County District Court File No. 19HA-CV-14-3536
Murray, Friedman Iverson, Minneapolis, Minnesota (for
J. Bruno, Robert J. Bruno, Ltd., Burnsville, Minnesota (for
Kautzer, Ruvelson & Kautzer, Ltd., St. Paul, Minnesota
(for amicus curiae Northland Independent Auto Dealers
Considered and decided by Hooten, Presiding Judge; Reilly,
Judge; and Smith, Tracy M., Judge.
Denial of a motion for summary judgment arguing that a party
has not pleaded fraud with sufficient particularity under
Minn. R. Civ. P. 9.02 is not within an appellate court's
scope of review after a trial has been held and the parties
have been given a full and fair opportunity to litigate their
merchant's fraudulent misrepresentation about the
condition, value, quality, or fitness of the goods for any
purpose is a "circumstance" under Minn. Stat.
§ 336.2-316(3)(a) (2016) that may invalidate a warranty
TRACY M., Judge
tort and contract case arises out of appellant Esmeralda
Sorchaga's purchase of a 2008 Ford F-350 pickup truck
from respondent Ride Auto, L.L.C., a used-car dealership.
Respondent Western Surety Company is the bond-surety holder
for Ride Auto. Sorchaga brought claims of fraud and breach of
implied warranty of merchantability, as well as a claim for
attorney fees under the Magnuson-Moss Warranty Act (MMWA),
against Ride Auto and Western Surety. Following a bench
trial, the district court awarded Sorchaga $14, 366.03 in
damages and $21, 949.35 in attorney fees, and ordered
Sorchaga to provide Ride Auto with an opportunity to retrieve
appeal, Ride Auto and Western Surety argue that (1) the
judgment is void because Sorchaga failed to file her amended
complaint with the district court; (2) the district court
erred in denying Ride Auto's motions for summary
judgment; (3) the district court erred in denying Ride
Auto's motion for judgment as a matter of law; (4) the
district court clearly erred in finding that sufficient
evidence supported Sorchaga's fraud claim; (5) the
district court erred in concluding that Ride Auto's
disclaimer of the implied warranty of merchantability was
ineffective; (6) the district court erred in awarding
attorney fees under the MMWA; (7) the district court erred in
ordering judgment in favor of Sorchaga on both her fraud and
breach-of-warranty claims; and (8) the district court's
judgment with respect to Western Surety is unsupported as a
matter of law. We conclude that the district court did not
err with respect to any of these issues and, therefore,
March 2014, Ride Auto purchased a 2008 Ford F-350 pickup
truck from Metro Salvage Yard for $6, 770. The original owner
had sold the truck to the salvage company because the engine
needed repairs. The original owner had taken the truck to a
Ford dealer, who diagnosed the truck as having a
"blown" motor, causing the truck to lack power and
to smoke from the tailpipe. By the time the original owner
sold the truck to the salvage yard, the check-engine light
had turned on and the truck could no longer start or be
driven. Ride Auto had the truck delivered to it on a flatbed
truck, had body and cosmetic repairs completed, and ensured
that the truck would start and drive short distances.
and her husband went to Ride Auto on May 20, 2014, to look at
trucks for her husband's roofing business. They spoke
with Jordy Perez, who was acting as Ride Auto's
salesperson, about the truck. The Sorchagas returned to Ride
Auto on May 21 and test drove the truck with Perez. During
the test drive, the truck smoked from the tailpipe and the
check-engine light was illuminated. Sorchaga asked about the
check-engine light. Perez told Sorchaga that the truck had a
faulty oxygen sensor but represented that the oxygen sensor
would be easy to fix and that the truck would last a long
time after it was fixed. He also explained that the smoke was
a result of the truck being a diesel that smokes when it
warms up. Perez also indicated that the truck could be driven
with the check-engine light on and, if purchased, could be
brought back to Ride Auto to be fixed after a couple of days.
After the test drive, Sorchaga asked whether Ride Auto could
place the truck on a scanner to determine the cause of the
check-engine light. Arash Shakibi, an owner of Ride Auto,
informed Sorchaga that Ride Auto's mechanic was
uncertified and could not perform the inspection. Perez again
told Sorchaga that the check-engine light was caused by a
faulty oxygen sensor, and Shakibi did not correct that
statement. Ride Auto provided Sorchaga with an ASC Vehicle
Protection Plan (ASC agreement) at no cost, and Shakibi told
Sorchaga that the ASC agreement would allow her to have the
truck inspected and repaired for free.
worked with Perez and Shakibi to purchase the truck for $12,
950.68. Sorchaga signed a purchase agreement, which stated
that the truck had a salvage title and that the check-engine
light was on. The purchase agreement also provided a
disclaimer of express and implied warranties:
Dealer's disclaimer of warranty and pollution system.
"AS IS, NO WARRANTY." You will pay all costs for
any repairs. The Seller assumes no responsibility for any
repairs regardless of any oral statements about above name[d]
vehicle . . . . As between retail seller and buyer the above
name[d] vehicle is to be sold "AS IS" and the
entire risk as to the quality and performance of the above
name[d] vehicle is with the buyer. The Seller expressly
disclaims all warranties either expressed or implied. The
buyer acknowledges being informed of this statement prior to
signed a separate document, which stated that the truck had a
salvage title and that Sorchaga was "receiving a
discounted price because of the prior bodywork."
Sorchaga also signed a buyer's guide, which stated that
the truck was sold "AS IS - NO WARRANTY" and listed
"some major defects that may occur in used motor
also signed the ASC agreement, which listed Perez as the
salesperson. Because the truck had a salvage title, the ASC
agreement would cover a maximum of $500 in repair expenses.
Sorchaga also signed a document that stated: "I
understand that I am purchasing this vehicle from Ride Auto
Co. 'AS IS' and the service contract that I have is
through a third party . . . ."
husband drove the truck to and from work, but the truck
lacked power and continued to smoke. Sorchaga sought
assistance from Ride Auto within days of purchase, but Ride
Auto refused to diagnose or repair the truck. Eight days
after purchase, Sorchaga had the truck towed to Inver Grove
Ford and inspected for $1, 415.35. Inver Grove Ford concluded
that the truck should not be driven and recommended a full
engine replacement, which would cost Sorchaga approximately
served Ride Auto with a complaint, alleging that Ride Auto
(1) had breached the implied warranty of merchantability, (2)
violated the MMWA, and (3) committed fraud. Before Ride Auto
filed its first answer, Sorchaga amended the complaint to
include Western Surety. Prior to discovery, Ride Auto and
Western Surety moved for summary judgment, arguing that all
three counts failed as a matter of law and that Sorchaga had
failed to plead fraud with particularity as required by Minn.
R. Civ. P. 9.02. The district court denied this motion. After
discovery, Ride Auto and Western Surety again moved for
summary judgment. The district court also denied this motion.
The district court held a two-day bench trial. During trial,
after Sorchaga rested her case, Ride Auto and Western Surety
moved for judgment as a matter of law, a motion the district
court also denied.
district court ordered judgment for Sorchaga on all three
counts. The district court found that the warranty disclaimer
of the purchase agreement was ineffective and concluded that
Ride Auto had breached the implied warranty of
merchantability. Because it concluded that Ride Auto breached
the implied warranty of merchantability, the district court
concluded that Sorchaga was entitled to attorney fees under
the MMWA. The district court also concluded that Ride Auto
committed fraud because Ride Auto had misrepresented the
condition of the truck to Sorchaga. The district court
ordered Western Surety, as bond-surety holder for Ride Auto,
to share liability with Ride Auto. The district court awarded
Sorchaga $14, 366.03 in damages and $21, 949.35 in attorney
fees and litigation expenses. The district court also ordered
Sorchaga to provide Ride Auto with the opportunity to
retrieve the truck.
the judgment void because Sorchaga failed to file her amended
complaint with the district court?
the district court err in denying Ride Auto's
Did the district court err in denying Ride Auto's motion
for judgment as a matter of law?
the district court clearly err in finding that sufficient
evidence supported Sorchaga's fraud claim?
the district court err in concluding that Ride Auto's
disclaimer of the implied warranty of merchantability was
the district court err in awarding attorney fees under the
Magnuson-Moss Warranty Act?
Did the district court err in ordering judgment in favor of
Sorchaga on both her fraud and breach-of-warranty claims?
Did the district court clearly err in ordering judgment
against Western Surety?
Auto forfeited its argument that the judgment is void.
Auto argues that the judgment is "void" because
Sorchaga never filed her amended complaint with the district
court as Ride Auto asserts is required by Minn. R. Civ. P.
5.04(b). Ride Auto admits that it did not raise
this issue before the district court. We therefore need not
consider this issue. Thiele v. Stich, 425 N.W.2d
580, 582 (Minn. 1988). Nevertheless, Ride Auto urges that
review is necessary in the "interest of justice, "
Minn. R. Civ. App. ...