Cuesta v. Classic Car 358 N.J.Super 512 (App.Div 2003)

In Cuesta v. Classic Wheels, Inc., the Trial Court dismissed the plaintiff’s consumer fraud claims, alleging that the plaintiff had failed to establish an ascertainable loss. In Cuesta, the plaintiff made the allegations that the owner of the vehicle did not receive what he bargained for when the seller provided an odometer disclosure statement which was inaccurate. The seller of the automobile claimed that he had no knowledge of the inappropriate/incorrect odometer statement on the vehicle. This was a lease and not a purchase.

The Appellate Division held that the plaintiff sufficiently established the case for a revocation of acceptance. The defendant’s argument that the plaintiff’s continued use of the vehicle barred any recovery was not accepted by the Appellate Division. The Appellate Division established a five-part analysis to determine whether or not the plaintiff would be entitled to a return of his money, based on a decision by the jury.

The following are the questions that the Appellate Division wanted to ask:

  1. Upon Notice of Revocation, what instructions did the seller give the buyer concerning the goods?
  2. Did the buyer’s business needs or personal circumstances compel continued use?
  3. During the period of use by the buyer, did the seller assure the buyer that the defects would be cured and that the provision would be made to compensate the buyer for inconvenience resulting from the defects?
  4. Did the seller act in good faith?
  5. Was the seller unduly prejudiced by the buyer’s continued use?

In Cuesta, the Appellate Division held that the plaintiff sufficiently supported a case for revocation. The Appellate Division also affirmed the Trial Court’s decision that the seller of the automobile committed an act of consumer fraud and should have been awarded attorney’s fees. The important aspect of this case is that if you have collateral which has been detrimentally affected as a result of a claimed defect, you are entitled to a revocation of acceptance or return of monies paid on the contract.

This case is a very powerful case to any consumer who has been aggrieved. This case established that an odometer rollback constitutes consumer fraud even to an innocent seller of goods. This case also demonstrated that one need only produce an expert witness to demonstrate the nature and extent of the ascertainable loss with regard to an odometer rollback case. In essence, if an odometer has been rolled back or the odometer is improper, it is basically strict liability meaning the dealership is liable and less they can demonstrate that the consumer has not sustained an ascertainable loss associated with the improper, odometer rollback or improper odometer reading.

The same basic premise is a consumer must demonstrate an ascertainable loss.  There are many defenses but they only tend to increase the attorney fees associated with these claims and it turns out to be bad news when these claims are fought by the dealer.  So dealer beware if there is a car with a wrong odometer reading do not sell it.