New Jersey Lemon Law Lawyer Blog

Honda Accord Sedan with the V6 engine: Problems? Lemon?

February 14, 2008 | Jonathan Rudnick

Are you experiencing any problems with the operation of this car? If you are, you are not the only Honda owner complaining. The engine works on a variable management system that shifts cylinder use based on need, varying from three to six cylinders. There appears to be some issue with the operability of these engines with excessive noise and vibration.

The New Jersey Lemon Law would provide a remedy with these vehicles owners under many circumstances and permit a refund of monies paid to acquire these vehicles. If you are experiencing these problems make sure to document the complaints in writing. Do not accept the standard “can not duplicate” mantra from the dealership service representatives. Just remember that the dealership has no real power to take you out of the car without the manufacturer’s participation. You need to involve the manufacturer zone representatives at the earliest possible moment.

Do You Have The Right To Cancel A Car Purchase?

February 14, 2008 | Jonathan Rudnick

Most people think that the consumer has the right to cancel a car purchase agreement within three days from signing the agreement. This in not true. You cannot cancel a contract, but there are a few exceptions.

The dealer permits you to cancel the contract within a certain period of time. This is true for some of the manufacturer-certified used car programs or even the internal dealer policy.

The car is delivered on a condition agreement before financing is approved. You have the right to get out of the deal.

Used-car salesman charged with fraud!

February 14, 2008 | Jonathan Rudnick

It’s never-ending. How many of these stories do we see on a daily basis on the internet and read in the newspapers? Charged with fraud: his name is Vahid Sedaghat, 52, and the criminal complaint was filed in Ramsey Country District Court. Please remember: innocent until proven guilty.

Do Automobile Dealers Know when Cars Have Been in an Accident? Part II

February 13, 2008 | Jonathan Rudnick

TECHNOLOGY

Reasonably priced technology assures that dealers are aware of any damage to a car that they sell. An Elcometer. This device measures the thickness of the paint on the car. There are manufacturer standards for paint thickness. There are standards for consistency on a car. This device can absolutely warn a dealer if a car was repainted. This raises a red flag that the dealer must take a closer look at the car. They will then see other evidence that the car was wrecked, such as frame repair, over spray or bondo on the car. This is all obvious to anyone with any automotive experience, especially a dealer selling cars for a living. There are also frame machines that can measure even slight imbalances in the frame. These are a reasonably-priced option for the dealers selling cars to the public. Don’t you think they should take the steps necessary to assure the cars that they both buy and sell are safe for the public’s use? Does it seem to be asking very much? Not really.

Do Automobile Dealers Know when Cars Have Been in an Accident? Part I

February 12, 2008 | Jonathan Rudnick

The answer is simple: YES, YES, YES.

AUTOMOTIVE INDUSRTY STANDARDS

Dealers are required to inspect the cars before they sell them to the public. Industry standards mandate this result. They are in the best position and have the expertise to make these safety inspections. This aside, common sense mandates this result. Why would a dealer want to open himself to liability for selling a dangerous car when they had the chance to assure the car was safe? At a minimum they do not want a pissed-off customer with many mechanical complaints. Bad for business. Might cost the dealer money in repairs. Might get sued.

Also, the dealer has a process for acquiring cars from auctions, on trades and by wholesale to assure that the cars are not damaged. Most of the auctions have special designations for damaged cars. Green light means no problem while cars sold under the yellow and red light have problems, mechanical or otherwise. Manheim Auto Auction is the main source of cars for these dealerships and they have a detailed system of disclosure. Manheim actually offers an inspection service for those buying and selling cars at the auction to assure an open and honest marketplace.
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FLORIDA AUTO DEALER FOUND GUILTY OF FRAUD

February 12, 2008 | Jonathan Rudnick

According to the ledger.com John Giovanetti, former owner of Big Oaks Buick Pontiac GMC, Inc., located at Bartow, Florida, was found guilty by a federal jury of wire fraud and bank fraud. According to this story, Mr. Giovanetti was using advances from his credit line to run the dealership rather than acquire vehicles for sale. It was asserted that there were fraudulent documents which were submitted to the finance company, SunTrust, listing vehicles that had already been sold by Big Oaks. The indictments specifically read “that the money obtained from the bank was used to finance their daily operations and support of the owner’s lifestyle.” This just demonstrates that not only do the customers need to be careful but the bank’s lenders as well. Be careful, be very careful.
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Consumer Fraud and Selling Damaged Cars: Dealer Liability

February 8, 2008 | Jonathan Rudnick

Millions of new and used cars are sold every year in this country. It is well-known within the industry that many of the used cars are damaged, ranging form minor body damage to serious frame damage.

Many dealers sell these cars and make a handsome profit. The first issue is: what is the dealer’s liability if they sell these cars?

There are many areas of law that address this liability: Consumer Fraud, Fraud, Breach of Warranty, Lemon Law (New and Used)

FRAUD
The basic premise of fraud is that if the dealer knows about the damage and they think that disclosing the information would make a difference in the consumer’s purchasing decision they must make the disclosure, whether or not they are asked by the purchaser. There is also liability for reckless disregard, meaning if they intentionally disregard the risk and stick their heads in the sand to avoid learning that the car was damaged, there is liability.

CONSUMER FRAUD
The analysis is more complex but, for the sake of brevity, if the dealer knew or should have known and failed to disclose this information there is liability under the Consumer Fraud Act. Intent must be proven under this situation.
The dealer can also be sued if the they misrepresented that the car was not in an accident when it actually was, even if they did not know. This is called an affirmative misrepresentation of fact. The dealer as a seller of merchandise is obligated to assure that their representations pertaining to their goods must be accurate.
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Deceptive Conduct is Actionable

February 5, 2008 | Jonathan Rudnick

The capacity to mislead is the prime ingredient in all types of consumer fraud. See Cox v. Sears Roebuck & Co., 138 N.J. 2,17 (1995).

An excellent example of deceptive, but truthful conduct, is contained in Miller v. American Family Publishing, 284 N.J. Super 67, 76 (App. Div. 1995), where the Court held that the plaintiffs establish a prima facie case and the defendant’s Motion for Summary Judgment should be denied. In Miller, the plaintiffs contended that the defendant’s advertising materials were deceptive and violated the New Jersey Consumer Fraud Act in three respects. First, plaintiff said that the defendants deliberately planted the impression that the chances of winning in its sweepstakes were enhanced by ordering a magazine subscription. Second, plaintiffs claimed that those who responded to defendant’s earlier mailings were, thereafter, urged to submit further responses from misrepresentations that they had survived a “winnowing down” process which had placed them in a select group of finalists and had increased their chances of winning. Thirdly, plaintiffs pointed to defendant’s “alert” to sweepstakes participants who had not ordered the magazines, implying that a continued failure to subscribe would lead to their being dropped from the contest. The Court held as follows:
” . . . here the entire tenor of the defendant’s promotional literature has the capacity to mislead. It misleads by strongly implying that purchase of a magazine subscription will enhance one’s chances of winning the sweepstakes. It misleads by saying (not just implying) that the contestant to whom the mailing is addressed has survived some earlier thinning-out process and now has an enhanced likelihood of success in the sweepstakes. And, it misleads by indicating that if the reader does not buy a subscription, he or she will be dropped from any opportunity to win the sweepstakes.” Id. at 83.

The Court held specifically that neither the defendant’s disclaimers, nor the literal truth of the solicitations, constituted a defense to any of the plaintiffs’ claims. Id. at 84.
Miller was pre-dated by the case of Barry v. Arrow Pontiac, 193 N.J. Super 613 (1984), (App. Div. 1984), wherein the Appellate Division held that the automobile dealership advertising “dealer invoice” prices was inherently deceptive. The Court held as follows:
“When a dealer advertises that he is selling a car for what it costs, the reader can easily be misled into believing that if he purchased the car, he would be getting a bargain, not realizing that the advertiser’s idea of the cost may include a portion of overhead and payment to manufacturers, which would be later refunded.”

As can be seen by the applicable case law, the New Jersey Courts have a long history and strong tradition of prohibiting deceptive conduct.
In respect of what constitutes an “unconscionable commercial practice, this Court explained in Kugler v. Romain that unconscionability is “an amorphous concept obviously designed to establish a broad business ethic.” The standard of conduct that the term “unconscionable” implies is lack of “good faith, honesty in fact and observance of fair dealing.” Id. at 544, 279 A.2d 640.106. See Herner v. House of America,349 N.J.Super 89 (App.Div 2002)

The model civil jury charge defines the following:

“Deception” is conduct misleading to an average consumer. It does not matter that at a later time it could have been explained to a more knowledgeable and inquisitive consumer, nor need the conduct or advertisement actually have misled the plaintiffs. The fact that the defendants may have acted in good faith is unimportant. It is the capacity to mislead that is important.

“Unconscionable commercial practice” is an activity in the public marketplace which is basically unfair or unjust and/or which materially departs from standards of good faith, honesty in fact and fair dealing. To find a commercial practice to be unconscionable, there should be factual dishonesty and a lack of fair dealing.

“Fraud” is a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that the other person will be cheated
See the model jury instruction for consumer fraud section 4.23 Continue reading ›

The New Jersey Consumer Fraud Act Must be Liberally Construed to Effectuate its Remedial Purpose

February 3, 2008 | Jonathan Rudnick

The New Jersey Consumer Fraud Act should be liberally construed to effectuate its remedial purpose. The New Jersey Consumer Fraud Act was passed in 1960 to permit the Attorney General to combat the increasingly widespread practice of defrauding the consumer. Cox v. Sears Roebuck & Co., 138 N.J. 2, 14 (1994) (quoting Senate Committee, Statement to the Senate Bill No. 199 [1960].) The New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2, states:
“Any act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false promise, misrepresentation, or the knowing concealment, suppression or omission, of material fact with intent that others rely upon such concealment, suppression, or omission in conjunction with the sale . . . or with the subsequent performance of such person as aforesaid, whether or not any person has, in fact, been misled, deceived or damaged thereby, is declared to be an unlawful practice.”

The Consumer Fraud Act was initially designed to combat sharp practices and dealings that victimize consumers by luring them into purchases through fraudulent or deceptive means. Id. at 16. See also Lemelledo v. Beneficial Management, 289 N.J. Super. 489, 495 (App. Div. 1995). In 1971, it was specifically amended to include a private cause of action with treble damages, giving New Jersey one of the strongest consumer protection laws in the nation. Cox at 15, Lemelledo at 495. Quoting Governor’s Press Release for Assembly Bill No. 2402, at 1 (April 19, 1971): “The Consumer Fraud Act is no longer aimed solely at shifty, fast-talking and deceptive merchants, but reaches non-soliciting artisans as well.” Thus, the Act is designed to protect the public, even when a merchant acts in good faith. Cox at 16.

Both the New Jersey Supreme Court and the Legislature have declared that the New Jersey Consumer Fraud Act is a remedial statute and, as such, should be construed liberally in favor of consumers. Cox at 16. The Legislative history supports this conclusion, evidenced by two significant Amendments to the Act. In 1962, the Act was amended to include a cause of action for “deceptive practices”. Also, in 1975, the Legislature amended the Act to include unlawful practices in the sale and advertisement of real estate. An analysis of relevant New Jersey law supports the proposition that the Consumer Fraud Act should be liberally in an expansive fashion to protect the consumer for potentially deceptive conduct.
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New Jersey Consumer Fraud Act

February 3, 2008 | Jonathan Rudnick

The New Jersey Consumer Fraud Act is one of the strongest Consumer statutes in the country. It provides for mandatory triple damages and attorney fees if you are successful. The posts in this category are primarily for lawyers or those writing briefs on the Act. I will include both basic and more advanced points of law. Good luck.

The Law Office of Jonathan Rudnick is a law firm located in Red Bank/Middletown New Jersey and has extensive experience in litigating against car dealerships and other defendants using the Consumer Fraud Act.