Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—MaineSupJudCt: Dealer-to-Dealer Purchase of Vehicle Bars Maine Unfair Trade Practices Act Claim, (Jan 22, 2013)

By Tobias J. Gillett, J.D., LLM.

A recreational vehicle dealer could not bring a Maine Unfair Trade Practices Act (UTPA) claim against an automobile dealership over alleged modifications to a vehicle that voided the manufacturer’s warranty because the dealer had not purchased the vehicle for personal use, the Maine Supreme Judicial Court has ruled (Seacoast RV, Inc. v. Sawdran, LLC, January 10, 2013, Saufley, L.).

The recreational vehicle dealer, Seacoast RV, Inc., had purchased a Smart Car from the automobile dealership, Sawdran, LLC, doing business as Prime Motor Cars, that had been modified in a manner that caused mechanical problems and voided the manufacturer’s warranty. The problems were allegedly concealed by the presence of black electrical tape over the “check engine” light.

Seacoast filed suit, alleging breach of contract, breach of warranty, fraud, violation of the UTPA, and punitive damages. The trial court granted Sawdran’s motion to dismiss as applied to the UTPA claim, finding that the UTPA did not apply because Seacoast had not purchased the vehicle for personal use, as required by the UTPA. The trial court also found against Seacoast on the fraud and punitive damages claims, but determined that Sawdran had committed breach of contract and breach of warranty. The trial court rescinded the contract, ordered Sawdran to refund the purchase price of the vehicle to Seacoast, and ordered Seacoast to return the vehicle to Sawdran.

On appeal, the Supreme Judicial Court affirmed the trial court’s disposition of the UTPA claim, finding that the evidence supported its dismissal. The court observed “that the sales documents were redrafted at Seacoast’s request to show Seacoast, not an individual, as the purchaser; the sale was arranged as a dealer-to-dealer purchase, rather than a personal-use purchase; and the arrangement avoided the ordinary, immediate payment of sales tax.” Therefore, the trial court did not err in concluding that Seacoast had not purchased the vehicle for personal use, and thus that Seacoast could not bring a UTPA claim.

The case is No. 2013 ME 6.

Attorneys: Neal L. Weinstein for Seacoast RV, Inc. Bruce C. Gerrity (Preti, Flaherty, Beliveau & Pachios, LLP) for Sawdran, LLC.

Companies: Seacoast RV, Inc.; Sawdran, LLC

Cases: ConsumerProtection StateUnfairTradePractices MaineNews