Turner v. Aldens, Inc.

Citation179 N.J.Super. 596,433 A.2d 439
PartiesRobert W. TURNER and James R. Sternik, Plaintiffs-Appellants, v. ALDENS, INC., an Illinois Corporation, Defendant-Respondent. Kathryn A. PFLUMM, Plaintiff-Appellant, v. SPIEGEL, INC., an Illinois Corporation, Defendant-Respondent.
Decision Date10 July 1981
CourtNew Jersey Superior Court – Appellate Division

Jeffrey W. Herrmann, Saddle Brook, for all plaintiffs-appellants (Cohn & Lifland, Saddle Brook, attorneys; Peter S. Pearlman, Saddle Brook, of counsel).

Morrill J. Cole, Rochelle Park, for defendant-respondent Aldens, Inc. (Cole, Berman & Belsky, Rochelle Park, attorneys).

Francis E. P. McCarter, Newark, for defendant-respondent Spiegel, Inc. (McCarter & English, Newark, attorneys; Francis E. P. McCarter and Lanny S. Kurzweil, Newark, of counsel and on the brief).

Before Judges FRITZ, POLOW and JOELSON.

The opinion of the court was delivered by

FRITZ, P. J. A. D.

Each of these appeals, in which the operative facts are essentially identical, presents the single issue of whether the Retail Installment Sales Act (RISA), N.J.S.A. 17:16C-1 et seq., is applicable, on the basis of extraterritorial effect, to the "revolving charge accounts" maintained by defendants for use by plaintiffs. In the absence of objection from counsel, we have consolidated the appeals. 1

Both parties in each action brought motions in the trial court for summary judgment. In an oral opinion the trial judge granted the motions of defendants, relying solely on Sliger v. R. H. Macy & Co., Inc., 59 N.J. 465, 283 A.2d 904 (1971) as authority for his determination. His opinion is somewhat equivocal. It appears to be premised in part, at least, on his reading of Sliger as directing that courts not interfere with legislative prerogative absent an "egregious situation" involving something more than the "no great disparity" between New Jersey RISA rates and those of the other state involved, in this case, Illinois. Recognizing the single question presented of whether the Legislature intended RISA to have extraterritorial application, he said:

The problem in this state, however, is that the New Jersey Supreme Court decided the case of Sliger v. R. H. Macy & Co., Inc., 59 New Jersey, Page 465 (283 A.2d 904) (1971). If that case had not been decided as it was decided, and even with or without the statute, the Court might be free to conclude differently or take a different view of the particular matters that are before it. Of course, I am bound by that decision, and I conclude that essentially based on the analysis and the applicability of the Supreme Court decision in Sliger v. R. H. Macy & Co. that I have cited, that the present New Jersey statute does not apply in the case before me, so that means that obviously I could not grant the relief requested by the plaintiff.

... The Sliger case indicated that absent statutory provision, either express or implied, that the finance charge rates on retail charge accounts as to out-of-state sellers or in-state sellers would be a problem to regulate in New Jersey, and we are talking about a situation where there is no great disparity of rates. That was found not to be regulated at the time of the R. H. Macy decision. The Court said then that the Legislature could fill the void and that absent and I conclude also that absent a clear violation of public policy and absent a legislative expression, although I think either one could be in the alternative there and not conjunctively, there is no basis for the Court to impose its own views.


I want it clear that the decision I am making here this morning and I have a few other things I have to say is not meant to imply or suggest an out-of-state lender who sues in the New Jersey courts could collect higher interest charges, necessarily. That may be a different situation. It may be that an out-of-state company, mail order, such as the defendants in the two motions that are really being considered here might well be limited in such cases to the New Jersey rates on a lawsuit. I think, however, in terms of the agreement between the parties, they are free to agree in most cases as to which law should apply and they have done that and there is, obviously, nothing so shocking in what is before me that I could conclude that public policy would require that the Courts of this state step in at this particular point and say the New Jersey Retail Installment Sales Act is to have an extraterritorial application. It is up to the Legislature to act at this point. It is not up to the province of the Court unless there is some egregious situation which clearly, on its face, would create such a disparity that this Court, as a matter of equity, or based on public policy grounds, should not enforce the law of another jurisdiction on traditional rules.

... But for the Sliger case that I cited, as I said, it might be possible to find different public policy in this state, but based on that decision, I cannot make that determination here.

We believe the determination avoids the issue. The Legislature has acted. It enacted RISA. Our obligation is to determine whether its intention at that time 2 was to give that statute extraterritorial effect. Put another way, we must decide whether the Legislature meant the limit it imposed on time price differentials (N.J.S.A. 17:16C-44.1) to apply to revolving charge account contracts in which the retail buyer, who is in New Jersey, agrees with the retail seller, whose only contact with New Jersey (other than the shipping here of goods ordered) is its solicitation of business by catalogues mailed to or otherwise provided the buyers and others in New Jersey, that the statutes of the foreign state shall apply. In this case the statutes of the foreign state permitted a higher time price differential than did the statutes of New Jersey. The charge exceeded that permitted in New Jersey, but was in compliance with the law of the foreign state. Our principal disagreement with the trial judge springs from our respective differing views on the import of Sliger. In terms of the case before us, he apparently believes Sliger says, in essence if the statute does not expressly state that it is to have extraterritorial effect, then that must be left to a later express legislative decree. We do not conceive that to be mandated by Sliger, and believe the principle runs afoul of well-settled law.

It is true that at first blush Sliger appears quite apposite. There a usury statute was held not to be controlling with respect to time price differential payments, the Supreme Court being satisfied that the interplay between a "time-price doctrine (which) is firmly imbedded in this state" with the "element of reliance upon that doctrine" and the usury statute be left "with the Legislature, the author of the usury laws." 59 N.J. at 469, 283 A.2d 904. 3

Here we have no such choice. Here we are called upon to determine, on an absolute rather than a relative basis, the perimeters of effectiveness of a statute. In such circumstance it becomes the duty of a court to fathom as well as it can the intent of the Legislature in the enactment of the legislation. "The goal of the interpretative process is the intent of the Legislature." State v. Provenzano, 34 N.J. 318, 322, 169 A.2d 135 (1961).

It is well settled that the law of the state chosen by the parties will be honored so long as that choice does not contravene a fundamental policy of New Jersey. Crinnion v. Great Atlantic & Pacific Tea Co., 156 N.J.Super. 479, 483, 384 A.2d 159 (App.Div.1978); Knollmeyer v. Rudco Industries, Inc., 154 N.J.Super. 309, 312-313, 381 A.2d 378 (App.Div.1977), certif.den. 77 N.J. 477 (1978); see Restatement, Conflict of Laws 2d, § 187 at 561. Nevertheless, "(a) court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law." Restatement, supra, § 6(1) at 10.

We are of the opinion that our Legislature intended to offer New Jersey consumers the protection of RISA no matter from where the seller deals, and that this intent constitutes a statutory directive respecting choice of law. We believe that a contrary conclusion would contravene fundamental policy of this State as it appears documented in RISA. Thus we hold that that statute must be applied here despite the "election" of the parties in this contract of adhesion (see Vasquez v. Glassboro Service Ass'n, Inc., 83 N.J. 86, 104, 415 A.2d 1156 (1980)) to look to Illinois law.

As we noted in Oxford Consumer Dis. Co. of No. Phila. v. Stefanelli, 102 N.J.Super. 549, 246 A.2d 460 (App.Div.1968), mod. 104 N.J.Super. 512, 250 A.2d 593 (App.Div.1969), mod. 55 N.J. 489, 262 A.2d 874 (1970), app.dism. 400 U.S. 808, 91 S.Ct. 45, 27 L.Ed.2d 38 (1970):

Legislative intent can be discerned by background circumstances revealing the evil sought to be remedied and as thus illuminated may be read into the statute by implication with the same effectiveness as though expressly declared therein. (102 N.J.Super. at 565, 246 A.2d 460)

We have no doubt that the evil sought to be remedied by N.J.S.A. 17:16C-1 et seq. is the charging of excessive interest to New Jersey consumers. That evil is of such a nature that we are confident the Legislature did not intend to discriminate on the basis of the source of supply. Rather, it endeavored to protect residents of this State from that evil irrespective of whether its source was in-state or out-of-state.

Objective evidence of such an intent may be found in a comparison of the definitions of a "retail charge account" and a "retail installment contract." N.J.S.A. 17:16C-1(r) provides:

"Retail charge account" means any account ... established by an agreement which prescribes the terms under which a retail buyer may from time to time purchase or lease goods or services which are primarily for personal, family or household purposes, and under which the unpaid balance thereunder, whenever incurred,...

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