7.7Odometer Tampering
The Michigan Vehicle Code “expressly prohibits odometer tampering.” McCallum v M 97 Auto Dealer, Inc, ___ Mich App ___, ___ (2025). MCL 257.233a, the odometer statute, provides in part:
“(6) A person shall not alter, set back, or disconnect an odometer; cause or allow an odometer to be altered, set back, or disconnected; or advertise for sale, sell, use, install, or cause or allow to be installed a device which causes an odometer to register other than the actual mileage driven. [MCL 257.233a(6)] does not prohibit the service, repair, or replacement of an odometer if the mileage indicated on the odometer remains the same as before the service, repair, or replacement. If the odometer is incapable of registering the same mileage as before the service, repair, or replacement, the odometer must be adjusted to read zero and a notice in writing must be attached to the left door frame of the vehicle by the owner or the owner’s agent specifying the mileage prior to service, repair, or replacement of the odometer and the date on which it was serviced, repaired or replaced. A person shall not remove, deface, or alter any notice affixed to a motor vehicle under [MCL 257.233a(6)].
(7) A person who violates [MCL 257.233a(6)] is guilty of a felony.” [MCL 257.233a(6)-(7)].
MCL 257.902 provides the following penalties:
•imprisonment for not less than one year or more than five years; or
•fine of not less than $500 or more than $5,000; or
•both.
1.Applicability
The odometer statute also applies to a new or used vehicle dealer, a lessor of a leased vehicle, and an auction dealer or vehicle salvage pool operator. See MCL 257.233a(11)-(13).
2.Required Criminal Intent
“[T]he odometer statute in Michigan does not require the intent to defraud . . . . The main purpose behind the odometer statute is to protect a buyer from being defrauded by a seller who fraudulently turns back the odometer.” People v Houseman, 128 Mich App 17, 22 (1983) (footnote and citations omitted).
3.Civil Liability
MCL 257.233a(15) governs the civil liability of a person who, with intent to defraud, violates MCL 257.233a(6). The person is liable in an amount equal to three times the amount of actual damages sustained or $1,500, whichever is greater, plus costs and reasonable attorney fees in the case of a successful recovery of damages. MCL 257.233a(15).
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. “‘The elements of actionable fraud are: (1) That defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury.’” 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).
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”).