Kentucky

Fraud, consumer protection act and purchase of truck: KEETON v. LEXINGTON TRUCK SALES, INC. (COA 7/18/2008)

By Michael Stevens

KEETON       v. LEXINGTON TRUCK SALES, INC.
TORTS:  FRAUD, Consumer Protection Act       
      2007-CA-001576
PUBLISHED: AFFIRMING IN PART, REVERSING IN PART AND REMANDING
      PANEL: ACREE PRESIDING; VANMETER, WINE CONCUR
      FAYETTE COUNTY
      DATE RENDERED: 7/18/2008

Keeton appeals the TC's entry of summary judgment for Lexington Truck Sales (LTS) on Keeton's numerous claims that included fraud, Kentucky Protection Act violations, Magnuson-Moss Warranty Act violations, and finally a violation of KRS 186A.540. Keeton's claims stemmed from his purchase of a used commercial truck from LTS and problems that he encountered with the truck and its engine after the purchase.

The COA first addresses the fraud claim for LTS's alleged rollback of the truck's odometer, and notes that CR 9.02 requires all allegations of fraud to be stated with particularity such that it sets forth the time, place and substance of the fraudulent acts, which Keeton failed to do. The dismissal of his fraud claim was therefore affirmed.

As to the alleged consumer protection violations under both the federal and state statutes, the COA agreed with the TC that Keeton could not assert a claim against LTS under these Acts because he was not a "consumer" for whom protection is afforded since the evidence clearly showed that Keeton purchased the truck for commercial business purposes. Keeton did not purchase the truck for personal, family, or household purposes and thus did not fit within the protected class of persons under either the federal or state Act.

On the KRS 186A.540 violation claim, however, the Court agreed with Keeton that the evidence demonstrates a genuine issue of material fact exists as to whether the truck he purchased had sustained prior damage and whether LTS knew of the damage and failed to disclose it to him. The COA rejected LTS's argument that liability can only found under this statute if the damage allegedly concealed from the buyer occurred while in the concealing seller's possession. The COA therefore reversed the dismissal of Keeton's negligence per se claim against LTS for further proceedings.

By Chad Kessinger
Schiller Osbourn Barnes & Maloney

Full post as published by Kentucky Cases on September 29, 2008 (boomark / email).