BAYSIDE CHRYSLER PLYMOUTH JEEP EAGLE, INC. v. ELIZABETH MA & DAVID MA

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3575-04T33575-04T3

BAYSIDE CHRYSLER PLYMOUTH

JEEP EAGLE, INC.,

Plaintiff-Appellant/

Cross-Respondent,

v.

ELIZABETH MA & DAVID MA,

Defendants-Respondents/

Cross-Appellants,

__________________________________

 

Argued April 24, 2006 - Decided May 26, 2006

Before Judges Cuff, Parrillo and Holston, Jr.

On appeal from the Superior Court of New Jersey,

Law Division, Essex County, Special Civil Part, Docket No. DC-9699-02.

Russell S. Massey argued the cause for appellant/

cross-respondent.

Laurence H. Olive argued the cause for respondents/ cross-appellants.

PER CURIAM

Plaintiff, Bayside Chrysler Plymouth Jeep Eagle, Inc. (Bayside), appeals from an order of the Special Civil Part dismissing its claim against defendants, Elizabeth and David Ma, for unpaid monies under a contract and awarding defendants, on their counterclaim, treble damages of $1360.02 and attorneys' fees of $13,037.50. Defendants cross-appeal contending the damages award was inadequate.

The facts are anything but straightforward. Bayside is a car dealership in Bayside, Queens, New York and defendants reside in Short Hills, New Jersey. Bayside placed an advertisement in the World Journal, a Chinese newspaper distributed in both New York and New Jersey, offering various motor vehicles for sale. Elizabeth Ma responded on May 15, 1998, inquiring by phone of the salesperson, Kenny Eng, about the 1998 Mercury Villager Wagon displayed in the April 6, 1998 advertisement. Eng advised her that the advertised car was not on the lot, but assured her Bayside would locate another car. According to Elizabeth Ma, Bayside agreed to sell her a 1998 Mercury Villager, forest green color, for the price of $20,500, and that same day, she paid Bayside $500, via credit card, as a deposit.

The phone order was confirmed by fax dated May 15, 1998, which acknowledged receipt of the $500 deposit, fixed the price at $20,500, and itemized the options selected on the vehicle purchased, including: 3:0 liter, 6 cylinder, automatic transmission, power windows, power locks, cruise control, dual air conditioner and heat, power driver's seat, am/fm cassette, alloy wheels, and forest green exterior. The vehicle identification number (VIN), however, was not listed on the faxed phone order. The order also stated, at the top of the document "THIS AGREEMENT IS NOT BINDING UNLESS SIGNED BY THE SELLER AND THE BUYER". In the line marked "BUYER'S SIGNATURE", "PHONE ORDER" was handwritten. It also states "IF THIS CONTRACT IS CANCELLED BY ME WITHOUT YOUR CONSENT, I UNDERSTAND I SHALL BE LIABLE TO YOU FOR LIQUIDATED DAMAGES IN THE AMOUNT OF $500., IN ACCORDANCE WITH PARAGRAPH THREE (3) (reverse side) OR ANY ADDITIONAL DAMAGES THAT YOU MAY INCUR THEREFORM."

When the Mas went to pick up the vehicle and pay the balance on May 21, 1998, they were presented with a red Villager, which they rejected, insisting on the green vehicle they had ordered. Because Bayside now had to locate another vehicle, the dealer asked for an additional $2,000 deposit, which the Mas paid with a credit card. They also tendered a personal check, dated May 22, 1998, in the amount of $18,035, which included an additional $35 document fee. The Mas, in turn, received a window sticker indicating that the car purchased had a VIN number of 4M2ZV111XDJ30272, with deluxe gold aluminum wheels, the gold package, and quad captain chairs. The Mas were not informed of any further balance due on the purchase.

The Mas returned to Bayside on May 27, 1998, to pick up the vehicle. They signed a retail certificate of sale, dated May 21, 1998, identifying the car purchased as a green 1998 Mercury Villager, with VIN 4M2ZV111XWDJ30272, and listing the price as $20,500 plus $3180 for sealants and $1000 for a service contract. According to Elizabeth, the Mas were unaware of these extra charges, and in fact, were not told of any further balance due upon delivery of the car to them.

The Mas were also unaware that one of the documents they signed on May 27 was an installment retail sales contract indicating a total sales price for the vehicle of $23,735, which included $3,180 for sealants; a $1,000 service contract; and a $37 fee to satisfy New York State insurance requirements. Once the deposit was deducted, the amount financed by the Mas, according to the contract, was $22,272, to be paid over 48 months, in monthly installments of $522.95, beginning June 21, 1998.

The Mas took possession of their vehicle on May 27, 1998. However, the VIN on this vehicle, 4M2ZV1119WDJ1440, was different than that indicated on the Bill of Sale and window sticker they received on their first visit to Bayside on May 21. Also, the window sticker attached to the vehicle they took possession of listed the correct VIN, but did not list any of the optional features previously identified, and also stated that the color of the Mercury Villager was wedgewood blue. The Mas did not note the discrepancy in VINs until years later, after litigation ensued between the parties.

On June 1, 1998, Bayside called Elizabeth Ma explaining the check was misplaced. That same day, she hand-delivered a replacement check to Bayside in the amount of $18,035. In a letter of July 16, 1998, Bayside returned the check to the Mas, stating:

On June 1, 1998 you left the enclosed voided check made payable to Bayside Chrysler In[c.], in the amount of $18,035.00, check #424. It was (I think) your understanding that this check should be utilized to pay off your car.

Unfortunately, we are not in a position to assist you in this endeavor. Accordingly, I am returning to you your check.

Apparently, the Mas assumed that Bayside had located the prior missing check and had no need for the replacement check Elizabeth had delivered in June. Again, there was no indication from Bayside of an additional amount due.

Bayside next contacted the Mas on October 3, 1998, again asking for yet another check to replace the prior one that was also lost. Elizabeth Ma then issued a third check, this time in the amount of $18,020.00, reflecting a $15 deduction for the cancellation fee she incurred in stopping payment on the June check, and bearing the notation "pay off Auto Villager Mercury 1998." She hand delivered this check to Bayside's accounting office. Although no one questioned the payment, Bayside's Chief Financial Officer, Michael Quick, indicated that on October 19, 1998, when he received the $18,020 check, he reminded the Mas that there was an additional $4252 outstanding. The Mas have no recollection of receiving such notice.

However, on December 9, 1998, Bayside wrote the Mas indicating that they "owe the financing with the Sovereign Bank"; that there was a balance due of $4252, that the 5.99% monthly interest rate was in effect, augmenting the amount owed; and attaching a finance agreement, which the Mas say they had never seen previously. Elizabeth then called Sovereign Bank and thereafter informed Bayside that "Sovereign Bank has no record." Although Bayside said it would get back to them, the Mas did not hear from the dealer until April 15, 2002, when Bayside instituted the present suit, seeking recovery of the $4252 balance remaining on the retail installment sales contract.

When defendants failed to answer Bayside's complaint, Bayside obtained a default judgment and shortly thereafter commenced collection efforts. Defendants moved to vacate the default judgment after Bayside levied on defendants' bank account for $4865.34. The motion judge denied defendants' application. In an unpublished opinion, we reversed, declaring the default judgment void because of defective service and likewise vacating the turnover order.

On remand, defendants filed their answer and asserted a counterclaim, alleging a violation of the New York and New Jersey consumer fraud acts, and of the Unfair Debt Collection Practices Act, and breach of contract. Defendants contended that they paid in full for the automobile without the need for financing and that the financed contract, upon which Bayside based its complaint, was fraudulently produced. After a two-day bench trial in the Special Civil Part, the judge dismissed Bayside's claim for unpaid monies under the contract and found in favor of defendants on their counterclaim, awarding them treble damages of $1360.02, and attorneys' fees in the amount of $2250.50 for the costs of the appeal, as well as $13,037.50 for costs incurred in prosecuting the consumer fraud claim.

On appeal, Bayside raises the following issues:

I. THE TRIAL COURT ERRED IN RULING THAT NEW JERSEY LAW APPLIES TO THIS CASE.

II. THE TRIAL COURT ERRED WHEN IT RULED THAT THE STATUTE OF LIMITATIONS DID NOT BAR THE DEFENDANTS' COUNTERCLAIM.

III. THE TRIAL COURT ERRED IN RULING THAT THE UNEXECUTED ORDER FORM WAS A BINDING CONTRACT.

IV. THE TRIAL COURT ERRED IN RULING THAT THE MAS' HAD MET THEIR BURDEN OF PROVING THAT BAYSIDE COMMITTED CONSUMER FRAUD.

V. THE TRIAL COURT'S AWARD OF ATTORNEY'S FEES WAS EXCESSIVE.

On cross-appeal, defendants raise the following issues:

I. DEFENDANT'S DAMAGES AWARD WAS INADEQUATE.

II. THE COURT SHOULD HAVE PREMITTED DEFENSE COUNSEL TO CONTINUE CROSS EXAMINATION ON THE ISSUE OF PLAINTIFF'S PREVIOUS DECEPTIVE & MISLEADING ADS AS DETERMINED BY THE NEW YORK CITY DEPARTMENT OF CONSUMER AFFAIRS.

(i)

Plaintiff first contends that the trial court erred in applying New Jersey law to this case. We disagree.

A choice of law is necessitated because of the conflict between New York's and New Jersey's statutes of limitations governing consumer fraud. New York's consumer protection law allows actions to be commenced within three years, N.Y. Gen. Bus. Law, 349 (Consol. 2006), N.Y.C.P.L.R. 214 (Consol. 2006), whereas in New Jersey, consumer fraud actions are governed by a six-year statute of limitations. N.J.S.A. 2A:14-1. Since New Jersey is the forum state, our choice-of-law rules apply. Fu v. Fu, 160 N.J. 108, 117 (1999).

New Jersey abides by the "most significant relationship" test in conflict-of-law matters involving issues of breach of contract. State Farm Mut. Auto. Ins. Co. v. Estate of Simmons, 84 N.J. 28, 34 (1980); Glynwed, Inc. v. Plastimatic, Inc., 869 F. Supp. 265, 270 (D.N.J. 1994). This "significant relationship test focuses upon that state which has the most meaningful connection[] with the transaction and the parties in issue." State Farm Mut. Auto. Ins. Co., supra, 84 N.J. at 34. In this regard, the Restatement (Second) of Conflict of Laws 188 (1971) has identified seven factors relevant to our conflict-of-law analysis:

(1) the needs of the interstate and international system, (2) the relevant policies of the forum, (3) the relevant policies of other affected states and the relevant interests of those states in the determination of the particular issue, (4) the protection of justified expectations, (5) the basic policies underlying the particular field of law, (6) certainty, predictability, and uniformity of result, and (7) ease in the determination and application of the law to be applied."

[State Farm Mut. Auto. Ins. Co., supra, 84 N.J. at 34 (quoting Restatement (Second) of Conflict of Laws 6 (1971)).]
 

We evaluate these factors in light of their "'relative importance'" to the contacts. Ibid. (quoting Restatement, supra, 188.) These contacts typically refer to the location the parties contracted, the location of the performance, or the respective domiciles of each party. Id. at 34-35. Although the situs of the contract typically informs the choice of law because it generally coincides "with the reasonable expectations of the parties," we are not confined to an inflexible, mechanical application of lex loci contractus. Id. at 36-37. Instead, we weigh the interest each state has in the resolution of the controversy, taking into account "the connection of the parties to the respective states, the nature of pertinent events that have transpired within each state, and the character of each state's policy preferences relevant to the particular litigation." Id. at 36. In other words, we apply the lex loci contractus rule "unless the dominant and significant relationship of another state to the parties and the underlying issue dictates that this basic rule should yield." Id. at 37.

To ascertain which state has the greater interest in the issue, we apply the "governmental-interest" test. Fu, supra, 160 N.J. at 118; Gantes v. Kason Corp., 145 N.J. 478, 484 (1996); Veazey v. Doremus, 103 N.J. 244, 247 (1986). This flexible test is applied to each individual issue presented during litigation. Gantes, supra, 145 N.J. at 484. "The governmental interest test focuses upon whether a state has a legitimate concern with the resolution of the particular controversy, placing special emphasis upon the status of the parties and their connections with the state." State Farm Mut. Auto. Ins. Co., supra, 84 N.J. at 43 n.2. This test is a subsection of the "significant relationship test" as it involves a closer examination of factors (2), (3) and (5) mentioned in State Farm Mut. Auto. Ins. Co. and the Restatement (Second) of Conflict of Laws 6. Ibid. Thus, proofs under the
"governmental interest test" are subsumed by those necessary for the "significant relationship test." Ibid.

Applying this approach to the present controversy, we conclude that the law of the State of New Jersey should govern the rights and liabilities of the parties under the contract. Turning first to the relevant policy behind each state's consumer fraud act, in New Jersey, "[t]he available legislative history demonstrates that the act was intended to be 'one of the strongest consumer protection laws in the nation.'" New Mea Constr. Corp. v. Harper, 203 N.J. Super. 486, 501-02 (App. Div. 1985) (quoting Skeer v. EMK Motors, Inc., 187 N.J. Super. 465, 471 (App. Div. 1982)). "The act is broadly designed to protect the public, even when a merchant acts in good faith." Skeer, supra, 187 N.J. Super. at 470. As such, these "regulations should be liberally construed in favor of the consumer." Levin v. Lewis, 179 N.J. Super. 193, 200 (App. Div. 1981); see also State v. Hudson Furniture Co., 165 N.J. Super. 516, 520 (App. Div. 1979) (stating there is a "perceived need to liberally construe the act in favor of protecting consumers . . . .").

Consumer protection law in New York "is a creature of statute based on broad consumer-protection concerns." Gaidon v. Guardian Life Ins. Co. of Am., 725 N.E.2d 598, 603 (N.Y. 1999). It "was enacted initially to give the Attorney General enforcement power to curtail deceptive acts and practices --willful or otherwise -- directed at the consuming public." Ibid.; see also Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741, 744 (N.Y. 1995).

In light of the character of each state's comparative policy preferences in this area of the law, we consider New Jersey to have a greater, special concern in this controversy and the lawsuit's outcome than does New York. This conclusion is further buttressed by the significant relationships that New Jersey has to the parties and the underlying transaction.

First, Bayside placed the April 6, 1998 advertisement in a Chinese newspaper circulated in New Jersey, thereby encouraging New Jersey residents to purchase automobiles from its dealership. Second, the Mas, who reside in New Jersey, responded to this advertisement while in this State. Third, the Mas executed a telephone order from New Jersey and placed a $500 deposit via credit card from this State. Fourth, the Mas received confirmation of the telephone order via facsimile received at their Short Hills home, outlining the terms of the purchase including the vehicle's price, model, color, engine size, and the particular features selected. Fifth, there was regular correspondence between Bayside and the Mas, involving mailings from New York to New Jersey, including the return of the Mas' July 16, 1998 check and the December 9, 1998 correspondence from plaintiff's Chief Financial Officer informing the Mas of the financing agreement they supposedly executed. Sixth, the vehicle purchased was registered, licensed and titled in New Jersey. And lastly, plaintiff sought a deficiency judgment against the Mas in New Jersey. Given this extensive connection to New Jersey, as well as this State's strong governmental interest in protecting its residents against fraud in commercial transactions, we are satisfied that the trial judge properly applied New Jersey's six-year statute of limitations. There are no sufficiently cogent countervailing considerations which dictate against following New Jersey law in this instance.

(ii)

Applying New Jersey law, defendants' counterclaim, filed October 8, 1998, is not barred by this State's statute of limitations. We reject plaintiff's argument, as did the trial judge, that the accrual date for defendants' fraud claim is July 16, 1998, when plaintiff returned defendants' check and supposedly informed them that Bayside was seeking the remaining balance. Rather, as defendants claim, they were first advised of the deficiency plaintiff claimed they owed, and therefore of plaintiff's deceptive practices, in the December 9, 1998 correspondence from Bayside. As such, defendants filed their counterclaim alleging consumer fraud within New Jersey's six-year statute of limitations.

(iii)

Plaintiff next contends that even if defendants could pursue their consumer fraud claim, it should nevertheless fail because the unexecuted order form did not constitute a formal contract as it lacked specificity and a signature. We disagree.

As a general proposition, "[t]he essentials of a valid contract are mutual assent, consideration, legality of object, capacity of the parties and formality of memorialization." Cohn v. Fisher, 118 N.J. Super. 286, 291 (Law Div. 1972); Davis v. Wells, 104 U.S. 159, 26 L. Ed. 686 (1881). Here, the dispute only concerns the elements of mutual assent and formality of memorialization. "A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." N.J.S.A. 12A:2-204(1). The term "goods" includes a new automobile. N.J.S.A. 12A:2-105. As to the formal elements of memorialization, N.J.S.A. 12A:2-201(1) clearly requires that "a contract for the sale of goods for the price of $500 or more", to be enforceable, must have "some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought . . . ." N.J.S.A. 12A:2-201(1).

It is possible, however, to have a valid contract even though the document did not strictly comply with the requirements imposed by the statute of frauds. Those contracts that fail to satisfy the requirements stated in N.J.S.A. 12A:2-201(1) that are also "valid in other respects [are] enforceable." N.J.S.A. 12A:2-201(3). This means that a contract is enforceable for "goods for which payment has been made and accepted or which have been received and accepted." N.J.S.A. 12A:2-201(3)(c).

We have also noted that "[a] deposit or part payment for an automobile has been held to satisfy the statute of frauds under provisions of law similar to N.J.S.A. 12A:2-201." Truex v. Ocean Dodge, Inc., 219 N.J. Super. 44, 51 n.4 (App. Div. 1987); see Lockwood v. Smigel, 96 Cal. Rptr. 289, 291 (Cal. Ct. App. 1971) (holding that an oral contract for the sale of automobile was enforceable upon proof that the buyer paid $100 to the seller after agreeing to buy the vehicle because proof of part payment evidences existence of a contract and identifies the party to be charged, taking the contract out of statute of frauds); Paloukos v. Intermountain Chevrolet Co., 588 P.2d 939, 944 (Idaho 1978) (explaining that buyer's $120 down payment to seller, which seller accepted and subsequently "returned, constitute[ed] sufficient part performance under UCC 2-201(3)(c) to excuse compliance with [signature requirement of] statute of frauds"); The Press, Inc. v. Fins & Feathers Publ'g Co., 361 N.W.2d 171, 173-74 (Minn. Ct. App. 1985) (holding that partial payment removed parties' contract from bar of statute of frauds because partial payment was made on indivisible unit, there was "no quantity dispute involved"; and as there was no quantity dispute the partial payment showed existence of contract just "as satisfactorily as would a written memorandum" required by statute of frauds); Morris v. Perkins Chevrolet, Inc., 663 S.W.2d 785, 787 (Mo. Ct. App. 1984) (explaining how buyer's $100 down payment removed parties' contract from statute of frauds in UCC 2-201(1) because buyer's "partial payment for single indivisible commercial unit", a car, validated parties' contract under UCC 2-201(3)(c)); Sedmak v. Charlie's Chevrolet, Inc., 622 S.W.2d 694, 698 (Mo. Ct. App. 1981)) (discussing how seller's acceptance of $500 deposit took contract out of statute of frauds since there was no dispute as to quantity); Thomaier v. Hoffman Chevrolet, Inc., 64 A.D.2d 492, 495 (N.Y. App. Div. 1978) (holding that the purchase of an automobile from automobile dealer involved an enforceable contract pursuant to UCC 2-201(3)(c) because buyer made, and the seller accepted $1,000 deposit; and noting that the order form seller sent constituted a sufficient writing to take the contract out of the statute of frauds); Starr v. Freeport Dodge, Inc., 282 N.Y.S.2d 58, 61 (1967) (upholding a contract for the purchase of an automobile which was written on an order form but not signed by the seller; and holding it to be enforceable where the buyer made and the seller accepted a $25 down payment because a part payment of the purchase price exempts an indivisible contract from the operation of the statute of frauds under UCC 2-201(3)(c)).

Here, the Mas gave a $500 deposit to Bayside for the purchase of a particular Mercury Villager. The exchange was memorialized in a telephone order, confirmed by facsimile, sufficiently identifying the vehicle to be purchased and listing the various features that the Mas had selected. Under the circumstances, the fact that the telephone order was unsigned or did not contain a specific VIN number is not dispositive as to the formation of a contract. The $500 deposit was made for a specified quantity, i.e., one vehicle, and Bayside accepted the good faith deposit, evidencing mutual assent that both buyer and seller were working towards the same goal - the purchase/sale of a particular Mercury Villager automobile.

Moreover, "[a] writing is not insufficient because it omits or incorrectly states a term agreed upon . . . ." N.J.S.A. 12A:2-201(1); Cohn, supra, 118 N.J. Super. at 294. "Even though one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy." N.J.S.A. 12A:2-204(3). We are satisfied that under the facts of this case, a contract was formed.

Even if no formal contract was formed when the parties executed the telephone order and defendants paid the deposit, the facts as found by the trial judge establish that the parties reached an accord and satisfaction. In this regard,

"The traditional elements of an accord and satisfaction are the following: (1) a dispute as to the amount of money owed; (2) a clear manifestation of intent by the debtor to the creditor that payment is in satisfaction of the disputed amount; (3) acceptance of satisfaction by the creditor."

[A. G. King Tree Surgeons v. Deeb, 140 N.J. Super. 346, 348-49 (Cty. Dist. Ct. 1976) (quoting U.S. for Use of Glickfeld v. Krendel, 136 F. Supp. 276, 282 (D.N.J. 1955)).]

In New Jersey, the "rule has been that when a check is tendered as payment for an unliquidated claim on the condition that it be accepted in full payment, the creditor is deemed to have accepted this condition by depositing the check for collection notwithstanding any obliteration or alteration." Chancellor, Inc. v. Hamilton Appliance Co., 175 N.J. Super. 345, 347 (Cty. Dist. Ct. 1980); see also Decker v. George W. Smith & Co., 88 N.J.L. 630, 632 (E. & A. 1916) ("[W]here a claim is unliquidated, or in dispute, payment and acceptance of a less sum than claimed in satisfaction, operates as an accord and satisfaction."); Castelli v. Jereissati, 80 N.J.L. 295, 297 (E. & A. 1910). Moreover, a valid accord and satisfaction requires consideration, which means "[t]here must be some advantage, or presumed or assumed advantage, accruing to the party who yields his claim, or some detriment to the other party." Decker, supra, 88 N.J.L. at 632.

As to the first element, there is clearly an amount in dispute. Bayside indicated in its December 8, 1998 letter that $4252.00, together with interest accrued at the rate of 5.99% per month, was still owing and due. The Mas, on the other hand, believed that the amount they owed, apart from the $2500 in deposit monies they provided to Bayside, was only $18,020.00.

As to the second element, "[w]hether a tender is accompanied by such acts and declarations as are necessary on its acceptance to constitute an accord and satisfaction must, of course, be determined from the facts of each particular case." Rose v. Amer. Paper Co., 83 N.J.L. 707, 709-10 (E. & A. 1912). The requisite manifestation of intent "may be expressed in the check itself, or in the letter or account, or receipt accompanying the remittance, or even orally in conversation." Id. at 710 (citations omitted). On that score, references on the check "to the specific claims being paid" and "language constituting a release" carry significant probative force when determining whether the debtor clearly intended to satisfy the disputed amount. McDermott v. Botwick, 38 N.J. Super. 528, 534 (App. Div. 1956). Compare A.G. King Tree Surgeons, supra, 140 N.J. Super. at 348, 251 (finding that a check with a typed notation above space for endorser's signature explaining that the payment "was in full and final settlement of all claims" demonstrated intent to satisfy disputed amount) with Castelli, supra, 80 N.J.L. at 298 (explaining that phrase "in full settlement to date" written on a check was "uncertain in . . . meaning" and that the intent behind the words was a factual question for the jury to resolve).

The replacement check Elizabeth Ma wrote to Bayside, in the amount of $18,020, dated October 3, 1998, contained the vehicle VIN number, as well as the phrase "pay off auto villager mercury 1998 new auto" written in the memo line. This unambiguous language specifically references the claim being paid, as well as expresses the maker's clear intent to fully settle the claim, as it states that it is for the payoff of one Mercury Villager.

The third element, which requires us to identify the acceptance of the offer, is typically satisfied when the creditor deposits the check. See A.G. King Tree Surgeons, supra, 140 N.J. Super. at 350-51 (stating "the deposit of the check by plaintiff operated ipso facto as such an acceptance"). Even if the creditor protests, there is acceptance the moment the check cashing occurs. Id. at 351. In other words, when "a check bears a notation indicating that it is being tendered in full satisfaction of the disputed debt, we impute to the creditor an intent to be bound by the amount of the check if the creditor deposits the check for collection, notwithstanding the deposit is made 'under protest.'" Zeller v. Markson Rosenthal & Co., 299 N.J. Super. 461, 463-64 (App. Div. 1997). "'If the check was unacceptable as a final settlement, plaintiff's remedy was to return the check to defendant and sue for the full amount claimed due.'" Chancellor, Inc., supra, 175 N.J. Super. at 347 (quoting A.G. King Tree Surgeons, supra, 140 N.J. Super. at 349). See Rose, supra, 83 N.J.L. at 711 (holding that there was no accord and satisfaction because creditor did not accept check stating "in full of all demands", returned it to debtor, and accepted another check without the objectionable language upon cashing).

Here, not only did Bayside accept the $500 deposit monies on May 15, 1998, to secure the price as advertised, and the $2000 in additional deposit monies on May 21, 1998, to secure the green-colored Mercury Villager actually selected, but also, most significantly, Bayside accepted and deposited the Mas' October 3, 1998 replacement check without any reservation of rights whatsoever. We are satisfied that the deposit and negotiation of the Mas' check without any reservation of rights amounts, in this instance, to an accord and satisfaction.

(iv)

Plaintiff also contends that the trial court erred in its finding of consumer fraud. We find this argument unpersuasive.

The Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, "is a remedial statute, [and] its provisions are construed liberally in favor of the consumer to accomplish its deterrent and protective purposes." Lettenmaier v. Lube Connection, 162 N.J. 134, 139 (1999). In proving a violation, there is "no indication that the Legislature intended to impose any greater burden of proof than that usually required in a civil action." Gennari v. Weichert Co. Realtors, 288 N.J. Super. 504, 541 (App. Div. 1996), aff'd, 148 N.J. 582 (1997). Thus, although the party asserting the fraud must prove the allegations "by clear and convincing evidence, 'a trial judge should not be overruled in his finding if it is supported by substantial and credible evidence.'" Ibid. (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)).

The CFA prohibits "any unconscionable commercial practice, deception, fraud, false pretense, false promise, [or] misrepresentation . . . in connection with the sale or advertisement of any merchandise . . . .", and protects consumers from the "knowing concealment, suppression, or omission of any material fact", N.J.S.A. 56:8-2, "whether or not the merchant acts in bad faith." Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 11 (2004). To establish a violation of the CFA, there must be proof of an "unlawful practice", meaning there must be an affirmative act, a knowing omission, or a violation of a regulation. Cox v. Sears Roebuck & Co., 138 N.J. 2, 17 (1994). The conduct designated an unlawful practice, as listed in the CFA, is to be read "in the disjunctive, . . . . [and] [p]roof of any one . . . will be sufficient to establish unlawful conduct under the Act". Id. at 19.

Omissions address the "concealment, suppression, or omission of any material fact [and] require[] proof that the offending conduct occurred knowingly and with an intent that others rely on the concealment, suppression, or omission." Chattin v. Cape May Greene, Inc., 124 N.J. 520, 522 (1991). Under circumstances involving a violation of a specific regulation, "intent is not an element of the unlawful practice, and the regulations impose strict liability for such violations" because "[t]he parties subject to the regulations are assumed to be familiar with them . . . ." Cox, supra, 138 N.J. at 18-19.

Affirmative acts on the other hand, "include[] unconscionable commercial practice, deception, fraud, false pretense, false promise, and misrepresentation [and] do[] not require proof of intent to deceive, suggesting an analogy to what the common law denominates as equitable fraud." Chattin, supra, 124 N.J. at 522. "[P]roof of intent to deceive," is not required, suggestive of "what the common law denominates as equitable fraud." Ibid. In other words, proof of violation does not require a showing of "actual deceit or a fraudulent act; any unconscionable commercial practice is prohibited." Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 472 (1988). "Unconscionability of an act or practice is a question of law for the court" to determine. D'Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11, 29 (App. Div. 1985).

An "unconscionable commercial practice", N.J.S.A. 56:8-2, "is an amorphous concept obviously designed to establish a broad business ethic" and is identified on a case-by-case basis. Kugler v. Romain, 58 N.J. 522, 543 (1971). "The standard of conduct contemplated by the unconscionability clause is good faith, honesty in fact and observance of fair dealing." Id. at 544. It "is measured by analyzing the potential effect the conduct will have upon the consumer or marketplace." D'Ercole Sales, Inc., supra, 206 N.J. Super. at 25.

That said, "a breach of warranty, or any breach of contract, is not per se unfair or unconscionable, and a breach of warranty alone does not violate a consumer protection statute." Ibid. (citation omitted). This is so because "the Legislature must have intended that substantial aggravating circumstances be present in addition to the breach." Cox, supra, 138 N.J. at 18; see Di Nicola v. Watchung Furniture's Country Manor, 232 N.J. Super. 69, 73 (App. Div.) (explaining that although seller breached warranty by delivering defective furniture and denying that it supplied defective furniture, there was no unconscionable commercial practice because the requisite aggravating factors were absent), certif. denied, 117 N.J. 126 (1989); D'Ercole Sales, supra, 206 N.J. Super. at 31 (holding "that a breach of warranty under a sales agreement" involving a faulty tow truck that seller refused to repair is not an unconscionable violation of CFA); New Mea Constr. Corp. v. Harper, 203 N.J. Super. 486, 501 (App. Div. 1985) (explaining that builder's breach of contract, poor workmanship, and substitution of materials of an inferior quality constitute unconscionable commercial practice in violation of CFA).

In this case, there is substantial credible evidence that Bayside raised the price of the vehicle from $20,535 to $24,735 to include the cost of sealant and service contract, although neither feature was approved by the Mas or even explained to them. Apart from the price differential, the record reflects that Bayside initiated a finance contract between Mr. Ma and Sovereign Bank, which Ma denies knowingly executing. The Mas asserted that they were only first notified of the retail installment agreement upon receipt of a letter of December 9, 1998, from Bayside, indicating that the Mas "owe the financing with the Sovereign Bank." The letter noted that Bayside had not yet received the $4,252.00 due, and that the 5.99% monthly interest rate was in effect, in effect augmenting the amount owed. Efforts to verify the existence of a financing agreement with Sovereign Bank failed, and when Elizabeth Ma informed Bayside that "Sovereign Bank has no record", Bayside never returned her call. This, despite the fact that the Mas consistently expressed their desire to pay for the car in cash, and that they were not interested in financing the Mercury Villager and further, that defendants' vehicle left the dealership without being encumbered by a lien in favor of the lending institution, Sovereign Bank.

As to this behavior, the trial judge specifically found:

There has been nothing that has been submitted to this Court that shows anything from Sovereign Bank that there was any kind of a contract or monies or were any claims from Sovereign Bank to the Mas, a payment book, anything that has been submitted to this Court.

Testimony is that the Mas, there was, were paying for the vehicle in cash, I think it's very credible . . . .

. . . .

There's something that is very unusual in that situation [referring to the loss of the check and the request for another], but [the] bottom line is that it's quite credible that the Mas were not, did not sign an installment contract. Mr. Ma's testimony was well it may look like mine but he did not say it was his. And even further in evidence is that there's been nothing submitted by Sovereign that there is any kind of a loan.

[T]he next issue as to the purchase price of the vehicle . . . there has been nothing that's been submitted to the Court that shows that they [the Mas] ever received a list of all the charges.

It is signed, I hereby acknowledge that this is the full bill of sale and is the true, and is true and correct.

Therefore, this Court does find there's been nothing to prove that there was sealant . . . .

. . . .

Based on that, Court finds that there was deception here to the consumer and it is in violation, misrepresentation and therefore there is violation and Consumer Fraud.

We see no reason to disturb this well-founded conclusion.

(v)

Lastly, plaintiff contends that the trial court's award of attorney's fees of $13,037.50 for the prosecution of defendants' consumer fraud claim was excessive. We disagree.

It is well-settled that the decision to award attorney's fees rests within the discretion of the trial judge, and accordingly we review the decision under the abuse of discretion standard. Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 444 (2001). In this regard, we have long recognized that, "'[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services.'" Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 564, 106 S. Ct. 3088, 3097, 92 L. Ed. 2d 439, 455 (1986) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 1939, 76 L. Ed. 2d 40, 50 (1983)); Rendine v. Pantzer, 141 N.J. 292, 316 (1995)). In all cases, "[a] lawyer's fee shall be reasonable." R.P.C. 1.5(a).

The factors to be considered in determining the reasonableness of a fee include the following:
 
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
 
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
 
(3) the fee customarily charged in the locality for similar legal services;
 
(4) the amount involved and the results obtained;
 
(5) the time limitations imposed by the client or by the circumstances;

 
(6) the nature and length of the professional relationship with the client;
 
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;
 
(8) whether the fee is fixed or contingent.
 
[R.P.C. 1.5(a).]

The trial court is charged with determining whether the attorneys' assigned hourly rates are reasonable:

"Generally, a reasonable hourly rate is to be calculated according to the prevailing market rates in the relevant community. Thus, the court should assess the experience and skill of the prevailing party's attorneys and compare their rates to the rates prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation."
 
[Rendine, 141 N.J. at 337 (quoting Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)).]

See Gallo v. Salesian Soc'y, Inc., 290 N.J. Super. 616, 629 (App. Div. 1996) (finding that hourly rates of $200 per hour for experienced trial attorney and $100 per hour for an associate are reasonable); Schmidt v. Schmidt, 262 N.J. Super. 451, 455 (Ch. Div. 1992) (explaining that hourly rate of $175 for attorney with extensive family law experience is reasonable);
H.I.P. (Heightened Independence & Progress, Inc.) v. K. Hovnanian at Mahwah VI, Inc., 291 N.J. Super. 144, 160 (Law Div. 1996) (finding that fee of $200 per hour is reasonable for attorney with extensive experience); Downey v. Coalition Against Rape & Abuse, Inc., No. 99-3370 (JBS), 2 005 U.S. App. LEXIS 22986, at *8 (D.N.J. Sept. 30, 2005) (explaining that $175 per hour fee is reasonable, and typically, an attorney with extensive experience "would normally charge a substantially higher rate for the services performed in such a case").

Next, the trial court must determine whether the time expended in pursuit of the "interests to be vindicated," the "underlying statutory objectives," and recoverable damages is equivalent to the time "competent counsel reasonably would have expended to achieve a comparable result . . . ." Rendine, supra, 141 N.J. at 336. "'[H]ours that are not reasonably expended,'" meaning hours that "'are excessive, redundant, or otherwise unnecessary,'" should be excluded. Id. at 335 (quoting Rode, 892 F. 2d at 1183). Furthermore, "[t]he court also can deduct hours when the fee petition inadequately documents the hours claimed." Ibid. (quoting Rode, 892 F. 2d at 1183). Obviously, double-billing is impermissible.

Finally, the trial court should decrease the lodestar if the prevailing party achieved limited success in relation to the relief sought. Id. at 336. On the other hand, if the prevailing attorney has entered into a contingent-fee arrangement the trial court should decide whether that attorney is entitled to a fee enhancement, and consider the result achieved, the risks involved, and the relative likelihood of success in the undertaking. Id. at 340-41.

Here, the counsel fee award was made after the submission of an affidavit of services, as required. The court reduced counsel's $350 per hour fee to $250, and the parties agreed to 51.95 hours. There is no warrant for our interference with the trial court's fee award, which we find to be reasonable. N.J.S.A. 56:8-19.

(vi)

In their cross-appeal, defendants contend their damage award was inadequate. We disagree.

Pursuant to the CFA, wronged private consumers are awarded treble damages and reasonable counsel fees, inclusive of filing fees and "reasonable costs of suit." N.J.S.A. 56:8-19. Indeed, it is clear that the three purposes of the CFA are:

to compensate the victim for his or her actual loss; to punish the wrongdoer through the award of treble damages; and, by way of the counsel fee provision, to attract competent counsel to counteract the community scourge of fraud by providing an incentive for an attorney to take a case involving a minor loss to the individual.

 
[Lettenmaier, supra, 162 N.J. at 139 (citation omitted).]

Thus, the Act seeks "not only to make whole the victim's loss, but also to punish the wrongdoer and to deter others from engaging in similar fraudulent practices." Furst, supra, 182 N.J. at 12.

These treble damages and attorney fees are awarded to "[a]ny person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act . . . ." N.J.S.A. 56:8-19. The "plain language of the Act unmistakably makes a claim of ascertainable loss a prerequisite for a private cause of action." Weinberg v. Sprint Corp., 173 N.J. 233, 251 (2002). "The act requires, therefore, that a causal relationship be established between any ascertainable loss and the unlawful practice condemned." Ramanadham v. New Jersey Mfrs. Ins. Co., 188 N.J. Super. 30, 33 (App. Div. 1982); Cannon v. Cherry Hill Toyota, Inc., 161 F. Supp. 2d 362, 373 (D.N.J. 2001). It is true, that "[u]nlike other states that require plaintiff to prove reliance under their consumer protection statutes, the proof requirements that the [CFA] places on its claimants is less burdensome." Fink v. Ricoh Corp., 365 N.J. Super. 520, 540-541 (Law Div. 2003) (footnote omitted). "[C]onsumer fraud requires only proof of a causal nexus between the concealment of the material fact and the loss." Varacallo v. Mass. Mut. Life Ins. Co., 332 N.J. Super. 31, 43 (App. Div. 2000); see Meshinsky, supra, 110 N.J. at 474-75 (explaining that although seller engaged in unconscionable commercial practice when forging buyer's signature on a loan application, there was no ascertainable loss and plaintiff received damages for the breach of contract). Although the "[e]xecution of a contract between the parties is not essential to recovery under the [CFA]", "the existence or nonexistence of a contract between the parties may impact on the amount of damages." Truex, supra, 219 N.J. Super. at 49-50.

"In cases involving breach of contract . . . either out-of-pocket loss or a demonstration of loss in value will suffice to meet the ascertainable loss hurdle and will set the stage for establishing the measure of damages." Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 248 (2005). The claim "must be supported by sufficient evidence to get to the factfinder." Ibid. It is "implicit in the concept of an 'ascertainable' loss is that it is quantifiable or measurable." Ibid. Accordingly, we are required to determine whether the consumer alleging the violation "proffer[ed] evidence of loss that is not hypothetical or illusory", and demonstrated a measurable loss that "capable of calculation . . . . " Ibid. However, we do not require that the consumer demonstrate this loss "in all its particularity to avoid summary judgment." Ibid.

Here, defendants were awarded $1360.02, which represented damages of $453.24 trebled. The actual damage amount was properly limited to the amount of money that the Sheriff's Office retained when executing upon defendants' bank account. Those monies that were levied upon by the Sheriff's Office were returned to defendants before start of trial and, therefore, the only ascertainable loss was the amount of money the Sheriff's Office retained.

To be sure, defendants claimed damage to their credit and a failed opportunity to purchase a house. However, as the trial court concluded, defendants provided no specifics and no documentation of any loan they could not or did not obtain. Consequently, any loss in this regard they may have sustained was unquantified, unproven, and unascertainable, and, therefore, unrecoverable. Thus, defendants' damages were properly limited to their out-of-pocket loss of $453.34, trebled to $1,360.02 pursuant to the CFA. N.J.S.A. 56:8-19.

Defendants' remaining contention of evidentiary error is moot in light of our ultimate determination, and, in any event, is without merit. R. 2:11-3(e)(1)(E).

Affirmed.

 

Judge Parrillo was not present for oral argument but has reviewed the tape recording of the session.

The Mas had arrived at Bayside with a cashier's check in the amount of $20,000. However, because of the new arrangement, the cashier's check was not used, and the Mas instead wrote a personal check for $18,035, dated the following day, May 22, 1998, to allow the re-deposited check to clear.

Although Bayside claims the first written notification of any deficiency was contained in an October 9, 1998 letter to the Mas, defendants denied ever receiving this correspondence. Of course, even if there was receipt, defendants' counterclaim would still be timely.

The trial court entered a second order on February 4, 2005, awarding an additional $2250.50 in fees and costs incurred by defendants in the prosecution of the appeal from the order of default judgment.

(continued)

(continued)

36

A-3575-04T3

May 26, 2006