Gutierrez v. Nissan

We represented Mr. Gutierrez in his successful suit against Nissan for compensation for defective brakes.  An abridged case summary with final verdict is below.


State of New Jersey

OFFICE OF ADMINISTRATIVE LAW

INITIAL DECISION

OAL DKT. NO. CMA 11138-02

MARTIN GUTIERREZ,

Petitioner,

NISSAN NORTH AMERICA, INC.

Respondent.

_______________________________________

Howard A. Gutman, Esq. representing Petitioner

Michael Rubin, Esq., representing Respondent

(Cooper, Rose & English , attorneys)

 Record Closed:  January 24, 2003                     Decided: February 13, 2003

BEFORE: SANDRA ANN ROBINSON, ALJ:

 

This matter involved a consumer with brake noise and problems.  Nissan argued that this was a characteristic of the vehicle.  With expert testimony, we were able to show a defect and the Court awarded a full refund.

STATEMENT OF THE CASE

This case arises under the New Jersey Lemon Law Act, N.J.S.A. 56:12-29 to 49, and the implementing regulations of the Division of Consumer Affairs (“Division”), N.J.A.C. 13:45A-26.1 to 13:45A-26.14. Manufacturers of motor vehicles must repair all defects that substantially impair the vehicle’s use, value or safety if reported by the customer within the first 18,000 miles of operation or within two years of delivery, whichever is first. If a manufacturer fails to repair such defects within a reasonable time, the customer is entitled to a speedy administrative remedy. Petitioner claims: that steering and brake problems affect the use, value and safety of the vehicle; that repeated attempts at repair were made; a Last Chance letter was issued and after a last attempt at brake repairs the alleged malfunction remains uncorrected. Petitioner seeks a refund under the New Jersey Lemon Law.

PROCEDURAL HISTORY

By letter dated July 24, 2002, (Petitioner) notified Nissan of North America, Inc. (Respondent) of a potential claim under the Lemon Law Act. On July 30, 2002 Respondent signed a Certified Mail Receipt acknowledging delivery of Petitioner’s letter.

STATEMENT OF ISSUES

(1).      Does Petitioner’s vehicle have nonconformities?

(2).      If there are nonconformities, are those nonconformities defects or conditions, which substantially impair the use, value or safety of the vehicle.

 

SUMMARY OF EVIDENCE

       1. Petitioner

Petitioner’s testimony included a recap of the brake repair requests he gave to dealership repair service personnel and an oral review of the written Dealer Repair Orders for the repair dates in question, as follows:

On 2-7-02 the Petitioner complained because the brake pedal went to the floorboard when the brake was applied in an effort to stop the vehicle. The mileage on the Work Order sheet was 11,472.  The dealership adjusted the rear brakes on 2-7-02. (Exhibit J-4).

On 2-14-02 Petitioner again complained because of feeling that he would lose control of the vehicle when the brake pedal continued to touch the floor board when trying to stop the vehicle and smoke came from the wheel. The mileage on the Work Order sheet was 11,729. (Exhibit J-5).  The dealership checked the master cylinder, calipers, rear brake cylinders and completed a road test, but found no problem.

       2. James Cookingham – Expert Witness For Petitioner

James Cookingham, (Expert) spends 90% of his time as owner/manager of an automotive repair facility and 10% of his time as an expert witness especially for auto cases assisting dealerships.  He also gives evaluations to used auto dealers on what repairs are needed, gives advice to third party independent persons and informs persons or dealerships when nothing is wrong with a vehicle. Expert has a Certificate from the National Institute for Automotive Excellence; Certificate as a Master Certified Mechanic; and is Certified in nine areas of automotive components.

On 11-25-02 Expert listened to Petitioner’s explanation of the problem “so there would be no goose chase”, then he test drove Petitioner’s vehicle, removed the brakes and inspected them. Expert confirmed the replacement of the master cylinder by the dealership. He testified that there was a problem with the brakes and said his foot went to the floor when he applied the brake; and that the vehicle rolled to a stop. He stated that there were no signs of a hydraulic leak but that the rear brake had been adjusted too high and caused the heat (smoke). In his opinion the safety of the vehicle should be questioned because the brake peddle remains too low.

       3. Carlos Ferrara for Nissan (Respondent)

Carlos Ferrara (Respondent) is employed by Nissan North America as a Technical Specialist. He helps dealerships with difficult repair issues. He has been a technician for 10 years and a specialist for 10 years.

On 8-28-02 Respondent made an inspection on Petitioner’s vehicle because of the Last Chance Letter.  He did a six mile road test on Route 1-9 and noticed that the brake pedal felt low “ to his liking”.  He inspected the brakes, pads, rotors, rear drums, adjusted the rear brakes, measured the brake peddle height and adjusted it to the top end of the specifications. Respondent then drove the vehicle again and determined that the brakes then felt normal.

On the day of the OAL hearing, January 24, 2003, Respondent test drove the vehicle again and determined that the brake again felt a little low. Respondent testified that the vehicle stops, but the pedal is lower than he would like or expect it to be. He estimated that the free play was approximately an 8th inch from the floor.

Nissan argued that its representatives verified a brake problem and made the necessary adjustments so as to comply with specifications required in the Manufacturer’s Service Manual.  Nissan noted that the vehicle had not been in an accident and that expert testimony was contradictory with regard to whether the pedal hit the floorboard when the brake was applied. Alternatively, Nissan argued that any defect that may exist does not substantially impair the use, value or safety of the vehicle.

 

LEGAL ANALYSIS AND FINDINGS OF FACT

Most people regard the lease or purchase of a new car as a major investment, “rationalized by the peace of mind that flows from its dependability and safety.” Zabriskie Chevrolet, Inc. v. Smith, 99 N.J. Super 441, 458 (Law Div. 1968). Adoption of the Lemon Law in New Jersey was accompanied by express legislative findings that the purchase of a new motor vehicle is “a major, high cost consumer transaction” and that the absence of an effective procedure for correcting defects in new vehicles results in “a major hardship and an unacceptable economic burden on the consumer.”

If a consumer reports a nonconformity in a motor vehicle to the manufacturer or its dealer during the first 18,000 miles of operation or during the first two years following the date of original delivery to the consumer, whichever is earlier, the manufacturer or the dealer must within a reasonable time make all repairs necessary to correct the nonconformity.  N.J.S.A. 56:12-31.  “Nonconformity” means a defect or condition which substantially impairs the use, value or safety of a motor vehicle.  N.J.S.A. 56:12-30.  It is an affirmative defense that the alleged nonconformity does not substantially impair the use, value or safety of the motor vehicle.  N.J.S.A. 56:12-40.  In a commercial context, “substantial impairment” of the value of an automobile is broadly construed to apply to a nonconformity which “shakes the buyer’s confidence in the goods.” GMAC v. Jankowitz, 216 N.J. Super 313, 339 (App. Div. 1987).

If the manufacturer or its dealer is unable to repair or correct the nonconformity within a reasonable time, the manufacturer must accept return of the vehicle from the consumer and provide a full refund.  N.J.S.A. 56:12-32.  It is presumed that a manufacturer or its dealer is unable to repair or correct a nonconformity within a reasonable time, if substantially the same nonconformity has been subject to repair three or more times by the manufacturer or its dealer or the vehicle was out of service for a total of twenty or more days and the nonconformity continues to exist.  N.J.S.A. 56:12-33(a).

Petitioner and his expert gave credible testimony to the effect that the brakes on the vehicle intermittently will hit the floor or come close to hitting the floor board when the brake is pressed to stop the vehicle.

Based upon evidence presented at the hearing, I FIND:

  1. Petitioner experiences an intermittent problem with the brake system and that the brakes hit the floorboard on occasion and come close to hitting the floor board on other occasions.
  2. Petitioner has experienced the problem at least since 2-7-02 and the problem has continued intermittently until the current date.
  3. Petitioner’s expert, James Cookingham, experienced the

Petitioner’s presentation is persuasive that the condition substantially impairs the safety of the vehicle.  If a vehicle intermittently will not brake properly, the potential for an accident is readily apparent.  Petitioner’s testimony is also persuasive that his safety concerns and those of his child and others have substantially impaired his use of the vehicle.  A reasonable person in Petitioner’s position would be justified in believing that the vehicle is unsafe. Surely Petitioner’s apprehension diminishes the use and enjoyment he gets from the vehicle. Further, assuming that Petitioner is forthright with any prospective buyer about the condition of the vehicle, the value thereof would be substantially impaired.


CONCLUSION

Based upon the above, I CONCLUDE that Petitioner’s Nissan Frontier has a defect which constitutes a nonconformity.  It follows that Petitioner is entitled o a refund pursuant to N.J.S.A. 56:12-32.

The computation of a refund in this matter shall be in accordance with N.J.A.C. 13:45A-26.1. In this instance the total lease price $ 23,272.97 including finance charges, sales tax, license fees, registration fees and any stated credit or allowance for consumer’s used motor vehicle; and the cost of reasonable attorneys fees $ 2,905.00 and expert fees $485.00 shall be used when calculating a refund. A deduction from the total sum of the items above ($26,662.97) shall be calculated to determine a reasonable allowance for vehicle use (multiple the mileage at the time the consumer presents the vehicle to the dealer to correct the nonconformity (11,472 miles), by the total lease price ($23,272.97), then divide by 100,000 miles).

Respondent has not stipulated to the attorney’s and expert’s fees, but did not specifically challenge the amounts thereof.  Based on the foregoing, I CONCLUDE that Petitioner has established by a preponderance of the credible evidence that the defects complained of exists and that it substantially impairs the use, value and safety of the vehicle. I FURTHER CONCLUDE that the Petitioner has established by a preponderance of the credible evidence that the substantial defect entitles Petitioner to relief pursuant to the Lemon Law. I FURTHER CONCLUDE that Petitioner is entitled to judgment of a refund on money expended to date. Nissan is to reimburse Petitioner for the down payment $1,500.00 plus the Lemon Law filing fee of $50.00, plus the total loan payment of $$7,930.50 (assuming February 2003 has been paid). From this amount should be subtracted a usage fee of $2,669.88. In addition Nissan must pay off the remaining loan balance to the lien holder.  The total refund due Petitioner is $6,810.62.

Accordingly, it is ORDERED that:

  1. Petitioner return the subject vehicle to Respondent;
  2. Respondent make a full refund to Petitioner in the amount of  $6,810.62 and pay the remaining loan balance to the lien holders