In Jasek v. Texas Farm Bureau Underwriters, the Court held that the Seller of used personal property was not liable to the Buyer for alleged misrepresentations posted by the third party online auction service. Jasek v. Tex. Farm Bureau Underwriters, No. 14-19-00759-CV, 2022 WL 364050, at *1 (Tex. App.—Houston [14th Dist.] Feb. 8, 2022, no pet.)

Background. Jasek purchased a used, badly damaged tractor “from an online auction website, SalvageSale.com.” Id. at 1. The following information was posted on the website:

“On December 5, 2013, this unit was damaged when the operator hit a stump. This unit will not start, run or operate in its current condition. No work has been done to the unit. Damage includes but is not limited to: undercarriage, housing, clutch, flywheel and driveshaft. Please refer to the attached photos and bid accordingly.

This listing is AS IS WHERE IS with all faults and no warranties expressed or implied.”

Id. at 1.

The listing included 16 photographs of the damaged tractor and no inspection was permitted before the auction. “However, the listing provided that at the  time of removal “if the item differs significantly from how it was represented in the lot description, the Buyer must contact Customer Care prior to removing.”” Id. at 1.

Jasek submitted the winning bid. He never inspected the tractor and hired a third party to pick up the tractor and deliver it to a repair shop that “identified a large hole in the clutch housing that had not been depicted in the listing photographs.” Id. at 1. As a result, Jasek filed a lawsuit against the seller, Texas Farm Bureau, alleging fraud and violations of the Texas Deceptive Trade Practices Act.

The Trial. Testimony revealed  that the tractor was determined by Texas Farm Bureau to be a total loss from being damaged when it hit a stump. Texas Farm Bureau paid its insured an amount equal to the tractor’s agreed pre-loss fair market value. In turn, Texas Farm Bureau decided to sell the damaged tractor through SalvageSale’s online auction, in order to recoup any remaining value of the tractor.

Prior to the sale, Texas Farm Bureau provided SalvageSale with a “Loss Assignment Sheet,” photographs of the damaged tractor, and the prior owner’s repair estimate. The Loss Assignment Sheet stated that the tractor “hit a stump causing damage to undercarriage. Damage is to housing, clutch, flywheel, and drive shaft.” The tractor was listed “as is” with no presale inspection permission allowed. Id. at 1.

“SalvageSale then created the online listing, scheduled an auction, and forwarded the proceeds from the sale to Texas Farm Bureau.” Id. at 2. SalvageSale was not included as  a party to the lawsuit.

At the conclusion of the trial, the jury found in favor of Jasek on his fraud and DTPA claims. Unfortunately for Jasek, the trial court entered a take nothing judgment, notwithstanding the jury verdict, in favor of Texas Farm Bureau.

Appeal. Jasek appealed the take nothing judgment. The Court of Appeals upheld the trial court’s take nothing judgment because Jasek did not establish that Teas Farm Bureau wrote or created the online listing for the tractor. Texas Farm Bureau emailed the Loss Assignment Sheet, photos, and repair estimate to SalvageSale. The implication was that SalvageSale created the final information posted online about the tractor. There was “not evidence that Texas Farm Bureau prepared the [online] listing or made a disclosure or representation to Jasek.”

Further, there was no evidence that SalvageSale was acting as the agent for Texas Farm Bureau in posting the listing that would make Texas Farm Bureau vicariously liable for the posting by SalvageSale.

As a result, the Court of Appeals, held that the trial court did not err in rendering its judgment notwithstanding the verdict.

Conclusion. It is interesting that, based upon these facts, the jury returned its verdict in favor of the buyer. Although it could be argued that the online posting should have included a photograph of the hole in the clutch housing, the damage to the clutch was mentioned and the tractor was being sold “as is” through “SalvageSale.com” without inspection. Surely, a buyer would not be expecting much value in return for this purchase. Interestingly, the Court of Appeals never really addressed whether the alleged misrepresentations or omissions of fact were actionable. It was able to dispose of the case on the grounds that the seller was not the one that made the alleged misrepresentations in the posting.