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Shiplet v. Copeland - 450 S.W.3d 433 (Mo. Ct. App. 2014)

Rule:

Damages under the Missouri Merchandizing Practices Act (MMPA) customarily are measured using the lost benefit of the bargain rule. However, the benefit of the bargain rule does not apply where the purchaser rescinds and returns the property received. In such a case, the purchaser may properly recover the amount he paid with interest from the date of payment, plus incidental losses and expenses suffered as a result of the seller's misrepresentations. However, a purchaser cannot continue to use property aware of its defect and later claim the benefit of rescission. The price paid for property is not the proper measure of damages under the benefit of the bargain rule. Rather, in some fashion actual damages must approximate the difference between the actual value of the property and what its value would have been if it had been as represented. Where property has been returned to the seller without objection, but under circumstances where the purchaser willingly used the property for a considerable period of time aware of, and notwithstanding, its defect, calculation of the benefit of the bargain by crediting the price paid for the property by a reasonable value for its use is not error.

Facts:

Larry and Judith Copeland are the owners of C&C Car Sales, a used car dealership. Larry Copeland and Bob Lees struck a deal with regard to the physical location of the C&C Car Sales. Thereafter, Billy Shiplet purchased two cars. The first car was a Pontiac in a wrecked condition and required automobile body repair. Lees never completed the repairs on the Pontiac, and Shiplet never took possession of the Pontiac. The second vehicle was a Volkswagen. Shiplet took possession of the Volkswagen, and Lees provided Shiplet with a temporary permit to use until he could license the vehicle. Lees did not deliver the title but offered Shiplet a C&C Car Sales' dealer tag to use on the Volkswagen. Shiplet accepted the dealer tag and continued driving. The Volkswagen started having mechanical issues, despite Lees' repair. Shiplet demanded return of the $10,500 he paid for the vehicle.

Plaintiff Billy Shiplet sued defendants, the Copelands and Lees, alleging violations of the Missouri Merchandizing Practices Act. Shiplet argued that the Copelands and Lees made certain false or misleading representations and led him to believe certain falsehoods about the vehicle’s condition. After the suit was filed, Billy Shiplet died and was substituted by Julie Shiplet. The trial court ruled in favor of Julie Shiplet and made the Copelands and Lees jointly and severally liable. Julie Shiplet filed a motion for attorney's fees, which was left unaddressed. Both Julie Shiplet and the Copelands appealed the decision. On appeal, Julie Shiplet argued the she was entitled to attorney’s fees. Defendant Copelands appealed the trial court's determination that they were jointly and severally liable to Julie Shiplet in connection with the sale of the Volkswagen.

Issue:

1. Was the plaintiff entitled to attorney’s fees?

2. Did the trial court err in determining the amount of money judgment awarded to plaintiff?

3. Were the defendants jointly and severally liable on the money judgment with respect to the Volkswagen car, considering there were no sufficient evidence showing Lees as the agent of the Copelands?

Answer:

1. No. 2. No. 3. No.

Conclusion:

1. The Court ruled that the trial court did not abuse its discretion in not awarding attorney’s fees to any party in connection with the claims against the Copelands. The Court observed that Julie Shiplet had prevailed on only one of her two MMPA claims and did not recover the full extent of the damages she sought on the claim where she prevailed. The Copelands prevailed on one claim, and Julie prevailed in part on the other. As to Lees, a statement of fees was attached to Julie's motion for attorney's fees, was not a part of the record on appeal, leaving the Court no way to discern whether the amount of the claim was reasonable.

2. The Court held that the trial court did not abused its discretion when it based the amount of damages on the benefit of the bargain rule. Where the property has been returned to the seller without objection, but under circumstances where the purchaser willingly used the property for a considerable period of time aware of, and notwithstanding, its defect, calculation of the benefit of the bargain by "crediting" the price paid for the property by a reasonable value for its use is not error. Instead of returning the Volkswagen when Billy first learned he could not license the vehicle because of the missing title, Billy accepted and used a C&C Car Sales dealer tag and continued to operate the vehicle, aware it had not been, and could not be, duly licensed.

3. The Court resolved that the evidence could be reasonably interpreted to support either a finding of actual authority or apparent authority. Lees plainly had the authority to hold himself out as C&C Car Sales with Larry Copeland's consent, and to use C&C Car Sales dealer tags. Moreover, the circumstances that surrounded the sale of the Volkswagen would reasonably lead a third party to believe that Lees was acting on behalf of C&C Car Sales. Though Billy Shiplet never met or communicated with the Copelands, Shiplet plainly could have believed that he was dealing with C&C Car Sales. The Copelands cited no authority for the proposition that a third party must interact with the sole proprietors/owners of an unincorporated business to establish apparent authority of another to act for the business.

The Court affirmed the judgment of the trial court.

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