New Jersey Lemon Law Lawyer Blog

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.

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

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

ANTI CONSUMER LEGISLATION IS COMING SOON TO YOU HERE IN NEW JERSEY

The New Jersey Assembly and the Senate have introduced bills that would permanently and prohibitively make New Jersey an anti-consumer forum and roll back years of consumer protection laws which have accumulated benefits for thousands, if not millions, of New Jersey consumers.

A3333 which has been introduced into the State Assembly and parallel introduction of S2538 into the State Senate are anti-consumer and significantly reduce consumers’ rights in the State of New Jersey.

These bills destroy consumer protections which have been established through the years by both the legislature and the court. Initially, there is a very good chance that the interpretation of these new laws will prohibit any and all lawsuits and exempt car dealerships from the protection of the New Jersey Consumer Fraud Act.

CAR DEALERS WILL NOW BE PROTECTED

The provision of the bill which would arguably protect car dealerships and most businesses from the reach of the Consumer Fraud Act would be an exemption for businesses which are already regulated such as the Federal Trade Commission, Division of Banking and Insurance or other administrative agency. Since car dealerships are arguably regulated by the Division of Banking and Insurance, the Division of Motor Vehicles and arguably come within the reach of the Federal Trade Commission, they would argue that they are exempted from legislation of the New Jersey Consumer Fraud Act since they are already extensively regulated.

This provision will take away the private right of action or, in similar terms, the right for a consumer to sue a car dealership if they are ripped off or subject to deceptive practices. This applies to advertising, finance fraud and used car dealership fraud. This would arguably repeal extensive legislation which has already been established and set forth by the legislature and the assembly. This is just one provision of the new law which would affect New Jersey consumers.

There would also be an abolishment of the mandatory triple damages and it would be to the discretion of the trial judge. This is not set forth with any particularity so as to provide a trial judge with any guidance as to how to triple the damages. However, nonetheless, the changes in the Consumer Fraud Act would encourage fraudulent and deceptive conduct rather than discourage fraudulent and deceptive conduct.

Businesses which are hardworking and honest would be forced to change their mode of operation due to the lowering standard and low cost entry for deceptive businesses.

If two car dealerships were on the same street and one car dealership was using deceptive acts and practices to sell cars and exempted from the Consumer Fraud Act, the honest and hardworking dealership would be forced to do the same. Would this be considered a fair leveling off the field and evening of the competition? I think not. This is a foolish legislation blatantly anti-consumer and would help no one.

Wrongful Repossession Lawsuits

These are factual allegation in a New Jersey Lawsuit. These were submitted to the court in opposition to a summary judgment motion filed by the defendant

1. This litigation arises out of the plaintiff’s possession and subsequent repossession of the subject automobile which is a XXX

2. The plaintiff was indebted to the defendant, Finance Company, as a result of a vehicle purchase, a XXX

3. When this vehicle was repossessed on or about May 2010, it was not the first time that there were issues with regard to payments and repossession on the subject automobile.

4. The vehicle had been repossessed on at least one previous occasion and there had been several discussions back and forth between the parties pertaining to payment arrangements to avoid repossession.

5. The plaintiff had several agreements with the defendant,XXX, with regard to late payments so the vehicle would not be repossessed.

6. The repossession in question occurred on or about May 14, 2010. The plaintiff was in her car with her two young children both of whom who are under five years of age and wearing diapers.

7. The plaintiff was returning to her home and driving slowly towards her house.

8. The plaintiff then noticed a vehicle coming directly at her in the same lane of traffic.

9. At the same time, she noticed two other cars, one on the side and one on the rear boxing her in and barricading her into the street. The gentlemen who exited the cars wearing badges and looked like police badges.

10. The plaintiff felt barricaded in her car with her children and refused to get out of the car despite numerous requests to the contrary from XXX.

11. A heated argument ensued between XXX and the plaintiff with regard to exiting from the vehicle. The repossession agent refused to let the plaintiff drive to her home or get out of the car.

12. The repossession agent, XXX, actually unlocked the plaintiff’s vehicle while she was in the vehicle.

13. When the defendant, XXX, approached the plaintiff, he said, ‘well, well, well, we meet again’, and he was wearing a badge. At one point during the repossession process, the repossession agent showed the badge to the neighbors and said that the situation was under control. Ultimately, the plaintiff refused to exit her car and was driven to her home with her children in the rear by a repossession agent of XXX. The plaintiff testified specifically in her deposition that: “As I was coming down my street maybe a house and a half away from my own house, a white car came head on at me, a car came at my driver side and one came from behind me. I stopped my truck. XXX said well, well, well, we meet again. He unlocked my door and opened it. I said I just made a payment. He said that it was not for my van but they'd be back for it, it was for the XXX and I explained to him that I talked to Darryl from XXX and I had my girls in the back. And my youngest daughter just had a diaper on and he told me to get out and walk. I told him I wasn’t walking because I was so close to the home. Just let me drive home. He wouldn’t let me. I said my daughter only had a diaper. He said he would give me a shirt to put on her. I said I wasn’t getting out of my truck. I called my husband at his job and XXX had one of the other two guys that were there. He told me to move out of the driver seat into the passenger seat and the other guy got into driver seat and drove the plaintiff to her home.” The argument occurred when the defendant, XXX, kept telling the plaintiff to get out of the truck and the plaintiff said she was not getting out of the truck, just let her drive.

This was actually submitted in an arbitration against a New Jersey car dealership.

In the present case, the plaintiff has demonstrated that the defendant has committed acts of consumer fraud with a nexus to an ascertainable loss and, thus, the plaintiff should receive an award against the defendant. Reverse engineering and backing out numbers does not equate with fair business practices! This is coupled with an advertisement that is blatantly in violation of New Jersey law case law and the Administrative Code.

ADVERTISEMENT – CONSUMER FRAUD

Initially, the advertisement utilized by the defendant is inherently deceptive, has the capacity to mislead and violates New Jersey law. The terms used by the defendant in the applicable advertisement violate are not permitted under the law. N.J.A.C. 13:45A-26A.7(9-10) (the term “authorized sale” and “whole sale” and not permitted); Barry v. Arrow Pontiac, Inc., 100 N.J. 57, 494 A.2d 804 (1985) (dealers use of these terms violates the Consumer Fraud Act.)
Thus, the next issue is whether or not the applicable advertisement is applicable to the plaintiff’s transaction. The defense has claimed that the advertisement expired on or about April 30. Plaintiff testified that the defendant would honor the advertisement and wrote this on the advertisement. This is confirmed by the initialed memo from the general sales manager. The general sales manager, XXX , refused to appear to contradict this testimony despite a subpoena issued to him. Plus the defendant failed to produce him to rebut the plaintiff’s testimony. Thus, the allegations as to the conversations with dealer’s representatives should be accepted as the truth. It should be accepted, it is not disputed and thus the defendant dealership forwarded the advertisement by direct mail and agreed to permit this advertisement to apply to the plaintiff’s transaction, per XXX, in the transaction in this case.
The next issue is whether or not the terms and promises in the advertisement were honored and whether or not this resulted in an ascertainable loss to the plaintiff. Looking at the paperwork it is difficult to tell whether or not the plaintiff received the advertised price and whether or not the appropriate credits are granted.

The entire transaction must be viewed in light of the admitted testimony of the defendants that the transaction was ‘reverse engineered’. The transaction was “manipulated” to appear that the credit for the trade was over $9,291 when in fact they received only a credit of $6,500. This is admitted. The devil is in the details. The dealer actually testified that even though the deal showed a $9,291 credit the plaintiff was told that he was REALLY getting only $6,500. (This is admitted) Again the dealer admitted to a material misrepresentation. This was an intentional act. Plaintiff denies this fact and continued to testify that he was never told he would receive $6,500 but the $9,291 was negotiated at length. Somebody is lying! Why would the deal have reflected the numbers that were never agreed upon by the dealer?

If you were the dealer wouldn’t you put the CORRECT NUMBER IN TO PROTECT YOURSELF RATHER THAN THE WRONG NUMBERS THAT WERE “BACKED OUT” OR REVERSED ENGINEERED? Why is any reverse engineering needed? Why did the deal have to be backed out? Why did the paperwork submitted to the bank not actually reflect the transaction? This was a plan. This was intentional. This was a scam. This was the dealer’s successful attempt to wrongfully take the plaintiff’s money. Where was the salesman? Where was XXX ? Why should the dealer be believed when the primary persons dealing with the plaintiff, on the important issues DID NOT ATTEND, even after receiving a subpoena?

Price Packing and Products

These are the products that you need to watch very carefully when you are purchasing a car:
Try and insist for a list of every product that you have PURCHASED:

• Extended Service Contracts
• GAP (Guaranteed Asset Protection)
• Credit life, accident or disability insurance
• Undercoating
• Rust proofing
• Paint sealant/clear coat protection
• Fabric protection
• Pinstripes
• Plastic door-edge guards
• Mud flaps
• Appearance Packages/Environment
Packages/Tinted Windows
• Tire and wheel protection packages
• Prepaid maintenance packages
• Road Service/club membership
• Theft protection/car alarms/auto immobilizers
• Lojack
• “Etch”
• Various prep fees (extra profit)
• “Dealer Price Add-On” or “Adjusted
Market Value” (extra profit)

Car Salesman and selling a car

Sometimes you just need to laugh. This is a commercial that some dealerships use to sell cars.
Have you ever met a car salesman like this? They can sell cars!!

This is good too!!

The New Jersey Consumer Fraud Act is to be Watered Down, significantly.

New Jersey has one of the strongest Consumer Fraud Acts in the United States.

There is pending legislation to change the Consumer Fraud Act and make it easier to avoid civil penalties for fraud.

The changes include provisions to exempt "out of state transactions" from the protections of the act.

The changes include the limitation on attorney fees.

The changes include the requirement for detrimental reliance AND makes treble or triple damages optional.

There are no real disincentives to discourage fraud. This bill encourages bad business practices.

THE TRUE COST OF FRAUD IS TREMENDOUS

CARTON AND RUDNICK

Anti Consumer Bill: New Jersey to Welcome Corrupt Businesses

Amy Handlin and John McKeon are sponsoring an anti consumer bill that would change the business landscape in New Jersey.

A key provision of the new New Jersey Consumer Fraud Act would exempt out of state transactions. This means the following. If a someone in New Jersey commits consumer fraud upon a non resident (living in NY, PA or CT) there are no consequences.

"a. apply only to transactions that take place in the State"

The Consumer Fraud Act would encourage businesses to travel to New Jersey to deceive people in other states on the internet or otherwise.

This bill makes consumer fraud easier and will encourage corrupt businesses and individuals to come to New Jersey where they will be protested. Amy Handlin is the co sponsor.

Car Salesman and Dealerships to be Protected with Proposed Changes in Consumer Fraud Act.

Amy Handlin and Jack McKeon have sponsored and introduced ANTI CONSUMER legislation to reduce consumer rights and protect car dealerships.

The changes in the Consumer Fraud Act would exempt or limit liability against businesses that are already regulated such as car dealership. It would also limit liability for consumers who consummate out of state transactions. This arguably contradicts other legislation that has been introduced to increase liability for those committing consumer fraud

CRACKDOWN ON INTERNET FRAUDS

The combination of these two laws would probably create conflicts and a haven in New Jersey for fraudsters.

CHANGES IN THE NEW JERSEY CONSUMER FRAUD ACT TO PROTECT CAR SALESMAN

Amy Handlin is the co-sponsor on this bill to protect car salesman

John McKeon is the primary Sponsor on this bill to protect car salesman

There is a bill pending in the Assembly which significantly and permanently change the way that businesses transact business in the State of New Jersey and the rights afforded to consumers. The bill is labeled [A3333] and if passed by the legislature and signed by the governor that would forever and permanently damage the rights of New Jersey consumers. There are various and daunting adoption in consumer rights in this bill. Unfortunately, this bill is sponsored by a democrat and a republican.

Initially, the substance of this bill would reduce consumers’ rights to proceed on claims against car dealerships.

A nickname for this bill should be the Car Dealership Protection Act. A major portion of the exemptions written to this bill would exempt businesses who were regulated by other agencies and/or authorities. This means that a car dealership who would be regulated by the Banking and Insurance and the Division of Motor Vehicles would likely be exempt from the protections that consumers have under the New Jersey Consumer Fraud Act.

Hypothetically, if a car dealership were to have to a new car on their lot, crash it and sell this vehicle which was damaged, the plaintiff would be without rights under the New Jersey Consumer Fraud Act. This would mean that an individual could not sue the direct car dealership for consumer fraud and seek attorney’s fees and triple damages. The car dealerships would gain significant protection if this bill were passed. This bill is definitely and certainly anti-consumer in every way, shape and form. This bill would protect businesses that engaged in fraudulent acts to the detriment of consumers.

It would force the conduct of businesses to be reduced to the lowest common denominator. In effect, the businesses that were acting honestly and within the law would be encouraged and forced to act in the manner inconsistent with the law as a result of the competition with the illegal or improper businesses. This is anti-competitive and will cost New Jersey consumers a significant amount of money. There would be almost no consequences for violating the law.

It is not uncommon that there is absolutely no disclosure to the sales staff and they are not even given what is commonly known as a deal recap or some sort of washout sheet. It is not uncommon that the sales staff is completely left in the dark pertaining to how their commissions are calculated, what the costs are, what the charge backs are and other reductions in the gross commissionable proceeds. The same laws that apply to contracts apply to agreements between sales staff and their management team. There is an obligation of good faith and fair dealings and there is an obligation pertaining to full disclosure. I have discovered that it is not uncommon that there are various “extras” that the dealership management feels obligated to put into the costs of the vehicle which a sales staff might be upset about an have a valid legal claim.

The auto sales business is a major tax source for all states including Jersey. In this regard, many states have hundreds if not thousands of dealerships which generate billions of dollars in tax revenue for state coffers. All these dealerships rely upon the skills of sales people to sell cars in order to benefit themselves as well as the state economy. It is an ongoing battle between the sales persons and management pertaining to the issuance and calculation of gross commissionable proceeds upon which sales people are paid.

Generally, there are two areas of profit to the dealership.

The front end and the back end. The front end is associated with the profit on the sale of the car and of itself. The back end profit pertains to and relates to the profit on financing, after sale items, pre-delivery services and other items such as low jack. Car dealerships operate differently, however, generally, the sales people get paid on the front end and the managers and the upper management get paid on the back end of the transaction. On occasion, a car dealership does provide a certain amount of computation to the sales staff based on the total profit of the dealership which would naturally include the back end or the reserve part of the transaction.

CARTON AND RUDNICK LITIGATES THESE CLAIMS.

WRONGFUL REPOSSESSION CLAIMS, CLASS ACTIONS AND CONSUMER FRAUD

A brief review of the internet on the search wrongful repossession class action will yield a plethora of results indicating that this is an extensive, ripe and very litigious area of law both on the individual and class action basis. When you are dealing with wrongful repossession on an individual basis or a wrongful repossession on a class action basis, it seems to mostly arise out of the processing of paperwork either before, during or after the actual repossession.

On occasion, the wrongful repossession deals with the inappropriate conduct of a repossession company or an agent of the repossession company. However, as previously set forth, most of the lawsuits, class actions and wrongful repossession, consumer fraud, lawsuits arise out of the post-repossession notice of intent to sell and post sale paperwork which would include necessary accounting.

What makes the wrongful repossession cases necessarily excellent candidates for class action treatment is that there are specific delineated statutory damages contained under the Uniform Commercial Code. As a note, these damages are cumulative to the damages contained under the New Jersey Consumer Fraud Act. As an example, in most cases, wrongful repossession damages might equal the finance charges plus a certain 10% penalty assessed to the entity who wrongfully repossessed or dispossessed the collateral.
The issue of damages in the context of wrongful repossession lawsuits and wrongful repossession claims usually arises out of the demand for the statutory damages.

However, there are common law damages arising out of wrongful repossession claims such as conversion of the vehicle itself as well as property contained therein. The concept underlying a conversion claim is that the defendant repossession company had no right to repossess the vehicle and when they did, they in essence ‘converted’ the subject vehicle. This is a tort based on exercise of property rights and has its base in the most basic concepts of American law. However, what happens when a vehicle was repossessed and returned shortly thereafter or is not damaged.

This appears to be the underlying logic behind certain statutory damages contained in the Uniform Commercial Code for wrongful repossession. As an aside, a potential plaintiff might have additional out of pocket losses associated with a wrongful repossession which would be transportation charges, storage charges, towing charges, excess finance charges or any other specific out of pocket losses directly related or closely related to the wrongful repossession of the vehicle. On the certain circumstances, one might allege that since they did not have a motor vehicle in order to travel to their job, they were fired as a result of not having a vehicle. This type of claim would be appropriate under most basic concepts of ‘proximate cause’ in New Jersey jurisprudence. So not only are there statutory damages and property damages associated with a wrongful repossession claim, but there might be significant consequential damage which would be loss of a job, effect of the credit history and anything else arising from a plaintiff not having the vehicle for a significant period of time.

Consumer Fraud and the Uniform Arbitration Act

As previously stated in many of these posts, the dealers frequently use arbitration agreements as a method by which they bypass the court system. There are numerous organizations including JAMS, NAF and American Arbitration Association. All of these organizations ordinarily have consumer due process protocols for these arbitrations. The question is what happens when you win an arbitration and the dealership refuses to pay the arbitration award. Unfortunately, this is not an easy process but there is a provision in the Uniform Arbitration Act for the Superior Court to confirm an arbitration award entered by an arbitrator. Basically, the petitioner must file an order to show cause (fancy words for a court action) to confirm the arbitration award so as it can be entered into the docket system and be docketed against the dealer’s property. There is an entire provision under the court rules for a filing of an order to show cause and is relatively complicated. Nonetheless, the Court is permitted to confirm this arbitration award so long as there is not a basis to vacate the arbitration award filed by the loser of the arbitration. Once the arbitration award is confirmed by the Superior Court, it becomes a judgment docketed and the petitioner or plaintiff may use this docketed judgment or award as any other docketed judgment or award. Moreover, the Uniform Arbitration Act provides for the payment of counsel fees and costs associated with domesticating or confirming an arbitration award. The New Jersey Consumer Fraud Act also provides for the payment of counsel fees with the collection of a consumer fraud judgment. This was decided in the case of Tankersley wherein the Appellate Division held that an attorney who was attempting to collect judgment on a consumer fraud award would be entitled to counsel fees and costs. The Tankersley case involved the collection of a judgment against a car dealership.

Appearance Package, Wheel Well Molding, Door Edge Guards

Some dealerships use the sale or attempted sale of door edge guards, wheel well molding or pin striping commonly known as appearance packages to increase the costs of the vehicles. Frequently, these pre-delivery services are not included anywhere in the buyer’s order but only on a price addendum placed on the automobile. New Jersey law is relatively straightforward and requires a consumer to sign off and acknowledge the purchase of any pre-delivery services on the sale of an automobile. Dealership uses the guise of these expensive products. These products increase the “sticker” price of a vehicle. When the customer sits downs and looks all the paperwork, it is not apparent that these items are included the price anywhere. This is the intention behind the New Jersey Consumer Fraud Act and the associated Administrative Code regulations requiring consumers to acknowledge purchase of pre-delivery services. Even if these were considered aftermarket items or different types of products, it would still be appropriate for the dealer to disclose the nature and extent of these products, any warranties that were associated with these products and the costs thereof. Best advice would be to be very careful in the injunction of negotiating a purchase price on a new vehicle and demand for an itemization of any and all products and/or services that you are acquiring or think you are acquiring as part of the automobile purchase. The dealership is required to disclose this to you fully and honestly and the best way to do this would be to bring a piece of paper where the dealership would sign off on the specific products which you are purchasing. This would forego any potential confusion and document exactly what you are and are not purchasing.

This is a must watch. Who likes car salesman?

Car Dealer Tricks – Etch Products

It is a common practice for car dealerships in the State of New Jersey to sell a product known as etch. Frequently, this product is preprinted on a buyer’s order or a standard form used by the dealership as part of selling a new or used vehicle. Although the dealership might frequently claim that the purchase of this item is optional, it appears as though it is not optional because it is preprinted on a buyer’s order and it is applied to all the vehicles prior to the time of sale. As a practical matter, I have litigated numerous cases where the allegation was that a representative of the dealership explained to the customer that the purchase of this product was mandatory or part of the transaction. Frequently, this is contradicted by written statements contained in the various documentation prepared by the dealership and signed by the consumer so they feel they are “protected”.
Quite simply, the purchase of etch is neither required nor usually a good idea. The basic concept behind this etch product is that it somehow deters thieves from stealing a car once this particular identification is etched on the windshield. I have yet to see some type of study that etchings on the vehicle reduce the theft rate on the vehicle. Nonetheless, the benefit paid by the etch is not sufficient to support the amount of money or the price of the product. Usually, this product costs consumers from $200 to $500 and must be compared against the deductible of auto insurance. As an example, if you have a deductible with a $500 or on an auto and the vehicle is stolen or totaled, it is likely that this could be the maximum amount which would be received by consumer. So in essence, the consumer is paying $200 to $500 for a $500 benefit. The risk does not justify the price paid for the product. It is not uncommon that the etch product is sold in conjunction with a gap product which must be compared with the policy of automobile insurance sold with the vehicle. Nonetheless, it is overpriced for the risk assumed. Moreover, the requirements to apply for this benefit are overwhelming. There are numerous requirements including supplying of police report, notification within 30 days, and documentation from the insurance company and all sorts of other extras they are required to process this claim.