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Giaccio v. Hudson Toyota

A-3330-09T3 (N.J. Super. App. Div. 2011) (Unpublished)

CONSUMER FRAUD — To support a claim under the Consumer Fraud Act, the person whose name has been forged on sales and other documents needs to show that the party who legitimately signed those documents knowingly allowed the forgery or otherwise engaged in unconscionable commercial practices.

A car buyer forged his friend’s signature on a financing agreement. The friend claimed he neither signed the sales and finance documents nor authorized his friend to buy the car in his name. The friend discovered the forgery when he received a call from the finance company about missed payments on the car.

The friend sued both the dealership and finance company, alleging fraud, consumer fraud, and breach of the implied covenant of good faith and fair dealing. The finance company then located and repossessed the vehicle and released the friend from any loan obligation. The dealership and finance company moved for summary judgment at the close of discovery, arguing the friend never offered any evidence that either of them had engaged in wrongdoing or that the friend suffered an ascertainable loss because of any fraud. The lower court agreed, holding that the friend failed to produce evidence of any fraudulent activity. The friend appealed, asserting that because the dealership prepared the retail installment sales contract, it must have known about the buyer’s conduct.

The Appellate Division affirmed the lower court’s ruling, finding the friend, in order to support his claims for fraud or consumer fraud, had to show that the dealership and finance company were parties to the forgery or, at least, that they knowingly allowed the buyer to commit the forgery or otherwise engaged in unconscionable commercial practices. The friend did not witness the alleged conduct or locate any witness with personal knowledge of the events. He neglected to depose the buyer or employees of the dealership. Additionally, the Court held the friend failed to prove an ascertainable loss, a necessary element under New Jersey’s Consumer Fraud Act. Specifically, the friend was relieved of any financial liability when the dealership satisfied the debt on the vehicle once the vehicle was located.


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