TYLER J. HATFIELD VS. FCA US LLC (L-0287-18, BURLINGTON COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE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-3194-18T2
TYLER J. HATFIELD,
Plaintiff-Appellant,
v.
FCA US LLC,
Defendant-Respondent.
________________________
Argued January 9, 2020 – Decided June 3, 2020
Before Judges Nugent and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Burlington County, Docket No. L-0287-18.
Jason Greshes argued the cause for appellant (Kimmel
& Silverman, PC, attorneys; Shannon Ray Harkins and
Robert M. Silverman, on the brief).
Walter F. Kawalec, III argued the cause for respondent
(Marshall Dennehey Warner Coleman & Goggin,
attorneys; Walter F. Kawalec, III, on the brief).
PER CURIAM
This is a Lemon Law case. The trial court granted defendant FCA US
LLC's motion to dismiss the complaint with prejudice due to plaintiff Tyler J.
Hatfield's alleged spoliation of evidence. The court based its opinion on
evidence obtained in violation of the attorney-client privilege, on
representations made by defense counsel at oral argument unsupported by
defendant's expert, and on the unsupported supposition the vehicle that was the
alleged lemon was no longer available for inspection by defendant's expert.
Plaintiff appeals. We vacate the order of dismissal and remand for further
proceedings.
I.
Plaintiff's Purchase of the Vehicle and its Repair History
The pleadings and evidence on the motion record disclose the following
facts. Defendant manufactured the 2013 Fiat 500 Sport that plaintiff purchased
as a certified pre-owned vehicle from Fiat of Maple Shade (the "Dealership").
Plaintiff purchased the Fiat on January 6, 2017. The total sales price was
$15,086.20. The Fiat had 41,326 miles on its odometer. It came with a standard
"6-year/80,000-Mile" warranty. According to the complaint, "[t]he parties'
bargain includes an express 3-year/36,000 mile warranty." The Fiat began
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having problems the month after plaintiff purchased it. He took the car to the
Dealership for repairs four times within the next ten months.
The first time, February 23, 2017, the month after plaintiff purchased the
Fiat, he noticed the check engine light was on. The Dealership repair record
states: "Correction[:] reflash lates [sic] updates." Three months and three days
later, on May 26, 2017, plaintiff returned because the check engine light was on
again. The Dealership repair record states: "Cause[:] vehicle needs new purge
valve and purge hose." The repair record further states: "Correction[:] valve in
stock and hose will need to be ordered—5-10 busy [sic] days."
One month later, on June 27, 2017, plaintiff returned a third time due to
problems with the moonroof. The Dealership repair record states: "Concern[:]
Customer states moonroof not operating properly." The record identifies the
cause as "broken left side guide on moonroof" and the correction as "replace
guide and repair tracksublet to autosunroof." 1
Less than five months later, on November 13, 2017, plaintiff returned for
a fourth time because the check engine light had come on again. The Dealership
record states the cause as "evap code" and the repair as "replaced evap fuel vent
line."
1
The parties use the terms "moonroof" and "sunroof" interchangeably.
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Discovery and the Fiat's Resale to the Dealership
Plaintiff filed his complaint on February 7, 2018. Defendant answered on
April 2, 2018, and included in its answer a demand for "an inspection of the
vehicle in question pursuant to N.J.R. 4:18-1," as well as "the right to observe
any inspection conducted by an expert utilized by [p]laintiff." The court issued
a track assignment notice that provided for 150 days of discovery , with an end
date of August 30, 2018. The parties, by consent, extended the discovery end
date to October 29, 2018.
In April 2018, plaintiff notified defendant that "an inspection has been
scheduled in the above matter for 6/5 @ 1pm at the address below[.]" The
inspection proceeded as scheduled at the designated address.
Both parties had experts present: Scot Turner, a Master Automobile
Technician and Certified Professional Estimator for plaintiff, and Henry Gill, a
mechanical expert for defendant. Turner averred in an affidavit: "I know Mr.
Gill from my regular interactions with him in his capacity as a mechanical expert
and representative of [defendant]. . . . It is commonplace for Mr. Gill to attend
inspections on behalf of [defendant]. . . ." According to Turner, Gill was present
for the entire inspection and test drive of the vehicle. In his July 25, 2018
report—which [defendant] acknowledges receiving—Turner explained that
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when he inspected the vehicle he "scanned the vehicle for diagnostic trouble
codes and found code P1CEA00 for Boost Side EVAP Purge System
Performance." He also examined the sunroof.
In his report, before summarizing the Dealership's excuses for the ongoing
delay in obtaining the parts needed to repair the Fiat's "evap system," plaintiff's
expert recounted the Fiat's repair history. According to the report, the Fiat "was
originally put into service on October 30, 2012." The report continues:
"Chrysler warranty records show that prior to it being sold to [plaintiff] as a Fiat
Certified Pre-Owned vehicle, repairs were made for the same defects he
experienced with it after purchasing it including repairs to the evaporative
emission control system and the sunroof track." The report enumerates and
describes the repairs to the vehicle made before plaintiff bought it. These repairs
were made in April 2015, October 2016, and December 2016, with the last repair
being made sixteen days before plaintiff purchased the Fiat from the Dealership.
Among other opinions, Turner concluded that as a result of the
Dealership's failure to remedy the Fiat's problems and defendant's failure to
honor its warranties, the Fiat's use and value were "substantially impaired." He
further concluded the Fiat had diminished in value by 23.1 percent of the
purchase price. The report states in pertinent part:
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The purchaser of a manufacturer's certified pre-
owned vehicle has the assurance of the manufacturer
that it has been thoroughly inspected by its authorized
dealer prior to sale and any faults have been corrected.
The manufacturer also assures the purchaser that its
authorized dealers have the training, technical
information, factory assistance and tools to properly
service the vehicle. With these assurances, the
purchaser has the expectation that the vehicle they are
purchasing will be in excellent condition at the time and
place of delivery and not fraught with defects, and,
should a problem arise its dealers have the ability to
effectively repair it. As reflected by its repair history,
Mr. Hatfield's 500 Sport, and Fiat and its dealers have
not met those expectations and assurances.
The use of this vehicle has been substantially impaired
by its repeated failure to operate as designed or
intended, the unreasonable number of times it has had
to be returned attempting to have substantially the same
defects in its material and workmanship corrected, the
excessive number of days it has been out of service or
had to be operated in a defective condition, and by
difficulty obtaining satisfactory repairs from authorized
Chrysler repair facilities.
With regards to a reasonable number of repair attempts,
car manufacturers and consumers expect dealerships to
correct issues on the first repair attempt with a "fix it
right the first time" or similar mantra. This vehicle was
not repaired in the number of repair attempts expected
by a manufacturer or by a consumer, and in fact has
never been repaired by Fiat's authorized dealers.
The value of this vehicle was been substantially
impaired to Mr. Hatfield who never received the value
of the Fiat Certified Pre-Owned vehicle and the
warranties for which he paid. The vehicle he purchased
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had already been subject to repair for the same
problems that he experienced after he purchased it. The
vehicle he received was not free from significant or
recurrent defects or conditions, and corrective efforts
made under Fiat's warranty were not made in a
reasonable period of time or number of repair attempts.
As of July 24, 2018, Mr. Hatfield was still waiting for
a part to correct the evaporative emission system
diagnostic trouble code and Check Engine light, and
Fiat's dealer was refusing to make any further repairs to
the moon roof. These are failures of FCA US LLC to
honor its warranties. Furthermore, a vehicle with an
illuminated Check Engine warning light fails a state
administered emission inspection, making it ineligible
to have a state safety inspection performed.
....
According to the "Kell[e]y Blue Book, there are 5
categories that describe the condition of a used vehicle:
"Excellent, Very Good, Good, Fair, and Poor." One
expects a new vehicle under warranty to be in
"excellent" condition at the time and place of
acceptance, and also expects that a used vehicle still
under warranty would also be considered to be in
excellent mechanical condition throughout the
warranty period. A vehicle with significant or recurrent
warranty defects could not be considered "excellent."
Considering this vehicle's history and Chrysler's
substandard fulfillment of its warranties, I would
categorize the condition of this vehicle at the time and
place of [of] acceptance and during its warranty period
as being between "fair" and poor conditions, with fair
being described by KBB as having "cosmetic or
mechanical problems and needs servicing," and poor
being described as having problems that cannot be
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readily corrected. This vehicle's repair history is
consistent with those descriptions.
There is a 23.1 % difference between the value of this
vehicle in Kelley Blue Book excellent condition and its
value between fair and poor conditions. That 23.1%
difference, deducted from the purchase payments,
represents the difference in the value of this vehicle, as
warranted (to be free from significant or recurrent
defects or conditions) and as delivered, (with the
defects and conditions described in its repair history).
That amount is $2,917.
On June 7, 2018, two days after Turner completed his initial inspection,
but several weeks before he submitted his report, defendant served plaintiff with
discovery, including a "Request for Production of Documents Addressed to
Plaintiff." The request included a demand for production of "[t]he subject
vehicle and all components thereof, for purposes of non-destructive testing and
examination of the vehicle by [defendant] or its representatives, to be produced
at an appropriate time and place to accomplish said testing and examination."
Defendant did not request a specific date or time to inspect the car until more
than four months later, on October 19, 2018.
In September 2018—nearly three months after defendant served its
discovery request and a month before defendant gave plaintiff a date for
inspection of the Fiat—plaintiff again returned to the Dealership. The Fiat's
check engine light was on and there was "blue smoke" coming from the tailpipe.
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Concerning the engine light, the Dealership's September 4, 2018 repair order
states: "Cause[:] evap purge valve needed[.] Correction[:] part unavailable until
11/30/18 at the earliest." Concerning the blue smoke, Dealership personnel
could not confirm there was any blue smoke, but changed the car's oil.
Three days later, defendant deposed plaintiff. When asked if the Fiat still
had problems, plaintiff said the moonroof was still broken, and the Dealership
"refused to warranty it again." When asked if he had immediate plans to sell the
car, plaintiff responded he was considering a trade-in. Asked if he had taken
any steps to do so, plaintiff told defendant's counsel he had gone to a dealership
in Pennsylvania where he had been offered $4000. The deposition record does
not disclose that defendant's counsel said anything about inspecting the car
before plaintiff traded it in.
On September 18, 2018, the Fiat's check engine light came on again.
Plaintiff returned to the Dealership, where he was informed the Fiat's turbo
charger needed to be replaced but the required part was on national back order.
In addition, due to his observation of blue smoke and low oil, he was required
to return after he had driven 500 more miles so the Fiat's oil consumption could
be checked. The Dealership would not provide him with a loaner until the part
arrived.
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Concerned about further damaging the Fiat by driving it with a defective
turbo charger and "evap" purge valve, in need of transportation, and left with no
other options, plaintiff sold the Fiat back to the Dealership. He received $4500,
but due to the amount he originally financed and the balance he owed, he ended
up paying $3061.23. The sellback occurred on October 1, 2018. Plaintiff
averred he "did not intentionally destroy, alter, or lose the vehicle. To the
contrary, [he] sold the vehicle so it would not be destroyed or altered by being
driven with a defective turbo charger and evap purge valve."
On Friday, October 19, 2018, ten days before discovery ended, defense
counsel's paralegal wrote an email to plaintiff's counsel's secretary at 4:00 p.m.
with this request: "I would like to schedule plaintiff's vehicle inspection on
October 29, 2018 at 12:45 p.m. at Fiat of Maple Shade. Please confirm this date
and time as soon as possible." On Monday, October 22, 2018, in an email sent
at 12:39 p.m., the secretary responded that she had just been made aware the
vehicle "has been sold back to FIAT" and she attached supporting documents
evidencing the car had been sold back to the Dealership. Four days later, on
October 26, 2018, the Dealership sold the car to a third party. Defendant made
no attempt to extend discovery or to locate the car.
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Defendant's Motion to Dismiss
On December 26, 2018, after the parties twice adjourned arbitration,
defendant filed a "Notice of Motion to Dismiss" based on spoliation of evidence.
Defendant did not support the motion with a certification from its expert or any
evidence from its expert. Consequently, the court had no competent information
about what the defense expert could or could not conclude from the documentary
evidence generated by the Dealership and his presence at the inspection of the
Fiat that had taken place.
During argument on the motion, the following exchange occurred between
the court and plaintiff's attorney:
[The Court]: What did you tell your client about
maintaining the car for purposes of having the
inspections?
[Counsel]: I told my client that it was our very strong
recommendation that he retain the vehicle throughout
the discovery period and if, for some reason, he was
unable to retain the vehicle, he should contact us so that
we could give the defendant notice.
[The Court]: All right. And did he contact you before
selling the vehicle so you could give the defendant
notice?
[Counsel]: No, Your Honor. I did not get a direct
phone call before he decided to do that. We were made
aware at the deposition that he was considering it but I
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did not get a phone call. I only got one after the vehicle
had been sold.
[The Court]: All right. So he didn't abide by your . . .
instructions?
[Counsel]: Unfortunately not, Your Honor.
Defense counsel represented to the court that the defense expert typically
conducted his inspection of vehicles in such cases "at an automobile facility
where there's a service bay available to do a thorough inspection." Counsel also
told the court, "[t]ypically, our expert's test drives are longer so - - and, in my
opinion, more - - just much more thorough than plaintiff's expert's inspection."
After summarizing plaintiff's allegations, defense counsel added, "[s]o, there's
certainly the allegation that the servicing dealer's repair attempts were
unsuccessful but we have no way of defending that claim, Judge, because
plaintiff deprived FCA the opportunity to inspect the vehicle." Counsel did not
disclose to the court whether he was repeating what his expert said or merely
advocating based on his experience with the expert in prior cases and his
supposition about what the expert could or could not do in the present case.
The court granted defendant's motion to dismiss. In its oral opinion
delivered from the bench following argument, the court found plaintiff "took it
upon himself to deprive both counsel from really adequately representing their
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clients and he directly violated his attorney's instructions." Finding plaintiff had
left defendant "defenseless in this case," and reiterating "the plaintiff knew that
he wasn't supposed to do it and he did it," the court dismissed the complaint with
prejudice.
The trial court denied plaintiff's motion for reconsideration. This appeal
followed.
II.
Because we are reviewing the trial court's application of legal
consequences that flow from mostly undisputed facts, our review is de novo.
See Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995) ("A trial
court's interpretation of the law and the legal consequences that flow from
established facts are not entitled to any special deference."). Our analysis is
informed by fundamental principles surrounding motion practice. Motions
"based on facts not appearing of record or not judicially noticeable" may be
presented "on affidavits made on personal knowledge, setting forth only facts
which are admissible in evidence to which the affiant is competent to testify."
R. 1:6-6. "Affidavits by attorneys of facts not based on their personal knowledge
but related to them by and within the primary knowledge of their clients
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constitute objectionable hearsay." Pressler and Verniero, Current N.J. Court
Rules, cmt. on R. 1:6-6 (2020).
We also consider the interplay between these principles and those
concerning spoliation. The term spoliation, "as its name implies, is an act that
spoils, impairs or taints the value or usefulness of a thing." Rosenblit v.
Zimmerman, 166 N.J. 391, 400 (2001) (citing Black's Law Dictionary 1409 (7th
ed.1999)). Spoliation occurs when a party, usually an adverse party, hides or
destroys "litigation evidence." Id. at 400-01. Remedies for spoliation include
discovery sanctions and adverse inferences, Robertet Flavors, Inc. v. Tri-Form
Constr., Inc., 203 N.J. 252, 272 (2010), and in some instances "a separate tort
action against the spoliator." Rosenblit, 166 N.J. at 403.
When selecting an appropriate remedy, courts must be guided by the goals
served by such remedies: "to make whole, as nearly as possible, the litigant
whose cause of action has been impaired by the absence of crucial evidence; to
punish the wrongdoer; and to deter others from such conduct." Robertet Flavors,
Inc., 203 N.J. at 273 (quoting Rosenblit, 166 N.J. at 401). In considering the
extent to which a party has been prejudiced by spoliation, courts "should also
recognize that the non-spoliating party may bear some of the responsibility for
the loss of the evidence." Id. at 281.
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Courts must also consider the time the spoliation is discovered. Id. at 273.
"Spoliation that becomes apparent during discovery or trial often can be
addressed effectively through the use of ordinary discovery sanctions, such as
preclusion, or through adverse inferences." Ibid. (citing Rosenblit, 166 N.J. at
401-02).
The Supreme Court's "admonition concerning the circumstances in which
the harsh and draconian remedy of dismissal may be used" is another
consideration. Id. at 274. Dismissal "will normally be ordered only when no
lesser sanction will suffice to erase the prejudice suffered by the non-delinquent
party." Ibid. (quoting Zaccardi v. Becker, 88 N.J. 245, 253 (1982)).
Guided by these principles, we conclude the trial court's order dismissing
the complaint must be vacated. The trial court concluded plaintiff deliberately
spoliated evidence and thereby deprived defendant of the opportunity to obtain
an expert's opinion and present it at trial. But the court's conclusion concerning
plaintiff's state of mind was based on inferences derived from information
obtained in violation of the attorney-client privilege. In addition, the court's
conclusion concerning defendant's inability to obtain an expert opinion was
unsupported by competent evidence on the motion record.
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Communications between lawyers and their clients, in the course of their
relationship, made in professional confidence, are privileged. N.J.S.A. 2A:84A-
20; N.J.R.E. 504. There are exceptions, but not one of the exceptions identified
in the rule is asserted here. There is no blanket exception for judicial inquiries.
"The privilege shall be claimed by the lawyer unless otherwise instructed by the
client or [the client's] representative[.]" N.J.S.A. 2A:84A-20; N.J.R.E. 504.
Here, neither the court nor plaintiff's counsel apparently gave any consideration
to the privilege. Counsel's response to the court's question about advice she
gave plaintiff became a major argument point for defense counsel and formed a
significant part of the basis for the court's opinion dismissing the case.
The court's conclusion about plaintiff's deliberate spoliation in selling the
Fiat back to the authorized dealer from whom he purchased it is also
questionable. In making the finding, the court did not comment on plaintiff's
disclosure at his deposition, to defense counsel, that he had taken steps to trade
in the Fiat. The court had no information about when plaintiff's counsel told
plaintiff to preserve the Fiat, whether plaintiff believed defendant's expert had
inspected the car at the same time plaintiff's expert had inspected it, or whether
plaintiff might have considered that defendant had access to the Fiat through its
authorized dealership, from whom plaintiff purchased it, and to whom he
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eventually resold it. Indeed, plaintiff certified he sold the Fiat back, at a
considerable loss, because he needed transportation and did not want to damage
it by driving it in a condition the Dealership could not repair.
We need not decide, however, whether violation of the attorney-client
privilege would, without more, be grounds for reversing the court's decision.
The court's conclusion that the defense expert could not render an opinion was
based on nothing the expert said, but rather on statements made by defense
counsel during oral argument on the motion, which are hardly competent
evidence. The defense expert, who was present when plaintiff's expert inspected
the Fiat, provided no information as to whether he could or could not render an
opinion.
It is not insignificant that the defense expert was present for the inspection
of the Fiat. Nor is it insignificant that the defense expert had access to all the
information plaintiff's expert relied upon in formulating his expert opinion.
These considerations raise an obvious question: why was the defense expert
unable to render an opinion based on the same data that served as the foundation
for plaintiff's expert's opinion?
The trial court not only overlooked these considerations, but also
apparently overlooked plaintiff's theory of liability. Plaintiff's theory of
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liability, based on his expert's opinion, was the Dealership failed to remedy the
mechanical problems with the car, within a reasonable time, after having
multiple opportunities to do so. The court never questioned why the defense
expert could not have rendered an opinion based on the available information
and his presence at the inspection, or how, if at all, defendant's expert's
"inspection" of the Fiat at the Dealership would have undermined plaintiff's
expert's opinion.
Nor did the court give due consideration to whether defendant contributed
in any way to the alleged spoliation by waiting until the last extended discovery
end date to inspect the Fiat and by failing to notify the Dealership not to resell
the Fiat after learning plaintiff had resold it to the Dealership. Perhaps most
important, the trial court gave little or no consideration to whether spoliation
had occurred.
The Dealership resold the Fiat and presumably could identify the name
and address of the purchaser. Defendant made no effort to determine through
the Dealership whether the Fiat remained in New Jersey or whether the owner
could or would voluntarily produce it for inspection.
The trial court's oversights are significant, particularly in view of the
Supreme Court's admonition that the ultimate sanction of dismissal with
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prejudice should be a remedy of last resort. The imposition of that sanction in
this case was grounded on incompetent evidence and unsupported suppositions.
Accordingly, the trial court's order of dismissal is vacated, and the matter is
remanded for further proceedings consistent with this opinion.
Vacated and remanded. We do not retain jurisdiction.
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