## Facts

- Jason Murphy purchased a truck from Bull Motor Company (BMC) for $33,495, believing he was buying a “new” vehicle.
- Before the sale, an unknown thief stole the truck from BMC’s lot, drove it about forty miles, and police recovered it about ninety minutes later.
- The truck was returned to BMC’s lot. Murphy and the sales agent, Bo Henderson, did not know about the theft at the time of sale, and the theft history was not disclosed to Murphy.
- Murphy testified he wanted a “new” vehicle because he needed dependable transportation to work and believed a vehicle that had been stolen and driven by an unknown person was “used,” not “new.”
- After Murphy learned of the theft history (when he had driven the truck about 1,000 miles), he asked BMC to replace it with another new truck. BMC declined and offered to extend his warranty instead.
- BMC’s owner (Tony Bull) and service manager (James Smith) testified that after the vehicle was recovered, it was inspected and tested, but the rear differential was not specifically tested.
- Murphy later had to replace the rear end at about 18,000 miles, but he did not know whether that problem was related to the theft.
- Henderson testified that a theft history would reduce the truck’s value by about $1,000 to $1,500.
- Dean Sides, a local dealer, testified that a stolen vehicle might have less value, but that a vehicle not previously titled would still be considered “new.”
- BMC moved for summary judgment, arguing Arkansas’s statutory definition of “new motor vehicle” in the dealer-licensing scheme (based on whether title had been transferred to an ultimate purchaser) meant the truck was “new” as a matter of law. The trial court denied the motion.
- At trial, the jury was asked to decide what the parties meant by “new vehicle,” and the jury was given the statutory definitions as part of its instructions.
- The jury returned a verdict for Murphy and awarded $7,000 in damages. BMC appealed.

## Issues

1. Whether Arkansas’s statutory definition of “new motor vehicle” in the dealer-licensing statutes controlled the meaning of “new” in the parties’ retail sales contract and required judgment for BMC.
2. Whether the trial court properly submitted the meaning of “new vehicle” to the jury and properly instructed the jury (including by providing the statutory definitions).
3. Whether substantial evidence supported the jury’s $7,000 diminished-value award based on the truck’s theft history.
4. Whether the trial court committed reversible error in admitting challenged evidence related to value and damages (including evidence of the later rear-end replacement).

## Decision

- The Arkansas Court of Appeals affirmed the judgment for Murphy.
- The court held the statutory “new motor vehicle” definition used for dealer licensing did not control the meaning of “new” in the parties’ retail sales contract.
- The court approved submitting the meaning of “new vehicle” to the jury given the dispute over what the parties intended and understood, and it found no instructional error warranting reversal.
- The court held there was substantial evidence that the theft history reduced the truck’s value and that the $7,000 verdict was within the range supported by the testimony.
- The court found no reversible error in the trial court’s evidentiary rulings.

## Legal Principles

- A statutory definition written for an administrative or licensing scheme does not automatically set the meaning of the same word in a private sales contract.
- When a contract term is disputed and reasonably subject to more than one meaning in context, the fact-finder may determine the meaning the parties intended; a court need not treat a regulatory definition as controlling unless the contract or statute requires it.
- A vehicle’s theft-and-recovery history can be a fact that affects market value even if the vehicle was quickly recovered and never titled before the buyer’s purchase.
- Diminished-value damages may be supported by the buyer’s testimony about what price he would have paid (or required) and by testimony from dealer witnesses acknowledging that the history would reduce value; the jury may choose an amount within the evidentiary range.
- Admission of damages-related evidence is not reversible error absent a showing that the ruling was an abuse of discretion and caused prejudice affecting the verdict.

## Conclusion

The court affirmed a $7,000 jury award for breach of a sales contract where a dealer sold a truck as “new” without disclosing that it had been stolen and driven; the dealer-licensing statute’s definition of “new motor vehicle” did not control the parties’ retail contract, and the evidence supported a finding of diminished value from the theft history.


Bull Motor Co. v. Murphy, 270 S.W.3d 350 (2007)