JANSEN, P.J.
Plaintiff appeals by right the circuit court's opinion and order of February 9, 2012, granting summary disposition in favor of defendant and dismissing plaintiff's claims with prejudice. We affirm.
This case arises from the sale of a rare 1965 Dodge altered-wheelbase racecar ("the Dodge" or "the vehicle"), specially manufactured by Chrysler Corporation for drag racing and use as a promotional vehicle.
Defendant purchased the Dodge from Fengel in the early 1990s for $35,000. Fengel provided defendant with documentation concerning the vehicle's history, alterations, and chain of title. In particular, Fengel provided defendant with the vehicle's original 1965 certificate of title, bearing Dave Strickler's name and address.
Defendant gathered parts and spent more than 10 years restoring the vehicle. Ted Smith, who assisted defendant in the restoration of the Dodge, testified that he and defendant relied on historical photographs, manuals, and other bulletins to guide them in the restoration process. He testified that the Dodge was meticulously restored, using as many original 1965 parts as possible. According to Ted Smith, the only reproduction parts used in the restoration were the left and right front floor panels. Ted Smith agreed that the vehicle had been restored to "Concours level" condition and that it was better than the original car. Despite the presence of the 1966/1967 Dodge Charger body that had been installed by McJury, Ted Smith believed that the restored Dodge represented "the real and authentic Strickler vehicle."
Defendant testified that when he initially acquired the Dodge, it was "very rusty" and was "missing 90 percent of its parts." Defendant therefore acquired a "donor car" or "parts car" from which he took various parts that were necessary to restore the vehicle. However, defendant testified that he attempted to use as many original parts as possible. To this end, defendant purchased numerous 1965 replacement parts over the years. Defendant opined that, after his restoration of the Dodge, the car was "the real and authentic Strickler vehicle."
Defendant worked with Edward Strzelecki to sell the Dodge after he had finished restoring it. In February 2007, Strzelecki sent letters to potential buyers offering the vehicle for sale and providing certain information concerning the vehicle's history, restoration, and chain of title. In one of those letters, dated February 4, 2007, Strzelecki wrote to Nicholas Smith
Nicholas Smith considered Strzelecki to be a friend. Strzelecki gave him a binder
"[W]hen it looked like the transaction might happen," Nicholas Smith traveled to Michigan and went to the Chrysler Museum with Strzelecki to personally inspect the vehicle. He walked around the vehicle at the Chrysler Museum but remained "outside of the rails that protected the car from visitors." According to Nicholas Smith, defendant represented "on more than one occasion" that "all of the original parts were used in the [restoration] project."
As soon as plaintiff decided to purchase the Dodge, the parties entered into negotiations concerning the consideration to be paid. Plaintiff ultimately agreed to give defendant $600,000 in cash, plus two other classic automobiles in exchange: (1) a 1964 Dodge Coronet Hemi Super Stock valued at $278,000, and (2) a 1964 Ford Thunderbolt valued at $250,000. On March 29, 2007, the parties executed the following bill of sale
After plaintiff accepted delivery of the vehicle, Nicholas Smith altered the Dodge in certain respects according to his own preferences and took the vehicle to various
On April 20, 2010, plaintiff's attorneys in Florida sent a letter to defendant that stated in pertinent part:
On September 28, 2010, plaintiff commenced this action in the Oakland Circuit Court. Plaintiff alleged that it had discovered that the Dodge was reconstructed chiefly with replacement parts and, accordingly, that it was not "the real and authentic Strickler car" as defendant had represented in the bill of sale. Plaintiff set forth claims of breach of contract (count I), fraud in the inducement (count II), fraudulent misrepresentation (count III), and silent fraud (count IV).
During discovery, defendant and Strzelecki admitted that they had used more than 200 replacement parts in the restoration of the Dodge. Strzelecki confirmed that the Dodge, as restored by defendant, did not have the original chemically milled body
Galen Govier, an expert on altered-wheelbase racecars, inspected the Dodge. Govier opined that less than 15 percent of the original 1965 Dodge Coronet had been retained and that the body, engine, transmission, and rear axle were not "correct for a 1965 Dodge." James Schild, an expert on classic automobile restoration, testified that the restored Dodge was a "[r]econstruction" and that it had been "re-bodied." Because the vehicle had an entirely different body, Schild testified that "it cannot possibly be the real and authentic [Strickler] car...."
William Stiles testified that he "built Dave Strickler's altered wheelbase car" in 1965. Stiles asserted that he had refused to authenticate the restored Dodge because it was "not the car I built." According to Stiles, defendant "built a car to look like the original car.... But it's not the original car." Stiles opined that defendant should have used whatever remained of the original Dodge, even if it was in poor condition and required significant patching, and should not have used so many replacement parts. Stiles did not believe that the restored Dodge was collectible because it was no longer the original Strickler racecar.
On January 11, 2012, defendant moved for summary disposition pursuant to MCR 2.116(C)(10), asserting that there was no genuine issue of material fact for trial, that plaintiff had waived any claim concerning the vehicle's authenticity by waiting too long to sue, and that plaintiff could not have reasonably relied on any misrepresentations by defendant as a matter of law. According to defendant, it was readily apparent at the time of purchase that the vehicle had been restored using certain replacement parts and did not have the original 1965 Dodge Coronet body. Defendant contended that Nicholas Smith, a sophisticated car collector, should have immediately noticed these alterations. Defendant also contended that plaintiff had a full and fair opportunity to inspect the vehicle or retain an expert to inspect the vehicle, but had failed to do so before purchasing it. Defendant argued that because plaintiff had waited until April 20, 2010, to notify him of any alleged breach relating to the authenticity of the vehicle, plaintiff was barred from any remedy pursuant to MCL 440.2607(3)(a).
With respect to plaintiff's fraud claims, defendant argued that it was unreasonable as a matter of law for plaintiff to rely on any warranties or representations outside the four corners of the bill of sale. In addition, defendant argued that there could be no fraud in this case because the means to discover the true nature of the vehicle were at all times available to plaintiff. Defendant further contended that plaintiff's fraud claims were barred by the economic loss doctrine.
Following oral argument, the circuit court issued an opinion and order granting summary disposition in favor of defendant and dismissing plaintiff's claims with prejudice. The court ruled that it was beyond genuine factual dispute that plaintiff had waited too long to notify defendant of any alleged breach relating to the vehicle's authenticity. Thus, the court concluded that any remedy for breach of contract was barred by MCL 440.2607(3)(a). With respect to plaintiff's fraud claims, the court ruled that plaintiff could not have justifiably relied on any alleged misrepresentations by defendant because it had for itself the means to discover the truth. Specifically, the court noted that defendant had provided plaintiff with a full and fair opportunity to inspect the Dodge prior to its sale, but that plaintiff had chosen not to inspect the vehicle. Further, the circuit
We review de novo the circuit court's grant or denial of a motion for summary disposition. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). "Summary disposition is proper under MCR 2.116(C)(10) if the affidavits and other documentary evidence show that there is no genuine issue concerning any material fact and that the moving party is entitled to judgment as a matter of law." Kennedy v. Great Atlantic & Pacific Tea Co., 274 Mich.App. 710, 712, 737 N.W.2d 179 (2007). "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." West v. Gen. Motors Corp., 469 Mich. 177, 183, 665 N.W.2d 468 (2003).
Whether the Uniform Commercial Code (UCC) applies in a particular case is a question of law that we review de novo. Heritage Resources, Inc. v. Caterpillar Fin. Servs. Corp., 284 Mich.App. 617, 632, 774 N.W.2d 332 (2009). "When interpreting a uniform act, such as the Uniform Commercial Code, it is appropriate for this Court to look for guidance in the caselaw of other jurisdictions in which the act has been adopted." Id.
In general, "[t]he question whether a [party] may be a merchant as that term is used in the U.C.C. is a question of law for the courts to decide by applying the U.C.C. definition of merchant to the facts in the case." Milwaukee County v. Northrop Data Systems, Inc., 602 F.2d 767, 771 (C.A.7, 1979); see also Vince v. Broome, 443 So.2d 23, 28 (Miss., 1983) (noting that "[t]he ultimate question of whether a person comes within the definition of merchant is a mixed question of law and fact"). But when there are no disputed material facts, the question whether a party is a merchant under the UCC should be decided on summary disposition as a matter of law. See Hammer v. Thompson, 35 Kan.App.2d 165, 184, 129 P.3d 609 (2006); see also Moll v. Abbott Laboratories, 444 Mich. 1, 28 n. 36, 506 N.W.2d 816 (1993) (stating that "[t]he law does not oblige a trial judge to sit idle and present the issue to a jury when the undisputed facts support but one conclusion").
Whether a reasonable time has elapsed is generally a question for the trier of fact. Moore v. First Security Cas. Co., 224 Mich.App. 370, 379, 568 N.W.2d 841 (1997). If reasonable minds could not differ, however, the question of what constitutes a reasonable time should be decided on summary disposition as a matter of law. Computer Network, Inc. v. AM Gen. Corp., 265 Mich.App. 309, 322, 696 N.W.2d 49 (2005); see also Moore, 224 Mich.App. at 379, 568 N.W.2d 841.
As a preliminary matter, we hold that defendant's sale of the Dodge must be evaluated under article 2 of the Uniform Commercial Code (UCC), MCL 440.2101 et seq. An automobile is a "good" covered by the UCC, MCL 440.2105(1); see also Whitcraft v. Wolfe, 148 Mich.App. 40, 50, 384 N.W.2d 400 (1985), and defendant's sale of the Dodge to plaintiff unquestionably constituted a "transaction[] in goods" within the meaning of MCL 440.2102.
Plaintiff contends that the UCC should not be applied in this case because the transaction was merely a sale to a private collector and was not "commercial" in nature.
We also hold that plaintiff was not a "merchant" within the meaning of the UCC for purposes of the transaction at issue. A "merchant" is "a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill." MCL 440.2104(1).
Plaintiff argues that the circuit court erred by concluding that it was beyond genuine factual dispute that it failed to provide notice of the alleged breach of contract to defendant within a reasonable time. We disagree.
In general, under article 2 of the UCC, a buyer may (1) accept goods, MCL 440.2606; MCL 440.2607, (2) reject goods, MCL 440.2602, or (3) revoke acceptance within a reasonable time if a nonconformity substantially impairs the value of the goods, MCL 440.2608.
MCL 440.2607(3)(a) provides that when a tender has been accepted "the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy[.]"
The particular breach of contract alleged by plaintiff in this case pertains to the authenticity of the Dodge. Specifically, plaintiff asserts that it discovered sometime in the summer or fall of 2008 that the Dodge was not "the real and authentic Strickler car" as represented by defendant in the bill of sale. Plaintiff repeatedly asserts that the vehicle's replacement body and numerous replacement parts were difficult to detect and that this lengthened the time necessary to discover the alleged breach. But the documentary evidence presented in this case overwhelmingly establishes that the replacement body and parts would have been easily discoverable upon inspection of the vehicle. Indeed, plaintiff admits that it was given documents at the time of sale describing how McJury had replaced the vehicle's body and enumerating the numerous replacements parts used during the vehicle's restoration. Plaintiff also admits that defendant afforded it a full and fair opportunity to inspect the vehicle before the bill of sale was executed. There is simply no evidence to indicate that the vehicle's alleged inauthenticity was latent or otherwise hidden from plaintiff's view.
We need not definitively resolve whether the vehicle was "the real and authentic Strickler car" as represented in the bill of sale because plaintiff had ample time and opportunity to discover the claimed inauthenticities. Even if the Dodge is not "the real and authentic Strickler car," it was just as inauthentic at the time of purchase as it was when Nicholas Smith claims to have discovered the defects in the summer or fall of 2008. "Because of the static nature of authenticity," plaintiff was no less capable of discovering the inauthenticities at the time of purchase than it was at a later time. Wilson, 850 F.2d at 6. Moreover, plaintiff easily could have discovered any problems related to the vehicle's genuineness at the outset, by means of an inspection or an expert appraisal. See id. at 7; see also Krahmer v. Christie's Inc., 903 A.2d 773, 781-782 (Del.Ch., 2006). It is beyond dispute that any lack of authenticity would have been "readily apparent to the trained eye of an [automotive] expert." See Rosen v. Spanierman, 894 F.2d 28, 32 (C.A.2, 1990).
The fact that plaintiff had a full and fair opportunity to inspect the Dodge prior to purchasing it, and an even greater opportunity to inspect the Dodge after purchasing it, necessarily shortened the allowable period for discovering any nonconformities or inauthenticities. See 2 Hawkland, Uniform
Plaintiff should have discovered any alleged breach of contract relating to the authenticity of the Dodge shortly after purchasing it. Even viewing the admissible evidence in the light most favorable to plaintiff, reasonable minds could not conclude that plaintiff notified defendant of the alleged breach "within a reasonable time after [it] discover[ed] or should have discovered any breach" as required by MCL 440.2607(3)(a).
We further conclude that the circuit court properly dismissed plaintiff's claims alleging fraud in the inducement, fraudulent misrepresentation, and silent fraud.
Plaintiff's claims of fraudulent misrepresentation and silent fraud essentially reiterated the allegations set forth in plaintiff's breach-of-contract claim. The gravamen of these two claims was that defendant misled plaintiff by affirmatively representing that the restored Dodge was "the real and authentic Strickler car" and by failing to disclose the extensive use of replacement parts. But
We acknowledge that the economic loss doctrine does not bar claims of fraud in the inducement when one party's ability to negotiate fair terms and make an informed decision has been undermined by the other party's fraudulent behavior. See id. at 372-373, 532 N.W.2d 541. However, "there can be no fraud where the means of knowledge regarding the truthfulness of the representation are available to the plaintiff and the degree of their utilization has not been prohibited by the defendant." Webb v. First of Mich. Corp., 195 Mich.App. 470, 474, 491 N.W.2d 851 (1992). As explained previously, plaintiff received a binder containing numerous photographs, notes, and other documents concerning defendant's restoration of the Dodge. These documents detailed the restoration process, disclosed the presence of the replacement 1966/1967 Dodge Charger body, and listed many of the other replacement parts used on the vehicle. Additionally, plaintiff had a full and fair opportunity to inspect the vehicle, but did not do so. In sum, plaintiff fully possessed the means of discovering the truth or falsity of defendant's representations, and plaintiff's ability to utilize these means was never prohibited or impeded by defendant in any way. See id. Quite simply, plaintiff was "presented with the information and chose to ignore it," Mable Cleary Trust v. Edward-Marlah Muzyl Trust, 262 Mich.App. 485, 501, 686 N.W.2d 770 (2004), overruled on other grounds by Titan Ins. Co. v. Hyten, 491 Mich. 547, 817 N.W.2d 562 (2012), and therefore could not have been fraudulently induced to enter into the transaction as a matter of law. The circuit court properly granted summary disposition in favor of defendant with respect to plaintiff's claim of fraud in the inducement.
Affirmed. As the prevailing party, defendant may tax costs pursuant to MCR 7.219.
MARK J. CAVANAGH and MARKEY, JJ., concurred with JANSEN, P.J.