New Jersey Lemon Law Lawyer Blog

CONSUMER FRAUD ARBITRATION

Tue, 01 Nov 2011 21:22:28 -0500

This is part of a closing argument that was recently submitted to AAA, American Arbitration Association

The plaintiff has proved that the defendant has committed fraud/consumer fraud. The dealer advised the plaintiff that the car was without accident both verbally and in writing. The plaintiff proved (CARFAX) and it was admitted (Defense expert testimony) that the car was in a previous accident.

Defense only disputed severity of the accident. Defense expert and the General Manager, admitted that the dealer probably knew of the prior damage. He actually testified that the dealer did know that the car was in an accident. The car was inspected by used car manager, technicians, certification process (MFGR trained techs looking for accident damage) and elcometer use on car acquisitions. (THE USED CAR MANAGER NEVER TURNED UP TO TESTIFY) Even more significant is that this was a Manufacturer authorized dealer!!

Who would be in a better position to know that the car was not in FRONT LINE CONDITION? Nobody. The dealer’s claim or assertion of ignorance as to any prior damage is both insulting and incredulous. The Manufacturer representative testified that bondo should not be used on certified cars (not a quality repair) and any through panel penetration would render a car non-certifiable.

It is agreed that there is penetration resulting from a dent repair. The best the dealer can do with these facts is that they did not see it because the holes had plugs. As a threshold matter the “dealer knowledge” is irrelevant. The MFGR rep did not say dealer knowledge was important JUST that this car could not be certified with the “holes in the car” Three in total. The through body penetration was the key factor. The bottom line here is that the dealer refused to step up to the plate and do the right thing. They sold a car that was in an accident. When the plaintiff returned and then when counsel wrote a letter they failed to repurchase the vehicle.

This was after the plaintiff had returned, complained about an accident and they inspected the car. What exactly were they looking at? Did they use the elcometer then? Did they offer to do the repairs that defense expert admitted the car needed. NO NOTHING. This was after they knew that the car was in an accident. I guess the “thread” of an assertion the dealer might raise is the how do we know we really have bondo? Does this matter? The dealer sold a car and they did not know if it was bondo and chose to take the risk and sell it anyway. Maybe bondo maybe primer? They are the experts shouldn’t they know? They are experts in selling cars not selling grapefruit! They cannot have it both ways. Superior quality of a dealer, certified used cars and trained staff and then come and assert that we did not know? NOT REALLY. Where would the dealer place the blame? Please look at the experts report and look how much was wrong with the car? Did they know? Of course.

Lawsuits Against Dealerships: Who owns the dealership?

Sat, 01 Oct 2011 16:56:25 -0500

Dealer lawsuits, consumer lawyer

One option in lawsuits against dealers is instituting suit against the owners and/or employees. New Jersey laws held that the owners or the individual employees can be liable if they directly participated in the fraud or consumer fraud.

The New Jersey Consumer Fraud Act indicates that persons are liable which indicates fictitious persons such as corporations and real persons such as individuals.

One resource is the Department of Treasury, State of New Jersey wherein you can find out who the owners and the officers of the dealership are in order to assist your investigation.

Business Entity Status Search: Find the Owner

CARTON AND RUDNICK LLC

Repossession and Breach of the Peace

Wed, 21 Sep 2011 23:43:36 -0500

Repossession and Breach of the Peace

New Jersey Courts have analyzed what constitutes a breach of the peace.

“Breach of peace”, as used in the Code, should be construed according to the ordinary and usual meaning of the term, and ordinarily contemplates violence or the threat of violence. Slowinski v. Valley Nat. Bank, 264 N.J. Super. 172, 187, 624 A.2d 85, 93 (App. Div. 1993) emphasis added
The courts have determined that it is a question of facts as to whether there has been a wrongful repossession for a breach of the peace and that should be applied to this case. The plaintiff has alleged there was a threat of violence (arrest) to force the plaintiff to return the boat. It worked because the plaintiff returned the boat in order not to get arrested by what he thought was a Sheriff coming to arrest him and take him to jail. This is the type of conduct that creates a jury question on this issue.

The bank’s failure to sell the collateral and failure to send to auction creates a question as to whether the bank properly followed the repossession procedure. The “goods” were placed on the repossession company’s lot in Jackson New Jersey. There were no bids at the auction. The bank cannot prove that they properly advertised the auction or had a valid auctioneer conduct the auction. Moreover the goods were damaged on the repossession and ruined the collateral. There are serious doubts as to whether the repossession notices were even proper!!

Repossession Law in New Jersey

Mon, 19 Sep 2011 23:39:39 -0500

Repossession Law in New Jersey

The basic concepts for the body of law underlying repossession, rights and remedies are encompassed in the Uniform Commercial Code. The UCC has established a multistep process and a list of requirements to be followed by creditors who have secured rights. The concept of repossession is not a single act of “repossession” collateral to enforce creditor rights BUT rather an entire process or 1) repossession 2) notice 3) sale and final resolution of the rights and relationships between the parties. The entire repossession process promulgated by the UCC ensures fluidity and predictability of 1) parties expectations 2) standard of conduct. Again, repossession is an entire process from self help acquisition to post notice sale and deficiency.

The following is the entire repossession process:

• 12A:9-607. Collection and Enforcement by Secured Party
• 12A:9-608. Application of Proceeds of Collection or Enforcement; Liability for Deficiency and Right to Surplus
• 12A:9-609. Secured Party's Right to Take Possession After Default
• 12A:9-610. Disposition of Collateral After Default
• 12A:9-611. Notification Before Disposition of Collateral
• 12A:9-612. Timeliness of Notification Before Disposition of Collateral
• 12A:9-613. Contents and Form of Notification Before Disposition of Collateral: General
• 12A:9-614. Contents and Form of Notification Before Disposition of Collateral: Consumer-Goods Transaction
• 12A:9-615. Application of Proceeds of Disposition; Liability for Deficiency and Right to Surplus
• 12A:9-616. Explanation of Calculation of Surplus or Deficiency

As to the application of the UCC the drafters have specifically left the courts with guidelines for interpretation and specifically rely thereon for their sound discretion. See N.J.S.A 12A:9-609, comment 3. As an example the following concepts have been established by the UCC, adopted and interpreted by New Jersey Courts: A breach of the peace in the repossession process violates the UCC and entitles the aggrieved party to statutory damages and actual damages. N.J.S.A. 12A:9-609(b) (3). See also Slowinski v. Valley Nat. Bank, 264 N.J.Super. 172, (App.Div 1993); The duty to repossess collateral is a non delegable duty which has been assigned to the creditor as a matter of public policy. DeMary v. Rieker, 302 N.J.Super. 208, 695 A.2d 294 (App.Div 1997). The question if there has been a breach of the peace is a question of fact for the jury. Slowinski v. Valley Nat. Bank, 264 N.J.Super. 172, (App.Div 1993); It is not necessary that the repossession of the collateral actually occurred. Slowinski v. Valley Nat. Bank, 264 N.J.Super. 172, (App.Div 1993); Lawful repossession exists where (1) there has been a default on a valid security agreement and (2) the repossession is executed without a breach of the peace. Slowinski v. Valley Nat. Bank, 264 N.J. Super. 172, 92 (App. Div. 1993); other jurisdictions have held that a wrongful repossession can give rise to an action for conversion. Slowinski v. Valley Nat. Bank, 264 N.J. Super. 172, 189-90, 94 (App. Div. 1993)

Finance Company and Wrongful Repossession

Thu, 15 Sep 2011 08:04:46 -0500

Wrongful Repossession/Non-Delegable Duty

The law in the State of New Jersey is if a repossession agent repossesses a vehicle in an improper fashion which has been previously addressed, it is the non-delegable duty of the finance company that might have initially authorized a repossession, to make sure that the repossession happens without a breach of the peace.

New Jersey Courts have determined that it is a public policy that the repossession agents not breach the peace when repossessing a vehicle. The Courts have also determined that it is ultimately the obligation of the finance company to make sure that this does not happen in an improper manner. This is called a non-delegable duty. This means that it is ultimately the responsibility and the obligation of the finance company who authorized a repossession to make sure the repossession is done in a proper manner consistent with the New Jersey law. It does not matter whether it was with violence as an impersonation of a law enforcement officer or some other improper and illegal manner. This is the obligation of the finance company with regard to ultimate liability.

What this means as a practical matter for someone who owns or operates a vehicle is that if there is an improper act with regard to repossession of an automobile regardless of who this person is, where they are or why they did what they did, it is ultimately the liability of the finance company in this regard. This means that you can sue the finance company if a repossession agent engaged in illegal or wrongful repossession or breach of the peace or did some other inappropriate or wrongful action. The public policy is that the Courts insist they will not permit a finance company to put their head in the sand while or types of improper or illegal actions are occurring with regard to repossession. This is why it is a non-delegable duty, this is why it is the responsibility of the finance company to make sure it is done properly and this is why the finance company has insurance and/or the repossession agent is required to carry insurance by the finance company.

Self-Help Repossession Wrongful Repossession

Sat, 10 Sep 2011 07:43:07 -0500

Self-Help Repossession

Usually, the agreement will permit the finance company or bank to take the vehicle by self-help repossession without any further definition. The Uniform Commercial Code also permits a secured party to take a piece of collateral or the vehicle by self-help repossession. Again, self-help repossession is not specifically defined, however, must be deemed obvious in light of the relationship between the parties.

Self-help repossession is where the finance company ‘helps themselves’ to take the vehicle back.
One common question is whether or not there needs to be a notice to the owner of the vehicle prior to the ‘self-help repossession’. There is no requirement under the Uniform Commercial Code and there is usually no requirement under the written agreement between the parties. However, if the written agreement between the parties indicates there must be a type of pre-repossession notice, they must conduct same. If there are various calls between the parties with regard to late payments, this is not deemed and cannot be deemed a requirement but rather an attempt by the finance company to have the lessee or driver of the vehicle make payments.

Repossession law in the State of New Jersey

REPOSSESSION LAWS IN THE STATE OF NEW JERSEY

Thu, 01 Sep 2011 07:40:01 -0500

REPOSSESSION LAWS IN THE STATE OF NEW JERSEY

The laws in the State of New Jersey on repossession are based on two things: There is common law and statutory law addressing the relationship between the parties. Statutory law for repossession of the automobile or collateral is based on the Uniform Commercial Code. The Uniform Commercial Code specifically states when a vehicle or a piece of collateral may be repossessed.

The primary event to which the code references is a ‘default.’ Obviously, a default would refer to the written agreement between the parties to determine when there is in fact a default. This means that if the payments are due on the first of the month and the payments are not made, this would be ordinarily deemed a default of the agreement between the parties.
The legal significance of the default is addressed by the Uniform Commercial Code and permits the finance company or the party not in default to take appropriate action. The actions permitted to be taken by the finance company are also contained in the agreement between the parties. Usually, the agreement will make reference to self-help repossession or replevin. These terms and conditions are also addressed by the Uniform Commercial Code.

Repossession law in New Jersey

Consumer Fraud and Auto Fraud

Mon, 01 Aug 2011 16:14:42 -0500

Did a dealership do the following:

* Sell you a damaged car
* See you a defective car
* Lie to you about financing
* Lie to you about a warranty
* Lie to you about the history of a car
* Lie to you about the mechanical condition of the car
* Lie to you about the repair history
* Lie to you about the price
* Lien to you about the advertised price

Call Carton and Rudnick for help

HVAC, Air Conditioning Complaints

Sat, 23 Jul 2011 07:10:48 -0500

HVAC, Air Conditioning Complaints: What to do?

There are many rules and regulations pertaining to the installation of an HVAC system.

The failure to install a system properly will properly result in a system that 1) does not work 2) cost a lot of money to operate.

There are numerous ways that the HVAC company can ruin a system or install a system that does not work.

Load calculations
Obtain proper permits
Use the proper equipment
Test the system properly
Submit proper plans to authorities
Taking shortcuts
Not installing what was promised
Improperly trained staff

If you have and questions please call Carton and Rudnick 732-842-2070

C.L.U.E. - Comprehensive Loss Underwriting Exchange

Wed, 22 Jun 2011 00:14:29 -0500

C.L.U.E. - Comprehensive Loss Underwriting Exchange

If you think that you car has been in an accident you might be able to access the prior damage by asking for a C.L.U.E. report. The instructions are simple and you can have access to this massive data base that CAR FAX does not have access to at all. This information is kept by insurance companies and IS NOT REPORTED to CAR FAX

New Jersey Law on Damaged Cars

Fri, 17 Jun 2011 12:51:36 -0500

In New Jersey the legislature has partially codified the aforementioned principles in N.J.S.A. 56:8-68 which states that it is an unlawful practice for a used car dealer to (a) misrepresent the mechanical condition of a used vehicle (b) to fail to disclose, prior to sale, any material defect in the mechanical condition of the used motor vehicle which is known to the seller (c) to represent a used motor vehicle, or any component thereof, is free from material defects in its mechanical condition at the time of sale, unless the dealer has a reasonable basis for the representation at the time sale is made. It is arguable that these “disclosure” requirements would be required under any “common law” analysis, which predated this Statute. None the less, the creation reinforces the purposes advanced by the Consumer Fraud Act, trebling damages and providing for the award of attorney fees.

The Administrative Code also contains extensive regulation of dealership conduct. The failure to disclose that the motor vehicle had been previously damaged and that substantial repair or body work has been performed on it when such prior repair or body work is known or should have been known by the advertiser; substantial repair or body work shall mean repair or body work having a retail value of $1,000 or more. N.J.A.C. 13:45A-26A.7. Advertisement is defined by the Consumer Fraud Act as the attempt directly or indirectly by publication, dissemination, solicitation, endorsement or circulation or in any other way to induce directly or indirectly any person to enter or not enter into any obligation or acquire any title or interest in any merchandise or to increase the consumption thereof or to make any loan. N.J.S.A. 56:8-1(a). Again, this definition of “Unlawful Practice” would arguably exist under the Common Law principles set forth above.

Car Salesman and Damaged Cars

Thu, 16 Jun 2011 12:39:49 -0500

DEALER, HAS A DUTY TO INSPECT THE PLAINTIFF’S CAR AND MAKE RELEVANT DISCLOSURES

The general rule in American Jurisprudence is that used car dealers are required to exercise reasonable care in making an inspection for the purposes of discovering defects which would make the vehicle a menace to the highway or dangerous to use. See 7A Am Jur2d. Automobiles and HighwayTraffic § 730. This general proposition has been adopted by the New Jersey Supreme Court and implemented by the New Jersey Legislature. In Realmutto v. Straubb Motors, 65 N.J. 336, 444 (1974) the Supreme Court held: a used car dealer has the duty of reasonable inspection, testing and warning of any defects, as well as that of reasonable care with respect to any repairs or replacements he may make to the vehicle.

The reasons seem obvious but are worth repeating. The used car dealer is in a better position, by reason of his opportunity, than his average customer, to discover what defects might exist in any particular car to make it a menace to the public. It is not too harsh a rule to require these dealers to use reasonable care in inspecting used cars before resale to discover defects, which the customer often cannot discover until too late. Gaidry Motors v. Brannon, 268 S.W.2d. 627,628 (Ken. 1953). A seller's duty to disclose information concerning the condition of a product arises from its superior knowledge of the product. The courts considering the issues have recognized that used cars are more likely to have mechanical defects than new ones and that used car dealers are in a better position to discover these defects than their average customer. See Patton v. McHone, 822 S.W. 2d. 608, 613-614 (Tenn.1991). A car salesman cannot close his eyes to the truth. Nieto v. Pence, 578 F.2d. 640, 642 (1978).

Claims under the Consumer Fraud Act, N.J.S.A. 56:8-2, do not require the plaintiff to demonstrate intent, which exist in the current case, but any claims of civil fraud require proof of intent. Foont-Freedenfield v. Electro-Protective, 126 N.J.Super. 254, 259 (App.Div1973). The plaintiff need not prove that the defendant possessed actual knowledge but may prove constructive knowledge to satisfy the intent requirement. A widely accepted rule of fraudulent intent is that civil liability may be imposed where it is proved that a defendant's statements were made recklessly or carelessly, without knowledge of their truth or falsity, or without reasonable grounds for belief in their truth, especially in a case where

(1) the defendant was under a duty to have the knowledge in question,
(2) a relation of trust or expert reliance existed,
(3) a statement was made to induce a business arrangement, or
(4) the knowledge or information in question was within the special province of the defendant. Such conditions being met, it does not matter whether or not the declarant actually believed the statement (or statements) in question to be true. Jones v. Ford, 427 F.Supp. 1328 (D.C.Conn. 1977).

Selling Damaged Cars: Consumer Fraud

Wed, 15 Jun 2011 12:46:01 -0500

Selling Damages Cars: Consumer Fraud

Cases and examples

In Grabinski v. Blue Springs Ford, 136 F.Supp. 565, 568 (8thCir. 1998), the Court of appeals upheld a $210,000 punitive damage award where the jury awarded $7,835 in compensatory damages. In Grabinski, the plaintiff action was based on the following misstatements of material fact: 1) The car was very nice; 2) the car was driving fine; 3) the car only needed a clean up and standard service; 4) the car was in excellent condition had had one owner and had never been wrecked. The court determined that the jury had a reasonable basis to conclude that the dealer, defendant, should have been aware of the condition of the vehicle, which had been seriously damaged by a prior owner. Id at 569.

In Chezik Homerun v. NKC Motors, 153 F.3d. 1014 (8thCir. 1998), the Court of Appeals upheld a jury verdict for $6,900 in compensatory damages and $35,000 in punitive damages. The jury had determined that the defendant had violated the applicable Consumer Fraud Statute by misrepresenting; 1) the car was a one owner car; 2) the car had been traded in because the prior owner wanted an upgrade; 3) the car had nothing wrong except a pop can holder. The jury also found the defendant had violated the Act by concealing (representing by silence) that the car had sustained prior wreck damage.

In Parrott v. Carr Chevrolet, 965 P.2d. 440, 447 (Or.App. 1998) the jury awarded $11,496 in compensatory damages and $1,000,000 in punitive damages. The Trial Court reduced the punitive damage award to $50,000, which was increased to $300,000 by the Appellate Court. In Parrott the plaintiff alleged that the defendant 1) Falsely claimed the car was equipped with proper emission controls; 2) Falsely represented the car had been driven 100,608 miles; 3) With defaced or missing VIN numbers in violation of Oregon law; 4) Without disclosing that the emission control equipment had been removed; and 5) Selling the vehicle without disclosing it had previous out of state damage. Plaintiff’s expert testified that any minimally trained dealership employee would have recognized the apparent problems with the subject car, which was a Suburban. Id at 445.

Consumer Fraud Rights are Cumulative

Mon, 13 Jun 2011 21:32:57 -0500

The plaintiff’s rights under the New Jersey Consumer Fraud Act are in addition to any other common law or statutory rights.

The rights provided under the New Jersey Consumer Fraud Act are in addition to any other statutory or common law rights. N.J.S.A. 56:8-2.3 provides as follows:

“The rights, remedies and prohibition accorded by the provisions of this Act are hereby declared to be in addition to and cumulative above any other rights, remedies or prohibition accorded by the common law or statutes of this State, and nothing contained herein shall be construed to deny, abrogate, or impair any such common law or statutory right, redress or prohibition.”

The clear intent of the New Jersey Consumer Fraud Act was to provide consumers with additional and cumulative remedies and no way curtail their remedial opportunities for the redress of fraud and other unconscionable practices afforded by any other statute or common law. Cybul v. Atrium Palace Syndicate, 272 N.J. Super. 330, 335 (App. Div. 1994). In Cybul, the Appellate Division held that the plaintiff could maintain a cause of action under an administrative scheme wherein there was no direct provision for a cause of action to the plaintiff. In Lemelledo v. Beneficial Management, 150 N.J. 255 (1997), a watershed case, the New Jersey Supreme Court held that the plaintiff could maintain a private cause of action in addition to, a statutory scheme which provided the plaintiff only a return of premiums paid under the policy. The New Jersey Supreme Court held that: “The CFA simply complements those statutes, allowing for regulation by the Division of Consumer Affairs and a private cause of action to recover damages. The damages cause of action in no way inhibits enforcement of other statutes, because a Court can assess damages in addition to any other penalty to which a defendant is subject.”

Consumer Fraud Act Permits Claims Against Indirect Sellers

Sun, 12 Jun 2011 21:25:03 -0500

THERE IS NO PRIVITY REQUIREMENT TO MAINTAIN A CAUSE OF ACTION UNDER THE NEW JERSEY CONSUMER FRAUD ACT.

You have a right of action against those up the stream of commerce. An indirect seller.

There is no privity requirement to maintain a cause of action under the New Jersey Consumer Fraud Act. In Alloway v. General Marine Ind., 149 N.J. 620 (1997), the Supreme Court held that the New Jersey Consumer Fraud Act does not require privity to maintain a cause of action. In Alloway, the plaintiff purchased a defective boat, which was built by the (manufacturer) defendant. The plaintiff instituted suit against the manufacturer and other defendants for tort (negligence) and warranty claims. The Court dismissed the tort claims and permitted the plaintiff to proceed on the warranty claims, holding that privity was required for tort claims, but not for warranty type claims. The underpinnings of the decision were that the plaintiff had statutory avenues of remedy including, but not limited to, the Uniform Commercial Code (UCC) and the New Jersey Consumer Fraud Act to address economic injuries to property. Id. at 639 - 640. The Court specifically left unanswered whether or not tort or contract law applies to a product that poses a risk of causing personal injuries or property damage, but has caused only economic loss to the product itself.
The trend in the application of the Consumer Fraud Act has been to expand liability to those “upstream, in the chain of commerce”, including but not limited to remote suppliers of component parts whose products are passed on to a buyer and its representations are made to, or intended to be conveyed to the ultimate purchaser. Perth Amboy Iron Works v. Amhouse, 226 N.J. Super 200, 211 (App. Div. 1998).