The seller thought it was enough that the engine was the correct type, built the same time as the Camaro, and that its present number matched the VIN
The seller thought it was enough that the engine was the correct type, built the same time as the Camaro, and that its present number matched the VIN
The market places a substantially higher value on "numbers matching" cars, especially in these challenging times. Collectors want the best.
Here's a quick description of what "matching numbers" means. In addition to stamping a unique identifying number on each chassis (its VIN), every factory stamps unique identifying numbers on other components-usually the engine and transmission, often the differential, and sometimes the hood, doors, and various other body parts.
The factory records generally reflect the identifying numbers, as well as the corresponding chassis number in which they were installed. A "numbers matching" car is one where all the identifying numbers match the factory records for the chassis-or come as close to it as factory practices allow. The fact that all the major components of the car are the same exact ones that were installed by the factory makes the car more original, a more representative sample of the particular model, and therefore more valuable.
This isn't high technology. Replacement components come without any identifying numbers, and they can be stamped to match the look of the factory stampings. Stampings can be altered. They can even be removed and restamped. And any of that can be done with such skill that it is extremely difficult to identify the forgery.
Given the substantial enhancement that "numbers matching" status can bestow on the value of a collector car, it should be no surprise that unscrupulous individuals restamp numbers to make them conform to factory records. Some people will state-while looking you straight in the eye-that all the numbers match now, and it makes no difference who put the numbers there and when.
The case of the smoking Camaro
SCM subscriber Bryan W. Shook is a Camp Hill, Pennsylvania, attorney whose practice takes him all over the country, representing victims of classic car fraud. Shook provided "Legal Files" with the details of a case he recently handled involving the restamping of a 1969 Chevrolet Camaro Z/28 engine.
The Defendant acquired the Camaro from a co-worker in 2003 for $15,000. The Camaro was equipped with a non-original engine, but the co-worker threw in a spare rebuildable core engine that was date-coded appropriately for the February 1969 build date of the Camaro. The spare motor had the added bonus of having been stamped (by the co-worker) with the VIN of the Camaro, making it appear to have been the original engine for the car. After buying the Camaro, the Defendant had the spare engine rebuilt and installed it in the Camaro.
In 2004, the Defendant listed the Z/28 for sale on eBay. The listing described the car as "Numbers Matching DZ 302 Original," "unmolested," "low mileage," and "as close to being a true survivor as any you'll find," with nothing disclosed about the true nature of the engine. The Plaintiff bought the car with a high bid of $25,200.
Not quite what it looks like
In March 2007, the Plaintiff became interested in selling the Camaro. Looking to acquire more details to enhance the sale, the Plaintiff contacted the Defendant to inquire about the specifics of the engine rebuild. At this time, the Defendant came clean and boldly informed the Plaintiff that the engine in the Camaro was not the original engine, but actually a restamp made to visually mimic the original engine. Upon learning of the sham, the Plaintiff retained Shook, who recommended that the Camaro be inspected by an expert. The expert confirmed that the Camaro was a genuine Z/28 model, but that it had a restamped, non-original engine-he was able to tell because the font and clarity of the stamping differed from those employed by the factory during the particular week this Camaro was built. The expert valued the car at $19,500 at the time of purchase, or $5,700 less than the Plaintiff had paid.
During the three-day trial, the Defendant testified that he and the Plaintiff had different understandings of the meaning of the term "Numbers Matching DZ 302 Original." He thought it was enough that the engine was the correct type of engine, built around the time the Camaro was built, and that its present number matching the VIN was sufficient. The Plaintiff's expert testified that for someone in the market for a 1969 Camaro Z/28, the phrase "Numbers Matching DZ 302 Original" meant that the vehicle has its original 302-cubic-inch engine with its original stampings. The expert further testified that the restamping was very well done. He stated unequivocally that a person without specialized knowledge would not be able to tell the engine had been restamped and accordingly wouldn't know that he had been deceived until someone told him.
You win, but how much?
The jury had little trouble finding liability, but the problem turned out to be how much to award in damages. There are three ways to calculate the Plaintiff's damages here:
1. What he lost. At the time of trial (January 2009), this particular Camaro (a Z/28 with a non-original engine) was worth about $30,000. That was more than the $25,200 the Plaintiff had paid for it, so at first blush he still came out $4,800 ahead thanks to a rising market.
2. What he overpaid. Although the Plaintiff made money on the car, he still suffered a loss because he paid too much for the car. That is, he paid $25,200 for a car that was only worth $19,500. That gave the Defendant $5,700 too much money, and the Plaintiff was denied the ability to do something else with the $5,700.
3. What he could have made. Had the Plaintiff been told that this car was not a true numbers-matching car, he could have passed it by and instead used the same $25,200 to buy a real, numbers-matching, true survivor Z/28 Camaro in the same condition. If he had done that in 2003, he would have owned a Z/28 that was worth $80,000 at the time of trial. That would have been a profit of $54,800, or $50,000 more than his actual $4,800 profit.
We don't know why (that's one problem with juries-they don't explain their decisions), but the jury in this case took the middle ground and awarded the Plaintiff $5,700. We can speculate that the jury was not going to let the rising market wipe out the Defendant's fraud, in essence allowing him to gain the benefit of the Plaintiff's investment.
We can also speculate that the jury may have resisted awarding the additional $50,000 of profit the Plaintiff would have made if he had really received what he thought he had purchased, on the basis that it would have been too much of a penalty for the Defendant to suffer. After all, that was about double the sales price of the car.
"Legal Files" can make another observation here. This case presented the interesting situation that, under the "what he could have made" approach to damages, which the Plaintiff clearly favored, we would have the odd fact that the longer the Plaintiff took to bring the lawsuit, the higher the damages became. But that wasn't the Plaintiff's fault, as it was the Defendant who had concealed the true identity of the engine.
Of course, we now have a declining market. In a similar case, should the Defendant be able to convert the "what he would have made" claim to a "what he would have lost" defense? We can easily imagine that the value of a particular car may decline so much that being able to recover the amount you originally overpaid would be a pretty good deal indeed.