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Edelstein v. Toyota Motors Distributors

Decided: October 23, 1980.


On appeal from the Superior Court, Law Division, Monmouth County.

Matthews, Morgan and Morton I. Greenberg. The opinion of the court was delivered by Morton I. Greenberg, J.A.D.


[176 NJSuper Page 59] Plaintiff brought this action against Gateway Toyota, Inc. (hereinafter "Gateway") and Toyota Motors Distributors (hereinafter "Distributors"). He stated that he purchased a defective Toyota automobile from Gateway. Gateway, in turn, had received the automobile from Distributors. The alleged defects were not specified in the complaint but ultimately, at the proof hearing later discussed were claimed to include difficulty in shifting gears, a thumping noise and false readings from the electro-sensor warning panel. Plaintiff's complaint requested relief on theories of strict liability and breach of warranty. He sought recovery of the purchase price of $5,000.*fn1 Gateway answered and filed a cross-claim for indemnification against Distributors. The summons and complaint were served on Distributors in West Caldwell, New Jersey, on March 8, 1977 and were sent to Toyota Motor Sales, U.S.A., Inc. (hereinafter called "Sales"), a related corporation which was the importer of the vehicle, in California. They were then forwarded to an attorney in New Jersey for answering. Distributors, however, did not serve its answer within 20 days of the service of the summons and complaint upon it. R. 4:6-1(a). Thus, plaintiff filed a default against Distributors on April 12, 1977 and obtained a default judgment for $5,000 against it on April 18, 1977. Plaintiff and Gateway filed a stipulation of dismissal against Gateway. No consideration was paid to plaintiff for this stipulation. Plaintiff agreed to the dismissal because he conceived that the

judgment against Distributors gave him sufficient relief. Plaintiff has never sought to rejoin Gateway as a defendant.*fn2

After entry of the default judgment Distributors moved to have it vacated and simultaneously asked the court to dismiss the complaint against it. These motions were made returnable on May 13, 1977 and were heard on that date. The judgment was vacated but the motion to dismiss the complaint was denied. Distributors then filed its answer. On September 21, 1977 plaintiff obtained an order permitting him to join Sales as a defendant. The amended complaint against Sales asserted that since it was the importer of plaintiff's Toyota it was liable for damages equal to the purchase price on the theories previously asserted against Distributors.

During the discovery period plaintiff served interrogatories. The answers were signed by Yale L. Gieszl, a vice-president of Distributors and Sales in California. Since plaintiff thought that Gieszl's testimony would be significant he demanded by a letter of February 3, 1978 that Distributors and Sales produce him at the trial. R. 1:9-1. Defendants served a pretrial motion seeking an order setting aside the notice to produce. Defendants' attorney certified that Gieszl had no independent knowledge concerning the matter but had merely answered the interrogatories from corporate records. Plaintiff filed a certification dated March 8, 1978 in opposition to this motion. He stated: "The testimony of Yale W. Gieszl is essential to the proof of my case with respect to the defects in the automobile as manufactured and put in commerce by the Defendants." Defendants' motion was denied without prejudice and an appropriate order to that effect was entered April 3, 1978. This motion was renewed at the outset of the trial on May 24, 1979, but defendants were directed by the judge on that day to produce Gieszl on May 29, 1979. The judge warned defendants that if Gieszl was

not produced plaintiff could move to strike defendants' answer and obtain a default. Notwithstanding this admonition, defendants did not produce him. Instead, on May 29, 1979 counsel for defendants, after discussing settlement negotiations, told the judge:

And my client does not wish to produce Mr. Gieszl. They feel that if this case has any merit at all it should be resolved for at most the $750. They do not feel it is apparently in their interest to produce Mr. Gieszl at the trial and with all due respect, Your Honor, they are not going to comply with Your Honor's order.

Plaintiff then moved to strike their answers and have a default entered. This motion was granted. The case then proceeded to trial on damages. Defendants' counsel was permitted to participate at this trial, thus indicating that the default entered applied solely to the issue of liability.

At the outset of the hearing on damages there was a colloquy between plaintiff and the judge with respect to plaintiff's proposed relief. Plaintiff waived an asserted claim for mental anguish. The judge warned plaintiff that if he proceeded only on a theory of rescission that his proofs could be inadequate because the possibility existed that rescission was not an appropriate remedy. The judge asked plaintiff if he should not prove damages, but plaintiff replied:

Well, if Your Honor please, I have not repaired the vehicle and I was proceeding on the basis of rescission. I am entitled to rescission or not entitled to rescission. I had made no repairs. I offered-and this is part of my proof. I offered the Defendant the opportunity to make the repairs and I have their warranty which provides that repairs be made by their authorized agents.

It was thus clear that plaintiff sought only a rescission of the contract. Under the Uniform Commercial Code plaintiff's cause of action is characterized as revocation of acceptance. N.J.S.A. 12A:2-608. It should be noted, however, that this different characterization does not, under the facts of this case, affect the remedy sought. Plaintiff did not ask for, or prove, damages for repairs or for the diminution in value of the car. In accordance with plaintiff's request the judge, after hearing the evidence, ...

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