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Ollendorf v. Monk


August 2, 2007


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Somerset County, Docket No. DC-3528-04.

Per curiam.


Argued May 22, 2007

Before Judges Coburn and Gilroy.

Plaintiff Glenn Ollendorf appeals from the April 25, 2006, order of the Law Division, Special Civil Part, directing him to repay $216.50 to defendant Lacel Monk. We affirm in part; reverse in part; and remand to the trial court for further proceedings consistent with this opinion.

On July 22, 2004, plaintiff filed a complaint, alleging defendant had violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, when defendant failed to repair his car's engine in a proper and timely fashion. On September 8, 2004, plaintiff obtained a default judgment against defendant in the amount of $1,516.50, together with $54 in court costs. Because the trial court determined that defendant's activities as a part-time automobile repairman fell outside the scope of the CFA, the court refused to treble the damages, N.J.S.A. 56:8-19. On plaintiff's appeal, we reversed, determining that defendant's part-time automobile repair activities fell within the scope of the CFA. Ollendorf v. Monk, No. A-3924-04T5 (App. Div. December 21, 2005) (slip op. at 6). We remanded the matter to the trial court to resolve the issue of whether plaintiff's damages qualified as an ascertainable loss under the CFA, noting that we were not satisfied from the record that the repairs had been improperly performed. Id. at 7. We also expressed concern that the record failed to indicate that defendant had been served with the complaint, that defendant had been provided notice of the default judgment hearing, and that defendant had been served by plaintiff with a copy of the judgment after its entry. Id. at 7-8.

In the interim, plaintiff executed on the original judgment and obtained satisfaction on the full amount. On remand, after notice to both parties, another trial judge conducted a hearing as to whether defendant had been properly served with the complaint. Answering the inquiry in the affirmative, the judge proceeded with a second proof hearing, accepting plaintiff's testimony and allowing defendant to cross-examine plaintiff. After considering plaintiff's proofs, the judge entered default judgment in favor of plaintiff in the amount of $1,370,*fn1 together with court costs, and denied plaintiff's claims for: cost of automobile insurance incurred during the time that his automobile was being repaired ($176.50); damages for defendant's unauthorized use of the automobile while the vehicle was in defendant's possession ($228); and cost of obtaining a transcript from a prior municipal court proceeding, believing it necessary to establish defendant's liability ($80). In addition, the judge mistakenly denied plaintiff's claim for treble damages (believing that the Appellate Division had affirmed the original trial court's decision concerning the non-applicability of the CFA).

On plaintiff's motion for reconsideration, the judge acknowledged that he had misinterpreted the Appellate Division's decision and that the CFA applied to the matter. Determining that plaintiff's claim was one of rescission, as plaintiff was seeking a return of the monies that he had paid to defendant to effectuate the repairs, the judge awarded plaintiff $1,300, pursuant to N.J.S.A. 56:8-2.11. However, the judge did not treble the damages, concluding that the refund did not qualify as an ascertainable loss under the CFA, citing Artistic Lawn & Landscape Co., Inc. v. Smith, 381 N.J. Super. 75, 89 (Law Div. 2005). Lastly, having been made aware that plaintiff had obtained satisfaction of the original judgment, the judge netted the amount plaintiff had received under the original judgment against the amount awarded and directed that plaintiff repay defendant the difference of $216.50.

On appeal, plaintiff raises twenty-four issues for our consideration. We address the issues discussed infra and reject the remaining issues, determining that they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

In the context of a default judgment proof hearing, a trial court is obliged to view plaintiff's proofs indulgently, and the general practice is "to require only a prima facie case . . . ."

Heimbach v. Mueller, 229 N.J. Super. 17, 20 (App. Div. 1988). In the context of a default judgment, "the court should ordinarily apply the prima facie standard to plaintiff's proofs, thus not weighing evidence or finding facts, but only determining their sufficiency." Kolczycki v. City of East Orange, 317 N.J. Super. 505, 514 (App. Div. 1999). "[U]nless there is intervening consideration of public policy or other requirement of fundamental justice, the judge should ordinarily apply to plaintiff's proofs the prima facie case standard of R. 4:37-2(b) and R. 4:40-1." Pressler, Current N.J. Court Rules, comment 2.2 on R. 4:43-2 (2007).

Plaintiff testified as follows. Plaintiff was the owner of a 1984 Toyota Corolla automobile that had been driven between 100,000 and 110,000 miles when smoke began emanating from its exhaust system. Defendant operated an automobile repair shop from his home on a part-time basis. Plaintiff, who previously had motor vehicles repaired by defendant, brought the vehicle to defendant on or about November 20, 2002. After examining the automobile, defendant advised plaintiff that he would repair it by rebuilding the engine for the cost of $1,300, making the vehicle like new, with the engine outlasting the rest of the automobile. The verbal agreement was not only consummated by a handshake, but also by plaintiff's $600 down payment to defendant for the purchase of the necessary parts, including a new oil pump.

Upon receiving notification that the repairs had been completed, plaintiff retrieved his vehicle in mid-December 2002, paying defendant the $700 balance of the agreed repair price. Plaintiff immediately noticed that the heater was not working and returned the vehicle to defendant one or two days later, having only driven it the few miles from defendant's garage and plaintiff's home. In mid-February 2003, defendant informed plaintiff that "everything was fixed and plaintiff could pick up the automobile."

After obtaining his vehicle from defendant, plaintiff drove home, noticing the illumination of the oil pressure oil warning light. Plaintiff informed defendant by telephone of the oil pressure warning light, and defendant requested plaintiff to return the vehicle for re-inspection. Plaintiff complied within a couple of days. While the vehicle was in defendant's possession, defendant requested that plaintiff purchase a part from an automobile supply store, believing that it would cure the problem. After plaintiff purchased the part for $10 and was charged $30 by defendant to install the part, the problem with the oil pressure warning light continued. At that point, defendant "admitted that he made a mistake in rebuilding the engine, and it was his fault, and said he was going to fix it as soon as he recovered from the back injury he [suffered] while he was installing that part."

On March 16, 2003, plaintiff confronted defendant about failing to complete the repair. Defendant refused to perform any additional work on the vehicle, and plaintiff removed the vehicle from defendant's possession, noticing that the odometer had advanced about 800 miles from the time when plaintiff had most recently left the vehicle in defendant's possession.

On April 16, 2003, plaintiff demanded that defendant provide him with a receipt for the monies paid for the repairs. Defendant refused. On May 14, 2003, plaintiff obtained an estimate from Dillon Tire Company, Inc. The mechanic provided plaintiff with a written diagnostic estimate stating that the vehicle not only had 108,075.3 miles on its odometer and contained a rebuilt engine, but also that the engine had low oil pressure and had been "defective[ly]" rebuilt. The mechanic informed plaintiff that it was not worth replacing the engine because of the vehicle's age and mileage, estimating the cost at $2,487.50.

Other than driving the vehicle to obtain repair estimates from Dillon and several other repair shops, plaintiff had not driven the vehicle from the time he regained possession on March 16, 2003, through October 2003, because he had use of another vehicle. In October 2003, the second vehicle failed, and plaintiff drove his 1984 Toyota for approximately 4,000 miles at which point it became inoperable.

Plaintiff argues that the trial judge erred in determining that plaintiff failed to prove an ascertainable loss caused by defendant's violation of the CFA, concluding that plaintiff had only proven a prima facie case of rescission, thus entitling him to a refund of the monies paid for the initial repair.

A judgment in a non-jury case shall not be overturned, except where, after a careful review of the record and weighing of the evidence, the appellate court determines that "continued viability of the judgment would constitute a manifest denial of justice." Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977). An appellate court will not disturb the factual findings and legal conclusions of the trial judge unless they are "'so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Tp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)). However, "[a] [trial judge's] interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).

The CFA 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. Marascio v. Campanella, 298 N.J. Super. 491, 500 (App. Div. 1997). "A private plaintiff victimized by any unlawful practice under the [CFA] is entitled to 'threefold the damages sustained' by way of 'any ascertainable loss of [monies] or property . . . .'" Cox v. Sears Roebuck & Co., 138 N.J. 2, 21 (1984); N.J.S.A. 56:8-19.

"Unlawful practices [under the CFA] fall into three general categories: affirmative acts, knowing omissions, and regulation violations." Cox, supra, 138 N.J. at 17. "When the alleged consumer-fraud violation consists of an affirmative act, intent is not an essential element[,] and the plaintiff need not prove that the defendant intended to commit an unlawful act." Id. at 17-18. "However, when the alleged consumer fraud consists of an omission, the plaintiff must show that the defendant acted with knowledge, and intent is an essential element of the fraud." Id. at 18. "When the unlawful act consists of a violation of a regulation promulgated under the CFA, "intent is not an element of the unlawful practice and the regulations imposed strict liability for such violations." Ibid.

To prove a private claim under the CFA, a "plaintiff must [establish] each of three elements: (1) unlawful conduct by the defendant[]; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendant['s] unlawful conduct and the plaintiff's ascertainable loss." N.J. Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 12-13 (App. Div.), certif. denied, 178 N.J. 249 (2003). Treble damages are not awarded unless the private plaintiff can show that he or she suffered an ascertainable loss as a result of the unlawful conduct. Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 246 (2005). "The 'causation' provision of N.J.S.A. 56:8-19 requires plaintiff to prove that the unlawful consumer fraud caused his [or her] loss." Cox, supra, 138 N.J. at 23. Simply showing a violation of the CFA is not sufficient to entitle a private plaintiff to treble damages. See Scibek v. Longette, 339 N.J. Super. 72, 82 (App. Div. 2001) (failure to provide written estimate and written authorization for automobile repair constituted regulatory violations which "created the climate for the dispute [over cost of repairs] that ultimately developed" but did not result in an ascertainable loss).

Moreover, the mere showing that the work was performed in other than a good workmanlike manner does not qualify as an unconscionable commercial practice, Roberts v. Cowgill, 316 N.J. Super. 33, 37 (App. Div. 1998), nor does a mere breach of warranty or a breach of contract. Palmucci v. Brunswick Corp., 311 N.J. Super. 607, 616 (App. Div. 1998).

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 CFA. In accord with this legislative grant of power, the Division of Consumer Affairs has promulgated administrative regulations giving effect to the CFA's provisions. "The parties subject to the regulations are assumed to be familiar with them, so that any violation of the regulations, regardless of intent or moral culpability, constitutes a violation of the [CFA]." Cox, supra, 138 N.J. at 18-19. N.J.A.C. 13:45A-26C.2 governs automobile repairs and declares as "deceptive practices in the conduct of business of an automobile repair dealer" certain acts or omissions including:

1. Making or authorizing in any manner or by any means whatever any statement, written or oral, which is untrue or misleading, and which is known, or by which the exercise of reasonable care should be known, to be untrue or misleading.

2. . . .

3. Commencing work for compensation without either:

i. One of the following:

(1) Providing the customer with a written estimated price to complete the repair, quoted in terms of a not-to-exceed figure; or

(2) Providing the customer with a written estimated price quoted as a detailed breakdown of parts and labor necessary to complete the repair . . . ; or

(3) Providing the customer with a written estimated price to complete a specific repair . . . ; or

(4) Obtaining from the customer a written authorization to proceed with repairs not in excess of a specific dollar amount.

4. . . .

5. Making a deceptive or misleading statements or false promise of a character likely to influence, persuade or induce a customer to authorize the repair, service or maintenance of a motor vehicle.

[N.J.A.C. 13:45A-26C.2]

It is against these principles that we consider each of plaintiff's claims in light of the indulgent standards governing default judgment proof hearings. We conclude that the judge mistakenly determined that plaintiff's primary claim was for a rescission of the contract of repair and not a claim for consequential damages caused by defendant's deceptive business practices.

"Rescission . . . is an equitable remedy and only available in limited circumstances. Hilton Hotels Corp. v. Piper Co., 214 N.J. Super. 328, 336 (Ch. Div. 1986). The grant of rescission rests within the discretion of the court. Ibid. In contract actions, for the court to grant rescission, it must be able to return the parties to their original positions. Intertech v. City of Paterson, 255 N.J. Super. 52, 59 (App. Div. 1992). Here, plaintiff retained the benefits from the work that defendant had performed on his automobile and continued to operate it for a period of time thereafter. Therefore, the parties were not returned to their original positions. Accordingly, rescission was not a remedy available to plaintiff, nor does N.J.S.A. 56:8-2.11 create such a remedy for violation of the CFA. That statute merely provides a refund to a consumer where the consumer proves a deceptive business practice but is unable to prove an ascertainable loss. The remedy is "in addition to and cumulative of any other right, remedy, or prohibition accorded by the common law . . . ." N.J.S.A. 56:8-2.13. Moreover, in this matter, plaintiff did not plead rescission, but only asserted a claim for damages stemming from defendant's breach of contract, affirmative misrepresentations, and violations of N.J.A.C. 13:45A-26C.2.

We are satisfied that plaintiff proved a prima facie claim for consequential damages proximately caused by defendant's breach of contract and deceptive business practice by "[m]aking a deceptive or misleading statement or false promise of a character likely to . . . induce [the plaintiff] to authorize the repair . . . ." N.J.A.C. 13:45A-26C.2(a)5. Defendant told plaintiff, prior to entering into the agreement, that he would repair the vehicle by completely rebuilding the engine for a cost of $1,300 making the vehicle like new, with the engine outlasting the rest of the automobile. The proofs established that defendant did not completely rebuild the engine, failed to install the new oil pump as promised, and caused the engine to fail before the rest of the automobile. Liability was established by defendant's admissions. Plaintiff established a prima facie claim, entitling him to compensatory damages in the amount of $1,340, for defendant's failure to properly perform the repairs. The damages constitute an ascertainable loss under the CFA, proximately flowing from defendant's misrepresentations in violation of the consumer fraud regulation.

We also conclude that plaintiff established a prima facie claim for defendant's unauthorized use of the motor vehicle. Plaintiff reasonably estimated his damages by using the Internal Revenue allowance of $.36 per mile, less $60 that defendant would have expended for gasoline to drive such a distance, resulting in a net claim of $228. Defendant testified that the claim was not only based from his observation that the odometer had advanced 800 miles from the time he left the car in defendant's possession in mid-February 2003, until it was returned on March 16, 2003, but also from the condition of the automobile, which was filled with trash and used automobile parts.

The judge denied defendant's claim, not because of plaintiff's method in calculating damages, but on the judge's misinterpretation of plaintiff's testimony that the vehicle had 108,000 miles on the odometer when he left the car with defendant, and Dillon Tire Company had recorded the odometer at 108,075.3 miles in May 2003. We are satisfied that the judge misunderstood plaintiff's testimony as to the mileage on the vehicle when he first brought the car to defendant in November 2002. Plaintiff testified that the mileage was between 100,000 and 110,000, not a flat 108,000. Accordingly, we are satisfied that defendant proved a deceptive business practice by defendant's use of the vehicle without plaintiff's permission, entitling plaintiff to damages in the amount of $228, and that these damages were an ascertainable loss under the CFA.

We next address plaintiff's claim for the cost of obtaining a copy of a transcript from an unrelated municipal court proceeding that he believed necessary to prove his cause of action. Although the transcript was not admitted into evidence, plaintiff testified that it contained defendant's admission "that the repair failed because [defendant] did not change the oil pump." We are satisfied that the trial judge correctly denied plaintiff's request to assess the $80 expended for the transcript as taxed costs in the action.

It is public policy in this State that "litigants should bear the costs of their own expenses incurred in prosecuting or defending their interest," Hirsch v. Tushill, Ltd., Inc., 110 N.J. 644, 647 (1988), "except where specifically authorized by statute, rule or agreement." Buccinna v. Micheletti, 311 N.J. Super. 557, 564 (App. Div. 1998). Although costs are generally allowed "as of course to the prevailing party" under Rule 4:42-8(a), their allowance remains within the sound discretion of the court, Finch, Pruyn & Co., Inc. v. Martinelli, 108 N.J. Super.156, 159 (Ch. Div. 1969). See also N.J.S.A. 2A:15-59. Costs under the rule are those authorized by statute, N.J.S.A. 22A:2-8. Because the statute is in derogation of the common law, it is strictly construed. Hirsch, supra, 110 N.J. at 647. The statute does not include reimbursement of funds expended in obtaining a copy of a transcript from an unrelated court proceeding. Accordingly, the trial judge properly denied the application.

Plaintiff argues that he is entitled to have the monies expended for the transcript taxed as costs, asserting that the Legislature has provided that "the court shall also award . . . reasonable costs of suit" to a litigant who proves an unlawful practice under the CFA. N.J.S.A. 56:8-19. We disagree. Although the Legislature has mandated the awarding of "reasonable costs of suit" to a successful litigant under the CFA, the direction is limited to costs permitted under N.J.S.A. 22A:2-8. Not all litigation expenses are authorized to be taxed under the statute, and the CFA did not expand the category of taxed costs. See Josantos Const. v. Bohrer, 326 N.J. Super. 42, 47-48 (App. Div. 1999) (holding that although a prevailing party is entitled to recover expert fees under the frivolous litigation statute, N.J.S.A. 2A:15-59.1, because that statute allows recovery of "all reasonable litigation costs," a prevailing party under the CFA is not entitled to reimbursement of expert fees, as N.J.S.A. 56:8-19 only allows "reasonable costs of suit").

We affirm the judge's decision denying plaintiff's claim for damages for insurance costs during the period that defendant had possession of the automobile and the cost of the municipal court transcript. Although plaintiff claimed damages in the amount of $176.50 for six months of insurance premiums, he did not establish the claim with reasonable certainty. American Sanitary Sales v. State, Dept. of Treasury, Div. of Purchase and Property, 178 N.J. Super. 429, 435 (App. Div.), certif. denied, 87 N.J. 42 (1981). First, defendant did not have possession of the automobile for six months. At most, defendant would only have had possession of the vehicle for four months, November 20, 2002, through March 16, 2003. Moreover, defendant was entitled to possession of the vehicle for a reasonable period of time in order to repair it. In addition, plaintiff regained possession of the vehicle on several occasions during that time period. Lastly, plaintiff asserted a claim and has been awarded damages for defendant's unauthorized use of a motor vehicle, the damages estimated by using the Internal Revenue allowance of $.36 per mile. The allowance includes the miscellaneous costs for maintaining an automobile, including such items as depreciation, maintenance, repairs, tires, gasoline, oil, insurance, and license and registration fees. Rev. Proc. 2006-49, 2006-47 I.R.B. 936. Accordingly, defendant has already been awarded damages in part for the payment of insurance premiums. Plaintiff is not entitled to recover the same damages twice.

We next address plaintiff's request that he be awarded taxed costs on this appeal and on the first appeal, Ollendorf v. Monk, No. A-3924-04T5 (App. Div. December 21, 2005). Costs on appeal are recoverable in the action in which they were incurred. Accordingly, plaintiff is not entitled to have his costs on the first appeal included as costs in the present appeal. Moreover, unless ordered by the court, upon good cause shown, a party must apply for taxed costs within six months after entry of the appellate court's decision, except however, where further proceedings are directed post-decision. N.J.S.A. 2A:15-65. See also R. 2:11-5 (providing "that where a new trial is ordered taxation and costs on the appeal shall abide the event of the new trial unless the court otherwise orders"). Although we did not order a new trial in the first appeal, we did remand the matter to the trial court for further proceedings; however, we did not retain jurisdiction of the matter. Because the proceedings on remand were concluded in the trial court on April 25, 2006, plaintiff should have moved in the first appeal within six months thereafter for any costs he may have incurred.

In summary, plaintiff not only proved a prima facie claim, entitling him to: 1) $1,340 for consequential damages relating to defendant's failure to properly repair the vehicle; and 2) $248 for defendant's unauthorized use of the motor vehicle; but also proved that the aforesaid damages were ascertainable losses under the CFA, entitling him to treble damages. The April 25, 2006 order, directing plaintiff to pay defendant $216.50, is reversed; and the matter is remanded to the trial court to enter a new judgment in favor of plaintiff consistent with this opinion. Any costs taxed in the trial court shall not include the $80 expended for the transcript of the municipal court proceeding.

Affirmed in part; reversed in part; and remanded to the trial court for further proceedings consistent with this opinion. Costs on this appeal only are to be taxed in accordance with Rule 2:11-5.

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