New Jersey Lemon Law Lawyer Blog

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

COUNT V
Unconscionability of Arbitration Clause
1. The plaintiff reasserts the previous facts as if set forth at length herein.
2. All times hereinafter, the plaintiff signed at least two separate agreements with regard to the purchase of the vehicle. The first agreement, which was signed by the plaintiff, was a buyers order containing the arbitration clause. The second and final agreement signed by the plaintiff was considered a retail installment sales contract and contained the interest rate of the subject transaction. The retail installment sales contract specifically says that this is the entire agreement between us. There is no such arbitration clause in the retail installment sales contract and the buyers order was superseded by the retail installment sales contract including all of the relevant terms. Thus, the terms and conditions contained in the buyers order constitutes parole evidence and is not admissible as to the terms of the transaction.
3. In addition, the application of the American Arbitration Association rules and procedures would void the plaintiff from effectively litigating her claim. Specifically, the plaintiff acquired a vehicle for in excess of $46,000. New Jersey Law permits punitive damages equal to five times compensatory damages of $350,000 whichever is greater. Based on the defendants’ conduct and the purchase price of the vehicle, the plaintiff would be seeking the maximum amount allowable under New Jersey Law which should be up to $350,000. In this specific case, the plaintiff makes very strong allegations of fraud and consumer fraud against the selling dealership as well as the manufacturer permitting the plaintiff to recover three times the purchase price of the vehicle which would be in excess of $135,000. The plaintiff would also be entitled to costs of the suit plus punitive damages. The costs associated with filing an arbitration which seeks in excess of $200,000 to $300,000 in damages would be in excess of $15,000 to $20,000 based on the American Arbitration Association commercial rules.
4. Although this is a consumer transaction, once the damages are in excess of $75,000, the American Arbitration Association rules require commercial arbitration to apply to the dispute. Once these rules are applied to the dispute, the costs of the arbitration would be extensive and burdensome and would prohibit the plaintiff from adequately litigating this case in court of law.
WHEREFORE, the plaintiff demands that the Court declare that the arbitration agreement is null and void and unenforceable for both procedural and substantive unconscionability.

JURY DEMAND
Plaintiff hereby demands a trial by a jury of six (6) jurors as to all issues raised in these pleadings.
DESIGNATION OF TRIAL COUNSEL
Pursuant to the provisions of Rule 4:25-4, the Court is advised that JONATHAN RUDNICK, ESQ., is hereby designated trial counsel.
CERTIFICATION
I hereby certify that, pursuant to R. 4:5-1(b)(2), this matter in controversy is not the subject of any other action pending in any Court or of a pending arbitration, nor is any action or arbitration proceeding contemplated.

RUDNICK, ADDONIZIO & PAPPA
Attorneys for Plaintiff

BY:__________________________________
JONATHAN RUDNICK, ESQ.

Dated: March 7, 2007

XXXXXXXXXXXXX

Plaintiff

Vs.
XXXXXXXXXXXXXX
XXXXXXXXXXXXXX

Defendants. SUPERIOR COURT OF NEW JERSEY
LAW DIVISION
MONMOUTH COUNTY

DOCKET No.

CIVIL ACTION

COMPLAINT AND DEMAND FOR JURY

COUNT I
1. On December 15, 2006, the defendant, XXXXXX, and the defendant, XXXXXXXX, Olds, XXXXXXXXXXXX, were corporations licensed to do business in the State of New Jersey.
2. On that date, the plaintiff acquired a used 2006 XXXXXXXXXX, Vehicle Identification No. XXXXXXXXXXXX, from the defendant, XXXXXXX, which was manufactured and put into the stream of commerce by XXXXXXXX.
3. The vehicle, which was purchased and financed by the plaintiff, was represented to be a “certified vehicle” which the plaintiff understood to mean that the vehicle was of extraordinary quality, thoroughly inspected and thought to be the best of the used cars offered by both XXXXXXXXXXXXX. Although the vehicle was represented to be a used vehicle, the representations from the defendants were that it was as good as a new vehicle. This is based on their procedures and the certification received from XXXXXXXXXXX.
4. The purchase price of the vehicle was $45,371.47 which was financed over a 60 month period at $550 per month. The interest rate on the retail installment sales contract was 5.9%. At the completion of the transactions, the plaintiff will have paid $50,016.20 as a result of the $17,000 which was originally provided as a down payment on the subject automobile. Prior to signing the final retail installment sales contract which purports to “contain the entire agreement between you and us”, the plaintiff signed a “buyers order” purporting to represent the purchase price and specify some of the specifics of the transaction. The buyers order contained an arbitration clause referring the matter to American Arbitration Association.
5. After the transaction, the plaintiff acquired a CARFAX which revealed that the vehicle was in an accident on or about July 24, 2006 prior to the purchase. Subsequent to the accident, the vehicle was sold at auction worth $3,396 on September 26, 2006.
6. It is believed that the defendant dealership as well as defendant manufacturer had access to CARFAX at all times. The plaintiff asserts that the defendant dealership was specifically aware of the prior accident on the vehicle as a result of the entry in CARFAX.
7. As part of the transaction, the plaintiff received a detailed inspection checklist asserting that the defendants committed to and subjected the vehicle to an extensive inspection.
8. The plaintiff, subsequent to the transaction, discovered that the vehicle was in an accident, confronted the dealership and asked to rescind the transaction. The selling dealership refused to rescind to transaction.
9. A subsequent analysis the vehicle has revealed that there was an area of impact on the left front including front bumper, radiator support, hood, left fender and the unibody. Various areas were refinished as a result of repairs including the front bumper, hood, left and front fenders, left and right front doors and left inner fender top rail. The plaintiffs assert that there is frame damage on the subject vehicle which was not disclosed at any time and as a matter of fact, the representations by the selling dealership were that the vehicle was in perfect condition as backed by both the dealership and xxxxxxxxxx.
10. The plaintiff asserts that the defendants committed acts of fraud and consumer fraud insofar as the used vehicle, which was as good as a new vehicle, actually had been involved in an automobile accident which was known to the defendants through their examination of the vehicle and their access to CARFAX. The defendants either omitted this fact or misrepresented the condition of the vehicle to the contrary. The plaintiff asserts that the defendants’ conduct constituted fraud and consumer fraud in violation of the New Jersey Consumer Fraud Act resulting in damages to the plaintiff.
WHEREFORE, the plaintiff demands judgment against the defendants jointly and severally together with interest and costs of the suit with punitive damages.

COUNT II
Rescission
1. The plaintiff reasserts the previous facts as if set forth at length herein.
2. Subsequent to purchasing the vehicle, the plaintiff returned to the selling dealership and demanded a return of all monies. Then a letter was sent from counsel demanding a return of all monies. No such return of monies was forthcoming as requested and, as such, the plaintiff demands rescission together with interest and costs of the suit.
WHEREFORE, the plaintiff demands rescission together with interest and costs of the suit.

COUNT III
Breach of Warranty
1. The plaintiff reasserts the previous facts as if set forth at length herein.
2. At all times hereinafter, the defendants violated both the express and implied warranties as set forth under the Magnuson-Moss Warranty Act and New Jersey Law. This resulted in damages to the plaintiff.
WHEREFORE, the plaintiff demands judgment against the defendants jointly and severally together with interest and costs of the suit.

COUNT IV
Consumer Fraud – Certified Warranty
1. The plaintiff reasserts the previous facts as if set forth at length herein.
2. At all times hereinafter, the plaintiff acquired a vehicle which was a certified used vehicle. It is believed that the “certification” was a product which was purchased by the plaintiff and was nothing more than a warranty. The fact that the plaintiff was purchasing a warranty was not disclosed to her. Plaintiff assumed and was told that the vehicle was a certified used vehicle which contained a warranty. The plaintiff was never told that she could have declined the manufacturer’s warranted coverage and just purchase the vehicle without such a warranty. In the alternative, the plaintiff would have been in the position to negotiate the specific price on the warranty. Moreover, under the New Jersey Used Car Lemon Law, the defendants are required to disclose all relevant terms of the warranty. This includes both price and terms. The defendants violated the New Jersey Consumer Fraud Act as a result of their failure to do so. This resulted in damages to the plaintiff.
WHEREFORE, the plaintiff demands judgment against the defendants jointly and severally together with interest and costs of the suit.

COUNT IV
Truth in Lending
1. The plaintiff reasserts the previous facts as if set forth at length herein.
2. The Truth in Lending Act requires that the disbursement of all monies paid to others be specifically set forth in the retail installment sales contract. An item in this particular transaction which was paid to others was money paid to XXXXXXXX or a supplier of the certified warranty. No such disclosure was made and/or contained in the retail installment sales contract. The defendants’ failure to do so resulted in statutory damages entitling the plaintiff to counsel’s fees and costs of the suit. Plaintiff is also entitled to actual and consequential damages.
WHEREFORE, the plaintiff demands judgment against the defendants jointly and severally together with interest and costs of the suit.

How to sue a car dealer and discovery in those cases I have become faculty at lawline.com and have provided tow separate courses in car dealership litigation with in depth assistance in suing car dealerships. How to sue a dealer Discovery in auto fraud cases

Toyota Lawsuits Merge

A Federal Judge has set a hearing date on this issue. According to the internet news listing there is a hearing to make all the arrangements so this litigation can go forward.

Claims are for:

Deceptive Practices
Personal Injury
Breach of Warranty
Full Refund
Class Action Status

According to the news

"Some lawyers estimate Toyota faces potential civil liability of more than $10 billion as it struggles to contain an auto-safety crisis that has tarnished its public image.

The recent addition of demands for full refunds to U.S. owners of recalled Toyota vehicles as part of consumer protection cases filed in 12 states could raise the legal stakes even higher for the car company."

There are many useful resources on this issue. Consumer help for consumers on auto fraud and consumer fraud.

Stop auto fraud and consumer fraud

EXPRESS WARRANTY--DEFINITION

An express warranty is a representation, statement, promise or description made in writing, orally or by any other means, by a manufacturer or seller that its product has certain characteristics or will meet certain standards.

A manufacturer or seller can create an express warranty without intending to make a warranty, or without using words such as "warranty" or "guarantee."

EXPRESS WARRANTY--DEFINITION

An express warranty is a representation, statement, promise or description made in writing, orally or by any other means, by a manufacturer or seller that its product has certain characteristics or will meet certain standards.

A manufacturer or seller can create an express warranty without intending to make a warranty, or without using words such as "warranty" or "guarantee."

As an example, a warranty may be created when the purchaser is shown or is demonstrated a model or sample of the item being purchased. Under such a situation, an express warranty that the item will conform to the model or sample, and will perform as the model or sample performs, is created.

EXPRESS WARRANTY--BURDEN OF PROOF

The Plaintiff has the burden of proving that:

a. Defendant expressly warranted the product in one or more of the ways claimed by the Plaintiff;

b. the product did not conform to the warranty at the time of sale or within the time period covered by the warranty;

c. Plaintiff notified Defendant of the nonconformity within a reasonable time after Plaintiff discovered or should have discovered the nonconformity;

d. the Defendant failed to cure the nonconformity within a reasonable time after receiving notice;

e. as a result of the nonconformity, Plaintiff sustained a loss or damages.

Your verdict will be for the Plaintiff on this claim if you decide that all of these elements have been proved.

Your verdict will be for the Defendant on this claim if you find that any one or more of these elements has not been proved.

WHAT DID TOYOTA KNOW ?

The USA Today has an interesting report that NHTSA was notified by an insurance company, State Farm, of possible defects.

State Farm said it "has received numerous inquiries about alleged unwanted acceleration problems in Toyota and Lexus vehicles in recent years."

State Farm told the governmental agency that it had seen an increase in the acceleration problems in some vehicles, Toyota and Lexus Models.

If you have an questions about the legal implication feel free to call Carton and Rudnick to have you questions answered

TOYOTA RECALL AND POSSIBLE LEGAL CLAIMS

The questions must be asked!!

What if the manufacturer and/or distributor Toyota Motor Sales was aware that the cars had these defects when distributed to the dealers?

What if the defects were not addressed quickly enough?

What roles did the dealers play and what of the Toyota dealers were aware that the cars had defects and failed to disclose this information to the consumers?

What if the Toyota dealers made misleading disclosures about the known defects to potential purchasers?

Is there a breach of warranty claim even if they fix the problem?

How long have they known about the defect?

Is there a consumer fraud claim under New Jersey law against the dealer the manufacturer or both?

What did the dealers really know about the issues with these cars since they were the ones doing the repair work?

ANSWERS SOON TO FOLLOW

TOYOTA STOPS SELLING CERTAIN CARS

Toyota Recall

The law firm of Carton & Rudnick is investigating claims that individuals and/or entities have against Toyota Motor Sales for allegations that the vehicle is working improperly. As it has been reported recently, there is a significant recall underway with regard to problems which are currently widely known with various models distributed by Toyota Motor Sales U.S.A.

There is breaking news that there has been political implications for this issue

House Energy and Commerce Committee Chairman Henry Waxman said he would hold a hearing next month to consider "how quickly and effectively" the car maker responded to complaints about sticking pedals and slipping floormats.

Feel free to call the law office of Carton & Rudnick if you have any questions pertaining to your rights or obligations under this recall and the status of any claims that you might have against any entities including the dealership.

On January 21, 2010 Toyota Motor Sales U.S.A. issued a press release indicating there would be a recall of approximately 2.3 million vehicles to fix/correct a sticking accelerator in various specific Toyota Division models.

This press release stated that this action was distinct from an ongoing recall of approximately 4.2 million vehicles, Toyota and Lexus, to reduce the risks of pedal entrapment.
The press release indicates that Toyota had been investigating isolated reports over a lengthy period of time to determine if there was a risk under certain circumstances of danger to the drivers and the public with regard to this pedal condition. This is according to the Toyota website.

According to the Los Angeles Times reported per the internet, ‘Toyota found to keep tight lid on potential safety problems’, and that the website indicated a Times investigation shows the world largest automaker had delayed recalls and attempted to blame human error in cases where owners claimed vehicle defects.

This is per the December 23, 2009 internet posting by Ken Bensinger and Ralph Vartabedian. Apparently, this was discovered in a routine test on a Sienna minivan in April 2003 where the engineers found a plastic pedal could come loose and gas pedal could stick potentially making a vehicle accelerate beyond control.
The article asserts/alleges that in January, six years after discovering the potential hazard, the automaker recalled 26,501 vans made with this old pedal. The article states, ‘The automaker knew of a dangerous steering defect in vehicles including the 4Runner sport utility vehicle for years before issuing a recall in Japan in 2004. But it told regulators no recall was necessary in the U.S., despite having received dozens of complaints from drivers. Toyota said a subsequent investigation led it to order a U.S. recall in 2005’.

The law firm of Carton & Rudnick handles breach of warranty and other various consumer claims against both dealers and manufacturers. If you feel that the dealer and/or the manufacturer made material omissions of fact pertaining to the Toyota that you purchased, contact his office and you will receive a consultation.

The National Highway Safety Administration did an investigation on this issue

This is scary stiff taken from a NHTSA report: Be carefull

Driving home from work, I experienced a sudden uncontrollable surge in
acceleration causing my speed to increase from about 60 mph to 80+ mph.
Immediately I began to brake hard as I was rapidly approaching traffic just
ahead of me. Fortunately the inside left lane was unoccupied and I was able to
make an immediate lane change. Initially I depressed the brake pedal as hard as I
could using both feet but only managed to slow the vehicle to 40-45 mph. With
my speed reduced, I alternated between pumping the accelerator pedal and
pulling up on it from the underside with my right foot as it became clear that the
throttle was stuck in an open position. The vehicle continued to speed back up to
over 65 mph with less pressure on the brake pedal.
With traffic just ahead of me, I moved over to the left shoulder next to the
center barrier and continued to try to release the open throttle. There were
clouds of smoke around the vehicle and the smell of burning materials from the
overheating brakes. After finally getting the vehicle slowed down to about 25-30
mph, I shifted into “Neutral” and depressed the start/stop push button a number
of times hoping to stop the engine but nothing happened. Instead the RPMs
moved up into the redline range on the tachometer. I quickly shifted back into
“Drive”; the vehicle jolted and rapidly accelerated to 60+ mph.
As the brakes were fading quickly, I was certain that I would need to shift
back into “Neutral” and let the engine blow up to stop the vehicle. Suddenly the
acceleration surge stopped and I was able to bring the vehicle to a stop about 1 ½
to 2 miles from where it had started. I quickly shifted into “Park” and depressed
the start/stop push button to turn off the engine. The vehicle seemed to shutter as
I did so. Upon restarting the car, I drove cautiously to Lexus of Wayzata a short
distance away fully prepared to shift into “Neutral” if the acceleration repeated.
The car remains there over 5 weeks later.

This news story indicates that repossessions and charge offs are way up:

There are very high tech methods to grab you car. Check out this video. They will find your car!!

More repo man

CONSUMER FRAUD CLAIMS AND MOVING COMPANIES

It is not uncommon that people make claims that a moving company has committed fraud or consumer fraud. These claims are usually in the context of improper or inaccurate estimates, improper or inappropriate moving practices and improper or inappropriate billing practices.
As an example, one person might claim that they were quoted one price and were required to pay a different price upon delivery of their goods. There are specific Administrative Code sections applicable to moving companies in the State of New Jersey. However, these regulations, would not be deemed the only avenue of potential standards against a moving company. The generalized New Jersey Consumer Fraud Act and deceptive and inappropriate conduct contained under the New Jersey Consumer Fraud would also be applicable to moving companies. As an example, if a moving company were to make an affirmative misrepresentation of fact as to a specific quote and then were to hold goods for ransom if additional monies were not paid, this could potentially be deemed a violation of the New Jersey Consumer Fraud Act, inappropriate conduct and actionable conduct under the New Jersey Consumer Fraud Act. What the ascertainable loss which is a requirement under the New Jersey Consumer Fraud Act would be an entirely different question.
Thus, when engaging a moving company, make sure that you get all representations in writing and also representations that this is a final and full quote. Many people have contacted my office while the moving companies are in possession of their goods and refusing to deliver the goods unless the consumer signs some additional documentation which indicates that additional charges are appropriate, additional card credit charges authorization are appropriate or a complete release from all liability is signed. Unless the moving company gets this documentation, generally they will not deliver the goods. This places the consumer in a very awkward and uncomfortable position dealing with a moving company that is in possession of their entire inventory of household goods.
If a moving company were to damage goods as opposed to making affirmative misrepresentations of fact, this would be a completely separate claim. There are various limitations against moving companies pertaining to the destruction of goods and the transportation process. This is also known as the Carmack Amendment.
Nonetheless, moving companies are subject to the reaches of the New Jersey Consumer Fraud Act and the liberal construction of the New Jersey Consumer Fraud Act to benefit consumers who have been duped or lied to by moving companies.

REPOSSESSION, CAUSES OF ACTION

Under New Jersey law, a company who is repossessing a consumer vehicle has an obligation to comply with all applicable laws. This means that if a repossession company breaches the peace in the context of repossession, the individual who has been aggrieved by this act would have a claim against both the repossession company and the finance company who hired this repossession company. The duty to make sure that there is no breach of the peace is a non-delegable duty. This means that the finance company who has owed the money is ultimately responsible for the actions of the repossession company to make sure that all of the laws are complied within the context of repossession.
Ultimately, the repossession company usually carries an extensive insurance company to cover any conduct with regard to improper repossession. Therefore, if the repossession company, the marketing company and/or the finance company are sued in the context of an improper or wrongful repossession, it is ultimately the insurance company from the repossession company who will be responsible for any and all losses. Many times there are agreements between the repossession company and the finance company with regard to repossession. This means the repossession company has agreed to be responsible, in writing, for any damages associated with the wrongful or inappropriate repossession of a vehicle. This is the way the finance companies protect themselves, with the signed agreement, with repossession company to make sure that there is insurance coverage to cover the finance company. As an example, if a repossession company were to get to a fight with the owner of the vehicle, break in to the owner’s house or conduct other illegal or inappropriate actions, the finance company could ultimately be responsible for any damages in this case since the duty is a non-delegable duty with regard to the repossession. There is also frequently an intermediary company which is hired by the finance company for form out the repossession to another party. Therefore, when investigating these claims, there are frequently additional parties which are not disclosed at the time of the repossession.
The Uniform Commercial Code contains most of the rights and remedies for those being aggrieved of a wrongful repossession. The New Jersey Consumer Fraud Act would also apply to the wrongful repossession of an automobile. The Uniform Commercial Code contains specific statutory damages if there were to be a wrongful repossession. Statutory damages are required damages to be awarded by the Court if the plaintiff were to prove a wrongful repossession. This is one of the benefits to making these claims. However, there is some dispute under the Uniform Commercial Code as to whether or not attorney’s fees would be recoverable under the Uniform Commercial Code for a wrongful repossession. Nonetheless, the statutory damages could potentially equal the amount of the finance charge with a 10% add-on pursuant to the Uniform Commercial Code. It is likely that any conduct which would violate the Uniform Commercial Code would also violate the New Jersey Consumer Fraud Act or the Truth in Contract and Warranty Act. As an example, if the repossession company were to lie to an individual who is having the vehicle repossessed stating that they were with the police or an official agency, they would probably be subject to violations of the New Jersey Consumer Fraud Act as well as the Uniform Commercial Code.

Thus, if a seller of an automobile says that the vehicle has not been in an accident, in fact it has been in an accident, that is an affirmative misrepresentation of fact which is false and inherently has the capacity to mislead a potential purchaser of the vehicle. This should be an actionable representation contemplated under the New Jersey Consumer Fraud Act for which the plaintiff would be entitled to damages if a case was proved. There are other ways to prove a consumer fraud under the New Jersey Consumer Fraud Act where good faith might be a defense. As an example, if a plaintiff is claiming a material omission of fact, the plaintiff would be required to prove intent to pursue a claim under the New Jersey Consumer Fraud Act. However, when the plaintiff is alleging an affirmative misrepresentation of fact, good faith is not a defense. As an example, if a dealer were to state that a vehicle was not in an accident and in fact was in an accident, even though they were relying upon a CARFAX or other industry accepted databases or documentation, they would not have a valid defense under the New Jersey Consumer Fraud Act.

As an example, there is a case under New Jersey law called Cuesta v. Classic Car. In this specific case, the seller of an automobile sold a vehicle with an inappropriate or improper odometer reading. The Court held that the improper odometer reading created a ‘misrepresentation of fact’ which was actionable under the New Jersey Consumer Fraud Act. Dealer claimed they were unaware of this rollback, however, this is not deemed a valid defense. This is consistent with the liberal interpretation of the New Jersey Consumer Fraud Act and the decision by the legislature to place the burden on a business to make sure that the product that they sell is in fact consistent with any representations set forth by the selling dealership or business.

A consumer should be able to rely upon the representations from the business since they are the experts in the field in which the consumer is dealing. It is an entirely separate post to quantify the amount of loss where the appropriate procedure or guidelines for pursuing a claim for consumer fraud under the New Jersey Consumer Fraud Act. However, this post just demonstrates types of claims which can be sued and the obligations upon a business when selling a vehicle product or other consumer goods.

DECEPTION AND THE NEW JERSEY CONSUMER FRAUD ACT

The New Jersey Courts have determined and held that the defendant’s acts of good faith are not necessarily a defense to a consumer fraud action. The Courts have held, as set forth in the Model Jury Civil Charges that it is the capacity to mislead that is the important aspect of consumer fraud. What exactly is the capacity to mislead in the context of a consumer transaction?

The business, who sells a product, including a car, is charged with the knowledge of all the associated Administrative Code Regulations. The seller of an automobile or a product is assumed to be knowledgeable in the industry in which they sell a specific product such as a vehicle. Thus, the seller of a product or a vehicle in making certain representations pertaining to that product have a duty/obligation to make sure that those representations and warranties with the product are accurate, complete and not misleading in any way. As previously set forth, it is the capacity to mislead that is important in a consumer fraud claim. Thus, the defendant in a defense to a consumer fraud claim cannot say we did not know, we were not sure or we did the best we could. Again, good faith is not a defense to certain claims under the New Jersey Consumer Fraud Act. The seller of a product is better suited than the purchaser of a product to assure that the representations pertaining to the product are in fact accurate and thus the consumer is not misled.