MARC KOHEL v. BERGEN AUTO ENTERPRISES, L.L.C.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3399-11T2

MARC and BREE KOHEL,

Plaintiffs-Appellants/

Cross-Respondents,

v.

BERGEN AUTO ENTERPRISES, L.L.C.

d/b/a WAYNE MAZDA INC.,

Defendant-Respondent/

Cross-Appellant,

and

ROBERT RAGO and KEVIN DiPIANO,

Defendants.1

____________________________________

February 6, 2013

Argued November 26, 2012 - Decided

Before Judges Graves and Guadagno.

On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-3277-10.

Joel M. Bacher argued the cause for appellants/cross respondents.

Robert J. Bennett, Jr., argued the cause for respondent/cross-appellant (Betsch & Bennett, attorneys; Mr. Bennett, on the briefs).

PER CURIAM

On May 24, 2010, plaintiffs Marc and Bree Kohel entered into a sales contract with defendant Bergen Auto Enterprises, L.L.C. d/b/a Wayne Mazda Inc. (Wayne Mazda), for the purchase of a used 2009 Mazda. Plaintiffs agreed to pay $26,430.22 for the Mazda and were credited $7,000 as a trade-in, for their 2005 Nissan Altima. As plaintiffs still owed $8,118.28 on the Nissan, Wayne Mazda assessed plaintiffs a net pay-off of this amount and agreed to remit the balance due to satisfy the outstanding lien.

Plaintiffs took possession of the Mazda with temporary plates and left the Nissan with defendant. A few days later, a representative of defendant advised plaintiffs that the Nissan's vehicle identification tag2 (VIN tag) was missing. The representative claimed it was unable to sell the car and offered to rescind the transaction. Plaintiffs refused.

When the temporary plates on the Mazda expired on June 24, 2010, defendant refused to provide plaintiffs with the permanent plates they had paid for. In addition, defendant refused to pay off plaintiffs' outstanding loan on the Nissan, as they had agreed. As a result, plaintiffs were required to continue to make monthly payments on both the Nissan and the Mazda.

On July 28, 2010, plaintiffs filed a complaint in the Law Division against Wayne Mazda, a salesperson, Robert Rago, and Kevin DiPiano, a principal. Plaintiffs alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20.

On May 27, 2011, the trial court ordered defendant's answer stricken and its defenses suppressed for failure to comply with discovery demands. Defendant did not correct the discovery deficiencies and on September 2, 2011, the trial court ordered defendant's answer dismissed, its defenses suppressed with prejudice, and entered default. On October 12, 2011, the trial court denied defendant's motion to vacate the orders of May 27, 2011 and September 2, 2011, finding defendant had failed to demonstrate exceptional circumstances.

On November 18, 2011, the court denied defendant's motion for reconsideration and proceeded with a proof hearing as to plaintiffs' damages. Marc Kohel testified that after he was told about the missing VIN tag, he offered to obtain a replacement. Marc produced an invoice from Meadowlands Nissan (Meadowlands) dated November 20, 2010, indicating he paid $35.31 for a new VIN tag. Marc made several follow-up calls to Meadowlands but never received the replacement tag. Marc also testified that he continued to make monthly payments on both the Nissan and the Mazda. When the temporary plates expired, Wayne Mazda refused to provide the permanent plates and Marc and his wife were unable to use the Mazda until they registered the car in New York State.

The hearing continued on January 12, 2012. Bree Kohel testified that during the negotiations for the purchase of the Mazda, representatives of Wayne Mazda inspected the Nissan twice before accepting the vehicle as a trade-in. Bree also claimed that defendant Kevin DiPiano would not return her calls. The only person at Wayne Mazda who would speak with her was the finance manager, Bernadette, who informed Bree that Wayne Mazda refused to provide plaintiffs with the permanent plates.

On February 2, 2012, the court rendered an oral decision finding that there was a breach of contract by Wayne Mazda but plaintiffs did not establish a prima facie case of violation of the CFA. On February 17, 2012, the court entered judgment in the amount of $5,405.17 in favor of plaintiffs against Wayne Mazda as follows:

1. $1299.15 reimbursement of three months auto payments;

2. $330 reimbursement of three months auto insurance;

3. $649 documentary fee paid by plaintiffs for the new license plates they did not receive;

4. $2,783.30 for ten months payments on the Nissan;

5. $28.18 prejudgment interest; and

6. $315.54 costs.

Several issues are raised on defendant's appeal and plaintiffs' cross-appeal. Defendant presents the following arguments for our consideration:

POINT ONE

THE TRIAL COURT ERRED IN GRANTING PLAINTIFFS RELIEF BASED UPON WAYNE MAZDA'S CLAIMED BREACH OF CONTRACT.

A. THE TRIAL COURT ERRED IN FAILING TO RECOGNIZE THAT PLAINTIFFS' MATERIAL BREACH BARRED THEM FROM RECOVERY BASED ON CONTRACT.

B. THE DOCTRINE OF MUTUAL MISTAKE BARRED PLAINTIFFS FROM OBTAINING RELIEF BASED UPON THE THEORY WAYNE MAZDA BREACHED THE CONTRACT.

C. PLAINTIFFS REPEATED REPUDIATION TO CURE BARRED THEM FROM RELIEF.

POINT TWO

THE DISMISSAL OF PLAINTIFFS' CONSUMER FRAUD ACT CLAIM SHOULD BE AFFIRMED.

A. THE TRIAL COURT'S FINDINGS OF FACT ARE ENTITLED TO DEFERENCE.

B. PLAINTIFFS FAILED TO ESTABLISH SUBSTANTIAL AGGRAVATING CIRCUMSTANCES.

POINT THREE

IN THE EVENT THE COURT ORDERS A REMAND ON PLAINTIFFS' CFA CLAIM, THE ORDERS SURPRESSING DEFENDANT'S ANSWER SHOULD BE REVERSED.

On plaintiffs' cross-appeal they raise the following issues:

POINT ONE

THE LAW DIVISION COMMITTED PLAIN ERROR BY DISMISSING COUNT TWO BECAUSE ACTS OF THE DEFENDANT DEALERSHIP CONSTITUTED VIOLATIONS OF THE CONSUMER FRAUD ACT.

POINT TWO

THE EVIDENCE SUPPORTED THE PLAINTIFFS' DEMAND FOR FULL DAMANGES REGARDING THE TRADE-IN VEHICLE'S LIEN.

Defendant argues that plaintiffs' delivery of the Nissan without a VIN tag was, itself, a breach of the contract of sale and precludes a finding that defendant breached the contract. However, the trial court found that plaintiffs were not aware that the Nissan lacked a VIN tag when they offered it in trade. Moreover, defendant's representatives examined the car twice before accepting it in trade and did not notice the missing VIN until they took the car to an auction where they tried to sell it. There is a material distinction in plaintiffs' conduct, which the court found unintentional, and defendant's refusal to "release the permanent plates for which the plaintiffs had paid[,]" an action the court concluded was done to maintain "leverage."

Defendant next argues the contract was voidable for mutual mistake in that both parties believed the Nissan had a VIN tag. Defendant relies on Beachcomber Coins, Inc. v. Boskett, 166 N.J. Super. 442 (App. Div. 1979). Beachcomber involved a coin sold from one coin dealer to another. Ibid. Both dealers assumed the coin was genuine when, in fact it was counterfeit. Id. at 444. We described those facts as presenting "a classic case of rescission for mutual mistake of fact." Id. at 445. The facts here are distinguishable. The evidence at the proof hearing indicated that, unlike the counterfeit coin in Beachcomber, the problem with the missing VIN tag could be rectified. Marc Kohel applied and paid for a replacement VIN tag at Meadowlands. While he initially made some calls to Meadowlands, he did not follow up in obtaining the VIN tag after the personnel at Wayne Mazda began refusing to take his calls. As the trial court concluded:

The sad part of the story is the Kohels nor Wayne Mazda [have] ever received, at least from the application to Meadowlands Nissan, the replacement VIN tag. It also should be noted that they never followed up, they never called, they never bothered to find out what became of their $35.31 investment in that they had to pay when they applied for the replacement VIN tag.

There was no proof that the missing VIN tag could not be replaced and the court concluded that "Wayne Mazda didn't handle this as as adroitly as they could . . . ." In referring to plaintiffs' testimony that Kevin DiPiano, identified in the complaint as the owner and/or CEO of Wayne Mazda, would not even take their calls to discuss this matter, the court found:

Mr. [DiPiano]3 could have been a better businessman, could have been a little bit more compassionate or at least responsive, you know? He was not. He acted like he didn t care. That obviously went a long way to infuriate the plaintiffs. I don t blame them for being infuriated.

The Restatement (Second) of Contracts 152(1) (1981) states:

Where a mistake of both parties at the time a contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake . . . .

The comments to this Restatement section explain that "[a] mistake of both parties does not make the contract voidable unless it is one as to a basic assumption on which both parties made the contract." Id. at cmt. b. The phrase "basic assumption" is further explained in the commentary "in connection with impracticability . . . and frustration" of the purposes of the contract. Ibid. Here, plaintiffs attempted to remedy the VIN tag issue but this resolution was frustrated by defendant's unreasonable conduct. We thus reject defendant's argument that plaintiffs' failure to obtain the replacement VIN tag amounted to a repudiation of the contract.

As to plaintiffs' cross-appeal challenging the dismissal of the CFA claim, we note that we defer to a trial court's findings of fact unless they are so "wholly insupportable as to result in a denial of justice." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974).

The CFA prohibits "[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, [or] misrepresentation . . . ." N.J.S.A. 56:8-2. Recently, our Supreme Court has identified three general categories of consumer fraud violations affirmative misrepresentations, knowing omissions, and regulatory violations. Allen v. V & A Bros., Inc., 208 N.J. 114, 131 (2011). Here, the trial court found that defendant "made a mistake. But a - but a mistake, not a premeditated scheme to somehow maximize profits at the expense of the - of the plaintiffs."

We have carefully considered plaintiffs' arguments challenging the dismissal of the CFA claim and the trial court's damage award and we are satisfied that the these arguments lack sufficient merit to warrant discussion in a written decision. R. 2:11-3(e)(1)(E). We affirm the dismissal of the CFA claim substantially for the reasons set forth in the trial court's decision rendered on February 2, 2011. We add only the following comments.

Plaintiffs argue that defendant took advantage of their lack of familiarity with VIN plates and imply that defendant intentionally ignored the missing VIN tag in order to void the sales contract. We reject this argument as it is unsupported by any facts in the record.

As to damages, the trial court carefully and meticulously analyzed each claim of loss by plaintiffs and provided a detailed explanation for the calculation of its damage award. We find no abuse of discretion by the trial court.

A

1 The claims against defendants Rago and DiPiano were voluntarily dismissed by plaintiffs.

2 "Automobiles each have at least two, sometimes three, distinguishing numbers which are placed in the car at the point of production." State v. Lungsford, 167 N.J. Super. 296, 299 (App. Div. 1979). "The primary and most visible number is called the vehicle identification number" (VIN) and "indicates the type, year and make of the car." Ibid. The second number, a confidential serial number, is for the benefit of auto theft investigation and is usually found elsewhere in a permanent component of the car. Ibid.

3 Throughout the pleadings and in the transcript, this defendant's name has been spelled "DePiano" and "DiPiano." We choose the spelling utilized by Mr. DiPiano in his certification.