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June Cowger v. Cherry Hill Mitsubishi


March 14, 2011


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Camden County, Docket No. DC-018199-09. Wesley G. Hanna argued the cause for appellant (Friedman Doherty, attorneys; Mr. Hanna, on the brief). Laura D. Ruccolo argued the cause for respondent (Capehart & Scatchard, attorneys; Ms. Ruccolo, on the brief).

Per curiam.


Argued February 16, 2011

Before Judges Fisher and Sapp-Peterson.

Plaintiff provided defendant, a used car dealer, with a $500 deposit for the privilege of driving a vehicle for a few days before deciding whether to purchase. Plaintiff returned the vehicle but defendant failed to return the $500 deposit, despite repeated calls and requests for eleven days, causing plaintiff to commence this action pursuant to the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. Ultimately, the money was returned thirteen days after suit was filed, a total of twenty-four days after the vehicle was returned. At the conclusion of a non-jury trial, the judge held that plaintiff failed to demonstrate defendant engaged in an unlawful act and sustained no ascertainable loss; he also viewed plaintiff's filing of suit as inappropriate because her attorney failed to first make a demand for payment. We disagree in all respects and reverse.


This action has its genesis in plaintiff June Cowger's desire to purchase a car during the summer of 2009. She visited defendant's business in Cherry Hill on Saturday, August 29, 2009, and expressed interest in a used BMW. Morris Harland, a salesman, allowed her to take the car home for the weekend if she provided a $500 refundable deposit. Plaintiff agreed to return the following Monday on the understanding that, if she liked it, the parties would negotiate an agreement or, if she was no longer interested, her deposit would be returned. Plaintiff then provided defendant with the $500 deposit by way of a debit card before leaving with the vehicle for the remainder of the weekend.

Plaintiff returned the vehicle to defendant on Monday, August 31, 2009. Defendant, however, did not immediately return the deposit. Instead, the used car manager told plaintiff she "would have a check within five business days." On September 4, 2009, in response to plaintiff's inquiries, another employee, Lucy Valcarcel, emailed plaintiff stating: "I relayed the message to Morris [Harland]. He said that he told you it takes 3-5 business days. Please get in contact with Morris if you have any other questions regarding this matter." On September 7, 2009, Harland instructed plaintiff that she should no longer expect a check, and that the charge on her debit card would be reversed within forty-eight hours. When that time passed, plaintiff engaged counsel to pursue her rights.

On September 11, 2009, counsel filed a complaint alleging defendant's violation of the CFA. Defendant received service of process on September 23, 2009, and, the next day, plaintiff's bank account was credited $500.

A non-jury trial occurred on February 8, 2010. Plaintiff called Harland as a witness and testified on her own behalf. Defendant called Pat Warren, defendant's office manager, as a witness.

Harland denied ever having a conversation with Valcarcel instructing her to tell plaintiff she would receive the refund in three to five days, as Valcarcel represented in her email. Regarding refunds, he stated that if a customer provides a deposit by card, it gets refunded to the card, and if the deposit is paid in cash, it is refunded with a check. He testified that in the five years he had worked for defendant, deposits had been returned to customers in as little as five days and as long as thirty days.

Plaintiff testified about the promises made to her regarding the deposit as well as the bank fees she incurred because of the slow return of her deposit. Plaintiff testified she lives "paycheck-to-paycheck like most Americans" and that without the deposit she had insufficient funds to meet her obligations. On cross-examination, plaintiff acknowledged she was refunded the $41 in fees charged by her bank less than twenty-four hours after they were imposed.

Warren testified without elaboration that the process of making a refund to a debit card normally takes "20 to 30 days" and that, in the present case, an extra delay occurred because of defendant's "new computer system, so . . . the way we look at the information is a lot different than we had back prior to the new system." Warren denied the refund was hurried by the lawsuit, suggesting -- we suppose -- that it was just a coincidence that the refund was returned the day after defendant was served with plaintiff's summons and complaint.


The trial judge ruled in defendant's favor, setting the tone of his decision by initially editorializing that: only in America does this happen. A $500 item not being returned in a couple of weeks and we call a lawyer.

The judge discussed how "some lawyers" would have first written to defendant requesting the deposit's return rather than filing suit, and that he was "amazed" by the fact "that a lawsuit was filed for this $500 deposit rather than a phone call being made or a letter being written to the other side."

The judge also described that the transaction was "not even close to a sale," but merely a tactic of a "good salesman" in exchanging a weekend drive of the car for a $500 refundable deposit. The judge found that because plaintiff used a debit card, there was a "procedure" involved to return her money and that if she had used cash, it would have been different. The judge said this was not a "policy case" because defendant had no policy on refunds, again iterating that the circumstances just reflect the type of thing that a "good salesman" would do. He declared that the lawsuit was not "absolutely necessary" and "a letter would have sufficed" to end the dispute.

The judge also found that plaintiff had not suffered an ascertainable loss because "[s]he got her money back." Although he recognized that plaintiff "should have gotten it back perhaps a little sooner," he rejected the claim that she had suffered any damage.*fn1

The judge also rejected the contention that defendant had misrepresented the time within which the deposit would be returned; he found that a response by the salesman that "it will take a few days" was "of course not" a "misrepresentation in the true sense" and that he did not "see this as a violation of the Consumer Fraud Act." The judge then concluded in the way in which he began, with his commentary that "[n]obody talks to one another . . .[;] [e]verybody sues."


The CFA has been heralded as "one of the strongest consumer protection laws in the nation," Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 555 (2009), which has been furthered by an uninterrupted history "of constant expansion of consumer protection," Gennari v. Weichert Co. Realtors, 148 N.J. 582, 604 (1997). Because it is remedial, the CFA is construed liberally in favor of consumers. Weinberg v. Sprint Corp., 173 N.J. 233, 257 (2002); Cox v. Sears Roebuck & Co., 138 N.J. 2, 15 (1994).

The CFA imposes liability on any person who uses "any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission." N.J.S.A. 56:8-2. To substantiate a CFA claim, a plaintiff must establish "(1) unlawful conduct . . .; (2) an ascertainable loss . . .; and (3) a causal relationship between the . . . unlawful conduct and the . . . ascertainable loss." Int'l Union of Operating Eng'rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J. 372, 389 (2007) (quoting N.J. Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 12-13 (App. Div.), certif. denied, 178 N.J. 249 (2003)).

The trial judge dismissed plaintiff's action because he found defendant did not engage in unlawful conduct and plaintiff did not sustain an ascertainable loss. In essence, he also determined that plaintiff's failure to make an additional demand for the refund prior to suit barred her claim.

Before considering these holdings, we first consider our standard of review. In examining a judgment resulting from a non-jury trial we will defer to the judge's findings except when "they are so wholly unsupportable as to result in a denial of justice." Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). This standard, however, does not require our deference to the conclusions a judge draws from undisputed or established facts. Here, there were no material facts in dispute and, thus, no findings to which we must defer.

That is, there was no dispute that plaintiff was permitted to take the car for a few days in exchange for a $500 deposit, and there was no dispute that the parties agreed the deposit would be returned to plaintiff after the vehicle's return. It was not disputed that the vehicle was returned on August 31, 2009, and the deposit was not returned to plaintiff until September 24, 2009. Neither of defendant's representatives who testified disputed anything plaintiff said in her testimony. Harland testified that some customers in these circumstances are not even asked to leave deposits and that, for those who do, the time for the return of the deposit can range from a few days to a month. He had no explanation for the variations in the time for return. And, when asked why it took so long for defendant to return the $500 deposit to plaintiff, Warren testified that the delay was apparently caused by defendant's new computer system. The matter was decided based on the assumption that all these facts were true and undisputed. As a result, there are no findings to which we must defer, only conclusions of law based on those undisputed facts, to which we owe no deference. See Estate of Hanges v. Metropolitan Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83 (2010).

With that understanding, we consider the judge's conclusions that: (a) defendant did not engage in any prohibited conduct; (b) plaintiff sustained no ascertainable loss; and (c) plaintiff's attorney should have informally demanded payment before commencing suit.


We first reject the judge's conclusion that defendant did not engage in unlawful conduct. The parties have expended considerable energy in arguing whether defendant made a misrepresentation of a material fact.*fn2 Lost in that dust-up is the fact that the CFA not only prohibits fraud and misrepresentations but unconscionable commercial practices as well.*fn3 See N.J.S.A. 56:8-2; Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 472 (1988) (holding that "it is not necessary to show actual deceit or a fraudulent act; any unconscionable commercial practice is prohibited").

The undisputed facts leave no doubt that defendant engaged in an unconscionable commercial practice by holding plaintiff's deposit for so long. It was undisputed that defendant held the deposit for twenty-four days, an unreasonable period of time in these circumstances. We doubt defendant would have been as understanding as it believes plaintiff should have been, if plaintiff had retained possession of the vehicle for as long as defendant held her deposit.

The CFA does not define and has placed no specific parameters on what constitutes an unconscionable commercial practice. In "[a]cknowledging that 'unconscionability' is an 'amorphous concept obviously designed to establish a broad business ethic,'" the Supreme Court has "defined the term as '[t]he standard of conduct contemplat[ing] . . . good faith, honesty in fact and observance of fair dealing.'" Meshinsky, supra, 110 N.J. at 472 (quoting Kugler v. Romain, 58 N.J. 522, 544 (1971)). We have no hesitancy in concluding that defendant's failure to return the deposit for so long falls far afield of the standard of conduct described in Meshinsky. Many people live paycheck-to-paycheck and, for many, $500 is a significant sum. Defendant had immediate access to plaintiff's $500; she did not pay by check but provided that sum by way of a debit card, providing defendant with immediate access to the funds. Even though the parties had no express agreement on the time within which the money would be returned, concepts of good faith and fair dealing imposed on defendant a duty to return the deposit commensurate with the time within which it was originally received. In short, good faith and fair dealing required that plaintiff's bank account be reimbursed as quickly as it was depleted to fund the deposit. If defendant truly had computer issues, as testified by Warren, then defendant should have given plaintiff a check or taken steps to provide her with cash when she returned the car. Any delay beyond a few days was unreasonable and a delay greater than a week or two in these circumstances is indefensible.*fn4


The conclusion that plaintiff suffered no ascertainable loss is also erroneous because it flies in the face of the undisputed fact that, when plaintiff filed suit, defendant possessed her $500 deposit.

The CFA requires only that the plaintiff have suffered an ascertainable loss at the time suit is filed. See N.J.S.A. 56:8-19 (declaring that "[a]ny person who suffers any ascertainable loss . . . as a result of the use or employment by another person of any . . . practice declared unlawful . . . may bring an action . . ."); Weinberg, supra, 173 N.J. at 250 (holding that "[t]he express language of the statute requires" that the plaintiff be able to claim "an ascertainable loss . . . in order to bring a cause of action"). If the plaintiff was suffering an ascertainable loss at the time of the filing of suit, as here, the CFA does not insist the loss continue thereafter or until the time of trial as defendant seems to argue. In short, defendant's reimbursement of the $500 approximately two weeks after suit was filed did not destroy or moot plaintiff's cause of action.

To hold otherwise would defeat the central protective purpose of the CFA by permitting a violator to compensate the consumer any time up to the entry of judgment in order to avoid liability for treble damages or any of the other remedies provided by the CFA. We refuse the invitation to water down the CFA by endorsing this approach, which was championed by defendant and adopted by the judge.

At the time the complaint was filed, defendant remained in possession of plaintiff's $500 deposit. That amount was "definite, certain and measurable" and thus, "ascertainable" within the meaning of the CFA. The judge's contrary conclusion was erroneous.


We also find troubling those aspects of the judge's decision that revealed a preoccupation with what he believed was plaintiff's precipitous commencement of suit. At the outset of his opinion, the judge warned that he was "going to make some comments which some of you may not like to hear," and then immediately followed with these statements:

This . . . case involves a $500 deposit. The plaintiff, after not getting her $500 deposit back in a couple of weeks, called a lawyer. And as I said, some of these comments are not going to be appreciated by either side. But I say, only in America does this happen. A $500 item not being returned in a couple of weeks and we call a lawyer. It's hard for me to grasp, quite honestly, that this rises to that significance that you would say, geez, I better get a lawyer to get my $500.

Now, what would lawyers -- some lawyers do? They would write a letter to the other side and say, hey, my client didn't get her $500 back, kindly send it to me. And it would be done, the $500 would be sent back and that would be the end of the case. The lawyer wouldn't have to spend all this time filing a lawsuit. The other side's lawyer wouldn't have to spend all this time defending, filing a brief, a memorandum et cetera.

That's what amazes me today about some of these lawsuits that I see so frequently in this court. This is the special civil part court. It's easy to file lawsuits here. The lawsuits generally don't involve lots of money. And so even though I am amazed at the fact that a lawsuit was filed for this $500 deposit rather than a phone call being made or a letter being written to the other side, in this case the plaintiff's lawyer decided that he was going to file a lawsuit, maybe because he could argue it's a consumer fraud action and seek treble damages and seek the assessment of attorney's fees. Maybe that had something to do with the filing of this lawsuit for $500.

At the end of his opinion, the judge reprised his theme of an overly litigious society:

I think this was just an unfortunate situation that did not require a lawsuit, but that's where we -- what we're doing today.

You should be here on the day where we have small claims. On small claims day I've got a courtroom packed standing room only, because what happens today, in my opinion, people here think that everything requires a lawsuit today. Nobody talks to one another. Everybody sues. And I think that's what this is all about.

Contrary to the trial judge's holding, "[t]he plain language of the CFA does not . . . impose upon any putative plaintiff the requirement that he or she first seek a remedy directly from the offending merchant" and "makes no demand upon plaintiff to try to obtain a refund first as a pre-condition of instituting suit." Bosland, supra, 197 N.J. at 557.*fn5 Otherwise, a merchant could rely on the pre-suit demand requirement by "boldly imposing inflated charges at no risk, and planning to refund the overcharges only when asked." Id. at 561. Here, the judge determined that plaintiff was required to have her attorney demand a refund before commencing suit. If that conclusion was correct, "the CFA would limit relief by making it available only to those consumers who are alert enough to ask for a refund, while allowing the offending merchant to reap a windfall." Ibid. To the contrary, the Legislature intended to "empower consumers who seek to secure relief for themselves and for others who may not be aware that they have been victimized. Because reading a pre-suit demand for refund requirement into the CFA would thwart those salutary purposes, we will not endorse it." Ibid.

The judge's admonitions regarding the timing of plaintiff's suit and the size of the amount in controversy have no place in this matter. The CFA, as we have observed, requires proof that plaintiff sustained an ascertainable loss. It does not impose a monetary threshold for the filing of suit; indeed, our courts have experienced many cases involving much smaller losses than that asserted here without concern or criticism for the size of the amount in controversy. See, e.g., Lee v. Carter-Reed Co., L.L.C., 203 N.J. 496, 529 (2010) (where each plaintiff sustained a loss of $39.99, which consisted of the cost of a bottle of allegedly falsely advertised pills); Bosland, supra, 197 N.J. at 559 (where the damages consisted of an alleged $20 overcharge for a vehicle registration fee).

Imposing the obligation on a CFA claimant of making a pre-suit demand or weighing the sufficiency of the proofs in light of the relatively minimal amount of damages would deprive the CFA of its deterrent effect.


For these reasons, we conclude that plaintiff was entitled to a judgment that defendant violated the CFA by retaining her $500 deposit for an unreasonable period of time. At the time she filed suit, plaintiff had incurred a $500 loss and, therefore, had an actionable claim for three times that amount, i.e., $1500. N.J.S.A. 56:8-19. Because defendant reimbursed her $500 after suit was commenced, plaintiff's damages were reduced to $1000 and she is, therefore, entitled to judgment in that amount.*fn6 In addition, the CFA permits the imposition of an award of counsel fees to a prevailing party. Ibid. We remand so that plaintiff may apply for such an award.

Lastly, we recognize that the judge has already expressed a view of the facts and, although our remand -- beside requiring the ministerial act of entering judgment in favor of plaintiff for $1000 -- requires only an evaluation of plaintiff's claim for counsel fees, "we think it a difficult and uncomfortable task" for the judge to "revisit and re-evaluate the evidence" insofar as it may impact on his quantification of plaintiff's counsel fees "in light of the opinion he has already expressed." See, e.g., State v. Henderson, 397 N.J. Super. 398, 416 (App. Div. 2008), remanded on other grounds, Docket No. A-8 (Feb. 26, 2009). As we have observed, the judge was mistakenly critical about the manner in which plaintiff's counsel proceeded with this suit; as a result, we think it would be onerous for the trial judge to set that view aside in quantifying the counsel fees to which plaintiff is entitled. Accordingly, we direct that all future proceedings in this matter be handled by a different judge. See also N.J. Div. of Youth & Family Servs. v. A.W., 103 N.J. 591, 617 (1986); State v. Gomez, 341 N.J. Super. 560, 579 (App. Div.), certif. denied, 170 N.J. 86 (2001); In re Guardianship of R., 155 N.J. Super. 186, 195 (App. Div. 1977).

Reversed and remand for further proceedings in conformity with this opinion. We do not retain jurisdiction.

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