Delaney v. Garden State Auto Park

318 N.J. Super. 15, 722 A.2d 967 (App. Div. 1999)
  • Opinion Date: February 2, 1999

CONSUMER FRAUD ACT; AUTOMOBILE DEALERS—An automobile dealer’s failure to itemize pre-delivery service charges is a violation of the Consumer Fraud Act, even in the absence of proof that the charges are unreasonable.

The New Jersey Consumer Fraud Act declares as unlawful the act, use, or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise,”. in connection with the sale or advertisement of any merchandise ... whether or not any person has in fact been misled, deceived or damaged thereby… .” With respect to automobile dealers, it is specifically unlawful to “accept, charge, or obtain from a consumer monies, . , in exchange for the performance of any pre-delivery service which is being performed and for failing to set forth in writing on the sales document the price for each specific pre-delivery service.” A “pre-delivery service fee” includes items which are often described or labeled as dealer preparation, vehicle preparation, predelivery service, handling and delivery, or any other term of similar imports. In this case, a dealership charged $2,200 for rust proofing, undercoating, applying a paint sealer, and applying a fabric guard. Apparently, its cost for these services was only $85. Even though the charge was not enumerated in the retail sales agreement, nor was the price of those items contained in any document, after hearing evidence, the lower court concluded that the car buyer did not meet his burden of proving that the price of the service items was unconscionable and accordingly, found for the car dealer. The Appellate Division refused to ignore the fact that there was no breakdown of the pricing for the items in any document, and considered it clear that there was nothing to indicate that the buyer had ever agreed to pay for the items. Therefore, the dealer’s behavior was an unconscionable business practice and the fact that the consumer accepted the vehicle at the stated price did not relieve the dealer of its liability. The Court expressly noted that the dealer had reaped an enormous profit in causing the consumer to pay for pre-delivery services expressly rejected by the consumer and not disclosed in the final sales agreement. This directly violated the purpose of the Act which is to protect consumers against abusive automotive sales practices. Hence, it was unnecessary for the Court to determine if the amount paid for the service items was unconscionable, even in the absence of any testimony as to the reasonable value of those services.