Skip to main content

Salem Truck Leasing, Inc. v. Delgado Trucking Express, Inc.

A-2188-09T2 (N.J. Super. App. Div. 2011) (Unpublished)

CONTRACTS — Where a contract makes one party responsible only for loss or damage resulting from careless, reckless, intentional or abusive conduct, and that party damages property, but not by reason of any of the listed reasons, it is not responsible for the cost of repair.

A truck lease made the leasing company responsible for maintaining and repairing the vehicle and keeping it in good operating condition and appearance. On the other hand, it made the lessee liable “for any loss or damage which results from careless, reckless, intentional or abusive conduct by any driver.” Payments made more than seven days late would trigger a service charge. If the lessee defaulted, it also became liable for the leasing company’s costs and expenses, including attorneys fees.

The lease “contemplated the possibility of the truck’s complete destruction.” If the vehicle was “damaged beyond repair,” the lease was to terminate but the lessee was required to “pay for all loss or damage to any Vehicle or any Vehicle being used as a substitute and extra therefor, including related expenses including towing arising from any cause ... .” The lessee’s liability was limited to the purchase price of the vehicle. In compliance with the terms of the lease, the lessee insured the truck. Then, the truck was destroyed in a one-vehicle accident. The lessee notified the sales representative of the accident and told the leasing company it could negotiate directly with the insurance company. Ultimately, the claim was settled and the leasing company sent the lessee an invoice for the difference between the insurance payment and the stipulated value of the truck.

When the lessee refused to pay, the leasing company sued for the claimed difference, together with interest and attorney’s fees. A bench trial took place and most of the evidence at trial dealt with the “insurance dispute.” However, the leasing company also introduced into evidence an “aging report” summarizing the repairs that it performed. The aging report showed not only the outstanding invoice for the destroyed truck, but also showed three unpaid charges totaling under $1,500. Although an executive of the leasing company testified that “these charges were ‘not related to [the destroyed vehicle],’ [H]e indicated that at least one of the bills was for a vehicle ‘damaged by the customer’ but did not identify which, if any, of the damages were caused by [the lessee].” The lessee denied owing any money and denied ever having been asked to pay any of the additional invoices.

The lower court ruled against the leasing company as to the additional damages for the destroyed vehicle, but found the lessee “liable for the outstanding charges listed on the aging report.” The Court believed that the leasing company had met its burden with its executive’s “testimony, the aging report and the invoices themselves.” It rejected the lessee’s president’s testimony as “not sufficient without any corroboration.” The Court awarded not only the amount of the unpaid invoices, but interest, court costs, and attorneys fees.

The lessee moved for a new trial and when that motion was denied, it appealed the damage award. The Appellate Division agreed with the lessee, saying “[g]enerally, plaintiffs have the burden of proving damages. ... They must do ‘with such certainty as the nature of the case may permit, laying a foundation which will enable the trier of the facts to make a fair and reasonable estimate.’” Here, the lease required the leasing company to maintain and repair the vehicle and only made the lessee liable to pay for losses or damage resulting from “careless, reckless, intentional or abusive conduct by any driver.” According to the Court, “[t]hese provisions are consistent with the implied warranty or representation of fitness that is imposed on companies that are in the business of leasing trucks.” Neither the invoices nor the leasing company’s testimony established that the repairs were necessitated by any acts or omissions on the part of the lessee. Consequently, the Court ruled that the leasing company had not met its burden to show that its lessee “was liable for the cost of the repairs.” Therefore, it reversed the order of the lower court.

66 Park Street • Montclair, New Jersey 07042
tel: 973-783-3000 • fax: 973-744-5757 •