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Scibek v. Longette

April 05, 2001


On appeal from Superior Court of New Jersey, Law Division, Monmouth County, DC-1010-99.

Before Judges Baime, Carchman and Lintner.

The opinion of the court was delivered by: Baime, P.J.A.D.


Argued March 14, 2001

This appeal is from the Special Civil Part's judgment awarding plaintiff $3,145 for automobile repairs performed on defendant's cars and high performance engine, and dismissing defendant's counterclaim for violations of the Consumer Fraud Act. We are constrained to reverse the judgment and remand for further proceedings.


Plaintiff owned and operated Classic Motorsports, an automobile repair shop located in Hazlet, New Jersey. Defendant approached plaintiff in January or February 1998 to perform repairs on his 427 cubic inch engine. Over the course of the next six or seven months, plaintiff performed various services on the engine and on defendant's 1968 and 1986 Chevrolet Camaros. Contrary to regulations promulgated under the Consumer Fraud Act, see N.J.A.C. 13:21-21.10; N.J.A.C. 13:21-21.11, plaintiff failed to give defendant a written estimate, and did not obtain a written authorization to complete the repairs. Under N.J.A.C. 13:45A-26C.2, these omissions constituted "deceptive practices in the conduct of the business of an automobile repair dealer."

Plaintiff performed many of the services agreed upon by the parties, but did not complete repairs on the two Camaros. According to plaintiff's testimony, the work on the 1986 Camaro was "ninety-eight percent complete," and the parts needed to finish the repairs were left with the car when he vacated the Hazlet premises.*fn1 Moreover, while the engine work on the 1968 Camaro was substantially complete, the car was not fully restored by the time plaintiff moved his shop. Defendant paid for the work performed on the engine and for a variety of parts for the two cars, but disputed the amount of the ultimate bill, particularly in regard to labor.

Plaintiff sued for the reasonable value of the services rendered. Defendant counterclaimed for violations of the Consumer Fraud regulations. Following a highly contentious trial, the Special Civil Part awarded a portion of the amount claimed in plaintiff's complaint. The judge dismissed defendant's counterclaim, finding that defendant waived the protection of the Consumer Fraud Act. In reaching this conclusion, the judge emphasized that defendant had owned and operated an automobile repair shop for many years, and obviously knew of, and agreed to disregard, the regulations requiring a dealer to give a customer a written estimate and obtain a written authorization to perform specified repairs. The judge further noted that plaintiff's violation of the regulations did not result in any ascertainable loss to the defendant. Defendant had paid plaintiff $3,500. In his final determination, the judge found that defendant owed an additional $3,145. This appeal followed.


The Consumer Fraud Act was enacted to "protect the consumer against imposition and loss as a result of fraud and fraudulent practices by persons engaged in the sale of goods and services." Fenwick v. Kay Am. Jeep, Inc., 136 N.J. Super. 114, 117 (App. Div.), reversed on other grounds, 72 N.J. 372 (1975); Marascio v. Campanella, 298 N.J. Super. 491, 500 (App. Div. 1997). The purposes of the Act are threefold: (1) to compensate the victim for his or her actual loss, (2) to punish the wrongdoer through the award of treble damages, and (3) 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).

The Act is to be applied broadly in light of the statute's remedial purpose. Lemelledo v. Beneficial Management Corp. of Am., 150 N.J. 255, 264 (1997); Blatterfein v. Larken Associates, 323 N.J. Super. 167, 178 (App. Div. 1999). Moreover, the Act is to be liberally construed in favor of the consumer. Lettenmaier v. Lube Connection, Inc., 162 N.J. at 139. "The legislative concern was the victimized consumer, not the occasionally victimized seller." Channel Companies, Inc. v. Britton, 167 N.J. Super. 417, 418 (App. Div. 1979). Nonetheless, "[t]he consumer fraud statute is aimed at promoting truth and fair dealing in the market place." Feinberg v. Red Bank Volvo, Inc., 331 N.J. Super. 506, 512 (App. Div. 2000).

A private party may bring a cause of action for consumer fraud under the Act, and may recover if he demonstrates that he suffered an "ascertainable loss," and that the defendant committed an unlawful practice. N.J.S.A. 56:8-19. An unlawful practice generally involves an affirmative act of fraud or a violation of the administrative regulations promulgated under the Act. See Jires v. B.P. Oil, 294 N.J. Super. 225, 229 (Law Div. 1996). An unlawful practice thus arises under the Act from an affirmative act, an omission, or a violation of an administrative regulation. Strawn v. Canuso, 140 N.J. 43, 60 (1995); Cox v. Sears Roebuck & Co., 138 N.J. 2, 19 (1994).

Pursuant to N.J.S.A. 56:8-4, the Attorney General is authorized to promulgate rules and regulations necessary to accomplish the objectives of the Act. In accord with this legislative grant of power, the Division of Consumer Affairs has promulgated administrative regulations giving effect to the Act's provisions. See Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 270-71 (1978); N.J.S.A. 56:8-48. In particular, the Department promulgated N.J.A.C. 13:45A-26C.2 to require that an automotive dealer give the customer a written estimate and obtain a written authorization before beginning repairs on an automobile. See also N.J.A.C. 13:21-21.10 (written estimates); N.J.A.C. 13:21-21.11 (authorization for repairs). N.J.A.C. 13:45A-26C.2 reads in pertinent part:

[T]he following acts or omissions shall be deceptive practices in the conduct of the business of an automotive repair dealer, whether such act or omission is done by the automotive repair dealer or by any mechanic, employee, ...

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