“So, I Have This Friend…”

John Osborn IV, KLJ Staff Editor[1]

*The following is for informational purposes only and is not to be construed as legal advice.*

I used to work with a certain individual who had a “friend” who always seemed to be getting into some kind of legal trouble.  Knowing that I was in law school, this individual would often try to squeeze any legal advice out of me if he could, although he was generally unsuccessful.  However, on the rare occasion I did acquiesce (only after throwing out all of the appropriate caveats of “I’m not a lawyer,” and the like) I would try to tell this individual (so he could inform his “friend”) what the state of the law was as I understood it.

Although many of the matters were criminal in nature, he did present one civil issue that I thought was interesting.  Apparently, my co-worker’s “friend” had recently purchased two luxury watches from a professional jeweler for around $10,000—we will call them “Folexes.”  The jeweler, whom had appraised the watches himself, had provided the friend with documentation stating that the two watches were genuine Folexes and were a “steal” at that price.” Little did the friend know the truth behind these words, as, unfortunately, due to a combination of the friend’s big mouth and a tendency to hang around unsavory characters, his two new Folex watches were stolen within a week.

However, a few weeks after the theft, the friend received a phone call from the police that the watches had resurfaced at a local pawnshop.  Normally the friend would have been ecstatic, however, when he went to retrieve the watches, the pawnshop informed him that the Folexes were not genuine Folexes, and that any “professional” jeweler would clearly have known these were fake.  The watches, based on their melt value, were worth at best $1,000 for both.

The question my co-worker had (on behalf of his “friend”) then was “can my friend sue the jeweler who sold him the watches?”  Of course, the immediate answer is “yes” because you can sue just about any one over anything.  However, the deeper issue would be (assuming the jeweler is not willing to accept a return for the watches) what do you sue for and what can you recover in a situation like this?

My co-worker’s “friend” has several avenues to choose from as far as recovery goes.  He might consider suing under a basic theory of fraud or breach of warranty.  With fraud, the friend would argue that the jeweler made a fraudulent misrepresentation, [2] while with breach of warranty, the friend would argue that the jeweler made an affirmation of fact upon which he relied in making the purchase. [3]  Under a theory of fraud, the friend could recover “compensatory damages (likely expectations damages), plus all reasonable investigation and litigation expenses including attorneys’ fees where appropriate.”[4] However, under a warranty theory, the friend will likely be limited to expectation damages, or the difference between the watches as promised or represented ($10,000), and the actual value ($1,000), equaling an award of $9000.[5]

Although the friend should not have any problems establishing common law fraud or breach of warranty, another vehicle of recovery available to him is the Kentucky Consumer Protection Act (KCPA).[6]   When suing for a violation of the KCPA, a plaintiff need only prove that the seller engaged in “unfair, false, misleading or deceptive acts or practices in the conduct of any trade or commerce.”[7] Moreover, under the KCPA, in addition to actual damages, the plaintiff may be able to recover punitive damages[8] and even attorney’s fees.[9]

In short, my co-worker’s “friend” could probably sue the jeweler under several different theories, but the KCPA offers the easiest road to recovery and the best chance for him to be fairly compensated for the ordeal.  Hopefully, this experience will teach my co-worker’s “friend” to be more careful when making expensive purchases; however, I harbor doubts that he will do so . . .

[1]  J.D. expected 2016.

[2] See Waldridge v. Homeservices of Ky., Inc. 384 S.W.3d 165, 171 (Ky. Ct. App. 2011).

[3] U.C.C. § 2-313 (West, current through 2014 annual meetings of the National Conference of Commissioner on Uniform State Laws and American Law Institute).

[4] Gibson v. Ky. Farm Bureau Mut. Ins. Co., 328 S.W.3d 195, 205 (Ky. Ct. App. 2010).

[5] See Ky. Rev. Stat. Ann. § 355.2-714(2) (West, current through the end of the 2015 regular session).

[6] See Ky. Rev. Stat. Ann. § 367.220(1) (West, current through the end of the 2015 regular session).

[7] Ky. Rev. Stat. Ann. § 367.170 (West, current through the end of the 2015 regular session).

[8] See Ky. Rev. Stat. Ann. § 367.220(1) (West, current through the end of the 2015 regular session).

[9] See Alexander v. S & M Motors, Inc., 28 S.W.3d 303, 305 (Ky. 2000); see also Ky. Rev. Stat. Ann. § 367.220(3) (West, current through the end of the 2015 regular session).