Frank A. Lauletta, Esq. publishes comment on recent New Jersey Consumer Fraud Act court decision
Court held that customized truck with an autoloader tow unit is a sale of "merchandise" under the New Jersey Consumer Fraud Act.
By: Lauletta Birnbaum Law Firm
Plaintiff, All The Way Towing, LLC (hereinafter "ATW") contracted to purchase a brand new truck from Bucks County International, Inc. (hereinafter "BCI") with an autoloader tow body manufactured by Dynamic Towing Equipment and Manufacturing, Inc. (hereinafter "Dynamic"). The estimated purchase price was over $160,000 with a $10,000 deposit. Dynamic discovered that its tow body was incompatible with BCI's truck, resulting in modifications to the towing unit. ATW rejected four separate delivery attempts due to deficiencies of the truck and/or towing unit. Eventually, ATW demanded a refund of the deposit, which was rejected by BCI and lawsuit was filed.
The trial court dismissed ATW's CFA claim ruling that, because the truck was a custom designed truck, it was not a product offered to the public and, therefore, not "merchandise"
Under the CFA, "[t]he term 'merchandise' shall include any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale[.]" The Supreme Court noted that "n light of the Act's original remedial purpose and its subsequent and continuous expansion by the Legislature, courts have consistently recognized that the CFA must be liberally construed." The Court also noted that CFA has been previously interpreted to cover commercial transactions and certain custom goods as well. For example, the New Jersey Supreme Court has already held in Czar, Inc. v. Heath that the "CFA can apply to the building and installation of custom kitchen cabinets." The Court also cited with approval a long list of cases from the New Jersey appellate division that held that customized goods can fall within the scope of CFA. Such goods covered custom auto repair work and a customized yacht.
The Court went on to explain that "In our examination of the matter at hand, the applicability of the CFA does not turn on whether the public at large purchases International trucks onto which a Dynamic 801 tow unit is installed. What is relevant is that a member of the public could, if inclined, purchase an operational tow truck consisting of a Dynamic 801 tow body installed onto an International chassis. It is consistent with the intent of the CFA to protect consumers regardless of the popularity of the product or service sold or advertised. To promote consistency in the application of the requirement that a product be offered to the public when evaluating a private individual CFA action, we hold that the availability requirement can be met by showing that any member of the public could purchase the product or service, if willing and able, regardless of whether such a purchase is popular." Therefore, the Court held that the transaction in question was covered by the CFA.
The case is All The Way Towing, LLC v. Bucks County International, Inc., A-66/67-17.
*** Frank Lauletta is an experienced corporate attorney who has many years of "hands on" experience in private and public companies. His practice focuses heavily on representing and counseling a broad array of companies in corporate transactions such as venture capital, corporate finance, and mergers and acquisitions.
Attorney Profile: https://solomonlawguild.com/
Blog of Frank Lauletta: https://franklaulettablog.blogspot.com/
Lauletta Birnbaum Law Firm
Frank A. Lauletta, lawyer and founding partner