The prior customers who purchased cars from him under the claims that they were non-auction autos could have a claim for fraud if they chose to pursue it.
The term 'fraud' is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. [Fraud may also include an omission or intentional failure to state material facts, knowledge of which would be necessary to make other statements not misleading.]
To constitute fraud the misrepresentation [or omission] must be made knowingly and intentionally, not as a result of mistake or accident; that is, that the person either knew or should have known of the falsity of the misrepresentation [or the false effect of the omission], or that he made the misrepresentation [or omission] in negligent disregard of its truth or falsity.
Finally to constitute fraud, the Plaintiff must prove that the Defendant intended for the Plaintiff to rely upon the misrepresentation [and/or omission]; that the Plaintiff did in fact rely upon the misrepresentation [and/or omission]; and that the Plaintiff suffered injury or damage as a result of the fraud.
Fraud avoids a contract, ab initio, both at law and in equity, whether the object be to deceive the public, third persons or one party endeavor thereby to cheat the other.
The hardest thing to prove in this case would be damages as the plaintiff would have to prove that they suffered some sort of economic damage that they would not have suffered had the car not been from an auction.
If you could show evidence that he was in fact selling autos from the auction and not disclosing it, you could file a complaint with the state Attorney General's Office and they would follow up on it as a possible criminal matter.
I hope this helps and thanks for the question.
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