Case Law Summaries

Lawson v. Dick Greenfield Dodge

• Opinion Date: March 22, 2001
• Business Law
• E-Mail

CONSUMER FRAUD ACT; AUTOMOBILES—Once a consumer proves a violation of the Consumer Fraud Act, the statute mandates an award of counsel fees and costs even if no harm was caused to the consumer.

An automobile buyer alleged that a dealership violated the Consumer Fraud Act by conducting a “bait-and-switch” scheme and misrepresenting odometer readings in an advertisement. The car buyer responded to a newspaper advertisement that specified the year, make and model of the car, listed the price, and gave the vehicle identification number, the stock number, and the car’s mileage. When the buyer visited the dealership in response to the advertisement, a salesperson told the buyer that the advertisement was a misprint and that it referred to a different car. The salesperson did not offer to show the buyer any other car. The buyer then searched the lot and found the specific car that had been advertised, although, because the odometer reading was not the same as the one in the advertisement, it did not realize that it was the same car. Fully aware of the odometer reading, the buyer began negotiating for the car, and finally arrived at a price slightly higher than the advertised price, but conditioned on the replacement of the car’s tires with new tires and repair of one of its windows. The resulting purchase agreement and the odometer disclosure statement both accurately listed the milage. When the buyer took the car home, he noticed that the vehicle application number and the car stock number were exactly the same as the ones in the advertisement. The next morning, the buyer called the dealership to complain that the car should have been sold at the advertised price. The dealer said it would agree to that, but only if it could reinstall the old tires and retain the new ones. In front of the lower court, the dealership admitted that the milage in the advertisement was incorrect but said that the mistake was inadvertent. It presented two advertisements for the same car, one of those showing a higher price than the buyer actually paid. The lower court held that the advertisement understated the car’s milage, but also that the dealership was not responsible for the error since it was inadvertent and since the buyer was advised of the correct milage before the sale. The lower court further concluded the buyer had not proved the dealership had violated the regulation governing “bait-and-switch” tactics. That opinion was based upon the fact that the salesperson had not offered to show the buyer a second car, but that the buyer located the advertised car during an unaided search. Consequently, the lower court held for the dealership, and did not award even attorney’s fees to the buyer. The Appellate Division agreed with the lower court with respect to the “bait-and-switch” allegation. Contrary to the lower court’s ruling, the Appellate Division held that the milage misrepresentation may have been unintentional, but this would be legally irrelevant. The regulations promulgated under the Consumer Fraud Act require that newspaper advertisements show the actual odometer reading as of the date the advertisement is placed in publication. On the other hand, the buyer was unable to prove that as a result of the misrepresentation, he sustained “ascertainable loss.” The buyer was informed of, and knew, the correct milage, and, consequently, got precisely what he bargained for. On the other hand, once a consumer proves a violation of the Consumer Fraud Act, the statute mandates an award of counsel fees and costs for “any violation of the Act, even if that violation caused no harm to the consumer.” Therefore, the matter was remanded to lower court for an appropriate assessment of attorney’s fees.

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