N.J. Chevy store's win in customer fraud suit upheld

A New Jersey Chevrolet store’s win in its suit for breach of contract and fraud against a customer has been affirmed by a state appeals panel.

The two-judge panel of the Appellate Division of the Superior Court of New Jersey upheld a $15,000 nonjury verdict, plus $11,600 in attorney fees, in favor of Mall Chevrolet in Cherry Hill, N.J.

The dealership successfully contended that the customer, Robert Collier, had failed to deliver clear title to a 2010 Avalanche LTZ trade-in he owned jointly with his estranged wife but falsely represented as his alone.

The case was unusual because it involved a dealership suing a customer for fraud, said dealership lawyer Laura Ruccolo of Mt. Laurel, N.J. And it was successful because the dealer had “the right language” in the documents, including a provision in the buyer’s order entitling it to attorney fees, she said.

Joint title

In March 2012, Collier went to Mall Chevrolet to trade his 2010 vehicle, which was registered in South Carolina, for a 2012 Avalanche LTZ, according to the appeals court. At the time, he and his wife were in the midst of a contested divorce.

The purchase agreement required him to deliver the original title to the dealership.

The store reconditioned and detailed the 2010 Avalanche and paid the balance due on its loan.

When the South Carolina Division of Motor Vehicles notified the dealership that the 2010 Avalanche was jointly titled, the store pulled it from the lot and told Collier that his wife’s signature was necessary.

Citing concern about possible forgery, the store declined to give Collier the title transfer paperwork for him to give to his wife. Instead, the dealership sent the documents directly to her. Her divorce lawyer told the store that she had no knowledge of the trade-in, and she refused to sign the paperwork.

Vehicle exchange

At that point, Mall Chevrolet told Collier to return the new vehicle and pick up the trade-in, which he did. The parties also signed a vehicle exchange agreement and had the original loan reinstated.

The dealership then sued Collier for depreciation of the new vehicle, reconditioning expenses for the trade-in and payments made on Collier’s loan and registration fees, including the cost to reinstate the original loan. Collier countered with claims under the state consumer fraud and truth-in-consumer contract laws and challenged the validity of the vehicle exchange agreement.

A trial court judge ruled in favor of the dealership on claims for breach of contract and failure of good faith and fair dealing.

‘Bad motive’

In its decision, the Appellate Division found sufficient evidence to support the verdict, including the failure of the purchase agreement to indicate that the trade-in was jointly owned and the salesman’s testimony that Collier hadn’t disclosed that information verbally or in e-mails.

Collier’s “‘bad motive’ was evidenced by his attempt to procure the 2012 Avalanche solely in his name to avoid distribution of the 2010 Avalanche as marital property in his divorce,” the court said.

It also rejected Collier’s argument that the dealership prevented him from obtaining clear title by refusing to let him directly secure his wife’s signature. But the court said the store’s policy of sending the paperwork to the wife “was not meant to interfere with Collier’s ability to meet the clear title requirement. Rather, the policy was meant to prevent forgery.”

‘Not cooperative’

Collier’s lawyer, Predrag Filipovic of Philadelphia, said the decision means “buyer beware” and that the New Jersey Consumer Fraud Act “doesn’t seem to apply to sheer trade-ins.”

“Everything was legitimate,” he said of Collier’s conduct. “He drove off with the car and he returned it three months later when they demanded it.”

No further appeal is expected, Filipovic said.

Ruccolo, the dealer’s lawyer said, “This was a unique case, and the gentleman wasn’t cooperative from the beginning.”

You can reach Eric Freedman at freedma5@msu.edu

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