New Jersey Lemon Law Lawyer Blog

COMPLIANCE WITH ATTORNEY GENERAL’S SETTLEMENT

As previously reported on the internet and through the Division of Consumer Affairs, specifically four Sansone dealerships signed a consent agreement with the state to cease various business practices. Interestingly enough as part of the settlement, there is a complaints program. The defendants in the lawsuit are required to submit a copy of the consent judgment to its officers, directors and owners within 30 days of the settlement and then within 45 days, the defendants shall provide the state with proof that they have been supplied a copy of the consent judgment with an alphabetic list of the names.

Then within 60 days, the specific Sansone dealership shall provide the plaintiff with a memorandum detailing the specific policies and procedures within the advertisements and websites required by the motor vehicle advertising regulations as compliance as part of the consent judgment. The dealerships are required to make available for inspecting and copying at no cost to the plaintiffs all policies and procedures applicable to this portion of the settlement.

This is significant. If now a consumer were to institute suit against Sansone for one of the actual or legal theories which were covered as part of the state investigation and settlement, Sansone would effectively be on notice and in essence, have committed an intentional violation of the law. If the officers and directors are required to know, required to review the appropriate compliance procedures and policies to make sure that the program is followed, the only reasonable conclusion would be that Sansone would be aware of any of the appropriate violations. You would think that this would be unnecessary as part of running a dealership but apparently it is not.

There is consent judgment. There has been extensive information in the news about the four Sansone dealerships in the Sansone Auto Network who have recently signed a consent judgment with the state. What is this? Consent judgment is in essence a settlement agreement. Apparently the subject dealerships and the state have agreed to a settlement of the matter. In an ordinary lawsuit, there would be a settlement agreement signed between the parties and the payment of moneys. That is for an individual lawsuit between individual parties, not a state entity. However, in this matter, the state is an entity and I must assume that the state would not go with a simple settlement agreement but wanted a consent judgment.
In my opinion, the difference is that it is an official matter of public record rather than a settlement agreement which many times can be confidential. Nonetheless, a “judgment” under the law gives a significantly more effect than just a regular settlement agreement. But for practical purposes, they are the same thing.
What usually occurs in these cases is that the Division of Consumer Affairs or the state gets various complaints from numerous consumers against a particular dealership. The state then investigates these complaints risen or filed by the individual consumers. After these complaints are accumulated, the state will file a lawsuit against the particular dealership or entity and ultimately try the matter if it cannot be resolved. Obviously the resolution of one of these claims is by a consent judgment.

SANSONE SETTLEMENT

One of the extensive provisions of the Sansone dealerships settlement in the State of New Jersey is that they must disclose the prior use of the automobile including rental. Over the years, I have litigated numerous cases, non Sansone dealerships, where it has been alleged that the prior use of the automobile in the case of a rental must be disclosed. The dealerships would take the position that this is a non-material fact and as such, need not be disclosed. I have taken the position numerous times and have been successful that this is a material fact and must be disclosed.

Ultimately this is very fair and that significant prior use must be told to the plaintiffs or the purchaser of the automobile. If the dealership thinks it might make a difference in the purchaser’s decision-making process, then it must be disclosed. Apparently now, the state has taken the position that a prior rental use of a vehicle is deemed a material fact. Therefore, a dealership cannot say the prior use of an automobile in the case of a rental is a non-material fact.

Please remember that only four Sansone dealerships were sued and only four settled. There is no allegation and no inference should be taken that the others are doing anything improper.

THE DEALERSHIP ARE AS FOLLOWS

Fords National Auto Mart, Inc., which does business as Sansone Ford Lincoln Mercury in Ocean Township;

Paladin Chevrolet, which does business as Sansone Chevrolet in Avenel;

Sansone Plaza Dodge, Inc., which does business as Sansone Dodge in Ocean Township;

Sansone Management Corp., which does business as Sansone's Route 1 Auto Mall in Avenel.

There is a consent judgment that has been entered in this matter

The state resolved a claim against Spectrum Home Furnishings Inc., Charles Serouya & Son Inc., also known as Gallery, CS&S Inc., Charles Serouya Inc., Spectrum Home Furnishings Inc., Charles Serouya & Son Inc, also known as Gallery. The state filed suit against these entities alleging violations of the New Jersey Consumer Fraud Act, the Refund Policy Disclosure Act, the regulations governing disclosure of refund policy in retail establishments, accepted mail order practice and regulations, regulations governing delivering of household furniture and regulations governing general advertising. The entities who were subject to this lawsuit filed by the state entered into a consent order to resolve the matter. In essence, the defendants agreed not to violate any laws and pay various fines.

In this case an arbitration was filed against the dealer because it was alleged that they refused to return the deposit after the plaintiff returned the car. No return of deposit.

CONSUMER FRAUD

The petitioner was forced to enter the transaction when she was told that her first transaction was not approved for financing. They told her that she would not receive the deposit of $2,000 returned but they told her that she would receive credit towards the next transaction. She did receive that credit on the next transaction although she did not to purchase the vehicle or have any dealings with the defendant but had no choice. The failure to return the money after the cancellation of the contact by the respondent constitutes unconscionable conduct if not out right conversion. The representation that she would not receive her money when the transaction was cancelled by the dealer constitutes and affirmative representation. Then when petitioner defaults on the payments the car is repossessed and no post repossession notice is provided and there is not post sale accounting. It is unknown what occurred to the car, whether the defendants used it for personal purposes or profit. Without proof we must make such assumptions.

The New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2, states:
“Any act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false promise, misrepresentation, or the knowing concealment, suppression or omission, of material fact with intent that others rely upon such concealment, suppression, or omission in conjunction with the sale . . . or with the subsequent performance of such person as aforesaid, whether or not any person has, in fact, been misled, deceived or damaged thereby, is declared to be an unlawful practice.

All of the remedies are cumulative to any remedies that are available to claimants, such as those contained in the Uniform Commercial Code.
56:8-2.13. Cumulation of rights and remedies; construction of act
The rights, remedies and prohibitions accorded by the provisions of this act are hereby declared to be in addition to and cumulative of any other right, remedy 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, remedy or prohibition.
CONVERSION OF PLAINTIFF’S $2,000
Generally, one who exercises unauthorized acts of dominion over the property of another inconsistent with or to the exclusion of the latter's rights therein is liable for conversion, although he acted in good faith and in ignorance of the rights of the owner. McGlynn v.Schultz, 90 N.J.Super. 505, 526, 218 A.2d 408 (Ch.Div.1966), aff'd 95 N.J.Super. 412, 231 A.2d 386 (App.Div.1967). Plaintiff is entitled to the value of the converted property, $2,000. The general rule with regard to the measure of damages in conversion is to award the fair and reasonable market value of the property at the time of conversion. Chemical Bank v. Miller Yacht Sales,173 N.J.Super 90, 99-100 (App.Div 1980).

WRONGFUL REPOSESSION

The dealership has violated every provision of the Uniform Commercial Code pertaining to repossession notice and dispossession of collateral actionable permitting the plaintiff to recover statutory damages as permitted under the Code and punitive damages for conversion.
Repossession Requirements
N.J.S.A. 12A:9-610 Disposition
N.J.S.A. 12A:9-611 Post repossession notice required before disposition
N.J.S.A. 12A:9-612 Post repossession notice requirements
N.J.S.A. 12A:9-313 Notice contents
N.J.S.A. 12A:9-614 Notice contents
N.J.S.A. 12A:9-616 Explanation of deficiency
Penalties
N.J.S.A. 12A:9-625(c)(2) Damages are finance charges plus 10% cash price
N.J.S.A. 12A:9-625(e) Minimum $500 damages plus other contained in the