## Facts

- Cutter Dodge ran a newspaper “inventory reduction” advertisement promoting specified vehicles with “$0 Cash Down.”
- Fine print stated that prices included certain discounts tied to “Recent College Grad” and “Loyalty Rebate” programs.
- Mary Zanakis-Pico and Thomas Pico, Jr. went to the dealership to buy a Jeep Grand Cherokee Laredo on the advertised terms, including “0 cash down.”
- After test-driving, they were told “$0 Cash Down” applied only to qualifying recent college graduates with a loyalty rebate; otherwise a down payment of about $1,400 was required.
- The Picos refused to pay a down payment and left without purchasing.
- The Picos sued alleging statutory deceptive practices, common-law torts (including fraud and negligent misrepresentation), breach of contract, and punitive damages.
- The circuit court entered rulings that, in effect, barred the statutory and tort claims for lack of cognizable damages and entered judgment as a matter of law for Cutter on remaining claims, including contract; Cutter cross-appealed on fees/sanctions and related matters.

## Issues

1. Whether consumers who respond to an allegedly deceptive advertisement but do not complete a purchase can plead “injury to business or property” and recover damages under HRS chapter 480.
2. Whether the Picos alleged cognizable damages sufficient to proceed on statutory UDAP and common-law fraud/misrepresentation-type claims.
3. Whether the newspaper advertisement constituted a definite contractual offer creating an enforceable contract upon the Picos’ attempted acceptance.
4. Whether the circuit court properly handled Cutter’s requests for attorneys’ fees, costs, and sanctions in light of the merits.

## Decision

- The court affirmed in part and vacated in part, and remanded.
- It vacated dismissal/judgment against the Picos on the HRS chapter 480 claim, concluding the circuit court applied an unduly narrow view of cognizable damages.
- It vacated dismissal/judgment against the Picos on fraud and other sufficiently pled common-law tort claims, rejecting the circuit court’s “substantial pecuniary loss” threshold as applied.
- It affirmed judgment as a matter of law for Cutter on the contract claim, holding the advertisement was not a definite offer but an invitation to negotiate, especially given the qualifying language.
- It affirmed the circuit court’s refusal to treat the case as wholly frivolous for purposes of broad fee/sanction relief, given that statutory and tort claims were viable.

## Legal Principles

- Under HRS § 480-13, a plaintiff may sue for unfair or deceptive acts or practices upon alleging injury to “business or property” caused by the unlawful practice; a completed purchase is not required.
- Cognizable injury for consumer-deception claims may include losses incurred in responding to or relying on a deceptive advertisement (including time, effort, and out-of-pocket expenditures), not solely overpayment in a consummated transaction.
- Common-law fraud and misrepresentation claims require actual pecuniary loss, but allegations of reliance-related, out-of-pocket harms can satisfy the damages element at the pleading/judgment-as-a-matter-of-law stage.
- Retail advertisements with qualifying conditions typically are invitations to deal rather than definite offers; contract formation requires sufficiently definite terms and intent to be bound.
- When claims are legally viable, broad awards of attorneys’ fees or sanctions premised on frivolousness are generally unwarranted.

## Conclusion

The court held that consumers misled by an advertisement may pursue statutory UDAP and certain tort remedies even without completing a purchase, because reliance-related losses can constitute cognizable injury; however, the qualified “$0 Cash Down” advertisement did not create an enforceable contract, and the case was remanded for further proceedings on the statutory and tort claims.


Zanakis-Pico v. Cutter Dodge, Inc., 47 P.3d 1222 (Haw. 2002)