1.2.12 Gray Market Vehicles
Gray market vehicles are ones that were not manufactured for sale in this country but are sold in the United States. Sale of a gray market vehicle may raise a number of claims.
- • The operation of the gray market is described in § 188.8.131.52, infra.
- • If the odometer has been improperly altered when converted from kilometers to miles, the buyer may have a claim under MVICSA or a parallel state odometer statute for $3000 minimum damages, treble damages, and attorney fees. See Chs. 5, 6, infra.
- • Some states have specific statutes requiring disclosure of a gray market vehicle’s origin. See § 7.4, infra.
- • Sale of a gray market vehicle without disclosure of its origins and drawbacks may involve common law fraud, which may lead to punitive damages. See Ch. 8, infra.
- • Sometimes the buyer will find it impossible to title or register a gray market vehicle because it does not meet emissions or customs requirements, resulting in a breach of the warranty of title that is implied in every contract. See § 9.2.2, infra.
- • The manufacturer may deny warranty coverage for a gray market vehicle, or parts may be unavailable, potentially giving the buyer breach of contract or breach of warranty claims against the seller. See § 9.2, infra.
- • Sale of a gray market vehicle without disclosure will violate a state UDAP statute, which will often provide attorney fees, minimum, multiple, or punitive damages, and which may not require proof of the defendant’s intent or knowledge. See § 9.4, infra.
- • In a few states, sale of a gray market vehicle without disclosure will violate a special gray market statute. See § 184.108.40.206, infra.
- • Fraudulent sale of gray market vehicles may also violate the federal or state RICO statute. The federal statute provides federal jurisdiction, attorney fees, and treble damages. See § 9.5, infra. The state RICO statute may provide similar remedies in state court. See § 9.6, infra.
- • How to litigate a fraudulent gray market vehicle sale case is examined in Chapter 10, infra, including: advising the client, who to sue, what claims to plead, jurisdictional issues, res judicata, class actions, evidentiary issues (such as how to introduce evidence of the defendant’s misconduct against other consumers), trial of a fraudulent gray market vehicle sale case, damage issues, settlements, attorney fees, and collecting judgments against the defendant, the defendant’s surety, related lenders, and auction companies. A sample complaint in a gray market vehicle case is found in the online version of this treatise, and summarized in Appendix G, infra. Other automobile fraud pleadings found in the online version, such as the jury trial papers, can be adapted for a gray market vehicle case.