SALEM TRUCK LEASING INC v. DELGADO TRUCKING EXPRESS, INC.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2188-09T2

SALEM TRUCK LEASING, INC.,

Plaintiff-Respondent,

v.

DELGADO TRUCKING EXPRESS, INC.,

Defendant-Appellant.

____________________________________________________________

June 16, 2011

Submitted December 7, 2010 - Decided

Before Judges Graves and Waugh.

On appeal from Superior Court of New Jersey,

Law Division, Essex County, Docket No.

L-007914-07.

Francis J. Dooley, attorney for appellant.

Respondent has not filed a brief.

PER CURIAM

Defendant Delgado Trucking Express, Inc., appeals from two orders of the Law Division. The first, dated October 7, 2009, entered judgment for plaintiff Salem Truck Leasing, Inc., in the amount of $5,053.71. The second, dated December 4, 2009, denied defendant's motion for a new trial. Having reviewed the record and applicable law, we reverse.

According to defendant, it has leased trucks from plaintiff "for several years." The controversy before us stems from a master lease signed by the parties on July 12, 2002. The lease required plaintiff to provide "[m]aintenance and repairs which may be required to keep the Vehicle in good operating condition and appearance." However, it also rendered defendant liable "for any loss or damage which results from careless, reckless, intentional or abusive conduct by any driver." If defendant failed to make payment within seven days, plaintiff would be entitled to a "service charge" that would "be the lower of 1 % per month (18% per year) or the highest lawful rate of interest." In the event of default, defendant would also be liable for "all of [plaintiff's] costs, and expenses, including attorney's fee[s], incurred in collecting amounts due from [defendant] or in enforcing any of [plaintiff's] rights."

The lease also contemplated the possibility of the truck's complete destruction. It provided that if plaintiff considered the vehicle "damaged beyond repair," the lease would terminate, "provided any amounts due [to plaintiff] pursuant to Paragraph 12B hereof have been paid." Defendant was required to insure the vehicle, and Paragraph 12(B) stated:

[Defendant] will pay for all loss or damage to any Vehicle or any Vehicle being used as a substitute and extra therefor, including related expenses including towing arising from any cause, but [defendant's] liability shall not exceed the purchase price of the damaged Vehicle computed according to the provisions of Paragraph 15 at the time of such loss or damage.

In accordance with the terms of the lease, defendant obtained insurance for the truck through Inter America, an insurance agent with an office in Union City, New Jersey. The policy itself was issued by the Adriatic Insurance Company (Adriatic), an insurer located in Metairie, Louisiana.

On February 11, 2004, one of the leased trucks was destroyed in a one-vehicle accident. At that time, Eliezer Delgado, president of Delgado Trucking Express, Inc., notified Ronald Wilk, one of plaintiff's sales representatives, of the incident. Through Wilk, Delgado also gave plaintiff permission to negotiate directly with the insurance company. Plaintiff ultimately settled with Adriatic for $55,000.1 On December 29, 2004, plaintiff sent defendant an invoice seeking reimbursement for the difference between the insurance payment and the truck value stipulated in "Schedule A" of the lease agreement.

Defendant refused to pay this amount, and on December 31, 2007, plaintiff filed a complaint. The first count alleged that defendant had defaulted on the lease "by failing to make the required lease payments"; the second sought recovery for "the reasonable value of the goods and/or services delivered to the Defendant"; and the third claimed damages for the breach of defendant's promise "to pay for the goods and/or services delivered by the Plaintiff." Each count of the complaint sought the same overall damages:

WHEREFORE, Plaintiff demands judgment against the Defendant(s) in the amount of $12,289.44, together with interest at the rate of 18% from the date of default of December 29, 2004 through the filing of the Complaint, September 4, 2007, in the amount of $5,933.27, for a total due Plaintiff of $18,222.71, together with attorney's fees, interest and costs of suit.

Defendant denied plaintiff's allegations, and a one-day bench trial took place on August 25, 2009. The vast majority of the evidence adduced at trial, both documentary and testimonial, concerned the parties' insurance dispute.2 However, plaintiff also introduced into evidence an "aging report" that summarized the charges for repairs performed by plaintiff. In addition to the outstanding invoice for the destroyed truck, the report showed three unpaid charges in the amounts of $906.48, $136.87, and $306.08, for a total of $1,349.43.

Jared Steinberg, plaintiff's executive vice president, testified that these charges were "not related to [the destroyed] vehicle." He indicated that at least one of the bills was for a vehicle "damaged by the customer" but did not identify which, if any, of the damages were caused by defendant. Later, when Delgado was asked whether defendant owed plaintiff money for these bills, he testified: "I don't owe them a penny." He further stated that he had never been contacted by any collection agencies and "never receive[d] any paperwork, indicating . . . that [defendant owed] . . . Salem money for anything."

After hearing testimony from Steinberg, Delgado, and Wilk, the court rendered an oral decision. Although the trial judge determined that plaintiff was not entitled to additional damages for the destroyed vehicle, he found defendant liable for the outstanding charges listed on the aging report. The judge indicated that plaintiff met its burden with Steinberg's testimony, the aging report, and the invoices themselves. He found that Delgado's testimony was "not sufficient without any corroboration" and stated: "[Plaintiff] sued for an amount, and [it] presented an invoice that equaled the amount [it] sued for, and I think that's enough proof, and there was . . . nothing to counter that [defendant] incurred these bills, and didn't pay for it." The court awarded plaintiff damages with one-and-a-half percent monthly interest, together with counsel fees and costs of suit.

Pursuant to the court's instructions, plaintiff submitted a letter itemizing its damages as follows: $1,349.39 for repairs; $1,857.42 in interest; $545.20 for court costs; and $1,301.70 for counsel fees. On October 7, 2009, the court entered an order awarding plaintiff $5,053.71 in accordance with these calculations.

Defendant filed a motion for a new trial, asserting that the evidence introduced by plaintiff was insufficient to support the award and that "[t]he trial Judge erred in disregarding the language in the Lease providing for free maintenance of the leased vehicles." In its supporting papers, defendant also attached the three invoices at issue. According to defendant, "[t]hey were submitted once to [defendant] and were cancelled by [plaintiff]. And they were based on repairs or services, which had to be performed by [plaintiff], free of charge." The court denied defendant's motion on December 4, 2009.

On appeal, defendant argues that the court erred by awarding damages. We agree.

"Generally, plaintiffs have the burden of proving damages." Caldwell v. Haynes, 136 N.J. 422, 436 (1994) (citing Lane v. Oil Delivery, Inc., 216 N.J. Super. 413, 420 (App. Div. 1987)). They must do so "with such certainty as the nature of the case may permit, laying a foundation which will enable the trier of the facts to make a fair and reasonable estimate." Lane, supra, 216 N.J. Super. at 420.

In this case, the relationship between the parties was governed by a master lease. That lease required plaintiff to provide "[m]aintenance and repairs which may be required to keep the Vehicle in good operating condition and appearance." Defendant was obliged to pay only for "any loss or damage which result[ed] from careless, reckless, intentional or abusive conduct by any driver." These provisions are consistent with the implied warranty or representation of fitness that is imposed on companies that are in the business of leasing trucks. See Cintrone v. Hertz Truck Leasing & Rental Serv., 45 N.J. 434, 451 (1965) ("The retained supervision and control permit Hertz to see to it that the vehicles remain fit for use, or to withdraw them from operation and replace them if the estimated service life is at or approaching an end, or if for any reason continued fitness for use is questionable.").

In the present matter, neither the invoices themselves nor Steinberg's testimony established that the repairs performed by plaintiff resulted from careless or abusive conduct by defendant or any of its employees. In light of this omission, we find that plaintiff has not met its burden to show that defendant was liable for the cost of the repairs. We therefore reverse the October 7, 2009 order that awarded damages, together with interest, court costs, and counsel fees to plaintiff.

Reversed.

1 This amount was initially reduced by $3,928.99 to cover the deductible, "excess storage," and premium due. Thus, the check from Adriatic was in the amount of $51,071.01. However, plaintiff was subsequently provided with a supplemental check from Inter America that covered the difference.

2 The insurance dispute is not at issue in this appeal.