NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0270-06T10270-06T1

JEFFERSON LOAN COMPANY, INC.,

Plaintiff-Respondent/

Cross-Appellant,

v.

RUBENA A. SESSION,

Defendant,

and

SHAMEKA N. GRANDBERRY,

Defendant-Appellant/ Cross-Respondent.

__________________________________

Argued on October 9, 2007 - Decided

Before Judges Weissbard, Gilroy, and Baxter.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-0026-02.

Andrew R. Wolf argued the cause for appellant/cross-respondent (Galex Wolf, LLC, attorneys; Christopher J. McGinn, Richard Galex, Rebecca Schore, and Mr. Wolf, on the brief).

Steven Siegel argued the cause for respondent/cross-appellant (Sokol, Behot & Fiorenzo, attorneys; Joseph B. Fiorenzo, of counsel and on the brief; Mr. Siegel, on the brief).

David McMillin argued the cause for amicus curiae Legal Services of New Jersey (Melville D. Miller, Jr., attorney; Henry P. Wolfe and Mr. McMillin, on the brief).

The opinion of the court was delivered by

GILROY, J.A.D.

Defendant Shameka N. Grandberry, a co-signor of a retail installment sales contract (RISC), appeals from the July 20, 2006, order of the Law Division, which granted partial summary judgment in favor of plaintiff Jefferson Loan Company, dismissing Counts Three and Four of her counterclaim, alleging violations of the Consumer Fraud Act (CFA) and the Truth-In-Consumer, Contract Warranty and Notice Act (TCCWNA). Although there does not appear to be a separate order, the effect of that order also denied Grandberry's cross-motion for summary judgment on those two counts of her counterclaim.

Plaintiff cross-appeals from the July 10, 2006, order that: 1) granted Grandberry's motion for partial summary judgment on Counts One and Two of her counterclaim, alleging violations of Article 9 of the New Jersey Uniform Commercial Code (UCC); and 2) dismissed plaintiff's complaint for failure to state a claim upon which relief could be granted. Plaintiff also appeals from the amended order of July 28, 2006, which entered judgment in favor of Grandberry in the amount of $7,347.21 on the UCC claims.

The primary question presented on appeal is whether an assignee of a RISC can be held liable under the CFA for the assignee's own unconscionable commercial practices and activities related to the assignee's repossession and collection practices, in connection with the subsequent performance of the RISC. Because we answer the question in the affirmative, we reverse that part of the order of July 20, 2006, which dismissed Count Three of Grandberry's counterclaim alleging violations of the CFA, and remand that count to the trial court for further proceedings consistent with this opinion. We affirm that part of the order of July 20, 2006, which dismissed Count Four of the counterclaim. We also affirm the orders of July 10, 2006, and July 28, 2006.

I.

Plaintiff is a finance company that engages in the financing of automobiles by purchasing RISCs from automobile dealers. Plaintiff also offers credit life and credit disability insurance through the dealers, insuring the life and health of the borrowers, as well as property insurance on the financed automobiles. Plaintiff receives a commission on each policy of insurance sold.

On July 24, 2000, Rubena Session entered into a RISC with National Auto Sales, Inc., for the purchase of a 1992 Honda Accord automobile for $10,091.20. Session paid $1,000 down at the time of purchase and financed $11,996.43, representing $9,091.20 principal; $257.64 for credit life insurance; $502.59 for credit disability insurance; $200 for property insurance; $145 for title registration fees; and $1,800 for GAP insurance and additional un-itemized "dock fees." Although National, not plaintiff, sold the GAP insurance, plaintiff was named as the lender thereon. The RISC also included a $6,147.57 finance charge at the rate of 22.007% interest per annum, for a total sales price of $19,144. The RISC required that the total sales price (less the $1,000 down payment) be repaid in forty-eight monthly payments of $378 each, commencing August 23, 2000, and ending July 23, 2004. Grandberry co-signed the RISC on behalf of Session.

Plaintiff provided RISC forms to National. Under the RISC, plaintiff was required, upon default, to provide a rebate for unearned interest. The RISC contemplated compliance with Article 9 of the UCC, providing that upon default, the creditor would have "all the remedies of a secured party under the [UCC]" and that any notice required under the UCC "will be reasonable if we send it to your address shown [on the contract] at least five days before the event with respect to which notice is required." On the day of the installment sale, plaintiff advanced National the funds for the purchase and assignment of the RISC. On assignment, plaintiff became the holder of the title to the automobile.

Session made two payments, totaling $1,115, on the RISC: $737 on August 24, 2000; and $378 on October 3, 2000. After Session defaulted, plaintiff, without prior notice to either Session or Grandberry, arranged for Professional Process Services (PPS) to repossess the automobile on December 19, 2000. Plaintiff charged Session's account $500 as a repossession fee, paying $380 to PPS for its services. Plaintiff cannot explain the additional $120 charged to Session's account. Although plaintiff sold the credit life and credit disability insurance, which had a term of 48 months, it failed to cancel the insurance policies, saving the unearned premiums, notwithstanding the RISC provided an assignment from the borrowers of "unearned premiums" to the holder of the RISC.

On December 19, 2000, plaintiff sent a notice to Session and Grandberry, stating that because the car payments had not been made, plaintiff had repossessed the automobile. The notice, however, was only sent to Session's residence as indicated on the RISC, not to Grandberry's address, which had been provided to National on other loan documents. The notice provided in pertinent part "[t]o redeem your vehicle, you will have to pay the entire amount owed and expenses. You may purchase your vehicle back at any time before it is sold. Information on the sale date will be supplied to you upon request." The notice further provided that "[i]f you wish to buy back your vehicle, the following list shows the entire amount you owe and all other expenses." The notice then set forth the total amount required for Session and Grandberry to purchase the automobile back from plaintiff: $17,029 for the gross unpaid balance; $20 for late charges; and $500 for repossession expenses, for a total amount of $17,549, together with storage fees assessed at $25 per day.

Notwithstanding the December 19, 2000 notice, plaintiff did not sell the automobile at a public or private sale, but rather, returned the automobile to National "with no recourse." Under the arrangement, National was obligated to make all remaining monthly payments on the automobile. When the last payment was made, plaintiff would assign the automobile title over to National, which could then resell the motor vehicle. After repossession, plaintiff did not send any further notices to Grandberry or Session, informing them of their rights of redemption or of plaintiff's intended method of disposition.

On receiving possession of the automobile from plaintiff in December 2000, National made five payments on the account, totaling $1,612, the last payment having been made on August 29, 2001. When National made two payments after the due date, plaintiff assessed a $10 late fee on each payment and charged the fees to Session's account, not National's account. Although plaintiff was aware that National had ceased making payments, plaintiff never attempted to retrieve the automobile from National or arrange for a sale of the collateral.

During the time National was making the loan payments, it fraudulently obtained a duplicate motor vehicle title, sold the automobile, and retained the funds. Plaintiff first learned that the automobile had been unlawfully sold by National five years after the event, when it received copies of the motor vehicle's title documents from Grandberry during the course of discovery in this action.

On January 4, 2002, plaintiff filed a complaint against Session only for monies due under the RISC. Session defaulted, and a judgment was entered against her on March 7, 2003, in the amount of $20,758.22. Because plaintiff was not able to collect from Session on the judgment, plaintiff caused that judgment to be vacated by order of court on August 6, 2003. On the same day, plaintiff filed an amended complaint, adding Grandberry as a defendant. The complaint did not state that plaintiff had repossessed the motor vehicle; rather, it only demanded judgment in the amount of $19,649.93, "plus accruing interest to the date of judgment[,] plus costs." This amount was itemized as "$17,544.00, plus interest from 1/11/2001 to 7/25/2003 in the sum of $157.61 for a total of $17,701.61" from a "money loaned account . . . in default," and $1,948.32 for "attorney fees of 20% of the first $500 and 10% of the excess."

On August 23, 2005, Grandberry filed a second amended answer and counterclaim for damages, alleging violations of the UCC (Counts One and Two); of the CFA (Count Three); and of the TCCWNA (Count Four). After discovery, Grandberry moved for summary judgment on all counts of her counterclaim and for dismissal of plaintiff's complaint for failure to state a cause of action. Plaintiff cross-moved for dismissal of Counts Three and Four of the counterclaim only.

Following oral argument on March 31, 2006, the trial judge granted plaintiff partial summary judgment, dismissing Counts Three and Four of the counterclaim. The judge determined that plaintiff had not directly participated in the sale of the automobile with National, and that the CFA only applied to unconscionable commercial practices in connection with the sale or advertisement of merchandise or real estate, not to the loan collection or repossession activities of an assignee of a RISC. The judge also dismissed the TCCWNA claim on the basis that the Act only applied to express contracts or offerings, not to the failure of a secured party to provide a notice to a debtor concerning the repossession and disposition of collateral. A confirming order was entered on July 20, 2006. In the interim, the matter was continued, with the parties directed to submit additional briefs on Grandberry's motion pertaining to the UCC claims.

On July 10, 2006, the judge issued a written opinion, determining that plaintiff had violated the UCC by: 1) not disposing of the repossessed motor vehicle in a commercially reasonable manner, thereby depriving Grandberry of the resale value of the motor vehicle; and 2) not providing an explanation of the deficiency forming the basis of the action against Grandberry. The judge also dismissed the complaint for failure to state a claim on which relief could be granted, based on the absence of any facts in the complaint supporting the cause of action, "[t]he plaintiff's complaint fails to provide any statement of facts. There is no information about the repossession or disposition [of the automobile]. It only makes the conclusionary allegation that money is due." A confirming order was entered the same day. An amended order was entered on July 28, 2006, directing plaintiff pay Grandberry the statutory penalty of $7,347.21 pursuant to N.J.S.A. 12A:9-625. This appeal and cross-appeal followed.

On appeal, Grandberry argues:

POINT I.

THE CONSUMER FRAUD ACT APPLIES TO JEFFERSON LOAN'S ACTIONS IN SUBSEQUENT PERFORMANCE OF THE RISC; ITS REPOSSESSION AND COLLECTION ACTIVITIES CONSTITUTE UNCONSCIONABLE BUSINESS PRACTICES.

A. THE COURT ERRED IN DISMISSING MS. GRANDBERRY'S CFA CLAIMS.

B. THE EXPANSIVE CFA APPLIES TO THE SUBSEQUENT PERFORMANCE OF A MOTOR VEHICLE SALE AND EXTENSION OF CREDIT.

1. THE TEXT OF THE CFA APPLIES TO JEFFERSON LOAN'S PERFORMANCE OF THE CREDITOR'S OBLIGATIONS UNDER THE RISC.

2. THE LEGISLATURE HAS NOT INTENDED TO EXEMPT REPOSSESSION ACTIVITIES FROM CFA LIABILITY.

i. THE CFA AND [UCC] TEXTS DO NOT PRECLUDE CFA CLAIMS FOR [UCC] VIOLATIONS.

ii. THERE ARE NO SHARP CONFLICTS BETWEEN THE NJUCC AND THE CFA SO AS TO PRECLUDE LIABILITY UNDER THE CFA.

3. EXEMPTING ASSIGNEES FROM LIABILITY UNDER THE CFA FOR THEIR REPOSSESSION AND COLLECTION ACTIVITIES WOULD LEAD TO AN UNDESIRABLE RESULT.

4. JEFFERSON LOAN'S ACTIONS CONSTITUTE DECEPTIVE AND UNCONSCIONABLE BUSINESS PRACTICES UNDER THE CFA.

5. MS. GRANDBERRY SUFFERED AN ASCERTAINABLE LOSS.

POINT II

THE COURT ERRED IN DISMISSING MS. GRANDBERRY'S CLAIMS UNDER TCCWNA AS THE FAILURE TO PROVIDE AN ADEQUATE DEFICIENCY DEMAND VIOLATES THE ACT AND THERE ARE NO DISPUTED FACTS AS TO JEFFERSON LOAN'S TCCWNA LIABILITY.

A. BACKGROUND OF TCCWNA.

B. JEFFERSON ADMITS IT FAILED TO PROVIDE MS. GRANDBERRY WITH THE CONSUMER NOTICE REQUIRED BY NEW JERSEY LAW.

C. TCCWNA APPLIES TO THE FAILURE TO PROVIDE REQUIRED NOTICES.

On cross-appeal, plaintiff argues:

POINT I.

THE COURT BELOW ERRED IN GRANTING SUMMARY JUDGMENT IN FAVOR OF GRANDBERRY WITH RESPECT TO GRANDBERRY'S COUNTERCLAIM ARISING UNDER THE UNIFORM COMM[]ERCIAL CODE, BECAUSE A REVIEW OF THE RECORD ON APPEAL DISCLOSES THAT THERE EXIST NUMEROUS GENUINE ISSUES OF MATERIAL FACT AS TO WHETHER JEFFERSON ACTED IN A "COMMERCIALLY REASONABLE" MANNER IN CONNECTION WITH THE REPOSSESSION OF THE COLLATERAL FOLLOWING GRANDBERRY'S DEFAULT UNDER THE LOAN.

II.

A trial court will grant summary judgment to the moving party "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). "An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c).

On appeal, "the propriety of the trial court's order is a legal, not a factual, question." Pressler, Current N.J. Court Rules, comment 3.2.1 on R. 2:10-2 (2008). "We employ the same standard that governs trial courts in reviewing summary judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

III.

Grandberry's claims center around plaintiff's collection activities enforcing its rights under the RISC. Grandberry contends that although plaintiff's collection activities as a secured party were subject to the provisions of the UCC, plaintiff intentionally undertook actions outside of the remedies provided by the UCC to her detriment.

In Point I, Grandberry argues that the CFA applies to plaintiff's conduct in the subsequent performance of the RISC, "irrespective of [plaintiff's] status as an assignee." Grandberry contends that after plaintiff had repossessed the automobile, plaintiff improperly returned the automobile to National, rather than disposing the collateral by private or public sale, pursuant to the UCC. N.J.S.A. 12A:9-601(b); N.J.S.A. 12A:9-609; N.J.S.A. 12A:9-610. Grandberry asserts that plaintiff's improper disposition of the automobile deprived her of having the net proceeds of the sale applied to the secured obligation, thereby reducing her indebtedness under the RISC. N.J.S.A. 12A:9-615. Amicus supports Grandberry's contention that the CFA applies to the direct conduct of an assignee of a RISC. Plaintiff counters that the CFA does not apply to the assignee of a secured loan as a matter of law. We conclude that an assignee of a RISC can be held liable under the CFA, for its own unconscionable commercial activities in the subsequent performance of the assigned contract.

A private party may recover on a cause of action under the CFA if the party demonstrates that the defendant committed an unlawful practice under the CFA and that the aggrieved party suffered an ascertainable loss as a result thereof. N.J.S.A. 56:8-19. The heart of the CFA is contained in N.J.S.A. 56:8-2, which provides in pertinent part:

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 with intent that others rely upon such concealment, suppression or omission, 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 . . . .

The CFA forbids affirmative acts and knowing omissions that constitute deceptive trade practices, as well as violations of certain regulations adopted by the Division of Consumer Affairs. Barry v. Arrow Pontiac, Inc., 100 N.J. 57 (1985). Affirmative acts prohibited by the CFA include deception, fraud, false pretenses, false promise, misrepresentation, and unconscionable commercial practices. N.J.S.A. 56:8-2. The CFA is "one of the strongest consumer protection statutes in the nation." Cox v. Sears Roebuck, 138 N.J. 2, 15 (1994). "Courts have repeatedly stressed that similar to other remedial legislation, the [CFA] should be construed liberally in favor of consumers." Ibid. Moreover, "[t]he history of the [CFA] is one of constant expansion of consumer protection." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 604 (1997). Accordingly, we "deem it our responsibility to construe the [CFA] broadly, not in a crabbed fashion." New Mea Constr. Corp. v. Harper, 203 N.J. Super. 486, 502 (App. Div. 1985).

Because of the unforeseeable varieties of abuses that are continually devised to take advantage of consumers, trial courts are instructed to interpret the CFA broadly in determining the range of endeavors that fall under its protective umbrella:

Given that "[t]he fertility of [human] invention in devising new schemes of fraud is so great . . . ," the CFA could not possibly enumerate all, or even most, of the areas and practices that it covers without severely retarding its broad remedial power to root out fraud in its myriad, nefarious manifestations.

[Lemelledo v. Beneficial Mgmt., 150 N.J. 255, 265 (1997) (quoting Kugler v. Romain, 58 N.J. 522, 543 n.4 (1971)).]

The CFA was enacted by the Legislature in 1960, L. 1960, c. 39, with the purpose of protecting the consumer "'against imposition and loss as a result of fraud and fraudulent practices by persons engaged in the sale of goods and services.'" Schibak v. Longette, 339 N.J. Super. 72, 77 (App. Div. 2001) (quoting Fenwick v. Kay Am. Jeep, 136 N.J. Super. 114, 117 (App. Div.), rev'd on other grounds, 72 N.J. 372 (1977)). The Legislature amended N.J.S.A. 56:8-2 in 1967 to apply not just to the acts or omissions of an individual in the "sale or advertisement" of merchandise or real estate, but also "with the subsequent performance of such person aforesaid." L. 1967, c. 301,