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The law in the State of New Jersey is that if a repossession agent repossesses a vehicle in an improper fashion which has been previously addressed, it is the non-delegable duty of the finance company, that might have initially authorized a repossession, to make sure that the repossession happens without a breach of the peace.

New Jersey Courts have determined that it is a public policy that the repossession agents not breach the peace when repossessing a vehicle. The Courts have also determined that it is ultimately the obligation of the finance company to make sure that this does not happen in an improper manner. This is called a non-delegable duty. This means that it is ultimately the responsibility and the obligation of the finance company who authorized a repossession to make sure the repossession is done in a proper manner consistent with the New Jersey law. It does not matter whether it was with violence as an impersonation of a law enforcement officer or in some other improper and illegal manner. This is the obligation of the finance company with regard to ultimate liability.

What this means as a practical matter for someone who owns or operates a vehicle is that if there is an improper act with regard to repossession of an automobile, regardless of who this person is, where they are or why they did what they did, it is ultimately the liability of the finance company in this regard. This means that you can sue the finance company if a repossession agent engaged in illegal or wrongful repossession or breach of the peace or did some other inappropriate or wrongful action. The public policy is that the Courts insist they will not permit a finance company to put their head in the sand while any type of improper or illegal actions are occurring with regard to repossession. This is why it is a non-delegable duty; this is why it is the responsibility of the finance company to make sure it is done properly and this is why the finance company has insurance and/or the repossession agent is required to carry insurance by the finance company.

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Usually the agreement will permit the finance company or bank to take the vehicle by self-help repossession without any further definition. The Uniform Commercial Code also permits a secured party to take a piece of collateral or the vehicle by self-help repossession. Again, self-help repossession is not specifically defined; however, it must be deemed obvious in light of the relationship between the parties.

Self-help repossession is where the finance company ‘helps themselves’ to take the vehicle back. One common question is whether or not there needs to be a notice to the owner of the vehicle prior to the ‘self-help repossession.’ There is no requirement under the Uniform Commercial Code, and there is usually no requirement under the written agreement between the parties. However, if the written agreement between the parties indicates there must be a type of pre-repossession notice, they must conduct same. If there are various calls between the parties with regard to late payments, this is not deemed and cannot be deemed a requirement, but rather an attempt by the finance company to have the lessee or driver of the vehicle make payments.

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The laws in the State of New Jersey on repossession are based on two things: there is both common law and statutory law addressing the relationship between the parties. Statutory law for repossession of the automobile or collateral is based on the Uniform Commercial Code. The Uniform Commercial Code specifically states when a vehicle or a piece of collateral may be repossessed.

The primary event to which the code references is a ‘default.’ Obviously, a default would refer to the written agreement between the parties to determine when there is in fact a default. This means that if the payments are due on the first of the month and the payments are not made, this would be ordinarily deemed a default of the agreement between the parties.
The legal significance of the default is addressed by the Uniform Commercial Code and permits the finance company or the party not in default to take appropriate action. The actions permitted to be taken by the finance company are also contained in the agreement between the parties. Usually, the agreement will make reference to self-help repossession or replevin. These terms and conditions are also addressed by the Uniform Commercial Code.

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Did a dealership do the following:

* Sell you a damaged car * Sell you a defective car * Lie to you about financing * Lie to you about a warranty * Lie to you about the history of a car * Lie to you about the mechanical condition of the car * Lie to you about the repair history * Lie to you about the price * Lie to you about the advertised price
Call The Law Office of Jonathan Rudnick for help

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If you think that your car has been in an accident you might be able to access the prior damage by asking for a C.L.U.E. report. The instructions are simple and you can have access to this massive data base that CAR FAX does not have access to at all. This information is kept by insurance companies and IS NOT REPORTED to CAR FAX.

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In New Jersey the legislature has partially codified the aforementioned principles in N.J.S.A. 56:8-68, which states that it is an unlawful practice for a used car dealer to (a) misrepresent the mechanical condition of a used vehicle; (b) to fail to disclose, prior to sale, any material defect in the mechanical condition of the used motor vehicle which is known to the seller; (c) to represent a used motor vehicle, or any component thereof, is free from material defects in its mechanical condition at the time of sale, unless the dealer has a reasonable basis for the representation at the time sale is made. It is arguable that these “disclosure” requirements would be required under any “common law” analysis, which predated this Statute. Nonetheless, the creation reinforces the purposes advanced by the Consumer Fraud Act, trebling damages and providing for the award of attorney fees.

The Administrative Code also contains extensive regulation of dealership conduct. The failure to disclose that the motor vehicle had been previously damaged and that substantial repair or body work has been performed on it when such prior repair or body work is known or should have been known by the advertiser; substantial repair or body work shall mean repair or body work having a retail value of $1,000 or more. N.J.A.C. 13:45A-26A.7. Advertisement is defined by the Consumer Fraud Act as the attempt directly or indirectly by publication, dissemination, solicitation, endorsement or circulation or in any other way to induce directly or indirectly any person to enter or not enter into any obligation or acquire any title or interest in any merchandise or to increase the consumption thereof or to make any loan. N.J.S.A. 56:8-1(a). Again, this definition of “Unlawful Practice” would arguably exist under the Common Law principles set forth above.

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DEALER HAS A DUTY TO INSPECT THE PLAINTIFF’S CAR AND MAKE RELEVANT DISCLOSURES

The general rule in American jurisprudence is that used car dealers are required to exercise reasonable care in making an inspection for the purposes of discovering defects which would make the vehicle a menace to the highway or dangerous to use. See 7A Am Jur2d. Automobiles and HighwayTraffic § 730. This general proposition has been adopted by the New Jersey Supreme Court and implemented by the New Jersey Legislature. In Realmutto v. Straubb Motors, 65 N.J. 336, 444 (1974), the Supreme Court held: a used car dealer has the duty of reasonable inspection, testing and warning of any defects, as well as that of reasonable care with respect to any repairs or replacements he may make to the vehicle.

The reasons seem obvious but are worth repeating. The used car dealer is in a better position – by reason of his opportunity – than his average customer, to discover what defects might exist in any particular car to make it a menace to the public. It is not too harsh a rule to require these dealers to use reasonable care in inspecting used cars before resale to discover defects, which the customer often cannot discover until too late. Gaidry Motors v. Brannon, 268 S.W.2d. 627,628 (Ken. 1953). A seller’s duty to disclose information concerning the condition of a product arises from its superior knowledge of the product. The courts considering the issues have recognized that used cars are more likely to have mechanical defects than new ones and that used car dealers are in a better position to discover these defects than their average customer. See Patton v. McHone, 822 S.W. 2d. 608, 613-614 (Tenn.1991). A car salesman cannot close his eyes to the truth. Nieto v. Pence, 578 F.2d. 640, 642 (1978).

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Cases and examples:

In Grabinski v. Blue Springs Ford, 136 F.Supp. 565, 568 (8thCir. 1998), the Court of appeals upheld a $210,000 punitive damage award where the jury awarded $7,835 in compensatory damages. In Grabinski, the plaintiff action was based on the following misstatements of material fact: 1) The car was very nice; 2) the car was driving fine; 3) the car only needed a clean up and standard service; 4) the car was in excellent condition, had had one owner and had never been wrecked. The court determined that the jury had a reasonable basis to conclude that the dealer, defendant, should have been aware of the condition of the vehicle, which had been seriously damaged by a prior owner. Id at 569.

In Chezik Homerun v. NKC Motors, 153 F.3d. 1014 (8thCir. 1998), the Court of Appeals upheld a jury verdict for $6,900 in compensatory damages and $35,000 in punitive damages. The jury had determined that the defendant had violated the applicable Consumer Fraud Statute by misrepresenting 1) the car was a one-owner car; 2) the car had been traded in because the prior owner wanted an upgrade; 3) the car had nothing wrong except a pop can holder. The jury also found the defendant had violated the Act by concealing (representing by silence) that the car had sustained prior wreck damage.

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The rights provided under the New Jersey Consumer Fraud Act are in addition to any other statutory or common law rights. N.J.S.A. 56:8-2.3 provides as follows:

“The rights, remedies and prohibition accorded by the provisions of this Act are hereby declared to be in addition to and cumulative above any other rights, remedies 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, redress or prohibition.”

The clear intent of the New Jersey Consumer Fraud Act was to provide consumers with additional and cumulative remedies and in no way curtail their remedial opportunities for the redress of fraud and other unconscionable practices afforded by any other statute or common law. Cybul v. Atrium Palace Syndicate, 272 N.J. Super. 330, 335 (App. Div. 1994). In Cybul, the Appellate Division held that the plaintiff could maintain a cause of action under an administrative scheme wherein there was no direct provision for a cause of action to the plaintiff. In Lemelledo v. Beneficial Management, 150 N.J. 255 (1997), a watershed case, the New Jersey Supreme Court held that the plaintiff could maintain a private cause of action in addition to a statutory scheme which provided the plaintiff only a return of premiums paid under the policy. The New Jersey Supreme Court held that: “The CFA simply complements those statutes, allowing for regulation by the Division of Consumer Affairs and a private cause of action to recover damages. The damages cause of action in no way inhibits enforcement of other statutes, because a Court can assess damages in addition to any other penalty to which a defendant is subject.”

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