April 17, 2012
HANN FINANCIAL SERVICES CORP., PLAINTIFF-RESPONDENT,
PETER DIPIETRO, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Gloucester County, Docket No. DC-6722-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 26, 2012 -
Before Judges Grall and Skillman.
Defendant Peter DiPietro appeals from a judgment in favor of plaintiff Hann Financial Services Corp. in its action to collect a deficiency defendant allegedly owed on a retail installment contract for his purchase of a motor vehicle, and he challenges the dismissal of his counterclaims for damages and punitive damages on his allegations of breach of the peace, fraud and consumer fraud.*fn1 The judgment was entered on plaintiff's summary judgment motion, which had been adjourned to the trial date scheduled in the Special Civil Part. It awards plaintiff $14,463.01, which includes a $12,649.16 deficiency, $333.58 for costs of the repossession and sale, $120 for late charges and a title fee, and attorney's fees in the amount of $1360.27.
The evidence submitted on the motion is inadequate to establish an essential element of plaintiff's claim for deficiency - the commercial reasonableness of Hann's sale of the vehicle following its repossession. Accordingly, we reverse the grant of summary judgment and remand for further proceedings in conformity with this opinion. On remand, the court should clarify its dismissal of defendant's counterclaims, which was stated on the record but not referenced in the judgment.
In May 2006, defendant purchased a used 2003 Dodge RAM from Auto Lender's Liquidation Center for $20,649, and he financed the purchase with a retail installment contract. Pursuant to that contract, defendant was obligated to pay $424.16 monthly, making the total "sale price" $30,539.52. The contract stated that it would be "assigned (transferred) to Hann Financial Services Corp." and that payments were to be made to the assignee directly.
There is no dispute that defendant defaulted by failing to make a payment due. Upon the terms of the retail installment contract, this default gave the assignee the right to accelerate all sums due and owing, peaceably enter premises to take possession of the vehicle, treat personal property in the vehicle that is not claimed within seven days of the repossession as abandoned, and the "right, as provided by law," to retain the vehicle or sell it and collect the deficiency. It further authorizes the assignee to collect its costs and any attorney's fees incurred in a collection action.
"Early" one morning, plaintiff's agents appeared at defendant's home to repossess the vehicle and pounded on his front door. The agents "pressed" defendant and his wife to remove their personal items from the vehicle before towing it from their driveway. According to defendant, his family did not have adequate daylight to retrieve all of the personal property they had in the car, but the record does not include a list of items lost or any evidence that defendant advised the plaintiff of a claim for any item left in the vehicle in the week following the repossession.
Plaintiff sold the vehicle in July 2008 for $5200, when the balance due on the contract was $17,849.16. Plaintiff incurred $333.58 in connection with the repossession and sale and attorney's fees in the amount of $1360.27. Plaintiff charged defendant an additional $120 that includes a late charge and title fee. Apart from a certification prepared by plaintiff's paralegal, which asserts that the vehicle was "sold in a commercially reasonable manner" and references a charge incurred for publication of a notice in a newspaper, the record includes no information about the sale.*fn2 Defendant, relying on a used car guide published by the National Automobile Dealers Association, asserts that the value of the vehicle was about $7500 at the time of the repossession.
Defendant opposed plaintiff's motion for summary judgment. He presented no evidence other than that referenced above to raise an inference of fraud in the formation or performance of the contract precluding enforcement, or relevant to the commercial unreasonableness of the sale or to circumstances warranting an offset based on plaintiff's breach of the peace during the repossession.
On appeal defendant presents the following issues:
I. COURT ERRED DENYING APPELLANT'S MOTION FOR LEAVE TO AMEND COMPLAINT AND GRANTING RESPONDENT'S MOTION BECAUSE RESPONDENT HANN FINANCIAL IS NOT "REAL PARTY IN INTEREST."
II. THE COURT ERRED IN GRANTING RESPONDENT'S MOTION FOR SUMMARY JUDGMENT BASED ON RESPONDENT'S OBJECTIONS TO INTERROGATORIES, OTHER DISCOVERY ISSUES AND FAILING TO ATTACHED
[sic] THEIR "STATEMENT OF MATERIAL FACTS."
III. THE COURT ERRED GRANTING RESPONDENT'S MOTION FOR SUMMARY JUDGMENT BECAUSE THE VEHICLE WAS NOT SOLD COMMERCIALLY REASONABLE
IV. THE COURT ERRED IN GRANTING RESPONDENT'S MOTION FOR SUMMARY JUDGMENT BECAUSE RESPONDENT HANN FINANCIAL HAS NO STANDING TO INCLUDE FEES OTHER THAN HOLDING AND PREPARING COLLATERAL.
V. THE COURT ERRED GRANTING RESPONDENT'S MOTION FOR SUMMARY JUDGMENT BECAUSE THE APPELLANT HAS A VALID CLAIM AGAINST RESPONDENT FOR BREACHING THE PEACE.
VI. THE COURT ERRED GRANTING RESPONDENT'S MOTION FOR SUMMARY JUDGMENT BECAUSE THE COURT ITSELF STATED THAT APPELLANT HAS VALID AFFIRMATIVE DEFENCES
[sic] AND AFFIRMATIVE CLAIMS.
VII. THE COURT ERRED GRANTING SUMMARY JUDGMENT BASED ON APPELLANT'S FAILURE TO ATTEND.
VIII. COURT ERRED GRANTING PLAINTIFF'S MOTION
FOR SUMMARY JUDGMENT WHEN THE ISSUE OF MATERIAL FACT IS STILL IN DISPUTE.
IX. THE COURT ERRED GRANTING THE RESPONDENT'S MOTION FOR SUMMARY JUDGMENT AND DENYING JUST ABOUT EVERY MOTION THE APPELLANT HAS EVER BROUGHT BEFORE THE GLOUCESTER COUNTY COURT BECAUSE IT WAS MOTIVATED SOLELY BY A "SPITEFUL EFFORT TO 'GET' HIM FOR REASONS WHOLLY UNRELATED TO ANY LEGITIMATE STATE OBJECTIVE."
A We first consider whether plaintiff is entitled to a grant of summary judgment. In reviewing a grant of summary judgment, we apply the same standard as the trial court. Prudential Property Ins. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998). We must consider the evidence presented on the motion in the light most favorable to the non-moving party to determine whether the prevailing party is entitled to judgment as a matter of law. Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995). In making that determination, we must consider the standard and allocation of the burden of proof at trial. Ibid.
Defendant's position on the inadequacy of plaintiff's evidence that its sale of his vehicle was commercially reasonable is well-taken. The contract gives plaintiff the right to resell the vehicle defendant purchased and recoup the deficiency "as provided by law."
Pursuant to N.J.S.A. 12A:9-610(a), plaintiff, as assignee of the seller who was a secured party to this transaction under the terms of the retail installment contract, was entitled to "sell, lease, license, or otherwise dispose" of the repossessed vehicle. That entitlement, however, has boundaries: "Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable." N.J.S.A. 12A:9-610(b). "[C]ommercial reasonableness should be viewed as a flexible concept, based upon a consideration of all relevant factors presented in each individual case." Security Sav. Bank v. Tranchiatella, 249 N.J. Super. 234, 239 (App. Div. 1991).
The Legislature has provided guidance on commercial reasonableness, however. Pursuant to N.J.S.A. 12A:9-627(a), defendant's evidence of a higher book value for the vehicle was not "of itself sufficient to preclude [plaintiff] from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner." But the adequacy of defendant's evidence is not at issue here, because plaintiff had the burden of proving the commercial reasonableness of the sale in order to recover the deficiency it alleged. Security Sav. Bank, supra, 249 N.J. Super. at 240.
To meet that burden, plaintiff could demonstrate commercial reasonableness by making one of the showings specified in N.J.S.A. 12A:9-627:
(b) . . . A disposition of collateral is made in a commercially reasonable manner if the disposition is made:
(1) in the usual manner on any recognized market;
(2) at the price current in any recognized market at the time of the disposition; or
(3) otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.
While none of the specific methods of disposition set forth above "is required or exclusive," N.J.S.A. 12A:9-627 cmt. n.3, plaintiff presented no evidence on the circumstances under which this sale was conducted, and defendant's evidence of current value suggested it was not commercially reasonable.
In Security Savings Bank, we held that a secured creditor who has not established commercial reasonableness must overcome a "presumption that the value of the collateral at least equaled the debt it secured." 249 N.J. Super. at 245. Because plaintiff did not submit evidence adequate to make the threshold showing or overcome the presumption, we cannot conclude that plaintiff is entitled to the judgment as a matter of law. Consequently, we vacate the judgment and remand for further proceedings.
We reject defendant's assertion that his counterclaims and other affirmative defenses - breach of the peace, fraud and consumer fraud - precluded entry of summary judgment in favor of plaintiff. In opposition to plaintiff's motion, defendant did nothing more than point to deficiencies in plaintiff's proofs and rely on his allegations supporting his affirmative defenses and counterclaims. The record does not include a certification attesting to facts or referencing evidence supporting any of his defenses or counterclaims. To the extent defendant relied on his affirmative defenses or counterclaims to defeat plaintiff's summary judgment motion on its claim, he was required to raise a genuine dispute of material fact supported by the evidential materials submitted on the motion. He could not rely on the allegations and denials in his pleadings. R. 4:46-5(a); see Robbins v. Jersey City, 23 N.J. 229, 241 (1957) (noting that that where a prima facie claim warranting summary judgment is established, the party opposing the motion must "demonstrate by competent evidential material that a genuine issue of fact exists").
Because we are remanding, it is appropriate to narrow the scope of the proceedings by summarily addressing the other issues defendant has raised on this appeal that lack sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E). These claims include procedural and substantive issues.
Contrary to defendant's claim, plaintiff, the assignee of the retail installment contract, was the appropriate party to file a complaint seeking relief pursuant to its terms. An assignee of a debt is a real party in interest. Zurcher v. Modern Plastic Machinery Corp., 24 N.J. Super. 158, 163 (App. Div. 1952); see also R. 4:26-1 (providing that the real party in interest may litigate a claim); King v. So. Jersey Nat'l Bank, 66 N.J. 161, 165-66 (1974) (wherein an assignee of an installment sales contract brought suit upon the buyer's default).
Plaintiff's failure to include a statement of material facts as required by N.J.S.A. 4:46-2(a), without more, did not require the court to deny summary judgment. See Leang v. Jersey City Bd. of Educ., 198 N.J. 557, 568 n.2. (2009) (discussing options available to trial courts faced with motions for summary judgment failing to conform with the requirements of Rule 4:46-2). In this case, the record was not voluminous and plaintiff submitted a certification in support of its motion that set forth the material facts and references to the record. As discussed above, that certification was not adequate to permit entry of judgment in plaintiff's favor, but plaintiff's failure to fully comply with Rule 4:46-2(a) did not hamper defendant's effort to respond or the court's effort to review the record. In these circumstances, the judge did not err by overlooking the technical deficiency and addressing the merits.
Defendant also complains about the scheduling of the summary judgment motion. But defendant, who failed to appear, had proper notice of the date on which the summary judgment motion would be heard, and he is not entitled to relief because the date was the same as the trial date. His failure to appear cannot be justified on that basis, and he cites no authority in support of his argument that the scheduling of the motion and the trial for the same date was improper.
Relying upon the Retail Installments Sales Act, N.J.S.A. 17:16C-1 to -61, defendant objects to the assessment of a late charge and title fee. In Saul v. Midlantic National Bank South, 240 N.J. Super. 62, 74 (App. Div. 1990), we held the Act does not apply to vehicles sold at a price higher than $10,000. See N.J.S.A. 17:16C-1(a) (defining goods to exclude goods costing more than $10,000). Thus, defendant who purchased a car for a higher price may not rely on the Act.
Affirmed in part; reversed in part and remanded for further proceedings in conformity with this opinion.