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Court Holds Consumer Sales Practices Act Allows Recovery for Economic and Non-Economic Damages
2005-0331. Whitaker v. M.T. Automotive, Inc., 2006-Ohio-5481.
Summit App. No. 21836, 2004-Ohio-7166. Judgment reversed and cause remanded.
Moyer, C.J., Resnick, Pfeifer, Lundberg Stratton and Lanzinger, JJ., concur.
O'Donnell, J., dissents.
O'Connor, J., not participating.
Opinion: http://www.supremecourtofohio.gov/rod/newpdf/0/2006/2006-Ohio-5481.pdf
(Nov. 8, 2006) The Supreme Court of Ohio held today that under R.C. Chapter 1345, the Ohio Consumer Sales Practices Act (CSPA), a consumer who is harmed by a supplier's unfair or deceptive trade practices is entitled to recover not only actual economic losses, but also noneconomic damages that result from the CSPA violations. In a 5-1 decision, the Court held further that actual damages proven by a consumer, whether economic or noneconomic, are subject to trebling when the offending practice had previously been identified as deceptive or unconscionable by rule or in a court decision.
The case involved a decision of the Summit County Court of Common Pleas finding that M.T. Automotive, Inc., doing business as Montrose Toyota of Akron, was guilty of multiple violations of the CSPA in its dealings with customer Craig Whitaker. Whitaker took “spot delivery” of a used pickup truck in October 2001 believing that he and the dealership had signed a binding lease agreement. A few days later, however, the dealership took back the truck and denied Whitaker a refund of his $1,500 down payment when he refused to sign a new, less-favorable lease after the dealership advised him that he “had not qualified” for financing under the original lease agreement.
Whitaker, who had sold his old truck and was without transportation for several weeks after the new vehicle was repossessed, sued the dealership alleging multiple CSPA violations and seeking damages for extra expense, inconvenience, public embarrassment and emotional distress. A jury found that Montrose had engaged in 11 unfair and deceptive sales practices, and awarded Whitaker $105,000 in damages plus legal fees. The damage award was subsequently increased to $315,000 by the trial court under a provision of the CSPA that allows trebling of damages when a violator's business practice has previously been labeled as deceptive or unconscionable by rule or in a published court decision.
Montrose appealed, and the 9th District Court of Appeals reversed the trial court's damage award. The appellate panel ruled that the CSPA allows claimants to recover only for actual economic losses, and does not authorize awards for emotional distress or other noneconomic damages. Since there was insufficient evidence of actual economic damages, the court of appeals reversed and remanded the case to the trial court with instructions to issue a judgment awarding Whitaker statutory damages of $200. Whitaker appealed the 9th District's ruling to the Supreme Court.
In today's decision, authored by Justice Judith Ann Lanzinger, the Court reversed the 9th District and held that the CSPA does not limit recovery to economic damages.
Justice Lanzinger wrote that “R.C. 1345.09(A) states: ‘Where the violation was an act prohibited by section 1345.02 or 1345.03 of the Revised Code, the consumer may, in an individual action, rescind the transaction or recover his damages.' … The enacting clause stated that the intent was ‘to prevent unfair, deceptive, and unconscionable acts and practices, to provide strong and effective remedies, both public and private, to assure that consumers will recover any damages caused by such acts and practices, and to eliminate any monetary incentives for suppliers to engage in such acts and practices.' When the word ‘damages' is used without a modification, we have held that the term is broad in scope. ‘ “Damages,” absent a restrictive modifier like “compensatory,” “actual,” “consequential” or “punitive,” is an inclusive term embracing the panoply of legally recognized pecuniary relief.' ”
“In assessing the language employed by the General Assembly,” wrote Justice Lanzinger, “the court takes words at their usual, normal or customary meaning. … In order to exclude noneconomic damages from R.C. 1345.09, we would have to read the term ‘pecuniary' or ‘monetary' or ‘out-of-pocket expenses' into the statute. Therefore, we hold that in an action brought under the CSPA, all forms of compensatory relief, including noneconomic damages, are included within the unrestricted term ‘damages' under R.C. 1345.09(A).”
In interpreting R.C. 1345.9(B), the legal provision authorizing treble damages for certain CSPA violations, Justice Lanzinger noted that the statute allows courts to award a consumer “three times the amount of his actual damages or two hundred dollars, whichever is greater … ” Quoting from the Supreme Court's 1929 decision in Mouse v. Central Savings & Trust, Justice Lanzinger wrote: “When considering whether noneconomic harm may be included as part of ‘actual damages,' this court has stated that ‘“[a]ctual damages” is a term synonymous with compensatory damages and covers all loss recoverable as a matter of right.' … In Fantozzi [v. Sandusky Cement Products Co.], we defined ‘compensatory damages' in such a way that it includes both economic and noneconomic damages.”
Citing multiple cases in which state and federal courts have interpreted the Ohio CSPA and federal consumer-protection laws to include noneconomic damages in actual damages, Justice Lanzinger concluded that “because actual damages and compensatory damages are equivalent, and because compensatory damages can consist of both economic and noneconomic damages, we hold that the actual damages proven, whether economic or noneconomic, are subject to trebling under R.C. 1345.09(B).”
Because the 9th District's review of the trial court judgment did not address whether the sufficiency and weight of the evidence in Whitaker's case supported the jury's award of noneconomic damages, the Supreme Court remanded the case to the 9th District to consider and rule on those issues. Justice Lanzinger's opinion was joined by Chief Justice Thomas J. Moyer and Justices Alice Robie Resnick, Paul E. Pfeifer and Evelyn Lundberg Stratton. Justice Terrence O'Donnell dissented without opinion. Justice Maureen O'Connor did not participate in the Court's deliberations or vote on the case.
Contacts
Laura K. McDowall, 330.784.8800, for
Craig Whitaker.
Clair Dickinson, 330.535.5711, for M.T. Automotive, Inc. d.b.a. Montrose Toyota.
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