Roper v. Yanni

Filing 13

ORDER: The Motion for Summary Judgment filed by Defendant Philip Yanni is Denied. (ECF No. 8 ). Signed by Judge William Q. Hayes on 07/26/2018. (All non-registered users served via U.S. Mail Service)(ajs)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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TIMOTHY ANDREW ROPER,

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Case No.: 18-cv-0489-WQH-KSC
Plaintiff,

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v.

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PHILIP YANNI,

ORDER

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Defendant.
HAYES, Judge:
The motion before the court is the Motion for Summary Judgment filed by
Defendant Philip Yanni. (ECF No. 8).
BACKGROUND

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On March 7, 2018, Plaintiff Timothy Roper initiated this action against Defendant

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Philip Yanni by filing a Complaint for fraudulent concealment, fraudulent

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misrepresentation, and breach of express warranty. (ECF No. 1). On March 26, 2018,

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Plaintiff filed the First Amended Complaint. (ECF No. 4). On April 11, 2018, Defendant

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filed the Motion for Summary Judgment. (ECF No. 8). On May 5, 2018, Plaintiff filed a

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Motion in Opposition to Defendant’s Motion for Summary Judgment. (ECF No. 12).
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FACTUAL BACKGROUND

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Defendant Philip Yanni was the third owner of the car at issue, a 1971 Porsche 911S

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(“the Car”) (Declaration of Philip Yanni, ECF No. 10-3, at ¶ 1). Yanni sold the Car to

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Plaintiff Timothy Roper in September 2017 through the Bring A Trailer (“BAT”) auction

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website for $102,000. (Declaration of Timothy Roper, ECF No. 12 at 20). Yanni shipped

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the Car to Roper on September 16, 2017. (Yanni Decl. at ¶ 17). On November 8, 2017,

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the Car was picked up by a driver from Williams Crawford from the Southampton docks

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in the United Kingdom. (Roper Decl. at ¶ 4). The Car was taken directly to a mechanic

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for initial inspection. Id. After inspection, Roper was notified that the Car had extensive

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damage presumably from a massive frontal accident. (Roper Decl. at ¶ 5).

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Yanni is a classic car collector and “generally own[s] and maintain[s] 15 and 20

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[cars].” (Yanni Decl. at ¶ 7). Yanni owned the car for a period of approximately two and

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a half years prior to the sale of the Car. (Yanni Decl. at ¶¶ 1, 17). During this time, Yanni

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commissioned a “bare metal” restoration of the Car. (Yanni Decl. at ¶ 4). During this

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restoration process, the Car was in and out of the possession of two individuals. Id. at 5.

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The first individual is William Losee, a Porsche mechanic. (Declaration of William Losee,

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ECF No. 10-7, at ¶ 1). Losee was hired by Yanni “to perform any mechanical work

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necessary to restore [the Car].” (Losee Decl. at ¶ 3). The second individual, Eric Bishop,

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is a body repair, restoration, and paint restoration professional. (Declaration of Eric Bishop,

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ECF No. 10-9, at ¶ 2). Bishop performed the paint work on the Car. (Yanni Decl. at ¶ 5).

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Bishop and Losee declare that they reviewed Roper’s allegations and throughout their work

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on the Car, they did not see any evidence of the damage that Roper alleges. (Bishop Decl.

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at ¶¶ 13, 14; Losee Decl. at ¶ 8).

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Roper had the initial inspection of the Car performed at Williams Crawford, a

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business specializing in Porsche maintenance, restoration, and collision repairs in the UK.

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(Declaration of Adrian Crawford, ECF. No. 12 at 61). Adrian Crawford, a Co-Director of

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Williams Crawford, performed the initial inspection and wrote a report of his findings.

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(Crawford Decl. at ¶¶ 2, 3). Crawford states in the report that the Car has “major damage”
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and repairing the damage would be uneconomical. (Crawford Decl. at 64). Roper sent the

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Car to Jeffrey Moyes, an experienced mechanical engineer, for a second opinion. (Roper

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Decl. at ¶ 23). Moyes declared the Car has “severe damage” that is sufficient to render the

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car financially unviable for repair. (Declaration of Jeffrey Moyes, ECF No. 12, at ¶ 7).

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On March 7, 2018, Roper filed a complaint for fraudulent concealment, fraudulent
misrepresentation, and breach of express warranty against Yanni. (ECF No. 1).
LEGAL STANDARD

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A party may move for summary judgment, identifying each claim or defense or the

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part of each claim or defense on which summary judgment is sought. Fed. R. Civ. P. 56(a).

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A court shall grant summary judgment if the movant shows that there is no genuine dispute

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as to any material fact and the movant is entitled to judgment as a matter of law. Id. A

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material fact is one that is relevant to an element of a claim or defense and whose existence

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might affect the outcome of the suit. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio

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Corp., 475 U.S. 574, 586–87 (1986). The materiality of a fact is determined by the

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substantive law governing the claim or defense. See Anderson v. Liberty Lobby, Inc., 477

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U.S. 242, 248 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322–24 (1986).

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The moving party has the initial burden of demonstrating that summary judgment is

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proper. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 153 (1970). The burden then shifts

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to the opposing party to provide admissible evidence showing that summary judgment is

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not appropriate. See Anderson, 477 U.S. at 256; Celotex, 477 U.S. at 322, 324. The

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opposing party’s evidence is to be believed, and all justifiable inferences are to be drawn

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in its favor. See Anderson, 477 U.S. at 255.

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ANALYSIS
1. FRAUDULENT CONCEALMENT

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Yanni contends that he did not conceal any material fact because the Car was not

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damaged when he sold it to Roper. Yanni contends that he had no duty to disclose any

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damage to Roper. Yanni further contends that because Roper did not take the opportunity

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to inspect the car before purchasing it any reliance Roper placed on Yanni’s representations

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was unreasonable.

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Roper contends that the Car had extensive damage when Roper received it from

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Yanni. Roper contends that the damage is from a major frontal accident that was poorly

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repaired and concealed by Yanni. Roper contends that Yanni had a duty to disclose the

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damage to the Car because Yanni knew that the damage existed and that the damage was

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not known to or reasonably discoverable by Roper. Roper contends that Yanni had to have

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known of the damages given the severity of the damage and Yanni’s extensive knowledge

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of classic cars. Roper contends that Yanni must have become aware of the damage during

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the restoration of the car in which the car was stripped down to a bare shell.

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To state a claim for fraudulent concealment under California law, the plaintiff must

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establish five elements: “1) the defendant concealed or suppressed a material fact; 2) the

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defendant was under a duty to disclose the fact to the plaintiff; 3) the defendant

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intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; 4) the

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plaintiff was unaware of the fact and would not have acted as he did had he known of the

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concealed or suppressed fact; and 5) the plaintiff was damaged by the concealment.” Jones

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v. Conoco Phillips, 198 Cal. App. 4th 1187, 1198 (2011). A duty to disclose may arise in

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three circumstances: “(1) the defendant makes a representation but does not disclose facts

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which materially qualify the facts disclosed, or which render his disclosure likely to

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mislead; (2) the facts are known or accessible only to defendant, and defendant knows they

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are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively

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conceals discovery from the plaintiff.” Warner Constr. Corp. V. City of Los Angeles, 2

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Cal. 3d. 285, 294 (1970).

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Yanni submits photographs of the Car that were posted on the BAT website and the

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declarations of two mechanics, William Losee and Eric Bishop, to prove that the car was

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not damaged prior to selling it to Roper. (ECF No. 10-3, Exhibit 1). Losee and Bishop

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both declare they saw no damage while working on the Car. (Losse Decl. at ¶ 8; Bishop

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Decl. at ¶ 14). Roper’s assertion that the Car was damaged is supported by the declarations
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of two professionals, Adrian Crawford and Jeffrey Moyes, who conclude that the Car was

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involved in a frontal collision that damaged its frame. (Moyes Decl. at ¶ 7; Crawford Decl.

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at Exhibit A). Roper has attached photographs of the alleged damage juxtaposed with

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photographs of an undamaged Porsche 911. (Roper Decl., Exhibits A–H). The evidence

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in the record presents a genuine issue of a material fact regarding whether the car was

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damaged before Yanni sold is to Roper.

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Roper has submitted evidence that supports the conclusion that Yanni intentionally

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concealed the damage. (Crawford Decl. at 62, “heavy textured material has been applied

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to disguise the damage.”) (Moyes Decl. at ¶ 7, “Although the car outwardly looks

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presentable…the severity of the damage is sufficient to render the car financially unviable

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to properly repair.”). The evidence in the record is sufficient to support an inference that

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Yanni knew of the damage and actively concealed discovery of the damage by Roper.

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Yanni has not met his burden to establish that he is entitled to summary judgment as
a matter of law on Roper’s claim for fraudulent concealment.1

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2. FRAUDULENT MISREPRESENTATION

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Roper brings a claim against Yanni for fraudulent misrepresentation based on the

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statement posted on the Auction website, “Bring A Trailer,” that the “donor” used for

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restoration was “sound” and “rust free with solid floors.” (ECF No. 12 at 44). Yanni

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asserts that he did not make any misrepresentation concerning damage to the Car because

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the Car was not damaged when Yanni sold it to Roper. Yanni contends that Roper’s

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reliance on the misrepresentation was unreasonable because Roper did not inspect the Car

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before purchasing it.

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The elements of fraudulent concealment are “1) a misrepresentation, 2) with

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knowledge of its falsity, 3) with the intent to induce another’s reliance on the

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Yanni asserts that Roper did not take the opportunity to have the car inspected prior to making his
purchase. (ECF No. 9 at 5). However, plaintiff is not required to prove reliance in order to recover on a
fraudulent concealment claim. See Jones, 198 Cal. App. 4th at 1198 (2011) (listing the elements plaintiffs
are required to prove for a fraudulent concealment claim).
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misrepresentation, 4) justifiable reliance, and 5) resulting damage.” Conroy v. Regents of

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University of California, 45 Cal. 4th 1244, 1255 (2009) (citing Small v. Fritz Companies,

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Inc., 30 Cal. 4th 167,173 (2003)). “Justifiable reliance is an essential element of a claim

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for fraudulent misrepresentation, and the reasonableness of the reliance is ordinarily a

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question of fact.” Guido v. Koopman, 1 Cal. App. 4th 837, 843 (1991) (citing Seeger v.

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Odell, 18 Cal. 2d 409, 414–415 (1941)); see also Blankenheim v. E.F Hutton & Co., 217

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Cal. App. 3d 1463, 1475 (1990) (citing Arthur L. Sachs, Inc. v. City of Oceanside, 151 Cal.

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App. 3d 315, 323 (1984)) (“Except in the rare case where the undisputed facts leave no

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room for a reasonable difference of opinion, the question of whether a plaintiff’s reliance

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is reasonable is a question of fact.”).

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The court has concluded that there is a genuine issue of fact concerning whether or

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not the Car was damaged when Yanni sold it to Roper. Roper bought the Car on the BAT

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auction website. (Roper Decl. at ¶ 2). Roper purchased the Car from Yanni, who is an

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experienced car collector. (Yanni Decl. at ¶ 7). Roper then shipped the Car from California

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to the United Kingdom where Roper resides. (Roper Decl. at ¶ 4). Roper relied on the

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statements made on the BAT website in making his decision to purchase the car. (Roper

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Decl. at ¶ 3). The court concludes that this is not the case where “undisputed facts leave no

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room for a difference of opinion” as to whether Roper’s reliance on Yanni’s alleged

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misrepresentation was reasonable. Blankenheim, 217 Cal. App. 3d at 1463. Yanni is not

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entitled to summary judgment on Roper’s claim for fraudulent misrepresentation. 2

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3. BREACH OF EXPRESS WARRANTY

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Roper contends that the “Bring A Trailer” website stated “the body used was rust

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free with solid floors.” (ECF No. 12 at 52). Roper contends that this statement created an

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express warranty and Yanni breached this warranty by supplying a car that had several

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Yanni contends that, even if the Car was damaged, Yanni had no duty to disclose the damage to
Roper. Id. However, a duty to disclose is not an element of a fraudulent misrepresentation claim. See
Conroy, 45 Cal. 4th at 1255 (2009) (listing elements for fraudulent misrepresentation).

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rusty areas repaired. Id. Yanni contends that Roper’s breach of express warranty claim

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fails as a matter of law because the California Uniform Commercial Code does not apply

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to this transaction because Yanni “is not in the business of selling cars.” (ECF No. 9 at 7).

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Section 2313(1)(b) of the California Commercial Code states “Express warranties

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by the seller are created as follows: Any description of the goods which is made part of the

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basis of the bargain creates an express warranty that the goods shall conform to the

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description.” The term “seller” is defined as “a person who sells or contracts to sell goods.”

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Cal. Com. Code § 2103. The facts in the record are sufficient to infer that Yanni is a person

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who sold and contracted to sell goods.

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Yanni further contends that Roper’s express warranty claim fails because the

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contract which Roper signed “expressly disclaims any warranties.” (ECF No. 9 at 7). The

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California Uniform Commercial Code states, “[a] clause generally disclaiming ‘all

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warranties, express or implied’ cannot reduce the seller’s obligation with such respect to

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such description and therefore cannot be given literal effect under Section 2-316.” Cal.

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Com. Code § 2313 cmt. 4. See also Hauter v. Zogarts, 14 Cal. 3d 104, 119 (1975) (citing

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Wilson Trading Corp. v. David Ferguson, Ltd., 23 N.Y.2d 398, 405 (1968)) (“Because a

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disclaimer or modification is inconsistent with an express warranty, words of disclaimer or

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modification give way to words of warranty…”). Therefore, Yanni is not entitled to

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summary judgment on Roper’s claim for breach of express warranty.

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IT IS HEREBY ORDERED that the Motion for Summary Judgment filed by
Defendant Philip Yanni is denied.
Dated: July 26, 2018

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