OLGA MULLAKANDOVA v. C&K AUTO IMPORTS, INC., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1059-05T21059-05T2

OLGA MULLAKANDOVA,

Plaintiff-Appellant,

v.

C&K AUTO IMPORTS, INC.

Defendant-Respondent,

and

HIGHLAND LEASE CORPORATION,

Defendant.

__________________________________

 

Submitted September 25, 2006 - Decided October 5, 2006

Before Judges Lintner and C.L. Miniman.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9530-04.

Jeffrey Benjamin, attorney for appellant.

No brief was filed on behalf of respondent.

PER CURIAM

Plaintiff Olga Mullakandova appeals from the denial of her application for an award of counsel fees, pursuant to N.J.S.A. 56:8-19, 56:12-17, and 56:12-70, based on violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -12 (CFA), the Truth in Consumer Contract, Warranty and Notice Act, N.J.S.A. 56:12-14 to -18 (TCCA), and the Consumer Protection Leasing Act, N.J.S.A. 56:12-62 and -67 (CPLA). The trial judge denied the application because the jury found no damages and no liability as to defendant C&K Auto Imports, Inc. (C&K). She wrote on the order that "Vlad may have 'taken' [plaintiff's] money but he and [plaintiff] both [live] in N.Y. [There is n]o colorable money claim here, which is essential to [a] private cause of action." We reverse and remand for an award of fees.

Plaintiff went to the premises of C&K to lease a used motor vehicle and met with "Vlad," the only person at C&K who assisted her in leasing the used motor vehicle. In its answer, C&K denied that Vlad was employed by or associated with C&K. After all the proofs were presented to the jury, the trial judge ruled that plaintiff had proven as a matter of law that "the New Jersey and the Federal Consumer Fraud Acts as well as the administrative codes that have been issued that explain those laws" were violated.

Specifically, the judge found that plaintiff was not "given one full business day to take home and fully review the filled in contract before [she] sign[ed] the contract and [took] the property off of the defendant's lot," a violation of 8 of the CPLA, N.J.S.A. 56:12-67(b). The judge also ruled as a matter of law that "there was no itemization on the contract for all of the payments for the car," a violation of 3 of the CPLA, N.J.S.A. 56:12-62(g)(2). In addition, she found that N.J.S.A. 56:12-62(g)(9) had been violated in that the lease did not disclose that insurance must cover the amount due on the lease and that the lessee is not liable for more than that amount unless the option to purchase had been exercised before any loss. Furthermore, the trial judge found that the lease left the cost of gap insurance blank, a violation of N.J.S.A. 56:12-62(e). Next, she found that the lease had "no capitalized cost reduction noted," which violated N.J.S.A. 56:12-62(g)(10).

After instructing the jury on these violations, the trial judge instructed the jury on the issue of Vlad's apparent authority to act on behalf of C&K. The jury found that plaintiff had proven by a preponderance of the evidence that Vlad had apparent authority from C&K to arrange for plaintiff's vehicle lease. However, the jury also found that plaintiff had not proven that C&K failed to credit all of the money that was attributable to the car lease transaction and had not proven that C&K misrepresented or fraudulently submitted the credit information. Thus, the only Title 56 violations were those found by the judge under the CPLA. As to these, the jury concluded that plaintiff failed to prove that they were the proximate cause of any monetary damages she sustained.

It is readily apparent from the jury verdict that the judge erred when she denied the counsel fee application on the ground that the jury found no liability as to C&K. The jury's finding that Vlad acted with apparent authority from C&K in negotiating and preparing the lease makes C&K liable to plaintiff for the TCCA violations that the judge found as a matter of law in the lease Vlad prepared.

In denying the counsel fee application, the trial judge stated that there was "[n]o colorable money claim here which is essential to [a] private cause of action." The Supreme Court in Cox v. Sears Roebuck & Co., 138 N.J. 2, 24-25 (1994), interpreted the treble damages and attorneys' fees provision of the CFA.

Finally, we determine that an award of treble damages and attorneys' fees is mandatory under N.J.S.A. 56:8-19 if a consumer-fraud plaintiff proves both an unlawful practice under the Act and an ascertainable loss. The use of the word "shall" in the statute suggests as much. Moreover, the legislative history indicates that the provision for attorneys' fees was intended to impose on the defendant in a private action "a greater financial penalty [than in an action brought by the Attorney General] and * * * [to ensure] that the financial cost to the private plaintiff was minimized and compensation maximized." Accordingly, we remand to the trial court to calculate an appropriate award for plaintiff's attorneys' fees, filing fees, and costs.

For the sake of completeness we add that a consumer-fraud plaintiff can recover reasonable attorneys' fees, filing fees, and costs if that plaintiff can prove that the defendant committed an unlawful practice, even if the victim cannot show any ascertainable loss and thus cannot recover treble damages. . . . The fundamental remedial purpose of the Act dictates that plaintiffs should be able to pursue consumer-fraud actions without experiencing financial hardship.

[Ibid. (emphasis added, citations omitted).]

The second paragraph quoted above relied on Performance Leasing Corp. v. Irwin-Lincoln-Mercury, 262 N.J. Super. 23, 31, 34 (App. Div.), certif. denied, 113 N.J. 443 (1993) (holding that where the jury found that defendant had committed unconscionable commercial practice and thus had violated the Act, but that plaintiff had not been damaged by that violation, strong precedent supported award to plaintiff of attorneys' fees). But the statement was dictum in Cox because plaintiff had actually proven an ascertainable loss.

Subsequently, the Supreme Court clarified this dictum in Weinberg v. Sprint Corp., 173 N.J. 233 (2002). The issue before the Weinberg court was "whether a plaintiff, who pleads but cannot survive a motion for summary judgment in respect of the issue of ascertainable loss, may proceed with remaining claims for . . . attorneys' fees under the Act." Id. at 253. The Court concluded that such a plaintiff could not go forward. Ibid. The Court explained:

The legislative intent to permit a private cause of action under the Act would be frustrated if a private litigant, who succeeds in bringing such a claim to a jury, must gamble on whether he or she will prevail ultimately on proof of the loss in order to obtain attorneys' fees, when he or she otherwise proves unlawful conduct.

Thus understood, the plaintiff with a bona fide claim of ascertainable loss that raises a genuine issue of fact requiring resolution by the factfinder would be entitled to seek also injunctive relief when appropriate, and to receive an award of attorneys' fees, even if the plaintiff ultimately loses on his damage claim but does prove an unlawful practice under the Act. The Act's remedial purposes are promoted thereby and the Legislature's requirement of ascertainable loss for a private cause of action is respected.

[Ibid.]

When the trial judge, here, denied counsel fees, she relied on Pron v. Carlton Pools, Inc., 373 N.J. Super. 103 (App. Div. 2004). There, the plaintiff's CFA claims were involuntarily dismissed for failure to prove an ascertainable loss after Pron presented all of his proofs and before the defendant's case began. Id. at 111. After considering Cox and Weinberg, we compared the standard for the grant of summary judgment with the standard for the grant of an involuntary dismissal at the end of plaintiff's case and concluded that those standards "are the same and functional equivalents." Id. at 112. We concluded as follows:

We hold that in a Consumer Fraud Act case where the defendant obtains a motion for involuntary dismissal at the end of the plaintiff's case for failure to prove an ascertainable loss, and the defendant is not required to present its defense to the plaintiff's claim, and the fact-finder, whether judge or jury is not called upon to decide whether an ascertainable loss has been proved, plaintiff is not entitled to recover attorneys' fees.

[Id. at 113.]

There clearly was no involuntary dismissal here. The plaintiff obtained a directed verdict on some of her CFA and CPLA claims, and the issue of ascertainable loss was submitted to the jury for its determination. Accordingly, plaintiff was entitled to an award of attorneys' fees under the CFA. Sema v. Automall 46, Inc., 384 N.J. Super. 145, 151 (App. Div. 2006); Scibek v. Longette, 339 N.J. Super. 72, 86 (App. Div. 2001); Branigan v. Level on the Level, Inc., 326 N.J. Super. 24, 30-31 (App. Div. 1999); Cybul v. Atrium Palace Syndicate, 272 N.J. Super. 330, 335-36 (App. Div.), certif. denied, 137 N.J. 311 (1994); Performance Leasing, supra, 262 N.J. Super. at 33-34.

Reversed and remanded for further proceedings consistent with this opinion.

 

Any violation of the CPLA is an unlawful practice and a violation of the CFA. N.J.S.A. 56:12-70.

The judge also found that the lease provision prohibiting any changes to its terms was contrary to New Jersey law, inferentially, a violation of the TCCA. N.J.S.A. 56:12-15. The TCCA has its own attorney-fee provision. N.J.S.A. 56:12-17. Because the application of this statutory provision has not been addressed in plaintiff's brief, we will confine our analysis to the CFA and the CPLA.

(continued)

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A-1059-05T2

October 5, 2006