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Torts -- Statutory Consumer Fraud Action in Face of Disclaimer

Castle v. Barrett-Jackson Auction Co., 634 Ariz. Adv. Rep. 24 (App. Div. I, May 10, 2012) (J. Orozco)

WHERE DEFENDANT CLEARLY DISCLAIMED IN WRITING THAT IT WAS MAKING ANY REPRESENTATIONS REGARDING CAR SALE AND PLAINTIFF SIGNED AGREEMENT ACKNOWLEDGING THIS FACT, CONSUMER FRAUD ACTION COULD NOT WITHSTAND MOTION TO DISMISS

http://scholar.google.com/scholar_case?case=17987919407181595266&hl=en&as_sdt=2&as_vis=1&oi=scholarr

Plaintiff bought a 1957 Thunderbird from defendant. Defendant is an auctioneer which sells classic cars on consignment. The defendant expressly stated in writing on the “Car Card” attached to the T-bird that it was making no representations regarding the car and that any representations included on the car card were those of the owner selling on consignment. The plaintiff also signed a bidder's agreement which stated the same thing. The defendant was granted a rule 12 (b) (6) failure to state a claim motion to dismiss (converted to a motion for summary judgment when the documents disclaiming representations were filed) by the trial court and the Arizona Court of Appeals affirmed and awarded defendant fees.

The court acknowledged that while ARS § 44-1521 et seq. does create a private cause of action for fraud in which reliance need not be proven, it does not create a cause of action where no representation was ever made by the defendant. Here the disclaimers were clear and unambiguous and signed by the plaintiff. There was no evidence of any representations by defendant. Further, a disclaimer stating no representations are made is not the equivalent of a contract freeing the defendant from its own fraud. While the latter is not allowed under the law, there is nothing to bar a party from expressly stating it is not making any representations regarding a product.

Finally, the court of appeal affirmed the award of attorneys' fees below pursuant to ARS § 12-341.01 and awarded fees and costs on appeal based in part on the bidder agreement where plaintiff had agreed not to sue defendant for misrepresentation and to reimburse defendant costs and expenses if he failed to comply with this promise.

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