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Financial Services Vehicle Trust v. Panter

Superior Court of New Jersey, Appellate Division

February 28, 2019

FINANCIAL SERVICES VEHICLE TRUST, Plaintiff-Respondent,
v.
JAMES PANTER, Defendant-Appellant. NISSAN INFINITI LT, Plaintiff-Respondent,
v.
BENJAMIN A. FRATTO, Defendant-Appellant. SANTANDER CONSUMER USA, Plaintiff-Respondent,
v.
ALBARI M. EL, Defendant-Appellant. FINANCIAL SERVICES VEHICLE TRUST, Plaintiff-Respondent,
v.
DEBORAH MOORE, Defendant-Appellant.

          Argued January 15, 2019

          On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket Nos. SC-002133-17, SC-002646-17, SC-002661-17 and SC-000367-18.

          Kristin J. Vizzone argued the cause for appellant James Panter (Law Offices of Stephen E. Gertler, attorneys; Kristin J. Vizzone, on the brief).

          Jeffrey D. Noonan argued the cause for appellants Benjamin A. Fratto, Albari M. El, and Deborah Moore (Pomeroy, Heller & Ley, LLC, attorneys; Daniel J. Pomeroy, Karen E. Heller and Jeffrey D. Noonan, on the brief).

          Kari B. Samuels argued the cause for respondents.

          Before Judges Fisher, Suter and Firko.

          OPINION

          FISHER, P.J.A.D.

         In these four suits, lodged in the Small Claims Section of the Special Civil Part, [1] plaintiffs sought damages to redress the alleged diminished value of motor vehicles they claim to own. Defendants stipulated that the operation of their vehicles caused physical damage[2] to the vehicles in question, but they argue that the claim that each vehicle was also devalued by the stigma of having been in an accident is too speculative to be cognizable.

         Each suit was the subject of a bench trial before the same judge; two of them - El and Fratto[3] - were tried the same day.[4] And each suit resulted in verdicts favorable to plaintiffs. Defendants' separate appeals - now consolidated for disposition through a single opinion - pose certain common questions. Although the cases involve relatively small damage awards, [5] the parties urgently seek our views on the issues raised because of what they claim is a statewide plethora of similar diminished value claims.

         I

         We chiefly direct our attention to the issue arising from the fact that each vehicle is mentioned in one or more databases that reveal to consumers the vehicle's accident history. The parties' dispute whether that fact alone gives rise to a tangible item of damage. They disagree about whether a vehicle, which has been repaired or restored to its pre-accident condition and function, can be said to have less "value" than an identical but never damaged vehicle. In other words these four cases ask the same question: all other things being equal, would you pay the same amount for a vehicle with an accident history as you would for a vehicle without?

         As a matter of law, we agree with plaintiffs that a motor vehicle owner - like the owner of any other chattel - may recover for an additional reduction in value when a vehicle has become less desirable for resale because of the stigma of having once been damaged. We recognize that consequence might be overlooked in many cases; property owners often seek compensation by presenting only evidence about the cost of repair. See Parisi v. Friedman, 134 N.J.L. 273, 274 (E. & A. 1946). But the law has never limited compensation to that element alone. To the contrary, our courts have long recognized that a vehicle owner is entitled to recover the difference between the vehicle's value before the harm and its value after, see Jones v. Lahn, 1 N.J. 358, 362 (1949); Hintz v. Roberts, 98 N.J.L. 768, 770 (E. & A. 1923); Premier XXI Claims Mgmt. v. Rigstad, 381 N.J.Super. 281, 283-84 (App. Div. 2005); Fanfarillo v. East End Motor Co., 172 N.J.Super. 309, 313-14 (App. Div. 1980); Nixon v. Lawhon, 32 N.J.Super. 351, 354 (App. Div. 1954), which could, in appropriate cases, involve any other non-speculative impact on the vehicle's value.

         To be sure, the measure of damages might be impacted by other circumstances beyond the mere cost of repair, such as a change in the marketplace, Parisi, 134 N.J.L. at 274-75, depreciation, Fanfarillo, 172 N.J.Super. at 313, and the loss of the vehicle's use, Restatement (Second) of Torts, § 928 (Am. Law Inst. 1979). Measuring damages might also be complicated by an owner's election not to repair prior to bringing suit. Premier XXI Claims Mgmt., 381 N.J.Super. at 284-85. But, when implicated, all these factors are soluble through the submission of adequate proof. Their implication does not bar recovery. Ibid.

         Because the measure of damages is a product of the difference between the vehicle's pre-harm and post-harm value, the fact that the defendant's negligence has given the vehicle an accident history bears on its post-harm value. With the advent of databases such as CarFax, the consuming public now has the ability to learn whether a vehicle wears the "scarlet letter" of an accident history. Because the claims at hand rely on this newly-available source of information doesn't mean the information should be excluded when fixing damages in such a case. To the contrary, we hold that the damage caused by such a "scarlet letter" is just another factor that bears on value and is recoverable if supported by sufficient proof. See Restatement, § 928(a) (recognizing that damages are recoverable "for any difference between the original value and the value after repairs" (emphasis added)). An award based on this "scarlet letter" or "stigma" is not speculative but is consistent with our past recognition that damages may include such intangible concepts. Value is a concept based on what a willing buyer would pay and a willing seller would accept when neither was under a compulsion to act. City of ...


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