Member of:
New Jersey State Bar Association Badge
LawLine Online Faculty

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.

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.

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).

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.

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.”

THERE IS NO PRIVITY REQUIREMENT TO MAINTAIN A CAUSE OF ACTION UNDER THE NEW JERSEY CONSUMER FRAUD ACT.

You have a right of action against those up the stream of commerce, e.g., an indirect seller.

There is no privity requirement to maintain a cause of action under the New Jersey Consumer Fraud Act. In Alloway v. General Marine Ind., 149 N.J. 620 (1997), the Supreme Court held that the New Jersey Consumer Fraud Act does not require privity to maintain a cause of action. In Alloway, the plaintiff purchased a defective boat, which was built by the (manufacturer) defendant. The plaintiff instituted suit against the manufacturer and other defendants for tort (negligence) and warranty claims. The Court dismissed the tort claims and permitted the plaintiff to proceed on the warranty claims, holding that privity was required for tort claims, but not for warranty type claims. The underpinnings of the decision were that the plaintiff had statutory avenues of remedy including, but not limited to, the Uniform Commercial Code (UCC) and the New Jersey Consumer Fraud Act to address economic injuries to property. Id. at 639 – 640. The Court specifically left unanswered whether or not tort or contract law applies to a product that poses a risk of causing personal injuries or property damage, but has caused only economic loss to the product itself.

Individuals are specifically authorized to act as private attorneys general. The New Jersey Consumer Fraud Act’s provisions authorizing consumers to bring their own private actions is integral to fulfilling the legislative purposes, and those purposes are advanced as well by Court’s affording the Attorney General the broadest kind of power to act in the interest of the consumer public. The empowerment of citizens to act as private attorneys general reflects an apparent Legislative intent to enlarge fraud-fighting authority and to delegate the authority among the various governmental and non-governmental agencies, each exercising different forms of remedial power. That Legislative intent is readily inferable from the ongoing need for consumer protection and the salutary benefits to be achieved by expanding enforcement, authority and enhancing remedial address. When a remedial power is concentrated in one agency, under-enforcement may result because of lack of resources, concentration of agency responsibilities, lack of expertise, agency captured by regulated parties, or a particular ideological bent by an agency decision-maker. See, E.G. Arcadia v. Ohio Power Co., 498 U.S. 73, 87-88, 111 S.Ct. 415, 423-24, (1990); (Stevens J. concurring).

Under-enforcement by an administrative agency may be even more likely where, as in this case, the regulated party is a relatively powerful business entity, while the class protected by the regulation tends to consist of low income persons with scant resources, lack of knowledge about their rights, inexperience in a regulated area, and an insufficient understanding of the prohibited practice. The primary risk of under- enforcement – the victimization of the protected class – can be greatly reduced by allocating enforcement responsibilities among the various agencies, among the members of the consuming public in the forms of judicial and administrative proceedings, and in private causes of action. Lemelledo v. Beneficial Management Co., 150 N.J. 255, 269-270.

NEW JERSEY LAW PERMITS DISCOVERY TO DEMONSTRATE THE DEFENDANTS’ INTENT AND OTHER OF THE PLAINTIFF’S DEMAND REASONABLY CALCULATED TO LEAD TO ADMISSIBLE EVIDENCE

New Jersey Court Rules provide that parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of books, documents or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not grounds for objection that the information sought will be admissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. See Rule 4:10-2. The public policies of expeditious handling of cases, avoiding stale evidence, and providing uniformity, predictability and security in the conduct of litigation is the policy underlining the New Jersey Discovery Rules. See Abtrax Pharmaceuticals v. Elkinssinn, Inc., 139 N.J. 499, 512 (1995). The effect of the discovery rules cite that, in effect, the discovery rules were designed to eliminate, as far as possible, concealment and surprise in the trial of lawsuits to the end that judgments rest upon the real merits of the causes and not upon the skill and maneuvering of counsel. See Payton v. NJ Turnipike Authority, 148 N.J. 524 (1997).

Discovery, however, is intended to lead to facts supporting or opposing an asserted legal theory; it is not designed to lead to formulation of a legal theory. Energy Rec. v. Dept. of Environmental Protection, 320 N.J. Super 59, 64 (App. Div. 1999). The relevant standard of the Court Rules does not relate only to matters which would necessarily be admissible in evidence, but includes information reasonably calculated to lead to admissible evidence respecting the cause of action or a defense. See Comments to New Jersey Court Rules 2000, R. 4:10-2, Comment 2, Page 1203.

New Jersey Lemon Law Unit

If you are interested in filing a lemon law claim, whether with or without an attorney, the site that you might want to review is the Department of Consumer Affairs. This website gives all the appropriate instructions on how to file a lemon law claim and all the requirements. The forms are also listed on this page and make it easier for a person to represent themselves in the process of filing a lemon law claim.

All of the forms might be simple. The law and the legal principles underlying a lemon law claim are in fact quite contrary.

Contact Information