The New Jersey Appellate Division delivered a ‘clunker’ to a Bergen County auto dealership by affirming a trial court judge’s opinion that found the dealership violated the New Jersey Consumer Fraud Act in the sale of a used Rolls Royce to a North Carolina man. Bishop vs. Richard Catena Auto Wholesalers, Inc., Superior Court of New Jersey, Appellate Division, Docket No.: A-4059-11T4. The end result of this case is that a $14,841 sale turned into an approximate $138,000 nightmare for the dealership.
The plaintiff in this case, James Bishop, resided in North Carolina. In response to an online advertisement by the Bergen County dealership (“Catena Auto”), Bishop agreed to purchase a used 1989 Rolls Royce Silver Spur for $14,814. Bishop made the purchase without visually seeing the vehicle in person, instead relying upon photographs displayed on the dealership’s online advertisement, the verbal representations made by the salesman, and the dealership’s written guarantee to provide a full refund within 3 days of the sale “for any reason” so long as the vehicle is purchased “sight unseen” and the purchaser pays for the shipping costs to transport the car back to the dealership. The dealership’s guarantee policy appeared on its website, and required the purchase to provide written notice of cancellation to the dealership within 3 days of the sale and return the car within 14 days of the written notice.
Based on the salesman’s representations and his view of the photographs appearing on the dealer’s advertisement, Bishop though he was receiving a “significantly above average” used Rolls Royce. Bishop proceeded to sign a written contract with the dealership; not surprisingly, certain provisions of the contract differed from the dealership’s written guarantee of a 3-day refund period.
However, Bishop noticed significant problems with the car immediately after inspecting it upon delivery to North Carolina such as: mismatched hubcaps, rusting to the body, grill and Rolls Royce emblem, significant dents and gouges, a non-functioning horn, broken cruise control, broken power locks, a significant rip to the driver’s seat, and a long scrape along one of doors. In addition, the trunk key broke off inside the trunk lock when Bishop tried to open the trunk. Bishop contacted the salesperson on the same day to complain about all of these defects. The salesman claimed the damage must have occurred during shipping, and encouraged Bishop to file an insurance claim with the shipper.
Instead, Bishop took the car to a local auto body shop in North Carolina whom he understood specialized in repairing Rolls Royce cars. The body shop estimated over $21,000 to repair all of the items of disrepair, including an estimate of $12,000 to $14,000 just to make the car roadworthy or safe for driving. Bishop, who was obviously dissatisfied with the car at this point – just eleven days after the dealership delivered the car to North Carolina – sent the salesman an email informing him that he wanted to return the car and obtain a full refund. In his email Bishop told the salesman that the dealership’s written advertisement and verbal representations about the car were inaccurate. The dealership refused to comply with Bishop’s demand, claiming he was out of time to return the car because the 3-day return period already had passed.
The matter came to be heard on a 1-day bench trial in Bergen County. In addition to Bishop testifying, his counsel presented the deposition testimony of the mechanic who inspected the car in North Carolina. In this deposition, the mechanic explained the testing that he performed and provided his findings along with his estimates for repair. In contrast, the dealership’s only witness was Mr. Catena who disclaimed having any personal knowledge of this sale transaction; the salesman who dealt with Bishop was no longer employed by the dealership and was not present at the trial. The dealership also did not present any expert witness testimony to rebut Bishop’s contentions about the car’s multiple defects and repair estimates.
The trial judge sided with the plaintiff Bishop, finding that the dealership violated the New Jersey Consumer Fraud Act by making numerous affirmative misrepresentations and omissions in connection with the sale of the car. As the Appellate Division remarked:
In this regard, the judge pointed specifically to defendants’ various oral and written assertions that “all electrical components on the car were in working order, that no warning lights were on, that the paint was in excellent condition[,] and that the car was a ‘7’ out of ten.” The judge also faulted defendants for their failure to disclose the rust on the car.
The trial court awarded Bishop damages of $45,620.25 representing 3 times the amount of the purchase price he paid for the car based on application of the treble damages provision of the New Jersey Consumer Fraud Act, plus inspection fees of $392.75, $2,458.50 in pre-judgment interest, $2,340 in expert’s fees, plus a whopping $89,146 in legal fees under the fee shifting provision of the New Jersey Consumer Fraud Act.
This case serves as a wake-up call to auto dealerships. Those who engage in fraudulent advertising will pay the price.