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Case Law Update: The Perils of Buying a Car on eBay

Posted Thursday, July 25, 2013 by Christopher L. Thayer

alt textIn Brown v. Best Auto Limited, the Court of Appeals recently addressed a case involving a used vehicle purchased from a Washington-based company off of eBay. In Brown, the Browns purchased a 2004 Mini Cooper from Best Auto Limited based on an eBay listing. The eBay listing made various representations about the vehicle, including that it was “great driving,” and that the seller had “driven it many miles over the past few weeks and freeway cruised at 75 MPH” with no problems. Based on the statements in the eBay listing and conversations with Best Auto Limited owners, the Browns, who resided in Texas, decided to purchase the car.

When the car arrived in Texas,  they soon discovered a number of problems, including non-functioning air conditioning, a check engine light indicating the engine was running hot (cracked radiator), and that it required a number of repairs. The estimated cost of repairs was over $4,000. A mechanic in Texas also noted that over 75% of the body panels had been replaced, indicating the vehicle had been involved in at least one serious accident. The Browns requested that Best Auto Limited take back the car and refund the purchase price. Best Auto Limited declined to refund the purchase price. Of note, when the title to the vehicle was finally provided, the Browns noticed that, based on the odometer reading, the vehicle had only 1 mile put on it while in Best Auto Limited’s possession–indicating that the representation about driving it “many miles” was false.

The Browns eventually filed suit against Best Auto Limited in Parker County, Texas. Best Auto Limited was aware of the lawsuit and indicated it intended to seek dismissal–as the purchase documents required suit to be brought in Washington. However, Best Auto Limited failed to take any action or formally respond to the suit, so the Browns eventually ended up taking a default judgment against Best Auto Limited. The Browns then had this judgment “domesticated” in Washington (i.e., converted to a Washington judgment) and commenced collection and garnishment proceedings. Best Auto sought to have the judgment vacated, relying again on the venue clause included in its purchase and sale contract.

The King County Superior Court granted Best Auto Limited’s request and vacated the Texas judgment. The Court of Appeals ruled that, under these specific circumstances, vacating the default judgment was an error. A judgment may be vacated where it can be shown that a court lacked jurisdiction. Best Auto Limited argued that the Texas Court did not have jurisdiction over the dispute, given the contractual provision requiring that all disputes be resolved in Washington. In analyzing this situation, the Court of Appeals weighed the contractual provisions versus the Texas “long-arm” statute authorizing the exercise of jurisdiction over nonresident defendants “doing business” in the state of Texas. The Court of Appeals held that Best Auto Limited should have filed a motion to dismiss in Texas, and having failed to do so, that it was not proper for a Washington court to vacate the default judgment.

Thus, even in the face of a venue selection clause, the Washington Court of Appeals was willing to uphold a Texas default judgment, in light of Best Auto Limited’s failure to respond to the Texas lawsuit in a timely and appropriate manner. It is also likely that Best Auto Limited’s inequitable conduct did not win it any favoritism from the court as it weighed the option of whether or not the Texas judgment should be enforced.

For more information, contact Christopher Thayer at (206) 805-1494.

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