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Grauer v. Norman Chevrolet Geo

321 N.J. Super. 547, 729 A.2d 522 (Law Div. 1998)

CONSUMER FRAUD ACT; AUTOMOBILE LEASING—A consumer who has no intention of responding to the offer can not make a claim under the Consumer Fraud Act for damages arising out of a misleading automobile leasing advertisement.

A passerby saw a sign outside a car dealership that said “96 Prizm, $185. month, zero down.” He alleged that he was misled by this sign into believing he could purchase a 1996 Prizm at that price, but when he went into the showroom to do so, he was advised that he could not purchase the vehicle at that price because it was a “lease” price. He claimed damages under the Consumer Fraud Act. The dealer moved for summary judgment, arguing that the Consumer Fraud Act prohibited affirmative acts and acts of omission but that the facts did not constitute an affirmative act since there were no actual misstatements on the sign; it did not say “purchase,” “buy,” or “for sale.” Also, it argued that acts of omission violate the Consumer Fraud Act only when they are done with fraudulent intent. Therefore, it argued that since the passerby had produced no evidence of fraudulent intent whatsoever, the facts alleged did not rise to a violation of the Act. It further pointed out that even common law fraud requires proof of intent. In response, the passerby argued that the administrative regulations promulgated pursuant to the Act specifically require that in any advertisement offering a car for lease at an advertised price, certain specified information be included. That information includes a statement that the transaction advertises a lease and also specific information about the price, payments, and other important terms. The passerby argued that, since the sign in question did not contain all the information required by the regulation, it was a per se violation of the act. Case law holds that violations of state regulations are violations of the Act even if there is no damage. However, in the Court’s view, this case could be distinguished from prior court decisions. In prior court decisions, signs were directed at a particular transaction. Here, the merchant placed a sign visible to the general public. Even though it may have violated the regulation, the Court could not determine in did it created a cause of action. “Neither logic nor common sense would allow [the Court] to conclude that everyone who sees this sign possesses a grievance.” According to the Court, the cause of action is created only as to bona fide consumers of the product. Here, there was no evidence that the passerby ever intended to purchase the vehicle in question. He was equipped with a tape recorder when he went into the dealership and he recorded the conversation with the salesperson. According to the Court, the inference that might be drawn from this was that he was aware that the sign was not intended to advertise the vehicle for sale and he was attempting to “set up” the car dealer for this suit. Because, at the very least, there was a factual issue as to whether the buyer was a bona fide consumer, all motions for summary judgment were denied and the matter was listed for trial.


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