Facts
- Donald Hinkle bought a 1969 Ford Galaxie from Rockville Motor Co., Inc., after the dealer represented it was “new.”
- The odometer showed about 2,000 miles; after noticing this on the way home, Hinkle returned to the dealer.
- The dealer refunded $109.86, and Hinkle signed a release of further claims except for breach of warranty.
- Months later, Hinkle learned the car had previously been in a serious accident (including major body damage) and had been repaired before the sale.
- Hinkle sued for fraud and deceit based on the “new” representation.
- Hinkle introduced expert testimony that repairing the car to the condition represented (new or equivalent) would cost about $800.
Issues
- In a deceit action based on a vehicle falsely represented as “new,” must the plaintiff prove the automobile’s market value at the time of sale (as represented and as delivered) to establish damages?
- May the plaintiff instead establish damages through evidence of the cost to repair the vehicle to conform to the representation?
Decision
- The Court of Appeals of Maryland reversed the directed verdict for the dealer and remanded.
- The court held the plaintiff was not required to prove the vehicle’s actual market value at the time of purchase to present a damages case in deceit.
- The expert’s cost-to-repair evidence was sufficient to permit a jury to find damages and therefore to defeat a directed verdict.
Legal Principles
- Maryland does not apply a single rigid measure of damages in fraud and deceit; permissible measures depend on the proof and the circumstances.
- A plaintiff may recover either out-of-pocket loss or benefit-of-the-bargain damages when supported by sufficiently definite evidence.
- Evidence of the reasonable cost to repair or bring property into the condition represented can serve as a proxy for the value difference and support benefit-of-the-bargain damages.
- For sufficiency purposes, a plaintiff in deceit must present evidence of deceit, reliance, and resulting damages; direct market-value testimony at the time of sale is not invariably required.
Conclusion
The court held that a fraud plaintiff alleging a car was falsely sold as “new” could prove damages through competent cost-to-conform repair evidence, and that the absence of market-value evidence at the time of sale did not justify taking the case from the jury.