SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-2788-97T5
ALBERT DELANEY,
Plaintiff-Appellant,
v.
GARDEN STATE AUTO PARK,
a New Jersey Corporation,
Defendant-Respondent.
____________________________________________
Submitted: January l3, l999 Decided: February 2,
1999
Before Judges King, Newman and Fall.
On appeal from Superior Court of New Jersey,
Law Division, Special Civil Part, Monmouth County.
Ronald L. Lueddeke, attorney for appellant.
Ciarrocca & Ciarrocca, attorneys for respondents
(Mark P. Ciarrocca, on the brief).
The opinion of the court was delivered by
NEWMAN, J.A.D.
In this Consumer Fraud Act case, plaintiff Albert Delaney,
an automotive consumer, brought suit against defendant Garden
State Auto Park, an automobile dealership, seeking damages for
consumer fraud, breach of contract and negligence relating to the
purchase of a used automobile. At issue is whether an automobile
dealer's failure to disclose the price charged to the consumer
for pre-delivery services and failure to itemize such services
violates the Consumer Fraud Act, N.J.S.A. 56:8-1. We hold that
defendant violated the Consumer Fraud Act in failing to disclose
to the consumer the price of the pre-delivery services and in
failing to itemize such services in the final sales agreement.
Plaintiff responded to a newspaper advertisement in the Asbury Park Press for a l988 Ford Crown Victoria at defendant's advertised price of $5995. On October l8, l993, plaintiff met with Donna Mattos, a salesperson with defendant. He entered into a retail buyer's order for a sale price of $5783. Leaving a deposit of $75, he sought to finance part of the purchase in order to establish credit because he had not done so for many years.
Plaintiff received a call from the dealership informing him that there was a problem with the credit submission. He, therefore, returned on October 26, l993 depositing an additional $3425, $3000 of which was paid in cash. Plaintiff was then referred to a financial officer, Joseph DeGeorge, Jr. DeGeorge sought to sell plaintiff a vehicle service contract for $ll00. The standard warranty on the used car plaintiff was purchasing for the engine and powertrain was thirty days or l,000 miles. The service contract extended the warranty to two years or 24,000 miles. In connection with this warranty, plaintiff signed an internal authorization form which listed the following items to be completed: rust proofing, undercoating, paint sealant and fabric guard. Underneath those four items, the following appeared:
All this is included in payment with the payment with the powertrain warranty. $2l8.29 b.o. 36 months.
Plaintiff rejected the service contract, considering it too
costly. The service contract was then marked "VOID."
Thereafter, a retail installment sales agreement was
executed, although some dispute exists over whether plaintiff
endorsed the agreement in blank. The retail sales agreement,
containing an itemization of the amount financed, noted
plaintiff's total cash purchase price of $7983. After the
deduction of plaintiff's total cash deposit of $3500 and added
finance charges, plaintiff's monthly payment was reduced to $177
for a thirty-six month term once he rejected the service
contract. The retail installment sales agreement did not include
or enumerate any pricing or listing of any type of pre-delivery
service.
John Schmelz, III, the owner and president of Garden State
Auto Park, testified that the price of each pre-delivery service
was not enumerated in any document provided to the consumer:
Q. Now, you were asked a question
regarding the invoice, and the fact that
these items don't appear separately on an
invoice. Is that unusual?
A. No, it would never be reflected.
This is an internal document. This document
is not provided to the consumer; this is an
internal accounting document, so that the
office can then put this through our
accounting system.
Q. And when it talks about accessories
and other things that Counsel pointed out to
you, what type of stuff would that be?
A. It's never provided on this
document. This document never reflects
anything like that. The vehicle was sold as
a whole, and as I said, this particular
document is used, prepared by the clerk who
administers the sales file in getting it
ready for the bank. And then it's provided
to the account personnel so that they can
account for the sale of this vehicle. It's
not ever provided. The only other thing that
would be shown on this internal document,
other than what's shown, is if there's a
trade-in, that would be reflected on this
document so that also it could be accounted
for and brought into inventory.
After plaintiff made all of the payments, he received a copy
of the retail installment sales agreement, disclosing that he had
paid $7983 for the vehicle, an amount $2200 more than the $5783
he had agreed to pay pursuant to the retail buyer's order. Upon
contacting defendant, plaintiff learned that the $2200
discrepancy represented the cost for rust proofing, undercoating,
paint sealer and fabric guard.
Schmelz testified concerning the dealership costs associated
with such services. He indicated that the dealership had a
working relationship with Final Detail, Inc. and paid a flat fee
of $85 per vehicle to do all vehicle cleanings and cosmetic
detailing, including cleaning the motor area, interior shampooing
of carpets and cleaning the exterior. Rust proofing,
undercoating, paint sealer and fabric guard were also included
items of work under the arrangement with Final Detail for this
same price of $85.
Defendant's records show a $2732 profit on this sale.
Defendant acknowledged that the service contract was void.
Schmelz had no knowledge of whether there were any discussions
concerning the items for which plaintiff was charged $2200. He
did indicate that the internal authorization form showed those
items were authorized. He also testified the company's policy
was to make sure that retail installment sales agreements were
filled out before they were signed by customers and that he would
fire anyone who would not adhere to that policy. He did
acknowledge that the items for which defendant was charged $2200
were not enumerated in the retail sales agreement, nor was the
pricing for those items contained in any document. He assumed
that the matter was discussed with the financial representative,
Joe DeGeorge, Jr. Significantly, however, DeGeorge was not
called as a witness.
The trial judge entered a judgment of no cause for action on
plaintiff's complaint, finding that plaintiff did not sign the
retail installment agreement in blank and that he knowingly
entered into the retail installment agreement. He further
concluded that plaintiff did not meet his burden of proving that
the price of the service items was unconscionable. Even though
there was an enormous discrepancy between what it cost the
dealership for those items and what it charged its customers,
plaintiff presented no evidence of the reasonable value of these
services. Accordingly, the trial judge entered a verdict for
defendant.
On appeal, defendant contends that the trial judge erred in
not finding a consumer fraud violation regarding the service
items and that he should have concluded, as a matter of law, that
the price charged to plaintiff for those service items was
unconscionable.
The New Jersey Consumer Fraud Act, N.J.S.A. 56:8-l to -48, focuses on commercial deception. It declares as unlawful
The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression or omission, of any material fact ... in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby....
[N.J.S.A. 56:8-2].
The Consumer Fraud Act ("Act") was passed in response to
widespread complaints about selling practices that victimize
consumers. It was designed to prevent deception, fraud or
falsity, whether by acts of commission or omission, in connection
with the sale and advertisement of merchandise and real estate.
Barry v. Arrow Pontiac Inc., l
00 N.J. 57, 69 (l985). The Act has
been liberally construed as remedial legislation in favor of
protecting consumers. Fenwick v. Kay Am. Jeep, Inc.,
72 N.J. 372, 376-77 (l977).
In response to observed abuses in automotive sales practices
where consumers were frequently induced to expend additional
monies for services that were either unnecessary or not being
performed, the Act was broadened, through implementing
regulations, to further protect the automotive consumer.
27 N.J.R. 3568 (Sept. 18, 1995) (recodifying 13:45A-6.2). N.J.A.C.
13:45A-26B.2 declares it unlawful under the Act for an automotive
dealer to:
Accept[], charg[e], or obtain[] from a
consumer monies, or any other thing of value,
in exchange for the performance of any pre-delivery service without first itemizing the
actual pre-delivery service which is being
performed and setting forth in writing on the
sales document the price for each specific
pre-delivery service.
[N.J.A.C. 13:45A-26B.2(a)1(ii)].
"Pre-delivery service fee" means:
... any monies or other thing of value which
an automotive dealer accepts from a consumer
in exchange for the performance of pre-delivery services upon a motor vehicle, and
includes, but is not limited to, items which
are often described or labeled as dealer
preparation, vehicle preparation, predelivery
service, handling and delivery, or any other
term of similar import.
[N.J.A.C. 13:45A-26B.1].
Rust proofing, undercoating, paint sealer and fabric guard, the
items associated with the added $2200 cost, are services included
in vehicle preparation prior to the delivery of an automobile.
In response to interrogatories, defendant indicated that the
exact date of the installation of these services was "unknown."
Whether such services were actually performed is even
questionable on this record.
We have no hesitancy in concluding that the circumstances
presented here were designed to be eliminated by the consumer
fraud legislation. The evidence showed that the service items
were to be installed in connection with the powertrain warranty
which was covered by the vehicle service contract. The service
contract was rejected by plaintiff because he did not want to
spend $ll00 above the price he was paying for a used l988
vehicle. He testified that he definitely would not have spent
double that amount for the service items.
Moreover, there was no evidence presented of any pricing for
these items. The items were not enumerated in the retail
installment agreement as required by N.J.A.C. 13:45A-26B.2.
Schmelz had no knowledge of this particular transaction and
DeGeorge, the person who attempted to sell the service contract
covering the extended warranty for the engine and powertrain, was
not produced as a witness.
We cannot ignore the fact that there is no breakdown of the
pricing for these items in any document. Plaintiff's testimony
that these items were not discussed nor was the pricing for them
ever mentioned is unrebutted on this record. Plaintiff contends
that these items may have been mentioned, but only in terms of
"an icing on the cake," probably in the context of the service
contract. It is clear that there is nothing to indicate that
plaintiff agreed to pay for these items. The internal
authorization listing these items is not signed by plaintiff and
the reference to the powertrain warranty is omitted.
The trial judge, noting that plaintiff failed to present
evidence of the reasonable value of the services, did not address
plaintiff's claim that defendant violated the Act even though it
was presented by plaintiff. On this record, as a matter of our
original jurisdiction, R. 2:10-5, we can reach no other
conclusion than that defendant engaged in an unconscionable
business practice in violation of the Act. N.J.S.A. 56:8-2 and
N.J.A.C. 13:45A-26B.2. The fact that the dealer has reaped an
enormous profit in causing the consumer to pay for pre-delivery
services explicitly rejected by the consumer and not disclosed in
the final sales agreement colors the result vividly in this case
and reinforces the purpose of the Act in protecting the consumer
against abusive automotive sales practices.
The damages for this violation are readily ascertainable.
The cost for the service items was $2200. The extra interest
charged because these items were wrongfully included in the
automobile's price, as plaintiff's counsel noted, was $53l and
increased the sale's tax by an additional $l32. When added
together, the total is $2863, which when trebled equals $8589.
N.J.S.A. 56:8-l9. Because plaintiff is also entitled to an award
of reasonable attorney's fees, filing fees and reasonable costs
of suit, we remand so those amounts may be determined upon
sufficient proofs including the reasonable attorney's fees for
the prosecution of this appeal and a single judgment for the
entire amount entered. Ibid.; R. 2:11-4 and R. 2:11-5.
In view of our determination, we find it unnecessary to
determine if the amount so charged for the service items of $2200
was unconscionable even in the absence of any testimony as to the
reasonable value of these services.
Reversed and remanded for further proceedings consistent
with this opinion.