200 A.3d 398
N.J.2019Background
- Plaintiff Chayim Goodman and his company All the Way Towing, LLC (ATW) contracted with Bucks County International, Inc. (BCI) in February 2011 to buy a custom-built International chassis outfitted with a Dynamic 801 autoloader tow body; ATW paid a $10,000 deposit.
- Dynamic Towing Equipment manufactured the tow body (not the chassis) and was not a signatory to the purchase contract; BCI arranged factory specs and installation.
- Multiple attempted deliveries in Oct–Nov 2011 failed because the tow rig leaked hydraulic fluid, dropped metal parts, and did not operate correctly; ATW rejected the vehicle and demanded a refund, which defendants refused.
- Plaintiffs sued, asserting a claim under New Jersey’s Consumer Fraud Act (CFA); defendants moved for summary judgment arguing the CFA does not apply because the transaction involved a custom, negotiated sale not offered to the public at large.
- The trial court granted summary judgment for defendants on the ground the tow truck was custom-built and thus not "merchandise" under the CFA; the Appellate Division reversed and remanded; the Supreme Court granted certification on whether the CFA covers such a sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a custom-built tow truck with an installed tow rig qualifies as "merchandise" under the CFA (N.J.S.A. 56:8-1(c)) | The CFA's definition is broad and covers custom goods; any member of the public could purchase such a truck, so the sale is within the CFA | Custom, heavily negotiated, business-to-business sales of uniquely fabricated goods are not "offered to the public for sale" and thus fall outside the CFA's scope | The CFA covers the custom tow truck; customization alone does not remove a product from the definition of "merchandise" |
| Whether the commercial nature and sophistication of the parties preclude CFA protection | ATW was not so sophisticated about manufacturing as to remove consumer-protection coverage; transaction resembled a direct consumer purchase | Months-long negotiations between experienced commercial parties (and absence of mass marketing) show the transaction was not sold to the public at large | Sophistication and negotiation are relevant but not dispositive; courts must assess factors (complexity, sophistication, relationship, public availability) to decide applicability |
| Whether prior case law (Finderne, Princeton Healthcare) prevents CFA coverage for customized goods | Those cases are distinguishable because they involved complex financial programs or custom enterprise software requiring expert advice | Finderne and Princeton support limiting CFA where transactions are complex, heavily negotiated, and aimed at a specific sophisticated purchaser | Court rejects conflating customization with complexity; Finderne and Princeton remain applicable where the transaction’s nature shows it was not offered to the public |
| Remedy on remand after holding CFA applies to the product | Plaintiffs seek CFA claim to proceed to trial on merits | Defendants ask for dismissal because plaintiffs allegedly fail to meet other CFA elements | Supreme Court affirms Appellate Division and remands for trial court to decide remaining summary judgment arguments on the record |
Key Cases Cited
- Real v. Radir Wheels, Inc., 969 A.2d 1069 (N.J. 2009) (describing the CFA as a broad legislative broadside against unsavory commercial practices)
- Cox v. Sears Roebuck & Co., 647 A.2d 454 (N.J. 1994) (CFA protects public even when merchant acts in good faith)
- Furst v. Einstein Moomjy, Inc., 860 A.2d 435 (N.J. 2004) (CFA is remedial and construed liberally)
- Czar, Inc. v. Heath, 966 A.2d 1008 (N.J. 2009) (CFA can apply to custom-built home fixtures such as kitchen cabinets)
- Finderne Mgmt. Co. v. Barrett, 955 A.2d 940 (N.J. Super. App. Div. 2008) (transaction’s character, complexity, and sophistication can place it outside CFA)
- Princeton Healthcare Sys. v. Netsmart New York, Inc., 29 A.3d 361 (N.J. Super. App. Div. 2011) (custom enterprise software procured through RFP and lengthy negotiation not a sale "to the public")
- D'Ercole Sales, Inc. v. Fruehauf Corp., 501 A.2d 990 (N.J. Super. App. Div. 1985) (CFA applied in commercial contexts; courts focus on whether unconscionable practice shown)
- DiProspero v. Penn, 874 A.2d 1039 (N.J. 2005) (statutory interpretation begins with plain language)