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Robert E. Smith, On Behalf of Himself and All Others Similarly Situated v. Vanguard Dealer Services

December 21, 2010

ROBERT E. SMITH, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-RESPONDENT,
v.
VANGUARD DEALER SERVICES, L.L.C., AND RASSAS PONTIAC, INC., DEFENDANTS-APPELLANTS,
AND ROYAL GUARD, L.L.C., DEFENDANT.



On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3215-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 6, 2010 - Decided Before Judges Grall, C.L. Miniman and LeWinn.

By leave granted, defendants Rassas Pontiac, Inc. (Rassas) and Vanguard Dealer Services, L.L.C. (Vanguard) appeal an order refusing to dismiss plaintiff Robert E. Smith's complaint as to them for failure to state a claim upon which relief can be granted. R. 4:6-2(e). At issue are Smith's claim against Rassas under the Truth-in-Consumer-Contract, Warranty, and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, and Smith's claims alleging that Rassas and Vanguard have been unjustly enriched.*fn1 Because a searching and liberal reading of the complaint suggests viable causes of action, we affirm. See Banco Popular N. Am. v. Gandi, 184 N.J. 161, 183 (2004); Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989).

Smith's complaint, filed on his own behalf and that of others similarly situated, includes these assertions.*fn2

Defendants Vanguard and Royal Guard are affiliated entities that share a principal place of business in New Jersey. Vanguard and Royal Guard, along with Rassas and other dealerships acting as their agents, "orchestrate the manufacture, distribution, sale and administration" of a theft- protection plan known as Royal Guard Etch.

In 2004, Smith purchased a car from the Rassas dealership and paid $109 for the Royal Guard Etch. The plan includes an alpha-numeric etching on the car's windows and a warranty for a buyer who pays the fee to register the etching. The anti-theft etching is placed on the windows of all vehicles offered for sale at the dealership at no additional cost to the buyer, but the warranty is supplied only if the buyer registers the etch and pays a fee.

The benefit of the warranty is a credit payable if the theft-prevention system fails and results in a total loss. The credit is payable only at the selling dealership and only if "used toward the purchase" of a replacement vehicle from that dealership.

Smith purchased the warranty and signed the registration form at the dealership when he bought his car. The registration form lists Rassas as the dealer and includes blanks for the signatures of the customer and Rassas's representative.

Smith alleges that the provision of the warranty limiting the remedy to a credit that can only be used at Rassas is a "tying arrangement" prohibited by the Magnuson-Moss Warranty Act (Magnuson-Moss), 15 U.S.C.A. § 2302(c). Defendants did not seek dismissal of Smith's complaint on the ground that Magnuson-Moss permits this tying arrangement, and, quite properly, they do not seek reversal on that ground here.*fn3 Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).

On appeal defendants argue that even if the warranty violates Magnuson-Moss, Smith's complaint does not state a cause of action against Rassas under TCCWNA. Assuming, without deciding, that this warranty violates a consumer right established by federal law, we disagree.

The conduct proscribed by TCCWNA and pertinent here is set forth in N.J.S.A. 56:12-15:

No seller . . . shall in the course of his business offer . . . or enter into any written consumer contract or give or display any written consumer warranty, notice or sign . . . which includes any provision that violates any clearly established legal right of a consumer . . . as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed.

Interpretation of the statute is a question of law reviewable de novo. In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 94 (2007). Although the statute permits liability on proof of one or more of several grounds, only one is required. Because we conclude that Smith's complaint states a claim based on Rassas's "display" of the warranty "in the course of [its] business," within the meaning of N.J.S.A. 56:12-15, we need not consider defendants' objections to the ...


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