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State v. Tri-Way Kars

August 18, 2008


On appeal from the Superior Court of New Jersey, Law Division, Criminal Part, Bergen County, Docket No. BMA-009-11-07.

The opinion of the court was delivered by: C.L. Miniman, J.A.D.



Argued: May 27, 2008

Before Judges Collester, C.S. Fisher and C.L. Miniman.

Defendant Tri-Way Kars, Inc., appeals from an October 12, 2007, judgment of the Law Division on de novo review upholding an April 4, 2007, decision by the Central Municipal Court of Bergen County finding defendant guilty of violating the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -166, and ordering it to pay a fine of $1257, costs of $33 and restitution of $2062.50 to Samuel White, the individual consumer involved in the subject motor vehicle sale.


This action was begun in the name of the State of New Jersey on March 6, 2007, when the Central Municipal Court of Bergen County issued a summons to defendant on the complaint of Frank Benedetto, Director, Bergen County Division of Consumer Affairs,*fn1 alleging "consumer fraud" in violation of N.J.S.A. 56:8-2 without any further elaboration respecting the nature of the consumer fraud or the essential facts of the transaction. After some limited discovery, defendant's president, Edward Goldberg, appeared with counsel on April 4, 2007, before the municipal court judge to answer the charges, at which time defendant made a preliminary motion for dismissal. Defense counsel argued that the summons and complaint lacked specificity and violated the due process clauses of the United States and New Jersey Constitutions. Defense counsel also argued that the summons was defective on its face because it had not been sworn. The State offered to cure the defect in the summons and then argued that defendant knew that the consumer fraud was the sale of a vehicle to which defendant did not have clear title, issued an illegal second temporary registration certificate without having clear title, and refunded an insufficient amount of the purchase price. The municipal judge denied both motions, requiring Benedetto to sign the summons to cure the "technical" defect. The matter was tried to a conclusion.

On April 9, 2007, defendant filed a timely notice of appeal with the Law Division. At an initial hearing on September 10, 2007, the judge ordered briefing on two issues: whether the municipal court had jurisdiction to hear allegations of consumer fraud and what burden of proof applied to such allegations. After briefs were filed, a hearing was held on October 3, 2007, at which time the parties waived oral argument and relied on their submitted briefs. The judge issued a letter opinion holding that the municipal court had jurisdiction to hear the consumer fraud charge under N.J.S.A. 56:8-14 and -14.1 and affirming defendant's conviction for consumer fraud in violation of N.J.S.A. 56:8-2. All fines and penalties were stayed pending appeal. We reverse on jurisdictional grounds.


The undisputed facts at trial establish that defendant is a used car dealer located in South Hackensack that has been in business for over thirty years. It maintains an inventory of between eighty and one hundred vehicles. Defendant's president is Edward Goldberg. In July 2006 defendant purchased a 1999 Dodge 3500, a fifteen-passenger van, from a repeat customer, Herbert Brown, as a trade-in toward the purchase of another vehicle. In doing so, Brown tendered the New York Certificate of Title No. 7681060 for the van registered in his name to defendant. The certificate indicated that AmeriCredit Financial Services, Inc., had a recorded lien on the vehicle. Brown provided defendant with a lien release obtained from AmeriCredit as proof that the lien had been satisfied in full some time in 2002. After Brown provided the lien release to defendant, he picked up the Chevy Suburban on July 26, 2006, and surrendered the Dodge 3500. Defendant's salesman for the transaction with Brown was Anthony Petrullo. Thus, it was undisputed that as of July 26, 2006, defendant had the New York title certificate and the release of lien in its possession.

Samuel White testified without dispute that on August 24, 2006, he went to defendant's place of business and negotiated the purchase of the Dodge 3500 van for $5000, plus $350 in sales taxes. The salesperson was also Petrullo. White gave defendant $4400 because he was unable to pay the full amount at that time.

Petrullo agreed that White would have until September 13, 2006, to pay the remaining $950 balance.

White executed an Agreement and Bill of Sale indicating that a balance of $950 "MUST BE PAID WITHIN 20 DAYS OF TEMP. PLATE." The Agreement warned that the sale was "AS IS, NO GUARANTEE." White received a service contract from Protection Plus, Inc., for complete automotive repair services (C·A·R·S) and signed a New Jersey Used Motor Vehicle Waiver of Limited Warranty on August 24, 2006. He further acknowledged that service would be provided by C·A·R·S and that the vehicle was not guaranteed by the dealer.

White also signed an undated promissory note agreeing to pay $950 no later than September 13, 2006, and acknowledged that "Tri Way Kars holds lien to title on my ____*fn2 [u]ntil all such promissory notes are satisfied." The promissory note warned that "[i]t is illegal to issue or receive a second temporary plate. ONE temporary plate per vehicle. NO EXCEPTIONS." The Odometer Disclosure Statement revealed that the Dodge 3500 van had 91,600 miles on the odometer and White signed the statement. White was then given possession of the vehicle and issued a temporary registration. White, thus, agreed that defendant would retain permanent title to the van until the $950 balance was satisfied.

By and large, the testimony with respect to what happened after August 24, 2006, is hotly disputed. Because we decide this case on jurisdictional grounds, further explication of the facts is unnecessary. Suffice it to say that White contended that he tendered the balance due but defendant did not have clear title. Defendant contended that it always was ready, willing and able to transfer title, but White never tendered the balance due.


The Law Division judge in a written decision held that the municipal court had jurisdiction to hear the consumer fraud charge under N.J.S.A. 56:8-14 and -14.1:

The Municipal Courts of the state have jurisdiction to hear cases arising from violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. The relevant statute states, in part, that "[t]he Superior Court and every municipal court shall have jurisdiction of proceedings for the collection and enforcement of a penalty imposed because of the violation, within the territorial jurisdiction of the court . . ." N.J.S.A. 56:8-14 (emphasis added).

Defendant submits that N.J.S.A. 56:8-2.20, stating that "[t]his act shall not apply to the sale of motor vehicles . . .", plainly denies the Municipal Court jurisdiction over the instant matter. However, 56:8-2.20 is a provision of the "Refund Policy Disclosure Act," N.J.S.A. 56:8-2.14 et seq., and so the reference to "[t]his act" clearly applies with specificity to the Refund Policy Disclosure Act, not to the entirety of the Consumer Fraud Act.

Finally, as this action was brought by Frank Benedetto, the Director of the Bergen County Division of Consumer Affairs, N.J.S.A. 56:8-14.1 confers jurisdiction to "a municipal court in the municipality where the offense was committed" for actions brought by a county Division of Consumer Affairs. As the violation in question occurred in South Hackensack, the Central Municipal Court had jurisdiction over the matter.

Based on all of these factors, Central Municipal Court had jurisdiction over the instant case, and was ...

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