The opinion of the court was delivered by: McCURN, Chief Judge.
MEMORANDUM-DECISION AND ORDER
Plaintiff Joann Ralbovsky brought this action to enforce
civil liability for violations of the federal odometer
disclosure requirements contained in the Motor Vehicle
Information and Cost Savings Act, 15 U.S.C. § 1981-1991
("Odometer Act"). Plaintiff has moved for summary judgment
pursuant to Rule 56 of Federal Rules of Civil Procedure against
defendants Orange Motor Co. ("Orange Motors") and Michele
Meyers. Defendant Orange Motors has also moved for summary
judgment dismissing the complaint as to it, and defendant
Meyers has cross-moved for summary judgment dismissing the
complaint as to her.
Among the forms Meyers was required to fill out as part of
her purchase of the new vehicle was an odometer mileage
statement. According to Meyers' affidavit, the Orange Motors
salesman instructed her as to what information to write on the
statement, and to check the box on the form next to the
statement: "I hereby certify that to the best of my knowledge
the odometer reading as stated above reflects the actual
mileage of the vehicle described below." Meyers states that
she then told the salesman that the odometer "had been broken
for a period of time." At this point, Meyers states, the
salesman did not tell her to check another box, but told her
that if she did not purchase the new car that evening, she
would not get as good a deal and that the interest rate for
the transaction would go up. Meyers signed the odometer
mileage statement, certifying that the actual mileage on the
car was 31,316. These statements in Meyers' affidavit are
uncontroverted by the affidavits and other papers submitted by
plaintiff and defendant Orange Motors.
On or about October 10, 1987, Orange Motors sold the vehicle
to defendant Brando Wholesale Autos ("Brando Wholesale"),
certifying by odometer mileage statement that the actual
mileage on the car was 31,318. On or about October 26, 1987,
defendant Brando Wholesale sold the car to defendant Daniel
Lamphere, certifying by odometer mileage statement that the
actual mileage on the car was 31,328. On or about November 12,
1987, defendant Lamphere sold the car to the plaintiff,
Ralbovsky, without certifying the mileage.
The plaintiff subsequently took the car in for repairs, and
a repairman discovered a sticker on the air filter indicating
that the car had traveled more than 100,000 miles by August
1987. Records from a Jiffy Lube Service Center located in the
glove box also indicated that the vehicle had traveled more
than 100,000 miles.
Plaintiff has alleged, inter alia, that the various
defendants have violated 15 U.S.C. § 1988 and 1989, which
together prohibit the making of false statements as to the
actual mileage on an automobile with the intent to defraud.
These allegations against defendants Meyers and Orange Motors
are the subject of the present motions.
Section 1988 requires a transferor of an automobile to
disclose to the transferee the accurate mileage as set forth
on the odometer, or disclose that the actual mileage is
unknown if the transferor knows that the odometer reading is
not accurate. Section 1988 makes it unlawful to give a false
statement to a transferee in making such disclosure. 15 U.S.C. § 1988(a)
and (b). The Odometer Act provides for a civil
penalty against "any person who, with intent to defraud,
violates any requirement imposed under this subchapter. . . ."
15 U.S.C. § 1989. Thus, the mere fact that a transferor has
violated the disclosure requirements of the Act does not
necessarily mean that he or she is civilly liable. The
transferor must have acted with "intent to defraud" in order to
be subject to liability from a purchaser.
Plaintiff contends that defendant Orange Motors had either
actual or constructive knowledge that the odometer reading was
inaccurate, or recklessly disregarded the truth as to the
inaccuracy of the odometer reading, and therefore intent to
defraud can be inferred. Plaintiff maintains that defendant
Meyers may be held liable under the statute because she had
actual knowledge that the odometer reading was false.
Defendant Orange Motors urges, on the other hand, that it is
not alleged that Orange Motors intended to deceive plaintiff,
nor are facts alleged upon which intent to defraud may be
inferred. Defendant Meyers contends that there is no evidence
that she intended to defraud any transferee, and in fact the
evidence shows that she did not intend to defraud any
The transferors cannot be protected by the absence of
privity between themselves and the actual purchaser, because
a consumer is entitled to recover damages under the Act from
each transferor in the chain of title who has made a false
mileage statement with the intent to defraud. Ryan v. Edwards,
592 F.2d 756 (4th Cir. 1979); Byrne v. Autohaus on Edens, Inc.
488 F. Supp. 276 (D.C.Ill. 1980). Therefore, plaintiff in the
instant case can recover from each of the named defendants if
they have made false odometer statements with the intent to
At issue is the standard for demonstrating "intent to
defraud" within the meaning of Section 1989. The question
raised is apparently one of first impression in this district,
and has been treated by only one other court in the Second
Circuit. Auto Sport Motors v. Bruno Auto Dealers, 721 F. Supp. 63
(S.D.N.Y. 1989). The majority view is that a seller of a
used car reporting that the mileage shown on the odometer is
true may be held liable in the absence of actual knowledge that
an odometer reading is false if he reasonably should have known
that the odometer reading was incorrect. See Auto Sport, 721
F. Supp. at 65; Tusa v. Omaha Auto Auction, Inc.,
712 F.2d 1248, 1253 (8th Cir. 1983) (intent to defraud can be inferred
"where the seller exhibited gross negligence or a reckless
disregard for the truth in preparing odometer disclosure
statements."); Ryan v. Edwards, 592 F.2d 756, 762 (4th Cir.
1979) ("Constructive knowledge, recklessness, or even gross
negligence in determining and disclosing the actual mileage
traveled by a vehicle have been held sufficient to support a
finding of intent to defraud under the statute."); Nieto v.
Pence, 578 F.2d 640, 642 (5th Cir. 1978) (liability may be
imposed when "a transferor reasonably should have known that a
vehicle's odometer reading was incorrect"); Oettinger v.
Lakeview Motors, Inc., 675 F. Supp. 1488, 1493 (E.D. Va. 1988)
("[A] dealer is subject to liability where he recklessly
disregards the truth as to a car's ...