## Facts

- A buyer purchased a used 1984 Chevrolet van from a motor company under a contract disclaiming express and implied warranties.
- The van’s original engine had been replaced before the dealership acquired it with a rebuilt engine using an older engine block manufactured around 1966.
- The replacement engine used a canister-style oil filter associated with older vehicles, and the dealership kept and used the van for months, adding thousands of miles.
- The dealership did not tell the buyer that the engine was non-original, built on a 1966 block, or allegedly unsuitable and worn.
- After purchase, the van developed oil leaks, stalling, and other problems; a mechanic discovered the older engine block and significant wear.
- The buyer sued for fraud and deceit based on misrepresentation and nondisclosure of material facts about the engine.
- A jury found for the buyer and awarded compensatory damages and substantial punitive damages.
- The trial court denied dispositive motions on liability but granted a new trial limited to damages, finding the damages award unsupported.

## Issues

1. Whether the evidence was sufficient to submit the fraud and deceit claims to the jury and to deny a directed verdict/JNOV for the dealership.
2. Whether a new trial limited to damages was proper where the jury’s compensatory and punitive awards were found excessive.

## Decision

- The Supreme Court of South Dakota held the case was properly submitted to the jury on fraud and deceit, and the dealership was not entitled to judgment as a matter of law on liability.
- The court held the damages award was clearly excessive and could not stand.
- The judgment was affirmed as to liability, but the case was reversed and remanded for a new determination of damages.

## Legal Principles

- Warranty disclaimers and “as-is” language in a sales contract do not bar common-law fraud and deceit claims based on misrepresentation or concealment of material facts.
- A fraud/deceit claim should be submitted to the jury if, viewing the evidence favorably to the nonmoving party, reasonable factfinders could differ on whether the elements are met; credibility conflicts are for the jury.
- A court may order a new trial on damages when the award is so excessive that it indicates passion or prejudice or lacks evidentiary support, including where punitive damages are disproportionate to the record.

## Conclusion

The court left the liability verdict intact because evidence permitted a finding that the seller knew or should have known of the materially different engine and failed to disclose it despite contractual disclaimers, but it required a retrial on damages because the compensatory and punitive awards were clearly excessive.


Maybee v. Jacobs Motor Co., 519 N.W.2d 341 (S.D. 1994)