New Jersey Lemon Law Lawyer Blog

Consumer Arbitration. Consumer Fraud

In this case, the plaintiff was asserting that the dealership made affirmative misrepresentations or false promises that the vehicle had previously not been in an automobile accident. The vehicle that was purchased by my client was a Lexus GS with 84,000 miles. As part of the transaction, the dealership representatives provided my client with a CARFAX which indicated there were no prior accidents in the CARFAX history. Therefore, the purchaser of the vehicle relying upon the CARFAX assumed that the vehicle did not have any prior accidents.
After my client was driving the vehicle for a period of time, she learned that the vehicle was in fact in a prior accident when it was looked at by another auto body shop. The petitioner alleged that when she returned to the dealership and complained of the problems, the dealership failed to help her and failed to repurchase the vehicle.

The petitioner then accessed CARFAX and it appeared as though the vehicle had been in two prior automobile accidents. The question was why CARFAX had not reported the vehicle with an accident at the time of the sale. The answer is relatively simple and that this information was not in the CARFAX database at the time of the sale to the plaintiff. Thus, the dealer took the position that they were unaware of the prior automobile accident. The plaintiff produced an expert who testified that had the dealership looked at the vehicle carefully they would have known the vehicle was in an automobile accident. It took some time but acquired the police report and then the record of the automobile accidents for which there was actually three. The sum of the total prior accident damage on the vehicle was approximately $15,000.

The issue in the arbitration is whether or not the dealership knew or should have known of the automobile accidents and whether or not the CARFAX was an affirmative misrepresentation or a false promise. Under New Jersey Law, there is no requirement that a false promise or an affirmative misrepresentation be within the knowledge of the defendant. In addition, good faith is not a defense in this regard.

Ultimately, the arbitrator decided that the dealership committed an act of consumer fraud by selling this Lexus with 84,000 miles with three prior accidents. The arbitrator determined that the CARFAX constituted an affirmative misrepresentation which is actionable under the New Jersey Consumer Fraud Act. The arbitrator then tripled the damages as required under the New Jersey Consumer Fraud and awarded counsel fees. This determination by the arbitrator is probably a matter of public record within the American Arbitration Association guidelines. I think that they keep a record of all the arbitrations, however, I am uncertain as to the method by which these documents might be obtained.

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Carton and Rudnick consumer law
Carton and Rudnick

Consumer Fraud Arbitration: Victory

I won the case and I will not name the dealer currently BUT the claim was that the car was sold and was in a two prior accidents and the plaintiff was told that the car was not involved in any prior accidents. The plaintiff was shown a CARFAX that showed no accidents.

CARFAX later, months after the transaction, that the car was in two accidents and the plaintiff found out and was upset, returned to the dealer and demanded he money back.

The dealer, according the the plaintiff, refused this request and she was forced to seek legal advise.

To be continued

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Carton and Rudnick consumer law
Carton and Rudnick

Consumer Fraud: Misrepresentations

What is a misrepresentation under New Jersey's Consumer Fraud Act:

An “affirmative act” is something done voluntarily by a person. It includes not merely physical acts, but also any steps taken voluntarily by a person to advance a plan or design, or to accomplish a purpose. “False promise” is an untrue commitment or pledge (which is communicated to another person) to create the possibility that that other person will be misled. Model Civil Jury Charge 4.43 http://www.judiciary.state.nj.us/civil/charges/4.43.pdf The defendant’s intent is not pertinent as good faith is not a defense to an affirmative representation. Cox v. Sears, 138 NJ 1, 16 (1994).

There are many cases that address what is considered ocnsumer fraud under New Jersey law.

The following are examples of affirmative representation that were actionable.
A cellular service provider’s advertisement that its service was so reliable that “you could make your wireless phone your only phone” Union Ink Company v. ATT Corp, 352 N.J.Super 617, 644 (App.Div 2002). A real estate agent’s statement that the termite problem was minimal when it was not. Byrne v. Weichert Realtors, 290 N.J.Super 126, 134 (App.Div 1996). Misrepresenting the mileage on a Corvette. Cuesta v. Classic, 358 N.J.Super 512 (App.Div. 2003). See also Cogar v. Monmouth Toyota 331 N.J.Super 137 (App.Div 1997)(odometer case)

In Ji v. Palmer, 33 N.J. Super. 451 (App. Div 2000) the sellers agent of a certain apartment building represented to the purchasers that the certificate of occupancy was sufficient to rent the unit as a multi family when in fact the unit was zoned single family and could not be utilized as a multi family dwelling. It was admitted that this was a mistaken belief by the seller’s agent but was determined to be actionable. The Appellate Division specifically determined that the seller’s agent intent was irrelevant under the CFA.

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Carton and Rudnick consumer law
Carton and Rudnick

Consumer Fraud Arbitration

I recently filed a demand for an arbitration under the American Arbitration Association consumer rules against a New Jersey dealership, South Jersey. The hearing is concluded and a decision should be rendered soon and I will start from the beginning and explain how arbitration works as opposed to a court case filed in Superior Court.

Remember all defendants are presumed innocent and the plaintiff has the obligation to prove the case.