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Pisack v. B & C Towing, Inc.

Supreme Court of New Jersey

January 16, 2020

Bernice Pisack, on behalf of herself and all others similarly situated, Plaintiff-Respondent,
v.
B & C Towing, Inc., Defendant-Appellant, and Marie J. Cavalchire and Alan Anthony Young, Defendants, and B & C Towing, Inc., Defendant-Third-Party Plaintiff,
v.
The City of Newark, Third-Party Defendant. Eptisam Pellegrino, on behalf of herself and all others similarly situated, Plaintiff-Respondent,
v.
Nick's Towing Service, Inc., Defendant-Appellant, and Nicholas Testa and Susan Testa, Defendants. Christopher Walker, on behalf of himself and all others similarly situated, Plaintiff,
v.
All Points Automotive & Towing, Inc., Defendant, and Thomas Locicero, Defendant.

          Argued October 24, 2019

          On appeal from the Superior Court, Appellate Division, whose opinion is reported at 455 N.J.Super. 225 (App. Div. 2018).

          Gabriel H. Halpern argued the cause for appellant B & C Towing, Inc. (Pinilis Halpern, attorneys; Gabriel H. Halpern, on the briefs).

          Jeremy B. Stein argued the cause for appellants Nick's Towing Service, Inc. (Hartmann Doherty Rosa Berman & Bulbulia, attorneys; Jeremy B. Stein and Paul S. Doherty, III, on the briefs).

          Andrew R. Wolf argued the cause for respondents Bernice Pisack and Eptisam Pellegrino (The Wolf Law Firm, The Law Office of Christopher J. McGinn, and Law Office of Edwyn D. Macelus, attorneys; Andrew R. Wolf, David J. DiSabato, Lisa R. Bouckenooghe, Christopher J. McGinn, and Edwyn D. Macelus, on the briefs).

          Matthew J. Giacobbe argued the cause for amicus curiae Garden State Towing Association (Cleary Giacobbe Alfieri Jacobs, attorneys; Matthew J. Giacobbe and Jessica V. Henry, on the briefs).

          Isabella R. Pitt, Deputy Attorney General, submitted a brief on behalf of amicus curiae Attorney General of New Jersey (Gurbir S. Grewal, Attorney General, attorney; Jason W. Rockwell, Assistant Attorney General, of counsel, and Isabella R. Pitt, on the brief).

          Michael R. McDonald submitted a brief on behalf of amicus curiae Tumino's Towing, Inc. (Gibbons, attorneys; Michael R. McDonald and Caroline E. Oks, on the brief).

          LaVECCHIA, J., writing for the Court.

         This appeal concerns consolidated putative class actions brought by plaintiffs whose vehicles were towed at the direction of local police and without plaintiffs' consent. Each plaintiff was charged for the non-consensual tow by a privately owned towing company that had a contract with the respective local government to perform that towing service. Plaintiffs brought suit challenging those charges in three class actions with common legal claims. Plaintiffs alleged that the fees imposed by the private companies violated the Predatory Towing Prevention Act (Towing Act), the Consumer Fraud Act (CFA), and the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA).

         One class action was dismissed on summary judgment and the other was allowed to proceed only as an individual case. Plaintiffs appealed. The Appellate Division reversed in a consolidated opinion. 455 N.J.Super. 225, 231-32 (App. Div. 2018).

         The Appellate Division's decision explained that the Towing Act does not require a preliminary exhaustion of administrative remedies prior to filing a complaint in Superior Court, id. at 242; it considered and rejected the argument that defendants have derivative immunity under the Tort Claims Act (TCA) because the private towing companies were directed by the local police to tow plaintiffs' vehicles, id. at 244; it emphasized that the Towing Act expressly contemplates a CFA action, id. at 245; and it addressed the pivotal question whether the pre-2018 Towing Act limited the types of services for which a towing company can charge a fee and held that towing charges must be consistent with the limitations provided by the Act and its regulations, id. at 245-47.

         In that last holding, the Appellate Division carefully reviewed and relied on the then-current language of the Towing Act, which required the Director to "establish a schedule of private property and other non-consensual towing and related storage services for which a towing company may charge a service fee." N.J.S.A. 56:13-14(a) (2018). The Act then provided that it is "an unlawful practice for [a]towing company that provides non-consensual towing services . . . [t]o charge a fee for a private property or other non-consensual towing or related storage service not listed on [that] schedule of services . . . except as may be permitted by the director by regulation." N.J.S.A. 56:13- 16(f)(1). The Director's implementing regulations reinforced that command by providing that "[a] towing company shall not charge any fee for private property towing or other non[-]consensual towing and related storage services not included in [the Director's schedule]." N.J.A.C. 13:45A-31.4(e). Given that statutory and regulatory language, the Appellate Division reached the indisputable conclusion that "if a service is not listed on the Director's schedule, a towing company cannot charge for that service." 455 N.J.Super. at 247.

         Finally, the Appellate Division addressed whether any of plaintiffs' asserted claims can be pursued as class actions, holding that, depending on the facts developed post-discovery, violations of the Towing Act and the CFA, as well as the TCCWNA, may be challenged in a class action. Id. at 250.

         The defendant towing companies filed motions for leave to appeal to challenge the Appellate Division's decision, which the Court granted. 236 N.J. 24, 25 (2018); 235 N.J. 477 (2018). Those defendants now not only dispute the determinations listed above, but also assert that amendments made to the Towing Act after the Appellate Division issued its decision should be applied retroactively and would essentially resolve these disputes.

         HELD: The 2018 legislation amending the Towing Act does not have retroactive effect, and the Court agrees with the Appellate Division's construction of the pre-2018 Act. The Court affirms the Appellate Division's thorough and thoughtful decision as to exhaustion of administrative remedies, derivative immunity, and the remand as to the Towing Act and CFA claims, all substantially for the reasons expressed in Judge Gilson's opinion. The Court separately addresses whether plaintiffs can pursue claims under the TCCWNA and finds that plaintiffs are unable to state a claim under that statute. The Court therefore reverses the judgment of the Appellate Division on that issue but affirms as to all others.

         1. In 2008, the Legislature enacted the Towing Act, codified at N.J.S.A. 56:13-7 to -23. The Court reviews key provisions of that act as it existed at the time of the trial court and Appellate Division decisions. After the Appellate Division rendered its decision, the Legislature amended the Towing Act, see L. 2018, c. 165. Among the amendments effected by the 2018 legislation, the Legislature added a new subsection to N.J.S.A. 56:13-16, which provides in pertinent part that no provision of the Towing Act should be interpreted to prevent towing companies "from charging fees for non-consensual towing or related storage services in accordance with a duly-authorized fee schedule established by a municipality or other political subdivision of this State with respect to a vehicle that has been subject to non-consensual towing authorized by a law enforcement officer of this State or the political subdivision." L. 2018, c. 165, § 3(i) (codified at N.J.S.A. 56:13-16(i). The new section 16(i) took effect after the events that gave rise to this appeal. (pp. 5-10)

         2. Three scenarios justify retroactive application of a legislative amendment: (1) when the Legislature expresses its intent that the law apply retroactively, either expressly or implicitly; (2) when an amendment is curative; or (3) when the expectations of the parties so warrant. (pp. 10-11)

         3. Here, the Legislature did not state that the 2018 amendments to the Towing Act would have retroactive effect. Rather, the Legislature provided that the 2018 amendatory legislation "shall take effect immediately." L. 2018, c. 165, § 5. Those words bespeak an intent contrary to, and not supportive of, retroactive application. Defendants point to language in a Statement that accompanied the bill when introduced, which mirrored the language of the bill and described it as clarifying. Case law has consistently recognized that an amendment may be treated as curative provided it does not establish different or new standards but rather is designed to reaffirm and clarify the existing standards. The 2018 legislation incorporating the new subsection (i) substantially changed the Towing Act in a major way. Prior to the amendment, it was unlawful for a towing company to charge a fee not included within the Director's schedule. N.J.S.A. 56:13-16(f)(1) (2017). After the amendment, towing companies may charge fees not included in the Director's schedule if the fee is authorized by a municipal ordinance. N.J.S.A. 56:13-16(i) (2018). With that significant change, the Legislature substantively deviated from its prior approach in the Towing Act; the amendment therefore cannot be considered curative. Finally, the evidence and briefing submitted to the trial court and Appellate Division indicated that all parties expected the issues in this appeal to be governed by the prior version of N.J.S.A. 56:13-16. The 2018 legislation amending the Towing Act does not have retroactive effect and has no application in the present matter. (pp. 11-15)

         4. After reviewing the procedural history of the consolidated cases, the Court affirms the determinations detailed in the "Held" paragraph above. (pp. 15-21)

         5. The Court addresses separately the Appellate Division's determination that the TCCWNA provides a cause of action for vehicle owners who received towing bills with prohibited charges. Pisack, 455 N.J.Super. at 249. To assert a claim under the TCCWNA, a plaintiff must establish: first, that the defendant was a seller, lessor, creditor, lender or bailee or assignee; second, that the defendant offered or entered into a written consumer contract or gave or displayed any written consumer warranty, notice or sign; third, that at the time that the written consumer contract is signed or the written consumer warranty, notice or sign is displayed, that writing contains a provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by state or federal law; and finally, that the plaintiff is an aggrieved consumer. (pp. 21-24)

         6. With respect to the first element, the owners of vehicles subjected to non-consensual towing clearly were not buying, leasing, or borrowing any money, property, or services from the towing companies. The Appellate Division agreed but found that the companies are "bailees" under the Act when they "take a vehicle." Id. at 248. Here, no contract existed between the vehicle owners and the towing companies when the companies towed the vehicles, and it seems far from clear that a non-consensual or involuntary bailment is what the Legislature had in mind for purposes of authorizing a TCCWNA action that is premised on the idea that it is a consumer contract remedy. For bailment to constitute a contract for purposes of a TCCWNA claim, the Legislature likely intended contractual bailments for purposes of the TCCWNA, if at all. And, as for the second element of a TCCWNA claim, the only writing exchanged between the plaintiffs and the towing companies was the list of charges, which was provided after the plaintiffs paid to retrieve their vehicles. The Court cannot accept that such after-the-fact "bills" constituted a contract or notice to plaintiffs when plaintiffs had already paid the amount demanded to recover their cars. That could not constitute a "meeting of the minds." Given the contractual underpinning of the consumer remedy that the TCCWNA is designed to accomplish, that cause of action is ill-suited as a vehicle for plaintiffs to assert claims relating to their non-consensual relationship with the towing companies. The Court finds that plaintiffs are able to establish the final two elements of a TCCWNA claim but that they failed to establish elements one and two. Plaintiffs therefore cannot state a cause of action under the TCCWNA. The Court reverses the portion of the Appellate Division's judgment reinstating plaintiffs' TCCWNA claims. (pp. 24-31)

         The judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART.

          CHIEF JUSTICE RABNER and JUSTICES ALBIN, PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in JUSTICE LaVECCHIA's opinion.

          OPINION

          LaVECCHIA, JUSTICE.

         This appeal concerns consolidated putative class actions challenging the fees charged in connection with the non-consensual towing of vehicles at the direction of local police.[1] The putative class plaintiffs brought lawsuits against the towing companies that had municipal contracts to provide the towing services. These consolidated actions involve a common set of facts. None of the named plaintiffs consented to the towing of their vehicles. Each had his or her vehicle towed at the direction of local police. And, each plaintiff was charged for the non-consensual tow by a privately owned towing company that had a contract with the respective local government to perform that towing service.

         In addition to a common set of basic facts, the actions asserted common legal claims. Plaintiffs alleged that the fees imposed by the private companies violated the Predatory Towing Prevention Act (Towing Act or the Act), N.J.S.A. 56:13-7 to -23, the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -211, and the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18.

         Defendants not only dispute plaintiffs' ability to pursue their causes of action but assert that amendments made to the Towing Act after the Appellate Division issued its decision should be applied retroactively and would essentially resolve these disputes.

         Because the Towing Act lies at the center of this appeal, we begin by reviewing that Act and the amendments thereto and by determining which version of the legislation applies in this case.

         I.

         We first summarize the Towing Act, in the form in which it existed when these causes of action arose; we then turn to the recent legislative amendment of that Act and consider whether the amendments apply retroactively, as defendants urge, or prospectively.

         A.

         In 2008, the Legislature enacted the Towing Act, L. 2007, c. 193 (codified at N.J.S.A. 56:13-7 to -23), for the stated purpose "to create a coordinated, comprehensive framework to establish and enforce minimum standards for tow truck operators," N.J.S.A. 56:13-8(e) (2008).[2] The Legislature found that prior regulation of towing and towing companies was "fragmented among various State agencies and local governments," was "inconsistent or inadequate," and provided "insufficient recourse . . . under the law." N.J.S.A. 56:13-8(d). In addition, the Legislature found that some towing companies engaged in predatory practices such as "charging unwarranted or excessive fees." N.J.S.A. 56:13-8(a), (b). In particular, the Legislature found companies were "overcharging consumers for towing services provided under circumstances where the consumer ha[d] no meaningful opportunity to withhold consent." N.J.S.A. 56:13-8(b). Accordingly, the Legislature enacted the Towing Act, stating, as it was advancing this reform legislation, its intent to stop "predatory towing, where a vehicle is removed without the owner's notice or consent and the owner is charged an exorbitant fee for the vehicle's return." A. Consumer Affairs Comm. Statement to A. 4053 1 (May 17, 2007).

         As enacted in 2008 and, where noted, amended by the Legislature in 2009, the Towing Act requires the Director of the Division of Consumer Affairs (Director) to "establish a schedule of private property and other non-consensual towing and related storage services for which a towing company may charge a service fee." N.J.S.A. 56:13-14(a). The Act instructs the Director to "specify services that are ancillary to and included as part of basic . . . towing services for which no fees in addition to the basic towing service fee may be charged." Ibid. And, the Act renders it unlawful for towing companies "[t]o charge a fee for private property or other non-consensual towing or related storage service not listed on the schedule of services for which a fee may be charged as established by the director except as may be permitted by the director by regulation." N.J.S.A. 56:13-16(f)(1).[3] The Towing Act makes breach of its provisions a violation of the CFA. N.J.S.A. 56:13-21(a). In addition to remedies available under the CFA, the Towing Act provides that "the director may order a towing company that has billed a consumer for any non[-]consensual towing or related storage an amount determined by the director to be unreasonable to reimburse the consumer for the excess cost with interest." N.J.S.A. 56:13-21(b).[4]

         As required by N.J.S.A. 56:13-14(a), the Director promulgated a schedule of permitted fees for non-consensual towing and related storage services. See N.J.A.C. 13:45A-31.4. Plaintiffs allege that, in violation of the Towing Act, the towing company defendants here charged them fees that were authorized by municipal ordinance but were outside the schedule established by the Director. Thus, this appeal springs from the conflict between what defendants charged and what appears in the Director's schedule.

         The trial courts and Appellate Division addressed plaintiffs' claims in each of the individual matters based on the law in effect at the time under the Towing Act and the Director's ...


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