Jordan v. Nissan North America, Inc. (2002-446); 176 Vt. 465; 853 A.2d 40
2004 VT 27
[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
2004 VT 27
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,
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.
¶ 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
¶ 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:
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
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