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BMW Financial Services NA, LLC v. Datto

November 6, 2009

BMW FINANCIAL SERVICES NA, LLC, PLAINTIFF-APPELLANT,
v.
JEFFREY P. DATTO, PH.D., AND GEORGE A. DATTO, DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS,
v.
BMW OF TURNERSVILLE, THIRD-PARTY DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. DC-9397-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 21, 2009

Before Judges Sabatino and Newman.

Plaintiff BMW Financial Services NA, LLC, appeals the Special Civil Part's dismissal of its collection action against Jeffrey Datto and George Datto ("defendants"), and the transfer of plaintiff's claims to binding arbitration. For the reasons stated herein, we find that plaintiff was not obligated to arbitrate its claims, and therefore reinstate plaintiff's action in the trial court.

The pertinent facts of this case arise out of the purchase by defendants of a used 2004 BMW 325ci automobile from a car dealer, BMW of Turnersville*fn1, on August 24, 2006. Defendants purchased the vehicle for $30,816.08 and decided to finance the purchase with a loan from plaintiff. In return for that loan, defendants provided plaintiff with a security interest in the car and a promise to pay finance charges of $4,691.32. The finance charges and principal were to be paid in sixty monthly installments. Defendants also received a $1,500 credit toward their purchase by trading in a 1993 Nissan Maxima.

To finance the car, defendants entered into a Motor Vehicle Retail Installment Contract (the "Installment Contract") with BMW of Turnersville on the same day. The Installment Contract recites that it "describes all of the agreements with respect to the retail installment sale of the Vehicle between Seller and [defendants] and all prior agreements, whether oral or in writing, are superseded." Additionally, the document states that defendants "accept the Vehicle in its present condition, including all the equipment, parts and accessories." As part of the Installment Contract, the dealership "or its assignee" received a security interest in the car, plus the right to repossess and resell the car in the event of default on the part of defendants.

The Installment Contract was then assigned by BMW of Turnersville to plaintiff, in return for payment in full for the amount due on the car.

Shortly after defendants took delivery of the car, they received a summons for driving with fictitious license plates, and the car was temporarily impounded. The car also did not have so-called "heavenly pinstripes" painted on it, a detailing feature that defendants allegedly had been promised by the dealership's sales manager. These negative experiences induced defendants to attempt to return the car to BMW of Turnersville. However, the dealership refused to take possession of it.

Defendants did not pay to plaintiff any of the installments due under the financing agreement. Consequently, plaintiff repossessed the car and had it sold at auction for $20,000, leaving a deficiency owed to plaintiff in excess of $13,000.

Plaintiff filed a complaint against defendants in the Special Civil Part, seeking a deficiency judgment under the financing agreement, plus interest and attorney's fees. Defendants, who are self-represented, answered the complaint, denying plaintiff's allegations. At the same time, defendants joined BMW of Turnersville as a third-party defendant, alleging breach of contract based upon the car's lack of pinstripes and the dealership's issuance of improper license plates.

Thereafter, BMW of Turnersville moved to have the third-party complaint dismissed and the case sent to binding arbitration. The motion was made returnable on September 22, 2008. BMW of Turnersville relied upon the original sales contract (denominated as a "Motor Vehicle Retail Order") between it and defendants, which contains a binding arbitration clause. Specifically, the clause stated:

The parties to this agreement agree to arbitrate any claim, dispute or controversy, including all statutory claims and any state or federal claims, that may arise out of or are related to the purchase or lease of the automobile identified in this Motor Vehicle Retail Order and the financing thereof, including the validity of this agreement.

This Arbitration Agreement is made pursuant to a transaction involving interstate commerce and should be governed by the Federal Arbitration Act, 9 U.S.C. ยงยง1 ...


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