Johnson v. Road Ready Used Cars, Inc et al

Filing 57

ORDER granting 49 Motion in Limine. Signed by Judge Warren W. Eginton on 9/22/16. (Ladd-Smith, I.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
MICHAEL JOHNSON,
Plaintiff,
v.
ROAD READY USED CARS, INC.,
RONALD SARACINO, and
GATEWAY ONE LENDING & FINANCE,
LLC,
Defendants.

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3:15-cv-00271-WWE

MEMORANDUM OF DECISION ON PLAINTIFF’S MOTION IN LIMINE
Plaintiff has filed a motion in limine seeking to preclude (1) evidence or argument that
the vehicle at issue was sold “as is,” (2) evidence or argument that the Connecticut Department
of Motor Vehicles approved defendants’ contract form, and (3) reference to attorney’s fees.
Plaintiff also requests that the Court rather than the jury determine common law punitive
damages. For the following reasons, plaintiff’s motion will be granted in full.
Familiarity with the factual background of this case is presumed.
Disclaimer of the Implied Warranty of Merchantability through “as is” Sale
“The warranty of merchantability is the broadest and most important warranty in the
Uniform Commercial Code. A warranty of merchantability is implied in any sale of goods by a
merchant seller; the statutory standards for merchantability include, under s 42a-2-314(2)(c), that
the goods be fit for the ordinary purposes for which such goods are used.” Schenck v. Pelkey,
176 Conn. 245, 253-54 (1978).
A used motor vehicle dealer may disclaim implied warranties pursuant to Connecticut
General Statutes § 42-224, which provides:

“As is” sales. Disclaimer
(a) A used motor vehicle may be sold “as is” by a dealer only if its cash purchase
price is less than three thousand dollars or if such used motor vehicle is seven
years of age or older, which age shall be calculated from the first day in January of
the designated model year of such vehicle.
(b) No “as is” disclaimer by a dealer shall be enforceable unless all of the
following conditions are met:
(1) A disclaimer shall appear on the front page of the contract of sale, which shall
read as follows:
“AS IS”
THIS VEHICLE IS SOLD “AS IS”. THIS MEANS
THAT YOU WILL LOSE YOUR IMPLIED WARRANTIES.
YOU WILL HAVE TO PAY FOR ANY REPAIRS
NEEDED AFTER SALE.
IF WE HAVE MADE ANY PROMISES TO YOU, THE
LAW SAYS WE MUST KEEP THEM,
EVEN IF WE SELL “AS IS”.
TO PROTECT YOURSELF,
ASK US:
1. TO PUT ALL PROMISES INTO WRITING, AND
2. IF WE OFFER A WARRANTY ON THIS VEHICLE.
(2) The text of the disclaimer shall be printed in twelve-point boldface type,
except the heading shall be in sixteen-point extra boldface type. The entire notice
shall be boxed.
(3) The consumer shall indicate his assent to the disclaimer by signing his name
within the box containing the disclaimer.
(c) An “as is” sale of a used motor vehicle waives implied warranties but shall not
waive any express warranties, whether oral or written, which may have been made
nor shall it affect the dealer's responsibility for any representations which may
have been made, whether oral or written, upon which the buyer relied in entering
into the transaction.
(d) Nothing in sections 42-220 to 42-226, inclusive, shall be construed to limit the
effect of any other requirements of law or of any representations on a certificate of
title that the vehicle is in suitable condition for legal operation on the highways of
this state.
Conn. Gen. Stat. § 42-224
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Plaintiff argues that defendants’ failure to comply with Section 42-224(b)(2)’s type size
and style requirements should preclude defendants from offering evidence or argument that the
vehicle was sold “as is.” Plaintiff’s expert, a professional typesetter, proffers that defendants’
disclosure was made in seven-point regular type, rather than the twelve-point boldface type and
sixteen-point extra boldface type required by statute. Accordingly, defendants have failed to
meet the second of the three conditions required to render an “as is” disclaimer enforceable.
Defendants respond that the doctrine of substantial compliance should relieve them from
having to perform in exact compliance with the statute where hyper-technical application of the
statute would be unjust. Defendants argue that, “[a]s the hyper-technical application of C.G.S. §
42-224(b) which is being advocated by the Plaintiff would yield an absurd result, the Court may
look to the legislative history of the statute.”
Connecticut has a “plain meaning rule” statute, whereby:
The meaning of a statute shall, in the first instance, be ascertained from the text of
the statute itself and its relationship to other statutes. If, after examining such text and
considering such relationship, the meaning of such text is plain and unambiguous and
does not yield absurd or unworkable results, extratextual evidence of the meaning of
the statute shall not be considered.
Conn. Gen. Stat. § 1-2z
The text of Section 42-224(b) is plain and unambiguous: No “as is” disclaimer by a dealer
shall be enforceable unless it is printed in twelve-point boldface type, with the heading in
sixteen-point extra boldface type. Requiring used motor vehicle dealers to strictly adhere to this
statutory condition does not yield absurd results; failure to comply simply effectuates the default
implied warranty of merchantability, including that upon sale the motor vehicle be fit for the
ordinary purposes for which such motor vehicles are used. Far from an unintended, unworkable
result, the invalidation of fine print disclaimers is the explicit purpose of the remedial consumer
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protection statute.
In Kinsey v. Pacific Employers Ins. Co., the Supreme Court of Connecticut found what
the concurring judge called “a slender reed of ambiguity,” which permitted the Court to hold that
a statutory text-size requirement designed to protect individual consumers was incidental when
both contracting parties were large sophisticated corporations. 277 Conn. 398, 415. The
majority held:
[T]here is no reason to require strict adherence to the twelve-point type requirement
of § 38a–336(a)(2) in the context of a commercial fleet policy. Friedkin, which had
more than 2700 employees and was insured under a commercial fleet policy covering
more than 1000 vehicles, is not a member of the class of consumers that the
legislature sought to protect when it enacted that typeface requirement. Indeed, in the
arbitration proceeding, Isbell, Friedkin's vice president of risk, who signed the
informed consent form on behalf of Friedkin, attested to the fact that when she
endorsed the form, she was “fully cognizant of the availability, relative costs and
benefits of uninsured and underinsured motorist coverage as well as the implications
of selecting minimum coverage limits,” and that her endorsement reflected “a
conscious decision,” on behalf of Friedkin, “to select uninsured/underinsured
motorist limits of $40,000 in Connecticut.” Under the circumstances, we are
unwilling to conclude that Friedkin's request for a reduction in uninsured and
underinsured motorist coverage was ineffective even though, contrary to the dictates
of § 38a–336(a)(2), the heading of the informed consent form in which the request
appeared was printed in eight-point type rather than twelve-point type.
Kinsey, 277 Conn. at 413-14.
Absent the ambiguity as to the applicability of the statute to large corporations, it is clear
that the Supreme Court of Connecticut would have strictly applied the text-size requirement. Id.
at 407 (“In view of that language, we cannot determine from the text of the statute itself whether
the legislature intended the heading and typeface requirements to be strictly applied to
commercial fleet policyholders in addition to noncorporate, individual policyholders.”). In the
instant case, there is no similar ambiguity, as plaintiff is a member of the class of consumers that
the legislature sought to protect when it enacted the typeface requirement. Accordingly, the text

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of Section 42-224 will be strictly applied, rendering defendants’ disclaimer unenforceable.
Defendants will be precluded from offering evidence or argument that the vehicle was sold “as
is.”
Connecticut DMV Approval of Defendants’ Contract Form
Defendants did not respond to plaintiff’s motion regarding admissibility of evidence or
argument that the Connecticut Department of Motor Vehicles approved defendants’ contract
form. Absent objection, such evidence will be precluded.
Reference to Attorney’s Fees
Plaintiff has moved to preclude reference to attorney’s fees in this case to avoid prejudice,
as such an award is a matter for the Court, not the jury.
Defendants respond that they ought to be permitted to expose this cynical money grab to
the jury for what it is – a perversion of the public policy purpose of the fee-shifting statute –
whereby the tail of this case (plaintiff’s counsel’s attorney’s fees) is wagging the dog (actual
damages).
To the contrary, “[a] clear motivation for Congress to enact Magnuson-Moss was to allow
for potentially small claims in consumer actions. This court recently stated that ‘[g]iven the
social benefit of consumer protection cases, it is good public policy to encourage the prosecution
of claims that, although small, are meritorious by awarding attorney's fees. As evidenced by [the
applicable section of Magnuson-Moss], that policy clearly has been adopted by Congress as
well.” Ernst v. Deere and Co., 92 Conn. App. 572, 578 (2005) (quoting Krack v. Action Motors
Corp., 87 Conn. App. 687, 698 (2005). Moreover, Connecticut courts explicitly endorse the
public policy behind disproportionately large attorney’s fees awards in Magnuson-Moss cases:
“Another factor that supports [a] court's high award of attorney's fees, relative to the plaintiff's
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recovery, is the undesirability to Connecticut attorneys of relatively small dollar amount
consumer cases such as the plaintiff's case.” Krack, 87 Conn. App. at 697.
Defendants’ position conflicts with the “good public policy” of encouraging the
prosecution of consumer protection claims. Accordingly, reference to attorney’s fees will be
precluded.
Punitive Damages
Defendants do not dispute that the Court shall determine common law punitive damages.
CONCLUSION
For the foregoing reasons, plaintiff’s motion in limine is GRANTED. (1) Evidence or
argument that the vehicle at issue was sold “as is,” (2) evidence or argument that the Connecticut
Department of Motor Vehicles approved defendants’ contract form, and (3) reference to
attorney’s fees are precluded. The Court shall determine common law punitive damages.
Dated this 22nd day of September, 2016, at Bridgeport, Connecticut.

/s/Warren W. Eginton
WARREN W. EGINTON
SENIOR UNITED STATES DISTRICT JUDGE

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