Heard, considered, and decided by the court en banc.
In a private consumer fraud class action brought under Minn. Stat. § 8.31, subd. 3a (2002), and Minn. Stat. § 325F.69, subd. 1 (2002), dismissal on a Rule 12 motion is inappropriate because (1) the complaint alleges that misrepresentations were made and consumers were damaged thereby, and (2) the existence of a written contract that contradicts the alleged oral misrepresentations does not negate any possibility of plaintiffs proving a causal nexus between the alleged misrepresentations and consumer injuries.
The opinion of the court was delivered by: Anderson, Paul H., Justice.
Took no part, Page and Gilbert, JJ.
Appellant Jeff Wiegand brought this private consumer fraud class action against respondent Walser Automotive Group, Inc. under Minn. Stat. § 8.31, subd. 3a (2002), and Minn. Stat. § 325F.69, subd. 1 (2002). Wiegand seeks damages on behalf of a class of consumers who purchased service contracts and/or credit insurance from Walser. The issue before us is whether the complaint sets forth a legally sufficient claim for relief. The district court dismissed the suit on a Rule 12 motion. The court concluded, as a matter of law, that causation could not be proven on the facts alleged. More particularly, the court concluded that a causal nexus for consumer fraud violations could never be proven between oral representations and consumer injuries when a contract, signed by the consumer, contradicts the content of the oral representations. The court of appeals affirmed. We reverse.
On or about September 26, 1998, appellant Jeff Wiegand visited an automobile dealership owned and operated by respondent Walser Automotive Group, Inc. in order to purchase a motor vehicle-a 1995 Isuzu Trooper. Wiegand alleges that when he purchased the Isuzu Trooper, a Walser representative misrepresented to him the need to purchase a service contract and credit insurance. More specifically, Wiegand alleges that the representative told him he was required to purchase a $1,500 service contract and a $340.37 credit insurance policy in order to obtain financing. Wiegand also alleges that the representative told him that after he made 12 monthly payments, he could refinance at an annual percentage rate (APR) lower than the 19.75% provided for in the contract. According to Wiegand, after he made the 12 monthly payments, he contacted an employee at the bank where he obtained financing and was told that the bank would not refinance.
Wiegand alleges that he agreed to purchase the $1,500 service contract and the $340.37 credit insurance based on the misrepresentations of Walser's representative. Wiegand asserts that these misrepresentations were made to induce him to purchase the service contract and the credit insurance, which resulted in substantial profits for Walser.
Wiegand brought this class action against Walser under Minn. Stat. § 325F.69, subd. 1-a provision of the Minnesota Consumer Fraud Act. Wiegand seeks damages under the private attorney general statute-Minn. Stat. § 8.31, subd. 3a. Minnesota Statutes § 325F.69, subdivision 1, prohibits fraud and misrepresentation related to the sale of merchandise. Specifically, section 325F.69, subdivision 1, provides:
The act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided herein.
Minnesota Statutes § 8.31, subdivision 3a, allows private plaintiffs to seek damages if they are "injured" by violations of the Consumer Fraud Act. Specifically, Minn. Stat. § 8.31, subd. 3a, provides:
In addition to the remedies otherwise provided by law, any person injured by a violation of any of the laws referred to in subdivision 1 may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney's fees, and receive other equitable relief as determined by the court.
Wiegand seeks damages on behalf of a class of consumers who purchased service contracts and/or credit insurance from Walser, which Wiegand alleges includes at least 100 other consumers. Wiegand bases these class action allegations on his own alleged experience with Walser, as well as a settlement agreement reached between Walser and the Minnesota Attorney General. This settlement resolved the Attorney General's investigation of Walser dealerships over their sales and business practices in connection with motor vehicle service contracts. In the settlement, Walser agreed that in the future it would tape record its sales process for service contracts and other products, agreed not to suggest that a service contract is a required purchase, not ...