5.24​Failing to Disclose Odometer Mileage¹¹

A.​Statutory Authority

“The Michigan Vehicle Code imposes specific requirements for disclosing a vehicle’s mileage when title is transferred.” McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ (2025). See MCL 257.233a(1) (“Except as otherwise provided in [MCL 257.233a(17)], if the owner of a registered motor vehicle transfers the owner’s title or interest in that vehicle, the transferor shall present to the transferee before delivery of the vehicle, written disclosure of odometer mileage by means of the certificate of title or a written statement signed by the transferor . . . .”). “In short, mileage must be disclosed at the time of title transfer through either the certificate of title or a written statement that identifies the odometer reading, the transferee, and the transferor’s assessment of the mileage’s accuracy.” McCallum, ___ Mich App at ___. “Additional provisions ensure that the required communication is properly documented.” Id. at ___. See MCL 257.233a(3). “Under MCL 257.233a(1) and [MCL 257.233a(3)], the required disclosures must be made in a written statement and presented to the transferee; oral disclosures are insufficient.” McCallum, ___ Mich App at ___. Furthermore, the disclosures must comply with the other requirements of MCL 257.233a. Id. at ___.

In McCallum, “the written disclosures presented to [defendant fell] short of what MCL 257.233a require[d].” McCallum, ___ Mich App at ___. “There [was] no evidence that he received a certificate of title disclosing the mileage discrepancy, and the other documents—the ‘Odometer Disclosure Statement’ and the ‘Application for Title and Registration Statement of Vehicle Sale’—likewise fail[ed] to satisfy the statute.” Id. at ___. Accordingly, “the trial court properly granted summary disposition on plaintiff’s claim that defendant violated MCL 257.233a(1) and [MCL 257.233a(3)].” McCallum, ___ Mich App at ___.

B.​Penalties

MCL 257.901(2) provides for:

•​imprisonment for not more than 90 days; or

•​fine of not more than $100; or

•​both.

C.​Issues

1.​Voidable Transaction

“[F]ailure to comply with the odometer statute requirements merely renders the transaction voidable by the purchaser.” Whitcraft v Wolfe, 148 Mich App 40, 54 (1985). See also McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ n 6 (2025) (“A transfer induced by fraud or material misrepresentation is subject to rescission and restitution.”) (quotation marks and citation omitted).

2.​Civil Liability

“To protect used-car buyers from odometer-related deception, , , , MCL 257.233a . . . mandates specific mileage disclosures and imposes treble damages and fee-shifting when a seller violates the statute with intent to defraud.” McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ (2025). Indeed, “the purpose of the odometer statute requirements is to prevent fraud upon the buyer.” Id. at ___ (cleaned up). “To further that purpose, the statute provides a civil enforcement mechanism tied to fraudulent conduct:

‘A person who, with intent to defraud, violates any requirement under [MCL 257.233a(1)] . . . is liable in an amount equal to 3 times the amount of actual damages sustained or $1,500.00 whichever is greater, and in the case of a successful recovery of damages, the costs of the action together with reasonable attorney fees.’” [McCallum, ___ Mich App at ___, quoting MCL 257.233a(15).

Although the parties in McCallum “treat[ed] MCL 257.233a(15) as creating an independent cause of action.” McCallum, ___ Mich App at ___. “It is not clear that it does when a plaintiff seeks to recover treble damages.” Id. at ___. “A plausible reading is that once a plaintiff recovers under another recognized legal theory, damages are then trebled.” Id. at ___ (declining to resolve the issue because it was not raised by either party). For more information on treble damages under MCL 257.233a(15), see Section 5.24(C)(2)(b).

a.​Intent to Defraud

“‘Michigan’s contract law recognizes several interrelated but distinct common-law doctrines—loosely aggregated under the rubric of ‘fraud’—that may entitle a party to a legal or equitable remedy if a contract is obtained as a result of fraud or misrepresentation.’” McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ (2025), quoting Titan Ins Co v Hyten, 491 Mich 547, 555 (2012). “‘These doctrines include actionable fraud, also known as fraudulent misrepresentation; . . . and silent fraud, also known as fraudulent concealment.’” McCallum, ___ Mich App at ___, quoting Hyten, 491 Mich at 555.  McCallum, ___ Mich App at ___, quoting Hyten, 491 Mich at 555. “Relatedly, the doctrine of silent fraud holds that when there is a legal or equitable duty of disclosure, a fraud arising from the suppression of the truth is as prejudicial as that which springs from the assertion of a falsehood.” McCallum, ___ Mich App at ___ (cleaned up).

In McCallum, defendant contested the trial court’s finding that it acted with intent to defraud, asserting that plaintiff’s father “was orally informed of the mileage issue and that he signed the Application for Title form where the ‘X’ was placed near the ‘Not Actual Mileage’ box.” Id. at ___. “The court noted that much of defendant’s theory hinged on [his] alleged role as plaintiff’s agent, yet no writing evidenced such an agency, and plaintiff denied making any such appointment.” Id. at ___. “The court found credible [plaintiff’s father’s] testimony that he did not sign his daughter’s name on any documents.” Id. at ___. “Given that her signature appeared on documents she indisputably did not sign, the only remaining explanation was that defendant forged it.” Id. at ___. “The court also found it troubling that defendant’s online advertisement failed to disclose the mileage discrepancy, concluding that ‘that was an intentional misrepresentation and clearly reckless disregard of the truth of the matter asserted.’” Id. at ___. Considering the trial court’s credibility findings and the record as a whole, “the trial court did not clearly err in finding that defendant acted with intent to defraud under MCL 257.233a(15).” McCallum, ___ Mich App at ___.

b.​Treble Damages

“Under MCL 257.233a(15), a person who violates the statute ‘with intent to defraud’ is ‘liable in an amount equal to 3 times the amount of actual damages sustained or $1,500.00 whichever is greater.’” McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ (2025) (defining “actual damages” as “an amount awarded to a complainant to compensate for a proven injury or loss; damages that repay actual losses”) (cleaned up).

Purchase price. “When a contract is rescinded, the return of the purchase price is a form of restitution.” McCallum, ___ Mich App at ___. “If it is restitution, then it is not damages, because the law consistently treats damages and restitution as separate forms of relief.” Id. at ___. “Damages is a remedy different in kind from rescission and restitution.” Id. at ___ (cleaned up). In McCallum, the refund of the purchase price ordered as part of rescission was “not repayment for a loss but a form of restitution, which requires a mutual restoration and accounting in which each party restores property received from the other.” Id. at ___ (quotation marks and citation omitted). “Plaintiff [was] not being compensated for an injury; she [was] unwinding the transaction and returning the vehicle in exchange for a refund of the purchase price.” Id. at ___. “Because restitution is not a form of damages, the trial court did not err in declining to treble that aspect of the recovery.” Id. at ___.

Incidental expenses. “Recovery of what are commonly called ‘incidental damages’ may . . . be allowed in connection with rescission, consistent with the remedial objective of restoring the claimant to the precontractual position.” Id. at ___ (quotation marks and citation omitted). “Damages always begin with the aim of compensation for plaintiff.” Id. at ___ (cleaned up). “Restitution, in contrast, begins with the aim of preventing defendant’s unjust enrichment.” Id. at ___ (quotation marks and citation omitted). “Rescission of the parties’ exchange may leave the claimant with losses from related expenditures (as distinct from payment of the price) made in reliance on the transaction that is being set aside.” Id. at ___ (quotation marks and citation omitted). “Compensation of such loss by an award of damages is not necessarily inconsistent with an award of restitution when the claimant’s basic entitlement is to be restored to the status quo ante.” Id. at ___ (cleaned up). “Damages measured by the claimant’s expenditure can be included in the accounting that accompanies rescission, in order to do complete justice in a single proceeding.” Id. at ___ (quotation marks and citation omitted).

In McCallum, plaintiff’s incidental expenses “were costs plaintiff incurred in carrying out the transaction, and while they must . . . be unwound, they did not unjustly enrich defendant.” Id. at ___. “Rescission, however, is not limited to restoring property received from another; it may also compensate the other for loss from related expenditure as justice may require.” Id. at ___ (cleaned up). “In sum, compensatory payments made alongside an order of restitution are ‘incidental damages’ and therefore subject to trebling under MCL 257.233a(15).” McCallum, ___ Mich App at ___ (affirming the “trial court’s decision to treble the incidental damages it awarded to plaintiff”).