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United Consumer Financial Services Co. v. Carbo

Superior Court of New Jersey, Appellate Division

May 19, 2009, Argued; October 22, 2009, Decided

DOCKET NO. A-5501-06T2

Opinion

 [*291]  [**13]   The opinion of the court was delivered by

GRALL, J.A.D.

This appeal is from orders entered on claims pursued by a certified class consisting of consumers who entered into substantially similar retail installment sales contracts with distributors who sell Kirby vacuum cleaners door-to-door. 1 The trial court's  [*292]  rulings on class certification, liability, injunctive relief, damages, counsel  [***2] fees and pre-and post-judgment interest were made on a series of motions decided between May 21, 2004 and June 6, 2007. None of the issues were tried.

 [**14] Plaintiff United Consumer Financial Services Company (UCFSC), which accepts assignments of retail installment contracts obtained by door-to-door sellers of Kirbys, commenced the litigation to collect the amount defendant William Carbo owed on his retail installment contract with door-to-door seller A & M Merchandising, Inc. (A & M). Carbo filed a counterclaim against UCFSC and a third-party complaint against A & M, and he obtained class certification authorizing the identification of additional Kirby distributors who used similar contracts and the consumers who accepted them.

The class prevailed on claims alleging violations of the Door-to-Door Retail Installment Sales Act, N.J.S.A. 17:16C-61.1 to -61.9; the Retail Installment Sales Act, N.J.S.A. 17:16C-1 to -61; and the Truth-in-Consumer Contract, Warranty and Notice Act, N.J.S.A. 56:12-14 to -18. Pursuant to N.J.S.A. 56:12-17,  [***3] each of the 16,845 class members was awarded a civil penalty of $ 100, without pre-or post-judgment interest, and is exempt from payment of interest due during the three-year period of a preliminary injunction that restrained enforcement of the contracts. UCFSC and the distributors are jointly and severally liable for the civil penalty. In addition, they must pay class counsel $ 25,852.10 for costs and a fee of $ 1,008,583.20, which includes fifty-percent enhancement of the lodestar. Injunctive relief was also awarded; the permanent injunction bars use of the contract in its present form. 2 An order implementing the judgment was entered on June 6, 2007.

Class claims alleging violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, and the Licensed Lenders Act, N.J.S.A. 17:11C-1 to -50; [*293]  fraud; breach of contract; violation of the covenant of good faith and fair dealing; and unjust enrichment were dismissed. UCFSC's claim against Carbo was settled and dismissed after the class claims were resolved.

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410 N.J. Super. 280 *; 982 A.2d 7 **; 2009 N.J. Super. LEXIS 230 ***

UNITED CONSUMER FINANCIAL SERVICES COMPANY, PLAINTIFF-APPELLANT/CROSS-RESPONDENT, v. WILLIAM CARBO, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT/CROSS-APPELLANT, v. A & M MERCHANDISING, INC.; J & N DISTRIBUTING CO., INC.; FDR ENT., INC./TRI COUNTY KIRBY; XCEL ENTERPRISES, L.L.C.; AKVAC, L.L.C.; UNION COUNTY KIRBY CO.; A & C DISTRIBUTING CO., INC.; OMEGA TRADING, INC.; ADVANCE KIRBY; N.J. EASY-VAC. CO.; MSB MARKETING; BCK DISTRIBUTORS, INC.; OMNI CONCEPTS, INC.; J AND N DISTRIBUTING CO.; J.W. MARKETING & DIST., INC.; JMC GENERATION SYSTEM, L.L.C.; PRESTIGE MERCHANDISING CO., INC.; K QUALITY CORP.; BES ASSOC., INC.; ALL CITY VACUUM, INC.; POCONO KIRBY; TPR ENTERPRISES; RAS MANAGEMENT, INC.; GENERATION THREE; BROOKDALE MERCHANDISING; BROOKLYN/QUEENS MERCHANDISING; R-W MERCHANDISING; LBA DISTRIBUTORS; MGM DISTRIBUTORS; K.Q. SYSTEMS; KIRBY CENTER OF ORANGE COUNTY; AND K & M DISTRIBUTING COMPANY, THIRD-PARTY DEFENDANTS-RESPONDENTS/ CROSS-APPELLANTS, AND NORTHERN MARKETING GROUP, INC.; SULCO INDUSTRIES, INC.; INTERSTATE MARKETING, INC.; A & B INTERNATIONAL; E.C.M.A., INC.; D & M HOME CARE PRODUCTS ENT.; KIRBY OF NEWBURG; VINI MERCHANDISING, INC.; AAACTION KIRBY, INC.; A & H MERCHANDISING, INC.; D. WOOD MERCHANDISING, INC.; MB MERCHANDISING, INC.; KIRBY OF ROCKLAND; F.Y.F. ENT. D/B/A BERLIN KIRBY; NKA ENTERPRISES; JBK KIRBY DISTRIBUTING; A & T INTERNATIONAL, INC.; LBS ENTERPRISES; HUDSON VALLEY KIRBY; ANECSA SUCCESS CORP.; PREMIERE II SERIES, INC.; INTERCITY MARKETING, INC.; RHM MARKETING, INC.; K & J ASSOCIATES; D.M.C. ENTERPRISES, INC.; D.J. ENTERPRISES; J.D.K. DISTRIBUTORS; AVKKO ENTERPRISES; SOUTH BAY DISTRIBUTING; D.C. DISTRIBUTORS; K.D.C. ASSOCIATE KIRBY, INC.; JDF & ASSOCIATES, INC.; DOMESTIC TECHNOLOGIES; E.J. LIM ENTERPRISES, INC.; P.M.C. ENTERPRISES; AND A.V. ASSOCIATES, THIRD-PARTY DEFENDANTS.

Subsequent History:  [***1] Approved for Publication October 22, 2009.

On remand at United Consumer Fin. Servs. Co. v. Carbo, 2010 N.J. Super. Unpub. LEXIS 2311 (Law Div., Jan. 29, 2010)

Prior History: On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3438-02.

United Consumer Fin. Servs. Co. v. Carbo, 2004 N.J. Super. Unpub. LEXIS 5 (Law Div., Apr. 8, 2004)

CORE TERMS

consumer, notice, seller, trial court, distributors, civil penalty, contracts, buyer, cancellation notice, retail installment sale, printed, cancel, door-to-door, cooling-off, violations, class action, retail, rights, injunction, preempted, class certification, member of the class, class claim, state law, post-judgment, enhancement, regulation, duplicate, lodestar, courts

Civil Procedure, Special Proceedings, Class Actions, Certification of Classes, Prerequisites for Class Action, Commonality, Judicial Officers, Judges, Discretionary Powers, Antitrust & Trade Law, Consumer Protection, Home Solicitation, Federal & State Interrelationships, Federal Common Law, Preemption, Federal Trade Commission Act, US Federal Trade Commission, Governments, Legislation, Interpretation, Deceptive & Unfair Trade Practices, State Regulation, Regulated Practices, Private Actions, Remedies, Damages, Punitive Damages, Appeals, Standards of Review, Abuse of Discretion, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees, Basis of Recovery, Statutory Awards, Judgment Interest, Postjudgment Interest, Remands, Reviewability of Lower Court Decisions, Preservation for Review