2013 QCCQ 708, 2013 QCCQ 708

Dupuis c. Padulo 2013 QCCQ 708 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-117131-096 DATE: January 21, 2013 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON ______________________________________________________________________ Gérald DUPUIS […] St-Léonard, Quebec, […] Plaintiff v. Ricky PADULO […] Montreal-Nord, Québec, […] Defendant And: BOULEVARD DODGE CHRYSLER JEEP

(2000) INC. 2955 Côte de Liesse, Montréal, Québec, H4N 2N3 LA COMPAGNIE GMAC LOCATION 3333 Côte Vertu, office 900 Montreal, Quebec, H4R 2N1 PLAZA CHEVROLET BUICK GMC CADILLAC INC. 10480 West Henri-Bourassa Boulevard St-Laurent, Quebec, H4S 1N6 Impleaded Parties JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff Gérald Dupuis took over the obligations of a lease of a 2007 Cadillac SRX from the original lessee, the Defendant Ricky Padulo.

The original lessor (tenant) was Clermont Chevrolet Cadillac, (Clermont) a dealership, but the lease was immediately assigned to La Compagnie GMAC Location (GMAC). The Plaintiff, Mr. Dupuis claims damages from Mr. Padulo because of an alleged odometer tampering occurring prior to the transfer of the lease. [ 2 ] Mr. Padulo contests, denying any involvement in odometer tampering respecting the vehicle.

He asserts that, if any such tampering took place, which he denies, then it would be the responsibility of Boulevard Dodge Chrysler (Boulevard) with whom he left the vehicle for a minor repair prior to the lease transfer.

He therefore impleaded Boulevard into the case. [ 3 ] Plaza Chevrolet Buick GMC Cadillac Inc., (Plaza) an other dealership involved in the transfer as well as GMAC, the finance company to whom the lease was initially assigned by Clermont, were also impleaded as third parties to permit a complete resolution of all issues. [ 4 ] The discovery of what is alleged to have been odometer tampering was made when Mr. Dupuis brought the vehicle to Clermont for routine maintenance. At that point in time, the odometer read 24,888 kilometres. [ 5 ] Clermont's records indicate that on a previous visit during the time when Mr.

Padulo was the lessee, the service advisor had

recorded the kilometres as reported by the customer as 31,534 kilometres. Clermont concluded in conjunction with the manufacturer, General Motors of Canada Ltd (GM) and with GMAC that the odometer had been tampered with. [ 6 ] From that point on, Mr. Padulo was denied the benefit of any warranties or services agreements to which he would otherwise have been entitled. [ 7 ] Mr. Dupuis takes the position that his consent to the transfer of the lease of obligations is vitiated by his ignorance of this odometer problem at the time of the sale.

He complains specifically about one particular recall, of which he became aware, that would have required the replacement of both primary-drive and secondary-drive timing chains (P-12). He asserts that, because he did not have the benefit of the warranty to replace these parts, he decided not to use the car except for local travel incurring additional costs for the lease of a vehicle for his weekend travel, for sport tournaments, the main purpose for which he had acquired the Cadillac. Issues [ 8 ] Mr.

Dupuis suffered a prejudice resulting from the refusal of GM, GMAC, and the dealer representing GM to provide him with the benefit of warranties that were usually attached to the vehicle he acquired. The first issue to be decided by the Court is to determine which of the parties must bear the loss associated with this refusal. [ 9 ] In the event that the Plaintiff is to be compensated for this prejudice by one or more of the other parties, the Court must determine its value. Facts [ 10 ] Mr. Padulo received the 2007 Cadillac SRX as a new vehicle from Clermont on May 24, 2007.

The credit lease was immediately assigned to GMAC, the finance company customarily involved in sales or credit leases of GM products. The lease was to end on July 24, 2010. [ 11 ] In August 2008, Boulevard got Mr. Padulo interested in the purchase of another vehicle. To facilitate the transaction, Boulevard advertised the Cadillac on a website called "Lease Busters.com" commencing August 19, 2008. At that point, the odometer read 21,395 kilometres. Paul Ladouceur of Boulevard asserts that he verified the odometer himself. Some minor repairs were carried out on the vehicle and at the time it was remitted to Mr.

Padulo on September 10 t , 2008, the odometer read 23,646 kilometres. [ 12 ] For reasons of commodity, the contract of transfer of the lease obligations (P-9) actually took place at the premises of Plaza to whom Boulevard directed Mr. Dupuis. [ 13 ] Mr. Dupuis asserts that he acquired the vehicle as a luxury vehicle for weekend travel to sport tournaments with his family. [ 14 ] He took the vehicle to Clermont, for an inspection, on September 24, 2008, at 24,888 kilometres and made another visit on October 15, 2008, at 26,046 kilometres.

A digital photo was sent of the reading of October 15 to GM (DP-3). [ 15 ] GM addressed a letter to Mr. Dupuis dated November 4, 2008 (P-6) [ 16 ] After relating that the facts concerning the discrepancy, Nicole Asselin of GM's legal department wrote: […] Compte tenu de l'information au dossier, pour ce véhicule, le compteur kilométrique a été soit déconnecté ou altéré. En vérifiant le livret de garantie et d'entretien Cadillac, vous remarquerez que dans l'éventualité où le kilométrage exact ne peut être déterminé, la garantie ne sera plus applicable. Une copie de la

section du livret est incluse à

titre d'information. […] [ 17 ] Clermont's records showed that technicians had read the odometer at 32,070 kilometres on June 17, 2008 and at 34,310 kilometres on July 15, 2008 during the time that Mr Padula was the lessee. [ 18 ] The work order no. 107412, prepared by Clermont, for signature by Mr. Padulo on June 17, 2008, indicates 31 500 kilometres. The customer's reading given by phone is indicated at 31 000 kilometres.

The detailed invoice for the work carried out and the complete letter on June 17, 2008 shows an exact reading by the technician of 32,070 kilometres. (DP-2). [ 19 ] The work order no. 108050 relating to work invoiced July 16, 2008, shows 34,000 kilometres while the invoice after the work is completed showed a exact reading of 34,310. [ 20 ] In both of these instances, Mr. Padulo's signature appears on the work order on which is indicated the approximate kilometrage. [ 21 ] Mr.

Padulo denies his signature on the work orders showing to the Court his credit card where the signature is quite different. [ 22 ] However, the appearance of the signature on the work orders is not dissimilar from documents found in the Court file, D-1, the lease-transfer document and the contestation signed June 17, 2009. [ 23 ] Mr. Padulo's denial of the signature is not plausible. It is more likely that he does not recall signing or that he signed without paying much attention to the document.

He mentions to the Court that he did not, at any time, pay much attention to the kilometrage and that it is only recently that he has becomes sensitised to the fact that a person servicing the car may incorrectly note the odometer reading in the course of performing his services. He experienced this recently when he took his car to be serviced and an error was made by the technician.

[ 24 ] Mr. Paul Ladouceur of Boulevard gave his point of view about the kilometre readings showing two invoices from Touchette Pneus et Mécanique that he obtained. [ 25 ] One, dated September 18, 2007, shows a reading of 19,556 kilometres.

Another, dated March 10, 2008, shows 26,523 kilometres. [ 26 ] While the accuracy of these records is not certain, the second, dated March 10, 2008, is completely inconsistent with a reading of 21,339 kilometres on August 19, 2008, when the Cadillac was advertised for a lease takeover on the Lease Busters.com. [ 27 ] There was no scientific or technical evidence given to prove that the odometer had not functioned or that it had been tempered with, only the historical data. [ 28 ] On the issue of damages, the Plaintiff figures that the use that he got from the Cadillac, restricted to local driving around town is much less than, what he had paid for, which was extended travel.

He asserts that the value of the Cadillac is reduced to that of a small car, for travel around town, for which he might have paid 350 $ per month as opposed to the amount of 576 $ that he paid for the Cadillac (taking into account the cash incentive). [ 29 ] This alleged difference in value of 226 $ per month amounts to a claim of an approximately 5,424 $ over the 24 month period that he continued to lease the vehicle without the benefit of warranties. [ 30 ] As far as direct damages for the unavailability of the warranty, Mr.

Dupuis speaks of a cost of 2,500 $ that would normally have been covered under a recall program for the replacement of the timing belt. He did not actually have this repair carried out. One can infer that the value of the vehicle is 2,500 $ less than it would have been if this repair had been covered by the manufacturer. [ 31 ] Mr. Padulo contests the calculation of damages and raises the fact that Mr. Dupuis benefited from a substantial cash rebate as inducement to take over the lease. Analysis [ 32 ] The Court wishes to state at the outside that there is no evidence that Mr.

Padulo was actually involved in any way in a tampering with the odometer nor that he knew that anyone else would have tampered with it. [ 33 ] On the other end, GM and GMAC and any dealer aware of the facts had significant substantial information coming from the service records to indicate that the odometer reading had, somehow, been reduced substantially, by approximately 13,000 kilometres. [ 34 ] Even though there is no basis to prove bad faith on the part of Mr. Padulo, nor any involvement in foul play with respect to the vehicle's odometer, he is at risk.

He has the obligation to deliver a vehicle that does not have any unknown problem of this type, whether he knows of it or not. Because he was unable to fulfill that obligation, he has a contractual liability to Mr. Dupuis who relied upon it in deciding to accept the lease transfer. [ 35 ] GMAC and the other third parties have no liability; GMAC was simply a passive assignee of the original lease. The dealerships acted, as best, as intermediary or facilitator in the transaction. This excludes any personal liability on their part. [ 36 ] Mr.

Dupuis's consent to the arrangement was predicated upon the vehicle having the benefit of all the applicable warranties and services agreements that normally apply. He would not have purchased the vehicle if he had known about the confusion respecting the odometer that led to the loss of these benefits. [ 37 ] Therefore, Mr. Dupuis was entitled to the annulment of the contract, which normally would have lead to restitution.

He would have been relieved of the lease, and Mr Padula would re-acquire the vehicle having a reduced value, but with the obligation of fulfilling the rest of the lease payments. [ 38 ] But, Mr Dupuis did not seek restitution. He held on to the vehicle but used it less extensively than he would have normally done in case the timing belts would give rise to a problem. His recourse is limited to damages. [ 39 ] The measure of his prejudice would have been the amount of the repair but he decided not to have it done. He could have avoided his greater prejudice of loss of use of the vehicle by carrying out the repair.

This was the only direct financial consequence he was able to demonstrate relating to the non-recognition of the warranties and service contracts by GMAC and GM. [ 40 ] But, if he had used the vehicle much more extensively, he would have incurred an additional expense for exceeding the allocated kilometrage. When he returned the vehicle in September 2010, he was charged for 1,303 $ extra kilometres at 15 cents per kilometre on the basis of the actual reading of 66,303 kilometres. [ 41 ] Mr Dupuis put 42,000 kilometres on the vehicle in about 24 months, despite having made use of the vehicle only around town.

If, during those 24 months he had used the vehicle regularly for out-of-town trips to sports tournaments as he had planned to do, he would have put substantially more kilometres on the vehicle, incurring additional expense when he returned the vehicle [ 42 ] For example, Mr Dupuis testified that in the first two weeks he travelled to several sports tournaments, putting on 3,500 km. [ 43 ] At 0.15 $ per kilometre, assuming, say, 20,000 additional kilometres over 24 months, he would have been charged 3,000 $ extra.

At 30,000 kilometres, 4,500 $ etc. [ 44 ] By not using the vehicle as much, he economised his use of the vehicle at least to the extent of the extra cost he would have incurred had he used it to a fuller extent.

[ 45 ] If there had been no fault, he would have used the vehicle more, but at a considerably higher cost. [ 46 ] Therefore, there is no economic loss associated with the fact that he restricted the use of the vehicle. At best he suffered moral damages, in the form of the inconvenience of his dealings with the dealership and GMAC. [ 47 ] The Court assesses this moral damage, arbitrarily at $ 500. [ 48 ] Because the facts of the case are so unusual and there is no proof of bad faith, on the part of Mr. Padulo, judgment will be awarded without costs.

FOR THESE REASONS, THE COURT: CONDEMNS the Defendant to pay to the Plaintiff the amount of 500.00 $, together with interest at the legal rate of 5% per annum and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated from the date of the institution of the proceedings. DISMISSES the proceedings in respect of the impleaded third parties. With each party assuming it own costs. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: July 18, 2011 and October 15, 2012