Plaintiff alleged that an auto dealer sold him a used Toyota Highlander with a “salvage” title not disclosed at sale. A salvage title indicates that a vehicle suffered significant damage due to, for example, collision, water, theft or vandalism.  At the time of sale, Car Fax reported a clean title history, and the New York State Department of Motor Vehicles certified a clean title.  Two years later, while renewing the SUV’s registration, plaintiff learned of a salvage notation in the SUV’s title history and obtained a new salvage title.  Plaintiff so informed the auto dealer, and traded-in the SUV to purchase another car. 

Nevertheless, Plaintiff sought the full value paid to the dealer for the first SUV.  Alleged causes of action included breach of contract, common law fraud, and violation of the Consumer Fraud Act (CFA) N.J.S.A. 56:8-1, et seq Id. at 3.  The trial court dismissed all claims for plaintiff’s failure to present competent evidence of damages, or even the auto dealer’s knowledge of the salvage title issue when it sold the car.  Id.  Plaintiff appealed.  In Essa Lee v. Hudson Toyota, Docket No. A-4027-14T (N.J. App. Div. July 5, 2017), the Appellate Division affirmed, holding that the trial court properly granted summary judgment when plaintiff could not adequately identify damages.

The court found that “plaintiff failed to provide any evidence supporting his argument that the car was incorrectly valued on either occasion [at the time of purchase or subsequent trade-in].”  Id. at 9.  It noted: (1) the absence of evidence about the value of the SUV at the time of purchase had the salvage title issue been known, (2) the absence of proof that the later trade-in value of the SUV was incorrect,  (3) the lack of expert or other evidence quantifying any loss, and (4) a failure to demonstrate that the auto dealer’s acceptance of the SUV and applying a trade-in credit towards a new car did not adequately address any purported loss resulting from the salvage title issue.  Id.

Essa Lee expresses the fundamental principle that, to state claims for breach of contract, fraud or violation of the CFA, a plaintiff must properly allege “an estimate of damages, calculated with a reasonable degree of certainty. . . .” Id. at 9-10, quoting Thiedmann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 249 (2005).  (Because of the court’s damages holding, it did not address the grant of summary judgment to auto dealer based upon the dealer being unaware of the salvage title issue at the time of sale.)  A plaintiff’s demand for damages based solely upon the price paid for a vehicle is insufficient.  Further, in some circumstances, before litigation, an auto dealer may act to ensure consumers do not suffer any out-of-pocket loss, as the dealer did here.  The court noted that the auto dealer accepted the return of the vehicle and applied a trade-in credit toward a new one.

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