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Froehlich v. Hillside Auto Center

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


June 26, 2007

MARLENE FROEHLICH AND CHRISTOPHER A. COON, PLAINTIFFS-RESPONDENTS/ CROSS-APPELLANTS,
v.
HILLSIDE AUTO CENTER AND JACK GOMES, DEFENDANTS-APPELLANTS/CROSS-RESPONDENTS.

On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-3220-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 6, 2007

Before Judges Lisa and Grall.

Defendants Hillside Auto Center (Hillside) and Jack Gomes appeal from a final judgment in favor of plaintiffs Marlene Froehlich and Christopher Coon on their complaint alleging violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, and the Lemon Law, N.J.S.A. 56:12-29 to -49. Following a grant of summary judgment on liability, which defendants do not challenge on appeal, the question of damages was tried to the trial court. The court awarded treble damages and interest in a total amount of $108,847.80 and counsel fees and costs in the amount of $33,780.18. Defendants' challenge on appeal is limited to that component of the treble damage award that is based on the difference between the total price plaintiffs paid for the car and the best offer they received for its sale by a buyer aware of the car's history.*fn1 Plaintiffs cross-appeal from the award of counsel fees and costs in the amount of $33,780.18.

Coon purchased a Mercedes from defendants and obtained financing through them. Defendants acknowledge that Coon was never given written notification that Mercedes Benz had repurchased the car from its initial owner due to a malfunctioning audio system. Hillside, with knowledge of the car's history, purchased it for $46,000 plus a fee of $475. Coon purchased the car from Gomes, an employee of Hillside, for $49,500. With financing obtained through Hillside, the total cost to Coon was $55,885.77.

After learning that the title record of the car he purchased included a reference to the car's repurchase by its manufacturer due to a defect, Coon attempted to return the car to the dealer. His offer was refused. Coon then undertook efforts to sell the car, including placing an ad in the newspaper and on E-Bay and attempting to sell the car through four automobile dealers, who offered it for sale from their lots and at auction. The highest offer plaintiffs received was an offer to purchase for $22,400, from which plaintiffs would have been required to pay fees in the amount of $850. Coon rejected the offer.

Defendants offered no conflicting evidence of value, other than the price they paid at auction with knowledge of the car's history.

Defendants raise only two issues on appeal:

I. THE PLAINTIFFS FAILED TO SATISFY THE STATUTORY REQUIREMENT OF DOCUMENTING AN ASCERTAINABLE LOSS.

II. EXPERT OPINION WAS REQUIRED TO ESTABLISH THE VALUE OF THE VEHICLE IN ORDER FOR DAMAGES TO BE ASSESSED.

In order to establish the "ascertainable loss" required by the Consumer Fraud Act, a plaintiff must present proofs to establish an actual loss that is quantifiable. Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 252-54 (2005). Where, as here, the claim is based on the lost benefit of a bargain, plaintiffs must "produce specific proofs to support or infer a quantifiable loss . . . ." See id. at 252. "The benefit-ofthe-bargain rule allows recovery for the difference between the price paid and the value of the property had the representations been true." McConkey v. AON Corp., 354 N.J. Super. 25, 52 (App. Div. 2002) (emphasis and internal quotation marks omitted), certif. denied, 175 N.J. 429 (2003). Thus, where mileage on a car is higher than the mileage disclosed at the time of purchase, the measure of the purchaser's damages is "the difference between the price [the purchaser] paid for the vehicle and the retail value of the vehicle with the excess mileage." Sema v. Automall 46 Inc., 384 N.J. Super. 145, 149 (App. Div. 2006). Here, the trial court based the damages award on the difference between the price paid for the car and evidence of the highest offer made by a purchaser with knowledge of the history of the vehicle. Thus, there was evidence of an ascertainable loss.

Defendants rely on Thiedemann in support of their claim that diminished resale value is too speculative to qualify as an "ascertainable loss." Thiedemann is distinguishable. In that case the owners had not made any effort to sell the car they purchased and had no evidence to establish diminished resale value. 183 N.J. at 252.

Defendants also contend that plaintiffs' evidence of diminished fair market value is too speculative and that expert testimony is required.*fn2 In a different context, we have held that when there is no conflicting evidence of value, the price at which a vehicle is sold on public bidding "is competent proof of its fair market value and should ordinarily be accepted as such." Vito's Towing, Inc. v. Kemp, 279 N.J. Super. 414, 419 (App. Div. 1995). Defendants presented no evidence to refute plaintiffs' evidence of fair market value or the value of use of the car, and the trial court found plaintiffs' evidence of efforts to sell the car and the offer they received after full disclosure adequate to establish its fair market value. See Cuesta v. Classic Wheels, Inc., 358 N.J. Super. 512, 522 (App. Div. 2003) (noting the dealership's superior position to present evidence relevant to value in the context of discussing its obligations to present evidence relevant to offset). On this record, we cannot conclude that the court's finding is so wholly unsupported by or inconsistent with the evidence as to be clearly mistaken. See Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974).

Plaintiffs present one issue on their cross-appeal:

I. THE TRIAL COURT ERRED BY DENYING THE REQUEST FOR AN ENHANCED COUNSEL FEE WITHOUT MAKING FINDINGS OF FACT OR CONCLUSIONS OF LAW.

The trial court's obligations on an application for counsel fees sought pursuant to fee-shifting statues are clear. "[A] trial court must analyze the Rendine factors in determining an award of reasonable counsel fees and then must state its reasons on the record for awarding a particular fee." Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21 (2004) (referencing Rendine v. Pantzer, 141 N.J. 292 (1995)); see R. 1:7-4(a) (requiring findings of fact and conclusions of law in actions tried without a jury). Because the trial court did not explain its exercise of discretion, we have no way to determine whether the court set this counsel fee award after considering the relevant facts and applying the controlling legal principles. Accordingly, we are constrained to reverse and remand for reconsideration in light of Furst, supra, 182 N.J. at 21-27.

The final judgment on damages is affirmed; the award of counsel fees and costs is vacated and remanded for reconsideration.


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