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Dabush v. Mercedes-Benz USA, LLC

378 N.J. Super. 105, 874 A.2d 1110 (App. Div. 2005)

CONSUMER FRAUD ACT — In order to succeed on a claim under the New Jersey Consumer Fraud Act, a person must show that he or she sustained an ascertainable loss caused by an unlawful act.

A man leased a luxury automobile from a car dealership. The car contained a navigational system, which the man used to drive to a business meeting. The system was unable to locate the exact address of where the meeting was to take place, and as a result the man was forty minutes late to the meeting. The man however did not suffer any loss of business or money due to his late arrival. The man filed a class action against the car dealership for breach of contract and violation of the New Jersey Consumer Fraud Act. He asserted that the dealership breached the representations contained in its marketing brochures regarding the navigational system. The car dealership moved for summary judgment. The lower court granted summary judgment in favor of the car dealership on the breach of contract claim on the basis that the marketing brochures were not a contract, and therefore there was no privity between the parties. It further granted summary judgment to the car dealership on the Consumer Fraud Act claim because the customer failed to show that the dealership intended to mislead him or that he sustained an ascertainable loss. The man appealed the lower court’s ruling.

The Appellate Division affirmed. In reaching its decision, it discussed the required elements for a cause of action under the Consumer Fraud Act. In order to assert a claim under the Act, the moving party is required to show: 1) unlawful conduct by the defendant; 2) an ascertainable loss on the part of the moving party; and 3) a causal relationship between the defendant’s unlawful conduct and the moving party’s loss. In applying these factors, the Court found that the man failed to establish that he sustained an ascertainable loss. There was no evidence presented indicating that the man suffered any loss of business or money from the navigational system’s failure to give him the proper directions. Additionally, the Court found that the man presented no evidence about the cost, price or value of the navigational system as delivered compared to the value allegedly promised by the car dealership. Accordingly, it upheld the lower court’s ruling in favor of the car dealership.

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