Boyes v. Greenwich Boat Works, Inc.

____ F. Supp.2d ____, 1998 WL812257 (U.S. Dist. Ct. D. N.J. 1998)
  • Opinion Date: November 20, 1998

CONSUMER FRAUD ACT; CONFLICTS OF LAW—The Consumer Fraud Act is intended to apply to sales by New Jersey merchants to non-New Jersey buyers and will apply when it is more protective of buyers than the law of other jurisdictions which also might govern.

A boat buyer attended a Philadelphia boat show and spoke with a boat dealer about a particular boat and its performance specifications. Following the show, the buyer met the representative at the boat dealer’s salesroom in New Jersey. The boat’s specifications were again discussed. The buyer, being satisfied, bought the boat and engines for it. The boat manufacturer installed the engines at its facility in North Carolina. The boat was shipped to the seller in New Jersey and then, with its engines installed, was delivered to the buyer in Delaware. Thereafter, the boat was always moored in Delaware. When the buyer complained that the boat did not perform as represented, the boat was returned to the manufacturer’s facilities in North Carolina.

The Court was faced with a case of a sale between a New Jersey seller and a Pennsylvania buyer of a boat which was constructed in North Carolina and, after delivery, docked in Delaware. In this diversity action, the District Court needed to apply the choice of law rule of the state in which it sat (New Jersey) and then to determine which state’s substantive law would apply. No party established any difference in the laws of the various jurisdictions involved and therefore, with respect the issues of breach of the contract, product liability, the UCC, common law fraud, and breach of warranty, the Court applied New Jersey law because it did not differ from the law of any other jurisdiction involved in the case. This left a question about the buyer’s reliance upon the New Jersey Consumer Fraud Act, especially where the seller and manufacturer argued that the Pennsylvania Unfair Trading Practices Consumer Protection Law should be applied. Subject to constitutional limitations, a federal court will generally apply the statutory law of the forum. Here, the District Court ruled that the New Jersey Legislature intended its Consumer Fraud statute to apply to sales made by New Jersey sellers, even if the buyer is an out-of-state resident or some aspect of the transaction took place outside New Jersey.

Courts have declared that the Consumer Fraud Act “should be construed liberally in favor of protecting consumers.” It was equally clear to the courts that New Jersey has a powerful incentive to insure that local merchants deal fairly with citizens of other states and countries. Both the New Jersey and the Pennsylvania statutes clearly were intended to protect buyers from the predatory behavior of sellers. However, in the District Court’s opinion, New Jersey’s law offered more protection than Pennsylvania’s in that treble damages and attorney fees are mandatory in New Jersey but discretionary in Pennsylvania. Consequently, the Court found that because the buyer chose to invoke the remedies of the New Jersey Law, a reasonable interpretation of that statute suggests it was meant to apply to New Jersey sellers, and nothing in that law is in conflict with, or repugnant to, Pennsylvania law.