## Facts

- Ride Auto, LLC bought a 2008 Ford F-350 from a salvage yard after the prior owner and a dealer had identified major engine problems, including a “blown” engine; the truck had arrived unable to be driven.
- Ride Auto performed cosmetic/body work and made the truck start and drive short distances before offering it for sale.
- Esmeralda Sorchaga and her husband visited Ride Auto to buy a truck for the husband’s roofing business; during a test drive they observed a check-engine light and tailpipe smoke.
- A Ride Auto salesperson stated the smoke was typical for a diesel truck and the check-engine light was due to an easy-to-fix oxygen sensor, and represented the truck would run for a long time.
- Ride Auto did not disclose its knowledge of the truck’s prior engine diagnosis and undrivable condition.
- The purchase agreement included an “as is” clause purporting to disclaim express and implied warranties, including merchantability.
- After purchase, the truck lacked power; Ride Auto refused repairs; a Ford dealer informed Sorchaga the engine was blown and required replacement.

## Issues

1. Whether the evidence supported findings that Ride Auto committed fraud in connection with the sale.
2. Whether an “as is” disclaimer effectively disclaimed the implied warranty of merchantability despite fraudulent misrepresentations and Minn. Stat. § 336.2-316.
3. Whether attorney’s fees were properly awarded under the Magnuson-Moss Warranty Act (MMWA), including whether the truck was a covered “consumer product.”
4. Whether entering judgment on both fraud and breach of implied warranty resulted in an impermissible double recovery.
5. Whether Western Surety Company, as Ride Auto’s bond surety, could be held liable for the judgment.

## Decision

- The court affirmed the judgment for Sorchaga after a bench trial, including damages ($14,366.03) and attorney’s fees ($21,949.35).
- The court upheld the fraud finding, concluding Ride Auto knowingly made material misrepresentations intended to induce purchase and Sorchaga justifiably relied to her detriment.
- The court held the “as is” clause did not bar implied-warranty liability where the seller’s fraud defeated the effectiveness of the disclaimer under Minn. Stat. § 336.2-316 and general contract principles.
- The court affirmed the MMWA fee award, concluding the truck qualified as a “consumer product” for MMWA purposes and the fee award was within the district court’s discretion.
- The court rejected the double-recovery argument because the district court structured relief to avoid overlapping compensation, including requiring Sorchaga to provide an opportunity for Ride Auto to retrieve the truck.
- The court affirmed judgment against Western Surety under Minnesota’s dealer-bond framework for losses caused by the dealership’s proven misconduct.

## Legal Principles

- Fraud is established by proof of a material misrepresentation made with knowledge of falsity (or reckless disregard), intent to induce reliance, actual and justifiable reliance, and resulting damages.
- Under Minn. Stat. § 336.2-316, implied warranties may be excluded by conspicuous “as is” language, but disclaimers remain subject to general contract doctrines; fraudulent affirmative misrepresentations can render an “as is” disclaimer ineffective.
- A prevailing consumer on a qualifying implied-warranty claim may recover reasonable attorney’s fees under the MMWA when the product meets the statute’s “consumer product” definition.
- A plaintiff may obtain findings on both fraud and breach of warranty if the remedy is structured to prevent duplicate compensation for the same loss.
- A motor-vehicle dealer’s surety may be liable on the dealer bond for monetary losses caused by the dealer’s failure to satisfy obligations established by judgment, including fraud and warranty-related misconduct.

## Conclusion

The court affirmed liability and remedies arising from a used-truck sale where the dealer’s intentional misrepresentations about known engine defects defeated an “as is” disclaimer, supported implied-warranty and fraud relief, permitted MMWA attorney’s fees, and allowed recovery against the dealer’s bond surety without duplicative damages.


Sorchaga v. Ride Auto, LLC, 893 N.W.2d 360 (Minn. Ct. App. 2017)