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06/28/93 AUTO WORLD v. DISTRICT COLUMBIA

DISTRICT OF COLUMBIA COURT OF APPEALS


June 28, 1993

AUTO WORLD, INC., APPELLANT
v.
DISTRICT OF COLUMBIA, APPELLEE

Appeal from the Superior Court of the District of Columbia; (Hon. Ricardo M. Urbina, Trial Judge)

Before Rogers, Chief Judge, and Terry and King, Associate Judges.

The opinion of the court was delivered by: Rogers

ROGERS, Chief Judge : Appellant Auto World, Inc., appeals from the dismissal of its complaint for failure to state a cause of action under the public duty doctrine. Concluding that Auto World failed to show that it fell within the special relationship exception to the public duty doctrine, and hence failed to show that the District owed it a duty, we affirm.

I.

Auto World is a used car dealership in Arlington, Virginia. According to the complaint, *fn1 in 1989 Auto World purchased a 1983 Porsche from another Arlington dealer, Carland Motors, who in turn had bought the car from Johnny Johnson. "During this period of time, in Carland's office on December 22, 1989, a call was made to the D.C. Division of Motor Vehicles (DMV) to verify that the title proffered by Johnny Johnson was true, valid, and correct." The Department "verified" that the title was "true and correct." Auto World bought the car and resold it to Rose Motor, a California business, which sold it to a Canadian dealership. The car was impounded in Canada when the Metropolitan Police Department advised that the car was stolen. Auto World was required to refund the purchase price to Rose Motor, a price that was "much higher" than what Auto World had paid for the car. *fn2

The complaint alleged that "the District was negligent in issuing a good title for a stolen car and for confirming it on the phone." It also alleged that the Department of Motor Vehicles "negligently allowed Mr. Johnson to fraudulently obtain good title in the District as well as confirm it on the phone." Further alleging that Auto World substantially relied to its detriment on the title and the representations on the telephone, that the District had a duty to warn, since it was or should have been on notice that improper automobile titles were issued, and that the District failed to make proper inspections and audits of facilities that issue titles, the complaint sought $500,000 for financial losses, corporate embarrassment, harm to professional reputation, and attorneys' fees, in addition to costs and prejudgment interest.

The District filed a motion to dismiss under Super. Ct. Civ. R. 12 (b)(6) on the ground that the District did not owe a duty of care to Auto World beyond the duty owed to the general public at large, and that the public duty doctrine barred Auto World's negligence claim. Following the filing of Auto World's opposition and a reply by the District, the trial Judge granted the motion to dismiss the complaint. By memorandum order, the trial Judge rejected "the crux" of Auto World's arguments that a special relationship arose between it and the District government after the alleged telephone call, concluding that the duty owed to Auto World was owed to the public at large, citing Wanzer v. District of Columbia, supra note 1, 580 A.2d 127.

III.

On appeal, Auto World does not contest that the statute requiring registration of motor vehicle titles, D.C. Code § 40-703 (d) (Supp. 1992), is intended "to prevent theft and to expedite the recovery of stolen vehicles," and thus serves a general law enforcement purpose to which the public duty doctrine would generally apply. *fn3 Rather, Auto World contends that the trial Judge erred in granting the motion to dismiss for three reasons: (1) the public duty doctrine is inapplicable because the District was behaving as a commercial actor, charging a non-waivable fee for vehicle titles; (2) there was a special relationship between Auto World and the District once the District verified the title in a telephone conversation and Auto World justifiably relied on the representation; and (3) the public duty doctrine is inapplicable because Auto World claims fraud, not negligence.

Under the public duty doctrine:

the District is subject to liability for injuries arising from the negligence of its employees only if the duty owed to the plaintiff was a special duty to that person as an individual or as a member of a class of persons to whom a special duty is owed; the District cannot be sued if the duty it owed was a general duty to the public-at-large.

Powell v. District of Columbia, 602 A.2d 1123, 1127 (D.C. 1992). A special relationship, as an exception to the public duty doctrine, may be established by showing that a statute prescribes "mandatory acts clearly for the protection of a particular class of persons rather than the public as a whole," Morgan v. District of Columbia, 468 A.2d 1306, 1314 (D.C. 1983) (citation omitted), or that there have been direct or continuing contacts between the plaintiff and the District, and the plaintiff shows justifiable reliance. Platt v. District of Columbia, 467 A.2d 149, 151 (D.C. 1983); see also Powell v. District of Columbia, supra, 602 A.2d at 1129; Turner v. District of Columbia, 532 A.2d 662, 667 (D.C. 1987).

The court has stated that the fact that the District functions in a commercial capacity does not necessarily make the public duty doctrine inapplicable. "Whether the District acts in a uniquely governmental capacity or as one of several business competitors does not bear on the underlying policy of the public duty doctrine to protect the government from interference in its 'legislative or administrative determinations concerning allocation of' limited public resources." Johnson v. District of Columbia, 580 A.2d 140, 141 n.1 (D.C. 1990) (quoting Warren v. District of Columbia, 444 A.2d 1, 4 (D.C. 1981) (en banc)). Consequently, the fact that the District charges a non-waivable fee for a title certificate does not make the public duty doctrine inapplicable. See Powell v. District of Columbia, supra, 602 A.2d at 1131 (applying public duty doctrine where plaintiff paid fee to obtain registration certificate and license plates); cf. Wanzer v. District of Columbia, supra note 1, 580 A.2d at 131 (despite user fees, ambulance service was an exercise of police power to serve general welfare, because service was meant to protect lives, was heavily subsidized in addition to collecting fees, and did not deny service to those unable to pay); Hines v. District of Columbia, 580 A.2d 133, 137 n.5 (D.C. 1990); Johnson v. District of Columbia, supra, 580 A.2d at 141. The twenty dollar fee is, moreover, a user fee, not meant to result in surplus revenues for the District but merely to make the title office self-supporting. D.C. Code § 40-703 (Supp. 1992); see S. REP. No. 1363, and H.R. REP. No. 2323, (supra) note 3.

In addition, the telephone call to the Department of Motor Vehicles was insufficient direct contact to establish a special relationship under the two-prong test of Platt v. District of Columbia, supra, 467 A.2d at 151. The caller neither sought nor received services which were any different than those provided to other members of the public. *fn4 Compare Wanzer v. District of Columbia, supra note 1, 580 A.2d at 132 (" one-time call to 911 for help does not establish a special relationship. . . . [The decedent] neither asked for, nor would he in all likelihood have received, a response different in any way from the response generally made to such requests, i.e., the dispatch of an ambulance") with Powell v. District of Columbia, supra, 602 A.2d at 1131 (where plaintiff applied for, paid fee regarding, and received car registration and license plates, it was foreseeable that plaintiff would be harmed by faulty processing of registration and license plate numbers). See Hines v. District of Columbia, supra, 580 A.2d at 136, 138-39 ("the mere fact that an individual has emerged from the general public and become an object of the special attention of public employees does not create a relationship which imposes a special legal duty"); Klahr v. District of Columbia, supra note 1, 576 A.2d at 719; cf. District of Columbia v. Forsman, 580 A.2d 1314, 1319 (D.C. 1990), cert. denied, 116 L. Ed. 2d 136, 112 S. Ct. 173 (1991). Auto World does not allege that the District did not verify titles for the general public and provided that service only to it. The caller merely asked whether the title was valid and received a response just like that which would be given to any other inquirer. Of course, the fact that the employee of the Department of Motor Vehicles happened to be wrong about the fact that Mr. Johnson held a valid title to the car does not in itself establish a special relationship. Cf. Morgan v. District of Columbia, supra, 468 A.2d at 1311; Platt v. District of Columbia, supra, 467 A.2d at 151.

Auto World maintains that a single telephone call was enough to establish a special relationship because no greater contact was possible or reasonable under the circumstances. But its proposition misses the mark. *fn5 As the District points out, the statutory scheme provides protection for the car owner and to the general public. Other protections -- civil and criminal -- are available to subsequent purchasers. While the titling system assists businesses such as Auto World, by facilitating their operations, this is distinct from a statutory scheme in which the District also assumes all financial risks in those transactions. In effect, as the District points out in its brief, Auto World seeks to have the court rule that "once the District issues an automobile title certificate for a dollar fee, everyone in the chain of title after that can treat the certification as if it were title insurance." *fn6

Even if Auto World were able to show that it had sufficient direct contact with the District, it would be unable to meet the second prong of the Platt test, which requires justifiable reliance. See Platt, supra, 467 A.2d at 151. The complaint alleged that Auto World would not have bought the car without the District's verification because the statement on the title of zero mileage was so unusual. Auto World's opposition to the motion to dismiss implies that the District's verification of title dissuaded Auto World from investigating further. But, in view of the title statement of zero mileage on a 1983 car, which Auto World admitted was "a most unusual circumstance," Auto World could not have justifiably relied on the District's telephone statement that the title was valid. *fn7 Cf. Powell v. District of Columbia, supra, 602 A.2d at 1132 (a plaintiff could justifiably rely on the District to accurately process her license and registration number). Even if Auto World did not know that, as its complaint alleged, the District had issued flawed certificates in the past, it still could not show that it had justifiably relied on the information it received as a result of a single telephone call. See Keller v. Judd, 671 S.W.2d 604, 606-07 (Tex. Ct. App. 1984) (prudent buyer cannot simply rely on title certificate but must look to the "whole context of a sale").

Finally, Auto World's complaint sounded in negligence, not fraud. *fn8 Although its opposition to the motion to dismiss referred to negligence and fraud, Auto World failed in its complaint to plead its claim of fraud with sufficient specificity. See Woodruff v. McConkey, 524 A.2d 722, 728 (D.C. 1987) ("fraud must he particularly pleaded and established by clear and convincing evidence"); Higgs v. Higgs, 472 A.2d 875, 876 (D.C. 1984) (plaintiff must allege each element of fraud: "(1) a false representation, (2) concerning a material fact, (3) made with knowledge of its falsity, (4) with the intent to deceive, and (5) upon which reliance is placed"); Bennett v. Kiggins, 377 A.2d 57, 59-60 (D.C. 1977), cert. denied, 434 U.S. 1034, 54 L. Ed. 2d 782, 98 S. Ct. 768 (1978); Super. Ct. Civ. R. 9 (b) (circumstances of fraud "shall he stated with particularity"). Auto World does not contend that the Department of Motor Vehicles' employee who responded to the telephone call acted with knowledge of the falsity of the car title or with intent to deceive Auto World. Instead, the complaint alleges that the Department of Motor Vehicles "negligently allowed Mr. Johnson to fraudulently obtain good title in the District as well his confirm it on the phone." Even assuming Auto World could recover damages from the District for issuance of a false title to a third person, who fraudulently obtained it, but cf. Powell v. District Columbia, supra, 602 A.2d at 1130 n.10; Platt v. District of Columbia, supra 467 A.2d at 151, Auto World has not alleged the circumstances of the fraud with sufficient particularity. There is no indication of how the fraud was perpetrated, who might have committed the alleged fraud, or at what stage of the title process the fraud occurred. There are neither specifics in the complaint concerning the alleged fraud nor an allegation of conspiracy to defraud. *fn9 See Higgs v. Higgs, supra, 472 A.2d at 877. The trial Judge observed in its memorandum order that "although the Plaintiff's Opposition to the Motion to Dismiss alludes to claims of fraud, an inspection of the complaint reveals no such claims." We agree. See Bennett v. Kiggins, supra, 377 A.2d at 59-60.

Accordingly, we affirm the order dismissing the complaint for failure to state a cause of action.


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