Gov’t car auction leads to Mexican jail
When the federal government sells you a car, you’d think that it would be safe to assume that the vehicle doesn’t contain a secret stash of illegal drugs.
Francisco Agredano found out the hard way that it’s best not to assume anything when dealing with the government.
All Agredano wanted was a good deal on a used car. In 2001, Agredano attended an auction of forfeited vehicles held by the U.S. Customs and Border Protection Service.
At the auction, a 1987 Nissan Pathfinder caught Agredano’s eye. He purchased the vehicle and happily took his prize home.
All was well until Jan. 24, 2002. That fateful day found Agredano and his friend, Alfonso Leon, tooling around Mexico in the Pathfinder.
They came upon a checkpoint manned by Mexican soldiers. No problem, they thought, they had nothing to hide.
You can imagine their shock when the soldiers inspected the Pathfinder and came across a cache of marijuana.
Agredano’s shock turned to horror when he and his compadre were hauled off to a Mexican prison.
Of course, it was all a huge mistake.
The Pathfinder had come into the possession of U.S. Customs when its previous owner was caught attempting to transport marijuana across the Mexican border. While Customs agents detected and removed some of the marijuana at that time, more remained secreted in the vehicle.
That’s what the Mexican military discovered when they stopped Agredano.
The problem for Agredano was proving to Mexican authorities that the marijuana was an unfortunate leftover from the Pathfinder’s previous owner. And sorting out the whole mess would take time, time that Agredano and Leon would be stuck in Mexico’s infamous prison system.
A Mexican court finally did exonerate the two men, but not until they had spent nearly an entire year behind bars.
Naturally, Agredano had a beef with the U.S. government. He sued under the Federal Tort Claims Act, alleging that Customs agents were negligent in failing ensure that there was no more marijuana in the Pathfinder before it was sold to him.
But that claim was foreclosed by recent Supreme Court precedent that a statutory exception to the FTCA bars all claims based on any injury suffered in a foreign country, regardless of where the federal government’s negligent actions occurred.
Agredano had one more trick up his sleeve.
He sued the government for breach of warranty.
Agredano’s theory of the case was that a contract arose when he agreed to purchase and Customs agreed to sell the Pathfinder, the contract contained an implied-in-fact warranty that the vehicle did not contain contraband, and Customs breached this warranty.
The U.S. Court of Federal Claims bought this argument.
Because Agredano had a hard time of it in Mexican prison, the Court of Claims awarded him damages for his past and future medical bills and his past and future psychiatric treatment. Agredano also was awarded his attorney fees incurred in the criminal proceedings in Mexico, as well as what it cost his family to visit him in prison.
Unfortunately for Agredano, the Federal Circuit on Wednesday overturned that verdict.
The Federal Circuit found that “Customs’ responsibility to remove contraband from forfeited vehicles does not provide a contractual warranty to future purchasers of the vehicles that it has done so. While Agredano is correct that the sale of the vehicle was a commercial transaction, not a regulatory function, the source of any responsibility on the part of Customs to search vehicles and remove contraband is its regulatory function and a failure to adequately perform this responsibility does not provide a contractual remedy.”
Probably Agredano’s main problem was that U.S. Customs sold him the Pathfinder “as is.”
The bidder registration form that he signed at the car auction bound him to the terms of Custom’s sales catalog for the event, which expressly stated that vehicles were sold “without warranty or guarantee as to condition, fitness to use, or merchantability stated, implied or otherwise.”
The court found that the disclaimer showed “that Customs did not intend to make any warranty with regard to the vehicle. The meeting of the minds required to form an implied-in-fact warranty therefore could not have occurred.”
Agredano’s last arrow in the quiver was his contention that the disclaimer was limited to the mechanical operation of the vehicle.
But the court said that Agredano’s interpretation of the disclaimer “ignores the language found in the sale catalog, which indicates that the disclaimer goes beyond mechanical operation of the vehicle by stating that no warranties are provided ‘regarding any aspect of the vehicle or its ability to operate’”
The court noted that the sales catalog for the auction “offers as examples of aspects of the vehicle for which no warranty is provided the vehicle’s identity, previous ownership, and registration status. These examples further demonstrate that the disclaimer is not limited to the ability of the vehicle to function for transportation. Customs clearly and unambiguously stated that it was not extending a warranty regarding any aspect of the vehicle, and it is incongruous to find that Customs impliedly warranted what it expressly disclaimed.” (Agredano v. United States)
This seems like a pretty harsh result for Agredano. After all, he appears to be the quintessential innocent bystander caught up in a Hitchcock-like twist of plot.
For lawyers and plaintiffs alike the case serves as a stark reminder that every injury does not necessarily have a remedy.
— Pat Murphy
