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Liberty Subaru in Oradell, N.J., charged $450 to register and obtain the title for Stephanie Chamberlin’s car, but her attorneys say it would have cost her just $88 to stand in line at the Motor Vehicle Commission to get the documents herself. At DiFeo Chevrolet in Jersey City, the dealer markup was only $5 on the tags for Donald Kaszner’s car, but he says he was assessed $180 for clerical expenses, motor vehicle messenger service and documents. Such dealer markups and extra fees for motor vehicle documents are prompting a wave of consumer fraud class actions. About a dozen suits pending across the state claim that such charges are excessive, poorly explained and misleading, in violation of the Consumer Fraud Act, N.J.S.A. 56:8-1. Three such cases have settled in the past three years, generally at little cost to dealers, since most of the payout is in the form of coupons for the purchase of cars at the same dealership. But the winnings for plaintiffs lawyers are in cash, and the cases are easy to prove, especially since the Consumer Fraud Act doesn’t require showing intent. All of which means this is a practice niche worth exploring. “It’s not always a sure thing, but it can be very lucrative for plaintiffs attorneys to take on these cases,” says Mitchell Berman, a solo in Vineland who represents dealerships. “The way the law is written is going to favor the plaintiff and disfavor the defendant.” He says tort lawyers whose work has dried up have moved into this type of litigation. “There’s tons of opportunity in this field,” says Ronald Lueddeke, a Spring Lake solo who helped win a $14 million settlement against a group of dealers last month. “There’s not many practitioners doing it and everybody has a car or two, so there’s a lot of opportunity,” he said. Plaintiffs lawyers say consumer disputes with dealers are particularly suited to class actions because of the industry’s common sales practices. The recent class action suits are modeled on a litigation recipe that yielded a $2.8 million settlement in Middlesex County in 2001. That case, Favorito v. Oasis Motors Inc., charged that customers of a Ford dealership in Old Bridge were made to pay registration and title fees in excess of rates charged by the state. Plaintiffs lawyers have since applied the same cause of action to successively larger numbers of defendants. The case Lueddeke is handling is Frenkel v. Sansone Plaza Dodge Inc., a suit against a group of 12 franchises owned by the Sansone dealer group. The suit alleged the dealers violated the New Jersey Consumer Fraud Act by charging inflated prices for title and tag fees and for other documents and services relating to purchases and leases. Lueddeke, a former Sansone general counsel, joined with Philadelphia’s Levy, Angstreich, Finney, Baldante, Rubenstein & Coren — the firm that represented the plaintiff in Favorito — to file Frenkel. The September settlement in Frenkel, which Superior Court Judge Alexander Waugh Jr. has yet to approve, sets a maximum payout of $14 million by way of $275 coupons to plaintiffs for buying another vehicle at any Sansone dealership or $60 in cash, plus a $215 coupon. The Frenkel and Favorito settlements also require defendants to pay plaintiffs’ legal fees awarded by a judge. In another case, a group of three dealers settled a Camden County class action over motor vehicle fees last May in Blake v. TJH Automotive. The defendant, Cherry Hill Classic Cars, accused of marking up registrations and titles, agreed to refund customers the amount of the markups. The maximum payout is estimated at $267,000, and plaintiffs’ lawyer Simon Paris, of Philadelphia’s Spector Roseman Kodroff, was awarded $87,600 in fees. The Blake suit also alleged that 20-dealer United Auto Group marked up title and registration fees and charged fraudulent documentation fees. Pending court approval expected on Nov. 18, the defendant agreed to give customers actual damages for the registration and title markups and coupons for a free oil change or $100 toward another car purchase at United Auto, says Paris. The defense lawyer, Garen Meguerian of Saltz Polisher in Wayne, Pa., declined to comment. Paris says he has four other putative class action suits in Camden County against dealers over motor vehicle fees. Not all of these cases have been slam dunks for plaintiffs. Last May, Superior Court Judge Louise Donaldson in Camden County dismissed Gross v. TJH Automotive, which alleged that three dealerships charged excessive service fees for documentation and did not adequately explain them. The plaintiffs wanted more thorough itemization of the extra fees, but the judge said the Consumer Fraud Act did not require that level of detail. Plaintiffs lawyer Madeline Houston has appealed. She and defense attorney Meguerian declined to comment. THE MOTHER OF ALL CLASS ACTIONS Trial could begin in January in a Bergen County class action that includes nearly every dealer in the state. Cerbo v. Ford of Englewood has about 110 named plaintiffs and about 500 dealer-defendants. Dealers who were not named were invited by Superior Court Judge Jonathan Harris last January to participate in alternate dispute resolution. Most have agreed, so a settlement could end most litigation on the issue, says Marvin Brauth, whom Harris appointed to represent the dealers. Brauth, of Wilentz, Goldman & Spitzer in Woodbridge, says dealer charges for registrations and titles sometimes exceed state rates because complex rules make it difficult to estimate charges before a dealer representative visits the motor vehicle office. He adds that dealers are free to set their own charges for obtaining documents. “Our position is none of these dealerships have committed consumer fraud, that there is no right to impose a limit on a document fee charge, and that if a customer is dissatisfied with the document fee a dealer charges, he is free to go to another dealer or do it himself,” says Brauth. Cerbo plaintiffs attorneys Donald Caminiti of Breslin & Breslin in Hackensack and Donald MacLachlan, a solo in Ridgewood, declined to discuss the case. Aside from the class actions over motor vehicle fees, lawyers see a general rise in the volume of number of consumer fraud suits against car dealers. But the increase is prompting some dealers to include mandatory arbitration clauses in sales contracts. Other states are experiencing a similar rise in suits, and the industry’s trade associations in Washington, D.C., are pushing for legislation that would move all class actions to federal court. A poll by the American International Automobile Dealers Association last month identified litigation as the most pressing issue members faced, followed by employee health-care costs and high federal taxes. Seventy percent of respondents said they were named in or threatened with litigation in the past year, up from 65 percent in the 2003 survey.

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