Brown v. Woodbury Auto Group LLC

IN THE UNITED STATES DISTRICT COURT FOR THE

MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

KEVIN L. BROWN, )

)

Plaintiff, )

) No. 3:21-cv-00955

v. )

) JUDGE CAMPBELL

WOODBURY AUTO GROUP LLC )

and KHATAB ALAZAWY, )

)

Defendants. )

MEMORANDUM

Plaintiff Kevin L. Brown filed a pro se Amended Complaint against Defendants Woodbury

Auto Group LLC and Khatab Alazawy concerning the alleged deceptive sale of a damaged used

motor vehicle. (Doc. No. 9). The Court granted Plaintiff pauper status and must now determine if

the Complaint is frivolous, malicious, fails to state a claim upon which relief may be granted, or

seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. §

1915(e)(2)(B); see also Ongori v. Hawkins, No. 16-2781, 2017 WL 6759020, at *1 (6th Cir. Nov.

15, 2017) (“[N]on-prisoners proceeding in forma pauperis are still subject to the screening

requirements of § 1915(e).”).

I. LEGAL STANDARD

Pro se complaints are held to less stringent standards than formal pleadings drafted by

lawyers and should be liberally construed. Williams v. Curtin, 631 F.3d 380, 383 (6th Cir. 2011);

Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citing Estelle v. Gamble, 429 U.S. 97 (1976)).

However, Plaintiff must comply with the Federal Rules of Civil Procedure and meet basic pleading

requirements. Martin v. Overton, 391 F.3d 710, 714 (6th Cir. 2004); see also Brown v. Mastauszak,

415 F. App’x 608, 613 (6th Cir. 2011) (“[A] court cannot create a claim which [a plaintiff] has not

spelled out in his pleading.”). Accordingly, on initial review, the Court applies the standard for

Rule 12(b)(6) of the Federal Rules of Civil Procedure. Hill v. Lappin, 630 F.3d 468, 470-71 (6th

Cir. 2010).

Under Rule 12(b)(6), the Court views the Amended Complaint in the light most favorable

to Plaintiff and takes all well-pleaded factual allegations as true. Tackett v. M & G Polymers, USA,

LLC, 561 F.3d 478, 488 (6th Cir. 2009) (citing Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir.

2009)). The Court then determines if Plaintiff’s factual allegations “plausibly suggest an

entitlement to relief,” Williams, 631 F.3d at 383 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 681

(2009)), that rises “above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). A plausible claim pleads factual content that allows the Court “to draw the reasonable

inference that the defendant is liable for the misconduct alleged,” and therefore it “must indicate

‘more than a sheer possibility that a defendant has acted unlawfully.’” Iqbal, 556 U.S. at 678

(quoting Twombly, 550 U.S. at 556). Because this obligation requires more than labels and

conclusions, “a formulaic recitation of the elements of a cause of action will not do.” Twombly,

550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Furthermore, a plaintiff may

not rely on conclusory allegations, unwarranted factual inferences or “legal conclusion[s] couched

as factual allegation[s].” Id.; Eidson v. Tenn. Dep’t of Children’s Servs., 510 F.3d 631, 634 (6th

Cir. 2007); DirectTV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007).

II. FACTUAL ALLEGATIONS

On October 22, 2021, Plaintiff and his elderly mother visited a used car lot operated by

Defendant Woodbury Auto Group LLP. (Doc. No. 9). Defendant Alazawy, acting as a salesman,

represented to Plaintiff that a 2015 Nissan Altima (“Subject Vehicle”) was in excellent mechanical

condition; did not have any damage; and had been traded-in by the prior owner for non-mechanical

reasons. (Id. at 1-2, 6-7, 12). Alazawy refused to provide Plaintiff with a report concerning the

vehicle’s mechanical history, but he confirmed that the vehicle was being sold with the thirty-day

“dealer warranty” for “engine and transmission” that was advertised in bold letters on the Buyer’s

Guide window sticker. (Id. at 10-11, 15-16; Doc. No. 9-1 at 22). Based on Alazawy’s

representations that the Subject Vehicle was “fit for the road” and covered by the warranty,

Plaintiff agreed to purchase the car for $9,000. (Doc. No. 9 at 7, 16).

After the bill of sale was executed, however, Alazawy ink-stamped “all vehicles sold as is”

over Plaintiff’s signature. (Id. at 16). Defendants refused to provide the Subject Vehicle’s title until

after the thirty-day warranty period expired. (Id. at 12). Upon receiving the title, Plaintiff

discovered that the Subject Vehicle had been rendered “salvage” condition by “flood damage” in

a hurricane-impacted area. (Id.) Within weeks, the Subject Vehicle developed significant

transmission problems, but Defendants “refused to fix the car” and avoided Plaintiff’s attempts to

seek a resolution. (Id. at 10-15, 23).

Based on these circumstances, Plaintiff alleges that Defendants engaged in a deliberate

scheme to “trick” him into buying a damaged vehicle by telling “lies” and concealing information

despite being “clearly aware” of the Subject Vehicle’s failing transmission and flood damage. (Id.

at 1-2, 14, 33-34). Plaintiff also alleges that Defendants deliberately concealed that the Subject

Vehicle was going to be sold without the advertised warranty. (Id. at 19). Plaintiff alleges that he

would not have purchased the Subject Vehicle “had [he] known the true condition and history.”

(Id. at 14). Finally, Plaintiff alleges the Subject Vehicle’s value has been impaired because (a) it

is “unsafe to drive on the roads . . . of Tennessee” due to the damaged transmission, and (b) as a

“salvage” vehicle, it is not “legally drivable” and cannot be registered for license plates or insured

in Tennessee. (Id. at 14-16; 27 & n.17).

III. ANALYSIS

The Amended Complaint brings federal claims under the Odometer Act, 49 U.S.C. §

32705, et seq.;1 Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq.; Tennessee Consumer

Protection Act, Tenn. Code Ann. § 47-2-101, et seq.; and Tennessee common law. The Court

addresses each claim in turn.

A. Odometer Act

The purpose of the Odometer Act (“OA”) is to “prohibit tampering with motor vehicle

odometers” and “provide safeguards to protect purchasers in the sale of motor vehicles with altered

or reset odometers.” Scherber v. Online Auctions, LLC, No. 3:13-cv-530, 2014 WL 3908114, at

*2 (N.D. Ohio July 3, 2014) (quoting 49 U.S.C. § 32701(b)). In addition to prohibiting odometer

and mileage tampering, the OA lists requirements for altering or repairing an odometer and

authorizes the Secretary of Transportation to prescribe regulations for vehicle mileage disclosures

on transfer of vehicle ownership. Id. (citing 49 U.S.C. § 32703-5; 49 C.F.R. § 580.5). Accordingly,

the OA does not authorize a general private right of action; Plaintiff must allege an “intent to

defraud regarding the vehicle’s mileage or odometer.” Id. at *3-4 (citing Paul’s Auto World v.

Boyd, 881 F.2d 1077 (6th Cir. 1989) (requiring, in case under MVICSA, “specific intent to deceive

a purchaser of the mileage on a car”)).

The Amended Complaint does not allege that Defendants intended to misrepresent or

otherwise defraud Plaintiff concerning the Subject Vehicle’s mileage or odometer. (See Doc. No.

9 at 32-33). Plaintiff’s allegation that an internet report suggested the odometer was altered on

“[a]t least one vehicle [sold by Defendants],” (Doc. No. 9 at 27), does not contain sufficient factual

matter to allow an inference that Defendants intended to defraud Plaintiff regarding the odometer

1 Plaintiff refers to the Odometer Act by its former name, the Motor Vehicle Information and Cost

Savings Act (“MVICSA”). (Doc. No. 9).

of the Subject Vehicle. Because Plaintiff fails to allege “more than a sheer possibility that a

defendant has acted unlawfully,” Iqbal, 556 U.S. at 678, the OA claim must be dismissed for

failure to state a claim.

B. MMWA and Tennessee Warranty Claims

The Magnuson-Moss Warranty Act (“MMWA”) creates a federal right of action for

breaches of warranty arising from state substantive law. Kuns v. Ford Motor Co., 543 F. App’x

572, 575 (6th Cir. 2013); Mayernik v. CertainTeed LLC, 476 F. Supp. 3d 625, 631 (S.D. Ohio

2020); see also Bearden v. Honeywell Int'l Inc., 720 F. Supp. 2d 932, 938 (M.D. Tenn. 2010)

(explaining that the MMWA “does not provide an independent cause of action for state law claims,

only additional damages for breaches of warranty under state law”). “Thus, to recover under the

[MMWA] . . . [P]laintiff[ ] must assert a viable state-law warranty claim.” Bearden, 720 F. Supp.

2d at 938; see also Kuns, 543 F. App’x at 575 (explaining that the elements of an MMWA breach

of warranty cause of action are coextensive with those required by state law). As explained below,

Plaintiff has stated colorable state-law claims for violation of (1) an express warranty, Tenn. Code

Ann. § 47-2-313, (2) an implied warranty of fitness for a particular purpose, Tenn. Code Ann. §

47-2-315, and (3) an implied warranty of merchantability, Tenn. Code Ann. § 47-2-314.

Accordingly, Plaintiff’s co-extensive MMWA breach of warranty claim may proceed for factual

development. Bearden, 720 F. Supp. 2d at 938.

1. Express Warranty

“Any affirmation of fact or promise made by the seller to the buyer which relates to the

goods and becomes part of the basis of the bargain creates an express warranty that the goods shall

conform to the affirmation or promise.” Tenn. Code Ann. § 47-2-313(1)(a). In addition, under

Tenn. Code Ann. § 47-2-313(b), “[a]ny description of the goods which is made a part of the basis

of the bargain creates a warranty that the goods shall conform to the description.” Tenn. Code Ann.

§ 47-2-313(b). “No magic words are necessary to create an express warranty. Rather, express

warranties are ‘dependent on the party’s intention.’” Barrette Outdoor Living, Inc. v. Vi-Chem

Corp., No. 2:13-cv-289, 2015 WL 12547568, at *6 (E.D. Tenn. Aug. 31, 2015) (quoting Coffey v.

Dowley Mfg., Inc., 187 F. Supp. 2d 958, 970 (M.D. Tenn. 2002)). To plead a breach of subsection

313(1)(a), Plaintiff must allege that (1) Defendants made an affirmation of fact intending to induce

Plaintiff to purchase the Subject Vehicle; (2) Plaintiff was, in fact, induced by Defendants’ acts;

and (3) the affirmation of fact was false regardless of Defendant’s knowledge of the falsity or

intention to create a warranty. Jones v. WFM-Wo, Inc., 265 F. Supp. 3d 775, 781 (M.D. Tenn.

2017) (quoting Smith v. TimberPro Inc., 2017 WL 943317, at *3 (Tenn. Ct. App. Mar. 9, 2017)).

Under subsection 313(b), Plaintiff must allege that “[Defendants’] incorrect description of the

[Subject Vehicle] induce[d] [Plaintiff] to purchase [the Subject Vehicle].” Jones, 265 F. Supp.3d

at 781 (citing H.B.H. Enterprises, Inc. v. Cates, 1997 WL 76804, at *2 (Tenn. Ct. App. Feb. 25,

1997)).

The Amended Complaint alleges that Defendants intentionally made misrepresentations

that induced Plaintiff’s purchase of a damaged vehicle that did not conform to Defendants’

description. Thus, at this preliminary stage, Plaintiff has stated a colorable claim for breach of

express warranty under Tennessee law. See, e.g., Jones, 265 F. Supp. 3d at 781-82 (collecting

cases and noting colorable breach of express warranty claims based on misrepresentations,

including cases involving a pizza with nuts that “did not conform to the description,” products sold

as “natural” that contained artificial ingredients, a product sold as “100% pure” that contained a

second ingredient, and a vehicle falsely described as new).

2. Implied Warranty of Fitness for a Particular Purpose

“Where the seller at the time of contracting has reason to know any particular purpose for

which the goods are required and that the buyer is relying on the seller’s skill or judgment to select

or furnish suitable goods, there is . . . an implied warranty that the goods shall be fit for such

purpose.” Tenn. Code Ann. § 47-2-315. To plead a breach of this implied warranty, Plaintiff must

allege that (1) Defendants had reason to know Plaintiff’s purpose; (2) Defendants knew Plaintiff

was relying on Defendants’ skill or judgment to furnish a vehicle; and (3) the Subject Vehicle was

not “fit for the particular purpose for which it was bought.” Scott v. Abernathy Motorcycle Sales,

Inc., No. 118CV01077STAJAY, 2021 WL 1030230, at *7 (W.D. Tenn. Mar. 17, 2021) (quoting

Allen v. Am. Med. Sys., Inc., No. 24, 1989 WL 105626, at *11 (Tenn. Ct. App. Sept. 15, 1989));

Barrette, 2015 WL 12547568, at *9 (quoting AutoZone, Inc. v. Glidden Co., 737 F. Supp. 2d 936,

949 (W.D. Tenn. 2010)); Dan Stern Homes, Inc. v. Designer Floors & Homes, Inc., No.

M200800065COAR3CV, 2009 WL 1910955, at *3 (Tenn. Ct. App. June 30, 2009).

The Amended Complaint alleges that Defendants knew Plaintiff’s specific purpose when

purchasing the vehicle (i.e., driving in Tennessee); Plaintiff relied on Defendants’ judgment in

selecting and purchasing a mechanically sound vehicle suitable for this purpose; Defendants

misrepresented the quality and condition of the Subject Vehicle knowing that Plaintiff was relying

on those misrepresentations; Plaintiff purchased the Subject Vehicle in reliance on those

misrepresentations; and the Subject Vehicle was not fit for the purpose it was bought. Accordingly,

Plaintiff has stated a colorable claim for breach of the implied warranty of fitness for a particular

purpose.

3. Implied Warranty of Merchantability

“[A] warranty that the goods shall be merchantable is implied in a contract for their sale if

the seller is a merchant with respect to goods of that kind.” Tenn. Code Ann. § 47-2-314(1). Goods

are “merchantable” when, among other things, they “are fit for the ordinary purposes for which

such goods are used.” Id. § 47-2-314(2)(c). Thus, a claim for breach of the implied warranty of

merchantability arises if a routine seller of goods fails to sell particular goods that are fit for the

ordinary purposes for which such goods are generally used. Scott, 2021 WL 1030230, at *10;

AutoZone, Inc., 737 F. Supp. 2d at 948-49. To state a plausible claim for breach of this implied

warranty, Plaintiff need only allege that “in a general sense and as understood by a layman, that

‘something was wrong’ with the product” – in other words, “that the goods did not measure up to

the requirements of the warranty at the time they were delivered.” AutoZone, Inc., 737 F. Supp. 2d

at 948-49 (quoting Browder v. Pettigrew, 541 S.W.2d 402, 406 (Tenn. 1976); Dan Stern Homes,

2009 WL 1910955, at *4).

Drawing all reasonable inferences in Plaintiff’s favor, the Amended Complaint plausibly

alleges that the Subject Vehicle was not merchantable at the time of delivery. Specifically, the

Amended Complaint alleges that Defendants are regular purveyors of used automobiles;

Defendants knowingly sold Plaintiff a flood-damaged, “salvage” vehicle with defective

transmission; and the vehicle was not fit for the ordinary purpose for which such vehicles are used

(i.e., driving). Plaintiff has, therefore, stated a colorable claim for breach of the implied warranty

of merchantability. See Patton v. McHone, 822 S.W.2d 608, 617 (Tenn. Ct. App. 1991) (“Whether

a particular used car is merchantable—that is fit for the ordinary purpose for which cars are used—

depends on the age, mileage, condition, and price of the car.”).

C. Tennessee Consumer Protection Act

The Tennessee Consumer Protection Act (“TCPA”) outlaws “[u]nfair or deceptive acts or

practices affecting the conduct of any trade or commerce.” Tenn. Code Ann. § 47-18-104(a). The

TCPA creates a cause of action for damages available to “[a]ny person who suffers an ascertainable

loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of

value wherever situated, as a result of the use or employment by another person of an unfair or

deceptive act or practice described in § 47-18-104(b).” Tenn. Code Ann. § 47-18-109(a)(1).

Section 47-18-104(b) includes a long list of acts encompassed by the definition of “unfair or

deceptive act or practice.” Thus, in order to plead a claim under the TCPA, Plaintiff must plausibly

allege that: (1) Defendants engaged in an unfair or deceptive act or practice declared unlawful by

the TCPA, and (2) Defendants’ conduct caused an ascertainable loss of money or property. Young

v. Black & Decker (U.S.), Inc., No. 3:20-cv-519, 2021 WL 1292528, at *1 (M.D. Tenn. Apr. 7,

2021) (quoting Tucker v. Sierra Builders, 180 S.W.3d 109, 115 (Tenn. Ct. App. 2005)); Westgate

Resorts, Ltd. v. Wesley Fin. Grp., LLC, No. 3:20-cv-00599, 2021 WL 794878, at *4 (M.D. Tenn.

Mar. 2, 2021) (quoting Tucker, 180 S.W.3d at 115).

Moreover, the TCPA “is to be liberally construed to protect consumers and others from

those who engage in deceptive acts or practices.” Amirazodi v. Capella Educ. Co., No. 3:21-cv-

00074, 2021 WL 1946643, at *3 (M.D. Tenn. May 14, 2021) (quoting Young, 2021 WL 1292528,

at *1); Westgate Resorts, 2021 WL 794878, at *4 (quoting Morris v. Mack’s Used Cars, 824

S.W.2d 538, 540 (Tenn. 1992)); McCollum v. Peters, No. E201402082COAR3CV, 2015 WL

4485557, at *6-7 (Tenn. Ct. App. July 23, 2015) (citing Signature Designs Grp., LLC v. Ramko,

No. M2011-01086-COA-R3-CV, 2012 WL 2519037, at *14 (Tenn. Ct. App. 2012)). Thus, the

Tennessee courts broadly define a “deceptive” act or practice as any “one that causes or tends to

cause a consumer to believe what is false or that misleads or tends to mislead a consumer as a

matter of fact.” Amirazodi, 2021 WL 1946643, at *3 (quoting Audio Visual Artistry v. Tanzer, 403

S.W.3d 789, 809-10 (Tenn. Ct. App. 2012)). A TCPA plaintiff is not required to allege fraudulent

or willful misrepresentations, Borla Performance Indus., Inc. v. Univ. Tool & Eng’g, Inc., No.

E201400192COAR3CV, 2015 WL 3381293, at *13 (Tenn. Ct. App. May 26, 2015) (citing Smith

v. Scott Lewis Chevrolet, Inc., 843 S.W.2d 9, 12-13 (Tenn. Ct. App. 1992)), or a breach of contract.

Mini Sys. Inc. v. Alexander, No. W201901871COAR3CV, 2020 WL 6892010, at *3 (Tenn. Ct.

App. Nov. 24, 2020) (quoting Hall v. Hamblen, M2002-00562-COA-R3-CV, 2004 WL 1838180,

at *4 (Tenn. Ct. App. Aug. 16, 2004)). And the TCPA expressly disclaims any disclaimer or

limitation of liability “by contract, agreement, or otherwise.” Morris, 824 S.W.3d at 539 (quoting

Tenn. Code Ann. § 47-18-113).

The Amended Complaint does not clearly reference specific “unfair or deceptive” acts

enumerated in Section 104(b). (See Doc. No. 9). However, this is not fatal to Plaintiff’s TCPA

claim at this juncture. See, e.g., Paty v. Herb Adcox Chevrolet Co., 756 S.W.2d 697, 699 (Tenn.

Ct. App. 1988) (concluding, despite plaintiff’s failure to invoke “any specific section” of the

TCPA, that the complaint stated a claim for deceptive acts by alleging that the seller failed to

disclose an automobile “had been involved in an accident which impaired its market value $1,500

to $2,000”). Drawing all inferences in favor of Plaintiff, the allegations of the Amended Complaint

implicate multiple provisions of Section 104(b). Among other things, Section 47-18-104(b) deems

unlawful:

(7) Representing that goods . . . are of a particular standard, quality

or grade, . . . if they are of another;

(19) Representing that a guarantee or warranty confers or involves

rights or remedies which it does not have or involve.

(21) Using statements or illustrations in any advertisement which

create a false impression of the . . . quality . . . value . . . usability or

origin of the goods . . . offered, or which may otherwise misrepresent

the goods . . . in such a manner that later, on disclosure of the true

facts, there is a likelihood that the buyer may be switched from the

advertised goods . . . to other goods or services.

(23) Misrepresenting [in any advertisement] the former . . . quality

. . . of any goods sold.

Id. §§ 47-18-104(b)(7), (19), (21), (23).

The Amended Complaint plausibly alleges that Defendants intentionally misrepresented

that the Subject Vehicle was of a particular quality despite knowing otherwise, and thereby created

a false impression of the quality, value, and usability of the Subject Vehicle to such an extent that

Plaintiff would have purchased a different vehicle had he known the true facts. The Amended

Complaint also alleges that Defendants misrepresented that the Subject Vehicle had not been

severely damaged under prior ownership. Furthermore, the Amended Complaint alleges that

Defendants misrepresented that the Subject Vehicle was sold with a thirty-day warranty giving

Plaintiff the right to repair of “engine and transmission” problems. Finally, Plaintiff alleges that

Defendants’ unfair or deceptive acts caused an ascertainable loss of $9,000. For purposes of initial

review, this is sufficient to state colorable claims for one or more violations of the TCPA. These

claims may proceed for factual development and – if appropriate – further clarification by

Plaintiff.2

2 The Court’s finding that Plaintiff states a colorable TCPA claim is not a conclusion regarding the wisdom

or merits of pursuing that claim under any referenced provision of Section 104(b) or a suggestion that

Plaintiff may not rely on a provision of Section 104(b) not discussed herein. Plaintiff remains the “master

D. Fraud Claims

Finally, Plaintiff brings overlapping causes of action that the Court liberally construes to

assert claims of fraudulent inducement, fraud, fraudulent misrepresentation, negligent

misrepresentation, and fraudulent concealment. (See Doc. No. 9). Although these claims are

governed by state law, Plaintiff’s pleading must satisfy the “particularity” requirement of Federal

Rule of Civil Procedure 9(b). Harding v. BMW of N. Am., LLC, No. 3:20-cv-00061, 2020 WL

5039439, at *2 (M.D. Tenn. Aug. 26, 2020) (quoting Smith v. Bank of Am. Corp., 485 F. App’x

749, 751 (6th Cir. 2012)); Bridgestone Ams., Inc. v. Int’l Bus. Mach. Corp., 172 F. Supp. 3d 1007,

1019 (M.D. Tenn. 2016). Under Rule 9(b), a plaintiff must “‘allege the time, place, and content of

the alleged misrepresentation . . . ; the fraudulent intent of the defendants; and the injury resulting

from the fraud.’” BiotronX, LLC v. Tech One Biomedical, LLC, 465 F. Supp. 3d 797, 809 (M.D.

Tenn. 2020) (quoting U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496, 504 (6th Cir.

2008)); United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d 493, 504 (6th Cir. 2008).

However, as long as a plaintiff pleads “sufficient detail – in terms of time, place and content, the

nature of a defendant’s fraudulent scheme, and the injury resulting from the fraud – to allow the

defendant to prepare a responsive pleading, the requirements of Rule 9(b) will generally be met.”

BiotronX, 465 F. Supp. 3d at 809 (citations omitted).

The Court finds that Plaintiff has adequately alleged the time, place, and content of a

fraudulent scheme to market and sell defective used automobiles by describing interactions with

Defendants and including specific examples of alleged misrepresentations. Moreover, Plaintiff has

described Defendants’ allegedly deceptive sales tactics and post-sale actions intended to prevent

Plaintiff’s discovery of the Subject Vehicle’s true condition or delay those facts from being known

of his complaint,” Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 407 (6th Cir. 2007), and thus

he may, subject to all applicable rules, clarify the precise contours of this claim.

until after expiration of the warranty period. Finally, Plaintiff has alleged specific injury from the

fraudulent scheme. Because the Amended Complaint includes sufficient detail “to allow [ ]

[D]efendant[s] to prepare a responsive pleading,” BiotronX, 465 F. Supp. 3d at 809, Plaintiff has

satisfied Rule 9(b).

1. Intentional Misrepresentation

In Tennessee, fraud, intentional misrepresentation, and fraudulent misrepresentation

comprise the same tort, which is typically referred to as intentional misrepresentation. Amirazodi,

2021 WL 1946643, at *4 (citing Thompson v. Bank of Am., N.A., 773 F.3d 741, 751 (6th Cir.

2014); Hodge v. Craig, 382 S.W.3d 325, 342-43 (Tenn. 2012)); Best Choice Roofing & Home

Improvement, Inc. v. Best Choice Roofing Savannah, LLC, 446 F. Supp. 3d 258, 275 (M.D. Tenn.

2020). To state a claim for intentional misrepresentation, Plaintiff must plausibly allege: (1)

Defendants made an intentional misrepresentation of a material fact; (2) Defendants made the

representation “knowingly” without belief in its truth, or “recklessly” without regard to whether it

was true or false; (3) Plaintiff justifiably relied on the misrepresentation and suffered damages;

and (4) the misrepresentation relates to an existing or past fact. Amirazodi, 2021 WL 1946643, at

*4 (citing BiotronX, 465 F. Supp. 3d at 809; Power & Tel. Supply Co., Inc. v. SunTrust Banks,

Inc., 447 F.3d 923, 931 (6th Cir. 2006)); Wischermann Partners, Inc. v. Nashville Hosp. Cap. LLC,

No. 3:17-cv-00849, 2021 WL 809683, at *8 (M.D. Tenn. Mar. 3, 2021). A future promise can

support a claim for intentional misrepresentation – known as “promissory fraud” – if it is made

without “the present intention to carry out the promise.’” BiotronX, 465 F. Supp. 3d at 809-10

(quoting Power & Tel. Supply, 447 F.3d at 931).

The Amended Complaint alleges that Defendants made misrepresentations to Plaintiff

encompassing both existing facts (e.g., the history and condition of the Subject Vehicle) and

promises to engage in future action (e.g., the thirty-day warranty). Plaintiff alleges that these

misrepresentations and promises were material; false; known by Defendants to be untrue; made

by Defendants as part of a scheme to sell damaged vehicles to unsuspecting purchasers; and made

by Defendants without the intention to deliver what was represented or promised. The Amended

Complaint also alleges that Plaintiff did not know Defendants’ misrepresentations were false;

relied on them in deciding to purchase the Subject Vehicle; and was quantifiably harmed by

Defendants’ actions. Plaintiff has therefore stated a colorable claim for intentional

misrepresentation.

2. Fraudulent Inducement

The tort of fraudulent inducement to enter into a contract is “closely related” to intentional

misrepresentation. Loew v. Gulf Coast Dev., Inc., No. 01-A-019010CH00374, 1991 WL 220576,

at *7 (Tenn. Ct. App. Nov. 1, 1991). The cause of action arises “when a person’s willingness to

enter into a contract is caused by another person’s fraudulent misrepresentations with regard to a

matter material to the contract.” Id. To state a fraudulent inducement claim, Plaintiff must plausibly

allege that Defendants (1) made a false statement concerning a fact material to the Subject Vehicle

transaction; (2) with knowledge of the statement’s falsity or utter disregard for its truth; (3) with

the intent of inducing Plaintiff’s reliance on the statement; (4) that Plaintiff reasonably relied on

the statement, and (5) that this reliance resulted in an injury. Thompson, 773 F.3d at 752 (citing

Baugh v. Novak, 340 S.W.3d 372, 388 (Tenn. 2011)). As in an intentional misrepresentation action,

fraudulent inducement claims may involve either false statements of past or present facts or false

promises made without the present intent to perform. Loew, 1991 WL 220576, at *7 (citing Fowler,

575 S.W.2d at 499).

Plaintiff has also stated a colorable fraudulent inducement claim. The Amended Complaint

plausibly alleges that Defendants knowingly made false statements to Plaintiff concerning material

aspects of the Subject Vehicle transaction (e.g., vehicle history, condition, warranty); Defendants

intended to induce Plaintiff to engage in the transaction in reliance on those misrepresentations;

and Plaintiff executed the purchase agreement for the Subject Vehicle to his detriment in reliance

on those false, material statements. Accordingly, this claim may proceed for factual development.

3. Negligent Misrepresentation

The tort of negligent misrepresentation concerns “business or professional persons who

negligently supply false information for the guidance of others in their business transactions.”

Hodge, 382 S.W.2d at 345 (quoting John Martin Co. v. Morse/Diesel, Inc., 819 S.W.2d 428, 433

(Tenn. 1991)). To state a claim, Plaintiff must plausibly allege: (1) Defendants were acting in the

course of business, profession, or employment, or in a transaction in which they had a pecuniary

interest; (2) Defendants supplied faulty information meant to guide others in their business

transactions; (3) Defendants failed to exercise reasonable care in obtaining or communicating the

information; and (4) Plaintiff justifiably relied upon the information. Thompson, 773 F.3d at 751-

52 (quoting Robinson v. Omer, 952 S.W.2d 423, 427 (Tenn. 1997)); Hodge, 382 S.W.2d at 344.

The Amended Complaint alleges that Defendants, acting in the course of their ongoing

used car sales business, deliberately supplied Plaintiff (and others) with faulty information meant

to guide them to engage in business transactions (i.e., used car purchases). Plaintiff alleges that

Defendants, at a minimum, did not exercise reasonable care when communicating faulty

information to Plaintiff. Finally, the Amended Complaint alleges that Plaintiff justifiably relied on

Defendants’ faulty information and consummated Defendants’ recommended consumer

transaction to his detriment. No more is required at this stage; Plaintiff’s colorable negligent

misrepresentation claim may proceed for factual development.

4. Fraudulent Concealment

In Tennessee, the “tort of fraudulent concealment is committed when a party who has a

duty to disclose a known fact or condition fails to do so, and another party reasonably relies upon

the resulting misrepresentation, thereby suffering injury.” EPAC Techs., Inc. v. HarperCollins

Christian Publ’g, Inc., 810 F. App’x 389, 395 (6th Cir. 2020) (quoting Shah v. Racetrac Petroleum

Co., 338 F.3d 557, 571 (6th Cir. 2003)); Chrisman v. Hill Home Dev., Inc., 978 S.W.2d 535, 538-

39 (Tenn. 1998)). There are two lines of Tennessee cases regarding a party’s duty to disclose

information. Bearden, 720 F. Supp. 2d at 939. The first line arose from a Tennessee Supreme Court

holding that the duty to disclose arises only in three “distinct” circumstances: (1) “where there is

a previous definite fiduciary relation between the parties,” (2) “where it appears one or each of the

parties to the contract expressly reposes a trust and confidence in the other,” and (3) “where the

contract or transaction is intrinsically fiduciary and calls for perfect good faith.” Id. (citing

Domestic Sewing Mach. Co. v. Jackson, 83 Tenn. 418, 425 (1885)). A second line of cases,

originating with Simmons v. Evans, 185 Tenn. 282, 206 S.W.2d 295 (1947), “prescribes a broader

duty to disclose.” Bearden, 720 F. Supp. 2d at 939. Thereunder, “contracting parties have a duty

to disclose material facts affecting the essence of a contract’s subject matter.” Id. (quoting Odom

v. Oliver, 310 S.W.3d 344, 349-50 (Tenn. Ct. App. 2009)); see also Garrett v. Mazda Motors of

Am., 844 S.W.2d 178, 181 (Tenn. Ct. App. 1992) (“[A] seller who induces a purchaser to buy an

article of property by . . . concealing a material fact is liable for the damages that are the natural

and proximate result of the fraud.”).

In 2003, the Court of Appeals for the Sixth Circuit adopted the Domestic Sewing

formulation in a dispute between parties to a gas station franchise. Shah, 338 F.3d at 571. In

declining to apply Simmons, the court noted that “these cases have generally been limited to real

estate purchases and used car sales.” Id. at 572 n. 9 (citations omitted). As Judge Aleta A. Trauger

of this Court has explained, since that time the Tennessee courts have reaffirmed the Simmons

formulation, expanded on it, and applied it in a greater number of contexts. Bearden, 720 F. Supp.

2d at 940-41 (collecting cases). Judge Trauger concluded that: (a) the Simmons line of cases

“clearly already applies to car sales,” and (b) “[g]iven the[ ] developments in Tennessee law since

the [Shah] decision [ ], and the fact that Shah was not a dispute between a consumer and a seller,

. . . the Simmons line of cases applies to consumer transactions” generally. Id.

Because this case involves a used car sale, the Court concludes that threshold dismissal

under the Domestic Sewing line of cases is not appropriate. See id. (“It is possible that . . . the

defendant will be able to show that it nevertheless had no duty to disclose information . . . But the

court will not dismiss the plaintiffs’ fraudulent concealment claim simply because the parties were

not in a fiduciary relationship.”). Under Simmons and its progeny, in the absence of a special

relationship, a seller must disclose material information about its product’s condition in the

following circumstances:

(1) A seller must disclose enough information to prevent its

statements from being misleading;

(2) A seller must give accurate answers to a buyer’s questions

concerning a product’s condition;

(3) A seller must disclose any condition or defect that it knows or

should know about that renders the product defective or

dangerous; and

(4) A seller must disclose basic, material information if it knows

that the buyer is about to act without knowledge of the

information and is without reasonable means to acquire the

information itself.

Patton, 822 S.W.2d at 615-16 (citing Simmons, 185 Tenn. 282, 285-86, 206 S.W.2d 295, 296

(1947); RESTATEMENT (SECOND) OF TORTS § 551(2)(e) (1976)).3

The Amended Complaint alleges that Defendants had one or more duties to disclose

material information concerning the Subject Vehicle’s history, condition, quality, and warranty;

Defendants were required to disclose such information to prevent other statements about the

Subject Vehicle from being misleading; Defendants knew or should have known that the Subject

Vehicle was defective and dangerous but intentionally failed to disclose that information (directly

or in response to Plaintiff’s questions); and Defendants possessed, and failed to disclose, material

information about the Subject Vehicle that Plaintiff was otherwise unable to acquire (e.g., a

“salvage” title indicating flood damage). Accordingly, Plaintiff plausibly alleges that Defendants

breached a duty to disclose material facts affecting the essence of Plaintiff’s contract to purchase

the Subject Vehicle. See, e.g., Garrett, 844 S.W.2d at 181 (noting that “[a] failure to disclose

3 In addition to these common law duties to disclose, the Amended Complaint asserts that Defendants had

other duties to disclose specific information pursuant to Tennessee law, see Tenn. Code Ann. § 55-3-209(9)

(“A seller of a passenger motor vehicle that becomes a flood vehicle shall, at or prior to the time of transfer

of ownership, give the buyer a written notice that the vehicle is a flood vehicle”), and federal regulations,

see C.F.R. § 455.2 (Federal Trade Commission rules concerning warranty information that must be

displayed on “Buyer’s Guide”). The Court need not reach these contentions on initial review.

material facts when one is under a duty to make disclosure amounts to fraud,” and concluding that

an automobile dealer who described a car prior to sale as lightly used and “babied” had a duty to

disclose that the car had been stolen and driven 10,000 miles); Patton, 822 S.W.2d at 615 n. 11

(noting that the duty to disclose was implicated by an automobile dealer’s statement that that a car

was “new” without also telling the customer that the car had also been in an accident and repaired)

(citing Paty, 756 S.W.2d at 699-700).

IV. CONCLUSION

For these reasons, the Court concludes that Plaintiff has stated the following colorable

claims: (1) Magnuson-Moss Warranty Act, (2) breach of express warranty; (3) breach of implied

warranty of fitness for a particular purpose; (4) breach of implied warranty of merchantability; (5)

violation of TCPA § 47-18-104(b); (6) intentional misrepresentation; (7) fraudulent inducement;

(8) negligent misrepresentation; and (9) fraudulent concealment. Plaintiff's Odometer Act claim

will be dismissed. This case will be referred to the Magistrate Judge for further proceedings.

It is so ORDERED.

ble

UNITED STATES DISTRICT JUDGE

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