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Sorchaga v. Ride Auto, LLC

Supreme Court of Minnesota

March 21, 2018

Esmeralda Sorchaga, Respondent,
v.
Ride Auto, LLC, et al., Appellants.

          Court of Appeals Office of Appellate Courts

          Todd Murray, Friedman Iverson, Minneapolis, Minnesota, for respondent. Robert J. Bruno, Robert J. Bruno, Ltd., Burnsville, Minnesota; and Mark A. Olson, Olson Law Office, Burnsville, Minnesota, for appellants.

          Edward F. Kautzer, Ruvelson & Kautzer, Ltd., Roseville, Minnesota, for amicus curiae Northland Independent Auto Dealers Association.

         SYLLABUS

         1. The seller's fraudulent statements about the fitness of a vehicle for the purpose for which it was purchased made "as is" disclaimers in the purchase agreement ineffective under Minn. Stat. § 336.2-316(3)(a) (2016).

         2. Because the district court did not award a double recovery, the court did not err in awarding damages under both fraud and breach of an implied warranty theories of liability.

         Affirmed.

          OPINION

          GILDEA, Chief Justice.

         In this case we are asked to determine whether a seller's fraudulent statements about the condition and fitness of a vehicle being sold prevent the seller from enforcing disclaimers in purchase documents stating that the buyer purchased the vehicle "as is." The court of appeals concluded that under Minn. Stat. § 336.2-316 (2016), the seller's fraudulent statements prevented the seller from enforcing the "as is" disclaimers. The court also concluded that the district court did not err when it awarded relief on both fraud and breach of warranty theories. Because we conclude that fraudulent statements about the fitness of a vehicle for the purpose for which it was purchased make "as is" disclaimers ineffective and Sorchaga did not doubly recovery, we affirm.

         FACTS

         This action arises from respondent Esmeralda Sorchaga's purchase of a pickup truck from appellant Ride Auto, LLC. Ride Auto purchased the truck from a salvage yard for $6, 770, knowing that the truck needed engine repairs. Ride Auto made cosmetic and mechanical repairs sufficient to ensure that the truck would look appealing and drive short distances and then offered it for sale.

         Sorchaga was interested in purchasing the truck and took it for a test drive. The length of the test drive was very short because the truck was low on fuel. But during the test drive, Sorchaga noticed that the check-engine light was on. Ride Auto's salesman told Sorchaga that the light was on because the truck had a faulty oxygen sensor. He said that the problem could be easily fixed, and that it would not affect the truck's longevity. The salesman also told Sorchaga that she could drive the truck with the check-engine light on, and if she purchased the truck, she could return to Ride Auto after a couple days to have the truck fixed. Sorchaga also expressed concern about the smoke coming from the tailpipe of the truck. The salesman told her that the truck emitted smoke as it warmed up because the truck had a diesel engine.

         Sorchaga asked whether Ride Auto could hook the truck up to a scanner to determine why the check-engine light was on. An owner of Ride Auto stated that Ride Auto could not do that because its mechanic was uncertified. The salesman then told Sorchaga again that a faulty oxygen sensor was the reason the check-engine light was on.

         As part of the sales process, Ride Auto told Sorchaga that she would get a third-party warranty, the ASC Vehicle Protection Plan (ASC agreement). Specifically, Ride Auto's owner told Sorchaga that she would be given the ASC agreement at no cost, and it would allow her to have the truck inspected anywhere. The salesman added ...


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