Jordan v. Nissan North America, Inc.

Jordan v. Nissan North America, Inc. (2002-446); 176 Vt. 465; 853 A.2d 40

2004 VT 27

[Filed 26-Mar-2004]
[Motion for Reargument Denied 26-May-2004]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2004 VT 27

                                No. 2002-446


  Neal and Terri Jordan	                         Supreme Court

                                                 On Appeal from
       v.	                                 Rutland Superior Court 

                                                 November Term, 2003
  Nissan North America, Inc. and 
  Jerry's Nissan, Inc.


  William D. Cohen, J.

  Jan Peter Dembinski and Herbert G. Ogden of Liccardi Crawford & Ogden,
    P.C., Rutland for Plaintiffs-Appellants.

  Shireen T. Hart of Eggleston & Cramer, Ltd., Burlington, and Bruce Terlep
    of Swanson, Martin & Bell, Wheaton, Illinois, for Appellee/Cross-Appellant.

  John J. Kennelly of Pratt Vreeland Kennelly Martin & White, Ltd., Rutland,
    for  Defendant-Appellee.


  PRESENT:  Amestoy, C.J., Dooley, Johnson and Skoglund, JJ., and Allen, C.J.
            (Ret.),  Specially Assigned

        
       ¶  1.  JOHNSON, J.   Plaintiffs Neal and Terri Jordan appeal from a
  jury verdict in favor of defendants Nissan North America, Inc. and Jerry's
  Nissan, Inc. on plaintiffs' claims under Vermont's Consumer Fraud Act, 9
  V.S.A. § 2453(a).  Plaintiffs allege that defendants violated the Act by
  representing a Nissan Quest as an import when the minivan was actually
  assembled in the United States.  Plaintiffs seek a new trial on the grounds
  that (1) the jury instructions misstated the law on consumer fraud; (2) the
  court erroneously allowed defendants to raise affirmative defenses for the
  first time at trial; (3) the court should have excluded testimony from a
  witness who was not disclosed as an expert before trial; and (4) the court
  erred by denying plaintiffs' motion for judgment as a matter of law. 
  Defendant Nissan North America (NNA) cross appeals the court's decision on
  NNA's petition for costs, granting NNA's request in part only.  We affirm
  the judgment for defendants, but we reverse and remand part of the trial
  court's award of costs to NNA.

       ¶  2.  The facts may be summarized as follows.  In August 1998,
  plaintiffs purchased a Nissan Quest minivan from Jerry's Nissan, Inc. to
  replace their Ford Taurus wagon with which they had become dissatisfied. 
  At the time of the purchase, the vehicle had a legally-required "Monroney"
  label affixed to it that stated in large bold lettering, "Three Years
  Running . . . #1 Import Minivan!"  Although price was ultimately the
  deciding factor in purchasing the Quest, plaintiffs wanted a Japanese-made
  vehicle, and they believed that the Nissan Quest fit that description.  

       ¶  3.  Eventually, the Quest developed a ticking sound in the blower
  fan, a sound identical to the one plaintiffs' old Taurus wagon made and
  that contributed to their decision to buy a new vehicle.  Plaintiff Neal
  Jordan began making inquiries about the origin of the Nissan Quest and
  discovered that it was manufactured and assembled in the United States
  through a joint venture between Nissan and the Ford Motor Company.  Many of
  the Quest's parts were identical to those used in Ford vehicles, although
  Nissan designed the Quest.  Nissan's facility in Japan also designed,
  engineered, and produced the tooling necessary to assemble the vehicle. 
  Nissan shipped that tooling from Japan to a facility in the United States
  where the Quest was ultimately assembled.
   
       ¶  4.  Believing they were deceived, plaintiffs wrote to Nissan
  officials asking that Nissan take the Quest back and return their purchase
  money.  After the request was refused, plaintiffs sued both NNA and Jerry's
  Nissan and tried the case by jury.  The jury returned special verdicts for
  both defendants, finding that neither had engaged in any deceptive act or
  practice.  The present appeal followed the trial court's denial of
  plaintiffs' motion for judgment as a matter of law.

       ¶  5.  Plaintiffs' claims against defendants arise under § 2453(a) of
  Vermont's Consumer Fraud Act.  9 V.S.A. § 2453(a).  The statute prohibits
  deceptive acts and practices in commerce, which a complainant must
  establish with proof of three elements: (1) the representation or omission
  at issue was likely to mislead consumers; (2) the consumer's interpretation
  of the representation was reasonable under the circumstances; and (3) the
  misleading representation was material in that it affected the consumer's
  purchasing decision.  Id.; Carter v. Gugliuzzi, 168 Vt. 48, 56, 716 A.2d 17, 23 (1998).  Under the Act's objective standard, a consumer establishes
  the first element if she proves that the representation or omission had the
  tendency or capacity to deceive a reasonable consumer.  Carter, 168 Vt. at
  56, 716 A.2d  at 23; Bisson v. Ward, 160 Vt. 343, 351, 628 A.2d 1256, 1261
  (1993).  Messages susceptible to multiple reasonable interpretations may
  violate the Act if just one of those interpretations is false.  Carter, 168
  Vt. at 57, 716 A.2d  at 24.  Notably, no intent to deceive or mislead need
  be proven because § 2453(a) requires only proof of an intent to publish.  
  Id. at 56, 716 A.2d  at 23.  We note that our construction of Vermont's
  Consumer Fraud Act takes into account interpretations of similar
  protections under the Federal Trade Commission Act and other state laws. 
  Id. at 52, 716 A.2d  at 21.  
   
       ¶  6.  Plaintiffs first claim that they are entitled to a new trial
  because the court's jury instructions did not accurately reflect the
  standard applicable to the first element under § 2453(a).  To prevail,
  plaintiffs must show that the jury instructions were both erroneous and
  prejudicial.  Mobbs v. Cent. Vt. Ry., 155 Vt. 210, 218, 583 A.2d 566, 571
  (1990).  The propriety of a jury instruction depends upon whether the
  charge, as a whole and not piecemeal, captures " 'the true spirit and
  doctrine of the law.' "  Irving v. Agency of Transp., 172 Vt. 527, 530, 768 A.2d 1286, 1290 (2001) (mem.) (quoting Harris v. Carbonneau, 165 Vt. 433,
  438, 685 A.2d 296, 300 (1996)); Mobbs, 155 Vt. at 218, 583 A.2d  at 571. 
  Plaintiffs argue that the court's instructions on the first element of
  consumer fraud did not meet the foregoing standard.  


       ¶  7.  At trial, plaintiffs contended that the Monroney label's
  representation of the Quest as the "#1 Import Minivan" was deceptive
  because the vehicle was actually assembled in the United States through a
  joint venture with a domestic company.  They also claimed that Jerry's
  should have told them that the Quest was made in a joint venture with Ford
  because they claim they told Jerry's that they did not want another Ford. 

         The trial court instructed the jury, in pertinent part, as
    follows: In order to find that the Defendants engaged in a
    deceptive act or practice you must find that each of the following
    elements has been proven by the Jordans with respect to each
    Defendant.  One, there must be a representation, omission or
    practice likely to mislead customers.  Two, the consumer must be
    interpreting the message reasonably under the circumstances.  And
    three, the misleading effect must be material, that is, likely to
    affect the consumer's conduct or decision regarding the product.

         I will now explain to you each of these elements in more
    detail.  The first element is an objective standard looking to
    whether the representation or omission had the capacity or
    tendency to deceive a reasonable consumer.  Actual injury as a
    result of these representations or omissions is not required to
    recover under the act.  Rather, a consumer is only required to
    show that the seller's representations or omissions were made and
    the capacity or tendency to deceive the reasonable consumer.  

         In considering whether a statement or omission had the
    capacity or tendency to deceive, there's a general rule of law
    that individual words and phrases in a larger message cannot
    themselves determine the meaning of a statement or representation. 
    Each claim delivered to the consumer must be interpreted as a
    whole in the context of all the other facts communicated.  Thus
    the Jordans must prove that the claim was deceptive in light of
    all the information they were given.

  (Emphasis supplied.)  

       ¶  8.  Singling out the last sentence, plaintiffs claim that the
  instruction misled the jury by allowing it "to focus on just one piece of
  information given to a consumer, versus the overall impression from all the
  information." (FN1)  At oral argument plaintiffs' counsel emphasized that
  the court's error was in not adequately explaining § 2453(a)'s first
  element to prevent jury confusion.  We do not share plaintiffs' view of the
  record.  The single sentence on which plaintiffs premise their claim
  summarized the court's more detailed explanation of the correct standard to
  satisfy § 2453(a)'s first element.  More importantly, the instructions as a
  whole reflected the proper legal standard on how to assess whether a
  representation is deceptive because they required the jury to consider the
  overall impression left by defendants' communications.  See Kraft, Inc. v.
  FTC, 970 F.2d 311, 314 (7th Cir. 1992) (claim is deceptive if it is likely
  to mislead reasonable consumers after examining overall net impression of
  representation); Avis Rent A Car Sys., Inc. v. Hertz Corp., 782 F.2d 381,
  385 (2d Cir. 1986) (unfair advertising claim requires fact finder to
  consider advertisement in its entirety, like a mosaic, and not in separate
  pieces); FTC v. Sterling Drug, Inc., 317 F.2d 669, 674 (2d Cir. 1963)
  (deception must be measured by ultimate impression advertisement leaves on
  reader since consuming public does not normally study or weigh each word in
  an advertisement).  The trial court's instructions on § 2453(a) were
  neither erroneous nor prejudicial.

       ¶  9.  Plaintiffs next argue that they were prejudiced by the court's
  decision to allow defendants to present evidence of two affirmative
  defenses - set-off and compliance with statute - because defendants did not
  identify them in their answer to the complaint.  We do not reach the issue
  of set-off, which relates to the damages component of plaintiffs' claims,
  because the issue became moot when the jury relieved defendants of any
  liability for fraud. 

       ¶  10.  For a different reason - lack of preservation - we do not
  address plaintiffs' argument on the compliance-with-statute defense. 
  Unlike set-off, the compliance-with-statute defense relates to liability
  and not to damages.  It is well settled, however, that matters not raised
  at trial may not be raised for the first time on appeal.  Harrington v.
  Dep't of Employ. & Training, 152 Vt. 446, 448, 566 A.2d 988, 990 (1989);
  see also V.R.A.P. 28(a)(4) (appellant's brief must explain how issues were
  presented below and preserved for appellate review).  Plaintiffs did not
  object to the statutory compliance evidence at trial on the basis they
  argue on appeal.  Rather, counsel objected to the evidence on hearsay
  grounds only.  Nowhere in the record of the exchange between counsel and
  the court to which plaintiffs have referred can we discern even a hint of
  the argument they raise here about failure to plead an affirmative defense. 
  We decline to address the argument.  See In re S.B.L., 150 Vt. 294, 297,
  553 A.2d 1078, 1081 (1988) (Court will not search the record for error).

       ¶  11.  The next ground plaintiffs present for reversal and a new
  trial pertains to testimony of a witness who was employed by defendant NNA
  and who, ironically, plaintiffs called in their direct case.  The witness,
  Louisa Bowers, was responsible for Nissan's Quest program since 1991. 
  Before trial, NNA disclosed to plaintiffs that it intended to call Bowers
  as a witness at trial to testify about the Nissan-Ford relationship. (FN2)  
  On appeal, plaintiffs contend that the court should have excluded her
  testimony about  the Quest's design and manufacturing and about Nissan's
  relationship with Ford because it was expert testimony that should have
  been disclosed before trial.  See V.R.C.P. 26(b)(4) (setting forth expert
  witness disclosure obligations during discovery).  Plaintiffs' contention
  has little merit.  The trial court rejected plaintiffs' characterization of
  Bowers's testimony as expert testimony, and we agree.  Bowers provided
  factual testimony about the Quest's manufacture and the joint venture
  between Ford and NNA.  Moreover, the record shows that it was plaintiffs'
  counsel who opened the areas of inquiry to which plaintiffs now object. 
  Plaintiffs' counsel asked Bowers questions about the Quest's design and
  engineering, the joint venture between Ford and Nissan, which company had
  authority over workers on the assembly line, who trained the employees
  working on the Quest, where the parts comprising the Quest originated, and
  labeling requirements related to the Quest.  Through defense counsel's
  examination, Bowers provided more detail on those topics.  Under the
  circumstances, we fail to see the prejudice or surprise that plaintiffs
  claim resulted from Bowers's testimony.   See Keus v. Brooks Drug, Inc.,
  163 Vt. 1, 7, 652 A.2d 475, 480 (1994) (error predicated on erroneous
  admission of evidence requires showing of prejudice).  The trial court's
  decision was soundly within its discretion, and we will not disturb it.
   
       ¶  12.  Plaintiffs also claim the court erred by overruling their
  numerous and unequivocal objections to Bowers's testimony on federal
  reporting and labeling laws applicable to automobiles.  They claim she
  provided expert legal opinion testimony that the court should have excluded
  because NNA did not furnish pre-trial disclosure of her expertise.  Like
  the previous claim, we find no merit to plaintiffs' contention.  Contrary
  to plaintiffs' assertion, the grounds for their objections at trial were
  not the grounds they assert now on appeal.  See V.R.E. 103(a)(1) (error may
  not be predicated on admission of evidence unless a party's rights are
  substantially affected and a specific and timely objection was made and
  ruled on by court); see Bull v. Pinkham Eng'g Assocs., 170 Vt. 450, 459,
  752 A.2d 26, 33 (2000) (to effectively raise an objection, party must
  present issue to trial court with specificity and clarity so that trial
  court may rule on it).  

       ¶  13.  Through Bowers, NNA sought to show the jury that NNA
  designated the Quest as an import in part due to federal regulations. (FN3)  
  Bowers testified that in her job with NNA, which included overseeing
  compliance with government regulations, she was required to become familiar
  with federal reporting and labeling obligations for automobile makers. 
  Counsel for plaintiffs interposed many objections to her testimony, but
  most were on relevance and hearsay grounds.  We can find only isolated
  instances where counsel objected because Bowers allegedly offered an expert
  legal opinion.  In those instances, plaintiffs' counsel acquiesced to the
  court's ruling that Bowers could testify based on her understanding of the
  law.  Rule 701 of the Vermont Rules of Evidence permits that type of lay
  opinion testimony so long as the testimony is based on the witness's own
  perception and is helpful to the fact finder.  V.R.E. 701; see also
  Irving,172 Vt. at 529, 768 A.2d  at 1289 ("[O]pinions from lay witnesses are
  limited to matters which they have perceived directly.").  NNA's counsel
  had already established that Bowers was familiar with certain aspects of
  federal law because her job with the company required it. We thus find no
  reversible error on this record.

       ¶  14.  Plaintiffs next claim that the trial court should have granted
  their motion for judgment as a matter of law.  Plaintiffs argue that if the
  court had excluded the testimony Bowers offered (and to which they
  objected) the record would have mandated judgment for plaintiffs as a
  matter of law.  We have affirmed the court's decision to admit Bowers's
  testimony.  Thus, whether plaintiffs were entitled to judgment as a matter
  of law in the absence of her testimony is a purely hypothetical question we
  will not entertain.  

       ¶  15.  We turn now to NNA's cross appeal on costs.  Following the
  jury's defense verdict, NNA filed a motion for costs in the amount of
  $15,480.58.  The bill of costs NNA prepared included air fare and hotel
  accommodations for seven witnesses NNA anticipated would testify at trial. 
  The bill also included attendance fees, in-state mileage, and out-of-state
  mileage for those seven individuals.  Of the seven people on NNA's list,
  only three actually testified.  The trial court eventually awarded NNA a
  portion of its request, rejecting all costs associated with travel -
  whether inside or outside of Vermont - because the court said it could find
  no authority to award travel costs.  The court did not address NNA's
  request for witness fees permitted by 32 V.S.A. § 1551(1), but it granted
  the company's request for the cost of deposing plaintiffs under V.R.C.P.
  54(g).  Seeking all of its costs, NNA filed this cross appeal.
   
       ¶  16.  Awarding costs to the prevailing party in a civil action is a
  discretionary matter for the trial court.  Peterson v. Chichester, 157 Vt.
  548, 553, 600 A.2d 1326, 1329 (1991); see V.R.C.P. 54(d) ("Costs other than
  attorneys' fees shall be allowed as of course to the prevailing party, as
  provided by statute and by these rules, unless the court otherwise
  specifically directs.").  We therefore review the court's order for an
  abuse of discretion.  Peterson, 157 Vt. at 553, 600 A.2d  at 1329.  

       ¶  17.  NNA argues that the court abused its discretion by failing to
  address its request for witness fees under 32 V.S.A. § 1551(l).  Section
  1551(1) provides for a fee of ten dollars per day for a witness's
  attendance at trial.  NNA's motion for costs under V.R.C.P. 54 itemized the
  witness fees it sought under the statute, yet the court's order is
  altogether silent on the matter.  Plaintiffs argue that we should deny
  NNA's request because NNA did not include a witness fee certificate as
  required by 32 V.S.A. § 1553.  See 32 V.S.A. § 1553 ("A party who produces
  a witness in superior court shall procure a certificate signed and sworn to
  by such witness, specifying the number of miles from his usual place of
  abode to the place of trial, and the number of days he attended as a
  witness, before the travel and attendance of the witness shall be allowed
  such party in his bill of costs.").  In Higgins & Bogue v. Hayward, 5 Vt.
  73 (1833), we held that § 1553 did not deprive the trial court of its power
  to take evidence on the issue of costs where a certificate complying with
  the statute was lacking.  5 Vt. at 74.  We have no reason to reconsider
  that holding here.  We remand the issue of witness fees to the trial court
  so it may consider NNA's claim in the first instance.
   
       ¶  18.  As to the issue of travel costs, NNA argues that the trial
  court committed two errors.  First, NNA claims that 32 V.S.A. § 1551(4)
  allows reimbursement for costs related to witness travel within the State
  of Vermont.  Second, NNA alleges that the court's denial of its costs
  incurred to bring witnesses to trial from out of state, including air fare
  and hotel accommodations, violates the Commerce and Equal Protection
  Clauses of the United States Constitution.  As to the first issue, we agree
  with NNA that the court's decision on in-state travel was error.  Section
  1551(4) of Title 32 allows the superior court to award witnesses a fee for
  in-state travel at the rate of eight cents per mile each way.  32 V.S.A. §
  1551(4).  The court's conclusion that it had no authority to award such
  costs stands contrary to the express intent of the Legislature and must be
  reversed for reconsideration under the statute.

       ¶  19.  Awarding costs for out-of-state travel presents a different
  issue.  NNA argues that § 1551(4) unconstitutionally discriminates in favor
  of parties who live in Vermont in violation of the Commerce Clause of the
  United States Constitution.  The Commerce Clause serves to further free
  trade among the states.  Frank W. Whitcomb Constr. Corp. v. Comm'r of
  Taxes, 144 Vt. 466, 470, 479 A.2d 164, 167 (1984).  The party urging a
  violation of the clause based on a statute that makes no distinction
  between in-state and out-of-state residents must demonstrate that the
  statute has a disproportionate impact on out-of-state residents.  See In re
  Tariff Filing of Cent. Vt. Pub. Serv. Corp., 167 Vt. 626, 628, 711 A.2d 1158, 1160 (1998) (mem.) (upholding a facially neutral rate classification
  under Commerce Clause challenge where record contained no evidence that
  classification affected out-of-state residents disproportionately).  NNA
  has wholly failed to make that showing here.  Without pointing to any
  record support, NNA asserts that § 1551(4)'s in-state travel costs limit
  imposes a special burden on foreign residents because their witnesses will
  presumably come from out of state and Vermont residents do not have to
  incur the same costs.  Bare assertions are an insufficient basis upon which
  to find a violation of the Commerce Clause or an abuse of the trial court's
  discretion.  We therefore reject NNA's challenge to the court's award on
  this ground. 
   
       ¶  20.  We find NNA's claim under the federal Equal Protection Clause
  similarly unavailing.  To find a violation of equal protection in this case
  we would have to conclude that the limit for in-state travel costs was
  arbitrary and had no legitimate state purpose.  See In re Picket Fence
  Preview, 173 Vt. 369, 374, 795 A.2d 1242, 1247 (2002) (economic regulation
  under Equal Protection Clause must pass so-called rational-basis test,
  which only requires showing that classification has legitimate governmental
  purpose); Governor Clinton Council, Inc. v. Koslowski, 137 Vt. 240, 246,
  403 A.2d 689, 693 (1979) (to withstand equal protection challenge,
  classification or distinction must rest on a real, unfeigned difference,
  have some relevance to legislative purpose, and lead to a difference in
  treatment that is not so dissimilar as to be arbitrary).  That we cannot
  do.  The policy to limit reimbursement for travel within the State of
  Vermont can be seen as a means to encourage parties - whether or not
  Vermont residents - to limit litigation costs.  The distinction may also be
  viewed as a way to conserve judicial resources by eliminating post-judgment
  disputes over the reasonableness of out-of-state travel costs.  We
  therefore affirm the trial court's decision to deny NNA any costs related
  to bringing witnesses to Vermont from out of state for trial.

       Judgment for defendants on liability under 9 V.S.A. § 2453(a) is
  affirmed.  The award of costs to defendant Nissan North America, Inc. is
  affirmed in part and reversed in part, and the matter is remanded for
  further proceedings consistent with the views expressed herein.



                                       FOR THE COURT:


                                       _______________________________________  
                                       Associate Justice


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                                  Footnotes


FN1.  The proper instruction, plaintiffs argue, would have told the jury to
  consider the representation or omission "in light of all the information
  [plaintiffs] were given in a particular communication."  (Emphasis
  supplied.)  At oral argument we asked plaintiffs' counsel to explain the
  difference in the two instructions, but he could not articulate one.

FN2.  In their reply brief, plaintiffs contend they were surprised by
  Bowers's testimony in part because NNA did not disclose her in its response
  to two interrogatories plaintiffs propounded early in discovery.  As far as
  we can tell from the record, plaintiffs never complained about the lack of
  disclosure to the trial court nor sought sanctions against NNA for the
  allegedly late disclosure.  There is no dispute, however, that NNA notified
  plaintiffs before trial that it intended to have Bowers testify and that
  NNA would have made her available for a deposition.  Apparently, plaintiffs
  decided to forego a deposition, but called Bowers to testify in their
  case-in-chief anyway.

FN3.  Plaintiffs also claim the court should not have allowed Bowers to
  testify about her understanding of federal law to prove NNA's "corporate
  state of mind" because she did not testify about "what she had personally
  witnessed" as to that state of mind.  This objection was also made for the
  first time in this Court and was never presented to the trial court.  We
  therefore do not address it.  We note, however, that to the extent NNA's
  intent or state of mind was relevant, an issue about which we express no
  opinion, it may be proven through actions or statements of officers or
  employees who have apparent authority to make policy decisions for the
  company.  See United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th
  Cir. 1983) (corporate state of mind or intent may be established through
  statements or actions of officers or employees who have authority to make
  corporate policy).