A Mitsubishi dealership in New Jersey must pay triple damages plus attorney fees for failing to return a customer's $500 deposit for 24 days after a test drive, despite her repeated requests for a refund, a state appeals panel has ruled.
The Appellate Division of the Superior Court of New Jersey found ample evidence that Cherry Hill Mitsubishi Inc., which does business as Cherry Hill Triplex, violated the state's Consumer Fraud Act.
The case involved plaintiff June Cowger, who used her debit card in August 2009 to pay a refundable deposit for the right to test drive a used BMW for a weekend. When she returned the car, the used-car manager told her it would take five business days to get her a check.
After unsuccessful demands for her money, Cowger sued the dealership, which paid the refund the day after it was served with legal papers, the court said.
At a nonjury trial, a Camden County judge ruled in favor of Cherry Hill and rebuked Cowger for litigating over such a small amount of money.
But a two-member appellate panel unanimously overturned the trial judge's decision and ordered the store to pay triple damages of $1,500, with credit for the $500 already refunded. It also said another judge should calculate the attorney fees.
"The undisputed facts leave no doubt that the defendant engaged in an unconscionable commercial practice by holding plaintiff's deposit for so long," the panel said.
Emphasizing that Cherry Hill had immediate access to Cowger's money because she used a debit card, the court said: "We doubt the defendant would have been as understanding as it believes she should have been if she had retained possession of the vehicle for as long as defendant held her deposit."
Although the parties didn't have an explicit agreement on when the dealership would pay the refund, "concepts of good faith and fair dealing imposed a duty" to reimburse her account "as quickly as it was depleted to fund the deposit," it said.
The court found that Cherry Hill made misrepresentations by giving Cowger inconsistent information about the timing and method for the refund. And it said the trial judge may not have "considered the possibility that a car dealer who periodically collects many such deposits might deliberately return them slowly as an additional revenue stream."
Plaintiff's lawyer, Wesley Hanna of Friedman Doherty in West Berlin, N.J., said Cowger sued because "she was tired of getting the runaround" after the dealership didn't make the refund within the promised time. Hanna said he couldn't discuss the amount of attorney fees to be requested until he files a fee petition in the trial court.
Cherry Hill's attorney did not respond to requests for comment.