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Romano v. Toyota

March 28, 2008

MARIE ROMANO, PLAINTIFF-APPELLANT,
v.
GALAXY TOYOTA A/K/A MONMOUTH TOYOTA, M.T. IMPORTS, INC., GALINA CAPORELLIE AND DANIEL CAPORELLIE, DEFENDANTS-RESPONDENTS, AND
TOYOTA FINANCIAL SERVICES, DEFENDANT, AND GALAXY TOYOTA A/K/A MONMOUTH TOYOTA, M.T. IMPORTS, INC., THIRD-PARTY PLAINTIFF/CROSS-APPELLANT/CROSS-RESPONDENT,
v.
DANIEL CAPORELLIE, THIRD-PARTY DEFENDANT/CROSS-RESPONDENT/CROSS-APPELLANT, AND GALINA CAPORELLIE POSS, THIRD-PARTY DEFENDANT/ CROSS-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2336-04.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued*fn1 December 19, 2007

Before Judges Lisa, Lihotz and Simonelli.

In this consumer fraud case, we review the appropriate measure of damages when a purchaser revokes acceptance of an automobile whose odometer has been rolled back. At trial, plaintiff urged and the jury found that her ascertainable loss for the purpose of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -166, was the purchase price paid for the vehicle. On defendant's motion, the trial court set aside the jury verdict, concluding that although a CFA violation was stipulated, plaintiff failed to establish damages measured by the difference between the vehicle's purchase price and its diminished value as a result of the altered odometer. The trial court also reduced the attorney's fees and costs claimed by plaintiff's counsel. Plaintiff appeals from those determinations.

Defendant, Galaxy Toyota, filed a defensive cross-appeal requesting review if, as a result of plaintiff's appeal, the jury's CFA verdict is reinstated or counsel fees increased. Finally, defendant Daniel Caporellie cross-appealed against Galaxy from the denial of his motion for a new trial and his motion to offset the damage award against him by the value of the car. We affirm the trial court's decision in all respects.

I.

We look to the statement of facts set forth in the trial court's written opinion issued to determine the parties' post-trial motions, which the parties have essentially accepted. Plaintiff Marie Romano purchased a 1999 Infiniti I-30 from M.T. Imports, Inc. d/b/a Galaxy Toyota (Galaxy), for $18,690. She financed the vehicle through Toyota Motor Credit Corporation. The odometer disclosure statement listed the vehicle's mileage as 42,305 miles. Two years later, the engine light activated. Romano took the vehicle to a Ray Catena dealership for service. A mechanic determined that as of April 11, 2002, the vehicle's odometer had recorded 68,674 miles. Romano concluded that the odometer had been "rolled back" approximately 26,369 miles prior to her purchase. Romano notified Galaxy. The two were unable to reach an acceptable resolution because Galaxy refused to refund Romano's purchase price. Romano retained possession of the vehicle and continued to make monthly payments of $295.14 on the loan obtained to finance the purchase. At this time, she continues to possess the automobile and likely, has satisfied the loan obligation.

Romano filed suit against Galaxy alleging violations of the CFA, the Federal Odometer Law (FOL), 49 U.S.C.A. § 32701 to § 32711, equitable fraud, and rescission of acceptance under the Uniform Commercial Code (UCC), N.J.S.A. 12A:2-608(1). Galaxy filed a third-party complaint against the vehicle's original owners, Daniel Caporellie and Galina Caporellie Poss, for contribution, indemnity, violation of the FOL, fraud, equitable fraud and breach of contract. Romano filed direct claims against Caporellie and Poss for violations of the FOL and fraud.

Following trial, the determination of the various claims was submitted to a jury through a detailed sixteen-page jury questionnaire. The jury found: (1) Galaxy proximately caused Romano's loss of $22,586, less a $9,360 set-off amount based on Romano's continued use of the car; (2) Galaxy was liable to Romano for equitable fraud, but no damage amount was specified; (3) Caporellie and Poss tampered with the odometer, but had no direct liability to Romano under the FOL; they each were liable to Galaxy pursuant to the FOL with resultant damages of $5,113; (4) Caporellie and Poss each were liable to Romano for fraud causing actual damages of $1,975; (5) Caporellie and Poss each were liable to Galaxy for legal fraud with resultant damages of $1,500; and (6) Poss was liable to Galaxy for equitable fraud, with no damages specified, and for breach of contract because she misrepresented the vehicle's mileage, resulting in Galaxy's loss of $1,000. Addressing the UCC claims, the jury determined that the non-conformity of the vehicle substantially impaired its value to Romano, Romano had revoked her acceptance within a reasonable time, she had notified Galaxy of her revocation, and revocation occurred before any substantial change in the condition of the vehicle. Therefore, Romano's continued use of the vehicle was found to be reasonable, and the value of use was fixed at $9,360.

All parties filed post-trial motions. Relevant to this appeal, Romano argued that the UCC rescission remedies, which included recovery of the purchase price of the vehicle, should be applied to her CFA claim resulting in treble damages based on the purchase price of the car. Alternatively, Romano suggested that the jury's finding of Galaxy's liability for equitable fraud allows rescission, permitting her to cancel the contract and obtain a full refund of the purchase price. She also argued the CFA damages were cumulative.

Galaxy sought judgment notwithstanding the verdict as to the CFA claim or alternatively, a new trial, and limitation of any attorney's fee awarded, suggesting counsel's claimed rate of $375 per hour was unreasonably high and the case was "a slam dunk." Galaxy also requested that its FOL damages against Caporellie and Poss include treble damages, attorney's fees and costs. Galaxy also sought additur of the legal fraud damages to match what it must pay Romano. Caporellie requested a new trial.

The trial judge found Romano failed to prove an "ascertainable loss" and denied her request for treble damages under the CFA. Additionally, he remitted plaintiff's attorney's fees and costs under the CFA to $26,102.95. The trial judge fixed Romano's UCC rescission damages as the vehicle's purchase price less the value of the post-revocation retention and ordered Romano to return the vehicle to Galaxy within forty-five days. Galaxy's request for a new trial was denied. Galaxy's damages against Caporellie and Poss under the FOL were affirmed but remitted to $1,500, along with attorney's fee and cost of suit in the amount of $32,764.09. Alternatively, Galaxy could recover fraud damages of $1,500 (without ...


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