Johnson v. Fort Mill Chrysler Plymouth Dodge

THIS OPINION HAS NO PRECEDENTIAL
VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS

PRECEDENT IN ANY PROCEEDING EXCEPT
AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Darrell R. Johnson and Sheryll K. Johnson, Appellants,

v.

Fort Mill Chrysler Plymouth Dodge, Respondent.

Appeal From York County

 John C. Hayes, III, Circuit Court Judge

Unpublished Opinion No.  2005-UP-058

Heard December 7, 2004 – Filed January
24, 2005

AFFIRMED IN PART, REVERSED IN PART
AND REMANDED

Mitchell K. Byrd, of Rock Hill, for Appellants

Michael E. Kozlarek, of Columbia, and Michael S. Malloy, of Charlotte, for Respondent.

PER CURIAM:  Darrell Johnson and his wife Sheryl (the Johnsons) appeal
the trial court’s grant of directed verdict for Fort Mill Chrysler Plymouth
Dodge regarding claims for breach of contract and violations of both the Motor
Vehicle Dealers Act and the Unfair Trade Practices Act.  We affirm in part,
reverse in part, and remand.

FACTS

In March 2000, Darrell Johnson attempted to purchase a Chrysler PT Cruiser
automobile from Fort Mill Chrysler Plymouth Dodge (Fort Mill Chrysler).  The
dealership was taking deposits from customers for the vehicles, although the
vehicles had not yet arrived on its lot. 

Darrell spoke with Fort Mill Crysler salesman Isaac Byers, who told him he
could purchase a shale green PT Cruiser that had been originally ordered for
Morris, a customer who no longer wanted the vehicle. The Johnsons paid a $500
deposit to the dealership, indicating on the check it was for the Morris automobile. 
Darrell received a New Car Order or Locate Sheet for a shale green PT Cruiser
and his name was written next to the Morris order on a vehicle display board
in the dealership showroom.  Byers informed Darrell no other documents could
be provided because the dealership would lose its allocation from Chrysler,
but assured him that the car would be available in June or July. [1]

A few weeks later, Darrell returned to the dealership
and asked Byers if he could change the color of the car because Sheryl did not
like the shale green color and did not want the Morris vehicle.  Byers informed
Darrell he could have a taupe PT Cruiser originally ordered for a customer named
Darmer.  Byers removed Darrell’s name from beside Morris on the display board
and wrote it next to Darmer.  No documents were signed regarding the Darmer
vehicle, but Byers gave Darrell a Darmer vehicle specifications sheet and again
cited Fort Mill Chrysler’s limited allocation as the reason for not signing
any documents referencing the transaction. 

Darrell checked on the availability of his car periodically and each time Byers
told him the automobile was in production.  In late September when he checked
on whether the taupe PT Cruiser had arrived, Darrell was unable to speak with
Byers, who was out of work due to a car accident.  Instead, he spoke with a
new manager, Tim Parker, who told Darrell the dealership had no file showing
the Johnsons’ order.  The next day, Parker told Darrell the only taupe vehicle
had been sold to another customer.  Subsequently, the dealership found evidence
of the Johnsons’ deposit check and refunded the $500 to them on September 27,
2000.  The Johnsons later purchased another PT Cruiser from a different dealership.

The Johnsons filed suit against the dealership for
breach of contract, violation of the Act to Regulate Manufacturers, Distributors,
and Dealers, and violation of the South Carolina Unfair Trade Practices Act. 
In the complaint, the Johnsons allege breach of the contract to sell them the
Darmer vehicle.  The second and third causes of action incorporate by reference
the preceding allegations and claim causes of action under the Dealers Act and
the Unfair Trade Practices Act.  The case was tried before a jury and at the
end of the plaintiffs’ case, the trial court directed a verdict in favor of
the dealership as to all three causes of action.  The Johnsons appeal.

STANDARD OF REVIEW

When ruling on a directed verdict, the trial court must view the
evidence and the inferences reasonably drawn therefrom in the light most favorable
to the nonmoving party.  Sabb v. South Carolina State Univ., 350 S.C.
416, 427, 567 S.E.2d 231, 236 (2002).  If the evidence is susceptible to more
than one reasonable inference, the case should be submitted to the jury. Heyward
v. Christmas, 357 S.C. 202, 207, 593 S.E.2d 141, 144 (2004).

LAW/ANALYSIS

I.                  
Breach of Contract

The Johnsons assert the trial court erred in granting the dealership’s motion
for directed verdict on the breach of contract claim.  We disagree. 

To succeed in a breach of contract claim, the Johnsons need to prove the Statute
of Frauds does not bar their action.  A contract for the sale of goods for $500
or more will not be enforced unless the parties have made a sufficient writing
signed by the party against whom enforcement is sought.  See S.C. Code
Ann. § 36-2-201(1) (2003).  A contract may be evidenced by one or more writings
that “are connected either expressly or through internal evidence of the subject
matter and occasion.”  Young v. Indep. Publ’g. Co., 273 S.C. 107, 110,
254 S.E.2d 681, 683 (1979) (citation omitted).  However, when several writings
must be considered, they must set forth all essential terms such that the contract
is proved without resort to parol evidence.  Id. at 111, 254 S.E.2d at
683 (citations omitted).   

To modify a contract within the Statute of Frauds, the modification must also
be in writing.  See S.C. Code Ann. § 36-2-209(3) (2003).   Part performance
by part payment may make the contract enforceable when the contract is divisible. 
See South Carolina Reporter’s Comments, S.C. Code Ann. § 36-2-201 (2003). 
When the subject matter of the contract is a single object, the contract would
not be enforceable without full payment.  Id.

Considering together
all the documents involved in the alleged transaction, no writing exists that
satisfies the Statute of Frauds.  If the Order and Locate Sheet and the deposited
$500 check form a contract, it is for the Morris vehicle, which the Johnsons
decided they did not want.  Darrell’s request to change the deal to one for
the Darmer vehicle fails to satisfy the Statute of Frauds’ requirement for written
modification.  The only writing referencing the Darmer vehicle is not signed
by an agent of the dealership.  In addition, no oral modification would be enforceable
based on part performance, because the Johnsons did not pay the full purchase
price for the automobile. 

Because only one reasonable inference can be drawn from the facts, the trial
court correctly granted the motion for directed verdict to the dealership regarding
the breach of contract claim.

II.               
Dealers Act

The Johnsons also assert the trial court erred in granting a directed verdict
to the dealership on their claim for violation of the Act to Regulate Manufacturers,
Distributors, and Dealers.  We agree. [2]  

Damages can be recovered under the Dealers Act if an automobile dealer engages
“in any action which is arbitrary, in bad faith, or unconscionable and which
causes damage to any of the parties or to the public.”  S.C. Code Ann. §56-15-40(1)
(1991);  see also, deBondt v. Carlton Motorcars, Inc.,
342 S.C. 254, 263, 536 S.E.2d 399, 404 (Ct. App. 2000).  Arbitrary acts include
those that are “unreasonable, capricious or nonrational; not done according
to reason or judgment; depending on will alone.”  Taylor v. Nix, 307
S.C. 551, 555, 416 S.E.2d 619, 621 (1992).   This does not require dealerships
to interact with customers solely by fixed rules and standards but does require
“some reasonable basis” for their conduct.  Id. at 556, 416 S.E.2d at
621.  Bad faith is “[t]he opposite of good faith, generally implying or involving
actual or constructive fraud, or a design to deceive or mislead another, or
a neglect or refusal to [fulfill] some duty or some contractual obligation,
not prompted by an honest mistake as to one’s rights or duties, but by some
interested or sinister motive.” deBondt, 342 S.C. at 263, 536 S.E.2d
at 404 (citations omitted). Generally, unconscionable as it relates to an act
or transaction means “showing no regard for conscience; affronting the sense
of justice, decency, or reasonableness.”  Black’s Law Dictionary (8th
ed. 2004). Unconscionability has been found in a situation lacking meaningful
choice due to one-sided contract terms.  Fanning v. Fritz’s Pontiac-Cadillac-Buick,
Inc., 322 S.C. 399, 403, 472 S.E.2d 242, 245 (1996).

Viewed in a light most favorable to the Johnsons, the facts raise more than
one reasonable inference creating a jury question and rendering a directed verdict
improper.  Byers recalled a practice of returning deposit checks to customers
after selling the vehicles associated with those deposits to other customers.
Fort Mill Chrysler accepted deposits for vehicles for which it knew it did not
have a definite inventory.  According to Darrell’s testimony, the dealership
indicated to him that a specific vehicle was being identified for his purchase
both by changing the name on a specification sheet and on a display board. 
The dealership later claimed to have no record of a transaction with the Johnsons
and Parker informed Darell that the dealership sold the only taupe vehicle. 
In addition, after accepting the Johnsons’ $500 deposit, Fort Mill Chrysler
held the check for six months before returning it to them.  Byers’ testimony
indicates that the dealership had a practice of accepting deposits for vehicles
not in stock with full knowledge that there would not be enough PT Cruisers
to satisfy the orders they procured.  At the very least, a question of fact
exists as to whether the dealership acted arbitrarily, in bad faith, or unconscionably. 
Therefore, the trial court erred in granting the dealership’s motion for directed
verdict on the Dealers Act cause of action.

III.            
South Carolina Unfair Trade Practices Act

The Johnsons also argue the trial court erred in granting the dealerships motion
for directed verdict involving their claim for a violation of the Unfair Trade
Practices Act.  We agree. 

To recover under this Act, the plaintiff must prove an “ascertainable loss
of money or property” because of an unfair or deceptive method, act, or practice. 
S.C. Code Ann. §§ 39-5-20, 39-5-140 (1985).  The plaintiff must also show the
actions of the defendant adversely affect the public interest, which can be
shown by proving the potential for repetition.  Daisy Outdoor Adver. Co.,
Inc. v. Abbott, 322 S.C. 489, 493, 473 S.E.2d 47, 49 (1996). 

Darrell’s testimony regarding paying a higher price for the PT Cruiser he purchased
from another dealership could lead a jury to infer that Fort Mill Chrysler’s
actions caused the Johnsons an ascertainable financial loss referenced by the
Act.  Darrell testified that he paid $23,000 for a PT Cruiser, $3,900 more than
the price he claims Fort Mill Chrysler quoted to him.  There was sufficient
evidence from which a jury could have found that the dealership accepted deposits
for vehicles not in stock and delayed the return of the deposits even after
it became clear that the stock would not meet the demands of those who had given
deposits.  A jury could have found the Johnsons were under the impression that
their deposit reserved them a specific PT Cruiser. The dealership promising
more cars than inventory would ever permit seems to have been the common practice—clearly
repeated and potentially repeatable. Again viewed in a light most favorable
to the Johnsons, sufficient evidence exists that indicates the dealership may
have engaged in practices that were unfair or deceptive based on its dealings
with them.  Therefore, the trial court erred in granting a directed verdict
as to the Unfair Trade Practices Act claim.

The trial court
was correct to grant a directed verdict to the dealership on the breach of contract
claim.  However, questions of fact were created as to the alleged violations
of both the Dealers Act and the Unfair Trade Practices Act, and those questions
should have been submitted to the jury. 

AFFIRMED IN PART, REVERSED IN PART and REMANDED.

ANDERSON, STILWELL, and SHORT, JJ., concur.

[1] Due to a successful marketing campaign, Chrysler
experienced high demand from customers prior to the arrival of the new PT
Cruiser on dealership lots; therefore, dealerships were allotted only a limited
number of the vehicles. 

[2] The dealership suggests the causes of action under the Dealers
Act and the Unfair Trade Practices Act must fail because they are derived
from the breach of contract claim.  Neither the Dealers Act nor the Unfair
Trade Practices Act contemplates a Statute of Frauds requirement.  See
S.C. Code Ann § 56-15-10 et seq. (1991), S.C. Code Ann. § 39-5-10
et seq. (1985).  Thus, the second and third causes of action
do not fail for this reason.