NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4487-12T3
JORGE CASAL,
APPROVED FOR PUBLICATION
Plaintiff-Appellant,
July 2, 2014
v.
APPELLATE DIVISION
HYUNDAI MOTOR AMERICA,
Defendant-Respondent.
____________________________________
Argued April 29, 2014 – Decided July 2, 2014
Before Judges Reisner1, Alvarez and Higbee.
On appeal from the Superior Court of New
Jersey, Law Division, Middlesex County,
Docket No. L-0468-12.
Andrew R. Wolf argued the cause for
appellant (The Wolf Law Firm LLC, attorneys;
Mr. Wolf and Aaron Mizrahi, of counsel and
on the briefs; Andrew W. Li and Christopher
J. McGinn, on the briefs).
Jane A. Rigby argued the cause for
respondent (McElroy, Deutsch, Mulvaney &
Carpenter, LLP, attorneys; Ms. Rigby and
Stephen F. Payerle, of counsel and on the
brief).
The opinion of the court was delivered by
HIGBEE, J.S.C. (temporarily assigned).
1
Judge Reisner did not participate in oral argument, but joins
in the opinion with the consent of counsel. See R. 2:13-2(b).
Plaintiff Jorge Casal (Casal) and defendant Hyundai Motor
America (HMA) entered into a settlement agreement concerning an
action seeking relief under N.J.S.A. 56:12-32(a)(1) (Lemon Law).
Pursuant to the settlement agreement, the issue of the
appropriate counsel fee award under N.J.S.A. 56:12-42 was
submitted to the court. The trial judge found that a
substantial portion of counsel's time was expended in obtaining
relief from the cost to Casal of optional vehicle protection
contracts that Casal purchased through the dealer from third
party vendors. For that reason, the court denied relief,
concluding that the statute did not include the cost or transfer
of these contracts.
We find the Lemon Law does extend this protection to the
consumer. Hence, we reverse and remand for reconsideration of
the attorney fee award.
Casal purchased a new Hyundai Santa Fe from Sansone
Hyundai, Inc. (Sansone), a dealer for HMA. Casal financed his
purchase, including the cost of the optional protection
packages, through a loan arranged by Sansone with non-party
Hyundai Capital America.
As set forth in the trial court's memorandum of decision:
At the time of purchase, Casal also
entered into several contracts for various
"protections." One contract was with non-
party NSD, which provided benefits for three
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years after the purchase against any losses
suffered as a result of the failure of the
Theft Detection System in the car. The
Theft Detection System was an etching of an
identifying mark in the car's window.
A second agreement was with non-party
Nation Motor Club Inc., [an affiliate of
NSD] which provided benefits for five years
after the date of purchase for the
replacement cost of any key or remote device
that is lost, stolen or destroyed.
Plaintiff entered into a third
agreement, also with non-party NSD, for its
Titanium Protection Plan, which included
roadside assistance, windshield repair
protection, tire and rim protection, and
dent and ding protection.
Lastly, Casal entered into a contract
through Sansone, as the dealer and
authorized representative of the lienholder
Hyundai Capital America, in which the
lienholder agreed to waive any gap in the
difference between actual cash value of the
vehicle and the loan balance in the event of
a total loss of the vehicle.
The parties agreed that the car met the criteria of the
statute as a "lemon." Except for attorney fees, the only
substantial dispute which remained was the resolution of these
optional third party contracts. The trial judge found HMA had,
in fact, offered to settle before the complaint was filed, but
the liability for the optional third party contracts was still
in dispute. He stated:
Thus, a threshold inquiry is whether the
offers of settlement by HMA, either in
providing a replacement vehicle or refund,
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without including a refund for these non-
party contracts, is violative of the
statute. If it is not consistent with the
statute, then the plaintiff has every right
to insist on asserting his full rights
thereunder. If, on the other hand, the
statute does not require such a payment,
then it is unreasonable to initiate
litigation solely to seek that redress.
We agree that is a threshold issue, but we find the statute
does provide this relief to the consumer. N.J.S.A. 56:12-
32(a)(1),(3) reads as follows:
a. If, during the period specified in
section 3 [C.56:12-31] of this act, the
manufacturer . . . or its dealer or
distributor, is unable to repair or
correct the nonconformity within a
reasonable time, the manufacturer . . .
shall accept return of the motor vehicle
from the consumer.
(1) In the case of a motor vehicle . . .
the manufacturer shall provide the
consumer with a full refund of the
purchase price of the original motor
vehicle including any stated credit or
allowance for the consumer's used motor
vehicle, the cost of any options or
other modifications arranged, installed,
or made by the manufacturer or its
dealer within 30 days after the date of
original delivery, and any other charges
or fees including, but not limited to,
sales tax, license and registration fees,
finance charges, reimbursement for towing
and reimbursement for actual expenses
incurred by the consumer for the rental
of a motor vehicle equivalent to the
consumer's motor vehicle and limited to
the period during which the consumer's
motor vehicle was out of service due to
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the nonconformity, less a reasonable
allowance for vehicle use.
. . . .
(3) Nothing in this subsection shall be
construed to preclude a manufacturer .
. . from making an offer to replace the
vehicle in lieu of a refund; except
that the consumer may, in any case,
reject an offer of replacement and
demand a refund . . . . In the event
that the consumer accepts an offer to
replace the motor vehicle in lieu of a
refund, it shall be the manufacturer's
. . . responsibility to insure that any
lien on the returned motor vehicle is
transferred to the replacement vehicle.
Casal purchased his vehicle on June 10, 2011. The problem
with the car started two days later. By mid-July the car met
the criteria for a refund or exchange under the Lemon Law.
Casal sent three letters to HMA explaining he believed his car
was a lemon; HMA did not respond until Casal obtained an
attorney, thus precipitating the need for counsel fees.
HMA first offered Casal $3,000.00 plus car rental expenses
after he hired counsel. The offer was declined and immediately
thereafter, on September 16, 2011, HMA offered to replace the
vehicle. The dispute over the scope of the statutory language
became the focus of the parties.
Casal wanted the dealer to transfer his protection plan
agreements to the new vehicle at no additional cost to him.
HMA's response was "HMA cannot make any guarantees as to the
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cost of the transfers of these plans as this is a matter between
Mr. Casal and the dealership."
Although the manufacturer is the entity responsible to the
consumer under the Lemon Law, the first release sent to Casal
with the HMA settlement offer included language releasing HMA
and the Hyundai dealer Sansone. Casal had paid approximately
$3,000.00 for the protection plans purchased through Sansone and
added into the finance agreement with Hyundai Capital Inc., the
lienholder, even though they were with the third party vendor.
HMA later offered Casal a refund instead of a replacement
vehicle, but still denied any responsibility for the
cancellation of the optional contracts. Since the trial judge
found that legal work performed after this offer by Casal's
counsel was for relief not included in the Lemon Law, he decided
counsel fees were not allowable for work performed after this
offer to settle.
HMA argues that all Casal had to do was cancel the
protection plans and he would receive reimbursement from the
third party vendors. However, it was not as easy as HMA
suggested. The actual process and difficulty in getting these
protection plans cancelled and transferred from the old car to
the new car is reflected in counsel's certification and attached
billing records submitted in support of the application for fees.
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At first Casal agreed to handle the transfers himself. His
attorney's billing record dated December 12, 2011 states that
when he "[s]poke to client [he] explained the replacement offer
and his obligation to work with the dealership and loan company
to initiate the transfers. Also mentioned the process should be
simple, no cost and without hassle."
Three months later Casal's attorney noted in his billing
record that "[Casal] told [him] that he is getting the
runaround; transferred to multiple extensions, no responding to
e-mails he left; being told certain plans not cancellable." At
that point, counsel believed his client could not accomplish the
transfers himself and counsel proceeded to handle the problem.
Shortly thereafter, the complaint under the Lemon Law was filed
against HMA.
According to counsel's certification in support of his fee
application, he received little assistance, in fact, some
resistance, from the dealer. He directly contacted the third-
party vendors about the policies and was told the cancellations
had to come from the dealer. In May, plaintiff's counsel was
still working on assuring the refunds were paid to the
lienholder on these contracts.
HMA's position is that it is not a party to these contracts
between vendors and Casal and, therefore, cannot cancel them or
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be held responsible under the statute. However, HMA
acknowledges that reimbursement for the contracts occurred after
they put pressure on their dealer.
The trial judge agreed with HMA that they had no
responsibility for these contracts, and interpreted the
statutory language to refer only to physical alterations or
2
additions made to the vehicle. He further found that the
statutory language requiring reimbursement for "any other
charges or fees including, but not limited to, sales tax,
license and registration fees, finance charges" did not include
the third-party contracts because they were not "direct costs
imposed on the transaction."
The expressed intent of the Lemon Law is to protect the new
car consumer. See DiVigenze v. Chrysler Corp., 345 N.J. Super.
314, 322-23 (App. Div. 2001), certif. denied, 171 N.J. 442
(2002); Berrie v. Toyota Motor Sales USA, Inc., 267 N.J. Super.
152, 155-56 (App. Div. 1993).
N.J.S.A. 56:12-29 states:
The Legislature finds that the purchase of a
new motor vehicle is a major high cost
consumer transaction and the inability to
correct defects in these vehicles creates a
major hardship and an unacceptable economic
2
N.J.S.A. 56:12-32(a)(1) states that "the cost of any options or
other modifications arranged, installed, or made by the
manufacturer or its dealer . . . ."
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burden on the consumer . . . . It is the
further intent of this act to provide
procedures to expeditiously resolve disputes
between a consumer and a manufacturer.
It is clear that the Act should be interpreted liberally
since the expressed general intent of the Lemon Law is to
protect the new car consumer. See N.J.S.A. 56:12-29; see also
Berrie, supra, 267 N.J. Super. at 155-56. The language of the
statute in no way excludes optional contracts arranged by the
dealer. There are no words in the statute that suggest that
"options or other modifications arranged" by the dealer are
limited to physical changes to the vehicle.
The statute lists additional charges such as fees for state
taxes, registration costs or finance charges. These are all
costs from third parties, not a party to the contract, but the
Lemon Law requires reimbursement for them by the manufacturer.
Although these items are listed in the statute, it also says
that reimbursement is not limited to these items. It is clear
from the statute that the consumer is to be made whole for all
costs associated with the purchase as long as they are arranged
by the dealer.
HMA has argued that there really is no cost at all from
these third party contracts since they can be cancelled and
reimbursements can be obtained. We disagree.
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HMA imposed the duty of negotiating with these third
parties, the dealer, and the finance company on Casal, and as a
result he had to incur counsel fees. The dealer has an ongoing
business relationship with the manufacturer. The third parties
involved have ongoing business relationships with the dealer,
and all of these contracts were offered as part of the sale of
the vehicle. All were negotiated by the manufacturer's dealer
with the consumer, albeit on behalf of a third party.
HMA may have needed Casal to sign requests for cancellations
of the contracts, just as they needed him to sign registration
forms and transfers of title, but there is no question that HMA
could have handled these transactions in a shorter time than the
consumer and his attorney were required to expend.
We hold the Lemon Law requires the consumer to be made
whole and authorizes a counsel fee award, if counsel is needed
to obtain relief from any options sold through the dealer, as
part of the purchase transaction. The Legislature specifically
stated the purpose of the statute is to resolve these disputes
expeditiously. N.J.S.A. 56:12-29. A consumer should be able to
resolve his claim with the manufacturer without counsel fees,
but where counsel is needed, the consumer is entitled to an
award of reasonable counsel fees to obtain full relief under the
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statute. We, therefore, reverse and remand the matter to the
court for reconsideration of the appropriate counsel fees.
[At the direction of the court, per R. 1:36-
2(a), the discussion of the other issues in
the appeal has been omitted from the
published opinion.]
Reversed and remanded.
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