JOSEPH V. ROBERTS v. DETROIT DIESEL CORPORATION, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4691-05T24691-05T2

JOSEPH V. ROBERTS,

Plaintiff-Appellant,

v.

DETROIT DIESEL CORPORATION and

JOHNSON & TOWERS, INC.,

Defendants-Respondents.

 
 

Argued February 27, 2007 - Decided April 9, 2007

Before Judges Lisa and Holston, Jr.

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-1602-04.

David T. Garnes argued the cause for appellant (Stradley, Ronon, Stevens & Young, attorneys; Francis X. Manning and Mr. Garnes, of counsel and on the brief).

John C. Falls argued the cause for respondent Detroit Diesel Corporation (Christie, Pabarue, Mortensen and Young, attorneys; E. Graham Robb and Mr. Falls, on the brief).

E. Michael Keating argued the cause for respondent Johnson & Towers (Hollstein, Keating, Cattell, Johnson & Goldstein, attorneys; Mr. Keating and Josette F. Spivak, on the brief).

PER CURIAM

Plaintiff, Joseph Roberts, appeals from grants of summary judgment as to defendants Detroit Diesel Corporation (Detroit Diesel) and Johnson & Towers, Inc. (J&T). Plaintiff's complaint alleging breach of warranty, breach of contract, fraud, negligent misrepresentation, breach of the New Jersey Consumer Fraud Act (CFA) and promissory estoppel arose out of three incidents of engine failure on plaintiff's forty-eight foot yacht. We affirm.

Plaintiff purchased a 48-foot yacht from South Jersey Yacht Sales in September 1998, which he used for recreational purposes, including long distance fishing and pleasure trips. The yacht was powered by two series 692 marine diesel engines manufactured by Detroit Diesel.

The yacht's engines were covered by a limited warranty provided by Detroit Diesel. Under this warranty, Detroit Diesel agreed to repair any malfunction occurring during the warranty period resulting from defects in material or workmanship. The warranty covered engine malfunctions occurring within the first two years of operation.

Plaintiff's claims arose out of three engine failures occurring over a five-year period. The first occurred in April 1999, after approximately 100 hours of engine use, and involved a cracked cylinder liner near the exhaust and intake ports at the top of one cylinder in the starboard engine. The engine was repaired by Palm Beach Power, an authorized Detroit Diesel representative in Florida, pursuant to the Detroit Diesel warranty.

The second incident occurred in June 2000, after approximately 300 hours of engine use while the yacht was being operated in New Jersey. This engine failure involved a cracked cylinder liner in the port engine. The engine was repaired by J&T pursuant to the Detroit Diesel warranty, and the yacht was operational following the repair. J&T told plaintiff that it did not know the cause of the cylinder problem, but that the engine was completely fixed.

The third incident occurred in September 2003, after approximately 800 hours of engine use. This failure involved the piston ring and other components on a cylinder on the starboard engine. This was a different cylinder from the one involved in the 1999 engine failure. J&T repaired the engine and, at plaintiff's request, replaced all remaining sleeves on the starboard engine cylinders at the cost of $15,008. Plaintiff was informed that these repairs were not covered by the Detroit Diesel limited warranty, which had expired. The repairs made by J&T in June 2000 and September 2003 have not failed since the date the repairs were made.

Plaintiff filed a complaint against Detroit Diesel and J&T on May 27, 2004, seeking to recover the money spent on the 2003 engine repair. After the close of discovery, Detroit Diesel filed a motion for summary judgment, which the trial court granted dismissing plaintiff's complaint as to Detroit Diesel. The court determined that plaintiff's failure to supply expert reports with respect to the manufacturing and design defects of the engines entitled Detroit Diesel to summary judgment:

I do not believe that without such expert testimony any reasonable jury could determine that there was a design or manufacturing defect. I'm satisfied . . . cases that have considered that issue, that this is specialized and technical equipment. The failures are not self-evident or ascertainable by common knowledge, especially in the context of a design defect claim or a manufacturing defect claim. And accordingly, the claims under the [CFA] and for strict liability must be dismissed.

The court also dismissed plaintiff's breach of warranty and breach of contract claims against Detroit Diesel:

With respect to the contract action, the facts establish a limited warranty. The warranty had a two-year life. The first two failures in . . . April of 1999 and June of 2000 were within the warranty period and, in fact, it is acknowledged and not disputed that repairs were done to the engines during that period of time. The incident that occurred in September of 2003 was, of course, beyond the warranty period and, therefore, was not attended to pursuant to the terms of the warranty.

The warranty by its terms would bar this claim on a contract action. . . .

I am satisfied that the warranty as presented complies with all applicable requirements with respect both to clarity and with respect to its positioning and the notice that was given of it. I'm satisfied that it was indeed designed to require the defendant to do that which it did during the life of the warranty, which was to repair the engines and return them to operational status, which, in fact, was done.

As to the claims of fraud and breach of the CFA, the court held:

I do not perceive on this record that any such representations were made as a part of the commercial transaction. The commercial transaction had already been completed. The boat had been bought and sold by that time. And therefore, in my view, the representations, even affording them, as I must today, the credibility status that the plaintiff asserts, cannot be as a matter of law a basis for an action under the consumer fraud statute.

On March 31, 2006, the judge granted J&T's motion for summary judgment with respect to all claims except plaintiff's breach of contract claim on the basis that plaintiff had submitted no opposition to the issues raised in J&T's motion. The court also granted summary judgment on the breach of contract claims with respect to the repair of the engine. The court stated:

I disagree with the plaintiff on the assertion that expert evidence is not required with respect to the repair. I am satisfied that with respect to both the manufacturing defect, which is gone away, and with respect to the manner of the repair, that those are subjects that require expert evidence. And I am therefore satisfied that in the absence of expert evidence that claim cannot be maintained.

The only claims against J&T that survived summary judgment were the claims involving an alleged 2004 fuel and oil leak. These claims were subsequently dismissed by plaintiff on April 12, 2006.

Plaintiff presents the following arguments for our consideration:

POINT I.

THE TRIAL COURT ERRED IN HOLDING THAT PLAINTIFF NEEDED EXPERT TESTIMONY TO ESTABLISH HIS TORT CLAIMS AGAINST DEFENDANTS.

POINT II.

THE TRIAL COURT ERRED IN HOLDING THAT THE WARRANTY BARRED PLAINTIFF'S BREACH OF CONTRACT CLAIM.

A. THE 1 999 AND 2000 ENGINE FAILURES WERE NOT REPAIRED, AND THE BOAT WAS NOT RETURNED TO WORKING ORDER.

B. THE 2003 ENGINE FAILURE WAS COVERED BY THE WARRANTY.

C. NEW JERSEY LAW DOES NOT BAR PLAINTIFF'S BREACH OF CONTRACT CLAIM.

POINT III.

THE TRIAL COURT ERRED IN DISMISSING PLAINTIFF'S NEW JERSEY CONSUMER FRAUD ACT CLAIM.

This appeal arises from the grant of summary judgment to defendants. A moving party is entitled to summary judgment if there is no genuine issue as to any material fact challenged and the moving party is entitled to a judgment or order as a matter of law. R. 4:46-2. In deciding a summary judgment motion, we apply the standard articulated by the Supreme Court in Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995):

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider 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.

Therefore, we must assume plaintiff's version of the facts is true and give plaintiff the benefit of all favorable inferences. Ibid.

I.

Plaintiff contends that the trial court erred in holding that plaintiff needed expert testimony to establish his tort claims against defendants contending that the fact that the engines did not work as defendants represented they would is sufficient evidence to establish a defect. Plaintiff argues that the series of three engine failures demonstrates that the engines did not function properly, and thus expert testimony was not needed. We disagree.

Expert testimony is generally required when "'a subject is so esoteric that jurors of common judgment and experience cannot form a valid conclusion.'" Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 450 (1993) (quoting Wyatt by Caldwell v. Wyatt, 217 N.J. Super. 580, 591 (App. Div. 1987)). "[W]here the allegedly defective product involves a complex instrumentality, a plaintiff is required to provide expert testimony." Lauder v. Teaneck Volunteer Ambulance Corps, 368 N.J. Super. 320, 331 (App. Div. 2004). "Expert testimony is necessary to assist the fact finder in understanding 'the mechanical intricacies of the instrumentality' and in excluding other possible causes of the [defect.]" Ibid. (quoting Jimenez v. GNOC Corp., 286 N.J. Super. 533, 546 (App. Div.), certif. denied, 145 N.J. 374 (1996)). Marine diesel engines are complex instrumentalities, and specific technical knowledge is needed to understand the engines and their component parts. See Biunno, Current N.J. Rules of Evidence, comment on N.J.R.E. 702 (2006) ("[e]xpert testimony may be required in 'complex instrumentality' cases depending upon the circumstances"); see also Rocco v. NJ Transit Rail Operations, 330 N.J. Super. 320, 341 (App. Div. 2000) (expert testimony required for railroad car's door-lock assembly). Moreover, the three incidents of engine failure involved different engines and different components of those engines: the 1999 engine failure involved a broken cylinder liner on the starboard engine; the 2000 engine failure involved a broken valve in a cylinder on the port engine; and the 2003 engine failure involved a failed turbocharger and a broken piston ring on the starboard engine. Additionally, the three incidents of engine failure occurred over a five-year period, and after more than 800 hours of engine use. We are convinced, therefore, that expert testimony explaining how the three incidents were related to each other and explaining the nature of the engine design or manufacturing defect was necessary to sustain plaintiff's tort claims.

Plaintiff has presented no evidence to show that the engines did not function properly. To allow a jury to determine without expert testimony whether three separate engine failures on three different occasions, involving different engine parts, proves that the engines were defective would require the jury to engage in pure speculation and "draw inferences which it was not qualified to draw." See Wyatt, supra, 217 N.J. Super. at 592.

Plaintiff cites Jerista v. Murray, 185 N.J. 175 (2005) for the proposition that a party can establish a defect, without expert testimony, by merely showing that a product has failed. Jerista involved a legal malpractice action in which there was an underlying claim of personal injuries suffered when the automatic door in a supermarket closed on a woman unexpectedly. Id. at 180. The central issue was whether the doctrine of res ipsa loquitur permitted a jury to infer, based on common knowledge, that automatic doors ordinarily do not malfunction unless negligently maintained by the store owner or whether the res ipsa inference was preconditioned on expert testimony first explaining the door's mechanics. Ibid.

The Court allowed a res ipsa inference of negligence against the store owner in Jerista, noting that:

An automatic door may be a highly sophisticated piece of machinery, but it probably does not close on an innocent patron causing injury unless the premises' owner negligently maintained it. That conclusion can be reached based on common knowledge without resort to expert testimony. A jury does not need an expert to tell it what it already knows.

[Id. at 197 (emphasis in original).]

We are convinced that unlike Jerista, there is no common knowledge held by an average jury member of the workings of a marine diesel engine. Therefore, common knowledge does not allow one to draw the conclusion that the engine failures in issue here were caused by an engine defect. Expert testimony is needed here to explain how the engines were defective and how the different failures on different engines were caused by this defect.

Plaintiff's arguments in regard to his tort claims against J&T are not properly before this court on appeal. Plaintiff did not present any opposition to J&T's summary judgment motion, except for the breach of contract claim. The trial judge stated:

The record will reflect, just to set the ground work that everybody else knows about, that I heard and decided a motion on March the 3rd in which I granted Detroit Diesel's motion to dismiss. There's some reference in, in the moving papers and dialogue before me this morning to arguments about the law of the case. I'm frankly not sure, I don't know that I need to determine that today because I think it's, it's a different question. But both parties seem to have proceeded on the basis that the ruling that I made with respect to Detroit Diesel is the law of the case with respect to the same legal issues involving the defendant Johnson & Towers. I note that both parties have taken that position. I simply am indicating that I made at no point - was not asked to make and did not make and do not today make any ruling or determination, or any suggestion of any ruling or determination as to that issue.

The motion for summary judgment was brought by . . . Johnson & Towers with respect to all of the counts of the complaint against it. No opposition to that motion . . . was filed by the plaintiff, and I will therefore take the position before we're finished today that whether, on the grounds of law of the case or not, there is no issue for me this morning with respect to . . . the defendant Johnson & Towers application to dismiss any portions of the complaint save for those that allege a breach of contract, which is the matter that we will discuss this morning. . . .

[(emphasis added).]

Plaintiff did not raise any objection to these statements by the trial court.

Given the trial court's statement that it was treating J&T's summary judgment motion as unopposed, and plaintiff having made no argument to the court to the contrary, we are convinced that plaintiff's arguments in regard to its tort claims against J&T are not properly before this court. However, even if we were to consider plaintiff's arguments as against J&T, we are equally convinced plaintiff needed to present expert testimony to show how the engines were defective in order to survive summary judgment on the tort claims. Without expert testimony, plaintiff has presented no evidence to show that the engines did not function properly. Thus, the trial court properly granted summary judgment.

II.

Plaintiff contends that the trial court erred in holding that the expiration of the warranty barred his breach of warranty and breach of contract claims. Plaintiff argues that the 1999 and 2000 engine failures were not repaired and the yacht was not returned to working order, that the 2003 engine failure was covered by the warranty, and that the breach of contract claim is not barred because a valid and enforceable warranty existed.

Plaintiff's second and third arguments apply only to defendant Detroit Diesel because J&T did not issue the warranty on the engines, and plaintiff's complaint did not include a breach of warranty count against J&T.

Plaintiff has produced no evidence establishing that the engines were not properly repaired. Plaintiff simply states that he was not convinced that the problem was solved after the repairs were completed, and that he holds the belief that the engine failures were identical to each other. However, plaintiff also testified that between the 1999 and 2000 engine repairs, the engines were used for approximately 280 hours, and that he experienced no problems with the engines other than minor oil leaks. Between the repairs made in 2000 and 2003, the engines were used for approximately 400 hours. Additionally, according to the repair records, the three engine failures involved different engine components on two separate engines.

Given the amount of time the engines were used after each repair, and that the subsequent engine failures involved different engine components, we are satisfied that the engines were repaired to working order following each incident of engine failure. Plaintiff presented no expert testimony to show how the engines were defective and that the repairs made to the engines did not fix those defects. We are satisfied, therefore, that there is no issue of material fact as to whether the 1999 and 2000 engine failures were properly repaired and whether the yacht was returned to working order.

Plaintiff, relying on Terrace Condominium Association v. Midlantic National Bank, 268 N.J. Super. 488 (Law. Div. 1993), argues that the 2003 engine failure was covered by the warranty. Plaintiff claims defendants intentionally misrepresented the defective nature of the engines, and thus are estopped from not extending the warranty to cover the 2003 engine failure.

In Terrace Condominium, the Law Division decided issues regarding the applicability of certain statutory home warranties in a construction defect case. Id. at 499-503. The court addressed whether the statute of limitations had run on certain statutory home warranties. Id. at 501. It found that even if the limitations periods in the statutory warranties applied, defendant was equitably estopped from arguing that the plaintiff failed to file its complaint within the statutory period because the defendant actively attempted to repair the construction defects and the plaintiff relied on these attempts and delayed pursuing remedies under the statutes. Id. at 500-01.

Terrace Condominium is inapplicable here because Detroit Diesel did not move for summary judgment on statute of limitations grounds. Rather, Detroit Diesel argued that it was not obligated to make repairs for engine problems arising after the expiration of the warranty period. In order for defendant to be equitably estopped from not extending the warranty to cover the 2003 engine failure, plaintiff first must show that the engines were defective. He has not done so.

Plaintiff, relying on General Motors Acceptance Corp. v. Jankowitz, 216 N.J. Super. 313 (App. Div. 1987), contends that the warranty coverage should be extended because the warranty failed of its essential purpose, due to Detroit Diesel's failure to correct the defect in the cylinder liners. However, the failure at issue in Jankowitz involved defects in the electrical system in an automobile that caused the "stop engine" warning light to flash. Id. at 320-21. Failures of the electrical system occurred seven times over a three-month period. Ibid. The warranty provided the sole remedy for repairing or replacing defective parts. Id. at 329-30. We held that the exclusive remedy of repair and replacement of defective parts failed of its essential purpose because, after numerous attempts to repair, the electrical system did not operate as it should. Ibid.

In contrast, plaintiff's claims of breach of warranty and breach of contract in this case arise out of three engine failures occurring over a five-year time period. The engine failures involved different engines and different engine parts, and plaintiff has provided no expert testimony to explain how the three incidents of engine failure are related to each other and how the engines were defective. This contrasts with the situation in Jankowitz, in which the same part in the automobile continued to malfunction after many attempts to repair it. We are satisfied that the warranty did not fail of its essential purpose because plaintiff cannot show that Detroit Diesel failed to repair the engine problems and that the engines did not operate properly after they were repaired.

Plaintiff contends that the trial court erred in dismissing his claim under the CFA, N.J.S.A. 56:8-1 to -166. The trial court held that plaintiff's claims were barred because the CFA only applies to fraudulent comments made at the time of the sale of the yacht, and not to comments made after the sale. Plaintiff argues that contrary to the trial court's decision, the CFA applies to misrepresentations that were made to plaintiff both before and after he purchased the yacht.

The CFA declares it to be an unlawful practice for "any person" to use an "unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression or omission of any material fact . . . in connection with the sale or advertisement of any merchandise." N.J.S.A. 56:8-2. In order to bring a private cause of action under the CFA, the plaintiff must be able to demonstrate that he or she has suffered an "ascertainable loss of moneys or property, real or personal" as a result of a practice in violation of the CFA. N.J.S.A. 56:8-19.

Plaintiff argues that statements made by a representative of Detroit Diesel in a May 1999 letter in response to plaintiff's inquiry as to the reason for the first engine failure were false and deceptive. The letter stated that the type of engine failure experienced by plaintiff in April 1999 was very rare and highly unlikely to reoccur. In order to demonstrate that these statements were false and deceptive, plaintiff must also demonstrate that the engines were defective and that all three of the engine failures were related. Plaintiff has not presented sufficient evidence to do so. Plaintiff also points to warranty claim information produced by Detroit Diesel in discovery that shows thirty-six examples of cylinder failures over a ten-year period in the same type of engine as owned by plaintiff. Plaintiff argues that this information demonstrates that the engines have a history of poor performance and that Detroit Diesel knew about that poor performance. However, plaintiff has presented no evidence to show that these other cylinder failures are similar to the cylinder failures experienced by plaintiff. Even if the court were to assume that all of the cylinder failures were of the same nature, plaintiff has presented no expert testimony to establish that thirty-six cylinder failures over a ten-year period (or an average of 3.6 failures a year) is an unacceptable failure rate given the complexities of the engine and the number of engines sold.

In plaintiff's CFA claim against J&T, plaintiff argues that J&T made misrepresentations to plaintiff including J&T's statement that it had no explanation for the second engine breakdown, and that the engine was completely fixed after J&T made its repairs. However, since plaintiff cannot sufficiently demonstrate a defect in the engines, he cannot show that J&T made misrepresentations about the nature of the defect and whether the defect was repaired.

Plaintiff argues that the trial court erred in holding that the CFA only applies to fraudulent comments made at the time of the sale of the yacht. Plaintiff relies on Perth Amboy Iron Works, Inc. v. American Home Insurance Co., 226 N.J. Super. 200 (App. Div. 1988), aff'd o.b., 188 N.J. 249 (1990), for the proposition that the provisions of the CFA apply to misrepresentations made to plaintiff before and after he purchased the yacht. In Perth Amboy, a commercial charter boat operator purchased a yacht with engines manufactured by Detroit Diesel, a division of General Motors (GM). The engines were supplied to the yacht distributor by J&T, an authorized GM distributor. Id. at 205. J&T modified the engines for higher performance, and the charter boat operator paid an additional $20,000 above the purchase price for these modifications. Ibid.

J&T allegedly had increased the horsepower beyond factory ratings, and GM had advised its dealers that such increases were unauthorized. Ibid. However, the engines were advertised as GM approved. Ibid. The yacht began experiencing mechanical and electrical problems beginning on its maiden voyage, and over a six-month period of time experienced a series of engine fires. Ibid. An inspection, completed approximately ten months after the yacht was purchased, revealed that the boat's structure and electrical system had been damaged by fire and the boat was structurally unsound, and required repairs that took eighteen months to complete. Id. at 205-06.

The plaintiff filed suit against GM and J&T, alleging a violation of the CFA. Id. at 207. The plaintiff specifically alleged that GM knew J&T's modifications of the engines were unsafe and defective, but allowed the GM logo to remain on the engine, and that GM and J&T concealed the defective nature of the engines after the sale. Ibid. The trial court dismissed this claim, and we reversed. Id. at 211-12. We interpreted the CFA to "encompass the acts of remote suppliers, including suppliers of component parts, whose products are passed on to a buyer and whose representations are made to or intended to be conveyed to the buyer." Id. at 211.

Under Perth Amboy, if plaintiff presented evidence showing that defendants made deceptive and concealing statements regarding the engines, even after the sale of the yacht occurred, plaintiff could pursue a claim under the CFA. cf. Gennari v. Weichert Co. Realtors, 148 N.J. 582, 607 (1997) (quoting Gennari v. Weichert Co. Realtors, 288 N.J. Super. 504 (App. Div. 1996)) (determining "that not just any erroneous statement will constitute a misrepresentation prohibited by the [CFA]. The misrepresentation has to be one which is material to the transaction and which is a statement of fact, found to be false, made to induce the buyer to make the purchase." Cole v. Laughrey Funeral Home, 376 N.J. Super. 135, 144 (App. Div. 2005) (holding that alleged misrepresentations of a funeral home did not violate the CFA because the misrepresentations alleged were not made to induce the buyer to make the purchase of funeral services from the funeral home). Assuming the applicability of Perth Amboy, plaintiff must first demonstrate that the engines were defective and that the three incidents of engine failure were related to that defect before he can show that defendants knew of a defect and concealed it. He has not presented sufficient evidence to do so. We are convinced that the trial court's grant of summary judgment on plaintiff's claim under the CFA was appropriate.

Affirmed.

 

The version of facts offered in plaintiff and defendants' briefs differ in certain respects. The facts as presented in this opinion reflect information confirmed by the record.

(continued)

(continued)

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A-4691-05T2

April 9, 2007