Present: All the Justices
MANASSAS AUTOCARS, INC.,
T/A MANASSAS CHRYSLER
v. Record No. 061458 OPINION BY JUSTICE ELIZABETH B. LACY
June 8, 2007
DANIEL T. COUCH, ET AL.
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
Rossie D. Alston, Jr., Judge
In this appeal we consider whether the trial court erred
in interpreting a regulation promulgated pursuant to Code
§ 46.2-1581(12)(a), and in submitting to the jury claims under
the Virginia Consumer Protection Act, Code § 59.1-196 et seq.
(the VCPA) and the revocation of acceptance statute, Code
§ 8.2-608.
Manassas Autocars, Inc., t/a Manassas Chrysler (Manassas)
is an automobile dealer licensed by the Virginia Motor Vehicle
Board. In February 2004, Daniel T. and Crystal L. Couch (the
Couches) went to Manassas' showroom in response to a newspaper
advertisement for a Chrysler Town & Country Touring minivan.
The advertisement contained a picture of the minivan and
listed a stock number, the principal equipment of the vehicle,
and the sales price. Upon arriving at the dealership, the
Couches were told that the minivan in the advertisement was
not available because it had already been sold. The Manassas
salesperson offered the Couches a Town & Country LX model
minivan for a price slightly higher than the Touring model
featured in the advertisement. The Couches ultimately agreed
to purchase a new red LX model minivan. Manassas did not have
a red LX model in stock but arranged to have one delivered
from another dealership that day.
The Couches returned to the dealership a few hours later
to pick up the LX model. While waiting for the vehicle to be
cleaned, they filled out the purchase and financing agreements
and made a $2,000 down payment. When the Couches saw the
minivan, they noticed a grey circular "splotch" approximately
seven to eight inches in diameter with a "drip" mark streaking
three to four inches down to the wheel well of the passenger
side rear panel. The Manassas salesperson told the Couches to
make an appointment to bring the vehicle back and Manassas'
detailer would remove the stain. The Couches made the
appointment and drove the vehicle home.
Over the next few weeks, Manassas tried unsuccessfully to
remove the stain. Ultimately Manassas repainted the area
affected by the stain without telling the Couches or getting
their permission to do so. The Couches subsequently attempted
to return the vehicle to Manassas, stating that they had
purchased a new vehicle, not a repainted vehicle. Manassas
refused to accept the repainted vehicle on the ground that
title to the vehicle had passed.
2
The Couches subsequently notified Manassas by letter that
they were revoking acceptance of the vehicle, and returned the
vehicle to Manassas, but Manassas had it towed back to the
Couches' residence.1 At that point, the vehicle had been
driven approximately 1,100 miles.
The Couches filed an amended motion for judgment against
Manassas claiming that they properly revoked acceptance of the
vehicle under Code § 8.2-608, and had suffered monetary
damages as a result of the revocation. They also claimed that
the use of the stock number in the advertisement of the Town &
Country Touring vehicle, without any indication of limited
availability, was a deceptive practice under Code § 46.2-
1581(12)(a) and, because the advertisement related to a
consumer transaction, it violated Code § 59.1-200(A)(8) of the
VCPA.2
Manassas responded to the Couches' VCPA claim by citing a
regulation adopted by the Motor Vehicle Board, 24 VAC § 22-30-
30(L), ("the regulation") which, according to Manassas,
permits an advertisement for new vehicles to list such
vehicles by stock number as "one means of satisfactorily
1
The Couches also notified Suntrust Bank (Suntrust), the
lender for the purchase, of the revocation. Suntrust
eventually repossessed the vehicle.
2
The amended motion for judgment contained additional
claims which are not at issue in this appeal, including claims
against Suntrust, which was eventually dismissed as a party.
3
disclosing a limitation of availability." Manassas argued that
the advertisement complied with the regulation and, because
acts "authorized under laws or regulations of this
Commonwealth" are excluded from the VCPA under Code § 59.1-
199(A), the Couches could not pursue a claim under the VCPA
based on the advertisement.
At trial, Manassas sought to introduce the regulation as
evidence that the advertisement containing the stock number
was permissible. The trial court refused to admit the
regulation, ruling that it was inconsistent with Code § 46.2-
1581(12)(a), and that statutes prevail over regulations in the
event of a conflict. The jury returned a verdict in favor of
the Couches, awarding damages of $3,993 on the revocation
claim and $2,375 on the VCPA claim. The VCPA damages were
increased to $7,125 because the jury found the violation
"willful" under Code § 59.1-204(A). Manassas appeals.
DISCUSSION
I. The VCPA claim
Manassas seeks reversal of the trial court's ruling that
the regulation was inconsistent with Code § 46.2-1581(12)(a),
and that Manassas therefore could not introduce the regulation
or argue that compliance with the regulation was a defense to
the Couches' claim of deceptive advertising. Manassas also
complains that the trial court erred in allowing the Couches
4
to maintain an action under the VCPA based on a violation of
Code § 46.2-1581(12)(a).
As a preliminary matter, we agree with Manassas'
statements that regulations of state agencies such as the
Motor Vehicle Board have the force of law, Sargent Electric
Co. v. Woodall, 228 Va. 419, 424, 323 S.E.2d 102, 105 (1984),
and that an agency's interpretation of its governing statutes,
as reflected in its regulations, is entitled to great weight.
Commonwealth v. American Radiator & Standard Sanitary, 202
Va. 13, 19, 116 S.E.2d 44, 48 (1960). Regulations, however,
may not conflict with the authorizing statute. Judicial
Inquiry & Review Comm'n v. Elliott, 272 Va. 97, 115, 630
S.E.2d 485, 494 (2006). Whether a regulation is inconsistent
with its enabling legislation is properly a subject of
judicial review. See, e.g., General Motors Corp. v. Dep't of
Taxation, 268 Va. 289, 292-95, 602 S.E.2d 123, 125-26
(2004)(holding regulation promulgated by Department of
Taxation was inconsistent with statute); Virginia Department
of Taxation v. Blanks Oil Co., 255 Va. 242, 246-47, 498 S.E.2d
914, 916 (1998)(holding regulation promulgated by Department
of Taxation was not inconsistent with statute); WTAR Radio-TV
Corp. v. Commonwealth, 217 Va. 877, 879-80, 234 S.E.2d 245,
246-47 (1977)(holding regulation promulgated by the
5
Commissioner of the Revenue was not "unwarranted extension" of
statute).
Code § 46.2-1581(12)(a) prohibits a motor vehicle dealer
from advertising for sale a vehicle which the dealer has no
intention to sell at the price or terms advertised. That
section states:
If a specific vehicle is advertised, the seller
shall be in possession of a reasonable supply of
said vehicles, and they shall be available at the
advertised price. If the advertised vehicle is
available only in limited numbers or only by
order, that shall be stated in the advertisement.
For purposes of this subdivision, the listing of
a vehicle by stock number or vehicle
identification number in the advertisement for a
used vehicle is one means of satisfactorily
disclosing a limitation of availability. Stock
numbers or vehicle identification numbers shall
not be used in advertising a new vehicle unless
the advertisement clearly and conspicuously
discloses that it relates to only one vehicle.
Code § 46.2-1581(12)(a). The regulation promulgated by the
Motor Vehicle Board pursuant to this statute states in
relevant part:
If the advertised vehicle is available only in
limited numbers or only by order, that shall be
stated in the advertisement. The listing of
vehicles by stock numbers or vehicle
identification numbers is permissible and is
one means of satisfactorily disclosing a
limitation of availability, provided a separate
number is used for each vehicle.
24 VAC § 22-30-30(L). Manassas argues that Code § 46.2-
1581(12)(a) specifically allows the use of stock numbers in
6
advertising new vehicles "as long as the advertisement clearly
and conspicuously discloses that the stock number used in the
ad relates to only one vehicle." The regulation, according to
Manassas, is consistent with the statute because the
regulation states that, if a separate stock number is used for
each car in the advertisement, the stock number satisfactorily
discloses limitation of availability.
Manassas' interpretation ignores the prohibition in Code
§ 46.2-1581(12)(a) against using a stock number in the
advertisement of new cars to indicate limited availability
"unless the advertisement clearly and conspicuously discloses
that it relates to only one vehicle." The plain meaning of
this section is that, for new car advertisements, the stock
number alone is insufficient to show limited availability and
that something in the advertisement, in addition to the stock
number, must clearly and conspicuously indicate that only one
vehicle is available. The regulation, however, specifically
allows the use of the stock number alone in an advertisement
for a new car to serve as an indication of limited
availability. Therefore, the regulation and the statute are
in conflict and the trial court correctly concluded that the
statute prevailed. See General Motors, 268 Va. at 293, 602
S.E.2d at 125 ("It is equally well established, however, that
if the language of a statute is clear and unambiguous, a
7
regulatory interpretation . . . that is in conflict with the
plain language of the statute cannot be sustained.").
Accordingly, the trial court did not err in refusing to allow
Manassas to introduce the regulation or argue as a defense
that the advertisement at issue complied with the regulation.3
Manassas also asserts the trial court erred in allowing
the Couches to "maintain a VCPA claim based on their
allegations that a violation of Code § 46.2-1581.12(a) was a
fraudulent act or practice under the VCPA." While this
assignment of error appears straightforward, Manassas'
arguments at trial, and on brief and in oral argument in this
Court encompass different legal issues. At oral argument
Manassas addressed this assignment of error by arguing that
the trial court did not have "subject matter jurisdiction" to
consider a violation of Code § 46.2-1581 under the VCPA.
Manassas based this position on the fact that Code § 46.2-1581
is not included among the sections of Title 46.2 which are set
forth in Code § 59.1-200 as possible violations of the VCPA.
In other words, according to Manassas, the failure to include
Code § 46.2-1581 in Code § 59.1-200 vested enforcement of that
3
On brief and at oral argument before this Court,
Manassas argued that the introduction of the regulation should
have been allowed to rebut the Couches' allegation that the
advertisement was a willful violation of the VCPA. However,
Manassas never raised that argument as a grounds for admission
8
section solely in the Motor Vehicle Board. Manassas did not
make this argument in the trial court, however, and we
therefore do not consider it. Rule 5:25.
Manassas did argue on brief and at the trial court,
however, that the Couches had no claim under the VCPA because
of the provision in Code § 59.1-199(A) that the VCPA does not
apply to "[a]ny aspect of a consumer transaction which aspect
is authorized under laws or regulations of this Commonwealth.
. . ." Manassas construes this language to mean that any
aspect of a consumer transaction that is regulated by Title
46.2, or by regulations adopted pursuant to that Title,
becomes an "authorized" aspect of the transaction and is
therefore exempt from the VCPA. Applying this logic to the
case before us, Manassas argues that the advertisement at
issue was exempt from a claim under the VCPA because it was
"an aspect of the consumer transaction" between Manassas and
the Couches, and dealer advertising is regulated and therefore
"authorized" by Code § 46.2-1581 and the regulation.
Manassas' construction of Code § 59.1-199(A) equates the
word "authorized" with "regulated." This interpretation, if
correct, would provide an exemption from the VCPA to all motor
vehicle dealer advertising regardless of content, since such
of the regulation before the trial court and we therefore do
not consider it here. Rule 5:25.
9
advertising is regulated pursuant to Title 46.2. Section
59.1-199(A), however, exempts only those aspects of a consumer
transaction that are "authorized." Authorized actions are
those sanctioned by statute or regulation. Manassas was not
entitled to exemption from a VCPA claim on the sole ground
that motor vehicle dealer advertising is regulated by other
statutory provisions and regulations. Accordingly, we find no
error in the trial court's ruling that the Couches could
pursue a claim under the VCPA in this case.
II. Revocation of Acceptance
Code § 8.2-608 allows a buyer to revoke acceptance of
goods if the goods contain a non-conformity that
"substantially impairs its value to him" and if the buyer
accepted the goods on the assumption that the nonconformity
would be cured. Code § 8.2-608. The revocation must occur
within a reasonable time after the nonconformity was
discovered by the buyer and before there is any substantial
change in the condition of the goods purchased. The buyer may
recover damages incurred as a result of the revocation. Id.
Manassas claims that the trial court erred in denying its
motions to strike the Couches' revocation claim because the
evidence did not establish that the nonconformity
substantially impaired the vehicle's value to the Couches.
Specifically, Manassas argues that under Gasque v. Mooers
10
Motor Car Co., 227 Va. 154, 313 S.E.2d 384 (1984), the measure
of substantial impairment of value to the buyer is not
diminution in the value of the goods on the open market;
rather, unless the evidence establishes otherwise, the usual
and customary purpose of the goods ― in this case,
transportation ― is presumed to be the reason for the purchase
and the measure by which the value of the goods is determined.
Considering this purpose, Manassas points out that there was
no evidence that the nonconformity adversely affected the
vehicle's "drivability." The only evidence offered at trial
regarding value was the Couches' expert witness who testified
that the repainting diminished the value of the vehicle by 20
percent. Manassas contends that the Couches therefore failed
to carry their burden of proof on their revocation claim and
the trial court erred in submitting this issue to the jury.
We disagree with Manassas' proposed application of Gasque.
The plaintiffs in Gasque sought to revoke their
acceptance of a new 1979 Fiat vehicle based on a number of
problems such as a water leak, heater malfunction, inoperative
clock and interior light, automatic choke problems, excessive
oil consumption, loud vibrations, and other noises and
rattles. The plaintiffs had driven the vehicle with these
various defects for at least 4,500 miles prior to revocation,
and the vehicle had been driven over 8,000 miles at the time
11
of trial. The trial court struck the plaintiffs' evidence and
entered judgment for the defendant dealer, holding that, under
a "driveability" test, there was no substantial diminution in
the value of the vehicle to the plaintiffs and the plaintiffs
did not notify the dealer of the revocation within a
reasonable time.
On appeal to this Court, one issue was whether the
"driveability" test used by the trial court was correct. The
plaintiffs argued that the appropriate test was a subjective
test, "under which the buyers need only persuade the fact-
finder that their 'faith has been shaken' in the product."
227 Va. at 160, 313 S.E.2d at 389. We rejected this argument,
holding that while a "driveability" test "would not be of
universal application," the application of the test in that
case was not erroneous "where the buyers failed to prove any
need for the car beyond ordinary transportation." Id. at 161,
313 S.E.2d at 389.
The record in this case shows that Mr. Couch testified he
wanted to purchase a new vehicle, not a repainted vehicle, and
that the repainted vehicle was not the vehicle they purchased.
Mrs. Couch testified that, if she had been told that Manassas
intended to cure the defect in the vehicle by repainting it,
she would not have given permission because she "purchased a
vehicle at new car standards and if you paint it, then, it is
12
no longer a new car." The Couches' expert witness then
testified that the vehicle lost 20 percent of its value in its
repainted condition.
This record thus demonstrates that the Couches intended
to buy not only a means of transportation but a new vehicle.
When the nonconforming condition was repaired by repainting,
the value of the vehicle to the Couches ― as a new vehicle ―
was impaired. The expert's testimony that the repainting
caused a 20 percent decrease in value supports a determination
that the impairment was substantial. Therefore the trial
court did not err in submitting the Couches' revocation of
acceptance claim to the jury.
For the reasons stated above, we will affirm the judgment
of the trial court.
Affirmed.
13