Car dealers must inspect used vehicles for safety defects and either make repairs or warn potential buyers before they are resold, the Nebraska Supreme Court ruled Friday.
The high court said that an "as is" sticker does not absolve dealers of their duty to look out for public safety.
"There is a relatively great magnitude of risk of injury in the circumstance where an unknowing buyer drives off the dealer's lot in a used vehicle which has a patent safety defect, such as defective brakes or steering," the court said. "The dealer is better equipped than the purchaser to perceive such a defect before it causes harm."
The decision is similar to those handed down by courts in other state, including Kentucky, Minnesota, Montana and Ohio, that recognize dealers' obligation to ensure the safety of used vehicles.
With the ruling, the high court overturned the dismissal of a 2006 lawsuit filed in Douglas County District Court by an Omaha couple who alleged that Woodhouse Ford Inc. was liable for injuries caused when their van shifted out of park.
The high court said that while Woodhouse sold the van "as is" and disclaimed all warranties, the Blair dealership may have been negligent for not inspecting the vehicle for safety defects. It ordered the case back to the lower court for trial.
Melany Lanagan, the attorney for Elizabeth and Mark Wilke, said the court's decision was "a very positive thing for consumers who are going to be buying used cars. It's all about safety."
She said most consumers believe used cars bought at Nebraska dealerships were being inspected before being sold, but that isn't necessarily true.
Woodhouse has said in court documents that it has such a high volume of used vehicles that it is unable to inspect all of them.
The dealership's attorney could not immediately be reached Friday.
The Wilkes sued Woodhouse for negligence and breach of implied warranty of merchantability over the "as is" sale of a 2002 Ford Econoline on Sept. 18, 2004. They said the dealership should have known the vehicle was defective at the time of the sale.
The couple said in court documents that Mark Wilke drove the van off the lot, parked it at a friend's house and removed the keys. The couple's then-3-year-old daughter pulled the gearshift out of park and the vehicle rolled over Elizabeth Wilke's right foot and thigh, causing her to fall and hit her head.
A federal regulation requires vehicles with automatic transmissions be made so that the key must be in the ignition to shift out of park. An automotive engineering consultant said in court documents that there were problems with the van's brake shift interlock system, transmission shift cable and key shift interlock that allowed the Wilkes' van to shift out of park.
Woodhouse has said in court documents that Elizabeth Wilke's injures could have been prevented if Mark Wilke had used the emergency brake and if the girl hadn't pulled the gearshift.
The high court ruled that the Wilkes could not sue for breach of warranty under the Uniform Commercial Code because the van was sold "as is." But it said the couple could sue for negligence because car dealers have "a duty to conduct a reasonable inspection of the vehicle prior to sale in order to determine whether there are any patent defects existing at the time of sale which would make the vehicle unsafe for ordinary operation."
Woodhouse has said in court documents that it did not inspect the van before it was sold. But the high court said it would be up to a jury to determine whether the van's safety defects would have been found during an inspection.
The Wilkes are seeking unspecified monetary damages.
On the Net:
Nebraska Supreme Court: http://www.supremecourt.ne.gov/
Woodhouse Ford: http://www.woodhouse.com