Law Office Of Paul DePetris

AUTOMOBILES

New Jersey Consumer Fraud Act Applies to Certain Internet Car Sales

The New Jersey Supreme Court recently decided that the New Jersey Consumer Fraud Act applies to the

sale of automobiles on the internet by a merchant located in New Jersey.  An out-of-state consumer

purchased a used automobile from a seller located in New Jersey via the internet.  The merchant assured the consumer that the automobile was in good condition and could be driven from New Jersey to Missouri.  Once the automobile arrived in Missouri, consumer had it taken to a specialty repair shop for an examination, whereupon he learned:  (1) the frame was rusted nearly in half, thereby disqualifying the automobile from registration in Missouri; (2) the convertible top was in poor condition; (3) the seats were ripped in various places; (4) the driver's seat frame was broken; (5) the radio/tape player was not original equipment; (6) the engine hesitated during acceleration; and (7) the carburetor was out of tune.   The consumer claimed that:  (1) the automobile’s description did not match its condition at delivery; (2) had he known this information, he never would have made the purchase; (3) he paid over $13,000 for an automobile worth between $5,000 to $8,000; and (4) consumer also paid in excess of $40,000 for professional work to make the automobile the worth between $25,000 to $30,000.   The Court noted that whether defendant was a “dealer” within the meaning of the New Jersey Used Car Lemon Law was irrelevant to whether the New Jersey Consumer Fraud Act was applicable to the case because, by the very terms of the New Jersey Used Car Lemon Law, it and the New Jersey Consumer Fraud Act supplement rather than preempt one other.  The Court decided that:  (1) the merchant satisfied the legal definition of “person”; (2) the automobile satisfied the statutory definition of “merchandise”; (3) the consumer proved he suffered an ascertainable loss -- a “textbook” New Jersey Consumer Fraud Act claim – since he presented an expert witness who corroborated the consumer's claims concerning the automobile’s condition and claimed that that, as delivery, the automobile was unsafe to drive.

Consumer fraud by dealership selling 1994 Mitsubishi Galant ES -- On August 11, 1994, the consumer went to Gateway Mitsubishi in response to a newspaper advertisement concerning the 1994 Mitsubishi Galant ES. After test driving a Galant, the consumer and a salesman entered into negotiations for its purchase. When they were not able to reach an agreement, the consumer began to leave the dealership. According to the consumer, at that point, the salesman “went after them” and told them he could give him a better deal if the consumer was willing to “pay it out,” which would purportedly allow the consumer to pay a certain amount of the purchase price each month until the outstanding debt was paid off.  After more time at the dealership, the consumer signed several documents.  One of the consumer was seventy-three years old at the time of this transaction and according to him, one of the documents he signed was folded over so that only the signature line was visible. After he took delivery of the car, he realized that that document was a lease and not a contract for sale. When he telephoned the salesman to complain, he was told that he could keep the lease or sign a new contract to purchase the vehicle for a sum substantially higher than the amount he was quoted for outright purchase early in the negotiations. Several days later, disgusted by the whole transaction, and not wanting to be saddled with lease, the consumer signed a new contract for the higher price. Within one week, he paid off the entire balance. Gateway Mitsubishi recounted a different version of the events, maintaining that the salesman had fully discussed the lease arrangement with the consumer and that the consumer had simply changed his mind about the arrangement several days later. Gateway maintained that when the consumer allegedly changed his mind, he was offered the option of switching the lease to a contract for purchase.  In December 1994, the consumer filed a complaint against Gateway and others, alleging common-law fraud, breach of contract, negligence, and violations of the New Jersey Consumer Fraud Act (“the Act”), the Uniform Commercial Code, and the Magnuson-Moss Warranty Act.  The consumer later amended his complaint to add claims for intentional and negligent infliction of emotional distress. At trial, the trial court dismissed all of the consumer's claims, except those relating to the New Jersey Consumer Fraud Act, breach of contract, and common-law fraud. The jury found Gateway and the others liable for breach of contract and for violations of the New Jersey Consumer Fraud Act but found no liability under common-law fraud. The jury awarded compensatory damages in the amount of $7,300, which the trial court trebled as required. The Superior Court of New Jersey further entered an award for counsel fees and costs, totaling $23,638.59. Thus, the consumer's final award amounted to $45,538.59. Gateway appealed, the Appellate Division set aside the jury's verdict and remanded the matter for a new trial and the Supreme Court of New Jersey overturned the Appellate Division and let the verdict in favor of the consumer stand.

HOME REPAIR CONTRACTS

Home improvement services – home renovator successful CFA claimant against subcontractor

An appeals court found that the New Jersey Consumer Fraud Act applied to the claims of a business of buying, renovating and reselling residential properties that contracted with defendant family-owned companies to purchase and renovate a building and then met with delays, shoddy workmanship and overcharges. The Superior Court of New Jersey explained that the subcontractor’s testimony established that they were involved in the sale or advertisement of home improvement services, either directly or indirectly to the public, and that the New Jersey Consumer Fraud Act protects business entities like plaintiff as well as individuals.

Home repair contractors and consumer fraud – A home repair contractor sued homeowners for the balance due on a home repair contract and they counterclaimed alleging a consumer fraud claim.  The contractor’s complaint for money due for the home repairs was dismissed and the Superior Court of New Jersey found that the contractor committed consumer fraud and awarded the homeowners $22,146.14 in treble damages, attorney's fees. 

Landscape irrigation contractor commits consumer fraud – A landscape irrigation contractor brought a lawsuit against its customer, seeking the balance due on sprinkler installation contract and the customer counterclaimed, alleging violations of the New Jersey Consumer Fraud Act.   The Superior Court of New Jersey ruled that the contractor violated the New Jersey Consumer Fraud Act, was not entitled to enforce the contract and had to pay the customer a refund and attorney’s fees.  On September 15, 2004, Michael Finnegan, the owner of the company, prepared and presented for signature a document entitled “Irrigation Contract Proposal.”  The proposal was signed on or about September 29, 2004, by both Finnegan, owner of the home repair contractor company and the customer. The contract was entered for the purpose of the installation of a sprinkler irrigation system in the customer's back yard. The installation took one day.  The contract price was $3,500. While the contract provided for a deposit of $1,500, the customer only paid a $500 deposit. The contract price was reduced by $150. The contractor claimed it was because the customer insisted on performing the system connection to the house and the customer says the reduction had nothing to do with the connection, but was simply a negotiated reduction of price.  The contractor sought $2,850 from the customer.  The contract was silent as to whether the contractor or any of its employees were licensed.  The customer was not aware of the requirement for a license or certificate until after the system was installed.  The customer did not pay the contractor after the system was installed because he believed that the contractor did not fulfill the terms of the contract.  The contractor installed five sprinkler zones but the customer interpreted the contract as requiring the installation of nine zones.   Item 1 under the contract stated: “Automatic Controller, Nine Zone LXI plus (Rainbird).”  As it turned out, the contractor installed an eight-zone Rainbird controller. The controller became an issue in the case. The customer specifically wanted a nine-zone LXI Rainbird brand controller.   Rainbird only makes an eight-zone or twelve-zone controller.  The distinction between the capacity of the controller and the number of zones actually to be installed was not made clear in the contract and was not understood by the customer.  On this point, the credibility of Finnegan was severely tested. Finnegan did not testify in his case-in-chief. In fact, he was not present in the Superior Court of New Jerseyroom to hear his office manager testify. His office manager testified on the first day of the trial that upon learning a nine-zone Rainbird was not even available she ordered the eight-zone controller on her own because it was closest to nine zones. She did it without consulting the customer. She was believable. Finnegan, on the other hand, was somewhat evasive in his testimony. He testified only on rebuttal. To the direct question by the Superior Court of New Jersey as to who ordered the controller, he said that he did. Finnegan said that he explained to the customer that the controller had to be eight zones and not nine. His testimony on this point was not credible, clearly contradicting his office manager. He also tried to give the impression that he was at the customer's home during most of the installation, but his installer's testimony hardly mentioned his presence. Clearly, Finnegan's testimony lacked credibility. His explanation that the contract called for five zones to be installed was based on Item 2 on the form contract, which stated: “Electric Valves with Boxes 4-7.” Finnegan explained that this meant four to seven zones would be installed because each valve is a zone. While it may be true that each zone has electric valves, this explanation is not included in the contract. The contract is not clear. Next, the customer believed that the system was to provide water to his entire property, including the area on both sides of his driveway. Finnegan said that was not provided for under the contract. The contract, however, is silent as to the scope of area to which the system would provide water. Thirdly, there was the issue as to who would tie in the system to the house. The contract provides that the home repair contractor would have that responsibility and would install a new “one-inch ball valve and drain spigot.” It was the customer who actually had another contractor make the final connection. The evidence shows that the contractor’s installer tried to make the connection on the far side of the water conditioner, but because of low water pressure the customer had to have a second contractor make the connection on the well side of the water conditioner. The home repair contractor states that the customer insisted on the tie-in be on the far side of the water conditioner so that the water would not stain his concrete. Customer denied that.  The Superior Court of New Jersey found that the home repair contract called for a nine-zone Rainbird controller, which the defendant wanted and specified. The home repair contractor had the obligation not to specify a product that does not exist. He should have informed the homeowner in advance of signing the contract that such a product as the homeowner wanted was not available. In the event that the contractor realized that only an eight-zone or twelve-zone controller of that brand was available, a written change order to the contract should have been prepared. The Superior Court of New Jersey noted that the contract was prepared by the contractor on September 15th and installation did not take place until September 29th, leaving adequate time to renegotiate the contract and provide a written change order with the appropriate controller, instead of the nine-zone controller specified in the original contract.  The evidence showed that there were two significant changes in the contract. The first is, as discussed above, that the controller was changed from a nine-zone to an eight-zone controller. And secondly, there was a change that was testified to by the plaintiff that the connection of the system to the house would no longer be done by the plaintiff as called for in the contract. Neither of these two changes was made in writing and thus this constitutes a violation of the regulations. If there had been written changes, the dispute among these parties may never have occurred.  In addition, while the contract has a starting date, it does not provide for an ending date or a time for performance. The contractor, Finnegan, testified that was because the system was installed on the same day as the homeowner signed the agreement. The regulations do not provide for such flexibility or discretion for the contractor. As the contract is written, a contractor could have started the job in the morning and left the site not to return until some indefinite period in the future. It is this circumstance, undoubtedly, that the regulations seek to avoid.  In summary, the Superior Court of New Jersey found that the contractor violated regulations and thereby violated the New Jersey Consumer Fraud Act.  The Superior Court of New Jersey also found that the contractor was a landscape irrigation contractor and no persons employed by the company held the required certificate. The contractor conceded these facts as well. The customer argued that the contractor, acting contrary to the law undertook an unconscionable and unlawful act by entering into the subject contract contrary to the terms of the New Jersey Consumer Fraud Act and, therefore, that the customer was entitled to a refund.  The Superior Court of New Jersey reasoned that to now permit the contractor to enforce the contract in the face of the unlawful regulatory violations and its failure to operate with the mandated license and recover the unpaid sums otherwise due would strip the New Jersey Consumer Fraud Act of the gravitas intended by the Legislature as a remedial statute.  Accordingly, the Superior Court of New Jersey dismissed the contractor’s complaint.

NEW HOME CONSTRUCTION

New home construction contracts and consumer fraud – A consumer fraud claimant filed a CFA claim against a builder, seeking damages for the failure of a retaining wall at site of a new home she purchased from the builder.  A jury found that the builder breached the contract of sale and committed consumer fraud, entered judgment for $403,652.93 — $89,250 in damages and $135,902.93 for attorney fees.  The builder appealed and the appellate court found that the evidence was sufficient to prove consumer fraud but reversed the jury’s finding of consumer fraud and directed a new trial because the jury charge was clearly capable of leading to a verdict based on insufficient grounds. The judgment based on violation of the CFA is reversed and remanded for a new trial. Further, the appellate court noted that the contract damages were excessive since they exceeded the amount necessary to make the claimant whole and thus, the Superior Court of New Jersey reduced the contract damages to $55,250.

CIGARETTE SALES

Cigarette Retailer Assessed Fines, Fees & Costs of $762,000 For Unauthorized CigaretteSales

A New Jersey Superior Court entered an order requiring a cigarette retailer -- Red Jacket Tobacco of Salamanca, New York -- to pay $762,776 in penalties, attorney’s fees and costs for the following misconduct:

·                     selling unregistered cigarettes without having a license

·                     avoiding taxes

·                     failing to confirm purchasers were above the age of 19

·                     violating the New Jersey Consumer Fraud Act, including administrative regulations.

The retailer’s direct-mail ads, called "Money Mailers," were sent to approximately 60,000 New Jersey residents, violated the New Jersey Consumer Fraud Act and administrative advertising regulations by claiming that the retailer sold cigarettes "tax-free" and promising that "if we don't have it, we can order it" when in fact the only cigarettes able to be sold are those which make the attorney general's list of approval.  By selling cigarettes without a license and by failing to comply with tax and sale practices, laws and regulations, the retailer committed unconscionable commercial practices.

DOES THE LAW OFFICE OF PAUL DEPETRIS HAVE EXPERIENCE HANDLING NEW JERSEY CONSUMER FRAUD ACT DISPUTES?

Yes.  Paul DePetris has performed the following tasks:

·                     represented consumers, home buyers, home sellers, home repair customers, home repair contractors, home inspectors, real estate brokers, real estate agents, junk yard dealers, automobile purchasers and owners, new and used car dealers, banks and automotive lenders, boat purchasers and owners, watercraft purchasers and owners and marinas in New Jersey Consumer Fraud Act  disputes.

·                     appeared in court in cases involving New Jersey Consumer Fraud Act disputes.

·                     mediated, arbitrated and tried New Jersey Consumer Fraud Act cases.

Mr. DePetris has appeared before the Superior Court of New Jersey in the following counties:

Mr. DePetris has also appeared in federal courts - the District of New Jersey in Camden, Trenton and Newark and in the Eastern District of Pennsylvania.

Mr. DePetris is also the author of the following publications:  New Jersey Consumer Fraud Act & Forms (New Jersey Law Journal Books, 2007); Learned Professionals, Licensed Semiprofessionals and the Consumer Fraud Act:  The Origins of the Licensed Professionals’ Doctrine (New Jersey Lawyer, Oct. 2008); and Liability For Consumer Fraud In Real Estate Transactions (New Jersey Law Journal, March 18, 2009).   Mr. DePetris also gives seminars on the New Jersey Consumer Fraud Act.

WHAT IF I DON’T HAVE ENOUGH MONEY TO HIRE AN ATTORNEY TO HANDLE MY CASE FROM BEGINNING TO END?

In many situations, the Law Office of Paul DePetris offers alternatives to handling cases for an hourly fee, such as by offering to prepare the court paperwork for you or helping you handle your claim by yourself.  Such flexible methods may allow you to keep the amount legal fees you spend on your case to a fixed sum, while providing you the help you need to handle your case.  For a no cost phone consultation about what the Firm might be able to do for you, call or write an email to Mr. DePetris at:  609-714-2020 or consumerlaw@newjerseylemon.com.