CHEE LI VS. BMW OF NORTH AMERICA, LLCÂ (L-3014-13, MORRIS COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0453-15T3
CHEE LI and FENG LI,
Plaintiffs-Appellants,
v.
BMW OF NORTH AMERICA, LLC,
Defendant-Respondent.
_____________________________
Submitted January 31, 2017 - Decided June 19, 2017
Before Judges Ostrer and Vernoia.
On appeal from the Superior Court of New
Jersey, Law Division, Morris County, Docket
No. L-3014-13.
Chee Li and Feng Li, appellants pro se.
Lindabury, McCormick, Estabrook & Cooper,
P.C., attorneys for respondent (Steven A.
Andreacchi, of counsel and on the brief).
PER CURIAM
Plaintiffs, appearing pro se, appeal an August 17, 2015 order
dismissing plaintiff Feng Li's claims due to a lack of standing,
and a May 28, 2015 order granting defendant's request to limit
plaintiffs' written discovery demands. Based on our review of the
record under the applicable law, we affirm.
I.
The material facts are not in dispute. On November 11, 2013,
plaintiffs Chee Li (Chee) and her husband Feng Li (Feng),1 filed
a pro se complaint against defendant BMW of North America, LLC,
alleging that in February 2011, plaintiffs purchased a defective
vehicle from a local BMW dealership (dealership). The vehicle was
covered by defendant's warranty agreement "against defects in
materials or workmanship to the first retail purchaser, and each
subsequent purchaser," for a period of "forty-eight months or
50,000 miles, whichever occurs first." Plaintiffs claimed that
following the purchase, defendant refused to honor the warranty
agreement when the vehicle experienced ongoing mechanical issues
related to oil usage.
Plaintiffs filed a complaint alleging defendant sold the
vehicle knowing it was defective, and breached the warranty
agreement by refusing to repair the alleged defect. Plaintiffs
asserted the following five claims: violations of the Magnuson-
Moss Warranty Federal Trade Commission Improvement Act (MMWA), 15
U.S.C.A. §§ 2301 to 2312, (count one); breach of express warranty
1
Because plaintiffs share a surname, for ease of reference we
respectfully refer to them by their first names.
2 A-0453-15T3
(count two); breach of the implied covenant of good faith and fair
dealing (count three); violations of the New Jersey Consumer Fraud
Act (CFA), N.J.S.A. 56:8-1 to -20, (count four); and breach of the
implied warranty of merchantability (count five).
Several disputes between the parties arose during discovery.
Plaintiffs opposed defendant's request that its expert inspect the
vehicle outside of plaintiffs' presence. Defendant claimed
plaintiffs' service of 318 interrogatories and fifty-three
document demands was excessive. Defendant moved to compel
plaintiffs to produce the vehicle for inspection, plaintiffs
cross-moved to permit their presence at the vehicle inspection,
and defendant moved for a protective order limiting plaintiffs'
discovery requests.
On May 28, 2014, the court entered an order granting
defendant's motions and denying plaintiffs' cross-motion. In a
written decision the judge found plaintiffs failed to demonstrate
good cause for allowing their presence at the vehicle inspection,
relying upon the standard set forth in Briglia v. Exxon Co., USA,
310 N.J. Super. 498, 502-03 (Law Div. 1997).2 The court also
determined plaintiffs' discovery demands were excessive and
2
The court recognized that Briglia governs the permissibility of
a party's attendance at independent medical examinations, but
found its reasoning instructive in the present matter.
3 A-0453-15T3
limited plaintiffs' discovery requests to twenty-five
interrogatories and fifteen document demands.
The discovery exchanged between the parties revealed that the
retail installment contract, purchase documentation, and vehicle
title listed Chee as the vehicle's purchaser. Defendant moved to
dismiss Feng's claims, arguing he lacked standing to prosecute the
causes of action in the complaint, and that Feng, a disbarred New
Jersey attorney,3 was engaged in the unauthorized practice of law
by acting as counsel for the vehicle's purchaser, Chee.
Following oral argument on defendant's motion, the court held
an evidentiary hearing on "the issue of whether Feng [] has [an]
ownership interest in the [vehicle] that is the subject of this
action and/or standing to maintain this action." On August 6,
2015, the court summarized the facts developed at the evidentiary
hearing and issued an oral decision.
As explained by the court, Feng testified he and Chee
purchased the vehicle for his use, and Chee owned a separate
vehicle. Feng testified he negotiated the purchase of the vehicle
with a dealership sales representative, but did not qualify for
the necessary financing. Feng explained that arrangements were
then made for Chee to purchase the vehicle, as she qualified for
3
See In re Feng Li, 213 N.J. 523 (2013).
4 A-0453-15T3
the financing. The paperwork for the purchase and financing were
made in Chee's name, and the motor vehicle title and registration
were issued to Chee. Feng testified that he later "attempted to
have his name put on the certificate of title, but [defendant]
refused."
Feng testified that "the purpose of the acquisition of the
car was so . . . he could drive it." Feng incurs all of the
maintenance costs on the vehicle, and Chee makes the monthly
financing payments with money Feng provides to her. Chee testified
"that she does not drive" the car and that Feng "pays for the car
in the sense that he transfers money to her, which she then
forwards along . . . electronically, to [defendant]."
Plaintiffs introduced evidence showing Feng is the named
insured on the insurance policy for the vehicle. Plaintiffs also
introduced several invoices for the vehicle's maintenance that
Feng signed, and documents showing he was loaned a temporary
vehicle while the vehicle was under maintenance.
Plaintiffs also filed a pleading dated October 10, 2014,
which they signed and entitled "Affidavit of Sale Agreement Between
Plaintiffs Chee Li and Feng Li" (Affidavit of Sale). The document
5 A-0453-15T3
appears to be both a purported affidavit,4 asserting Chee and Feng
were the joint purchasers of the vehicle, and a form of contract
by which Chee purports to transfer to Feng all of her claims and
causes of action against defendant, and her rights under the
vehicle's warranty.
The contract documents related to the financing and purchase
of the vehicle showed Chee was the purchaser, she solely applied
for the financing, and the certificate of title was in her name.
The retail installment contract listed Chee as the "buyer,"
included an acknowledgement that Chee was "purchasing the
vehicle," and was signed by Chee. The agreement included provisions
stating that Chee understood she had "no right to assign any of
[her] rights under" the contract, that the contract "described all
of the agreements with respect to the retail installment sale of
the [v]ehicle between [the] [s]eller and [Chee]," and that "all
prior agreements, whether oral or in writing, are superseded."
The court considered the evidence submitted and determined
that Feng lacked standing to assert the causes of action in the
4
The affidavit includes factual allegations plaintiffs suggest
are relevant here, but the affidavit is not competent evidence of
the alleged facts because it was not made upon oath or
verification. R. 1:4-4; Alan J. Cornblatt, P.A. v. Barow, 153 N.J.
218, 236-37 (1998) (explaining an affidavit must be confirmed by
oath or affirmation of the party making the statements).
6 A-0453-15T3
complaint. The court found Feng "is not a real party in interest,"
or "a consumer as defined by the Lemon Law5 or [MMWA]." The court
rejected Feng's claim he was a co-owner of the vehicle and
determined Chee was the vehicle's sole owner because:
[H]ere we have a certificate of title in the
name of [Chee]; a purchase invoice in the name
of [Chee]; a copy of a purchase order in the
name of [Chee]; the temporary registration and
license tag in [Chee's] name; the odometer
disclosure statement, which is signed by
[Chee] as transferee; the . . . BMW
[f]inancial [s]ervices consumer credit
application, which is in [Chee's] name; and
there is no co-applicant; and a BMW
[f]inancial [s]ervices motor vehicle retail
installment contract, which memorializes the
loan in the name of [Chee].
The court rejected Feng's claim that by negotiating the
vehicle's purchase and making monthly payments to his wife, he had
standing. The court rejected Feng's reliance on the purported
Affidavit of Sale agreement, noting it was contrary to the language
of Chee's retail installment contract with defendant, which
precluded the assignment of any of her rights, including "the
5
Plaintiffs' complaint did not allege a violation of New Jersey's
Lemon Law, N.J.S.A. 56:12-29 to -49. The court, however, liberally
read the complaint to allege a violation of the Lemon Law and
dismissed the claim. Feng does not challenge the court's ruling
on appeal and, in fact, affirmatively states that plaintiffs did
not allege a Lemon Law claim. We therefore do not address the
court's dismissal of the putative Lemon Law claim. An issue not
briefed on appeal is deemed waived. Jefferson Loan Co. v. Session,
397 N.J. Super. 520, 525 n.4 (App. Div. 2008); Zavodnick v. Leven,
340 N.J. Super. 94, 103 (App. Div. 2001).
7 A-0453-15T3
right to pursue the remedy under the [] warranty." The court
concluded Feng was not the purchaser of the vehicle or a transferee
of the vehicle's title, and therefore he lacked standing to
prosecute the claims asserted in the complaint. The court entered
an August 17, 2015 order dismissing Feng's claims.
Prior to the court's ruling, Chee's complaint was dismissed
pursuant to Rule 4:21A-4(f) for failure to appear for a court-
ordered mandatory non-binding arbitration. The court entered a
July 9, 2015 order dismissing Chee's claims. Ignoring the court's
order, Chee filed a notice of demand for a trial de novo on August
4, 2015, but the notice was returned by the court on August 12,
2015.
Plaintiffs filed the present appeal challenging the May 28,
2014 discovery order, and the August 17, 2015 order dismissing the
complaint as to Feng. Plaintiffs did not appeal the court's July
9, 2015 order dismissing Chee's claims pursuant to Rule 4:21A-
4(f).6
6
Plaintiffs' notice of appeal makes no reference to the July 9,
2015 order. R. 2:5-1(f)(3)(A). "[O]nly the orders designated in
the notice of appeal . . . are subject to the appeal process and
review." W.H. Indus., Inc. v. Fundicao Balancins, Ltda, 397 N.J.
Super. 455, 458 (App. Div. 2008). We therefore do not consider the
court's order dismissing Chee's claims. See, e.g., 30 River Court
East Urban Renewal Co. v. Capograsso, 383 N.J. Super. 470, 473-74
(App. Div. 2006) (refusing to review orders not designated in the
notice of appeal).
8 A-0453-15T3
II.
We first address plaintiffs' argument the court erred by
dismissing Feng's claims due to a lack of standing. We conduct a
de novo review of the orders dismissing claims for lack of
standing. Courier-Post v. Cty. of Camden, 413 N.J. Super. 372, 381
(App. Div. 2010) ("The issue of standing presents a legal question
subject to [an appellate court's] de novo review."). However, when
the court conducts an evidentiary hearing, we are bound by its
factual findings that are supported by substantial credible
evidence in the record. See Rova Farms Resort, Inc. v. Investors
Ins. Co. of Am., 65 N.J. 474, 483-84 (1974).
The issue of standing involves a threshold determination of
the trial court's power to hear the case. N.J. Citizen Action v.
Riviera Motel Corp., 296 N.J. Super. 402, 410 (App. Div.), certif.
granted, 152 N.J. 13 (1997), appeal dismissed, 152 N.J. 361-62
(1998). We have adopted a "broad and liberal approach" on the
issue of standing by a party to maintain an action before the
court. Garden State Equal. v. Dow, 434 N.J. Super. 163, 197 (App.
Div.), certif. granted, 216 N.J. 1, stay denied, 216 N.J. 314(2013). Generally, "a plaintiff must have a 'sufficient stake in
the outcome of the litigation, a real adverseness with respect to
the subject matter, and there must be a substantial likelihood
that the plaintiff will suffer harm in the event of an unfavorable
9 A-0453-15T3
decision.'" Ibid. (quoting N.J. Citizen Action, supra, 296 N.J.
Super. at 409-10).
Although our courts apply a broad approach to standing, it
is not automatic. EnviroFinance Grp., LLC v. Environmental Barrier
Co. LLC, 440 N.J. Super. 325, 340 (App. Div. 2015). "[A] litigant
usually has no standing to assert the rights of a third party."
Bondi v. Citigroup, Inc., 423 N.J. Super. 377, 436 (App. Div.
2011), certif. denied, 210 N.J. 478 (2012); Jersey Shore Med.
Center-Fitkin Hosp. v. Estate of Baum, 84 N.J. 137, 144 (1980).
Moreover, a plaintiff has no standing to assert a statutory claim
where standing is not conferred or implied by the statute. See
Crusco v. Oakland Care Center Inc., 305 N.J. Super. 605, 614-15
(App. Div. 1997); Lascurain v. City of Newark, 349 N.J. Super.
251, 274-75 (App Div. 2002) (finding plaintiff lacked standing to
bring suit under the New Jersey Cemetery Act, N.J.S.A. 8A:1-1 to
-12-6, because the statute did not authorize actions by private
parties); Middlesex Cty. Bar Ass'n v. Parkin, 226 N.J. Super. 387,
392-93 (App. Div.) (finding plaintiff lacked standing to institute
proceeding to remove worker's compensation judges because the
constitutional and statutory authority for removal was vested in
the Governor and Commissioner of the Department of Labor), certif.
denied, 113 N.J. 380 (1988).
10 A-0453-15T3
Here, we first consider Feng's claim the court erred by
finding he lacked standing to prosecute the alleged violation of
the MMWA under count one of the complaint. "[T]he [MMWA] permits
'a consumer who is damaged by the failure of [a] . . . warrantor
. . . to comply with any obligation under . . . a written warranty
[or] implied warranty . . .' to sue warrantors for damages and
other relief including attorneys' fees." Ryan v. Am. Honda Motor
Corp., 186 N.J. 431, 434 (2006) (quoting 15 U.S.C.A. § 2310(d)(1),
(2)).
"[T]o invoke the provisions of the Act, a plaintiff must fall
within one of [the following] three definitions of 'consumer'":
(1) "a buyer (other than for purposes of
resale) of any consumer product";
(2) "any person to whom such product is
transferred during the duration of an implied
or written warranty . . . applicable to the
product"; or
(3) "any other person who is entitled by the
terms of such warranty . . . or under
applicable State law to enforce against the
warrantor . . . the obligations of the
warranty."
[Ibid. (quoting 15 U.S.C.A. § 2301(3).]
Feng contends he has standing to prosecute his MMWA claim
because he qualifies as a consumer within each of the three
statutory categories of the MMWA. He claims the court erred by
holding otherwise. We disagree.
11 A-0453-15T3
The evidence supports the court's determination Feng was not
a buyer of the vehicle and thus did not qualify as a category one
consumer. Feng acknowledges he could not buy the vehicle because
he was not financially able to do so. As a result, he arranged for
Chee to purchase the vehicle. She obtained the financing, the
retail installment agreement identifies her as the buyer, and the
title of the vehicle was issued to her alone.
There is also no evidence supporting Feng's claim he qualifies
as a category two consumer as a transferee of the vehicle during
the warranty period. 15 U.S.C.A. § 2301(3). In order to qualify
as a category two consumer, Feng is required to establish he was
a "person to whom [the vehicle was] transferred during the duration
of an implied or written warranty." Ibid.Here, the title to the vehicle remained at all times in Chee's
name, there was no evidence Chee transferred any legal right to
the possession or use of the vehicle to Feng, and Chee was
prohibited by the retail installment contract from transferring
the vehicle without defendant's authorization, which Feng sought,
but which defendant denied.
We reject Feng's argument that the Affidavit of Sale
demonstrates a transfer of the vehicle from Chee to Feng.
Apparently aware that a transfer of the vehicle is prohibited by
Chee's retail installment contract and would constitute a default
12 A-0453-15T3
under the agreement, the affidavit memorializes a putative sale
only of Chee's "[c]ontract[] warranty, [c]laims and [c]auses of
[a]ction" against defendant and others. The affidavit, to the
extent it also constitutes a contract, simply does not transfer
to Feng any legal right to the vehicle.
We also reject Feng's argument he was a transferee within the
meaning of the MMWA based on his exclusive use of the vehicle
following its purchase. His argument is unencumbered by citation
to any legal authority supporting the notion that a transfer
pursuant to section 2301(3) of the MMWA occurs when a vehicle
owner permits another to use it. In support of his position, Feng
relies only upon the court's analysis of category three consumers
in Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516, 524-27 (7th
Cir. 2003), which has no application to Feng's contention he
qualifies as a category two consumer.
In Voelker, the court rejected the plaintiff's claim he was
a category two consumer, but not based on the lack of a transfer
of the vehicle. Id. at 524. The court considered whether
plaintiff's entry into the lease for the vehicle with the lessor
was a transfer of the vehicle under section 2301(3) of the MMWA.
Ibid. The court determined the plaintiff was not a category two
consumer, because the transfer by way of the lease did not occur
"during the duration of" the warranty as required by the statute.
13 A-0453-15T3
Ibid. Feng does not claim to be a lessee and, thus, Voelker does
not support his contention he is a category two consumer.
In Ryan v. Am. Honda Motor Corp., 376 N.J. Super. 185, 187-
89 (App. Div. 2005), aff'd as modified, 186 N.J. 431 (2006), we
considered whether a lessee of a motor vehicle qualified as a
category two consumer under the MMWA. We explained there was a
conflict among the courts addressing the issue, with some courts
determining a lessee could not qualify as a second category
consumer because the statute required a transfer involving a sale
and passing of title to the transferee. Id. at 193-94; see also
DiCintio v. DaimlerChrysler Corp., 768 N.E.2d 1121, 1126-27
(2002). We also explained other courts have held that if warranties
are issued initially as part of a sale, a subsequent lessee of the
vehicle qualifies as a category two consumer if the lessee leases
and takes possession of the vehicle during the duration of the
warranties. Id. at 197-98; see, e.g., Voelker, supra, 353 F.3d at
524; Parrot v. Daimier-Chrysler, 108 P.3d 922 (App. 2005); Mangold
v. Nissan N. Am., Inc., 809 N.E.2d 251 (2004).
We reasoned that the latter cases represented the more
accurate interpretation of 15 U.S.C.A. § 2301(3), and concluded
lessees could qualify as category two consumers. Id. at 197-99.
In a per curiam decision on the defendants' appeal, the Supreme
Court stated it would not address our conclusion concerning the
14 A-0453-15T3
qualifications for category two consumers, and affirmed solely on
the basis of our separate determination that the plaintiff
qualified as a category three consumer. Ryan, supra, 186 N.J. at
434-35. Thus, the issue of whether a lessee can qualify as a second
category consumer has not been resolved by our Court.7
We need not address or again resolve the precise issue we
addressed in Ryan, supra, 376 N.J. Super. at 196-99, and the court
addressed in Voelker, supra, 353 F.3d at 524, because in those
cases and the others that have addressed the issue, entry into a
lease has been uniformly construed as a transfer of the vehicle
under section 2301(3) of the MMWA. 15 U.S.C.A. § 2301(3). Thus,
those cases required only a determination as to whether the
transfer of the vehicle otherwise qualified the lessee as a
category two consumer.
In contrast, Feng is not a category two consumer because he
failed to establish Chee transferred any legally enforceable right
to the use or possession of the vehicle. Nor could she have
transferred those rights because the retail installment agreement
7
As noted in Justice Rivera-Soto's dissent, it is unclear whether
the Court's decision to affirm based solely on our determination
that the plaintiff qualified as a category three consumer was
intended as a rejection of our determination a lessee can be a
category two consumer. Justice Rivera-Soto stated that he
concurred with the majority to the extent it "disagree[d] with the
Appellate Division and conclude[d]" the plaintiff was not a
category two consumer. Ryan, supra, 186 N.J. at 437.
15 A-0453-15T3
prohibits the assignment of any of her rights to a third-party,
including her right to the vehicle's use, possession or ownership.
Lacking any evidence Chee granted Feng any legally
enforceable right or interest in the vehicle, we are satisfied the
court correctly determined he was not a category two consumer. We
reject Feng's contention that Chee's decision to permit him to use
the vehicle that she had purchased, without more, constitutes a
transfer under section 2301(3) of the MMWA. No legal precedent
supports the contention, and acceptance of it would lead to the
absurd conclusion that anytime the owner of a vehicle loans it to
another, the user becomes a consumer under the MMWA. We find no
support in law or logic for such a result.
We next consider whether the court correctly determined
plaintiff was not a category three consumer under the MMWA. To
qualify as a category three consumer, Feng was required to
establish he "is entitled by the terms of such warranty . . . or
under applicable State law to enforce against the warrantor . . .
the obligations of the warranty." 15 U.S.C.A. § 2301(3). Thus, the
inquiry is dependent in part upon Feng's state law claims for
breach of express (count two) and implied (count five) warranties,
which, as explained further below, are not viable claims under the
facts presented here.
16 A-0453-15T3
An automobile lessee that is assigned rights to a manufacturer
warranty can qualify as a third category consumer under the MMWA.
Ryan, supra, 186 N.J. 435-36. A lessee, "as the assignee of the
dealer's warranty, is entitled to enforce the warranty under New
Jersey law." Id. at 436 (citing Miller Auto Leasing Co. v.
Weinstein, 189 N.J. Super. 543, 546 (Law Div. 1983), aff'd o.b.,
193 N.J. Super. 328 (App. Div.), certif. denied, 97 N.J. 676(1984)).
Thus, an assignee of a buyer's rights to a warranty agreement,
though not the actual "buyer" within the statutory definition, may
nevertheless enforce the warranty agreement in limited
circumstances. Ibid. Plaintiffs' Affidavit of Sale, however, did
not result in an enforceable assignment to Feng of Chee's rights
under the warranties because the retail installment contract
barred Chee's assignment of her contractual rights, Somerset
Orthopedic Assoc., P.A. v. Horizon Blue Cross and Blue Shield of
N.J., 345 N.J. Super. 410, 415 (App. Div. 2001) (finding specific
and express anti-assignment clauses are generally upheld), and
Feng provided no other evidence of a valid assignment of Chee's
warranty rights.
Nevertheless, Feng argues he is entitled to assert the
warranty claims as a third-party beneficiary of the retail
installment contract. We disagree. A non-party cannot enforce a
17 A-0453-15T3
contract unless it "clearly appear[s] that the contract was made
by the parties with the intention to benefit the third party" and
that "the parties to the contract intended to confer upon him the
right to enforce it." First Nat'l State Bank v Carlyle House,
Inc., 102 N.J. Super. 300, 322 (Ch. Div. 1968), aff'd o.b., 107
N.J. Super. 389 (App. Div. 1969), certif. denied, 55 N.J. 316(1970). "The contractual intent to recognize a right to performance
in the third person is the key." Broadway Maint. Corp. v. Rutgers,
90 N.J. 253, 259 (1982).
"When a court determines the existence of 'third-party
beneficiary' status, the inquiry 'focuses on whether the parties
to the contract intended others to benefit from the existence of
the contract, or whether the benefit so derived arises merely as
an unintended incident of the agreement.'" Ross v. Lowitz, 222
N.J. 494, 513 (2015) (quoting Broadway Maint., supra, 90 N.J. at
259). The rights of a third party beneficiary are determined by
the intention of the parties who actually made
the contract. They are the persons who agree
upon the promises, the covenants, the
guarantees; they are the persons who create
the rights and obligations which flow from the
contract. . . . Thus, the real test is whether
the contracting parties intended that a third
party should receive a benefit which might be
enforced in the courts; and the fact that such
a benefit exists, or that the third party is
named, is merely evidence of this intention.
18 A-0453-15T3
[Ibid. (quoting Borough of Brooklawn v.
Brooklawn Hous. Corp., 124 N.J.L. 73, 76-77
(E. & A. 1940)).]
Where there is "no intent to recognize the third party's right to
contract performance," the third party is an incidental
beneficiary, having no contractual standing. Ibid.We are satisfied the record does not support Feng's claim he
is a third-party beneficiary under the retail installment
contract. The dealership may have been aware Feng would use the
vehicle, but the record is devoid of any evidence showing the
dealership or defendant intended "to recognize" a right in Feng
to enforce performance of the contract's terms. Ibid. Therefore,
Feng was not a third-party beneficiary under the retail installment
contract.
Feng does not articulate any viable state law claim that
would otherwise qualify him as a category three consumer under the
MMWA. Although we have recognized that the MMWA effectively removes
"the requirement of privity of contract between the consumer and
the warrantor," Ventura v. Ford Motor Corp., 180 N.J. Super. 45,
59 (App. Div. 1981), the absence of privity in this case would at
most allow Feng to pursue personal injury claims, not economic
loss damages, as a result of the alleged breach of express or
implied warranties. See Spring Motors Distribs. v. Ford Motor Co.,
98 N.J. 555 (1985).
19 A-0453-15T3
A buyer seeking economic loss damages resulting from the
purchase of defective goods can maintain an action for breach of
express or implied warranties pursuant to the Uniform Commercial
Code (UCC), N.J.S.A. 12A:1:101 to 12-26. See Alloway v. Gen. Marine
Indus., L.P., 149 N.J. 620, 627-30 (1997). The UCC "generally
applies to parties in privity," but our courts have construed the
statute to find that under certain circumstances, the absence of
privity is not a bar to maintain such actions. Spring Motors,
supra, 98 N.J. at 582. For example, the lack of vertical privity
amongst parties in a distributive chain, i.e., a supplier,
manufacturer, retailer, and ultimate buyer, does not preclude the
extension of the supplier's warranties made to the purchaser. Id.
at 583-84.
However, Feng's issue is one of "horizontal non-privity,"
or "the relationship between the retailer and someone, other than
the buyer, who has used or consumed the goods." Id. at 584. A
horizontal non-privity plaintiff refers to someone such as the
buyer's spouse or child. Ibid. The UCC extends warranties
horizontally to "any natural person who is in the family or
household of [the] buyer or who is a guest in his home if it is
reasonable to expect that such person may use, consume, or be
affected by the goods and who is injured in person by breach of
the warranty." N.J.S.A. 12A:2-318 (emphasis added). Thus, the lack
20 A-0453-15T3
of privity in this case would only allow Feng to pursue personal
injury claims, not purely economic loss damages.8
In sum, Feng failed to demonstrate he is a category three
consumer under section 2301(3) of the MMWA, and therefore lacked
standing to prosecute violations of the MMWA under count one of
the complaint or the claims for breach of express and implied
warranty under counts two and five.
Moreover, because Feng was neither party to an enforceable
contract providing for the warranties or entitled to assert a
claim as a third party beneficiary, the court correctly dismissed
his claim under count three for breach of the covenant of good
faith and fair dealing.9 See Cumberland Farms, Inc. v. New Jersey
Dep't of Envtl. Prot., 447 N.J. Super. 423, 443 (App. Div. 2016)
8
We also reject Feng's attempt to ignore his lack of third-party
beneficiary status by claiming he is the "true owner" of the
vehicle. Feng's reliance on Verriest v. Ina Underwriters Ins. Co.,
142 N.J. 401, 408 (1995), and Am. Hardware Mut. Ins. Co. v. Muller,
98 N.J. Super. 119, 129 (Ch. Div. 1967), aff'd o.b., 103 N.J.
Super. 9 (App. Div.), certif. denied, 53 N.J. 85 (1968), is
misplaced. Those cases addressed the issue of vehicle ownership
for insurance purposes under the terms of insurance contracts
different than the terms of the retail installment contract at
issue here.
9
Plaintiff's only remaining claim, asserted in count four, alleged
defendant's refusal to honor the warranty agreement violated the
the Consumer Fraud Act, (CFA), N.J.S.A. 56:8-1 to -20. The court's
dismissal of the CFA claim is not challenged in plaintiff's brief
on appeal, and therefore Feng's right to challenge the dismissal
is waived. Jefferson Loan Co., supra, 397 N.J. Super. at 525 n.4;
Zavodnick, supra, 340 N.J. Super. at 103.
21 A-0453-15T3
(finding there can be no breach of the covenant of good faith and
fair dealing in the absence of a contract), certif. denied, __
N.J. __ (2017).
We also reject Feng's argument that defendant "is equitabl[y]
estoppe[d]" from claiming Feng lacked standing by inducing Chee
to sign all of the documents related to the vehicles purchase. To
establish equitable estoppel, Feng was required to prove that
defendant "engaged in conduct, either intentionally or under
circumstances that induced reliance." Knorr v. Smeal, 178 N.J.
169, 178 (2003); accord Berg v. Christie, 225 N.J. 245, 279 (2016).
Feng must also establish defendant made "a knowing and intentional
misrepresentation." O'Malley v. Dep't of Energy, 109 N.J. 309, 317
(1987); accord Berg, supra, 225 N.J. at 279.
Feng presented no evidence and made no allegation that
defendant made misrepresentations related to the purchase of the
vehicle. The evidence showed Feng was advised he did not qualify
for the financing necessary to purchase the vehicle and, in
response, his wife Chee purchased the vehicle instead. Contrary
to Feng's assertion, there was no evidence supporting his equitable
estoppel claim.
III.
Because we affirm the court's dismissal of Feng's complaint,
it is unnecessary to address Feng's challenge to the May 28, 2015
22 A-0453-15T3
order granting defendant's motion for a protective order limiting
plaintiffs' written discovery demands. See, e.g., Lonegan v.
State, 341 N.J. Super. 465, 481 (App. Div. 2001) (appeal of refusal
to grant preliminary restraints mooted by substantive
determination of merits on appeal), aff'd, 176 N.J. 2 (2003). In
any event, we make the following comments.
The court found plaintiffs' 318 interrogatories and fifty-
three document demands were excessive, and granted defendant's
motion for a protective order, reasoning that ruling otherwise
"would cause defendant to suffer an undue burden." We do not find,
and plaintiffs have not established, the court abused its
discretion in its well-reasoned decision to limit plaintiffs'
demands. See Spinks v. Twp. of Clinton, 402 N.J. Super. 454, 459
(App. Div. 2008) (explaining an appellate court "defer[s] to the
'trial court's disposition of discovery matters including the
formulation of protective orders'" (quoting Payton v. N.J. Tpk.
Auth., 148 N.J. 524, 559 (1997))).
Last, we decline to address plaintiffs' arguments concerning
the administrative dismissal of Chee from the case based on her
failure to appear for the court ordered arbitration. The court's
July 9, 2015 order dismissing Chee's complaint pursuant to Rule
4:21A-4(f) was not listed in plaintiffs' notice of appeal. See,
e.g., 30 River Court, supra, 383 N.J. Super. at 473-74 (refusing
23 A-0453-15T3
to review orders not included in the notice of appeal pursuant to
R. 2:5-1(f)(3)(i)). Moreover, plaintiffs do not argue the court's
dismissal order was entered in error. Plaintiffs challenge only
the validity of a letter sent by the court staff to Chee rejecting
her request for a trial de novo. The letter is not an order or
judgment properly subject of the appellate review. R. 2:2-3.
Affirmed.
24 A-0453-15T3