On appeal from Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-256-99.
Before Judges Skillman, Wecker and Lesemann.
The opinion of the court was delivered by: Wecker, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
After a jury verdict for plaintiffs, the trial judge announced that judgment would be entered against defendant, Chrysler Corporation, for the adjusted lease price of a 1997 Jeep Cherokee under the New Jersey Automobile Lemon Law, N.J.S.A. 56:12-29 to -49 (the Lemon Law). The judge denied defendant's motion for judgment notwithstanding the verdict or for a new trial.
Defendant's appeal raises an issue of first impression with respect to a consumer's right to seek a Lemon Law remedy in the Superior Court. The present statute, enacted in 1988, repealed and replaced the prior Lemon Law statute, N.J.S.A. 56:12-19 to - 28, and provided for the first time for an administrative hearing procedure within the Division of Consumer Affairs. The novel issue before us arises out of an administrative regulation, N.J.A.C. 13:45A-26.5, which purports to require a consumer both to send the manufacturer a so-called "last chance" letter, and to establish that the claimed defect "continues to exist," as prerequisites to pursuing not only an administrative claim, as expressly required by the statute, but also as prerequisites to maintaining a Superior Court action under the Lemon Law. There is no dispute that plaintiffs did not send the last chance letter and that the defects were repaired one week before the complaint was filed. If the regulation as written governs Lemon Law claims brought in Superior Court, plaintiffs' claim fails as a matter of law, and we must reverse.
The statute itself expressly requires the consumer to meet the disputed requirements only in two circumstances: when a consumer seeks the statutory remedy in a summary administrative proceeding in the Division of Consumer Affairs (the Division) pursuant to N.J.S.A. 56:12-37, or when a consumer who seeks relief in any one of the three dispute resolution forums recognized by the statute invokes an evidentiary presumption established by N.J.S.A. 56:12-33. But N.J.A.C. 13:45A-26.5 requires the consumer to meet both prerequisites in order "[t]o initiate a claim under the Lemon Law," including a claim filed in the Superior Court.
The question posed is whether the regulation falls within the scope of the authority delegated to the Division by the statute, or whether it is inconsistent with the statute and therefore outside the scope of its authority. We conclude that the regulation on its face is inconsistent with the statute insofar as it establishes prerequisites to filing a Lemon Law claim in the Superior Court. Accordingly, neither plaintiffs' failure to send defendant a "last chance" letter nor the fact that the non-conformities were eventually repaired bars this claim.
We also reject defendant's arguments with respect to several evidentiary rulings, the jury charge, and the weight of the evidence. We therefore affirm.
On May 3, 1997, plaintiffs Nancy and Michael DiVigenze*fn2 entered into a lease agreement with an authorized Chrysler dealer for a new 1997 Jeep Grand Cherokee.*fn3 Several warranty repairs were performed between May 1997 and February 1998 and are not the basis for plaintiff's Lemon Law claim.
Plaintiff testified that she first experienced severe shaking of the entire vehicle and almost lost control of the vehicle on the highway on January 3, 1998, while driving her mother to a doctor's appointment. After pulling off the road, turning off the engine, and then restarting it, plaintiff was able to continue her trip. She drove the vehicle to the dealer the same day, but the dealer's mechanic was unable to reproduce the condition in a test-drive, and there is no written record of that service visit. Plaintiff's mother testified and corroborated plaintiff's version of the incident.
On February 27, 1998, when the vehicle had traveled 14,723 miles, plaintiff again experienced severe shaking and vibration of the vehicle which impaired her control. Plaintiff brought the vehicle to the dealer and also reported an inoperable brake light. The dealer diagnosed a loose steering box and a chafed brake light wire.
The severe vibration occurred again. This time, the vehicle began to shake badly while plaintiff was negotiating a curve in the road. The brake light also failed again, and both conditions led plaintiff to return to the dealer on March 27, 1998. The dealer again replaced the steering box and ordered a new module for the brake light. The severe vibration in the car occurred again the same day.
Plaintiff returned to the dealer with the same two complaints on April 14. The dealer installed a new brake light module, but claimed to be unable to reproduce the vibration while test-driving the vehicle. Both conditions occurred again, and plaintiff returned to the dealer on May 21, 1998. This time the dealer found a leak in the steering damper and a short in the brake light wiring. Both defective parts were replaced. Plaintiff testified that the vibration condition then improved substantially, from a "ten" on a scale of one to ten to a "one or two," although there were still intermittent incidents of vibration in the steering wheel. After the May 21 repairs, the vehicle itself no longer vibrated severely so as to threaten loss of control, and the brake light functioned properly.
This complaint against Chrysler Corporation*fn4 was filed on May 28, 1998, alleging substantial defects and non-conformities in the vehicle. The complaint included counts under the New Jersey Automobile Lemon Law, N.J.S.A. 56:12-29 to -49, the Magnuson-Moss Warranty Act, 15 U.S.C.A. §§ 2301-2312, the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -91, express warranties under the contract between the parties, and implied warranties of fitness and merchantability under the Uniform Commercial Code, N.J.S.A. 12A:2-313, -314, and -315.
At trial, plaintiff withdrew her consumer fraud claim and the court granted defendant's motion for judgment on plaintiff's implied warranty claims. The trial judge rejected defendant's arguments that plaintiff's failure to send a last chance letter and the fact that the defects were eventually repaired barred her Lemon Law claim. The judge denied defendant's motion for judgment dismissing plaintiff's Lemon Law and express warranty claims. Both parties agreed that if the jury found liability under the Lemon Law, the jury would be instructed not to consider the express warranty claim.*fn5 The judge also denied defendant's request to inform the jury of the amount that would be awarded in the event the jury found liability under the Lemon Law; however, the jury was informed that recovery under the Lemon Law would entitle plaintiff to return the vehicle, in which case the court would calculate the damage award to which plaintiff was entitled.
The judge accurately summarized the parties' contentions respecting the Lemon Law claim, telling the jury that it was plaintiff's contention that Chrysler failed to correct, within a reasonable time, defects which "substantially impair[ed] the vehicle's use, value or safety"; that such defects would constitute a nonconformity under the Lemon Law; and that defendant "asserts that any alleged problems with the vehicle have been corrected by it within a reasonable period of time. Additionally, that any alleged nonconformity does not substantially impair the use, value or safety of the vehicle."
In answer to four questions on the verdict sheet respecting plaintiff's Lemon Law claim, the jury determined that "plaintiff's vehicle had a nonconformity or non-conformities" that were "first reported to Chrysler . . . within the plaintiff's first twenty-four months or 18,000 miles of use," that Chrysler "failed to repair . . . within a reasonable period of time," and that the vehicle's milage was 14,723 when first presented "for corrections of a nonconformity."
The judge calculated the statutory refund based upon plaintiff's total lease payments and related fees of $42,024.38, less a mileage offset of $5,296.01, and entered judgment for $36,728.37.*fn6 Plaintiff was also awarded $8,751 in attorneys' fees and costs. Defendant moved for judgment notwithstanding the verdict or a new trial, arguing that plaintiff's Lemon Law claim failed because the defects had been repaired, and that plaintiff's failure to send a last chance letter barred her claim. The judge rejected those arguments, as well as defendant's arguments that the jury instructions were erroneous, that defendant's expert witness's testimony was unfairly limited, and that the verdict was against the weight of the evidence, and accordingly denied defendant's motions.
In order to address the legal issues raised by defendant's reliance on the regulation, we begin by examining and comparing the Lemon Law statute with the regulation in issue, N.J.A.C. 45:13-26.5.
N.J.S.A. 56:12-29 sets forth the legislative findings that precipitated enactment of the Lemon Law, along with three expressed goals of the law:
The Legislature finds that the purchase of a new motor vehicle is a major, high cost consumer transaction and the inability to correct defects in these vehicles creates a major hardship and an unacceptable economic burden on the consumer. It is the intent of this act to require the manufacturer of a new motor vehicle to correct defects originally covered under the manufacturer's warranty which are identified and reported within a specified period. It is the further intent of this act to provide procedures to expeditiously resolve disputes between a consumer and a manufacturer when defects in a new motor vehicle are not corrected within a ...