Articles Posted in Car Dealership Fraud

DOLLAR BILL

New Jersey law permits claims for fraud to be filed in the civil justice system. However, when pleading fraud the law requires a specificity of pleading. The law requires that the defendant should be put on notice as to what the fraudulent statements for which they are being sued. In a general sense it is best to plead who made the statement, to whom it was made, what the specific statement was and what was relied upon by the person suing. Again, this is in the general sense. However, the defendant should be put on notice as to what is being plead and why they are being sued.

This is known as the heightened pleading requirement. Usually, New Jersey is a notice pleading state. This means that you do not have to specifically state every fact upon which you will base your lawsuit. The facts only have to be stated in a general sense and generally refer to the cause of action. New Jersey has a very liberal pleading requirement with regard to the initial pleadings. This is different than federal court which has a heightened pleading requirement. Nonetheless, if you plead specific facts and legal claims the defendant is required to either admit or deny these claims in their answer. Sometimes, as a matter of strategy, it is better to plead a more specific claim than a general claim. In this fashion you might be able to determine what the nature and extent of the defenses will be.

This rule would apply to all transactions all plaintiffs and all defendants. Remember, it is covered in the New Jersey Court rules and it is a requirement. It is not uncommon that the fraud is not specifically plead and the defendants did not object to the filing of the claim. This could be a matter of strategy also. However, if the defendant does object to the type of pleadings were filed they would file a motion to compel a more specific statement of the fraud. The court would then either dismiss the complaint or permit an amended pleading to be filed with the court. In this way there’s fairness to both the plaintiff and the defendant.

In essence, a completed transaction is not necessarily required to maintain a cause of action under the New Jersey Consumer Fraud Act. The defendant’s assertion that there was no “purchase” of goods (not accurate based on the plaintiff’s submissions) is insufficient to support a claim for dismissal on summary judgment.

A completed sale is not required. The definitions section of the New Jersey Consumer Fraud Act defines a sale as an offer for sale or an attempt directly or indirectly to sell, rent or distribute. Consistent with this, it defines an advertisement as an attempt to directly or indirectly by publication or otherwise… to induce directly or indirectly any person to enter into an obligation. An interpretation of the New Jersey Consumer Fraud Act in the definitions sections to exempt offer for sales or advertisement from the New Jersey Consumer Fraud Act cannot be deemed consistent with the remedial purposes of the act.

See Miller v. Publishers Clearing House Miller v. Publishers Clearing House 284 N.J.Super. 67 (App.Div 1995) There are specific cases which address the applicability of the consumer fraud act to those who have sold no goods to the plaintiff. See Cogar v. Monmouth Toyota 331 N.J. Super 1997 (App. Div. 2000). See Perth Amboy Iron Works v. American Home Assurance Co. 226 N.J. Super 200, 211 (App. Div. 1988), aff’d, 118 N.J. 249 (1990). In both of these cases, the Appellate Division held the Consumer Fraud Act applicable to individuals and/or businesses who sold no goods to the plaintiff.

New Jersey is a notice state which means there are very liberal pleading requirements for most claims BUT some specificity is required for fraud. The following is an example of a complaint that was filed against a car dealership in New Jersey.

CARTON AND RUDNICK 788 SHREWSBURY AVENUE BUILDING 2, SUITE 204 TINTON FALLS, N.J. 07724 732-842-2070 FAX: 732-879-0213

ATTORNEYS FOR PLAINTIFFS.

New Jersey law defines bait and switch within Administrative Code regulations. As an example, the regulation specifically says that when you advertise a vehicle and it is part of a plan not to sell it or lease it at the advertised price is considered bait and switch.

As an example, if a car dealership would advertise a car for $1, lure potential consumers into the car dealership to purchase a car for $1, and not have it actually ready or available or willing to sell it for $1, this would be considered bait and switch.

There are also terms in the industry such as the golden hammer. An example of this is when there might be a vehicle advertised at a very good price, however, when ultimately, the consumer, arrives at the dealership, it is damaged or has some dings or dents to it and the customer does not want to buy it even at the advertised price.

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I would describe it as follows:

THE PAROLE EVIDENCE RULE DOES NOT APPLY TO THE FACTS OF THE CASE

The defendant’s claim that the plaintiff is barred by the ‘parole evidence rule’ is without merit. The current case has nothing to do with the terms and the contents of the agreement between the parties. The issue is the conduct of the defendants after the default on the agreement and GEMB obligation under the UCC and the Consumer Fraud Act. The court in Slowinski v. Valley National Bank 264 N.J.Super 172 (App.Div 1993) accepts this basic concept. If the defendant’s position was adopted the Slowinski holding would, effectively, be overruled. What does parole have to do with wrongful repossession? The alleged parole evidence does not fall within the definition of parole.

It is only after the meaning of the contract is discerned that the parole evidence rule comes into play to prohibit the introduction of extrinsic evidence to vary the terms of the contract. Conway v. 287 Corporate Ctr. Associates, 187 N.J. 259, 270 (2006). Even if the court were to apply the parole evidence rule to the facts here they fall within the fraud exception.

THE DEFENDANT SHOULD BE ESTOPPED FORM ASSERTING THE ARBITRATION CLAUSE THIS LATE IN THE LITIGATION, ESPECIALLY SINCE THEY 1) FILED A COUNTERCLAIM IN BREACH OF THEIR OWN AGREEMENT; 2) MOVED TO HAVE JUDGMENT ENTERED ON THAT COUNTERCLAIM AGAIN BREACHING THEIR OWN AGREEMENT TO HAVE ALL DISPUTES BETWEEN THE PARTIES

The defendant should be prohibited for enforcing the arbitration agreement because of (1) the extent of the time which they took to enforce the arbitration agreement, and (2) the making of a counterclaim clearly breached the agreement between the parties. The defendants breached the agreement by making a counterclaim rather than demanding arbitration and as such cannot enforce the agreement. Not only have they made a counterclaim but they have moved to enter a judgment on those pleadings.

It is black letter contract law that a material breach by either party to a bilateral contract excuses the other party from rendering any further contractual performance. Magnet Res., Inc. v. Summit MRI, Inc., 318 N.J. Super. 275, 285, 723 A.2d 976, 981 (App.Div. 1998). The court should hold that the defendants have waived their right to assert the matter should be arbitrated. The Supreme Court addressed the issue of waiver in Wein v. Morris, 194 N.J. 364, 376 (2008) and held the following:

In lawsuits usually you are permitted to demand documents from any car dealership to help you prove your case. In a damaged vehicle case you need to establish, at a minimum, that the dealership knew or should have known that the car was damaged when they sold it.

Most dealerships are run the same, or substantially similar, so the following documents request should be helpful.

Good Luck

This is part of a closing argument that was recently submitted to AAA, the 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!!

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