The opinion
STATE OF MAINE BUSINESS AND CONSUMER COURT
Cumberland, ss. Location: Portland
DCCI, LLC
Plaintiff,
v.
Docket No.: BCD-CV-13-65 t1'
KENDRICK PARKER
Defendant
DECISION AND JUDGMENT
This case came before the court for a jury-waived trial on August 27 and 28, 2015, at
which both parties presented evidence in the form of sworn testimony and exhibits, after which
the parties filed proposed findings of fact and conclusions of law. Based on the entire record,
the court adopts the following findings and conclusions and renders judgment as set forth
below. 1
1. Plaintiff DCCI, LLC ("DCCI") is a limited liability company based in Oregon. Robert
F. Gonzales is the managing member of DCCI. Mr. Gonzales has a longstanding interest in
the genre of older, high-performance automobiles known as "muscle cars."
2. Defendant Kendrick Parker ("Parker") is a resident of Fairfield, Maine who, like Mr.
Gonzales, has been a muscle car enthusiast for many years. He has bought and sold many
vehicles, and has worked on restoring many of them in the garage at his residence.
1 Trial of the case was delayed twice at the request of the parties, due to discovery and expert witness issues. As
the numerous case management orders issued indicate, trial was set for specific dates in February 2015, and then,
at the parties' request, trial was postponed to specific dates in April 2015. In April, counsel for the parties asked
again that the trial be postponed, and the court agreed, setting trial for August 2015. At the trial, both counsel did
a capable, efficient and effective job of presenting the evidence.
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3. In 2006, he purchased a rare and highly sought-after muscle car model, a 1968
Plymouth GTX with a Hemi 426 engine and a 4-speed transmission ("the GTX"), one of just
217 such vehicles sold in the United States. The GTX purchased by Mr. Parker came off the
assembly line on April 24, 1968. He bought it from a private seller and paid $75,000 for it. See
Trial Exhibit (hereinafter "Tr. Ex.") 13.
4. Muscle cars from the 1960's and 1970's are extensively traded and restored by and
on behalf of collectors and enthusiasts such as Messrs. Gonzales and Parker. Certain
characteristics are especially valued among muscle car enthusiasts. Significant value is attached
to a muscle car that has "numbers matching" parts and components, meaning the original parts
and components installed when the car was assembled at the factory, as shown by coded
numbers on parts and components that match the coding on the vehicle itself Parts and
components can also be "date code correct," meaning that, although the parts and components
are not original to the car, they were manufactured within three to four months prior to the
date on which the vehicle was assembled at the factory and thus could have been installed on
the vehicle at the time ofmanufacture.
5. Mr. Parker's plan for the GTX was to restore it by vanous means, including
acquiring date-code correct parts and doing much of the work himself in his home garage.
Soon after acquiring the vehicle, Mr. Parker noted low oil pressure, so he replaced the oil pump,
but the problem continued, so he decided the engine needed a rebuild.
6. The engine block was not original to the vehicle; instead, for reasons unknown, the
original engine block had to be replaced during the warranty period, so the engine block in the
GTX when Mr. Parker acquired it was a "warranty block" built in 1968, a few months after the
GTX itselfwas built.
7. Between 2006 and 2008, Mr. Parker paid Steven Benner's engme rebuilding
business to rebuild the engine in the GTX. Mr. Benner has extensive experience and expertise
in engine rebuilds for muscle cars, including Chrysler Hemi products. The rebuild took about
two years because Mr. Parker could afford only to pay in stages, so the work was done in
stages.
8. In the course of the rebuild, it emerged that the cylinder heads were mismatched so
Mr. Parker eventually purchased cylinder heads that matched the engine. The seller of the
heads told him that the heads would be "date-code correct" for a GTX built in April 1968.
Although this proved incorrect, because the heads dated to March 1969, not at all date-code
correct for a vehicle built the year before, Mr. Parker believed that the heads he had acquired to
be installed by Mr. Benner were indeed date-code correct.
9. During the engine rebuild, Mr. Benner also discovered a hole in the engine block
that had been repaired with a patch weld. This "window" in the engine was likely caused by a
rod connecting one of the pistons to the crankshaft detaching with sufficient centrifugal force
to penetrate the engine block. After inspecting the window and the weld, Mr. Benner advised
Mr. Parker that the window had been repaired competently, and that the repaired window
would not affect the integrity of the engine block or the operation of the engine.
10. In March 2007, Mr. Parker had the transmission in the GTX rebuilt by Robert
Eberle, who at the time operated a transmission repair facility, at a cost of about $1,100. Mr.
Eberle had experience rebuilding transmissions in Hemi vehicles and other muscle cars. While
working on Mr. Parker's GTX, Mr. Eberle noted that the transmission in the vehicle was date-
coded to indicate it had been manufactured in November 1967. He also noted that the
transmission had no Vehicle Identification Number (VIN), indicating it was a warranty
replacement transmission, also known as a "Chrysler exchange" transmission, not the originally
s
installed transmission. Both Parker and his friend, Robert Thibodeau, who helped Mr. Parker
work on the car at various times made the same observations.
11. In early 2011, Mr. Parker rebuilt the dashboard in the GTX. The vehicle had
come with a tachometer when Mr. Parker bought it, and the internal components of the
tachometer were part of the rebuild.
12. Over the years he owned the GTX, Mr. Parker purchased and restored other
components, including the carburetors, which he purchased on the understanding that they
were date code correct, and which he had restored. He also repainted the car so as to replicate
the original paint job, as indicated on the "fender tag" for the vehicle.
IS. During the period 2009-11, Mr. Parker drove the GTX both recreationally and
in some local drag races, putting a total of about 500 miles on the vehicle over the time he
owned it.
14. In 20 11 he decided to sell the GTX to raise funds for the purchase of a camp. He
advertised the vehicle on various Mopar 2 websites and on EBay. He listed the vehicle for more
than he had paid for it, but over time reduced the price.
15. His advertisement read:
1968 Plymouth GTX Hemi, 57k Original Miles, Dark Green/Black, 57,000 Miles
1968 Plymouth Hemi GTX. Rare 1 of2S4 4 speed. 57,000 original miles. GGI Racing
Green with White stripes this car was ordered new from Texas to go racing, Non
console, 4 speed with Buddy seat, Manual drums, Manual steering, Factory Tach,
Black interior, Original Fender tag, No build sheet, Previous ownership title from MI.
Galen has info on car, I have been working on this GTX for 2 years Bringing it to this
Level. Freshly Built July 68 Hemi Warranty, S months after build of car,
Professionally Built and Dynoe'd at 500+ HP (solid roller) Streetable 10:5:1 Engine.
Carbs are date coded correct and restored. Runs flawless. Intake, exhaust manifolds,
radiator, wiper motor, Heads, all dated coded. Hemi 4 speed Tranny, freshly rebuilt
and date coded, Dana rear is original to GTX with correct 3:54 gears. All sheet metal
is original panel except driver side rear quarter, Paint is fresh as it had minor dings and
2 Mopar is Chrysler's brand name for auto parts, but among car enthusiasts is taken to refer generically to
Chrysler products.
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scratches. Laser straight. Over 100 hrs of wet sanding and buffing, all trim is restored
and shines excellent. The Dark Racing Green Looks Black at dusk. I would be
interested in trading down for the right Mopar. No disappointments.
16. The advertisement is a combination of "puffery" and specific representations.
Mr. Parker believed all of the specific representations in his advertisement were correct, but
several were not, at least in the eyes of muscle car experts. For example, Mr. Parker thought
that a carburetor made in September 1967 would qualify as "date-code correct" for his April
1968 GTX, but the experts define "date-code correct" more narrowly and consider only parts
made three or four months before the vehicle to be date-code correct. Other discrepancies
discovered later were that the reference to July 68 should have been to August of that year, and
the 3:54 gear ratio was incorrect.
17. Sometime in 2011 or 2012, Mr. Parker's advertisements came to the attention of
Mr. Gonzales, who, like Mr. Parker, was a muscle car enthusiast of long standing. Mr.
Gonzales was looking for a vehicle "pretty close to showroom condition," preferably one that
was numbers matching at least to some extent. Mr. Parker's advertisement on its face did not
meet these criteria, and the asking price for the vehicle signaled that it was not top-quality-
GTX vehicles of the same vintage that have been fully restored and are worthy of showing at
national events sell for multiples more than Mr. Parker's asking price. Nonetheless, various
aspects of the advertisement, such as the references to date code correct components and the
engine running "flawlessly" led him to contact Mr. Parker.
18. Messrs. Parker and Gonzales communicated electronically for some time about
the vehicle. During those telephone and e-mail conversations, Mr. Gonzales asked, and Mr.
Parker answered, many questions about the vehicle. Mr. Parker characterized the vehicle as a
"local driver," meaning that the GTX was best suited to be driven recreationally rather than
restored to show level. Although Mr. Gonzales had been looking for a show car, he
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nevertheless decided to buy the GTX, fully aware that it was not a show car and would take
considerable additional work to be brought to anywhere near show-quality level. On or about
February 22, 2012, DCCI entered into an agreement to purchase the GTX from Mr. Parker for
$60,000.
19. The parties' agreement is memorialized in a letter drafted by Mr. Gonzales on
DCCI letterhead, signed by Mr. Gonzales on behalf of DCCI and by Mr. Parker, and reading as
follows:
To Whom It May Concern
This letter is to assure that both parties, Mr. Rick Parker and Mr. Robert F. Gonzales,
are in agreement that check number 5334 in the amount of $5,000 is a deposit on the
1968 Plymouth GTX for $60,000 that Mr. Gonzales found online and that we have
discussed over the phone. Mr. Gonzales has thirty (30) days to, either in person or by
proxy, inspect the vehicle to make sure that it is numbers matching and as represented
by Mr. Parker.
It is understood that if the above mentioned car does not completely check out, for any
reason, then the deposit is refundable. May it also be understood that Mr. Parker
agrees to the above stated terms by depositing or cashing the above mentioned check.
20. For reasons not explained, Mr. Gonzales drafted the agreement letter to suggest
that the GTX was "numbers matching" (i.e., equipped with original parts) when he clearly
knew it was not and had never been represented to be. When Mr. Parker brought the
misstatement to his attention, Mr. Gonzales refused to correct the letter and insisted that Mr.
Parker sign it as drafted, meanwhile assuring Mr. Parker that he knew the "numbers matching"
reference was wrong. Later, he asked Mr. Parker twice for a receipt that misrepresented the
purchase price, both of which requests Mr. Parker declined to honor.
21. To inspect the vehicle prior to making payment in full, Mr. Gonzales retained
James Mott, an expert in the field of muscle car restoration, to do a thorough inspection of the
vehicle. Mr. Mott initially declined the assignment because he is mainly an expert in Pontiacs
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and not an expert on Dodge Hemis or Chrysler products, but Mt. Gonzalez told him he could
not find anyone else to look at the GTX, so Mr. Mott ultimately agreed. Mott Dep. 55-56.
22. In March 2012 3 , Mr. Mott came to the Parker home in Maine, where the vehicle
was garaged, and spent four hours on the inspection. Due to winter conditions, Mr. Mott did
not ask to drive the vehicle, because taking the vehicle onto a public road, there likely to
encounter snow and ice and salt and sand, would have undone the many hours of work Mr.
Parker had invested in cleaning, painting and restoring it.
23. Although Mr. Gonzales later claimed that Mr. Mott had told him that Mr.
Parker refused to allow the car to be driven, Mr. Mott did not ask to drive the car. Mott Dep.
at 45. In fact, Mr. Mott had told Mr. Gonzalez before going to Maine that he likely would not
be driving the GTX, and Mr. Gonzalez seemed to understand that this was a "no-brainer ...
Wintertime in Maine, don't drive cars, classic cars, on the road." Mott Dep. at 72. However,
Mr. Mott did start the car and satisfied himself that it ran smoothly with no apparent issues or
problems.
24. The inspection lasted about four hours, and Mr. Mott was allowed to do
anything and everything he wanted to do during the inspection. Mott Dep. at 47.
25. After Mr. Mott completed his inspection, he reported his findings to Mr.
Gonzales in a lengthy telephone conversation, based on Mr. Matt's detailed notes, to the effect
that the GTX was basically what it was stated to be in the advertisement. He also told Mr.
Gonzales that, although he had not driven the car, the vehicle's engine had started and ran
well. Mott Dep. at 71, 82. His overall assessment, as conveyed to Mr. Gonzales that the GTX
was not worthy of being restored, but would be a good buy as a driver car-meaning a car used
only for driving for pleasure. Mott Dep. at 62.
Mr. Mott, whose telephonic deposition was admitted in lieu of his live testimony, said the inspection occurred
:J
March 7, 2012, and an itemized invoice to Mr. Gonzales, attached as a deposition exhibit, confirms that date.
Mott. Dep. at 23; Mott Dep. Ex. 14, p. 1.
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26. Mr. Gonzales had hopes of being able to restore the GTX to show car level, and
Mr. Mott's report made it clear to him that the vehicle was nowhere near that level of quality.
However, Mr. Gonzales arranged for the purchase to be completed by having DCCI pay the
balance of the purchase price and arranging for the vehicle to be shipped to Oregon. The
purchase was made in the name of DCCI, LLC, as an "investment."
27. DCCI paid Mr. Parker an additional $1,000 for wheels and tires. See Tr. Ex. 15.
28. After the vehicle arrived, Mr. Gonzales drove it several times. He contacted Mr.
Parker and told him of driving the vehicle with his daughter, with no mention of any problems.
29. However, soon after receiving the vehicle, Mr. Gonzales also began complaining
about it in e-mail messages to Mr. Parker:
• An email chain beginning April 30 and continuing into May 1 included complaints
by Mr. Gonzalez about a leak in the trunk and about problems with the transmission
second gear. Mr. Parker denied knowing about a trunk leak, because he had never
gotten the car wet, and said the transmission never popped out of second gear when
he drove it. Tr. Ex. 18
• A May 1 email message asked Mr. Parker for confirmation that the GTX had an
odometer reading of 57,000 miles, as advertised. See Tr. Ex. 17. Mr. Parker
responded the same day, pointing out he had sent a picture of the odometer when it
read 57,000, and also had sent an expl~nation about why the odometer's current
reading was 3300 miles.
• A May 23 email message from Mr. Gonzales reiterates the complaints about the
trunk leak and the transmission, and adds a complaint about a distributor cap being
painted over. Tr. Ex. 19. The message also says that "the Vehicle is on [its] way to
Sacramento to be completely taken apart to the frame." This statement was untrue.
8
• A May 24 message repeated the complaint about the distributor cap and the
odometer reading, and added complaints about several dash instruments--radio, the
tachometer, the fuel meter-and the fuel sender connector not being restored. Tr.
Ex. 40. This message also claims that Mr. Mott told Mr. Gonzales that he was not
permitted to drive the car, a point later contradicted by both Mr. Mott and Mr.
Parker. See id. To this, Mr. Parker responded by pointing out that he had sent a
receipt showing he had paid $800 to have the dash instruments restored and
denying that he had refused to allow Mr. Mott to drive the vehicle.
• A May 29 message adding complaints about the speedometer and the dash not being
as Mr. Gonzales expected, and also telling Mr. Parker that Mr. Mott had told Mr.
Gonzales that Mr. Parker would not let Mr. Mott drive the vehicle. Tr. Ex. 4-12,
41. Mr. Parker denied these assertions. See id.
• The last Gonzales to Parker email message in the record is one from July 5, 2012, in
which Mr. Gonzales claimed that "the car has now been completely disassembled"-
another untrue statement-and threatening civil action and possible criminal
prosecution. Tr. Ex. 42.
so. Mr. Parker had stopped responding to Mr. Gonzales's email messages sometime
previously.
31. There are two features ofMr. Gonzales's email messages that merit note:
• The first is that, at no point did Mr. Gonzalez ask for his money back or for Mr .
Parker to take back the vehicle. In fact, during his deposition, Mr. Gonzalez was
asked why he had not demanded his money back given concerns he was raising in
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e-mails sent around April 30 and May 1, 2012 (in the record as Trial Exhibit 18)
and he characterized the concerns as "a minor deal." Gonzalez Dep. at 153. 4
• The second noteworthy aspect of the April to July email messages is that none of
Mr. Gonzales's complaints mentions any problem with the engine or with how the
car ran, apart from the issue of the transmission popping out of second gear.
32. Mr. Gonzalez continued driving the GTX from time to time during the summer
of 2012. Late in July 2012 5, for example, while James Mott was in Oregon for a visit, Mr.
Gonzales took James Mott for a drive in the GTX. They took turns driving for a total of about
a half hour. Mott Dep. at 26. The transmission popped out of gear on occasion, but even so
Mr. Mott enjoyed driving the GTX. Mott Dep. at 27.
33. During Mr. Mott's July 2012 visit, Mr. Gonzalez voiced disappointment with
the GTX to Mr. Mott, but most ofwhat Mr. Gonzalez was complaining about were things Mr.
Mott had already noted in his inspection and had explained to Mr. Gonzalez, before Mr.
Gonzalez decided to purchase the vehicle. Mott Dep. at 30-31.
34. Sometime in the summer or fall of 2012, Mr. Gonzalez arranged for Galen
Govier, a nationally recognized expert on Mopar vehicles built between 1962 and 1980, to
perform an inspection of the GTX.
35. Mr. Govier performed his initial inspection in October 2012.
36. As a result of his October 2012 inspection, Mr. Govier initially gave the GTX a
rating of 2.6 on a 1 to 6 scale, describing the GTX as "A good amateur restoration. Is supposed
to be all date coded correct but is not. 1 of about 217 -4 Speeds built for and sold new in the
U.S.A. A #2 car with many incorrect parts." Tr. Ex. 63 at p. 005073a.
4 In a May 2014 email message to Mr. Mott, Mr. Gonzales acknowledged that "[t]he transmission regardless
[of] whether it is date code correct or not has little impact on vehicle value." Tr. Ex. 56.
5 Mr. Mott's itemized invoice to Mr. Gonzales indicates he was picking up a car during the period July 28-S 1,
2013. See Mott Dep. Ex. 14, p. 2.
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37. According to Mr. Govier's rating scale, a rating of 1 represents an excellent
vehicle--a vehicle restored to "maximum professional standards" and worthy of being shown
nationally-and a rating of 6 represents a "parts car"-a vehicle so weathered, wrecked or
stripped as to be of value only for any salvageable parts.
38. The 2.6 rating he initially assigned to the GTX placed the GTX between Fine-
"Well-restored or a combination of superior restoration and excellent original"-and Very
Good/ A verage-"a good amateur restoration, all presentable and serviceable inside and out."
39. At some point, 6 Mr. Govier downgraded the GTX to a 3.5 rating, describing it
as "an amateur restoration at most." put the GTX between Average and Fair-meaning
somewhere between "a good amateur restoration" and a "drivable vehicle needing no or only
minor work to be functional." Tr. Ex. 63 at p. 5075. Later, as a result of inspecting the GTX
again during the spring of 2013, Mr. Govier downgraded his rating a second time to 4.5,
meaning between 4-"a drivable vehicle needed no or only minor work to be functional"-and
5-a vehicle "need[ing] complete restoration of body, chassis and interior." See Tr. Ex. lOA.
He revised his characterization of the GTX to "a very poor amateur restoration at most."
40. At some point, Mr. Gonzalez directed that the GTX be entirely disassembled.
When the disassembly occurred is not clear from the record, but it apparently began before Mr.
Govier's second inspection of the vehicle in the spring of 2013 and was in progress when he
came to DCCI's facility to perform that inspection.
41. The disassembly was done by employees of DCCI in the garage that DCCI
maintains to service its company vehicles. Mr. Gonzalez did not supervise the disassembly.
The record does not indicate whether the DCCI employees who did the work had any
experience, expertise or qualifications relevant to disassembling a classic car.
6
All of Mr. Govier's three different evaluations bear the same date--October 30,2012, so it is unclear when
either of the downgrades in rating actually occurred.
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42. At some point, the transmission that had been in the GTX when it was shipped
to Oregon was removed and replaced with a transmission from another vehicle. Mr. Eberle,
Mr. Parker and Mr. Thibodeau all described the transmission as being different from the one
Mr. Govier reviewed, and Mr. Mott testified that Mr. Gonzales had given him transmission
information on the GTX different from what Mr. Govier had reported. Mott Dep. 89.
43. How, when and why the substitution in transmission occurred is unclear--one
inference that might explain the mystery is that Mr. Gonzalez had the transmission replaced in
2012 because the one that came with the car was popping out of gear, but this is only a
reasonable possibility. Mr. Gonzales neither acknowledged nor denied replacing the
transmission.
44. ·In 2013, Mr. Gonzales also decided to strip off all ofthe paint on the body ofthe
vehicle, exposing bare metal. Again, the record is silent on who did the work or what, if any
expertise, whoever did the work brought to the task. It became apparent as a result of
removing the paint that the vehicle had body rust-a fact that was not apparent to anyone until
after all the paint had been removed. None of the various emails from Mr. Gonzales to Mr.
Parker mentioned rust as a problem.
45. During his ip.spection Mr. Mott had queried Mr. Parker about whether the GTX
had any rust, and Mr. Parker said that, to his knowledge, the car had never had any rust. Mott
Dep. 33. The reason Mr. Mott had to rely on Mr. Parker's word was that the existence ofrust
underneath paint is not apparent unless the vehicle is stripped of paint. Mr. Parker had never
stripped all of the paint off the vehicle, and there is no specific evidence indicating that he knew
or should have had any more knowledge about rust on the vehicle than Mr. Mott, Mr. Govier,
Mr. Gonzales or any of the other people who examined the GTX prior to it being stripped of
paint down to the metal.
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46. During his two inspections, Mr. Govier found, among other things:
• The heads were not date code correct as advertised, because they dated to March
1969, nearly a year after the GTX had been built.
• The rear carburetor was not date code correct, because it dated to September 1967,
seven months before the vehicle was built and therefore outside the 3-4 month
window for date code correct parts and components. Mr. Govier determined that
the front carburetor was date code correct.
• The transmission had not been rebuilt and was not date code correct as advertised.
However, the transmission he evaluated was evidently not the one that was in the
car when Mr. Parker had it shipped to Mr. Gonzales in Oregon.
• The tachometer was not a factory-installed tachometer .
• The car had rust and non-original metal in more than one place as represented and
advertised. Mr. Govier made this finding during his second inspection, after the
vehicle had been stripped of paint, not during his first inspection.
47. At trial, Mr. Parker did not challenge any of these conclusions. However, the
transmission Mr. Govier examined was not the one he had sold to DCCI. Also, the heads were
sold to Mr. Parker as date code correct and he had advertised them as such on the assumption
that they were. His explanation as to the rear carburetor was similar. His mischaracterization
of parts being date code correct also stemmed from a different, possibly incorrect,
understanding of what the term "date code correct" means. Mr. Parker appears to have
thought the period that defines what is "date code correct" is longer than the 3-4 months Mr.
Govier and other experts use in applying the term.
48. Mr. Parker thought the tachometer was from the factory, and Mr. Govier's
reasons for determining it was not factory-installed, while valid, were so arcane as to cause Mr.
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Parker's mistaken assumption to seem quite reasonable. Mr. Parker also acknowledged the
discovery of rust on the GTX body but maintained that he had no knowledge of any rust as of
when he sold the vehicle.
49. In June 201.3, Mr. Gonzalez arranged to have the engme shipped to Dennis
Aldridge, a recognized expert in the field of muscle car engine rebuilding who has over 50
years of experience in rebuilding muscle car engines including experience with NASCAR
.engmes. Mr. Aldridge made a detailed examination of the engine. He determined that the
engine provided to him by Mr. Gonzalez had significant damage. He said the engine showed
signs of wear and tear not consistent with running "flawless," or having been "freshly rebuilt"
and "professionally" as advertised.
50. Mr. Govier initially valued the vehicle at about $.30,000 but he downgraded his
estimate as problems and issues emerged as a result of his own and Mr. Aldridge's inspections,
and also as a result of the discovery ofrust after the paint had been stripped down to metal. At
Mr. Gonzales's request, Mr. Govier prepared and ran an advertisement for sale of the GTX,
disassembled, on various MOPAR websites. See Tr. Ex. 24. The advertisement disclosed that
all of the known issues and problems with the vehicle. There were no takers at a $21,000
asking price, or even lower. Mr. Govier's ultimate opinion of the vehicle's value, presumably
disassembled, was that it is worth no more than $1.3,000.
51. DCCI's five·-count Amended Complaint pleaded claims of fraud (Count I),
negligent misrepresentation (Count II), breach of contract (Count III), breach of warranty of
fitness for particular purpose (Count IV), and breach of express warranty (Count V). In a
previous ruling on Mr. Parker's Motion for Summary Judgment, the court granted summary
judgment to Mr. Parker on Count II, the negligent misrepresentation count.
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52. DCCI has the burden of proof on all of its claims, meaning that it has to prove
liability, causation and damages. The Law Court has said,
"A defendant is liable for fraud if the plaintiff establishes the following elements by clear
and convincing evidence: [The defendant (1) makes a false representation (2) of a
material fact (.3) with knowledge of its falsity or in reckless disregard ofwhether it is
true or false (4) for the purpose ofinducing another to act or to refrain from acting in
reliance upon it, and (5) the plaintiff justifiably relies upon the representation as true
and acts upon it to his damage. When clear and convincing evidence is required,
plaintiffs bear the burden ofpersuasion to place in the ultimate factfinder an abiding
conviction that the truth of [their factual contentions are highly probable.
St. Francis De Sales Fed. Credit Union v. Sun Ins. Co., 2002 ME 127, ~ 26, 818 A.2d 995,
100.3 (citations and quotations omitted).
5.3. Based on this standard, DCCI has not proved fraud on the part of Mr. Parker.
His advertisement did contain outright false statements as to material facts, specifically that the
heads and carburetors were date code correct, but he believed that they were date code correct,
based on what he had been told when he purchased them. Also, as noted, his understanding of
what "date code correct" meant was broader than Mr. Govier's.
54. His other statements in the advertisement were not objectively false as to
material facts. Such as the engine running "flawlessly" and having been "freshly" built and
"professionally" rebuilt are subjective terms, and it has not been shown to a high probability
that they were false and that he knew they were false.
55. Other incorrect statements in the advertisement were immaterial. For example,
his advertisement also said that the engine dated to July 1968 when in fact it was built in
August 1968, but this was not a material error, and he believed that the July date was correct.
The advertisement stated the GTX was one of only 2.34 such vehicles, but Mr. Govier
determined it was even rarer-one of 217. Again, there is no evidence that this was anything
other than a mistake on Mr. Parker's part.
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56. As to the rust problem, nothing in the advertisement specifically promises or
warrants that the GTX had no body rust. Furthermore, the evidence did not establish that Mr.
Parker knew or had reason to know of rust. His statement to Mr. Mott that, to his knowledge,
the car did not have rust seems especially credible in light of the fact that no one who examined
the car before and after DCCI purchased it detected a rust problem until the paint was stripped
to metal, a step Mr. Parker had never taken.
57. Judgment on Count I will be granted to Defendant Kendrick Parker.
58. On the other hand, DCCI has proved that Mr. Parker is liable at least to some
extent for breach of contract, breach of express warranty and breach of implied warranty of
fitness for particular purpose. Mr. Parker's state of mind is relevant to DCCI's fraud claim, but
not to its breach of contract and warranty claims. Mr. Parker contracted with DCCI to sell the
car as advertised, with minor corrections and clarifications made during the conversations
between Mr. Parker and Mr. Gonzales. The same advertisement serves as an express warranty
as to the parts described in the advertisement being date code correct. Mr. Parker clearly knew
that DCCI was purchasing the car for the particular purpose of potential use as a classic driver
car and for restoration.
59. The fact that the GTX did not have date code correct heads and rear carburetor,
and did not have a factory tachometer, as advertised establishes all three types ofbreach.
60. The analysis now turns to what damages should be awarded. DCCI's damages
claim is for the benefit of the bargain, as permitted by the Maine Uniform Commercial Code, 11
M.R.S. § 2-714(2). DCCI has the burden on proving damages as well as liability. Proof of
damages, at least in this case, also implicates issues of causation, because DCCI is entitled only
to those damages that it establishes were the result of a breach of contract or express or implied
warranty.
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61. DCCI's position is that Mr. Parker's breaches of contract and warranty extend
to the entire vehicle. In its proposed findings, DCCI advances two alternative measures of its
benefit ofthe bargain damages. First, it argues that the car would have been worth $100,000 if
it had been as represented and in fact it was worth about $13,000, meaning that its damages are
the $87,000 difference between the two values. Alternatively, it argues that its damages are
measured by the difference between the purchase price of $60,000 and its actual value of
$13,000.
62. The problem with the first proposed measure is that, by the time DCCI bought
the car, it was clear that the vehicle was not worth $100,000. Mr. Gonzales testified to
thinking DCCI was getting a very good deal, but if that he is what he thought, it was a fantasy.
Neither the advertisement itself nor Mr. Mott's assessment supported that view-it should
have been clear that the vehicle was a driver car, not a show car.
63. The second proposed measure requires more consideration, but the court
concludes that DCCI has failed to prove the difference in value between the $60,000 purchase
price and the actual value of the vehicle at the time of sale. The primary reason for the failure
in proof is with the latter number, meaning that the evidence fails to establish to a
preponderance that the condition of the car when it was examined and valued by Mr. Govier
and examined by Mr. Aldridge was essentially the same as it was when the car was sold to
DCCI.
64. The substitution of another transmission for the one in the vehicle when it was
sold defeats any claim of DCCI relating to transmission problems. vVhatever the problems
with second gear in the original transmission were, they were not documented through Mr.
Govier because he examined a different transmission.
17
65. The unexplained installation of a different transmission also raises doubt as to
the reliability ofDCCI's evidence as to other alleged defects in the vehicle. The court has no
reason to question Mr. Govier's conclusions regarding the vehicle as a whole or Mr. Aldridge's
conclusions regarding the state of the engine-both of them are nationally recognized experts
in the field and both presented thorough and well-supported analyses. Mr. Govier's
conclusions did evolve over time, causing his rating of the GTX to decline, but this can be
explained by the fact that he was advised of more problems-with the engine and with rust, for
example-than were apparent during his first inspection in October 2012. However, both
experts were simply analyzing and reporting what they observed. Neither could speak
definitively to the condition of the GTX at the time it was sold and shipped to Mr. Gonzales, or
to what happened to the GTX between the time it was sold and the time they inspected it.
66. DCCI's position regarding the engine is that it was in essentially the same
condition when Mr. Aldridge evaluated it as when Mr. Parker sold it to DCCI. However, that
is just an assumption and there is substantial evidence calling that premise into question.
DCCI's claim regarding the engine hinges on the statement in Mr. Parker's advertisement that
the engine "runs flawlessly" and was professionally rebuilt and "dynoe'd." The latter statement
is true--Mr. Benner is a professional rebuilder of engines and did test the engine with a
dynamometer. The reference to the engine running "flawlessly" is at least in part puffery, and
can best be taken as meaning that the engine runs very well with no evident issues. This is
essentially what Mr. Mott concluded when he inspected the car and started the engine. Apart
from Mr. Aldridge's inspection five years later, there is no evidence that calls into question the
competence and quality of Mr. Benner's work.
67. Mr. Parker acknowledged drag racing the vehicle after the rebuild, and DCCI
points to the drag racing as potentially causing, or at least contributing to the problems
18
observed by Mr. Aldridge. However, substantial evidence undercuts this hypothesis as well as
the hypothesis about the rebuild. The engine ran well when Mr. Mott started the GTX on
March 7, 2012. Mr. Gonzales reported no problems when he drove the car with his daughter
soon after it arrived in Oregon. It is also quite significant that none of the many complaints
about the vehicle contained in the email messages Mr. Gonzales sent to Mr. Parker between
April and July, 2012 mentioned any problems with the engine itself or, other than the
transmission second gear, any problems with how the vehicle drove. It drove well other than
popping out of gear, when Mr. Mott and Mr. Gonzales drove it during Mr. Mott's visit to
Oregon in late July 2012.
68. Another significant factor in the court's assessment of the evidence-not just as
to the engine but as to DCCI's claims overall-is Mr. Gonzales's testimony. A major premise
ofDCCI's case-that the GTX was in the same condition when Mr. Govier and Mr. Aldridge
saw it as it was when DCCI purchased it-hinges almost entirely on Mr. Gonzales's testimony.
Except for Mr. Mott, who drove the vehicle in July 2012, Mr. Gonzales was the only witness
who testified about he did with the GTX during the first six months after it arrived in Oregon.
69. However, Mr. Gonzales' testimony was not very credible. He asked Mr. Parker
for a false bill of sale. His emails to Mr. Parker contained several outright fabrications-the
statements about the car being on its way to Sacramento and later completely disassembled
being an example. He gave a false answer under oath to an interrogatory question about his
criminal history and, when confronted at trial, gave what can only be called an implausible
explanation.' Other aspects of Mr. Gonzales testimony were persuasively contradicted by
7
The interrogatory question asked: Please state whether you have ever been indicted or pled guilty to a felony
or crime of moral turpitude." Tr. Ex. 11, p. 2. The answer given was, "I have not been indicted or pled to any
such crime." I d. In fact, Mr. Gonzales has been indicted for and convicted of a felony offense. His explanation for
the false answer was that he thought the question applied to DCCI, not to him. However, the answer to the first
interrogatory, which asked, "Please identify yourself ... ," lists his own name and job title.
19
other evidence. For example, he claimed to have learned, only after the sale, that Mr. Mott had
not driven the car during his 4-hour inspection. Mr. Gonzales's May 29, 2012 email to Mr.
Parker says, "If Jim had of informed me of this I would have told him to turn around and send
me an invoice." Tr. Ex. 4-12. But Mr. Gonzales had a lengthy telephone conversation with
Mr. Mott right after the inspection and before DCCI purchased the car. The idea that he
believed Mr. Mott would be driving the car and yet never asked about it during that
conversation is absurd. The truth, it can be inferred, is that Mr. Gonzales knew and
understood, before the inspection took place, that Mr. Mott would not be driving the car,
because it was a "no-brainer," to quote Mr. Mott, that a classic car would not and should not be
driven during the Maine winter. Another discrepancy has to do with how many miles Mr.
Gonzales actually drove the GTX after DCCI bought it. In a May 1, 2012 email message to
Mr. Gonzales, sent in response to a question about the odometer, Mr. Parker recorded the
GTX's odometer as reading SSOO, at the time of sale. Tr. Ex. 4-4. The odometer read .3684
when Mr. Govier saw the vehicle. Tr. Ex. lOA. Yet Mr. Gonzales testified at trial that he had
only driven the GTX a total of 50-100 miles. These and other discrepancies, along with the
unexplained substitution of a different transmission for the one that came with the GTX,
undermine the strength of DCCI' s proof
70. Thus, the court concludes that DCCI has failed to prove that it is entitled to
damages measured in terms of the value of the vehicle as a whole. Mr. Parker did not promise
or warrant the GTX to be anything more than a local driver car, and that is what it was.
71. However, certain components of the vehicle were admittedly not consistent with
what was represented, and the analysis shifts to those.
72. Many ofDCCI's specific concerns were not proved in terms ofbeing a breach of
contract or a breach of express or implied warranty:
20
• Body rust: the advertisement does not promise or warrant that the vehicle was free
ofbody rust, and Mr. Parker, when asked by Mr. Matt, said, truthfully, that there
was no rust as far as he knew.
• The engine: the advertisement said the engine runs "flawlessly," meaning very well,
and evidently it did when Mr. Matt started it. As noted above, DCCI failed to
establish that the engine when examined by Mr. Aldridge was in substantially the
same condition as when DCCI purchased the GTX. Moreover, DCCI did not
establish that the engine block was not a "warranty block." There was a confusing
conflict in the evidence on that point. Mr. Govier testified at trial that it is not a
warranty block, although his initial report seems to say it is. See Tr. Ex. lOA-5.
Mr. Benner testified that it is. The question is resolved against DCCI because it has
the burden of persuasion to show the block was not what it was purported to be.
• The transmission that was on the vehicle when sold had indeed been rebuilt as
indicated in the advertisement. Even Mr. Gonzales deemed the transmission issues
to be "minor"
• Miscellaneous: issues such as the trunk leak, the painted over distributor cap, the
dash instruments (speedometer, fuel meter, "sender") and the dyed buddy seat were
not shown to be breaches of contract or warranty, because nothing in the
advertisement addresses them. The evidence did not indicate that Mr. Parker was
aware of either the trunk leak or the dye job on the buddy seat prior to the sale.
73. DCCI's damages as to some areas that were specifically mentioned in the
advertisement-the non-factory tachometer and the gear ratio discrepancy for example--were
not quantified in terms of either cost ofrepair or difference in value. Although the rear
carburetor on the GTX was not date code correct as represented, the record does not contain a
21
sufficient basis, such as evidence of the cost of a date code correct carburetor, on which the
court could award damages. Moreover, even though the rear carburetor is not date correct for
the GTX, it is date code correct for vehicles built S-4 months after the date ofmanufacture for
the carburetor and thus presumably has some resale value. For that reason as well, DCCI has
not proved damages attributable to the rear carburetor not being date code correct.
74. The one area where the court finds and concludes that DCCI has proved both
liability and damages is for the non-date code correct heads, which Mr. Govier determined
were manufactured in March 1969, almost a year after the GTX was built. One of the receipts
in the record indicates that Mr. Parker purchased the heads in 2008 for $1,900. Tr. Ex. 16 at p.
9. 8 In the absence of better evidence of the cost of compatible heads manufactured during the
correct S-4 month period in early 1968, the court accepts this as the cost of purchasing date
code correct heads. As with the carburetors, the heads theoretically have some resale value
because they would be date code correct for vehicles built from March 1969 to July 1969, but
there is also evidence that one or both heads leak coolant, so no reduction for resale value is
justified.
7 5. Accordingly, DCCI is awarded damages of $1,900 for breach of contract and
express and implied warranty. Regarding costs, there is a good argument for assessing costs
against DCCI, because it failed to prevail on nearly all of its claims. On the other hand, DCCI
did prove that the GTX did not conform in multiple respects with the advertisement. Even
though it did not prove damages as a result of the nonconformities, Mr. Parker cannot be said
to have prevailed for purposes of obtaining an award of costs.
IT IS HEREBY ORDERED AS FOLLOWS:
1. Judgment on Count I (fraud) is hereby awarded to Defendant Kendrick Parker.
8 Trial Exhibit 16 at page 9 shows two receipts for cylinder heads, one from 2006 and the other from 2008. The
court infers that the later receipt is for the heads that were in the vehicle.
22
2. Judgment on Counts III (breach of contract), IV (breach of warranty of fitness for
particular purpose) and V (breach of express warranty) is hereby awarded to Plaintiff
DCCI, LLC. Plaintiff is awarded damages of $1,900 on each of the three counts, but
since the awards are for the same dollar damages, the net judgment is for $1,900, with
prejudgment and post judgment interest .
.'3. Each party shall bear its own costs.
Pursuant to M.R. Civ. P. 79(a), the Clerk shall incorporate this order into the docket by
·~~
reference.
Dated September 29, 2015
A.M. Horton
Justice, Business and Consumer Court
Entered on the Docl<et: q.,.. &2~
Copies sent via Mail_ ElectrnnieanY
2.'3
DCCI, LLC v. Kendrick Parker
BCD-CV-2013-65
DCCI, LLC
Plaintiff
Counsel: Walter McKee, Esq.
McKee Billings, LLC PA
133 State Street
Augusta, ME 04330
Kendrick Parker
Defendant
Counsel: Paul Sumberg, Esq.
263 Water Street
PO Box 9
Skowhegan, ME 04976-0009
STATE OF MAINE BUSINESS AND CONSUMER COURT
Cumberland, ss Location: Portland
)
DCCI, LLC )
)
Plaintiff, )
)
v. ) Docket No.: BCD-CV-1.3-65 /
)
KENDRICK PARKER )
)
Defendant )
)
)
ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Pursuant to M.R. Civ. P. 56, Defendant Kendrick Parker has filed a Motion for
Summary Judgment. Plaintiff DCCI, LLC ["DCCI'] opposes the Motion. The court elects to
decide the Motion without oral argument. See M.R. Civ. P. 7(b)(7).
Factual Background
DCCI is a limited liability company operating in Oregon, and Robert Gonzales is its
managing member and principal. Kendrick Parker is an individual resident of Fairfield,
Somerset County, Maine. Mr. Parker has had a longstanding interest in the category of
automobiles known as "muscle cars," and over the years has owned as many as 50 different
muscle cars.
In 2006, Mr. Parker purchased a 1968 Plymouth Hemi GTX automobile ["the GTX"],
which falls toward the high end of the muscle car category. Mr. Parker installed a new engine
and clutch in the GTX and invested considerable time and resources in restoring it, including
obtaining various "date-coded" parts manufactured in or around 1968, the vehicle's year of
manufacture, thereby enhancing the GTX's value. He also raced it a number of times.
1
In 2011, he decided to sell the GTX in order to raise money to buy a camp, and began
to advertise the GTX for sale in online muscle car market media. Mr. Gonzales saw one of the
online advertisements, and decided to purchase the vehicle through DCCI, subject to an
inspection. DCCI and Parker negotiated a price of $60,000, substantially less than the
originally advertised price of $85,000. The parties' contract is memorialized in a letter drafted
by Mr. Gonzales on DCCI letterhead, signed by Mr. Gonzales on behalf of DCCI and by Mr.
Parker, and reading as follows:
To Whom It May Concern
This letter is to assure that both parties, Mr. Rick Parker and Mr. Robert F. Gonzalez,
are in agreement that check number 5334 in the amount of $5,000 is a deposit on the
1968 Plymouth GTX for $60,000 that Mr. Gonzalez found online and that we have
discussed over the phone. Mr. Gonzalez has thirty (30) days to, either in person or by
proxy, inspect the vehicle to make sure that it is numbers matching and as represented
by Mr. Parker.
It is understood that if the above mentioned car does not completely check out, for any
reason, then the deposit is refundable. May it also be understood that Mr. Parker
agrees to the above stated terms by depositing or cashing the above mentioned check.
Consistent with the letter, DCCI sent a $5,000 deposit to hold the vehicle, and retained
a person named James Matt to inspect the GTX at Mr. Parker's premises. On February 23,
2012, Mr. Matt spent about four hours inspecting the vehicle. His inspection did not include a
test drive for reasons that appear to be disputed. DCCI claims Mr. Parker refused to allow it;
Mr. Parker denies th<lt, and contends that winter conditions precluded a test drive.
In any event, after the inspection, DCCI sent the balance of the purchase price to Mr.
Parker via wire transfer March 19, 2012, and the vehicle was shipped West for delivery to
DCCI. According to Mr. Parker, Mr. Gonzales initially expressed satisfaction with the GTX
during a telephone conversation, but sometime in late April or early May 2012 he began
contacting Mr. Parker via email regarding what he said were various problems with the
vehicle, including features that were not as represented in Mr. Parker's advertisement. None
of Mr. Gonzales's email message submitted into the summary judgment record appears to
request any specific relief in terms of rescission or money damages. Eventually Mr. Parker
stopped responding to Mr. Gonzales' email messages, the last of which, according to Mr.
Gonzales, was sent in July 2012, threatening criminal charges. After that, there appears to
have been a lapse in communication until this action was filed in 2013.
DCCI's five-count Amended Complaint pleads claims of fraud (Count I), negligent
misrepresentation (Count II), breach of contract (Count III), breach of warranty of fitness for
particular purpose (Count IV), and breach of express warranty (Count V).
Defendant Parker seeks summary judgment on two somewhat narrow grounds. First,
he claims that DCCI failed to give him timely notice of breach as required by the Maine
Uniform Commercial Code (UCC), 11 M.RS. § 2-607(3), barring DCCI from any remedy on
Counts III-V of the Amended Complaint. Second, he asserts that DCCI's tort claims in Counts
I and II are barred by the economic loss doctrine.
Analysis
I. Standard of Review
When a party files a motion for summary judgment, the court considers the parties'
statements of material facts and any reasonable inferences that a fact-finder may draw from
them, to determine whether the moving party is entitle to judgment as a matter of law. M.R.
Civ. P. 56; see Curtis v. Porter, 2001 ME 158, ~ 9, 784 A.2d 18. A moving party is entitled to
summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, ... show that there is no genuine issue as to any
material fact set forth" in the parties' statements of material facts and "that [the] party is
entitled to a judgment as a matter of law." M.R. Civ. P. 56( c); accord Beal v. Allstate Ins. Co.,
2010 ME 20, ~ 11, 989 A.2d 733.
A party wishing to avoid summary judgment must present a prima facie case for each
element of the claim or defense that is asserted against it. See Reliance Nat'l Indem. v. Knowles
Indus. Svcs., 2005 ME 29, ~ 9, 868 A.2d 220. In addition to "If material facts are disputed, the
dispute must be resolved through fact-finding." Arrow Fastener Co. v. Wrabacon, Inc., 2007 ME
34, ~ 18, 917 A.2d 123 (quotation marks omitted). A factual issue is genuine when there is
sufficient supporting evidence for the claimed fact that would require a fact-finder to choose
between competing versions of the facts at trial. See Inkel v. Livingston, 2005 ME 42, ~ 4, 869
A.2d 745.
II. The Issue ofNotice of Breach
The parties appear to agree that the GTX is a "good" for purposes of rendering Article
2 of the Maine UCC applicable to the sales transaction, and thus that at least DCCI's claims for
breach of contract and breach of express warranty and implied warranty of fitness in Counts
III-V ofthe Amended Complaint are governed by Article 2.
The undisputed facts indicate that DCCI accepted the GTX for purposes of section 2-
606 of the Maine UCC after arranging to have it inspected. Mr. Parker further contends,
correctly in the court's view, that the lack of any indication in the factual record that DCCI
.
revoked or attemoted to revoke acceotance means that its Article 2 remedies are limited to
~
damages. Lastly, Mr. Parker contends that DCCI failed to give him the notice of breach
mandated by Article 2, and that is the basis on which he seeks summary judgment on DCCI's
contract and warranty claims.
Section 2-607(3) of the Maine Uniform Commercial Code provides in part:"
3. Where a tender [by the seller] has been accepted,
4
(a). The buyer must within a reasonable time after he discovers or should have
discovered any breach notify the seller ofbreach or be barred from any remedy.
The requirement of notice under section 2-607(3)(a) is mandatory, and when the issue of
compliance with section 2-607(3) is raised, the burden is on the buyer to prove compliance. See
generally William H. Henning and William H. Lawrence, A Unified Rationale for Section 2-
607(3)(a) Notification, 46 SAN DIEGO L. REV. 573 (2009). Whether requisite notice was given is
a mixed question oflaw and fact, the existence, timing and extent of notice being factual
questions, and the sufficiency of notice in light of the statutory requirement being a legal
question. SeeK & M Joint Venture v. Smith International, Inc., 669 F.2d 1106, 1111 (6th Cir. 1982).
The commentators to the Uniform Commercial Code have explained the section 2-
607(3)(a) notice requirement as follows:
The time of notification is to be determined by applying commercial standards to a
merchant buyer. 'A reasonable time' for notification from a retail customer is to be
judged by different standards so that in his case it will be extended, for the rule of
requiring notification is designated to defeat commercial bad faith, not to deprive a good
faith customer of his remedy.
The content of the notification need merely be sufficient to let the seller know that the
transaction is still troublesome and must be watched. There is no reason to require that
the notification which saves the buyer's rights under this section must include a clear
statement of all the objections that will be relied on by the buyer, as under the section
covering statements of defect upon rejection (Section 2-605). Nor is there reason for
requiring the notification to be a claim for damages or of any threatened litigation or
other resort to a remedy. The notification which saves the buyer's rights under this
Article need only be such as informs the seller that the transaction is claimed to involve
a breach, and thus opens the way for normal settlement through negotiation.
Uniform L. Ann., UCC 2-607, cmt. 4.
In a pre-UCC decision, Judge Learned Hand observed, "The notice 'of the breach'
required is not of the facts, which the seller presumably knows quite as well as, if not better
than, the buyer, but ofbuyer's claim that they constitute a breach. The purpose of the notice is
to advise the seller that he must meet a claim for damages, as to which, rightly or wrongly, the
law requires that he shall have early warning." American Mfg. Co. v. United States Shipping
5
Board E. F. Corp., 7 F.2d 565, 566 (2d Cir. 1925) (L. Hand, J.). There is no formulaic recipe for
sufficiency ofnotice for purposes of section 2-607(S)(a). Rather, "the critical question [is]
whether the seller had been informed that the buyer considered him to be in breach." Eastern
Air Lines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957, 972 (5th Cir. 1976).
The facts of record here indicate that within days or weeks ofreceiving the GTX (the
exact date on which it was delivered to DCCI being unclear), DCCI through Mr. Gonzales
notified Mr. Parker ofvarious problems with the GTX. Although Mr. Gonzales's email
messages do not contain any formal notice ofbreach, a fair reading of the messages leaves the
inescapable impression that DCCI through Mr. Gonzales not only considered the GTX not to
be as represented, but also considered Mr. Parker to have misstated the condition ofthe GTX
in the online advertisement that kindled Mr. Gonzales's interest in the car.
The court agrees with DCCI that these facts, as well as the fact that neither DCCI nor
Mr. Parker appears to be a "merchant" in the business of buying and selling muscle cars, serve
to distinguish this case from the case mainly relied on by Mr. Parker, MK. Associates v. Stowell
Products, Inc., 697 F. Supp. 20, 21-22 (D. Me. 1988). Unlike the buyer in MK. Associates, there
is evidence in the present record to support a finding that Mr. Gonzales told Mr. Parker within
days or weeks of receiving delivery that he believed the GTX was not as represented in what
he considered to be material ways, and that Mr. Parker had misled him about the vehicle. The
literal word "breach" was not used, but a fair reading of Mr. Gonzales's messages leaves little
room for doubt about their import.
The fact that DCCI inspected the vehicle before completing the purchase and taking
delivery has obvious implications for the merits of its claim, but the court is not prepared to
declare notice to Mr. Parker under section 2-607 insufficient as a matter oflaw on the present
record, and thus will deny Mr. Parker's motion for summary judgment on this ground. On the
6
other hand, the court is also not rendering summary judgment against Mr. Parker on this issue.
This Order concludes only that Mr. Parker has not shown he is entitled to judgment as a
matter oflaw on the legal issue of sufficiency of notice.
The reason why the court is not in a position to render summary judgment for either
party on the sufficiency issue is that the resolution of the issue may depend in part on a
comparison between what was asserted in the notice given and what breach or breaches are
actually proved at trial. Thus, the burden at trial remains on DCCI to prove the sufficiency of
notice.
III. The Economic Loss Issue
The Maine Law Court unequivocally adopted the economic loss doctrine in Oceanside at
Pine Point Condominium Owners Assn. v. Peachtree Doors, 659 A.2d 267 (Me. 1995). In Peachtree,
the Law Court defined economic loss as "damages for inadequate value, costs of repair and
replacement of defective product, or consequent loss of profits -without claim of personal
injury or damage to other property." Id. at 270 n.4 (quoting Moorman Mfg. Co. v. Nat'l Tank
Co., 4.35 N.E.2d 44.3, 449 (Ill. 1982)). The court noted that, absent evidence ofpersonal injury
or property damage, "[c]ourts generally ... do not permit tort recovery for a defective
product's damage to itself" Id. at 27.3; see also In re Hannaford Bros. Co. Customer Data Security
Breach Litig., 61.3 F. Supp. 2d 108, 127 (D. Me. 2009).
The Law Court in Peachtree further determined "[d]amage to a product itself ... means
simply that the product has not met the customer's expectations, or, in other words, that the
customer has received 'insufficient product value."' Peachtree, 659 A.2d at 270. The doctrine
requires courts to "distinguish between a situation where the injury suffered is merely the
'failure of the product to function properly ... [and] those situations, traditionally within the
purview of tort, where the plaintiffhas been exposed, through a hazardous product, to an
7
unreasonable risk of injury to his person or property."' Fireman's Fund Ins. Co. v. Childs, 52 F.
Supp. 2d 139, 142 (D. Me. 1999) (applying Maine law) (citing East River S.S. Corp. v.
Transamerica Delaval, Inc., 476 U.S. 858, 868 (1986)). Where there is no contractual
relationship between the buyer and seller, the applicability of the economic loss doctrine can be
called into question, see Fireman's Fund, 52 F. Supp. 2d at 143-44; Banknorth, N.A. v. BJ's
Wholesale Club, Inc., 394 F. Supp. 2d 283 (D. Me. 2005).
DCCI argues that the rule of Peachtree does not apply at all to this case, because this
case is not a classic "products liability" case, i.e., a case in which a product was "injured", i.e.
failed, after being put into use. In other words, DCCI says Peachtree does not apply to cases in
which the product never was what it was represented to be. This is a metaphysical distinction
without a difference (at least when there is no allegation offraud, as discussed below). Any
claim for breach of warranty or negligent misrepresentation requires a showing that the
product at issue was, from the outset, not as warranted or represented, even if the defect
emerges later. That was the contention in Peachtree and is the contention here.
Notably, the plaintiffs complaint in the Peachtree case included a negligent
misrepresentation count, see 659 A.2d at 269, and the Law Court upheld the grant of summary
judgment on that count based on the economic loss doctrine. However, there was no fraud or
intentional misrepresentation count in Peachtree, and the legal question whether the economic
loss doctrine precludes a tort claim for fraud or intentional misrepresentation is still open
under Maine law. DCCI's opposition to Mr. Parker's economic loss argument focuses on the
fraud count and not on the negligent misrepresentation count. Although the court does not
interpret DCCI's opposition to concede formally that Peachtree precludes the negligent
misrepresentation claim in Count II of DCCI's Amended Complaint, the rule of Peachtree
8
explicitly applies to negligent misrepresentation claims, and the court therefore will grant Mr.
Parker's motion as to Count II.
However, for the following reasons, the court comes to a different conclusion as to the
fraud claim in Count I. It is well settled in Maine law that "[f]raud in the inducement of a
contract may vitiate the terms of that contract. Barr v. Dyke, 2012 ME 108, ~ 16, 49 A.3d 1280,
1286, citing Harriman v. Maddocks, 560 A.2d 11, 12-13 (Me.1989). The rationale for precluding
tort claims in favor of contractual remedies under the UCC disappears when a contract is
voidable for fraud.
Moreover, two provisions of the UCC explicitly preserve common law fraud remedies in
situations otherwise governed by the UCC. One of the general provisions of the Maine UCC
provides in part: "Unless displaced by the particular provisions of the Uniform Commercial
Code, the principles oflaw and equity, including the law merchant and the law relative to
capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion,
mistake, bankruptcy and other validating or invalidating cause supplement its provisions." 11
M.R.S. § 1-1103(2). There is no UCC section that displaces the common law remedy for fraud.
The other section in question, section 2-721 of the Maine UCC, titled "Remedies for Fraud,"
makes UCC remedies available for fraud without displacing common law remedies: "Remedies
for material misrepresentation or fraud include all remedies available under this Article for
nonfraudulent breach. Neither rescission or a claim for rescission of the contract for sale nor
rejection or return of the goods shall bar or be deemed inconsistent with a claim for damages or
other remedy" (emphasis added).
Taken together, these sections indicate that, although the UCC may in some sales cases
furnish the exclusive remedies for "nonfraudulent breach," the UCC supplements and does not
9
preclude remedies for fraud. 1 Based on that conclusion, and because the legal issue is open in
Maine, this court concludes that the Maine Law Court would likely decide that the economic
loss doctrine does not bar a claim of fraud or intentional misrepresentation, even in a case
involving sale of a good subject to Article 2 of the Maine UCC and not involving personal
injury or damage to other property. Accordingly, Mr. Parker's Motion for Summary Judgment
is denied as to Count I.
Conclusion
IT IS HEREBY ORDERED AND ADJUDGED: Defendant Kendrick Parker's Motion
for Summary Judgment is granted as to Count II of the Amended Complaint and is otherwise
denied.
Pursuant to M.R. Civ. P. 79(a), the Clerk shall incorporate this order into the docket by
reference.
Dated April SO, 2015
A.M. Horton
Justice, Business and Consumer Court
1 One view attempts to distinguish between the types of fraud that are subject to the economic loss
doctrine, holding claims of fraud in the inducement not to be barred by the economic loss doctrine and
claims of"fraud interwoven with the breach" to be barred. See Huron Tool v. Precision Consulting Servs.,
5.'32 N.W.2d 541, 544-45 (Mich. Ct. App. 1995), discussed inS. Tourek, T. Boyd & C. Schoenwetter,
Bucking the "Trend": The Uniform Commercial Code, the Economic Loss Doctrine, and Common Law Causes cif
Actionjor Fraud and Misrepresentation, 84 IOWA L.REV. 875, 9.'38 (1999). The premise that fraud in the
inducement is different than fraud "interwoven" with the breach may be doubtful, but the so-called
distinction does not matter here, because DCCI's claim plainly is one offraud in the inducement.
10 Entered on the Docket Lf 3D-1 {
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DCCI, LLC v. Kendrick Parker
BCD-CV-2013-65
DCCI, LLC
Plaintiff
Counsel: Walter McKee, Esq.
McKee Billings, LLC PA
133 State Street
Augusta, ME 04330
Kendrick Parker
Defendant
Counsel: Paul Sumberg, Esq.
263 Water Street
PO Box 9
Skowhegan, ME 04976-0009