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New Jersey’s Lemon Law authorizes attorney fee awards where a lawyer’s assistance is needed to aid the buyer—even if it’s dealer options that are at issue, a state appeals court said Wednesday in a suit against Hyundai.
“A consumer should be able to resolve his claim with the manufacturer without counsel fees, but where counsel is needed, the consumer is entitled to an award of reasonable counsel fees to obtain full relief under the statute,” the Appellate Division ruled in Casal v. Hyundai Motor America, a published case.
The plaintiff, Jorge Casal, purchased a Hyundai Santa Fe from Sansone Hyundai in Avenel in June 2011 and in the process spent $3,000 on optional protection packages administered by the third-party vendors but bought through the dealer, according to the opinion.
A problem with the vehicle cropped up days later, ultimately requiring a full engine replacement, said Casal’s lawyer, Andrew Wolf of the Wolf Law Firm in North Brunswick.
That July, Casal began seeking a refund or exchange under the Lemon Law, but had no success and retained Wolf, according to the opinion.
Hyundai eventually offered to replace Casal’s vehicle, but he also demanded that they transfer his costly protection plans to his new vehicle as well—which Hyundai claimed was the responsibility of Casal and the vendors, the opinion said.
Casal attempted to handle those transfers himself. But after at least three months of trying, he had to enlist Wolf’s aid, according to the opinion.
Wolf negotiated the matter—with the help of David Ricci, then a firm associate—but ended up filing a complaint in court. Hyundai ultimately agreed to pay a refund, and the matter settled, the opinion said.
The statute entitled the firm to fees, though the parties couldn’t agree on the amount. The issue was whether time spent seeking transfer of Casal’s protection plans was reimbursable, according to the opinion.
Middlesex County Superior Court Judge Arthur Bergman wouldn’t approve those fees, finding that the Lemon Law statute covers only vehicle defects, not costs associated with dealer protection plans. Hyundai had no responsibility for those third-party contracts, Bergman said.
But Appellate Division Judges Carmen Alvarez and Susan Reisner—along with Superior Court Judge Carol Higbee, who is temporarily assigned—disagreed and remanded the case for a fee award.
“We hold the Lemon Law requires the consumer to be made whole and authorizes a counsel fee award, if counsel is needed to obtain relief from any options sold through the dealer, as part of the purchase transaction,” Higbee wrote for the panel.
It’s clear that the law “should be interpreted liberally since the expressed general intent of the Lemon Law is to protect the new car consumer” and the consumer “is to be made whole for all costs associated with the purchase as long as they are arranged by the dealer,” Higbee said.
The statutory language does not list protection plans as reimbursable, but it does not limit recoverability of third-party costs either, the panel said.
Hyundai argued that Casal only needed to cancel the protection plans with the third-party vendors to get reimbursement, but Wolf’s certifications showed that it wasn’t so easy, according to the panel.
There’s “no question that [Hyundai] could have handled these transactions in a shorter time than the consumer and his attorney were required to expend,” Higbee said.
She noted that Wolf, in addressing Casal’s issue, “received little assistance, in fact, some resistance, from the dealer.”
Wolf, reached by phone, said the decision “is going to have an impact on every Lemon Law case that’s litigated or settles from now on.”
Because dealer protection plans are refunded on a pro-rated basis, automakers will have to cover any amounts not repaid by dealers if the buyer is to be made whole, he added.
“It’s going to end up costing the manufacturer a lot more, which they should’ve been paying all along,” Wolf said.
Hyundai’s counsel, Jane Rigby of McElroy, Deutsch, Mulvaney & Carpenter in Morristown, declined comment.
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