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SANSONE SETTLEMENT

One of the extensive provisions of the Sansone dealerships’ settlement in the State of New Jersey is that they must disclose the prior use of the automobile including rental. Over the years, I have litigated numerous cases, with non-Sansone dealerships, where it has been alleged that the prior use of the automobile in the case of a rental must be disclosed. The dealerships would take the position that this is a non-material fact and, as such, need not be disclosed. I have taken the position numerous times, and have been successful in doing so, that this is a material fact and must be disclosed.

Ultimately this is very fair and that significant prior use must be told to the plaintiffs or the purchaser of the automobile. If the dealership thinks it might make a difference in the purchaser’s decision-making process, then it must be disclosed. Apparently now, the State has taken the position that a prior rental use of a vehicle is deemed a material fact. Therefore, a dealership cannot say the prior use of an automobile in the case of a rental is a non-material fact.

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The state resolved a claim against Spectrum Home Furnishings Inc., Charles Serouya & Son Inc., also known as Gallery, CS&S Inc., Charles Serouya Inc., Spectrum Home Furnishings Inc., Charles Serouya & Son Inc, also known as Gallery. The state filed suit against these entities alleging violations of the New Jersey Consumer Fraud Act, the Refund Policy Disclosure Act, the regulations governing disclosure of refund policy in retail establishments, accepted mail order practice and regulations, regulations governing delivering of household furniture and regulations governing general advertising. The entities who were subject to this lawsuit filed by the state entered into a consent order to resolve the matter. In essence, the defendants agreed not to violate any laws and to pay various fines.

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In this case an arbitration was filed against the dealer because it was alleged that they refused to return the deposit after the plaintiff returned the car. No return of deposit.

CONSUMER FRAUD

The petitioner was forced to enter the transaction when she was told that her first transaction was not approved for financing. They told her that she would not receive the deposit of $2,000 returned but they told her that she would receive credit towards the next transaction. She did receive that credit on the next transaction, although she did not purchase the vehicle or have any dealings with the defendant, but had no choice. The failure to return the money after the cancellation of the contact by the respondent constitutes unconscionable conduct, if not outright conversion. The representation that she would not receive her money when the transaction was cancelled by the dealer constitutes an affirmative representation. Then, when petitioner defaults on the payments, the car is repossessed and no post-repossession notice is provided and there is no post-sale accounting. It is unknown what occurred to the car, whether the defendants used it for personal purposes or profit. Without proof we must make such assumptions.

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COUNT V Unconscionability of Arbitration Clause 1. The plaintiff reasserts the previous facts as if set forth at length herein.

2. All times hereinafter, the plaintiff signed at least two separate agreements with regard to the purchase of the vehicle. The first agreement, which was signed by the plaintiff, was a buyer’s order containing the arbitration clause. The second and final agreement signed by the plaintiff was considered a retail installment sales contract and contained the interest rate of the subject transaction. The retail installment sales contract specifically says that this is the entire agreement between us. There is no such arbitration clause in the retail installment sales contract and the buyer’s order was superseded by the retail installment sales contract, including all of the relevant terms. Thus, the terms and conditions contained in the buyer’s order constitutes parole evidence and is not admissible as to the terms of the transaction.

3. In addition, the application of the American Arbitration Association rules and procedures would void the plaintiff from effectively litigating her claim. Specifically, the plaintiff acquired a vehicle for in excess of $46,000. New Jersey Law permits punitive damages equal to five times compensatory damages or $350,000, whichever is greater. Based on the defendants’ conduct and the purchase price of the vehicle, the plaintiff would be seeking the maximum amount allowable under New Jersey Law, which should be up to $350,000. In this specific case, the plaintiff makes very strong allegations of fraud and consumer fraud against the selling dealership as well as the manufacturer, permitting the plaintiff to recover three times the purchase price of the vehicle, which would be in excess of $135,000. The plaintiff would also be entitled to costs of the suit plus punitive damages. The costs associated with filing an arbitration which seeks in excess of $200,000 to $300,000 in damages would be in excess of $15,000 to $20,000, based on the American Arbitration Association commercial rules.

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Whats is a warranty and how is one breached?

A warranty can be created in many different ways, which is specifically set forth by the Uniform Commercial Code. A statement as to the nature or the quality of the goods, a photo of the goods or a sample of the goods can create a warranty. A written warranty is also a simple way to create a warranty. The Code is very clear in that the creation of warranties is to be liberally construed in the favor of the consumer. There is an entire section that deals with conflicting warranties also and that is also to be liberally construed.

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