On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3882-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Kestin, Weissbard and Graves.
On April 18, 2002, plaintiff Lyle Real was the successful bidder for a 1970 Corvette convertible offered for sale by defendant Richard Conklin on eBay, an Internet website. After plaintiff paid Conklin the bid price in the amount of $13,651, plaintiff shipped the Corvette to his home in Missouri. Upon receipt of the car, however, plaintiff realized the condition of the vehicle was not as advertised, and he filed suit against Conklin, individually, and Radir Wheels, Inc. (Radir Wheels), a company owned by Conklin, alleging breach of contract, common law fraud, negligent misrepresentation, violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -166, and fraudulent inducement. In their answer, defendants denied all liability.
The parties waived a jury trial. Conklin appeals from a final judgment entered on June 8, 2005, that dismissed the complaint against Radir Wheels, but awarded plaintiff treble damages of $25,953, counsel fees of $29,950, and costs of $6,544.81 under the CFA. The primary issue presented to the trial court, and to this court, is whether Conklin is subject to liability under the CFA. We affirm the judgment of liability based on the trial court's implicit finding of common law fraud, but we conclude the court erred in applying the CFA. Consequently, we remand for modification of the final judgment.
In April 2002, while looking at various online advertisements for 1970 Corvettes, plaintiff, who lives in Missouri, came across an advertisement posted on the eBay website by the user "realcoololdstuff" (Real Cool Old Stuff). The advertisement read as follows:
Vehicle Description 1970 Corvette Convertable [sic]. Matching numbers, One owner Car, 350/300HP 4 speed, Good Frame, New exhuast [sic] system, Power steering, Soft top is good. New Carpet.
Runs Strong, Original rallys, Original radio/cassette. Title is original from 06/24 1970. If you have any Questions please feel free to give us a call at . . . . Thanks and good luck!
Needs door hinge pins, Radiator support, original interior is ok but seats are a little worn. Painted once now has a few chips. Windshield has small crack in the lower left corner.
Terms of Sale 10% deposit required within 5 days of auction close. Delivery options can be disccussed [sic]. Payment in Full required within 10 days of auction close.
Prior to the close of the auction, plaintiff called the telephone number in the advertisement, and he spoke to Conklin regarding the condition of the Corvette. Conklin told him "the car was in good condition," and it could be driven from its location in Montville, New Jersey, where Conklin lived, to Missouri. Thereafter, upon learning he was the highest bidder for the car, plaintiff sent Conklin an initial check for $1,651, and a subsequent check for $12,000. Although both checks were made payable to Conklin and deposited into Conklin's personal checking account, plaintiff received the title work in an envelope that had Radir Wheel's return address. In addition, when plaintiff called Conklin, the phone was answered "Radir Wheels." Plaintiff also noted when he clicked on Real Cool Old Stuff's hyperlink, he got Radir Wheel's website or address.
After the auction closed, plaintiff had another telephone conversation with Conklin about driving the car from New Jersey to Missouri. During this conversation, Conklin told plaintiff the headlights did not "come up automatically" when turned on, "the windshield wipers did not work and that there was no spare tire with the car." Based on this discussion and other considerations, including time constraints, plaintiff elected to ship the car to Missouri.
Plaintiff received the car on May 10, 2002, and later that month, he brought it to Dan Hughes, a mechanic at Just Corvettes, for an "assessment" and "a safety inspection." When Hughes "put the car on the lift to start the safety inspection," he discovered the frame, which was advertised as "good," was "rusted nearly in half," rendering the car unsafe and unlicensable in Missouri. Further inspection of the car showed the soft top, which was also advertised as "good," was in poor condition ("someone had stapled it with metal staples to hold it together"), the driver's seat was "ripped in numerous places," the driver's seat frame was broken, and the radio/cassette, which was advertised as "original," was an after-market item. In addition, defendant's eBay advertisement stated the car "runs strong," but plaintiff testified there was a "large hesitation" when he tried to accelerate. During the inspection by Hughes, plaintiff took digital photographs of the condition of the vehicle, which he sent to Conklin along with an e-mail, and copies of the photographs were marked into evidence during the trial.
Based on the information in the eBay advertisement concerning the condition of the Corvette, plaintiff testified he thought he was purchasing "a serviceable vehicle" that probably needed some repairs, but he expected the car would be safe to operate on the streets. Plaintiff acknowledged he did not expect to receive a Corvette in excellent condition, however, the car he received was "not even close" to the description in defendant's advertisement.
According to plaintiff, a "good frame" was an especially valuable indicator of the car's condition because Corvettes of that vintage have metal frames, which become poor and rusted. Thus, a good frame meant that it would not have to be replaced.
On October 30, 2002, upon advice of counsel, plaintiff videotaped the damage to the car, with Hughes narrating. Plaintiff took another videotape in January 2003, after the body and frame of the car had been separated, so the condition of the frame could be further documented. Plaintiff's expert, Raymond Williams, was present for the second taping.
Williams had owned and operated a business known as "Ray's Corvettes" from 1977 to 1997 and had previously testified as an expert in the repair and appraisal of vehicles, including Corvettes. He testified the frame of the Corvette plaintiff purchased was so full of holes, caused by rust, he could actually see the floor when looking from the top of the frame. When asked whether the rust was visible before the body of the car was removed from the frame, he testified: "We saw it. Laid on Lyle's garage floor just looking at it with a flashlight. It was terminal." He also acknowledged, however, that because the car "sits five inches from the ground," much of the rust was visible only after the car was on a lift. When Williams was asked whether "good frame" had a "meaning in the business," he testified a "good frame" meant the frame was "good and usable. The age doesn't make any difference between good and bad." In his estimation, no part of the frame of this car was in good condition, or even salvageable.
Williams testified the salvage value of the car plaintiff purchased was "around the $4000 range," and, contrary to the eBay ad, the car's engine did not "run strong." According to Williams, the engine was "totally worn out. It wasn't running good. It was a weak engine" that had "already been rebuilt once."
Plaintiff testified if he had known the true condition of the car, he would not have bought it. He believed the car he received in May 2002, was worth approximately $5,000 to $8,000. He originally planned on doing his own repairs to the car, but the repairs that were needed were "well beyond [his] capability." After Conklin refused to rescind the sale, he realized he was left with a car he ...