on the direct examination of a
witness except as may be permitted by the court in its
discretion to allow a party to develop the testimony" and that
"[w]henever a party calls a hostile witness, an adverse party, a
witness having an adverse interest, or a witness proving
adverse, interrogation may be by leading questions").
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The plaintiffs contend that there was circumstantial
evidence to permit the jury to infer that the two witnesses had
testified untruthfully and that a lesser price had been paid.
Our examination of the record, however, shows that those
circumstances do not tend to prove any fact, but are merely
supportive of a suspicion based entirely on conjecture. 4
Like presumptions, inferences are never allowed
to stand against ascertained and established facts
. . . . an inference which the plaintiff says would
impose liability upon the defendants must give way
to the positive, uncontradicted evidence which
exonerates the defendants from liability and
demonstrates that the inference is based upon
speculation and conjecture.
Ragland v. Rutledge, 234 Va. 216, 219, 361 S.E.2d 133, 135
(1987) (citations omitted).
It is true, as the plaintiffs argue, that the court
commented, when making its ruling, that the testimony of the two
witnesses was credible and believable, but in the context of the
record before the court, those comments were indicative only of
4
The circumstantial evidence consisted of Lt. Theiss' earlier
Internet advertisement of the Interceptor for sale for $2,000
and that someone at DRS had responded to the advertisement by
email. Mr. Short denied that he was the author of the email and
Lt. Theiss had no recollection of it. Discovery directed to Lt.
Theiss, Mr. Short, DRS, Craigslist and Microsoft Corporation
failed to produce any such email. The plaintiffs contend that
this, coupled with the fact that part of the price paid for the
Interceptor was in the form of a $2,000 check, gives rise to a
suspicion from which the jury could conjecture that the
testimony of the witnesses was untrue and the documents
contained false information.
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the fact that their testimony had not been refuted and was not,
on its face, unworthy of belief. We therefore hold that the
court did not usurp the function of the jury.
The second and third assignments of error overlap and will
be considered together. The second assignment of error asserts
that the court erred in holding that a violation of the VCPA
requires proof of fraud. Common law fraud consists of (1) a
false representation, (2) of a material fact, (3) made
intentionally and knowingly, (4) with intent to mislead, (5)
reliance thereon by the party misled, and (6) resulting damage
to the party misled. The plaintiff bears the burden of proving
these elements by clear and convincing evidence. Richmond
Metro. Auth. v. McDevitt Street Bovis, Inc., 256 Va. 553, 557,
507 S.E.2d 344, 346 (1998).
Proof of fraud in a consumer transaction is alone
sufficient to establish a violation of the VCPA, but the
legislative purpose underlying the VCPA was, in large part, to
expand the remedies afforded to consumers and to relax the
restrictions imposed upon them by the common law. That remedial
purpose would be nullified by an interpretation of the VCPA that
construed it as merely declarative of the common law. We adhere
to rules of statutory construction that discourage any
interpretation of a statute that would render any part of it
useless, redundant or absurd. Instead, we seek to read
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statutory language so as to give effect to every word.
Lynchburg Division of Social Services v. Cook, 276 Va. 465, 483,
666 S.E.2d 361, 370 (2008). Therefore, we agree with the
plaintiffs' argument that the VCPA's proscription of conduct by
suppliers in consumer transactions extends considerably beyond
fraud.
The VCPA clearly does not require the consumer to prove in
every case that misrepresentations were made knowingly or with
the intent to deceive, because of its additional provision that
damages may be trebled, but only in cases where the court finds
that the violation was "willful." Code § 59.1-204(A).
The VCPA, however, still requires proof, in
misrepresentation cases, of the elements of reliance and
damages. Code § 59.1-204(A) provides, in pertinent part: "Any
person who suffers loss as the result of a violation of this
chapter shall be entitled to initiate an action to recover
actual damages or $500, whichever is greater." (Emphasis
added.)
Applying those principles to the present case, it is
apparent, as stated above, that the plaintiffs failed to produce
evidence of misrepresentations concerning the purchase price of
the Interceptor, the donor car. The plaintiffs also argue that
the defendants violated the VCPA by misrepresentations
concerning whether the donor car would be purchased at an
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auction, whether its engine would be "certified" (the term was
never defined), 5 and Mr. Short's "certifications in multiple
automotive restoration fields."
If these were misrepresentations, the plaintiffs offered no
evidence of any loss they suffered from reliance upon them.
They never complained about the quality of the parts the
defendants provided, the time required to complete the project,
or the quality of the work that was being performed until the
plaintiffs interrupted it. The plaintiffs' evidence, therefore,
failed to meet the requirements of Code § 59.1-204(A): reliance
and resulting damages. If an unwritten contract existed between
the parties, the jury, after hearing all the evidence, found
that the defendants had not breached it.
In granting the motion to strike, the circuit court
commented that there had been no proof of fraud because the
plaintiffs' complaint expressed all allegations of VCPA
violations in terms of the elements of common law fraud. We do
not construe the court's words to constitute a ruling that all
claims under the VCPA must be supported by proof of fraud.
5
Mrs. Owens testified that she did not care what kind of an
engine would be provided as long as it was "reliable."
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Conclusion
For the reasons stated, we find that the evidence on the
VCPA claim was insufficient to go to the jury and we find no
error in the rulings of the circuit court. Accordingly, we will
affirm the judgment.
Affirmed.
JUSTICE POWELL, with whom CHIEF JUSTICE KINSER and JUSTICE MIMS
join, dissenting in part and concurring in part.
In my opinion, the majority fails to recognize key evidence
and fails to give the proper weight to the circumstantial
evidence establishing that Mr. Short defrauded the plaintiffs.
Therefore, I must respectfully dissent.
Under the majority’s logic, the circumstantial evidence of
fraud in this case must be disregarded in the face of the
alleged wrongdoers’ claim that they did not commit fraud. Such
a holding ignores this Court’s long recognition that “it is not
necessary that fraud be proved by direct and positive evidence.
Circumstantial evidence is not only sufficient, but in most
cases is the only proof that can be adduced.” Cook v. Hayden,
183 Va. 203, 209, 31 S.E.2d 625, 627 (1944).
Fraud is seldom, if ever, provable by direct
testimony, but usually must be shown by circumstances
which are sufficient to convince fair-minded men that
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they would not have occurred without the existence of
a fraudulent purpose and design. Fraud is a mixed
question of law and fact but, in most cases, is a jury
question. While fraud may be shown by circumstantial
evidence, it must have a logical and substantial basis
and can not rest upon vague suspicion and surmise.
French v. Beville, 191 Va. 842, 856, 62 S.E.2d 883, 889 (1951).
There is clear evidence in the record from which the jury
could have concluded that Lt. Thiess only asked $2,000 for the
Interceptor and that was the price DRS paid. Although the
majority states that it reviewed the evidence in the light most
favorable to the plaintiffs, it fails to give the appropriate
weight to the circumstantial evidence. In my opinion, when all
of the circumstantial evidence is properly considered, it is
more than sufficient to allow the jury to decide the issue.
At trial, Mrs. Owens testified that Mr. Short was only
authorized to spend between $2,000 and $3,000 on the donor car.
The seller, Lt. Thiess, had advertised his Interceptor on
Craigslist with an asking price of $2,000. The record further
demonstrates that, at 10:51 A.M. on July 13, 2012, Mr. Short *
*
A Craigslist server document showed that Mr. Short’s email
address was used to reply to the ad on July 13, 2012.
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responded to the advertisement via email. At 11:03 A.M.,
exactly twelve minutes later, Lt. Thiess called DRS. Then, on
July 16, 2012, DRS issued a check to Lt. Thiess for $2,000 and
took possession of the Interceptor.
Thus, contrary to the majority opinion, the jury was not
left with a “complete absence of evidence that any other price
had been paid” for the Interceptor. Rather, viewed in the light
most favorable to the plaintiffs, circumstantial evidence
establishes that Mr. Short and DRS purchased the Interceptor for
only $2,000. This evidence directly contradicts the claim that
the Interceptor was purchased for $6,000.
Furthermore, the majority also fails to give proper weight
to the role of the jury under the facts of this case. The
majority acknowledges the rule that:
When a defendant is called as an adverse witness the
plaintiff is not bound by such of his testimony as is
in conflict with evidence introduced by the plaintiff;
but the plaintiff is bound by so much of the testimony
of the defendant as is clear, reasonable and
uncontradicted.
Weddle v. Draper, 204 Va. 319, 322, 130 S.E.2d 462, 465 (1963).
While the majority rests its opinion on the basis that the
testimony was uncontradicted, it gives no weight to the fact
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that the jury could have found that the testimony was
unreasonable in light of the fact that Mr. Short paid three
times more for the Interceptor than Lt. Thiess advertised.
Therefore, in my opinion, the trial court erred in granting the
motion to strike as to the fraud claim.
With regard to the second and third assignments of error, I
agree with the majority’s legal analysis, but I ultimately
disagree with the conclusion the majority reaches. The
allegations underpinning the plaintiff’s fraud claim were
incorporated into the VCPA claim. Therefore, for the reasons I
have previously stated, I believe that the trial court erred in
granting the motion to strike as to the VCPA claim.
Accordingly, I would reverse the trial court and remand for
further proceedings below.
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