Triple damage award stands

A Little Falls, N.J., Toyota dealership that canceled a RAV4 owner’s extended service contract without telling her or sending a refund has failed to persuade an appeals court that her damage award was in error.

The Appellate Division of New Jersey Superior Court let stand a triple damage award against the store of $19,678, including the cost of transmission repairs to the RAV4 that would have been covered under the service contract. The dealership, Toyota Universe, had contended the plaintiff’s only ascertainable loss was the purchase price of the service contract.

The two-member appeals panel unanimously ruled Toyota Universe’s actions had violated the state consumer protection law and that a triple damage award had merit. However, it returned the case to the trial judge to detail the reasons for the size of the attorney award — $79,145.

Sara Bacon purchased the RAV4 new from Toyota Universe in May 2008. Ten days after buying the vehicle, she bought a 7-year/100,000-mile Platinum Extra Care Vehicle Service Agreement for $1,816, according to court documents.

In March 2013, she brought the then 5-year-old RAV4 to a different Toyota dealership because of a “banging noise.” She was told she needed more than $6,000 in transmission repairs and further that Toyota Universe had canceled the service contract in August 2008. The court documents cited unrebutted evidence from a mechanic that the necessary repairs would have been fully covered if the extended service contact had remained in effect.

Bacon’s lawyer, Sander Friedman of West Berlin, N.J., said it was unconscionable for the dealership to fail to obtain Bacon’s consent to the cancellation and to fail to refund the service contract price. “They found her money and decided to keep it. There’s no ethics, and that’s the problem,” he said.

He added that Bacon’s vehicle has been “sitting in her driveway for years and years” during the litigation.

In a nonjury trial in Passaic County Superior Court, a judge awarded $6,559.17 in damages for the transmission work — tripled under the consumer protection law to $19,678 — plus the $79,145 in attorney fees.

In its decision, the Appellate Division ruled the trial judge was proper to calculate Bacon’s damages based on the cost of repairs and not merely the refund price of the service contract.

The dealership rejected Bacon’s pretrial offers to settle the case for as little as $10,000, including attorney fees, according to court documents. The dealership’s lawyer didn’t respond to questions from Automotive News.