Chapter 14
Mistakes, Fraud, and
Voluntary Consent
Case 14.1
945 A.2d 855, 2008 VT 6
Supreme Court of Vermont.
Normand E. INKEL and Brandy Inkel
v.
PRIDE CHEVROLET-PONTIAC, INC., The Pride Motor Group, Michael Iovanna and Mark
Korbac.
No. 06-220.
Jan. 18, 2008.
BURGESS, J.
1. Plaintiffs Normand and Brandy Inkel appeal the superior court’s order granting defendant Pride Chevrolet FN1
summary judgment and awarding the car dealership damages after rejecting the Inkels’ consumer-fraud claims
concerning their purchase of a truck from the dealership. In addition to challenging the grant of summary judgment to
Pride Chevrolet, the Inkels contend that they are entitled to summary judgment based on undisputed facts
FN1. As the caption indicates, there are multiple defendants in this case. For the sake of simplicity, we will
refer to all defendants as Pride Chevrolet.
2. The following facts, for the most part, are elicited from the Inkels’ depositions, which represent nearly all of the
evidence submitted in support of the parties’ opposing motions for summary judgment. See
White v. Quechee Lakes
Landowners’ Ass’n,
170 Vt. 25, 28, 742 A.2d 734, 736 (1999) (“In determining whether a dispute over material facts
exists, we accept as true allegations made in opposition to the motion for summary judgment, so long as they are
3. On February 14, 2004, Normand Inkel drove to Pride Chevrolet in Lynn, Massachusetts to finalize the purchase
of the Tahoe truck. The sales representative presented Mr. Inkel with a copy of the purchase agreement, which
4. On the front side in small preprinted type, the agreement also stated that the contract was not binding on either
the dealer or the purchaser unless the purchaser provided the dealer with a valid title for the trade-in. The back page
5. Mr. Inkel signed the agreement that day, left the GMC truck for trade-in with the dealership, and drove the new
Tahoe truck home. Approximately one month after the sale, an employee of Pride Chevrolet called the Inkels and told
them that they owed an additional $1715 because the Chittenden Bank had misinformed the dealership as to the
6. In early April 2004, one of the owners of Pride Chevrolet called the Inkels and asked them to file suit against the
Chittenden Bank. The Inkels declined to do so, telling the owner to contact their *858 attorney. In August, the owner
sent the Inkels a copy of a “Notice of Complaint Hearing,” a form of process advising them to appear at a proceeding
7. After the parties filed opposing motions for summary judgment, the superior court issued a decision rejecting the
Inkels’ claims and granting summary judgment to defendants. In arriving at this decision, the court concluded, among
other things, that (1) the vehicle-purchase agreement unambiguously and reasonably required the Inkels to pay off
any lien to allow the dealership to obtain title to the trade-in, including any additional funds necessary because of an
inaccurate buyout amount provided by the purchaser or the lien holder; (2) the contract buyout amount was
trial court.
Anderson v. Cooperative Ins. Cos.,
2006 VT 1, 6, 179 Vt. 288, 895 A.2d 155. The moving party can
prevail on a motion for summary judgment only by demonstrating that there is no genuine issue as to any material
fact and that that party is entitled to judgment as a matter of law.
Id.
Thus, if a genuine issue of material fact exists or
the moving party is not entitled to judgment as a matter of law, summary judgment is not appropriate.
[2] 9. We start with the consumer-fraud claims, wherein the Inkels allege that Pride Chevrolet engaged in unfair or
federal law designed to protect the public). “Under the Act’s objective standard, a consumer establishes the first
element if she proves that the representation or omission had the tendency or capacity to deceive a reasonable
consumer.”
Jordan,
2004 VT 27, 5, 176 Vt. 465, 853 A.2d 40; see
Peabody v. P.J.’s Auto Village, Inc.,
153 Vt. 55,
57, 569 A.2d 460, 462 (1989) (stating that deception is measured by an objective standard focusing on the risk of
harm to the consumer in a given case). Representations susceptible to multiple reasonable interpretations may
40.“Notably, no intent to deceive or mislead need be proven because § 2453(a) requires only proof of an intent to
publish.”
Id.;
see
Winton v. Johnson & Dix Fuel Corp.,
147 Vt. 236, 243, 515 A.2d 371, 376 (1986) (“Intentional
11. In this case, the Inkels allege that Pride Chevrolet pressured them to give the dealership substantially more
money than previously agreed for their purchase of a new truck after (1) quoting them a specific payoff price for their
trade-in vehicle based on information that the dealership obtained from the lien holder, (2) assuring them that the lien
FN2. On appeal, the Inkels argue that the superior court failed to consider whether Pride Chevrolet engaged
in a deceptive trade practice by inserting unconscionable provisions into the vehicle-purchase agreement.
12. Practices such as hiding the negative equity in a trade-in, failing to pay off the lien on the trade-in, lowering the
agreed price of the trade-in, or otherwise effectively raising the cost of a vehicle after a deal has been consummated
are widely recognized as deceptive practices. See J. Sheldon & C. Carter, Unfair and Deceptive Acts and Practices
13. One treatise notes that a car dealer’s failure to pay off the lien on a trade–in is a “surprisingly common” practice
that may occur for a number of reasons,
id.
§ 5.4.4.5, at 381, including the dealer’s later realization that it had
assumed a mistaken buyout amount to pay off the lien. See
Tresh v. Mid-Ohio Ford AMC-Jeep-Renault, Inc.,
No.
Id.
§
5.4.8.2, at 426.
14. The evidence submitted in connection with the parties’ cross-motions for summary judgment does not establish
what happened in the instant case. Although the superior court stated in a footnote that it was undisputed that the
Chittenden Bank was negligent in giving Pride Chevrolet an incorrect payoff amount, Mr. Inkel testified in his
deposition that a bank employee told him that Pride Chevrolet had asked for the wrong payoff amount. Thus, it is not
15. Given the lack of clarity as to what transpired, summary judgment is inappropriate. Moreover, even if what
happened in this case does not fit precisely within the examples of deceptive practices cited above, the evidence
16. In
Frey,
the buyers negotiated a vehicle-purchase agreement that included the dealer’s buyout of the lease on
their trade-in. As in this case, the buyers signed the agreement, took possession of the new vehicle, and turned in
Id.
17. Although
Frey
does not indicate whether the parties’ agreement included a qualifying provision comparable to
the one relied on by Pride Chevrolet in this case and quoted above, the existence of such a provision in our case
would not necessarily foreclose a jury from finding consumer fraud here. Because “deception can be found where
there is no breach of contract or warranty,” contract and common law defenses generally do not foreclose consumer–
19. Given the current state of the record, whether the Inkels merely accepted Pride Chevrolet’s statements as true
or took advantage of the dealer’s mistaken beliefs, the existence of mutual mistake is questionable at best. See
Jim’s
(1980) (“[W]here the mistake has resulted solely from the negligence or inattention of the party seeking relief, and the
other party is without fault, relief will not be granted absent unusual circumstances that would make enforcement of
¶ 20. While we conclude that Pride Chevrolet’s contract defenses did not entitle it to summary judgment on the Inkels’
consumer-fraud claims, we also conclude that the Inkels’ contract claims are unavailing. Citing the familiar rule that
specific and exact contract terms are given greater weight than general contract language, Restatement (Second) of
21. Nor do we find merit in the Inkels’ argument that the preprinted language quoted above was an unlawful
inconspicuous disclaimer of the warranty of title required by 9A V.S.A. § 2-312(1)(b), which provides that “goods shall
be delivered free from any security interest or other lien or encumbrance of which the buyer at the time of contracting
has no knowledge.” Notwithstanding the Inkels’ allegations that a Pride Chevrolet employee told them that their lien
22. For the reasons stated above, we reverse the superior court’s decisions and remand the matter for trial on the
Inkels’ consumer-fraud claims. We further remand the matter for the court to consider the Inkels’ abuse–of-process
Case 14.2
N.Y.A.D. 1 Dept.,2009.
Rosenzweig v. Givens
— N.Y.S.2d —-, 2009 WL 37158 (N.Y.A.D. 1 Dept.), 2009 N.Y. Slip Op. 00061
Supreme Court, Appellate Division, First Department, New York.
in a romantic relationship with defendant, a student 19 years younger. Unlike most mortgage transactions, it was plaintiff who paid
the 10% down payment on the property. After the closing, plaintiff also paid the carrying costs on the apartment and most
household expenses.
Plaintiff had his long-term friend and colleague, attorney Thomas Gazianis, represent defendant at the apartment’s closing and
both plaintiff and defendant in connection with the loans. At or directly after the May 10, 2002 closing, the parties signed a letter, as
did this after she had found out that he had forged her signature on the loan application and after plaintiff’s bigamous marriage
became known to plaintiff’s first wife. Plaintiff contends that he did not record the second mortgage until three years later to avoid
certain taxes.
Eventually, defendant discovered that plaintiff was already married. In February 2007, the parties’ bigamous marriage was
annulled.
the mortgage agreements and his forgery of her name on a bank loan.
[2] Plaintiff argues that the mortgage terms are clear and unambiguous and cannot be reasonably read to indicate anything other
than a loan. However, “[a]greements between spouses, unlike ordinary business contracts, involve a fiduciary relationship requiring
the utmost of good faith” (
Christian v. Christian,
42 N.Y.2d 63, 72 [1977] ). Thus, courts exercise strict surveillance of agreements
between spouses (
see e.g. Levine v. Levine,
56 N.Y.2d 42, 47 [1982];
Barchella v. Barchella,
44 A.D.3d 696, 697 [2007] ).
fraudulently induced to sign them on the ground that her allegations did not rise to the level of fraud. However, this analysis fails to
take into account the highly unusual circumstances of this case and fails to apply the level of scrutiny appropriate considering the
relationship between these parties. Given the surrounding circumstances, especially the nature of the parties’ relationship,
defendant has sufficiently raised an issue of fact about whether plaintiff tricked her into signing the mortgage documents by
claiming they were merely a formality to effectuate his gift to her. That defendant did not have her own lawyer, but relied on a friend
including further development of the record.
Marmelstein v. Kehillat New Hempstead: Rav Aron Jofen Community Synogogue,
11 N.Y.3d 15, 862 N.Y.S.2d 311, 892 N.E.2d
375 (2008) is not to the contrary. In that case, the Court of Appeals held that there was no fiduciary relationship between a
congregant and the rabbi of the synagogue. The plaintiff had claimed that the rabbi had induced her into a 3 1/2 year intimate
relationship by suggesting that his “therapy” would help her find a husband. The Court held that there was no fiduciary relationship
it is plausible that plaintiff did trick defendant into thinking he was gifting her the apartment in an elaborate plot to obtain loan
proceeds under her name.
[3] It was also error to dismiss defendant’s first counterclaim for deceit in the inducement to enter a void marriage. Accepting as
true defendant’s allegations that plaintiff falsely misrepresented himself to be single, thereby inducing her to enter into a bigamous
272 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW
Case 14.3
Ala.Civ.App.,2010.
2081095.
March 5, 2010.
MOORE, Judge.
2006. Marguerite subsequently die d, and James, as the executor of her estate, was substituted as a plaintiff.
On September 17, 2007, Waldrop moved to strike the jury demand. On December 5, 2007, the trial court noted on the case-action-
summary sheet that the case was “nonjury only.” The trial court conducted a bench trial on June 11, 2009. At the conclusion of
James’s case-in-chief, Waldrop moved for a judgment as a matter of law,FN1 arguing that James had failed to prove that Waldrop
had made a representation “with intent to deceive.” The trial court granted that motion, and it entered a judgment on partial findings
fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party,
or if made by mistake and
innocently and acted on by the opposite party,
constitute legal fraud.” (Emphasis added.) In
Davis,
the Alabama Supreme Court,
citing § 6-5-101, stated that “a false representation, even if made innocently or by mistake, operates as a legal fraud if it is a
material fact that is acted upon with belief in its truth.” 965 So.2d at 1091. We also note that our supreme court has applied § 6-5-
101 in an action to set aside a deed.
See Cox v. Cox,
431 So.2d 527 (Ala.1983). In
Cox,
the supreme court, applying § 6-5-101,
Waldrop’s intent to deceive. Thus, the trial court erred in granting Waldrop’s motion for a judgment on partial findings.
James’s evidence showed that, some time after James had executed the deed to Marguerite and Waldrop, Waldrop convinced
Marguerite to deed the property solely to him. James argues that, for certain technical reasons, that deed did not effectively pass
legal title in the property to Waldrop. We need not address that issue. On remand, should the trial court determine that the deed to
Marguerite and Waldrop should be rescinded, Marguerite would not have had any interest in the property to convey, so the issue
302 (Ala.1988) ( “This is an action that is equitable in nature. The constitutional guarantee of trial by jury does not extend to causes
of action that are equitable in nature.”). James has not cited to this court a single case supporting his position that he should
receive a jury trial on his rescission claim. Thus, we conclude that the trial court did not err in denying James’s demand for a trial
by jury.
Based on the forgoing, we reverse the trial court’s judgment entered on partial findings and remand this cause for a new trial
consistent with this opinion.
REVERSED AND REMANDED.
Supplemental Case Printout for:
274 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW
Insight into Ethics
N.J.Super.A.D.,2002.
McConkey v. AON Corp.
354 N.J.Super. 25, 804 A.2d 572
Superior Court of New Jersey,
Appellate Division.
Philip J. McCONKEY, Plaintiff-Respondent/Cross-Appellant,
v.
AON CORPORATION and Alexander & Alexander Services, Inc., Defendants-Appellants/Cross–
Respondents.
Argued Jan. 8, 2002.
Decided July 23, 2002.
FN1. Aon is involved in all aspects of the insurance business including the insurance brokerage business.
FN2. Plaintiff’s complaint and amended complaint initially contained additional causes of action for breach of
contract and negligent misrepresentation, but these were dismissed before trial and before jury deliberations,
respectively. Plaintiff voluntarily dismissed his complaint against Zarb before trial, although the jury was not
made aware of that fact.
The case was tried to a jury which found defendants liable in fraud and awarded plaintiff $2,638,000 in past economic
FN3. A & A had 11,800 employees in eighty countries. The parties stipulated that A & A’s operating revenues
were $1,282,000,000, with a net income of $89,400,000 and net worth of $402,600,000.
While working for Ross, plaintiff had created a substantial “book of business,” FN4 and his future at Ross was
promising, with ownership of a portion of Ross a real possibility.
FN4. A “book of business” is a term of art in the insurance field referring to the commission that is credited to
the individual salesman and stays with him or her for as long as the client keeps renewing the insurance
policies.
FN5. The middle market is one of five practice areas of the greater New York division. The middle market
includes companies that are not the top 500 companies in the United States, but a little bit below that,
sometimes categorized as having $50 to $300 million a year in sales. Ross also served this segment of the
market.
FN6. A written statement admitted in evidence signed by Burk essentially corroborated McConkey’s
assertions.
On April 17, 1996, plaintiff met with Zarb in Zarb’s office in the company’s New York headquarters, and told him about
his rising status at Ross, his “ownership potential” there, and that he was “worried” about the rumors that A & A was
seeking to sell itself or merge with another company in a way that would alter the structure of the company.
Specifically, plaintiff asked Zarb if there were “any facts” at all, “if there was a scintilla of evidence of truth to these
rumors.”
Plaintiff testified that Zarb responded: “those rumors are started by our competition to bring us down. They are totally
FN7. Plaintiff testified that he was never given any kind of formalized objectives that plugged into this formula.
On May 15, 1996, McConkey started working for A & A.
Under the long-term incentive plan covering the period of 1996 through 1999, the letter provides:
The plan hurdle is to achieve at least $5 million of operating income over the period. If we achieve that level, you
will earn 6% of the operating income produced. If we achieve $5.5 million of operating income, you will earn 8% of
FN8. According to McConkey, Ross was doing roughly $8 million in commission business at the time, so if A
& A had bought Ross, McConkey would have received a commission of $800,000 toward the goal of $3 to $5
million. Plaintiff also attempted to hire Mark Kurstein, who worked for a competitor, as a practice leader.