ALLTHE WAY TOWING, LLC, and CHAYIM GOODMAN v. BUCKS COUNTY INTERNATIONAL, INC.

 

(NOTE: The status of this decision is Published.)

                NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                               SUPERIOR COURT OF NEW JERSEY
                               APPELLATE DIVISION
                               DOCKET NO. A-4825-15T2

ALL THE WAY TOWING, LLC, and
CHAYIM GOODMAN,
                                      APPROVED FOR PUBLICATION
         Plaintiffs-Appellants,
                                          January 9, 2018
    v.
                                         APPELLATE DIVISION
BUCKS COUNTY INTERNATIONAL, INC.,
and DYNAMIC TOWING EQUIPMENT
AND MANUFACTURING, INC.,

          Defendants-Respondents.
__________________________________________

         Argued November 14, 2017 – Decided January 9, 2018

         Before Judges Fisher, Fasciale and Sumners.

         On appeal from Superior Court of New Jersey,
         Law Division, Ocean County, Docket No. L-1865-
         12.

         Jay J. Rice argued the cause for appellants
         (Nagel Rice, LLP and Levin Cyphers, attorneys;
         Jay J. Rice, of counsel and on the brief; Harry
         J. Levin, of counsel; Randee M. Matloff, on
         the brief).

         Thomas E. Kopil argued the cause for
         respondent Bucks County International, Inc.
         (Marte and Toadvine, attorneys; Thomas E.
         Kopil, on the brief).

         Daniel J. Kluska argued the cause for
         respondent Dynamic Towing Equipment and
         Manufacturing, Inc. (Wilentz, Goldman &
         Spitzer, PA, attorneys; Daniel J. Kluska, of
         counsel and on the brief).
       The opinion of the court was delivered by

FISHER, P.J.A.D.

       Plaintiffs All The Way Towing, LLC, and Chayim Goodman, appeal

the dismissal of their complaint, which contained, among others,

a claim that defendant Bucks County International, Inc., breached

a contract to manufacture and sell to plaintiffs a custom-built

tow truck, and a Consumer Fraud Act (CFA)1 claim against both Bucks

and defendant Dynamic Towing Equipment and Manufacturing, Inc.

After discovery was completed, defendants successfully moved for

summary judgment on all counts. Because the judge applied incorrect

legal principles to these claims and failed to view the evidence

in the light most favorable to plaintiffs, we reverse.

       In examining the summary judgment under review, we apply the

same Brill standard2 that bound the trial judge. Townsend v.

Pierre, 
221 N.J. 36, 59 (2015); W.J.A. v. D.A., 
210 N.J. 229, 237

(2012). This standard requires that we examine the record in the

light most favorable to plaintiffs, the opponents of the successful

summary judgment motion. Brill, 
142 N.J. at 540. Following a brief

discussion of the operative facts in Section I, we separately

discuss in Sections II and III the dismissal of the breach of




1 N.J.S.A. 56:8-1 to -20.
2
    Brill v. Guardian Life Ins. Co. of Am., 
142 N.J. 520 (1995).

                                  2                           A-4825-15T2
contract and CFA claims, respectively, and, in Section IV, we

summarize our disposition of this appeal.


                                      I

      We start by recognizing that, after extensive discussions,

Bucks entered into a contract on February 3, 2011, that called for

its   manufacture   and   sale   of   a   tow   truck,   with   particular

specifications, deliverable to plaintiff by April 15, 2011. It is

undisputed the vehicle was not delivered by that date.3

      In fact, the first attempt at delivery occurred months later,

sometime in October 2011.4 At that time, the tow truck's forks did

not move correctly; other significant problems were identified as

well. Two more attempts at delivery later occurred; on those

occasions, the towing function was not operational and the truck

spewed hydraulic fluid. The fourth attempt at delivery appears to

have occurred in November 2011. At that time, metal fell out from

beneath the truck, and the wheel lift failed to close properly.



3
  Bucks asserts that this date was simply an estimate. That may be
so, but that contention is disputed and, in considering whether
Bucks was entitled to summary judgment, we must assume the parties
were bound by plaintiffs' version that the date stipulated in
their contract governed the time for delivery.
4
  The record on appeal does not provide any greater clarity as to
when this and the three other delivery attempts occurred, but
there appears to be no dispute that the first took place in October
2011 and the last in November 2011.

                                      3                            A-4825-15T2
Plaintiffs found the situation "hopeless" and believed Bucks would

never   be    able    to    deliver      a    properly    functioning   tow    truck.

Plaintiffs rejected delivery and demanded return of their $10,000

deposit. The deposit was not returned, and this suit was later

commenced.

     Following discovery, the trial judge granted defendants'

summary      judgment      motion   in       all   respects.    Plaintiffs    appeal,

arguing the judge erred in granting summary judgment, in applying

Article Two of the Uniform Commercial Code (UCC), 
N.J.S.A. 12A:2-

101 to -725, to their breach of contract claim, and in concluding

the CFA did not apply to this transaction. We agree.


                                              II

     The judge dismissed plaintiffs' breach of contract claim

because, in his view, Bucks produced and tendered a tow truck. In

support of this conclusion, the judge cited in his written opinion

only 
N.J.S.A. 12A:2-106(2), which, in defining terms relevant to

sales contracts, declares that "[g]oods" are "'conforming' or

conform to the contract when they are in accordance with the

obligations under the contract." In other words, as the judge

explained,      the     contract      called        for   the    delivery     of   "an

International 7300 4X4 with a Dynamic 801 tow body mounted" and

that's what was tendered; the judge did not consider plaintiffs'


                                              4                               A-4825-15T2
allegations that the tow truck failed to function properly and,

for that reason alone, we must reverse.

     Had he viewed the evidence in the light most favorable to

plaintiffs, the judge would have been required to assume that

Bucks attempted delivery on four occasions – all well beyond the

stipulated delivery date – and on each occasion failed to deliver

a truck that adequately performed its essential functions. If

plaintiffs'    allegations    regarding    the    tow    truck's      apparent

problems,    which   were   identified    at   each     of   four    attempted

deliveries,    are   ultimately    proven,       plaintiffs        would   have

demonstrated the tow truck was nonconforming, 
N.J.S.A. 12A:2-

106(2), its failure to conform authorized plaintiffs' rejection

of delivery, 
N.J.S.A. 12A:2-601; Ramirez v. Autosport, 
88 N.J.
 277, 289 (1982), and a proper rejection opened an avenue toward

plaintiffs pursuit of the remedies permitted by the UCC, see,

e.g., 
N.J.S.A. 12A:2-711 to -724. In short, the record reveals a

central factual dispute as to whether the tow truck conformed to

the contract and that dispute alone precludes summary judgment.

     Bucks    alternatively    argues    dismissal      of   the    breach    of

contract claim may be sustained because plaintiffs failed to show

damage. We reject this as well. Even if the judge had dismissed

on this discrete basis – he did not – the retention of plaintiffs'

deposit alone constitutes an element of damages. Because that fund

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alone represents a valid claim for damages, we need not now

consider   whether      other    damages5      may    also    prove    available      if

plaintiffs succeed at trial.


                                         III

       We also find merit in plaintiffs' argument that the judge

erred in dismissing the CFA claims against Bucks and Dynamic. The

judge's decision was based solely on his conclusion that the CFA

did not apply to this transaction; citing and relying only on

Finderne Mgmt. Co. v. Barrett, 
402 N.J. Super. 546 (App. Div.

2008) and Princeton Healthcare Sys. v. Netsmart N.Y., Inc., 
422 N.J.   Super.    467   (App.     Div.    2011),      the   judge      held   that    the

transaction was not a "sale of merchandise," 
N.J.S.A. 56:8-2,

because the tow truck was not something available "to the public

for    sale,"    N.J.S.A.       56:8-1(c).      The    judge       buttressed       this

conclusion      by   referring    only    to    the    fact    that    nine   of    the

contract's ten pages contained "vehicle specifications, and the

tow truck/chassis was tailored specifically to meet [plaintiffs']

needs." The application of the CFA in this instance, however, does

not turn on whether the item to be sold was tailored to the buyer's



5
  Defendants have argued that if we reverse in any respect we
should preclude any further discovery and bar plaintiffs' use of
an expert report on damages. We decline that invitation and leave
those matters to the trial judge in the first instance.

                                          6                                    A-4825-15T2
needs. As we observed in Finderne, a loan or an insurance policy

–    items   indisputably        designed       specifically   for    a       particular

consumer – may constitute a transaction falling within the CFA's

ambit. 
402 N.J. Super. at 571. We, thus, reject the sole express

basis upon which the judge entered summary judgment on this claim.

       Arguably, by citing Princeton Healthcare and Finderne, the

judge may have also found the goods sold in those cases to be

similar to the custom-built tow truck here and, thus, warranted

the same result. If that is what the judge intended, we reject

that conclusion as well.

       Princeton Healthcare and Finderne appear to have adopted an

exemption from what constitutes a "sale of merchandise" based upon

the fact that the goods and services sold there were "complex."

For instance, in Princeton Healthcare, 
422 N.J. Super. at 473, the

purchaser was sold a medical billing system. The panel found the

transaction     was    not   a    "sale     of    merchandise"   because         it    was

comprised of the "installation and implementation of a complex

computer system," ibid. (emphasis added), and "not . . . simply

the installation of a standardized computer software program," id.

at   474,    which    presumably     would       have   constituted       a    "sale    of

merchandise" as we have previously held, see Hundred East Credit

Corp. v. Eric Schuster Corp., 
212 N.J. Super. 350, 353-57 (App.

Div. 1986). In Finderne, the panel determined the sale of a

                                            7                                    A-4825-15T2
"multiple employer welfare benefit plan and trust," 
402 N.J. Super.

at 553, was exempt because it was "very complex," id. at 571

(emphasis added).

     Even if we were to agree that sales of "complex" computer

programs or tax shelters do not constitute "sale[s] of merchandise"

– a question we need not reach – we fail to see how such a theory

has application here. While it may be true that defendants engaged

in considerable efforts to create the tow truck in question, it

hasn't been shown there was anything more "complex" about this tow

truck than any other.

     Rather than be distracted by the unique circumstances in

Princeton Healthcare and Finderne, we instead lastly focus on

defendants' argument that the sale was not a "sale of merchandise"

because the item sold was custom built and, therefore, not, as we

expressed in Neveroski v. Blair, 
141 N.J. Super. 365, 378 (App.

Div. 1976), offered to "consumers in the popular sense." We reject

this interpretation of the CFA. It has been firmly established

that a sale of a custom-built item may constitute a "sale of

merchandise." Perth Amboy Iron Works v. Am. Home    Assurance Co.,


226 N.J. Super. 200, 209 (App. Div. 1988) (sale of a yacht), aff’d

o.b., 
118 N.J. 249 (1990); New Mea Constr. Corp. v. Harper, 
203 N.J. Super. 486, 501-03 (App. Div. 1985) (sale of a custom-built

home); see also Marascio v. Campanella, 
298 N.J. Super. 491, 497-

                                8                           A-4825-15T2
98 (App. Div. 1997) (applying the CFA to a contract for electrical

work    and   services   specific   to   the   premises   in   question).

Consequently, we conclude that the CFA encompasses the sale here

of a custom-built tow truck. Cf., D'Ercole Sales, Inc. v. Fruehauf

Corp., 
206 N.J. Super. 11, 21-24 (App. Div. 1985) (where we

discussed but ultimately did not decide whether the sale of a

custom-built tow truck falls within the CFA).

       For these reasons only,6 we reverse the summary dismissal of

the CFA claims asserted against defendants.


                                    IV

       Except for the dismissal of the breach of a warranty claim,

which, as plaintiffs conceded at oral argument in the trial court,

has no application because plaintiffs never accepted delivery of

the tow truck, we reverse in its entirety the order granting

summary judgment. We would note, however, that some of the other

common-law claims may be subsumed in those claims upon which we

have focused. We leave further consideration and narrowing of the



6
 Defendants also argue there was no evidence of an unconscionable
sales practice and seek our affirmance of summary judgment on that
basis. True, we may at times affirm for reasons other than those
adopted in the trial court. See Isko v. Planning Bd. of Livingston
Twp., 
51 N.J. 162, 175 (1968). But here the trial judge provided
no analysis of this contention. Consequently, the better course
is to leave this subject for further development in the trial
court.

                                    9                             A-4825-15T2
issues for the trial court proceedings that will follow today's

decision.

    Reversed and remanded for further proceedings. We do not

retain jurisdiction.




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