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Boyes v. Greenwich Boat Works

November 20, 1998


The opinion of the court was delivered by: Irenas, District Judge



Presently before the Court are four motions on behalf of the defendants: (1) defendants' choice of law motion that Pennsylvania and not New Jersey law should govern count six; (2) defendants' motion to dismiss plaintiffs' claim for punitive damages; (3) defendants' motion for partial summary judgment; and (4) defendants' motion to exclude expert testimony. At issue in this diversity of citizenship case, 28 U.S.C. § 1332, are plaintiffs' unmet expectations regarding the performance of a 1996 thirty two-foot Albemarle sport fishing vessel powered by two Caterpillar 300 horsepower (hp) 3116 model diesel engines.


Plaintiffs James Boyes ("Boyes") and Eleanor Clouser ("Clouser") attended the 1995 Philadelphia Boat Show which was held at the Philadelphia Civic Center from January 21 to 29, 1995. At the show, plaintiffs met Marvin Hitchner ("Hitchner"), president of defendant Greenwich Boat Works, Inc. ("Greenwich"). Hitchner, an authorized dealer of defendant Albemarle Boats ("Albemarle"), was displaying Albemarle boats at the boat show along with Albemarle principal and representative, Scott Harrell ("Harrell"). Plaintiffs allege that, upon expressing interest in purchasing an Albemarle boat, Hitchner gave them certain information concerning the speed, fuel consumption and range of the thirty two-foot Albemarle Fly-Bridge fishing boat. Boyes contends that he informed Hitchner of his need for a boat capable of obtaining a range and speed suitable for participating in sport fishing tournaments off the coast of New Jersey. According to Boyes, Hitchner told him that the thirty two-foot Albemarle Fly-Bridge fishing boat was available with Caterpillar 3116 engines, generating 300 hp, which would enable the boat to travel at 30 knots with a 300 nautical mile range. Boyes also contends that Hitchner informed him that the cruising speed of the engine was 2600 RPM's, that at this throttle the boat would travel at 28 knots with a 400 nautical mile range, and that at 20 to 22 knots the boat would have a 500 nautical mile range. Plaintiffs allege that Hitchner received this information from Albemarle, which in turn had received the information from Gary White ("White") of defendant Gregory Poole Equipment Co. ("Gregory Poole"). White allegedly took the information from Caterpillar specifications. Greenwich denies that Hitchner ever represented to Boyes that the vessel would have a specific speed and range at a specific rate of RPM's. Plaintiffs also claim that any information which Hitchner gave Boyes concerning the boat's specifications and performance was received from Albemarle, Harrell, and/or from trade publications.

Following the boat show, on March 18, 1995, Boyes met again with Hitchner at Greenwich's principal place of business in Greenwich, New Jersey. Boyes alleges that Hitchner repeated his earlier representations about the boat. Plaintiffs decided to buy the boat. They signed a purchase order with Greenwich for a 1995 32-foot Albemarle, powered by twin Caterpillar Model 3116 300 hp E-rated marine diesel engines, for a total price, including sales tax, of $175,636.00. The boat's engines, twin Caterpillar Model 3116, 300 hp E-rated marine diesel engines, Serial Nos. 4KG03984 and 4kKG03987, were manufactured by defendant Caterpillar, Inc. ("Caterpillar") and were sold and delivered to defendant Gregory Poole on or about March 27, 1995. These engines, in turn, were sold and shipped by Gregory Poole to Albemarle on or about May 15, 1995 and were installed in Hull 88, a 1996, 32-foot Albemarle Convertible Hull. Manufacture of the hull and installation of the engines were performed by Albemarle at its facility in North Carolina. The finished boat was shipped to Greenwich in New Jersey on June 23, 1995. The boat, with engines installed, was then delivered to plaintiffs in July 1995 in Delaware.

According to plaintiffs, since delivery of the boat in July 1995, the boat has burned significantly more fuel than Boyes was told it would prior to the sale. They also claim that it has not performed as represented in producing horsepower, reaching top speed, and reaching specified RPM's. During the winter of 1996, plaintiffs sent the boat back to Albemarle's facility in North Carolina for repair by Albemarle and/or Gregory Poole. These repairs were allegedly unsuccessful. Despite the attempt by Albemarle and/or Gregory Poole to repair the boat in North Carolina, the boat still fails to perform to plaintiffs' satisfaction. Defendants allege that plaintiffs overload the boat and this overloading causes it to perform at lower rates of speed and higher rates of fuel consumption. The plaintiffs ceased using the boat in December 1996. They have testified that they do not intend to use the boat again and are remaining in possession of it solely as a result of this litigation. Plaintiffs have at all times kept the boat in Delaware.

On April 25, 1997, plaintiffs filed the complaint in this matter, alleging that the Albemarle boat failed to meet the performance standards defendants led them to believe it would. Based on alleged misrepresentations and warranties made by the defendants prior to the sale of the boat, plaintiffs' complaint sets forth claims against the defendants for product liability, negligence, breach of warranties for a particular purpose, breach of warranty of merchantability, breach of contract, including express and implied warranties, misrepresentation and fraud.

This Court granted Plaintiffs motion to amend the complaint to allege sixteen new factual allegations of post-sale misrepresentations. The amended complaint makes new claims that the defendants induced plaintiffs to retain possession of the boat by misrepresenting, post-sale, their ability to make adjustments and corrections to the engines in order to make them perform as promised. Plaintiffs allege that, during the course of their efforts to have the boat repaired, defendants told plaintiffs that they would fix the boat to burn the amount of fuel set forth in Caterpillar's specifications. Plaintiffs also claim that Albemarle, Gregory Poole and Caterpillar knew, as the result of fuel tests, that the boat burned more fuel than the specifications indicated, yet continued to represent to plaintiffs and the general public that the boat would perform in accordance with the published specifications. The amended complaint also sets forth new theories of liability based on the New Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1 et seq. (West 1989), the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (1998), and the breach of warranty and any other relevant portions of the UCC, as codifed by N.J.S.A. § 12A:2-101 et seq. (West 1962).


In the modern commercial world, litigation often implicates transactions or events occurring in more than one jurisdiction. In this case we have a sale between a New Jersey seller and a Pennsylvania buyer of a boat which was constructed in North Carolina and docked after delivery in Delaware. Any court hearing such a case must determine what law applies to resolution of the various disputes. In a diversity action such as the present, a federal district court must apply the choice of law rules of the state in which it sits. See Day and Zimmerman v. Callower, 423 U.S. 3 (1975); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); McFarland v. Miller, 14 F.3d 912, 917 (3d Cir. 1994).

Where the parties fail to point out or establish any difference in the laws of the various jurisdictions involved in a particular case, it is proper for the court to apply the law of the forum. See Restatement (Second) Conflict of Laws § 136 cmt.h (1971); Publicker Industries, Inc. v. Roman Ceramics Corp., 652 F.2d 340, 343 n.6 (3d Cir. 1981); Schreiber v. Camm, 848 F. Supp. 1170, 1174 (D.N.J. 1994). With respect to issues of contract, products liability, the Uniform Commercial Code, common law fraud or breach of warranty the parties have not suggested that the law of New Jersey differs from the law of any of the other jurisdictions involved in this case. However, defendants question plaintiff's reliance on the New Jersey's Consumer Fraud Act, N.J.S.A. § 56:8-1 et seq.,(West 1989) arguing that the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. § 201-1 et seq. should be applied.

Subject to constitutional limitations, a court will generally apply the statutory law of the forum:

Provided that it is constitutional to do so, the court will apply a local statute in the manner intended by the legislature even when the local law of another state would be applicable under usual choice-of-law principles.

Restatement (Second) Conflict of Laws § 6 cmt. a (1971). See also N.J.S.A. § 12A:1-105(1) (West 1962) (Absent agreement of the parties "this Act applies to transactions bearing an appropriate relation to this state."); Oxford Consumer Discount Co. v. Stefanelli, 102 N.J. Super. 549,563-564, 246 A.2d 460,467 (App. Div. 1968), decision supplemented by, Oxford Consumer Discount Co. v. Stefanelli, 104 N.J.Super. 512, 250 A.2d 593 (App. Div. 1969) ("we do agree . . . that the statute, in light of its avowed objectives, particularly as illuminated by the legislative history, evinces an unmistakable intent that any secondary mortgage loan [on New Jersey property]. . . be subject to the act notwithstanding execution of the loan documents out of the state and in favor of a foreign corporation"). In Oxford, New Jersey applied its own Secondary Mortgage Loan Act notwithstanding a strong argument that ordinary conflict of laws principles would have dictated the application of Pennsylvania Law.

This court has little doubt that the New Jersey Legislature intended its Consumer Fraud statute to apply to sales made by New Jersey sellers even if the buyer is an out-of-state resident and some aspect of the transaction took place outside New Jersey. Courts have declared that the Consumer Fraud Act "should be construed liberally in favor of protecting consumers." Levin v. Lewis, 179 N.J. Super 193, 200, 431 A.2d 157, 161 (App. Div. 1981); State v. Hudson Furniture Company, 165 N.J. Super. 516, 520, 398 A.2d 900, 902 (App. Div. 1979) (noting the "perceived need to liberally construe the act in favor of protecting consumers"). Plainly, the "act is broadly designed to protect the public." Skeer v. EMK Motors, Inc., 187 N.J. Super. 465, 470, 455 A.2d 508, 512 (App. Div. 1982). "The available legislative history demonstrates that the Act was intended to be one of the strongest consumer protection laws in the nation." Huffmaster v. Robinson, 221 N.J. Super. 315, 319, 534 A.2d 435, 437 (Law Div. 1986) (citing New Mea Construction Corp. v. Harper, 203 N.J. Super. 486, 497 A.2d 534 (App. Div. 1985).

While there can be no doubt that the New Jersey legislature desired to protect its own residents, it is equally clear that this state has a powerful incentive to insure that local merchants deal fairly with citizens of other states and countries. Its magnificent seashore, to say nothing of casino gambling, bring millions of visitors annually to New Jersey making tourism a major industry. This industry would suffer if the state developed a reputation as a place were sellers ripped off the unsuspecting visitor.

As a general rule New Jersey applies a "governmental interest" test to choice of law issues. Amoroso v. Burdette Tomlin Memorial Hosp., 901 F. Supp. 900, 903 (D.N.J. 1995); Veazey v. Doremus, 103 N.J. 244, 510 A.2d 1187 (1986). This test parallels the "most significant relationship" test of the Restatement, 2d, of Conflict of Laws. See Veazey, 103 N.J. at 251, 510 A.2d at 1191. Under this test, the court must first "determine whether a conflict exists between the law of the interested states." Id. This determination must be made "on an issue-by-issue basis." Id. If the court finds that a conflict does exist, it must then determine "the state with the greatest interest in governing the particular issue." Id. To do this, the court must "identify the governmental policies underlying the law of each state and how those policies are affected by each state's contacts to the litigation and the parties." Id. It is "the qualitative, not the quantitative, nature of a state's contacts [that] ultimately determines whether its law should apply." Id.

If application of these principles suggested that the law of a state other than the forum should apply to some aspect of a litigation, notwithstanding the existence of a forum statute which was intended by the legislature to be applicable to the facts of the case, constitutional considerations of full faith and credit *fn1 might be implicated if the local statute were in conflict with that of the applicable foreign jurisdiction. Because both New Jersey and Pennsylvania have an interest in this litigation, we must ...

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