Chrysler Motors Corp. v. Morgan

Deen, Presiding Judge. Morgan, appellee/cross-appellant, purchased a new automobile from appellants/cross-appellees, Chrysler Motors Corporation and Ringgold Chrysler-Plymouth & Dodge, Inc. Upon discovering that prior to his purchase of the automobile it had been driven with the odometer disconnected as part of appellants’ “Plant Overnight Quality Evaluation Program” (OEP), Morgan sued appellants for breach of contract and fraud, seeking actual and punitive damages. The trial court denied appellants’ motion for summary judgment on the breach of contract and fraud claims, but granted the motion on the punitive damages claim. The main appeal (Case No. A89A1501) follows our grant of an application for interlocutory review of the partial denial of appellants’ motion for summary judgment. The cross-appeal is from the partial grant of the motion. In this case, before delivery of the motor vehicle to the dealer, Chrysler disconnected the odometer and test drove the car at one of its assembly plants for the purpose of detecting and correcting any defects in its product. Morgan, who purchased the car on October 21, 1986, was notified by Chrysler in July 1987 that the vehicle he purchased may have been so tested. Morgan immediately demanded rescission of the sales contract, return of the purchase price, and acceptance of the return of the vehicle; he commenced this action when Chrysler declined to do so. In his complaint, Morgan charged that “the ‘new’ automobile which he purchased was not, in fact, new and had been driven an unknown but substantial number of miles” pursuant to Chrysler’s quality evaluation program. OCGA § 40-8-5 (d) provides that “the disconnection of the odometer used for registering the mileage or use of new motor vehicles being tested by the manufacturer prior to delivery to a franchised dealer” is lawful. OCGA § 40-8-5 is designed to protect consumers against fraud in its general prohibition against odometer tampering. One legal effect of Subsection (d) is that a manufacturer’s disconnection of a new vehicle’s odometer and testing of that vehicle does not alter the status of that vehicle. It is still a new vehicle. Since under OCGA § 40-8-5 (d) the car purchased by Morgan was still a new car, his fraud and breach of contract claims asserting that Chrysler and the dealer had falsely represented and sold the vehicle as a new vehicle must fail as a matter of law. Chrysler and the dealer [40] were thus entitled to complete summary judgment. Judgment in Case No. A89A1501 reversed; judgment in Case No. A89A1516 affirmed. Carley, C. J., Banke, P. J., Birdsong, Sognier and Beasley, JJ., concur. McMurray, P. J., Pope and Benham, JJ., dissent.