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Wanetick v. Gateway Mitsubishi

May 10, 2000

SAUL WANETICK, PLAINTIFF-APPELLANT,
V.
GATEWAY MITSUBISHI, OCT PARTNERSHIP T/A GATEWAY MITSUBISHI, GLENN SWENSON AND LARRY EVANS, DEFENDANTS-RESPONDENTS,
AND
EMCO'S NEW GATEWAY TOYOTA AND JOHN DOE INDIVIDUALS AND CORPORATIONS, DEFENDANTS



The opinion of the court was delivered by: Verniero, J.

Argued January 3, 2000

On certification to the Superior Court, Appellate Division, whose opinion is reported at 318 N.J. Super. 156 (1999).

In this consumer fraud action, the jury awarded plaintiff compensatory damages, which the trial court thereafter trebled pursuant to N.J.S.A. 56:8-1 to -91 (Consumer Fraud Act or Act). The court also awarded counsel fees. The question to be decided on appeal is whether the trial court erred by not giving the jury an "ultimate outcome charge." That charge would have informed jurors that under the Act the court was required to treble damages and award counsel fees in the event they returned a verdict in plaintiff's favor.

Within the context of a consumer fraud action, the question is one of first impression. The Appellate Division concluded that the trial court committed error by not giving the charge and by incorrectly instructing jurors on the issue of punitive damages. The panel remanded the matter for a new trial. Wanetick v. OCT Partnership, 318 N.J. Super. 156 (App. Div. 1999). We agree that the trial court erred but conclude that the error was harmless. Thus, we affirm in part, reverse in part, and reinstate the judgment in favor of plaintiff.

I.

The pertinent facts and procedural history may be summarized briefly. According to plaintiff, he and his wife went to defendant's dealership on August 11, 1994 in response to a newspaper advertisement concerning the 1994 Mitsubishi Galant ES. A salesperson showed plaintiff the advertised model and allowed plaintiff's wife to test drive it. The parties then discussed the vehicle's price. According to plaintiff, the salesperson said he could go as low as $15,000 but plaintiff did not agree to the transaction. The Waneticks began to leave the dealership when, according to plaintiff, the salesperson "went after them" and told them he could "give [them] a good deal if [they] pay it out," an arrangement that purportedly would allow the customer to pay a certain amount of the purchase price each month until he paid off the outstanding debt. The salesperson allegedly indicated to plaintiff that if he would "[go] that way, it would only be $13,000."

After approximately two and one-half hours at the dealership, plaintiff executed several documents. He was seventy-three years old at the time of the transaction. Plaintiff claimed that one of the documents he signed was folded over so that only the signature line was visible. He testified that it was sometime later, after he took delivery of the car, that he realized the document he had signed was a lease, not a contract for sale. Plaintiff testified that, after protesting by telephone to the salesperson, he was told that he could keep the lease or sign a new contract to purchase the vehicle for $23,000. Plaintiff further testified that he did not want to execute a new contract but he "just signed it" because he was so "disgusted" by what had transpired and he did not want to be saddled with a lease. He executed the new contract on August 19th, eight days after the original transaction. The total purchase price under the new agreement was $23,164. Within one week, plaintiff paid off the entire amount due because, as he stated, he wanted to save interest and felt he was "paying so much money for this car."

Defendants recounted a different version of the transaction. The salesperson clearly recalled discussing a lease with plaintiff and stated that he "told [him] how it would be a low monthly payment for three years . . . and everything that needs to be explained about leasing." The salesperson further testified that the day after plaintiff took delivery of the vehicle, plaintiff "called and said he didn't want to lease the car no more." The salesperson then communicated that call to his manager who purportedly said that plaintiff could "switch from a lease to a finance, no problem, [tell him to] come back."

Plaintiff filed a complaint against defendants on December 22, 1994, alleging common-law fraud, breach of contract, negligence, and violations of the Consumer Fraud Act, the Uniform Commercial Code, N.J.S.A. 12A:2-101 to -725, and the Magnuson-Moss Warranty Act, 15 U.S.C.A. §§ 2301 to 2312. Plaintiff thereafter filed an amended complaint adding claims for intentional and negligent infliction of emotional distress.

Defendants filed an answer to both complaints, essentially denying all allegations. The trial commenced on September 22, 1997, and lasted one week. After plaintiff submitted his case in chief, the trial court dismissed all claims except those relating to the Consumer Fraud Act, breach of contract, and common-law fraud. At the charge conference on the last day of trial, the trial court had to decide whether to instruct the jury on the ultimate outcome of any verdict. The court recognized that there was a split of authority concerning that question and decided not to give the charge, believing that it "might be unduly prejudicial and that [it] might have the effect of causing the jury to discount any findings they might make as to that." The trial court did, however, charge the jury on the issue of punitive damages. The court instructed that "[p]unitive damages are awarded in connection with the plaintiff's fraud claim only. The law does not provide for punitive damages on the breach of contract or consumer fraud action."

The jury found defendants liable for breach of contract and for violations of the Act, but found no liability under common-law fraud. The jury awarded compensatory damages in the amount of $7,300. The court thereafter trebled that amount as required by the Act and also awarded attorneys fees and costs totaling $23,638.59. Thus, plaintiff's final award amounted to $45,538.59.

Defendants appealed. In addition to the ultimate-outcome question, the Appellate Division addressed two other issues, namely, whether there was sufficient evidence for the jury to decide the common-law fraud claim, and whether the trial court committed reversible error in admitting certain evidence. The court found for plaintiff on both issues. Wanetick, supra, 318 N.J. Super. at 159. In respect of the ultimate-outcome issue, the Appellate Division held that it was error for the trial court to refuse to give that charge and also that the trial court erred in its instruction regarding punitive damages. The panel set aside the jury's verdict and remanded the matter for a new trial. We granted plaintiff's petition for certification, 160 N.J. 479 (1999), which is limited solely to the ultimate-outcome question.

II.

The Consumer Fraud Act provides that "[i]n any action . . . the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest." N.J.S.A. 56:8-19. The statute also provides that "the court shall also award reasonable attorneys' fees, filing fees and reasonable costs of suit." Ibid. As we recently explained, two of the three main purposes of the Act are "to punish the wrongdoer through the award of treble damages, and, by way of the counsel fee provision, to attract competent counsel to counteract the community scourge of fraud by providing an incentive for an attorney to take a case involving a minor loss to the individual." Lettenmaier v. Lube Connection, Inc., 162 N.J. 134, 139 (1999) (citations omitted). The third purpose is to compensate victims for actual losses. Ibid.

The provisions pertaining to the trebling of damages and awarding of counsel fees are integral and essential to the Act. Cox v. Sears, Roebuck & Co., 138 N.J. 2, 24 (1994) (explaining that "the legislative history indicates that the provision for attorneys' fees was intended to impose on the defendant in a private action `a greater financial penalty [than in an action brought by the Attorney General] and . . . [to ensure] that the financial cost to the private plaintiff was minimized and compensation maximized'"); see also Gennari v. Weichert Co. Realtors, 148 N.J. 582, 604 (1997) (describing history of Act and observing that "the Act has protected consumers from deception and fraud, even when committed in good faith").

The courts below correctly observed that there is a split of authority concerning whether juries should be instructed on the ultimate outcome of their verdicts in the consumer-fraud context. As noted by the Appellate Division, Wanetick, supra, 318 N.J. Super., at 160-61, the Committee comments to the Model Jury ...


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