NISSAN NEW JERSEY LEMON LAW DECISION  

State of New Jersey

NEW JERSEY OFFICE OF ADMINISTRATIVE LAW

OAL DKT. NO. CMA11138-02

MARTIN GUTIERREZ,

Petitioner,

v.

NISSAN NORTH AMERICA, INC.

Respondent.

_______________________________________

Howard A. Gutman, Esq. representing Petitioner

Michael Rubin, Esq., representing Respondent

(Cooper, Rose & English , attorneys)

Record Closed: January 24, 2003 Decided: February 13, 2003

BEFORE: SANDRA ANN ROBINSON, ALJ:

STATEMENT OF THE CASE

This case arises under the New Jersey Lemon Law Act, N.J.S.A. 56:12-29 to 49, and the implementing regulations of the Division of Consumer Affairs ("Division"), N.J.A.C. 13:45A-26.1 to 13:45A-26.14. Manufacturers of motor vehicles must repair all defects that substantially impair the vehicle's use, value or safety if reported by the customer within the first 18,000 miles of operation or within two years of delivery, whichever is first. If a manufacturer fails to repair such defects within a reasonable time, the customer is entitled to a speedy administrative remedy. Petitioner claims: that steering and brake problems affect the use, value and safety of the vehicle; that repeated attempts at repair were made; a Last Chance letter was issued and after a last attempt at brake repairs the alleged malfunction remains uncorrected. Petitioner seeks a refund under the New Jersey Lemon Law.

PROCEDURAL HISTORY

By letter dated July 24, 2002, Martin Gutierrez (Petitioner) notified Nissan of North America, Inc. (Respondent) of a potential claim under the Lemon Law Act. On July 30, 2002 Respondent signed a Certified Mail Receipt acknowledging delivery of Petitioner's letter. On December 19, 2002, the Division accepted Petitioner's application for relief. Subsequently, on December 26, 2002, the Division transmitted the matter to the Office of Administrative Law ("OAL") for hearing. The OAL held a hearing on January 24, 2003 at its offices in Newark, New Jersey. Witnesses and Exhibits are listed in the appendix.

STATEMENT OF ISSUES

(1). Does Petitioner's vehicle have nonconformities?

(2). If there are nonconformities, are those nonconformities defects or conditions, which substantially impair the use, value or safety of the vehicle.

BACKGROUND AND UNDISPUTED FACTS

The parties agree on the following FACTS:

(1). Petitioner Martin Gutierrez, leased a new 2001 Nissan Frontier Crew Cab 4 door, VIN No. IN6ED27Y81C371910 from Elmwood Motors in Elmwood Park, New Jersey on March 24, 2001.

(2). The total Lease price, including fees and taxes, was $23672.97. Petitioner made a $1,500 deposit when he signed the Lease Agreement. Monthly Lease payments are $317.22 and all payments have been timely. The Lease years and mileage terms were 60 months and 12,000 miles per year. Elmwood Motors is an authorized dealership located in Elmwood Park, New Jersey. (Exhibit J-1).

(3). When Petitioner took delivery of the vehicle on March 24, 2001 the odometer reading was 73 miles.

(4). (5). Petitioner took the vehicle to the dealer for normal prescheduled mileage maintenance checks.

(5). Petitioner found it necessary to use two hands to turn right or left, so on 7-26-01 he took the vehicle into the dealership for repair of the steering mechanism. The mileage clocked in on the Work Order was 5,061. A part was ordered to correct the steering condition.

(6). On 8-30-01 when Petitioner returned to the dealership for the new part installation the mileage was 5,784. The steering compliant was resolved with the installation of the new part. (Exhibits J-2, J-3). On 2-7-02 and 2-14-02 technicians checked the steering conditions again and found no turning problems or "binding up after warming up". (Exhibits J-4, J-5).

(7). Commencing on or about 2-7-02 Petitioner returned to the dealership due to alleged problems with the brake system.

{site keywords, lemon law, problem, Nissan, defect, New Jersey lemon law, claim, lawyer, problem, lemon law requirements)

SUMMARY OF EVIDENCE

A. Petitioner

Petitioner's testimony included a recap of the brake repair requests he gave to dealership repair service personnel and an oral review of the written Dealer Repair Orders for the repair dates in question, as follows:

On 2-7-02 the Petitioner complained because the brake pedal went to the floorboard when the brake was applied in an effort to stop the vehicle. The mileage on the Work Order sheet was 11,472. The dealership adjusted the rear brakes on 2-7-02. (Exhibit J-4).

On 2-14-02 Petitioner again complained because of feeling that he would loose control of the vehicle when the brake peddle continued to touch the floor board when trying to stop the vehicle and smoke came from the wheel. The mileage on the Work Order sheet was 11,729. (Exhibit J-5). The dealership checked the master cylinder, calipers, rear brake cylinders and completed a road test, but found no problem.

On 3-15-02 Petitioner again returned to the dealership with a complaint because the brake pedal had continued to hit the floorboard when trying to stop the vehicle. The dealership checked the brake system for leaks and retested the brakes and fluid levels. The mileage on the Work Order sheet was 12,673. No repairs were made because the technicians said no problem was found. (Exhibit J-6).

On 4-26-02 Petitioner returned to the dealership with a complaint regarding the reoccurring brake problem. The technician was told the brakes go to the floor board intermittently, approximately five times each day. The technician was unable to duplicate the problem. The mileage on the Work Order sheet was 14,280. As a gesture of customer "good will", the dealership ordered a master cylinder. (Exhibit J-7).

On 5-30-02 Petitioner returned to the dealership for the installation of the new master cylinder, bleeding of brake system and top off of fluid level. The Work Order again indicated that the installation was an act of customer "Goodwill". The mileage on the Work Order sheet was 15,437. (Exhibit J-8).

On 8-28-02 Petitioner returned to the dealership with a complaint that the brake peddle continued to hit the floorboard. Respondent's Field Engineer inspected the vehicle and adjusted the brake pedal rod and cleaned and adjusted the rear brakes. The mileage on the Work Order sheet was 17,815. (Exhibit J-9).

Petitioner contends that on 8-29-02 the brake problem continued.

On the day of the OAL hearing, January 24, 2003, the mileage was at 22,700 and a "Test Drive" was completed. Petitioner described a panic stop during the test drive. He expressed concerns about: the safety of his daughter, if he had to drive her in the vehicle; for the safety of others if someone other than him had to drive the vehicle; the limitation of use of the vehicle and the denial of his expectation that he would be able to drive it to the mountains. Petitioner said he only drove vehicle out of necessity to get to and from his job as a Prison Senior Corrections Officer which 25 miles from where he usually resides at night in Paterson, New Jersey. The actual mileage between Petitioner's home and work is 1 mile. He works six days each week, year round. Petitioner was able to return home safely on the one occasion when the rear wheel locked up. Previously Petitioner drove a Volkswagen Beetle, a Bronco and a F350.Petitioner testified that because of the brake condition he believes the vehicle is impaired and the use, value and safety are diminished.

B. James Cookingham - Expert Witness For Petitioner

James Cookingham, (Expert) spends 90% of his time as owner/manager of an automotive repair facility and 10% of his time as an expert witness especially for auto cases assisting dealerships. He also gives evaluations to used auto dealers on what repairs are needed, gives advice to third party independent persons and informs persons or dealerships when nothing is wrong with a vehicle. Expert has a Certificate from the National Institute for Automotive Excellence; Certificate as a Master Certified Mechanic; and is Certified in nine areas of automotive components.

On 11-25-02 Expert listened to Petitioner's explanation of the problem "so there would be no goose chase", then he test drove Petitioner's vehicle, removed the brakes and inspected them. Expert confirmed the replacement of the master cylinder by the dealership. He testified that there was a problem with the brakes and said his foot went to the floor when he applied the brake; and that the vehicle rolled to a stop. He stated that there were no signs of a hydraulic leak but that the rear brake had been adjusted too high and caused the heat (smoke). In his opinion the safety of the vehicle should be questioned because the brake peddle remains too low. The vehicle is dangerous all the time because of the unpredictability of when the brakes will go to the floorboard and the vehicle not stop. In his opinion the suggestion for correction would be a review of the hydraulic control system and replacement of the entire module. On cross-examination Expert said that when brakes are applied a low point good distance from the floorboard may be 1 inch.

C. Carlos Ferrara for Nissan (Respondent)

Carlos Ferrara (Respondent) is employed by Nissan North America as a Technical Specialist. He helps dealerships with difficult repair issues. He has been a technician for 10 years and a specialist for 10 years.

On 8-28-02 Respondent made an inspection on Petitioner's vehicle because of the Last Chance Letter. He did a six mile road test on Route 1-9 and noticed that the brake peddle felt low " to his liking". He inspected the brakes, pads, rotors, rear drums, adjusted the rear brakes, measured the brake peddle height and adjusted it to the top end of the specifications. Respondent then drove the vehicle again and determined that the brakes then felt normal.

On the day of the OAL hearing, January 24, 2003, Respondent test drove the vehicle again and determined that the brake again felt a little low. Respondent testified that the vehicle stops, but the pedal is lower than he would like or expect it to be. He estimated that the free play was approximately an 8th inch from the floor.

Nissan argued that its representatives verified a brake problem and made the necessary adjustments so as to comply with specifications required in the Manufacturer's Service Manual. Nissan noted that the vehicle had not been in an accident and that expert testimony was contradictory with regard to whether the pedal hit the floorboard when the brake was applied. Alternatively, Nissan argued that any defect that may exist does not substantially impair the use, value or safety of the vehicle.

LEGAL ANALYSIS AND FINDINGS OF FACT

Most people regard the lease or purchase of a new car as a major investment, "rationalized by the peace of mind that flows from its dependability and safety." Zabriskie Chevrolet, Inc. v. Smith, 99 N.J. Super 441, 458 (Law Div. 1968). Adoption of the Lemon Law in New Jersey was accompanied by express legislative findings that the purchase of a new motor vehicle is "a major, high cost consumer transaction" and that the absence of an effective procedure for correcting defects in new vehicles results in "a major hardship and an unacceptable economic burden on the consumer." N.J.S.A. 56:12-29. Berrie v. Toyota Motor Sales, USA, Inc. 267 N.J. Super 152 (App. Div. 1993). See also Christeles v. Nissan Motor Corp., 305 N.J. Super 222 (App. Div. 1997). Consequently, the Legislature devised a quick and efficient remedy to protect consumers against such financial losses.

If a consumer reports a nonconformity in a motor vehicle to the manufacturer or its dealer during the first 18,000 miles of operation or during the first two years following the date of original delivery to the consumer, whichever is earlier, the manufacturer or the dealer must within a reasonable time make all repairs necessary to correct the nonconformity. N.J.S.A. 56:12-31. "Nonconformity" means a defect or condition which substantially impairs the use, value or safety of a motor vehicle. N.J.S.A. 56:12-30. It is an affirmative defense that the alleged nonconformity does not substantially impair the use, value or safety of the motor vehicle. N.J.S.A. 56:12-40. In a commercial context, "substantial impairment" of the value of an automobile is broadly construed to apply to a nonconformity which "shakes the buyer's confidence in the goods." GMAC v. Jankowitz, 216 N.J. Super 313, 339 (App. Div. 1987).

If the manufacturer or its dealer is unable to repair or correct a nonconformity within a reasonable time, then the manufacturer must refund the purchase price, including any trade-in allowance, together with "any other charges or fees," including sales tax, license and registration fees, finance charges, towing expenses and actual rental expense for a replacement vehicle. N.J.S.A. 56:12-32.

If the manufacturer or its dealer is unable to repair or correct the nonconformity within a reasonable time, the manufacturer must accept return of the vehicle from the consumer and provide a full refund. N.J.S.A. 56:12-32. It is presumed that a manufacturer or its dealer is unable to repair or correct a nonconformity within a reasonable time, if substantially the same nonconformity has been subject to repair three or more times by the manufacturer or its dealer or the vehicle was out of service for a total of twenty or more days and the nonconformity continues to exist. N.J.S.A. 56:12-33(a). This presumption shall apply against the manufacturer only if the manufacturer has received written notification by certified mail, return receipt requested, of a potential claim under the provisions of the Lemon Law and has had one opportunity to repair or correct the defect or condition within ten calendar days following receipt of the notification. N.J.S.A. 56:12-33(b).

The factual issues in this proceeding are whether the vehicle has the defect as alleged by petitioner and, if so, whether that defect substantially impairs the safety, use or value of the car. Petitioner and his expert gave credible testimony to the effect that the brakes on the vehicle intermittently will hit the floor or come close to hitting the floor board when the brake is pressed to stop the vehicle. There is no way of determining when the brake will or will not depress to the floorboard or when the vehicle will roll and not come to a complete stop. Testimony from Respondent's witness indicated that on both occasions when he tested the brake, it tested lower than he would like and that he had recommended an adjustment of the brakes, which was done. He also acknowledged that the master cylinder had been replaced in an effort to remedy the brake problem. Under the circumstances, I accept the testimony of petitioner and his expert and the testimony of Respondent's witness, to the effect that the brake problem does exist.

Based upon evidence presented at the hearing, I FIND:

1. Petitioner experiences an intermittent problem with the brake system and that the brakes hit the floorboard on occasion and come close to hitting the floor board on other occasions.

2. Petitioner has experienced the problem at least since 2-7-02 and the problem has continued intermittently until the current date.

3. Petitioner's expert, James Cookingham, experienced the problem during a test drive on 11-25-02.

4. Respondent's expert experience the problem of a lower than normal brake during his test drive on 8-28-02 and during the test drive on the date of the OAL hearing 1-24-03.

5. An intermittent failure of the vehicles brakes poses the danger of an accident.

6. As a result of this dangerous condition, petitioner has refrained from driving the vehicle to the mountains-vacations, riding his daughter-transporting her for usual reasons or allowing anyone else to drive-fear of their safety.

7. The car would have less value due to the defect described herein.

Petitioner's presentation is persuasive that the condition substantially impairs the safety of the vehicle. If a vehicle intermittently will not brake properly, the potential for an accident is readily apparent. Petitioner's testimony is also persuasive that his safety concerns and those of his child and others have substantially impaired his use of the vehicle. A reasonable person in Petitioner's position would be justified in believing that the vehicle is unsafe. Surely Petitioner's apprehension diminishes the use and enjoyment he gets from the vehicle. Further, assuming that Petitioner is forthright with any prospective buyer about the condition of the vehicle, the value thereof would be substantially impaired.

CONCLUSION

 

Based upon the above, I CONCLUDE that Petitioner's Nissan Frontier has a defect which constitutes a nonconformity. It follows that Petitioner is entitled o a refund pursuant to N.J.S.A. 56:12-32.

The computation of a refund in this matter shall be in accordance with N.J.A.C. 13:45A-26.1. In this instance the total lease price $ 23,272.97 including finance charges, sales tax, license fees, registration fees and any stated credit or allowance for consumer's used motor vehicle; and the cost of reasonable attorneys fees $ 2,905.00 and expert fees $485.00 shall be used when calculating a refund. A deduction from the total sum of the items above ($26,662.97) shall be calculated to determine a reasonable allowance for vehicle use (multiple the mileage at the time the consumer presents the vehicle to the dealer to correct the nonconformity (11,472 miles), by the total lease price ($23,272.97), then divide by 100,000 miles).

Respondent has not stipulated to the attorney's and expert's fees, but did not specifically challenge the amounts thereof. Based on the foregoing, I CONCLUDE that Petitioner has established by a preponderance of the credible evidence that the defects complained of exists and that it substantially impairs the use, value and safety of the vehicle. I FURTHER CONCLUDE that the Petitioner has established by a preponderance of the credible evidence that the substantial defect entitles Petitioner to relief pursuant to the Lemon Law. I FURTHER CONCLUDE that Petitioner is entitled to judgment of a refund on money expended to date. Nissan is to reimburse Petitioner for the down payment $1,500.00 plus the Lemon Law filing fee of $50.00, plus the total loan payment of $$7,930.50 (assuming February 2003 has been paid). From this amount should be subtracted a usage fee of $2,669.88. In addition Nissan must pay off the remaining loan balance to the lien holder. The total refund due Petitioner is $6,810.62.

Accordingly, it is ORDERED that:

1. Petitioner return the subject vehicle to Respondent;

2. Respondent make a full refund to Petitioner in the amount of $6,810.62 and pay the remaining loan balance to the lien holders;

3. Nissan shall make payments at the time of return of the vehicle to the dealership and the transfer of title, which shall take no later than 15 days following the date of the final decision by the agency head.

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, P.O. Box 45027, Newark, New Jersey 07102, 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.

February 13, 2003__ ___________________________________

DATE SANDR ANN ROBINSON, ALJ

Mailed to Division of Consumer Affairs:

_________________ ___________________________________

NEW JERSEY OFFICE OF ADMINISTRATIVE LAW, LEMON LAW 

 

APPENDIX

List of Witnesses

For Petitioner

Martin Gutierrez

James Cookingham

For Respondent

Carlos Ferrara

List of Joint Exhibits

 NEW JERSEY OFFICE OF ADMINISTRATIVE LAW OAL DKT. NO. CMA11138-02