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Raatz v. Dealer Trade Incorporated

United States District Court, D. Arizona

September 29, 2017

Tom Raatz, et al., Plaintiffs,
v.
Dealer Trade Incorporated, Defendant.

          ORDER

          DAVID G. CAMPBELL UNITED STATES DISTRICT JUDGE

         The Court held a bench trial on September 28, 2017. After considering the evidence and arguments of the parties, the Court will rule in favor of Plaintiffs.

         I. Background.

         Plaintiffs purchased a used 2010 Infiniti QX56 from Defendant in August 2015. Defendant represented that the vehicle had 35, 648 miles. Plaintiffs paid $33, 359.75, consisting of $3, 000 down and the rest financed through a credit union.

         Plaintiffs drove the vehicle to their home in Iowa and took it to the Willis Infiniti dealership for service. Plaintiffs assert that the dealership informed them that the vehicle was serviced in 2011 and had an odometer reading at that time of more than 46, 000 miles. Plaintiffs immediately contacted Defendant, and this disagreement ensued.

         II. Liability Holding.

         The Court held on summary judgment that Defendant gave an express warranty on the mileage of the vehicle, the express warranty was not validly disclaimed in the parties' contract, and Defendant breached the warranty because the mileage was inaccurate. Doc. 124 at 8. As a result, the trial concerned only Plaintiffs' alleged damages.

         Arizona law provides that “[t]he measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” A.R.S. § 47-2714. The Court held at the start of trial that Plaintiffs could not present evidence of incidental and consequential damages because they failed to disclose them as required by Rule 26(a)(1)(A)(iii) and their failure was not substantially justified or harmless. See Rule 37(c)(1).

         III. Findings of Fact and Conclusions of Law.

         The Court makes the following findings of fact and conclusions of law. The findings are based on the testimony and exhibits presented during the trial, including credibility determinations.

         1. The odometer reading when Plaintiffs purchased the vehicle - 35, 648 - was not accurate. Defendant concedes that “[t]he Vehicle has a mileage discrepancy.” Doc. 137-1 at 3. The precise amount of the discrepancy is not known, but the Infinity dealer told Plaintiffs in 2015 that the mileage recorded for the vehicle in 2011 was 47, 731. Plaintiffs did not attempt to place the dealer's service records in evidence, but this fact was not seriously disputed at trial. Indeed, Defendant's expert confirmed that he had seen the dealer report that the vehicle had 47, 731 miles in 2011. Court's Livenote Transcript at 89 (Infinity dealer report “shows there's 47, 731 miles”). The Court finds by a preponderance of the evidence that the vehicle had approximately 47, 000 miles in 2011, four years before it was purchased by Plaintiffs.

         2. A reasonable estimate of the vehicle's mileage in 2015 is more than 100, 000 miles. Plaintiffs' expert testified that 100, 000 was a conservative estimate. Defendant's expert suggested that 17, 000 miles per year is a reasonable expectation for a vehicle's mileage. Id. at 88 (“What we look at is the 17, 000 miles a year and if a car has in excess of 17, 000 miles a year that's when we start deducting for mileage. [If it] has less than 17, 000 miles per year that's when we start adding a value for mileage.”). If Plaintiffs' vehicle was driven 17, 000 miles per year between 2011 and 2015, it would have had more than 100, 000 miles in 2015 (17, 000 x 4 47, 000 = 115, 000).

         3. A 2010 Infinity QX56 with unknown mileage would be worth less than a 2010 Infinity QX56 in comparable condition with 35, 648 miles. A 2010 Infinity QX56 with more than 100, 000 miles would be worth less than a 2010 Infinity QX56 in comparable condition with 35, 648 miles. As a result, when purchased in 2015, Plaintiffs' vehicle was worth less than the $33, 359.75 they paid for it. Plaintiffs were injured by the breach of warranty.[1]

         4. Although it is true, as Defendant argues, that damages must be proven with reasonable certainty, Arizona law does not require absolute certainty, especially when the fact of injury is clear, as it is here. The Arizona Court of Appeals has explained: “Once the right to damages is established, uncertainty as to the amount of damages does not preclude recovery.” Felder v. ...


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