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Evan Roberts v. Lanigan Auto Sales

January 4, 2013



The opinion of the court was delivered by: Vanmeter, Judge

RENDERED: JANUARY 4, 2013; 10:00 A.M.




Evan Roberts appeals from the Kenton Circuit Court order dismissing his action against Lanigan Auto Sales ("Lanigan"). For the following reasons, we affirm.

The underlying action arose after Roberts purchased a used vehicle from Lanigan in September 2009. Roberts and Lanigan executed a purchase contract, which contained a clause stating the vehicle is "sold as is . . . without any guarantee express or implied[.]" Following the purchase, Roberts independently obtained a report which indicated that the vehicle had previously been involved in an accident and suffered damage to the undercarriage of the vehicle.

Roberts filed the underlying action alleging that Lanigan violated the Kentucky Consumer Protection Act, codified in KRS*fn1 367.110 -- 367.360, and committed fraud by omitting, suppressing, and concealing the vehicle's prior damage and accident history in order to induce Roberts into purchasing the vehicle. Lanigan maintained it never represented that the vehicle had not been damaged or involved in a wreck and filed a CR*fn2 12.02(f) motion to dismiss the action for failure to state a claim upon which relief can be granted. Roberts moved to amend his complaint to allege more specifically that an employee of Lanigan told him the car had not been in an accident or sustained any damage. The trial court denied his motion to amend the complaint and dismissed Roberts' action on the basis that the purchase contract, which contained the express term "sold as is," barred his action for fraud. This appeal followed.

On appeal, Roberts argues the trial court erred by dismissing his action because the "sold as is" clause in the purchase contract did not bar his action for fraud. We disagree.

A motion to dismiss should only be granted if "it appears the pleading party would not be entitled to relief under any set of facts which could be proved[.]" Fox v. Grayson, 317 S.W.3d 1, 7 (Ky. 2010) (citation omitted). The pleadings should be liberally construed so that all allegations are taken as true. Id. (citation omitted). Since the motion is granted purely on a question of law, this court reviews the matter de novo. Id. (citation omitted).

Kentucky's Uniform Commercial Code KRS 355.2-316 seeks to provide a structure for construing both oral representations and written disclaimers within an agreement for the sale of goods. To carry out that purpose, the statute provides that, "unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is," "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties[.]" KRS 355.2-316(3)(a).

An official comment to the statute provides that an "as is" clause in a sales contract is "understood to mean that the buyer takes the entire risk as to the quality of the goods involved." KRS 355.2-316 official cmt. 7 (2008). The rationale was further explained:

A valid "as is" agreement prevents a buyer from holding a seller liable if the thing sold turns out to be worth less than the price paid, because it is impossible for the buyer's injury on account of this disparity to have been caused by the seller and the sole cause of the buyer's injury is the buyer himself or herself. Thus, by agreeing to purchase something "as is," a buyer agrees to make his or her own appraisal of the bargain and to accept the risk that he or she may be wrong, and the seller gives no assurances, express or implied, concerning the value or condition of the thing sold.

67 Am. Jur. 2d Sales § 772 (2012) (emphasis added). Such a position parallels Kentucky case law, as well as the law in other jurisdictions. See Rivermont Inn, Inc. v. Bass Hotels & Resorts, Inc., 113 S.W.3d 636, 640-41 (Ky. App. 2003) (holding that "as a matter of law, a party may not rely on oral representations that conflict with written disclaimers to the contrary" (citation omitted)); Greg Coats Cars, Inc. v. Kasey, 576 S.W.2d 251, 253 (Ky. App. 1978) (noting that the expression "'caveat emptor,' or let the buyer beware, is a commercial reality in respect to the transfer of used cars"); and 37 Am. Jur. 2d Fraud and Deceit § 166 (2012) (stating that a "sold as is" clause "means sold in its present condition without any warranty as to the soundness of the condition or ...

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