Put yourself in Gary Duncan’s shoes. He had owned this great, numbers-matching 1970 Pontiac GTO for over three years. He’d had some good fun with the GTO, but he owned a lot of cars and it was time for this one to move on. So he consigned it to an auction, expecting to even make a little money on it. The grim-faced auction staffer approached and said, “Gary, I’m sorry, but your car is not numbers-matching.” “How could that be?” Gary thought. He had bought it from his good friend Lee Smith, who knew these cars inside and out and told […]
Put yourself in Gary Duncan’s shoes. He had owned this great, numbers-matching 1970 Pontiac GTO for over three years. He’d had some good fun with the GTO, but he owned a lot of cars and it was time for this one to move on.
So he consigned it to an auction, expecting to even make a little money on it. The grim-faced auction staffer approached and said, “Gary, I’m sorry, but your car is not numbers-matching.”
“How could that be?” Gary thought. He had bought it from his good friend Lee Smith, who knew these cars inside and out and told him it was numbers-matching.
A little while later, another fellow approached and asked if he could sit in the car. “You like that car?” Gary asked.
“I used to own this car,” he replied.
So Gary told him how he thought it was numbers-matching but he had just learned it wasn’t. The previous owner responded, “Well, I’ll tell you, I never represented it as numbers-matching.”
Gary consulted his attorney Harry Bosen, who hired an investigator to look into the car. There wasn’t much doubt about the character of the car.
The auction company had done its due diligence and scraped some paint off the engine block to unearth the number. It was a period-correct GTO engine, but it did not match the VIN. But Bosen was more focused on what Smith knew when he sold the car to Duncan.
A Legal File opens
After 25 years as an FBI special agent, Richard Ress knew how to get to the bottom of things. The investigations into Smith’s background disclosed a number of complaints and lawsuits from previous customers who thought they had been cheated on cars.
But the coup was when Ress managed to get the previous owner of the GTO and Smith on a conference call. According to Ress, Smith admitted that he knew it was not a numbers-matching car when he sold it to Duncan. He also boasted that Duncan wasn’t very good at assessing the value of classic cars — and he had made a lot of money over the years by getting Duncan to pay too much for cars. As it turned out, this GTO was the 97th car Duncan had purchased from Smith.
That information was enough to get Duncan determined to right the wrong no matter what it cost. He had to defend himself, and Smith had to be stopped.
A fool for a client
According to Smith, Duncan owns Montgomery County, VA.
The Duncan family has owned a number of large auto dealerships in the area, and they cast a long shadow. He said he consulted nine lawyers in several cities. All told him that Duncan had a lot of resources and would spend him into oblivion — and they declined to represent him due to “conflicts of interest.”
So Smith represented himself in the trial.
As you might expect, that didn’t work too well for him. The judge recused himself, so a judge from outside the area had to be brought in to preside over the trial. That didn’t help.
Bosen presented a number of witnesses who made all the right points. Smith didn’t do a good job of cross-examining them, as he essentially got into arguments with them more than questioning them, which resulted in frequent admonitions from the judge. This conduct resulted in some pretty humorous interchanges.
After a lengthy, rambling series of questions that seemed to go nowhere during one cross-examination, Bosen objected and questioned the relevance of the inquiry.
The judge responded, “I don’t find it relevant, but it’s cross-examination. You may proceed.”
At another point, the cross-examination of another witness devolved to where Smith and the witness were both arguing with each other. Here’s one I’ve never heard before — the judge interrupted and said, “The court reporter is going to knock one of you on your ass here because you’re talking at the same time.”
Maybe Smith thought that he had made all of the points he had to make during his cross-examination of Duncan’s witnesses. But for whatever reason, Smith rested his case without calling any witnesses, not even himself.
The decision
Justice didn’t take long to arrive. The next day, the judge issued his ruling that Smith knew that the GTO was not numbers-matching when he sold it to Duncan, but he had represented that it was.
That was fraud, and lest there be any doubt, it had been proven by “compelling and overwhelming evidence,” apparently stronger than the “clear and convincing evidence” level normally required to prove fraud.
The judge awarded Duncan the $45,000 he paid for the car, $15,000 in punitive damages, $50,000 in attorney fees, and $1,200 in court costs. Plus, Duncan was entitled to interest on everything going back as far as the purchase date five years before.
Duncan was also given a choice. He could keep the GTO and simply deduct $35,000 from what he was owed, which was the original actual value of the GTO that his appraiser had arrived at during the trial.
Was it or wasn’t it?
To be fair to Smith, he did reasonably well in court. It was just that the evidence was pretty overwhelming, and the case was probably unwinnable. The key questions were what Smith had said about the car and what his descriptions meant.
Duncan testified that Smith described the GTO as numbers-matching. The written contract signed by both parties described the GTO as “numbers match with paperwork.” Duncan introduced Smith’s Internet ad as corroboration, which stated “numbers matching with paperwork,” and “numbers matching with original window sticker.”
Duncan’s expert testified that these were terms of art in the collector car world, meaning that the VIN and the engine number match the factory build records for the car.
But Smith’s defense was to parse words. He explained to “Legal Files” that his words had quite a different meaning.
To him, “numbers match with paperwork” didn’t mean that the car was a complete numbers-matching example — and that he had documentation to back it up. Rather, all those words meant were that the VIN matched the factory paperwork, meaning that car was a real GTO and not a cloned Tempest.
Smith insisted that he never said the GTO had a “matching-numbers engine.” He also insisted that he told Duncan, before selling him the car, that it was a “real GTO with a date-coded GTO engine.” Duncan, of course, disputes that, and that conversation does not appear in the court record.
The lesson here is one for sellers. You can’t get cute here.
“Numbers-matching” is a term of art in the collector car world, and buyers are entitled to believe those words carry their usual meaning. Most people reading Smith’s ad would think they would be buying a numbers-matching GTO, with documentation to back it up — and with the original window sticker.
It isn’t a “numbers-matching” car because the numbers are all the same now — the numbers had to be placed there at the factory. An inconsistent statement such as “numbers matching with correct engine” is going to get you sued. “Legal Files” knows you’re trying to quietly explain that the car has a replacement engine, but your buyer isn’t expected to understand that. Fact is, courts will consider what a reasonable person would have thought your words meant — not what you intended them to mean. This is especially true when you’re being super-technical about their meanings.
What next?
Smith has lost his dealer’s license and is now working as a salesman for another dealer. He said he is not going to appeal the ruling — “No use to appeal. I can’t hire a lawyer. What are you going to do?” Smith said he felt he got steamrolled by a rich guy and a “very knowledgeable, high-powered, high-priced attorney,” and there isn’t much he can do about it. But he sounded an upbeat note — “Life’s good. Everyone in my community knows what he [Duncan] did. I have no shame.”
Duncan is happy with the outcome, and he’s proud that he stood up for his principles and to protect other innocent people.
“Economically, [the lawsuit] makes no sense. I’ll never get all my money back,” Duncan said. “But if it stops him from hurting others, it’s worth it.” Duncan still likes the car — “It’s a great car. It just doesn’t have matching numbers.”
Smith also complained that he sold 96 cars to Duncan without any complaints, so why did he complain for the first time?
Duncan responded that he is “not sure this was the only car he got cheated on.” ♦
JOHN DRANEAS is an attorney in Oregon. His comments are general in nature and are not intended to substitute for consultation with an attorney. He can be reached through www.draneaslaw.com.