The Missouri Court of Appeals ruled in favor of Cohen. The appellate court rejected the dealership’s first argument based on Hodson’s own testimony. The appellate court concluded that Hodson knew of the damage because he testified at trial that he had worked in the auto sales business for many years and was able to detect the signs indicating that a vehicle had been damaged and improperly rebuilt. The appellate court concluded that it was reasonable for the jury to infer that Hodson’s nondisclosure was done with reckless difference or was evil, motivated solely by his desire to make the sale.
The appellate court rejected the dealership’s second argument because of the dealership’s conduct after the sale. When Cohen discovered the car’s defects, he returned to the dealership, only to be rebuffed and thrown off the lot by the sales manager. The appellate court ruled that the jury was free to consider this conduct when assessing punitive damages. Given these facts, the jury assessed a higher degree of culpability to the dealership than to Hodson.
Because the dealership failed to object to the trial judge’s instruction to the jury on punitive damages, the appellate court ruled that the dealer failed to properly preserve the error for appellate review. Thus, the court declined to address the jury instruction.
It is important to note that there is no mention in the court’s opinion that Hodson or the dealership had actual knowledge of the vehicle’s repair history (we’ll leave it up to you to draw your conclusions as to whether there was actual knowledge or not). The court found that it was reasonable to conclude that Hodson knew of the prior damage and repair solely because he was experienced! Scary.
And also note the cost of not responding properly to a customer’s complaint. While it is possible that the customer’s behavior might have justified him being “rebuffed and thrown off the lot,” there’s nothing in the court’s opinion to indicate that was the case. This case is worth pointing out to your employees as an example of the potential cost of treating customers in anything but the most businesslike and polite manner. If our arithmetic is correct, this dealer paid over $40,000 for his lesson in being nice to folks.