Decisions under the New Jersey Used Car Lemon Law are compiled.  Here, the used car consumer was able to establish a defect

State of New Jersey

OFFICE OF ADMINISTRATIVE LAW

INITIAL DECISION

OAL DKT. NO. CMA9608-00

ELICE FITZ,

Petitioner,

v.

SANMAR AUTO SALES,

Respondent.

_________________________

Elice Fitz, pro se

Jose Santos, President, appearing pursuant to N.J.A.C. 1:1-5.4(a)5, for Respondent

BEFORE MARIA MANCINI LA FIANDRA, ALJ:

STATEMENT OF THE CASE

Petitioner brought this action under the New Jersey Used Car Lemon Law (UCLL). N.J.S.A. 56:8-67 et seq. The matter was transmitted to the Office of Administrative Law (OAL) for determination as a contested case on November 1, 2000, in accordance with N.J.S.A. 52:14B-1 to -15 and N.J.S.A. 52:14F-1 to -13.

Originally, the hearing was scheduled for November 20, 2000. It became clear, during preliminary discussions with both parties, that Petitioner had not complied with the terms and provisions of the warranty. Petitioner outlined the problems she had with the vehicle and stated that although she had had some repair work done, there was a problem with the transmission which would be too expensive to repair and wait for reimbursement from the warranty company. Accordingly, Petitioner had not had the work done.

As a result of the discussions with the parties, I issued an order requiring Petitioner to return the vehicle to the dealer, as required by statute, for further repair.

On December 20, 2000, the second date set for hearing, the parties appeared and reported that the issues had not been resolved. Consequently, the matter proceeded to a plenary hearing.

FINDINGS OF FACT

Based on the evidence presented at the hearing as well as on the opportunity to observe the witnesses and assess their credibility, I make the following findings of fact, which are essentially undisputed, in this matter.

1). Petitioner is the owner of a 1996 Dodge Stratus bearing VIN 1B3EJ46XOTN292210. She purchased the vehicle from Respondent and took delivery on September 13, 2000.

2). The price of the car was $6,680; in addition, Petitioner paid $400.80 in sales tax and $195 in motor vehicle fees. The total cost of the vehicle at the time of purchase, therefore, was $7275.80.

3). Petitioner made a down payment of $4,000 and financed the remaining $3,275.80 through Thrift Investment Corporation, Ford, New Jersey. Her monthly payment is $171.48.

4). Petitioner delivered the vehicle to the dealer for repair on September 15, 20 and 26, 2000, all of which were within the applicable warranty period. On September 15 and 26, 2000, she complained of the car vibrating and problems with the transmission pick up, specifically that the transmission did not kick in.

5). Petitioner also brought the car to the dealer for the problem with the transmission on or about November 20, 2000.

6). In addition to bringing the car to Respondent for repair, Petitioner brought it to Chrysler/Jeep of Essex (Maplewood) for diagnosis of the problem on September 26, 2000. She also brought it to Lee Myles (Union) on December 19, 2000.

7). Respondent brought the car to Lee Myles (Roselle) and to Chrysler/Jeep of Essex (Maplewood) to diagnose problems.

8). Three days prior to the hearing, Petitioner was unable to start the car.

9). Respondent failed to provide Petitioner with written documentation of his efforts to diagnose the problems with the car. Respondent failed to comply, therefore, with the provisions of the order of November 20, 2000.

DISCUSSION AND CONCLUSION

This action arises under the Used Car Lemon Law, N.J.S.A. 56:8-67 et seq., which is a consumer protection statute; therefore, it is to be liberally construed in favor of the consumer. The statute and regulations require that a used car dealer provide a consumer who purchases a used car with a written warranty. The scope of the warranty varies with the mileage on the purchased vehicle. In this case, since the vehicle had over 60,000 miles, the dealer was required to give a warranty for a minimum 30 days or 1,000 miles. N.J.A.C. 13:45A-26F.3(b).

If, during this warranty period, the consumer believes that the purchased vehicle does not conform to the applicable warranty the consumer must notify the dealer of a material defect and make the used car available for repair by delivering it to the dealer before the appropriate warranty period expires. Petitioner testified that she had notified the dealer of the problems she had; she had also brought the vehicle in to him for repair. The record is clear that there was some work performed; the dealer, however, also indicated that he had driven the car and could not find any material defect.

Accordingly, I FIND that Petitioner has met the requirements of providing notice and accessibility to the dealer.

The regulations further provide that if, within the applicable warranty period the same material defect has been subject to repair three or more times by the dealer or his agent and the material defect continues to exist, but the dealer has failed to refund the full purchase price of the vehicle with certain exclusions, the consumer may seek recourse. N.J.A.C. 13:45A-26.F.7 (emphasis supplied).

Since it is clear that Petitioner has complained of a material defect and has presented the car to the dealer on at least three separate occasions for repair of that purported defect, the issue to be resolved here is whether there is, in fact, a material defect in this vehicle. The regulations define a material defect as a malfunction which substantially impairs the use, safety, or value of a used car which is under warranty. N.J.A.C. 13:45A-26F.2. In this case, although Petitioner has other complaints about the car, the only problem which had been presented to the dealer for repair three times is one which Petitioner asserts has to do with the transmission.

During the hearing, I was particularly impressed with Petitioner's ability to articulate the problems she was having with the vehicle. It was apparent that Petitioner had some understanding of the ways in which the various components of an automobile work and interact with each other. Furthermore, the way in which she recounted what she had been told by the various mechanics who examined the vehicle reflected the same understanding. Accordingly, I FIND Petitioner's testimony to be reliable and credible.

Petitioner testified that the transmission did not kick in until she had driven almost to her job. Petitioner also presented work orders from two separate sources which indicated that there is a problem with the transmission (P-1, P-3); moreover, there were two separate references to problems with the timing belt. (P-3, R-2). Transmission and various transmission parts are covered items under the regulations, as is the timing belt. In addition, Petitioner testified that she has incurred a problem starting the car and had not been able to start it at all three days before the hearing.

Based on this testimony, I FIND that Petitioner has established a prima facie case supporting her assertion that the car has a material defect as defined by statute and regulation.

Respondent testified only that he could find no problem with the transmission. Pursuant to the order entered on November 20, 2000, he brought the car to Lee Myles to have the transmission checked and they found no problem with the car. Respondent also brought the car to Chrysler/Jeep of Essex to have the lifter noise of which Petitioner complained evaluated. When I noted that it was somewhat unusual to bring the vehicle to two separate repair facilities to diagnose a problem when one of those was a manufacturer's outlet, Respondent's answer was that Lee Myles had expertise in transmissions. When I asked if Chrysler would not have more expertise in what was essentially a Chrysler product, he shrugged and did not answer. I FIND, based on this exchange as well as Respondent's failure to comply with the provisions of the order of November 20, 2000, that his testimony lacks reliability; therefore, I accord it no weight.

Based on the reliability of Petitioner's testimony and the supporting documentation, I FIND that Petitioner has sustained the burden of providing by a preponderance of the evidence that the vehicle has a material defect, i.e., in the transmission, which continues to exist after three opportunities to repair. I CONCLUDE, therefore, that she is entitled to a full refund pursuant to the provisions of the regulations.

The regulations provide that the full price of the vehicle should be refunded, excluding, however, sales tax, motor vehicle fees, a reasonable allowance for excessive wear and tear, and a deduction, calculated as set forth in the regulations, for personal use. N.J.A.C. 13:45A-26F14. In this case, the total purchase price was $7,275.80; sales tax was $400.80 and government fees were $195. Accordingly, the price of the car was $6,680. There is no evidence of excessive wear and tear in the record and I decline to deduct any amount on that account from the $6,680. Petitioner testified that she had put on approximately 1,300 miles in the four months she had the car. The regulations provide that the deduction for personal use shall be calculated by multiplying the number of miles driven by a consumer by the amount of the mileage allowance set by the Federal Internal Revenue Service for business usage of a motor vehicle. In this case, that calculation is 1,300 x .325 for a total deduction of $422.50. I FIND, therefore, that Petitioner is entitled to a refund in the amount of $6,257.50.

ORDER

I hereby ORDER Respondent to refund to Petitioner the amount of $6,257.50.

I hereby FILE my initial decision with the DIRECTOR OF THE DIVISION OF CONSUMER AFFAIRS for consideration.

This recommended decision may be adopted, modified or rejected by the DIRECTOR OF THE DIVISION OF CONSUMER AFFAIRS, who by law is authorized to make a final decision in this matter. If the Director of the Division of Consumer Affairs does not adopt, modify or reject this decision within fifteen (15) days, this recommended decision shall become a final decision in accordance with N.J.S.A. 56:12-37(b).

Any party may file written exceptions with the DIRECTOR OF THE DIVISION OF CONSUMER AFFAIRS, PO Box 45027, Newark, New Jersey 07101, marked "Attention: Exceptions." Exceptions must be received by the Division of Consumer Affairs no later than eight (8) days from the date on which this recommended decision was mailed to the parties. Exceptions shall not exceed three (3) pages in length. A copy of any exceptions must be sent to the judge and to the other parties.

 

DATE MARIA MANCINI LA FIANDRA, ALJ

Mailed to Division of Consumer Affairs:

 

DATE OFFICE OF ADMINISTRATIVE LAW

Mailed to Parties:

 

DATE OFFICE OF ADMINISTRATIVE LAW

jb

APPENDIX

Witnesses:

Elice Fitz

Jose Santos

Exhibits:

For Petitioner:

P-1 Lee Myles Statement (Union), December 19, 2000

P-2 H&D Linden Motors, Inc. Statement, September 22, 2000

P-3 Chrysler/Jeep of Essex Statement, September 26, 2000

P-4 Buyers Guide

For Respondent:

R-1 Lee Myles Statement, November 22, 2000

R-2 Chrysler/Jeep of Essex Statement, November 29, 2000

The warranty is attached to the UCLL application and is, therefore, a part of the record. It contains specific provisions setting forth the procedure to be used to open a claim. I note that the warranty is not in form or the duration required by the regulations; moreover, it shifts the burden of repair to the consumer, which is also in contravention of the regulation. The regulations, however, do contain a provision which requires a written waiver of the warranty; there is no evidence of such a waiver. Accordingly, there is a dealer warranty in effect which places the responsibility for repair on the dealer subject to certain conditions as specified in the regulations. N.J.A.C. 13:45A-26F.3,4.

The order is dated November 20, 2000, and is also a part of the record.

OAL DKT. NO. CMA9608-00

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