Appeal from the Order of the Court of Common Pleas of Indiana County in case of Commonwealth of Pennsylvania, Acting by Attorney General Edward G. Biester, Jr. v. Luther Ford Sales, Inc. and Richard Kundla, individually and a sales representative of Luther Ford Sales, Inc., No. 48 EQ 1979.
Robert C. Edmundson, Deputy Attorney General, with him Jeremy W. Homer, Deputy Attorney General, for appellant.
No appearance for appellee.
Robert L. Rubendall, Keefer, Wood, Allen & Rahal, for Amicus Curiae, Pennsylvania Automotive Association.
Judges Mencer, Rogers and Williams, Jr., sitting as a panel of three. Opinion by Judge Rogers.
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One Gerald Lewis owned a 1976 Toyota Corolla which had been damaged in the 1977 Johnstown Flood. He was paid for total loss of the vehicle by his insurance company which took possession of the car and parked it in a salvage area. One Joseph Joseph purchased the Toyota and cleaned and repaired it.
On March 25, 1978, Richard Kundla, a licensed automobile salesman employed by Luther Ford Sales, Inc., acting as Luther Ford's agent, purchased the Toyota from Joseph. Joseph told Kundla that the car had been damaged in the Johnstown Flood and had engine problems. Luther Ford's attempts to repair the engine were only partly successful.
On March 22, 1979, Kundla sold the Toyota for Luther Ford to a Mr. and Mrs. Steven Butchkowski for $1,700 cash and a trade-in vehicle. Kundla did not tell the Butchkowskis that the Toyota had been damaged in the 1977 Johnstown Flood. He told them that
[ 60 Pa. Commw. Page 125]
the engine emitted a tapping sound. Butchkowski said he had a spare engine at home to replace the defective engine; but the spare engine was found not to fit the Toyota. The Butchkowskis had continuous trouble with the Toyota engine. They eventually learned from a person or persons unconnected with Luther Ford that their car had been a victim of the Johnstown Flood and lodged a complaint with the Bureau of Consumer Protection which (acting by the Attorney General) in turn sued Richard Kundla and Luther Ford in equity in the Court of Common Pleas of Indiana County charging them with violation of provisions of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), Act of December 17, 1968, P.L. 1224, No. 387, as amended, 73 P.S. § 201-1 et seq., forbidding false representation in selling goods. In particular, the defendants were charged with violating a regulation of the Bureau at 37 Pa. Code § 301.2(5)(v) declaring it to be an unfair practice to sell a flood damaged motor vehicle without disclosing this fact to the buyer. Injunctive relief, an order of restitution and civil penalties were sought. After trial, the chancellor filed an adjudication in which he found as a fact that the defendants did not disclose that the Toyota was flood damaged but concluded that the transaction was conducted essentially fairly and therefore by decree nisi denied the plaintiff Bureau all relief. The chancellor's finding that Kundla did not disclose that the Toyota had been flood damaged, a fact known to him, established that he and his principal engaged in a deceptive act or practice in violation of the regulation at 37 Pa. Code § 301.2(5)(v).*fn1 The court's conclusion that the
[ 60 Pa. Commw. Page 126]
UTPCPL was observed because the sale of the Toyota was generally fairly conducted by the sellers was error. The prayer for an order restraining the defendants from selling or offering flood damaged motor vehicles without disclosure should have ...