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Thiedemann v. Mercedes-Benz USA, LLC

369 N.J. Super. 402, 849 A.2d 196 (App. Div. 2004)

CONSUMER FRAUD; ASCERTAINABLE LOSS—Being forced to operate an inherently defective vehicle deprives a consumer of the benefit of the bargain and that constitutes a cognizable ascertainable loss under the New Jersey Consumer Fraud Act.

A driver began experiencing mechanical problems with a car he had purchased. He filed a complaint asserting violations of the New Jersey Consumer Fraud Act (CFA) against the company that oversaw the automobile manufacturer’s national sales, service, and marketing. Expert reports demonstrated that a common vehicle component had an incurable defect and that the only solution was to replace it with another unit with the same defect. The automobile company moved for summary judgment, and the lower court granted the motion. It held that proving damages was an essential element of the claim and that because the owner had not calculated any damages, no rational fact-finder could conclude that the owner had suffered any under the CFA. Furthermore, it concluded that there was neither expert proof of dimunition of value of the owner’s vehicle nor any evidence of out-of-pocket expenses because the manufacturer’s warranty covered the cost of the repairs.

The Appellate Division disagreed with the lower court’s holding. It found that the owner had presented sufficient evidence to support an inference that the replacement units were just as defective as the original units. Therefore, one could assume that the harm was likely to recur and the claim was not moot.

The Court also held that there was merit to the owner’s CFA claim. The cost of repairs is a valid measure of damages. Further, the owner had claimed that he was being forced to operate a vehicle defective in ways that the company intentionally concealed from him. Accordingly, the owner’s failure to receive the benefit of his bargain was a “cognizable ascertainable loss” for the purposes of the CFA.

The Court pointed out that case law requires a showing of ascertainable loss. Even though the owner’s loss could not fairly be measured by the amount of money that the company had to spend to replace the defective part, the Court concluded that the owner’s proofs sufficiently established the likelihood of an ascertainable loss for the purposes of summary judgment. It also noted that the defect was present in every replacement of the defective component and would most likely reappear in the future. Accordingly, the Court found common sense compelled a conclusion that the vehicle’s value was impaired to a measurable, even if presently unascertainable degree. The Court ordered a remand where the owner would have to quantify his losses to recover any damages.

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