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ALBANY – The claim in an eBay advertisement that a used Mercedes Benz was “gorgeous” was not enough to sustain claims of fraud and breach of warranty filed by the disgruntled elderly buyer after numerous problems surfaced, an appeals panel has ruled. John Nigro complained that far from being gorgeous, the Mercedes he bought at Internet auction for $21,200 had previously been in an accident, had serious mechanical problems, stained upholstery, rusted and worn-out undercoating and needed more than $1,700 in body work. He sought to have the 2006 sale rescinded or to recover damages for the allegedly fraudulent misrepresentations about the vehicle on eBay. The Appellate Division, Third Department, ruled unanimously last week, however, that Mr. Nigro failed to establish fraud by showing that the sellers knowingly made misrepresentations about the vehicle with the intention of inducing his reliance on the false statements for the sale and causing him damages. Instead, the panel held, Mr. Nigro could have exercised “reasonable diligence” prior to the purchase to uncover the deficiencies he discovered later and cannot now claim that he was induced into entering the transaction by any fraudulent misrepresentations. “Plaintiff could have contacted defendants to inquire about the vehicle or its history (as defendants’ advertisement specifically invited prospective purchasers to do), procured a vehicle history report (as recommended on eBay’s Web site) or hired a mechanic in Nevada to inspect and/or examine the car before purchasing it,” Justice Karen K. Peters wrote for the court in Nigro v. Lee, 506135. “Instead, plaintiff made no attempt to ascertain the true condition or history of the vehicle prior to this purchase.” The Third Department decision appears on page 33 of the print editiuon of today’s Law Journal. As to the breach of warranty claim, the court noted that a “statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty” under state Uniform Commercial Code 2-2313[2]. “While the advertisement did describe the car as ‘gorgeous,’ this generalized expression was merely the seller’s opinion of the car and constitutes ‘no more than puffery,’ which should not have been relied upon as an inducement to purchase the vehicle, particular in light of the fact that this was a used car transaction,” Justice Peters wrote, citing Scaringe v. Holstein, 103 AD2d 880 (1984). Justices Edward O. Spain, Robert S. Rose, Anthony T. Kane and William E. McCarthy joined in Justice Peters’ ruling. Maxwell Lee posted the solicitation for bids on the 1995 Mercedes Benz S600, a 12-cylinder car that retailed for more than $100,000 when new. The eBay advertisement referred to the 30,239 miles on the vehicle and to three “minor” blemishes—a missing master key, CD cartridge and spare tire—”which are all replaceable at minimal cost,” according to the solicitation. The ad also concluded with the notice that the “vehicle is [being] sold as it is and conditions are disclosed to the best of my knowledge.” At the time of the sale, the car was owned by Mr. Lee’s mother, Alice Aizhen Lee. Both lived in Las Vegas, and Mr. Nigro, who was 74 at the time, lived in the Albany suburb of Colonie. According to the Lees’ memorandum of law, a $15,000 minimum bid was set for the Mercedes and several competing bids were received before Mr. Nigro prevailed at $21,200. Under the terms of the auction, the Lees did not release the vehicle for transport east until Mr. Nigro had paid the price in full. According to estimates Mr. Nigro got from Albany-area car repair shops after he took possession of the car, electrical and sensory systems on the vehicle needed nearly $7,500 in repairs, the throttle needed just under $4,000 in repairs and a new catalytic converter, costing just over $1,000, was also required. Mr. Nigro complained about the condition of the car to the Lees after receiving the vehicle and received $1,077 in refunds. Mr. Nigro’s complaint sought $50,000 in actual damages and $50,000 in punitive damages. His attorney, Jaime B. Thomas of Schiller & Knapp of Latham, said the Third Department panel ignored in its ruling a point he made in oral arguments that eBay has a rule that buyers have 30 days from the time they consummate a deal to inspect a product and reject it, if they wish. The Lees acknowledged that the Mercedes was not delivered to Mr. Nigro until 30 days after the sale, according to Mr. Thomas. “I thought that was an important fact,” Mr. Thomas said. While Mr. Nigro had learned how to “dabble” on the Internet, Mr. Thomas said his client was far from a sophisticated Web consumer when he bought the Mercedes. “I thought a senior citizen who got victimized by an electronic medium would have had better luck,” Mr. Thomas said in an interview. Richard P. Jacobson of Albany represented the Lees. He did not return a call seeking comment. In his memorandum of law before the Third Department, Mr. Jacobson likened the eBay sale of a vehicle to the “weekend driveway car sale” of days’ past. In those circumstances, buyers understood the need to inspect vehicles and otherwise be satisfied that the condition of cars were to their expectations, whatever claims the sellers were making about the cars, Mr. Jacobson argued. Mr. Jacobson also argued that the Legislature in New York has traditionally provided fewer safeguards to auto purchasers in private transactions than commercial ones by not extending to them the protections afforded to buyers from commercial dealers under the used-car “Lemon Law.” eBay was not named as a defendant in Mr. Nigro’s suit. A spokesman did not return calls. The Third Department ruling affirmed a March 2008 decision by Albany Supreme Court Justice Eugene P. Devine in Nigro v. Lee, 1958-07. @

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