HANS J. KASPERSETZ v. CLARKS LANDING MARINA, INC

(NOTE: The status of this decision is .)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5104-07T35104-07T3

HANS J. KASPERSETZ,

Plaintiff-Appellant,

v.

CLARKS LANDING MARINA, INC.,

Defendant-Respondent,

and

LUHRS CORPORATION and

YANMAR MARINE USA CORP.,

Defendants.

___________________________

 

Argued March 9, 2009 Decided

Before Judges Lisa, Reisner, and Alvarez.

On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3635-05.

James M. Nardelli argued the cause for appellant (Parsons & Nardelli, attorneys; Mr. Nardelli, on the briefs).

David T. Lewis argued the cause for respondent.

PER CURIAM

Plaintiff Hans J. Kaspersetz filed a seven-count complaint against defendants, including Clarks Landing Marina, Inc., alleging, among other things, breach of contract, breach of warranty, and violation of consumer protection laws. The claims arise from Clarks Landing's sale to plaintiff of a customized thirty-eight-foot Luhrs fishing boat with twin Yanmar motors for a purchase price of $386,500. The Law Division judge granted Clarks Landing's motion for summary judgment. Thereafter, plaintiff filed a motion for reconsideration, which was also denied. This appeal followed. We affirm.

On February 6, 2004, while at the Atlantic City Boat Show, plaintiff signed a conditional sales agreement with Clarks Landing. He paid a $2000 deposit in order to secure a production slot for May 2004 at the Luhrs facility. After plaintiff made custom selections, a revised contract was executed. As Clarks Landing requires on special order boats, he paid a non-refundable deposit of $15,000 by credit card on May 1, 2004.

Plaintiff's special order boat arrived at Clarks Landing on September 2, 2004, after, according to plaintiff, delivery was delayed several times. Luhrs' retail invoice to Clarks Landing was for $319,471.50, including $19,871.50 in custom options. Clarks Landing paid this amount to Luhrs by check dated September 2, 2004.

Prior to leaving the Luhrs factory, a crack had been discovered in the boat's bell housing, which is a large cone-shaped piece between the motor and the transmission. The crack was repaired by Yanmar. Clarks Landing was not informed of the crack or the repair.

Before accepting delivery, plaintiff commissioned a boat survey, which was performed on September 7, 2004. Plaintiff notified Clarks Landing of the forty-one deficiencies discovered in the survey. Clarks Landing agreed to correct the deficiencies, which were mainly cosmetic.

Plaintiff then advised Clarks Landing that he would not accept delivery on the boat until the following year because it arrived so late in the boating season. Clarks Landing refused to hold the boat in their inventory for that length of time and told plaintiff that he would forfeit his $15,000 deposit if he did not accept the boat.

Closing on the boat was conducted on September 24, 2004. Not all of the deficiencies had been corrected, but Clarks Landing assured plaintiff that the list of repairs would be completed. At closing, plaintiff signed a separate document acknowledging that limited warranties were provided solely by the boat manufacturer, not by Clarks Landing, and that Clarks Landing would perform only those repairs authorized by the manufacturer.

The sales contract included a disclaimer by Clarks Landing of any and "all warranties, expressed or implied, including any implied warranty of merchantability or fitness for a particular purpose." The disclaimer specified that all warranties were extended solely by the manufacturers.

The limited warranty provided by Luhrs restricted a buyer's remedies to repair or replacement of any part that Luhrs determined to be defective. Yanmar's limited warranty stated that it would "replace or repair, at its option, without charge for the parts or labor, . . . any parts of a Yanmar engine/product covered by this Warranty found to be defective in material or workmanship."

In late May 2005, plaintiff attempted to drive the boat home from Clarks Landing for the Memorial Day weekend, when he noticed an unusual vibration. On his return, Clarks Landing assured him that nothing was wrong with the boat. Thereafter, when plaintiff drove three miles out into the ocean, he heard a "loud pop and a rattle" upon acceleration. When he returned to Clarks Landing, smoke was pouring out of the bilge compartment. At the marina, a mechanical failure was discovered in the boat's starboard engine. About two days later, a Yanmar service representative inspected the engine and did a compression check. The following month, the faulty engine was replaced at no cost to plaintiff.

When plaintiff took the boat out in early August 2005, he was unable to turn off the starboard engine. Smoke again poured out of the bilge and from the sides of the cockpit. The engine shut off only after plaintiff disconnected the fuel line with a wrench. This time, when the Yanmar representative inspected the engine, he discovered that it had overheated as a result of a fluid leak caused by a valve that should have been tightened during the earlier repair. The leak was repaired and fluids were replaced.

Consequently, plaintiff notified Clarks Landing that he no longer wanted the boat and listed it for sale at their boatyard. Eventually, Clarks Landing requested that plaintiff remove it from their premises.

On September 1, 2005, plaintiff filed the complaint. It included counts for breach of contract, breach of implied warranties, breach of express warranties, violation of the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (Magnuson-Moss), 15 U.S.C.A. 2301 to 2312, violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, rescission, and compensatory damages.

In October 2005, plaintiff drove the boat to another marina for storage. Upon arrival, he noted that the bilge was full of smoke, water and fluid, as the engine had overheated again. Plaintiff dry-stored the boat and abandoned any attempt to sell it, anticipating that no one would buy a boat with a faulty engine.

Plaintiff retained an expert, who issued a report on November 14, 2006. The expert indicated that he participated in two court-ordered sea trials, one on August 25, 2006, and the other on November 1, 2006, along with Yanmar and Luhrs representatives and counsel for all parties.

At the August 25 sea trial, noises were heard emanating from the marine gear area while the starboard engine was idling. Plaintiff informed everyone that he wanted no repairs to be made absent a specific directive from the court.

On October 30, 2006, everyone convened in order to determine the cause for the noise in the marine gear and discovered a small metal object under the engine in a drip pan. The object had apparently fallen out of the flywheel cavity during disassembly. It was not a part of the original assembly and was not intended to be a part of the engine or gear train. It could have been a stray part in the assembly process or could have been introduced at a later date. On November 1, when the starboard engine was started, the boat was run at full throttle for a sustained amount of time without incident.

Plaintiff's expert believed that the two instances of overheating may have caused internal damage in the starboard engine, but the extent of any damage could not be determined in a single test run. Plaintiff did not want the engine to be dismantled for inspection, although this approach was in line with industry standards and there was no other way to assess the potential damage. Plaintiff indicated to his expert that he no longer wanted the boat and was "disgusted." The expert acknowledged during deposition that the engines ran well during the sea trials, and that he never noted them failing to operate. Plaintiff's expert had previously opined in a July 1, 2006 report that the nine deficiencies remaining on plaintiff's punch list were "annoyances rather than structural or serious issues; however, when all added up, it shows a pattern of poor service and response to the vessel buyer."

On June 8, 2007, Clarks Landing moved for summary judgment. On June 26, 2007, plaintiff filed a cross-motion seeking partial summary judgment regarding the rescission count of the complaint. On July 6, 2007, the Law Division judge entered summary judgment in favor of Clarks Landing as to all counts except for the breach of contract and rescission counts. On July 20, 2007, the judge issued his decision as to those counts, dismissing them as well. Plaintiff's motion for reconsideration was also denied. Plaintiff has amicably resolved his dispute with Luhrs and Yanmar.

Plaintiff's complaint about the summary judgment decision, in brief, is that the court misapplied the relevant standard. Summary judgment must be granted where "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c).

In deciding a summary judgment motion, the trial court must determine whether "the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Therefore, "when the evidence 'is so one-sided that one party must prevail as a matter of law,' . . . the trial court should not hesitate to grant summary judgment." Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)). We apply the same standard as the trial court when reviewing an award of summary judgment. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

A motion for reconsideration should be granted only in those cases in which the trial court either 1) "expressed its decision based upon a palpably incorrect or irrational basis," or 2) "did not consider, or failed to appreciate the significance of probative, competent evidence." Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (citation omitted). Thus, "[r]econsideration is a matter within the sound discretion of the Court, to be exercised in the interest of justice." Ibid.

BREACH OF CONTRACT AND RESCISSION

Plaintiff contends that pursuant to the Perfect Tender Rule of the Uniform Commercial Code (U.C.C.), N.J.S.A. 12A:2-601, he was "fully justified in requesting that the closing be delayed until the [forty-one] deficiencies had been corrected." He also asserts that he would have been equally justified in canceling the contract with Clarks Landing altogether if they did not correct the deficiencies within a reasonable amount of time. We do not agree.

The items on plaintiff's punch list were minor and cosmetic in nature, and Clarks Landing never disputed its obligation to repair them. Those items in and of themselves would not have warranted rescission as they cannot be said to have resulted in a nonconformity that would substantially impair the value of the boat to the buyer. See N.J.S.A. 12A:2-601.

In addition, the manufacturers' limited warranties restricted the remedies available to plaintiff to the replacement of defective parts. N.J.S.A. 12A:2-719 permits a warranty contract to limit the remedies available to a buyer to repairs as opposed to revocation of the transaction within the scope of N.J.S.A. 12A:2-608.

In reaching his conclusion, the Law Division judge relied upon Palmucci v. Brunswick Corp., 311 N.J. Super. 607 (App. Div. 1998). In Palmucci, the plaintiff accepted delivery of a boat that he had previously owned, which had a new engine installed by the defendant. Id. at 611. The engine warranty book limited the defendant's obligation to repair or replacement of any defective parts or, at the defendant's option, refund of the purchase price. Ibid.

The plaintiff argued that N.J.S.A. 12A:2-608 allowed him to revoke his acceptance of the engine because the defect substantially impaired the product's value to him. Id. at 612. We held that "[a]lthough revocation of acceptance is available to the purchaser of a defective product pursuant to N.J.S.A. 12A:2-608, that right does not accrue where, as here, the product is sold with a limitation of remedy." Id. at 612. N.J.S.A. 12A:2-608 only affords a consumer relief where the limited remedy fails its essential purpose. Ibid. Because the plaintiff in Palmucci did not allow the manufacturer to extend the remedy as per the terms of the warranty, he was not entitled to recover under his breach of warranty claim. Id. at 613.

In this case, the punch list defects were unrelated to the boat's essential purpose. As to the boat engine, which is obviously necessary to the boat's essential purpose, plaintiff refused to allow the engine to be taken apart, even under the supervision of his own expert, which prevented any defendant from making whatever repairs may have been necessary. This plaintiff, like the plaintiff in Palmucci, did not comply with the terms of the warranty. He refused to allow defendants to proceed as provided in the warranty.

The evidence demonstrated that Clarks Landing was willing to comply with its contractual agreements. Plaintiff was not entitled to rescission under N.J.S.A. 12A:2-608 because of the punch list. Therefore, the Law Division judge properly granted summary judgment to Clarks Landing.

CONSUMER FRAUD

Plaintiff also contends that pursuant to the CFA, he is entitled to damages as Clarks Landing employed unconscionable commercial practices. In order to establish a claim under the CFA, plaintiff must allege each of three elements: "(1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendants' unlawful conduct and the plaintiff's ascertainable loss." N.J. Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 12-13 (App. Div.), certif. denied, 178 N.J. 249 (2003).

The CFA defines "unlawful conduct" as:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby.

[N.J.S.A. 56:8-2.]

"To constitute consumer fraud . . . the business practice in question must be 'misleading' and stand outside the norm of reasonable business practice in that it will victimize the average consumer." Turf Lawnmower Repair, Inc. v. Bergen Record Corp., 139 N.J. 392, 416 (1995), cert. denied, 516 U.S. 1066, 116 S. Ct. 752, 133 L. Ed. 2d 700 (1996).

The courts have recognized that "there is indeed a distinction between misrepresentations of fact actionable under the CFA and mere puffing about a product or a company that will not support relief." Schering-Plough, supra, 367 N.J. Super. at 13. Additionally, breach of contract or warranty is not a per se violation of the CFA:

[I]n a sense, unfairness inheres in every breach of contract when one of the contracting parties is denied the advantage for which he contracted, but this is why remedial damages are awarded on contract claims. If such an award is to be trebled, the . . . legislature must have intended that substantial aggravating circumstances be present.

[D'Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11, 31 (App. Div. 1985) (quoting United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985, 992 (4th Cir.), cert. denied, 454 U.S. 1054, 102 S. Ct. 599, 70 L. Ed. 2d 590 (1981)).]

Our review of the record, even examining the facts in the light most favorable to plaintiff, does not establish that representations as to the date of delivery of the boat constituted an unconscionable commercial practice. Each version of the contract between plaintiff and Clarks Landing indicated an approximate delivery date and explained that a definite delivery date could not be fixed. Clarks Landing accurately represented that when plaintiff paid his deposit in May, it only secured him a production slot. Hence, we concur with the Law Division judge's decision that the statements were not intended to mislead plaintiff.

Additionally, plaintiff alleges that false promises were made about the quality of the Yanmar engines. He contends that these representations were proven false when the bell housing had to be repaired prior to delivery, the starboard engine failed and had to be replaced after forty hours of use, and problems continued even with the replacement engine. Plaintiff asserts that misrepresentations about the quality of the engines could be viewed by a jury as an unconscionable commercial practice.

We agree with the Law Division judge's decision that the statements that Clarks Landing made about Luhrs' boats or Yanmar engines were mere "puffery . . . sort of a mild version." Clarks Landing merely stated that the product that they were selling was a good product. That is obviously not an unconscionable commercial practice. As noted in Schering-Plough, supra, 367 N.J. Super. at 13, in order to constitute consumer fraud, the commercial practice in question must be so misleading as to "stand outside the norm of reasonable business practice." Clarks Landing's statements about the Yanmar engines were not misleading representations beyond the norm of reasonable business practices.

Plaintiff also contends that the CFA makes concealment of the engine repair completed before delivery an unconscionable commercial practice. Because plaintiff has no evidence that Clarks Landing actually knew of the repair to the bell housing, however, there is no evidence that they engaged in an unconscionable commercial practice.

Plaintiff further asserts that it was an unconscionable commercial practice for a Clarks Landing representative to threaten him with the loss of his deposit and insist that closing occur prior to completion of the forty-one-item punch list. He further contends that this coercion deprived him of his right to insist upon perfect tender and to refuse delivery until all repairs were made.

As noted during oral argument in the Law Division by Clarks Landing's counsel, the parties agreed that plaintiff would pay a non-refundable deposit. Clarks Landing's notice to plaintiff that he would forfeit his deposit if he did not accept delivery of the boat was not a threat, but rather, a statement of intent to proceed in a manner permitted by the written contract. This sort of contractual provision is enforceable and not a violation of the CFA when applied to a customized high-end item such as the boat here. See Judge v. Blackfin Yacht Corp., 357 N.J. Super. 418, 425 (App. Div.), certif. denied, 176 N.J. 428 (2003).

WARRANTY CLAIMS

Plaintiff signed a separate disclosure form acknowledging that Clarks Landing extended no warranties, but would perform repairs if authorized to do so by the manufacturer. That commitment was more of a disclaimer than a promise to perform. Neither Luhrs nor Yanmar's warranties imposed upon Clarks Landing a responsibility to perform warranty-related repairs. The disclosure form stated in clear terms that all warranties were extended solely by the manufacturers, and that Clarks Landing's ability to act in the event of a problem was limited. That is neither a written warranty nor a service contract. Thus, Clarks Landing did not violate the Magnuson-Moss Act, 15 U.S.C.A. 2308(a).

We find no error in any of the Law Division judge's rulings resulting in issuance of summary judgment. Even if plaintiff's proofs are viewed in the most favorable light, he is not entitled to judgment as a matter of law.

Affirmed.

 

The listed deficiencies included gelcoat cracks, a small tear in the salon headliner, and the lack of interior door catches.

(continued)

(continued)

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A-5104-07T3

June 18, 2009