New Jersey Lemon Law Lawyer Blog

Although I do a significant amount of auto fraud litigation, the concept does not change with regard to the sale of any goods such as houses or any other consumer goods. Again, if you know the purchaser of the good would make a different decision and you fail to disclose and you know this, this would be deemed fraud.

This is particularly applicable to dealers in auto fraud litigation. In many, many cases which I litigate, it is alleged that the dealer knew that a vehicle had been damaged in transit or otherwise, whether the vehicle be new or used. You would be surprised of the number of cases where new cars were sold with transit damage. Clearly, if a new car has any damage, in my opinion, it must be disclosed since it is material to the transaction.

Once a vehicle has damage, I would consider this a used car rather than a new car. Although the law determines that a used car is one which had been titled, based on the use, I would submit that the vehicle would now be a used vehicle. In addition, on used vehicles, dealers are required to inspect them for safety under the law and especially the certified used vehicles undergo an extensive process. When the dealership sells one of its cars and they know they were damaged and fail to disclose them to the purchasing public, they commit an act of either fraud or consumer fraud.

The difference between fraud and consumer fraud is the burden of proof. Under consumer fraud, the plaintiff only has to demonstrate preponderance of the evidence and under fraud, clear and convincing. It is a significant difference. The legislator has chosen to deter this conduct by lowering the proof level on certain cases.

Can you commit fraud by maintaining silence?

The simple answer to this is yes. Under New Jersey law, you can commit fraud or consumer fraud when there is a fact which a seller of a good knows will be relevant to the purchaser’s decision, and as a material fact to the transaction, failure to disclose same will be considered fraud if the claimant can prove intent.

In simple words, if you know something is important and do not tell the other person and their decision on the particular transaction would change based on that information, it is fraud, assuming it was done intentionally.

There are many examples of both in- and out-of-state cases where the failure to disclose certain information was considered fraud. As an example, failure to disclose that a car had sustained damage in accident, failure to disclose engine damage, failure to disclose defective brakes, failure to disclose that a new had been damaged in transit and repaired, failure to disclose that the vehicle had been used as a racing vehicle, failure to disclose MSRP, failure to disclose that the odometer was inaccurate, failure to disclose mileage properly under a circumstance that required the dealer knew about the discrepancy, statements made recklessly or carelessly with any reasonable ground for a belief, and truth as to the mileage constitutes intent to defraud. These cases are from Massachusetts, Texas, Illinois, Washington, Pennsylvania and Connecticut.

Nonetheless, the concept is simple. If something is important, it would make a difference as to the nature of the transaction one must disclose this information.

This is a list of questions that a jury might have to answer at the end of a trial:

1. Do you find by a preponderance of the evidence that the Defendant committed any unconscionable commercial practice, deception, fraud, false pretense, false promise or misrepresentation as I have defined in connection with the transaction involving the sale of the subject vehicle?

YES _______ NO _______ VOTE ________

2. Do you find by a preponderance of the evidence that the Defendant knowingly concealed, suppressed or omitted any material fact as I have defined those terms in connection with the transaction involving the sale the vehicle, with the intent to deceive the Plaintiff?

3. YES _______ NO _______ VOTE ________

If 1 AND 2 were answered no please stop.
If you answered yes to 1 OR 2 please go to # 4

4. Did Defendant’s conduct proximately cause any damages to Plaintiff?

YES _______ NO _______ VOTE ________

If your answer is “YES”, proceed to the next question. If you answer is “NO”, proceed to question 6.

5. What amount of money, if any, will fairly compensate Plaintiff for ascertainable losses resulting from defendant’s conduct?

$___________ VOTE ___________

Please go to # 6 and continue the deliberations.

6. Do you find that the Plaintiff has established by clear and convincing evidence that:

a. Defendant made a false representation to the Plaintiff?

YES _______ NO _______ VOTE ________

If your answer is “YES”, proceed to the next question. If no, stop deliberations.

b. Defendant knew or believed the representation to be false?

YES _______ NO _______ VOTE ________

If your answer is “YES”, proceed to the next question. If no, stop deliberations.

c. Defendant intended to deceive Plaintiff?

YES _______ NO _______ VOTE ________

If your answer is “YES”, proceed to the next question.
If no, stop deliberations.

d. Plaintiff believed and justifiably relied upon the statement and was induced by it to proceed with the transaction involving the purchase of the vehicle?

YES _______ NO _______ VOTE ________

If your answer is “YES”, proceed to the next question. If no, stop deliberations.

e. Did the false misrepresentation by Defendant proximately cause any damages to Plaintiff?

YES _______ NO _______ VOTE ________

If your answer is “YES”, proceed to the next question. If no, stop deliberations.

7. NOTE: answer this question only if you answered “YES” to all of the questions 6 (a)-(e) above.

What amount of money, if any, will fairly compensate Plaintiff for losses proximately caused by Defendant’s fraudulent misrepresentations?

$ ____________ VOTE __________

Please return Jury verdict sheet now.