Claims Under NJ Fraud Act Fail Where Car Buyer Could Not Prove Dealership's Actions Caused Him Monetary Loss
By Thomas B. Hudson
Sometimes things go wrong between a dealership and a customer. But, as a recent case shows, the way a dealership handles those problems can mean the difference between a judgment in favor of the dealership and a judgment in favor of the customer.
Joel Ivans went to Plaza Nissan Ford to buy a used Dodge Durango. He required financing, and Plaza ran a credit check to determine the kind of financing for which he would qualify. After discovering Ivans' poor credit score and various delinquent debts, Plaza told Ivans it would not be able to arrange financing for him individually, but that it might be able to obtain financing if he came back with a co-signer.
Plaza and Ivans entered into a "rescission agreement," which stated that Ivans was to take delivery of the Durango and that the transaction was subject to financing approval by a third party. The agreement also stated that if the dealership could not arrange the financing, Ivans would return the Durango to the dealership after a required notice period and Ivans would receive a refund of his down payment.
Ivans took the Durango and left his Subaru at the dealership. Four days later, Ivans came back to Plaza with his uncle, who was to co-sign. They signed a sales contract for the car that same day. Ivans reclaimed his Subaru, which he had not intended to trade in, and replaced it instead with a Kia, for which the parties agreed to a $500 trade-in value.
However, even with Ivans' uncle as co-signer, Plaza was unable to arrange financing. Plaza demanded that Ivans return the Durango. Ivans brought the Durango back to Plaza, but Plaza had already sold the Kia. Ivans refused to turn over the keys to the Durango until Plaza agreed to sell him a substitute vehicle. Plaza sold him a Ford Explorer and also paid him the $500 owed for the Kia, which was credited toward the purchase of the Explorer.
Subsequently, Ivans experienced several problems with the titling process. Due to clerical error, all of the paperwork was submitted solely in the name of Ivans' uncle. Plaza processed additional paperwork at no expense to Ivans to correct the problem and eventually supplied him with correct documentation.
In the meantime, the temporary license plates that were affixed to the Explorer expired, and, as an accommodation, Plaza loaned a series of three rental cars to Ivans at no charge. Moreover, Plaza paid Ivans $400 as reimbursement for a hotel room in Florida that Ivans had to cancel because the rental car policies prevented Ivans from driving out of state. Plaza also reduced Ivans' down payment on the Explorer.
After Ivans traded in the Explorer for a more expensive vehicle, he sued Plaza, alleging violation of the New Jersey Consumer Fraud Act, among other claims. Plaza moved for summary judgment, which the trial court granted. The court found that Ivans had failed to make a sufficient showing of an "ascertainable loss of moneys or property," as required under the CFA. Ivans appealed.
The New Jersey Superior Court, Appellate Division, affirmed the trial court's ruling. The appellate court noted that although the term "ascertainable loss" was not defined in the CFA, it meant that the loss must be quantifiable or measurable. The appellate court found that Ivans was unable to show any economic damage. Ivans paid nothing for his use of the Durango and ended up buying a cheaper Explorer at a lower financing rate. Plaza reimbursed Ivans for all expenses associated with the titling errors, lowered his down payment, provided him with free rental cars, and paid for his cancelled hotel reservation. While Ivans claimed he was damaged by the increased cost of the new vehicle he bought when he traded in the Explorer, the appellate court noted that this cost was due to a decision by Ivans and was not related in any way to any acts or omissions of Plaza. Ivans claimed that Plaza damaged his credit, yet the appellate court found he presented no support for the allegation that his already damaged credit was further damaged by his dealings with Plaza. Although Ivans claimed Plaza caused him emotional distress and marital discord, the court found that those types of injuries were not compensable under the CFA.
Ivans v. Plaza Nissan Ford, 2007 WL 1284936 (N.J. Super. App. Div. May 3, 2007).
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