Kopischke v. First Continental Corp.

Supreme Court of Montana · Torts

Tortsused car dealer liabilityas is disclaimersseat belt defenseassumption of riskcomparative negligenceas isdisclaimer of warranties

Facts

The defendant sold the plaintiff a used car under a simple "as is" provision. The defendant failed to inspect the car for defects before the sale, and the court stated that the defect would have been discovered in a reasonable safety inspection. That defect proximately caused the plaintiff's accident and injuries. The defendant also sought to reduce or avoid liability by relying on the "as is" clause, the plaintiff's failure to wear a seat belt, and assumption of risk.

Issue

Does a simple "as is" clause relieve a used car dealer of tort liability for injuries caused by defects the dealer had a duty to discover and repair? Also, may the defendant assert a seat belt defense absent a Montana statute requiring seat belt use, and was the defendant entitled to an assumption-of-risk instruction on these facts?

Rule

A used car dealer in Montana has a duty to reasonably inspect for patent or ordinarily discoverable defects and to repair them, and a simple "as is" clause excludes warranties only, not tort liability for breach of that duty. Public policy forbids disclaimer of liability when performing an act in the public interest, including inspection of used cars for safe operation. In Montana, where no statute requires occupants to wear seat belts, evidence of failure to use a seat belt is not admissible to establish contributory negligence or to mitigate damages. Assumption of risk applies only when the plaintiff knew of the particular condition creating the risk, appreciated it as dangerous, voluntarily encountered it, and was injured as a result.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Billings, Montana, Nora Ellis bought a used SUV from Prairie Crest Auto Mart. The sales order stated only "AS IS." The dealer performed no safety inspection, and a visibly worn tie-rod end that would have been found through an ordinary inspection failed a week later, causing Nora to crash and suffer injuries.

If Nora sues the dealer in negligence, what is the strongest argument against the dealer's reliance on the "AS IS" language?

Explanation. The majority held that in Montana a used car dealer has a duty to reasonably inspect for patent or ordinarily discoverable defects and repair them. A simple "as is" clause is a warranty disclaimer, not a waiver of tort liability, and public policy forbids using such a bare disclaimer to avoid negligence liability in this public-interest context. (Derived from Kopischke v. First Continental Corp. (n.d.).)