Singer v. Land Rover North America, Civil Action No. 96-1947.

• Decision Date: 18 March 1997
• Docket Number: Civil Action No. 96-1947.
• Citation: 955 F.Supp. 359
• Parties: Evan SINGER, Plaintiff, v. LAND ROVER NORTH AMERICA, INCORPORATED, Defendant.
• Court: U.S. District Court — District of New Jersey

955 F.Supp. 359

Evan SINGER, Plaintiff, v. LAND ROVER NORTH AMERICA, INCORPORATED, Defendant.

Civil Action No. 96-1947.

United States District Court, D. New Jersey.

March 18, 1997.

Delia A. Clark, Kimmel & Silverman, P.C., Haddonfield, N.J., for Plaintiff.

William J. Tinsley, Sills, Cummis, Zuckerman, Radin, Tischman, Epstein & Gross, P.A., Newark, N.J., for Defendant.

OPINION

ORLOFSKY, District Judge:

Plaintiff filed this action against Land Rover North America, Inc. ("Land Rover"), alleging, inter alia, a violation of New Jersey's Consumer Protection Law ("Lemon Law").¹ N.J. Stat. Ann. §§ 56:12-29 to 12-49. Land Rover has moved for partial summary judgment pursuant to Fed.R.Civ.P. 56(b) on plaintiff's Lemon Law claim. Land Rover maintains that, as a former lessee, who no longer has possession of the automobile in question, plaintiff cannot avail himself of the remedies provided by the Lemon Law.

Defendant's motion raises an issue of first impression and requires this court to construe New Jersey's Lemon Law in a factual context unanticipated by its drafters. Because I conclude that the intent of the statute is to protect lessees, even if the lease term has expired, defendant's motion for partial summary judgment will be denied.²

I. Facts and Procedural History

On July 23, 1993, plaintiff signed a lease for a new, 1993 Range Rover sport utility vehicle. The lessor was Chase Manhattan Bank. The term of the lease was thirty-six (36) months, and the lease allowed 15,000 miles per year, or 45,000 miles over the entire term.

Plaintiff periodically brought the Range Rover to the dealer, complaining of poor handling and stalling. Plaintiff contends that these conditions were not repaired. On April 26, 1996, approximately thirty-three (33) months into the lease, plaintiff filed this action.

Sometime at the end of July, 1996, plaintiff returned the vehicle to the lessor. In early August, 1996, plaintiff's counsel informed defendant that plaintiff had returned the vehicle to the lessor. According to plaintiff's counsel, the vehicle was inspected by a representative of Land Rover on September 5, 1996, and subsequently sold at auction. Certif. of Delia A. Clark, Esq. ¶¶ 9-10.

On January 21, 1997, this matter was referred to arbitration pursuant to Rule 47D of the General Rules of the United States District Court for the District of New Jersey. An arbitration hearing in this matter is currently scheduled for March 24, 1997.

II. Standard of Review

A party seeking summary judgment must "show that there is no genuine issue as to any material fact and that [he] is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Hersh v. Allen Products Co., 789 F.2d 230, 232 (3d Cir.1986); Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir.1983). The district court must grant summary judgment when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir.1996). In deciding whether there is a disputed issue of material fact, the Court must draw all inferences from the underlying facts in favor of the non-moving party. See Hancock Indus. v. Schaeffer, 811 F.2d 225, 231 (3d Cir.1987) (citation omitted); Pollock v. American Telephone & Telegraph Long Lines, 794 F.2d 860, 864 (3d Cir.1986).

In order to defeat a motion for summary judgment, "a factual issue must be both material and genuine." Kowalski v. L & F Prods., 82 F.3d 1283, 1288 (3d Cir.1996). A material factual issue is "one that might `affect the outcome of the suit under governing law.'" Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)).

For the purposes of this motion, the parties are in substantial agreement on the facts outlined above. This motion presents a pure question of statutory interpretation and, accordingly, is ripe for summary adjudication. See Nation Wide, Inc. v. Scullin, 256 F.Supp. 929, 932 (D.N.J.1966), aff'd, 377 F.2d 554 (3d Cir.1967).

III. Discussion

Under New Jersey's Lemon Law, N.J. Stat. Ann. §§ 56:12-29 to 12-49, manufacturers of new vehicles must repair all defects which substantially impair the vehicle's use, value, or safety if reported by the purchaser (or lessee) within the first 18,000 miles of operation or within two years of delivery, whichever occurs first. For the purposes of this motion only, it will be assumed that the plaintiff can demonstrate that the Range Rover failed to perform as warranted.

A successful claimant under the Lemon Law statute, who has purchased a new vehicle, is generally reimbursed the full purchase price of the car, less an allowance for reasonable use, plus the filing fees and other costs associated with bringing the action. N.J. Stat. Ann. § 56:12-32(a). The successful claimant must return the defective vehicle to the manufacturer. Id. Defendant argues therefore, that New Jersey's Lemon Law provides only a "forced rescission" remedy to consumers, a remedy which should be unavailable to consumers who are unable to return the vehicle to the manufacturer.

Defendant notes that there are no New Jersey cases addressing the status of a lessee who brings an action under the Lemon Law and subsequently returns the vehicle to the lessor, before it is determined whether the vehicle is nonconforming. However, defendant cites several Pennsylvania cases which it argues are analogous. The protection afforded by the Pennsylvania "Lemon Law," however, by its very terms, does not extend to a lessee of a motor vehicle. See Industrial Valley Bank & Trust Co. v. Howard, 368 Pa.Super. 263, 533 A.2d 1055, 1059 (1987) (neither lessee nor lessor qualifies as a "purchaser" within the meaning of Pennsylvania's Lemon Law).

By contrast, New Jersey's Lemon Law specifically covers lease agreements. The statute provides, in pertinent part, that:

A consumer³ who leases a new motor vehicle shall have the same remedies against a manufacturer under this section as a consumer who purchases a new motor vehicle. If it is determined that the lessee⁴ is entitled to a refund pursuant to subsection a. of this section, the consumer shall return the leased vehicle to the lessor⁵ or manufacturer and the consumer's lease agreement with the motor vehicle lessor shall be terminated and no penalty for early termination shall be assessed. The manufacturer shall provide the consumer with a full refund of the amount actually paid by the consumer under the lease agreement, including any additional charges as set forth in subsection (a) of this section if actually paid by the consumer, less a reasonable allowance for vehicle use. The manufacturer shall provide the motor vehicle lessor with a full refund of the vehicle's original purchase price plus any unrecovered interest expense, less the amount actually paid by the consumer under the agreement. Refunds shall be made to the lessor and lienholder, if any, as their interests appear on the records of ownership maintained by the Director of the Division of Motor Vehicles.

N.J. Stat. Ann. § 56:12-32(b) (West Supp. 1996).

None of the three Eastern District of Pennsylvania cases cited by Defendant directly addresses leased vehicles. Berry v. General Motors Corp., Civ. A. No. 87-3237, 1989 WL 86224 (E.D.Pa. July 28, 1989), involved a plaintiff whose car was repossessed by the lienholder. In Simons v. Mercedes-Benz of N.A., Inc., Civ. A. No. 95-2705, 1996 WL 103796 (E.D.Pa. March 7, 1996), the plaintiff sought to maintain a Lemon Law action after having "traded in" the vehicle in question. Similarly, in Sinnerard v. Ford Motor Co., Civ. A. No. 95-2708, 1996 WL 544226 (E.D.Pa. Sept. 23, 1996), following the theft of the vehicle, the plaintiff accepted payment from its insurer. In each case, the court ruled that the Pennsylvania Lemon Law only protected "purchasers," by which the law meant those who retained possession or title to the motor vehicle.

More importantly, each Pennsylvania case cited by Land Rover addresses a distinct concern, none of which is presented to this court by this motion. In Berry, the court sought to prevent a unilateral suspension of loan payments by the borrower. See also Ford Motor Credit Co. v. Dunsmore, 374 Pa.Super. 303, 542 A.2d 1033 (1988). In Simons and Sinnerard, the plaintiffs would have had a double recovery, unless the court had ordered them to disgorge the insurance payment or trade-in value to the manufacturer in return for a refund of the purchase price of the vehicle.⁶ The Pennsylvania Lemon Law does not specifically authorize such a remedy, and the district court may simply have been unwilling to create it. See Simons, 1996 WL 103796 at *2; Reeves v. Morelli-Hoskins Ford, Inc., 415 Pa.Super. 431, 609 A.2d 828, 830 (1992) (legislature, not the courts, must expand the statutory definition of a "purchaser" to include those who no longer own or possess the vehicle in question). But cf., Harmon v. Concord Volkswagen, Inc., 598 A.2d 696, 702-03 (Del.Super.Ct.1991) (distinguishing Berry on similar facts, in part because the Delaware Lemon Law's definition of "consumer" is more inclusive than Pennsylvania's definition of a "purchaser").

Defendant points out that the New Jersey Lemon Law merely grants lessees the "same remedies" as buyers. N.J. Stat. Ann. § 56:12-32(b). See also Assembly Appropriations Comm. Statement, S. No. 2201, L.1988, ch. 123. The remedial scheme includes the consumer's return of the vehicle, either to the lessor or manufacturer. See § 56:12-32(b). Clearly, the New Jersey statute anticipates that the consumer will have possession of the vehicle at the time that it is adjudged a "lemon."

The New Jersey Lemon Law also provides that the lessor shall return the "lemon" to the manufacturer and be made whole. See § 56:12-32(b). The transaction between lessor and manufacturer, however, is a mere prerequisite to the further requirement of Section 56:12-35 of the...