Koons v. Ozzy's Cash & Go Auto, LLC

176 N.E.3d 1115

Dylan J. KOONS, et al., Plaintiffs-Appellees,

v.OZZY'S CASH AND GO AUTO, LLC, Defendant-Appellant.

No. 20CA3919

Court of Appeals of Ohio, Fourth District, Scioto County.

RELEASED: September 16, 2021

Ozzy's Cash and Go Auto, LLC, Pro Se¹ , Appellant.

Mark J. Cardosi, Southeastern Ohio Legal Services, Portsmouth, Ohio for Appellees.

DECISION AND JUDGMENT ENTRY

Wilkin, J. {¶1} This is an appeal from a Scioto County Court of Common Pleas judgment that found appellant, Ozzy's Cash and Go Auto, LLC ("Ozzy's"), liable to Dylan J. Koons and Tiffany Koons ("the Koons") for damages caused by its breach of warranties on two automobiles purchased by the Koons. Ozzy's asserts a single assignment of error: the court erred in not determining the proper measure of damages for a breach of an implied warranty for the sale of personal property. After reviewing Ozzy's arguments, the applicable law, and the record, we overrule Ozzy's sole assignment of error, and affirm the trial court's judgment in favor of the Koons.

BACKGROUND

{¶2} In April 2018, the Koons purchased a 2007 Hummer H3 SUV and a 2010 Chevrolet Traverse from Ozzy's. Including tax, the price of the Hummer was $10,851.08, but the Koons were credited $1,500 for a trade-in, and they made a $2,000 down payment. The Koons also purchased "gap protection" for $576, an "extended warranty" for $1,989.00, and paid $33.50 to license and register the Hummer. The Koons financed the balance of $9,949.58 at a 22.99 annual percentage interest rate, which resulted in 51 monthly payments of $307.40.

{¶3} Including tax, the purchase price of the Traverse was $15,532.38, but the Koons were credited $3,400 for a trade-in. The Koons also purchased an "extended warranty" for $1,736.00, and paid $33.50 to license and register the Traverse. The Koons financed the balance of $13,901.88, at a 22.99 annual percentage interest rate, which resulted in 54 monthly payments of $415.43.

{¶4} The day after their purchase, the Koons had "severe mechanical issues" with the Traverse, causing it to be inoperable; it got stuck in second gear and the power steering failed. The Koons returned the vehicle to Ozzy's, and it was eventually taken to Tim Short Auto to be repaired. After 3 ½ months, the Traverse was returned to the Koons, but the power steering still did not work. The Koons have driven the Traverse a total of 358 miles since the date of its purchase.

{¶5} About a week-and-a-half after the Koons purchased the Hummer, its transmission locked-up. Ozzy's eventually towed the Hummer to Tim Short Auto for repair. After 3 ½ months, it was returned to the Koons and was functional, but it continued to leak fluid from the transmission. The Koons have driven the Hummer a total of 3,485 miles since the date of its purchase.

{¶6} Approximately three weeks after they purchased the vehicles, the Koons asked Ozzy's to rescind the purchase agreements for both vehicles. However, Ozzy's refused stating that the Koons would have to wait 30 days " ‘for the warranty to kick in.’ "

{¶7} The Koons filed a five-count complaint against Ozzy's alleging (1) breach of contract and breach of expressed and implied warranties, (2) violation of the Consumer Sales Practices Act, (3) revocation of acceptance of the purchase agreements, (4) violation of the Magnuson Moss Warranty Act, and (5) common law duties, fraud and misrepresentation. The Koons subsequently amended their complaint adding the Credit Acceptance Corporation (CAC) as a defendant, which moved to arbitrate their claims. However, before the trial court resolved CAC's motion, the Koons dismissed CAC as a party with prejudice.

{¶8} The Koons’ remaining claims against Ozzy's were addressed in a bench trial. After considering the evidence presented by the parties, the trial court issued a decision and entry that included findings of fact and conclusions of law. The court found that the Koons failed to prove a violation of the Consumer Sales Practices Act, or common law fraud or misrepresentation. The court further found that the "as is" clauses in both automobile purchase agreements were contingent upon the Koons not purchasing extended warranties. Because the Koons purchased extended warranties for both vehicles, the court found that the "as is" clauses were negated, and consequently both vehicles were covered under implied warranties, "including the duty to act in good faith, as to those warranties." The court found that Ozzy's violated those warranties. The court also found a violation of the Magnuson Moss Act, which provides federal rights that permit enforcement of state law warranty violations.

{¶9} Applying R.C. 1302.66, the court found that "significant mechanical problems" caused both vehicles to be "non-conforming" goods, that qualified the Koons to revoke their acceptance of both purchase agreements. The court concluded that Ozzy's "put[ing] off" the Koons’ efforts to revoke the agreements caused them to incur $13,405.38 in damages. Ozzy's appeals this judgment, regarding the damage award.

ASSIGNMENT OF ERROR

THE COURT ERRED IN NOT DETERMINING THE PROPER MEASURE OF DAMAGES FOR A BREACH OF AN IMPLIED WARRANTY FOR THE SALE OF PERSONAL PROPERTY

{¶10} Ozzy's argues that the trial court erred in awarding the Koons $13,405.38 in damages. Ozzy's asserts that the trial court was required to calculate the Koons’ damages pursuant to R.C. 1302.88(B). This provision provides the measure of damages for breach of a warranty, which "is the difference at the time of acceptance between the value of the goods accepted and the value they would have been as warrantied," absent special circumstances under R.C. 1302.88(B). In support of this proposition, Ozzy's cites Eckstein v. Cummins , 46 Ohio App. 2d 192, 193-96, 347 N.E.2d 549 (6th Dist.1975) and Goddard v. General Motors Corp. , 60 Ohio St.2d 41, 396 N.E.2d 761 (1979). Ozzy's argues that because there is no evidence showing the difference in value as set forth under R.C. 1302.88(B), the Koons' "claim should be dismissed."

{¶11} In response, the Koons do not address Ozzy's assertion that the trial court erroneously failed to apply R.C. 1302.88(B) in determining their damages. Instead, the Koons claim that if a trial court determines that rescission of a contract is justified, the court has discretion to fashion a decree that will return the parties to their respective position they occupied before they entered the contract, citing Hubbard v. AASE Sales, LLC , 2018-Ohio-2363, 104 N.E.3d 1027, ¶ 59 (5th Dist.). The Koons argue that the $13,405.38 damages award placed both parties in the position that they occupied before the contract, i.e., Ozzy's paid back the money that Koons made toward the vehicles. The Koons also assert that the $13,405.38 is supported in the record pursuant to the purchase agreements. Therefore, the Koons maintain that we should affirm the trial court's judgment.

Law and Analysis

1. Standard of Review

{¶12} When a party "challenges the trial court's choice or application of law, our review is de novo." Hampton v. Lively , 2020-Ohio-4713, 159 N.E.3d 810, ¶ 13 (4th Dist.), citing Pottmeyer v. Douglas , 4th Dist. Washington No. 10CA7, 2010-Ohio-5293, 2010 WL 4273232, ¶ 21.

This means that in our review, we afford the trial court no deference in determining what statutory provision applies. See State v. Blanton , 2018-Ohio-1278, 110 N.E.3d 1, ¶ 50 (4th Dist.), citing State v. Sufronko , 105 Ohio App.3d 504, 664 N.E.2d 596 (4th Dist.1995). We apply a de novo review of Ozzy's assertion that the trial court was required to apply R.C. 1302.88(B) to calculate the Koons’ damages.

{¶13} To the extent that Ozzy's also argues that the trial court's award of damages was speculative, a "plaintiff must show its entitlement to damages in an amount ascertainable with reasonable certainty." Bevens v. Wooten Landscaping, Inc. , 4th Dist. Pike No. 11CA819, 2012-Ohio-5137, 2012 WL 5391961, ¶ 16, citing Allied Erecting & Dismantling Co., Inc. v. Youngstown, 151 Ohio App.3d 16, 2002-Ohio-5179, 783 N.E.2d 523, ¶ 64 (7th Dist.) ; Interstate Gas Supply, Inc. v. Calex Corp., 10th Dist. Franklin No. 04AP-980, 2006-Ohio-638, 2006 WL 328679, ¶ 59. "Generally, we will uphold a trial court's judgment as long as the manifest weight of the evidence supports it—that is, as long as some competent and credible evidence supports it." Bevens at ¶ 12, citing Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 17. Therefore, a damage award "should not be overturned as being against the manifest weight of the evidence if some competent and credible evidence supports that judgment." Knox v. Ludwick , 4th Dist. Ross No. 00CA2569, 2001-Ohio-2604, 2001 WL 1287156, ¶ 3, citing C.E. Morris Co. v. Foley Construction Co. , 54 Ohio St.2d 279, 376 N.E.2d 578 (1978). And, "[f]actual findings of the trial court are to be given a great amount of deference because the trial court is in a better position ‘to view the witnesses and observe their demeanor, gestures and voice inflections, and use these observations in weighing the credibility of the proffered testimony.’ " Id. , quoting Seasons Coal Co. v. Cleveland , 10 Ohio St.3d 77, 80, 461 N.E.2d 1273 (1984).

2. Analysis

{¶14} We begin by recognizing that the trial court concluded that Ozzy's breached implied warranties pertaining to the Koons’ vehicles, and that the Koons properly revoked the acceptance of the purchase agreements for both vehicles under R.C. 1302.66. These holdings are not disputed in Ozzy's appeal. Rather, Ozzy's contends that the trial court erred in not applying R.C. 1302.88(B) when it calculated the Koons’ damages for revocation. We will therefore adopt the trial court's finding that the Koons revoked the purchase agreements and solely address the appropriate calculation of damages.

{¶15} "Since the adoption of Article 2 of the Uniform Commercial Code in 1962, the law in Ohio governing contracts for the sale of goods has been codified in R.C. Chapter 1302." Hughes v....