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Moretti v. Motor Vehicle Dealers License And Hearing Board

Superior Court of Rhode Island

May 16, 2019

CARLO MORETTI
v.
MOTOR VEHICLE DEALERS LICENSE AND HEARING BOARD AND TOROS JOHARJIAN d/b/a J & T AUTO SALES

          For Plaintiff: Frank J. Manni, Esq.

          For Defendant: Marcy E. Coleman, Esq.; Michael Goldberg, Esq.

          DECISION

          McGUIRL, J.

         Before the Court is an appeal of the May 17, 2012 decision (decision) by the Motor Vehicle Dealers' License and Hearing Board (Board), dismissing Carlo Moretti's (Appellant) complaint against J & T Auto Sales (Dealership). Appellant seeks reimbursement for a vehicle purchased from Dealership, which he contends violated sections of the Rhode Island General Laws or the Rules and Regulations Regarding Dealers, Manufacturers and Rental Licenses (Rules and Regulations). Jurisdiction is pursuant to G.L. 1956 § 31-5-2.1(d).[1]

         I Facts and Travel

         On December 2, 2010, Appellant purchased a used, 2002 GMC Sierra from Dealership at a purchase price of $10, 000. The eight-year-old vehicle was sold with 27, 060 miles, and it contained a state inspection sticker issued by New England Tire, indicating that it had passed inspection on November 30, 2010.

         Appellant maintained that in July of 2011, an illuminated "check engine" light alerted him to make inquiry from his mechanic at Peter-John's Automotive in West Warwick, Rhode Island. Appellant's mechanic ascertained that the vehicle emission system caused the illumination of the "check engine" light and asserted that the vehicle's overall driving performance would not be affected.

         In September of 2011, Appellant lost pressure in the vehicle's brakes and promptly returned to Peter-John's Automotive for further inspection. During this visit, Appellant's mechanic informed him that the vehicle contained extensive rot to many areas of the frame, including the rails, crossmembers, and supportive brackets located underneath the vehicle. Appellant claimed that the emission canister had also detached from the vehicle's frame, causing the "check engine" light to illuminate. Additionally, directly following the repairs to the vehicle's brakes, the spare tire detached from the frame due to the extensive rot. With respect to the rot, Appellant alleged that the Dealership had undercoated the frame of the vehicle to conceal the rot, which has since been exposed.

         On November 16, 2011, Appellant's vehicle was inspected at a state garage. Upon completing its assessment, the Chief of the state garage (Chief) concluded that the vehicle was in "pretty severe condition at the time" of its inspection. (Tr. at 19.) The Chief further testified that there was no way to determine the time period over which the rot progressively had become worse. He added, however, that "[i]t looked like it may have been put on approximately a year prior to [Dealership's inspection] . . . ." (Hr'g Tr. at 21, July 23, 2012 (Tr.)) Moreover, the Chief asserted that the rust may not have been noticeable at the time of its initial inspection "because it was masked by the undercoating." Id. If the vehicle was "heavily undercoated," the inspector explained, "it could have expedited the progression of the rot . . . if you undercoat over rot or rust, you're going to speed up the deterioration, because you're . . . sealing any kind of moisture . . . it's like cancer." Id. The Chief concluded, testifying, "[i]t's unlikely that [the vehicle] went from being a hundred percent structurally sound to this condition, very unlikely in a year . . . ." (Tr. at 22.) He also explained, however, that no factual basis existed underlying his reasoning apart from his professional opinion. As such, the Chief explained that he did not pursue any further action against the Dealership due to the lack of substantiated evidence.

         The Dealership's owner, Toros Joharjian (Mr. Joharjian), also testified before the Board. In response to whether or not it was common practice to undercoat its vehicles, Mr. Joharjian explained that while he did not undercoat, the Dealership would seal a spot of rust with spray. See Tr. at 22. The owner further explained that in his experience, "[u]ndercoating does not cover rust. . . ." (Tr. at 23.)

         Contending that the Dealership thus did not perform a valid safety inspection of the vehicle prior to his purchase, Appellant sought a full refund, maintaining that the vehicle was sold to him under false pretenses. Specifically, Appellant testified that at the time he purchased the vehicle, "there was no possible way . . . to even identify that there was any damage because there was so much undercoating under the vehicle . . . ." (Tr. at 16.) Appellant further explained that "over time as you drove the vehicle, of course, the undercoating doesn't bond to rust and that's how [the mechanic] was able to identify [the damage] later." Id. at 17.

         After examining the extensive testimony regarding the vehicle and after reviewing the record, the Board found in the Dealership's favor, determining that it had not performed a faulty safety inspection prior to selling the vehicle to Appellant. Although the Board determined no error on the part of Dealership in its inspection, upon reviewing the bill of sale, the Board discovered Rules and Regulations violations. Specifically, the Board found that the bills of sale were not numbered and did not include the required state inspection language pursuant to Section VII(E) of the Rules and Regulations.[2] As such, the Board ordered Dealership to pay fines totaling $200 to the Dealers' License and Regulations Office of the Division of Motor Vehicles.

         On June 7, 2012, Appellant timely filed an appeal to this Court pursuant to § 31-5-2.1(d) and G.L. 1956 § 42-35-15, contesting the Board's decision. In his appeal, Moretti first argues that "the Board committed an error of law in repeatedly considering and referring to inadmissible evidence." Appellant also contends that the Board had no legally competent evidence upon which it could base its decision. See § 42-35-15(g); id.[3]

         II Standard of Review

         The review of the Board's decision by this Court is controlled by § 42-35-15(g), which provides for review of a contested agency decision:

"(g) The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced ...

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