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Date: 02-04-2020
Case Style:
Bernice Pisack v. B & C Towing, Inc.; Eptisam Pellegrino v. Nick's Towing Service, Inc.; Christopher Walker v. All Points Automotive & Towing, Inc.
Case Number: A-17/18-18
Judge: Jaynee LaVecchia
Court: SUPREME COURT OF NEW JERSEY
Plaintiff's Attorney: Isabella R. Pitt, Deputy Attorney General
Defendant's Attorney:
Description:
Need help finding a lawyer for representation for putative class actions challenging the fees charged in connection with the non-consensual towing of vehicles in New Jersey?
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This appeal concerns consolidated putative class actions challenging the
fees charged in connection with the non-consensual towing of vehicles at the
direction of local police.1 The putative class plaintiffs brought lawsuits against
the towing companies that had municipal contracts to provide the towing
services. These consolidated actions involve a common set of facts. None of
the named plaintiffs consented to the towing of their vehicles. Each had his or
her vehicle towed at the direction of local police. And, each plaintiff was
charged for the non-consensual tow by a privately owned towing company that
had a contract with the respective local government to perform that towing
service.
In addition to a common set of basic facts, the actions asserted common
legal claims. Plaintiffs alleged that the fees imposed by the private companies
violated the Predatory Towing Prevention Act (Towing Act or the Act),
N.J.S.A. 56:13-7 to -23, the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to
211, and the Truth-in-Consumer Contract, Warranty and Notice Act
(TCCWNA), N.J.S.A. 56:12-14 to -18.
1 There were initially three actions that were separately considered at the trial court level and consolidated before the Appellate Division into a single opinion. One action, captioned as Walker v. All Points Automotive & Towing, Inc., has not been appealed to this Court.
5
Defendants not only dispute plaintiffs’ ability to pursue their causes of
action but assert that amendments made to the Towing Act after the Appellate
Division issued its decision should be applied retroactively and would
essentially resolve these disputes.
Because the Towing Act lies at the center of this appeal, we begin by
reviewing that Act and the amendments thereto and by determining which
version of the legislation applies in this case.
I.
We first summarize the Towing Act, in the form in which it existed
when these causes of action arose; we then turn to the recent legislative
amendment of that Act and consider whether the amendments apply
retroactively, as defendants urge, or prospectively.
A.
In 2008, the Legislature enacted the Towing Act, L. 2007, c. 193
(codified at N.J.S.A. 56:13-7 to -23), for the stated purpose “to create a
coordinated, comprehensive framework to establish and enforce minimum
standards for tow truck operators,” N.J.S.A. 56:13-8(e) (2008).2 The
2 The Legislature has since changed all references to “tow truck operators” to “towing companies.” See L. 2018, c. 165. At the same time, the Legislature also changed the use of the word “consumer” in the Towing Act to “person.” Ibid. In this discussion, we adhere to the terminology of the version of the Towing Act in effect at the time these causes of action arose.
6
Legislature found that prior regulation of towing and towing companies was
“fragmented among various State agencies and local governments,” was
“inconsistent or inadequate,” and provided “insufficient recourse . . . under the
law.” N.J.S.A. 56:13-8(d). In addition, the Legislature found that some
towing companies engaged in predatory practices such as “charging
unwarranted or excessive fees.” N.J.S.A. 56:13-8(a), (b). In particular, the
Legislature found companies were “overcharging consumers for towing
services provided under circumstances where the consumer ha[d] no
meaningful opportunity to withhold consent.” N.J.S.A. 56:13-8(b).
Accordingly, the Legislature enacted the Towing Act, stating, as it was
advancing this reform legislation, its intent to stop “predatory towing, where a
vehicle is removed without the owner’s notice or consent and the owner is
charged an exorbitant fee for the vehicle’s return.” A. Consumer Affairs
Comm. Statement to A. 4053 1 (May 17, 2007).
As enacted in 2008 and, where noted, amended by the Legislature in
2009, the Towing Act requires the Director of the Division of Consumer
Affairs (Director) to “establish a schedule of private property and other non
consensual towing and related storage services for which a towing company
may charge a service fee.” N.J.S.A. 56:13-14(a). The Act instructs the
Director to “specify services that are ancillary to and included as part of basic
7
. . . towing services for which no fees in addition to the basic towing service
fee may be charged.” Ibid. And, the Act renders it unlawful for towing
companies “[t]o charge a fee for private property or other non-consensual
towing or related storage service not listed on the schedule of services for
which a fee may be charged as established by the director except as may be
permitted by the director by regulation.” N.J.S.A. 56:13-16(f)(1).3 The
3 The quoted language reflects the 2009 amendment to the Towing Act. See L. 2009, c. 39, § 6. The original 2008 version stated:
It shall be an unlawful practice for any towing company . . . [t]o charge any fee other than any applicable contract rate or, in the absence of an applicable contract rate, the lesser of the rate set forth in an applicable schedule of fees or other charges established by municipal ordinance adopted pursuant to section 1 of L. 1979, c. 101 ([N.J.S.A.] 40:48-2.49) or the rate specified in the towing company’s tariff on file with the director, or to charge a fee in an amount or for a service not listed on the tariff on file with the director at the time except as may be permitted by the director by regulation. Nothing in this section shall preclude a towing company, acting on behalf of a club or association, from charging members of the club or association a fee at a rate established by contract between the towing company and the club or association which is lower than the rate specified in the towing company’s tariff on file with the director, provided that membership in such club or association is
8
Towing Act makes breach of its provisions a violation of the CFA. N.J.S.A.
56:13-21(a). In addition to remedies available under the CFA, the Towing Act
provides that “the director may order a towing company that has billed a
consumer for any non[-]consensual towing or related storage an amount
determined by the director to be unreasonable to reimburse the consumer for
the excess cost with interest.” N.J.S.A. 56:13-21(b).4
As required by N.J.S.A. 56:13-14(a), the Director promulgated a
schedule of permitted fees for non-consensual towing and related storage
services. See N.J.A.C. 13:45A-31.4. Plaintiffs allege that, in violation of the
Towing Act, the towing company defendants here charged them fees that were
generally available to the public and that such rates are filed with the director pursuant to section 8 of this act.
[L. 2007, c. 193, § 10.]
4 The quoted language here also reflects the 2009 amendment. See L. 2009, c. 39, § 10. The 2008 version stated: In addition to any penalties or other remedies provided in L. 1960, c. 39 ([N.J.S.A.] 56:8–1 et seq.), the director may order a towing company that has billed a consumer or insurer an amount in excess of the fee specified in its filed tariff for the service provided to reimburse the consumer or insurer for the excess cost with interest.
[L. 2007, c. 193, § 15.]
9
authorized by municipal ordinance but were outside the schedule established
by the Director. Thus, this appeal springs from the conflict between what
defendants charged and what appears in the Director’s schedule.
The trial courts and Appellate Division addressed plaintiffs’ claims in
each of the individual matters based on the law in effect at the time under the
Towing Act and the Director’s regulations promulgated pursuant to his
authority under that Act.
B.
After the Appellate Division rendered its decision in Pisack v. B&C
Towing, Inc., 455 N.J. Super. 225 (App. Div. 2018), however, the Legislature
amended the Towing Act, see L. 2018, c. 165.
1.
Among the amendments effected by the 2018 legislation, the Legislature
added a new subsection to N.J.S.A. 56:13-16, which provides in pertinent part:
Nothing contained in any provision of the [Towing Act] shall be construed to prevent a towing company from charging a reasonable fee for storage of a vehicle that has been subject to non-consensual towing authorized by a law enforcement officer of this State or by any political subdivision of this State. Nothing contained in any provision of the [Towing Act] shall be construed to prevent a towing company from charging fees for non-consensual towing or related storage services in accordance with a duly-authorized fee schedule established by a municipality or other political subdivision of this State with respect to a vehicle that
10
has been subject to non-consensual towing authorized by a law enforcement officer of this State or the political subdivision, and there shall be a rebuttable presumption that fees charged in accordance with a fee schedule are not unreasonable or excessive.
[L. 2018, c. 165, § 3(i) (codified at N.J.S.A. 56:1316(i)) (emphasis added).]
The amendatory legislation stated that it would “take effect immediately,” L.
2018, c. 165, § 5; it therefore became effective when signed into law on
December 20, 2018.
Defendants contend that the new section explicitly permits the practices
challenged here, that is, the charging of “fees for non-consensual towing or
related storage services in accordance with a duly-authorized fee schedule.”
We turn first to their contention that the new section 16(i) should govern here,
even though it took effect after the events that gave rise to this appeal.
2.
“Settled rules of statutory construction favor prospective rather than
retroactive application of new legislation.” James v. N.J. Mfrs. Ins. Co., 216
N.J. 552, 563 (2014). In determining whether a statute applies retroactively, a
court’s analysis will focus on “whether the Legislature intended to give the
statute retroactive application.” Ibid. (quoting In re D.C., 146 N.J. 31, 50
(1992)). We recognize three scenarios that justify retroactive application of a
11
legislative amendment: “(1) when the Legislature expresses its intent that the
law apply retroactively, either expressly or implicitly; (2) when an amendment
is curative; or (3) when the expectations of the parties so warrant.” Ibid.
Here, the Legislature did not state that the 2018 amendments to the
Towing Act would have retroactive effect. Rather, the Legislature provided
that the 2018 amendatory legislation “shall take effect immediately.” L. 2018,
c. 165, § 5. Those “words bespeak an intent contrary to, and not supportive of,
retroactive application.” Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33,
48 (2008); accord Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 389
(2016).
Still, defendants maintain that the 2018 legislation should be given
retroactive effect because it was intended to be curative, and they point to the
language in a Statement that accompanied the bill when introduced:
The bill also clarifies that the Act does not prevent towing companies from charging a reasonable fee for storage of a vehicle that has been subject to nonconsensual towing authorized by a law enforcement officer of this State or by a political subdivision if the law enforcement officer or an agent or employee of the political subdivision initiates, directs, orders, or requests the non-consensual towing of the vehicle. The bill further clarifies that the Act does not prevent towing companies from charging fees set forth in a duly-authorized fee schedule established by a municipality or other political subdivision of the State for non-consensual towing of a vehicle or related storage fees when such service is authorized by a law
12
enforcement officer or a political subdivision. The bill establishes a rebuttable presumption that fees charged in accordance with such a fee schedule are not unreasonable or excessive.
[Sponsor’s Statement to A. 4782 6 (L. 2018, c. 165); accord A. Appropriations Comm. Statement to A. 4782 (L. 2018, c. 165).]
Essentially, that language mirrors the language of the bill and describes it as
clarifying. However, defendants’ reliance on the verb “clarifies” as dispositive
of curative status is simply misplaced and is legally insufficient to satisfy the
meaning of a curative amendment entitled to retroactive effect.
A statutory provision can be curative if it is “designed to ‘remedy a
perceived imperfection in or misapplication of the statute.’” James, 216 N.J.
at 564 (quoting Schiavo v. John F. Kennedy Hosp., 258 N.J. Super. 380, 386
(App. Div. 1992)); see also Ardan v. Bd. of Review, 231 N.J. 589, 611 (2018).
That said, amendatory legislation is deemed curative “if it does ‘not alter the
act in any substantial way, but merely clarifie[s] the legislative intent behind
the [previous] act.’” James, 216 N.J. at 564 (alterations in original) (quoting
2nd Roc-Jersey Assocs. v. Town of Morristown, 158 N.J. 581, 605 (1999)).
Case law has consistently recognized that an amendment may be treated as
curative provided it “do[es] not establish different or new standards” but rather
is “designed to reaffirm and clarify the existing standards.” See D.C., 146 N.J.
at 51. Our Court recently noted that “a legislative amendment is not
13
considered ‘curative’ merely because the Legislature has altered a statute so
that it better serves public policy objectives.” Ardan, 231 N.J. at 612 (first
citing James, 216 N.J. at 572; then citing Johnson, 226 N.J. at 391-92).
The 2018 legislation incorporating the new subsection (i) substantially
changed the Towing Act in a major way. Prior thereto, the Act’s plain
language restricted the imposition of fees for non-consensual towing and
related services to those fees included in the schedule the Director was
required to promulgate. With the pre-2018 version of the Towing Act, the
Legislature expressly and unambiguously provided that it is unlawful “[t]o
charge a fee for a private property or other non-consensual towing or related
storage service not listed on the schedule of services for which a fee may be
charged as established by the director except as may be permitted by the
director by regulation.” N.J.S.A. 56:13-16(f)(1). Now, the 2018 amendatory
language qualifies that provision, stating that a towing company may charge
“fees for non-consensual towing or related storage services in accordance with
a duly-authorized fee schedule established by a municipality or other political
subdivision of this State.” L. 2018, c. 165, § 10(i) (codified at N.J.S.A. 56:13
16(i)).
The difference between the two iterations of the law is stark. Prior to
the amendment, it was unlawful for a towing company to charge a fee not
14
included within the Director’s schedule. N.J.S.A. 56:13-16(f)(1) (2017).
After the amendment, towing companies may charge fees not included in the
Director’s schedule if the fee is authorized by a municipal ordinance. N.J.S.A.
56:13-16(i) (2018). With that significant change, the Legislature substantively
deviated from its prior approach in the Towing Act; the amendment therefore
cannot be considered curative. The descriptor “clarifying” on which
defendants seek to rely, moreover, is insufficient on its own to render the
amendment curative: the substantial change we have detailed here cannot
become something less than it is by use of the descriptor “clarifying” when
describing the amendment.
Finally, retroactive application of the 2018 amendments is not warranted
based upon the parties’ expectations in this matter. The evidence and briefing
submitted to the trial court and Appellate Division indicated that all parties
expected the issues in this appeal to be governed by the prior version of
N.J.S.A. 56:13-16, which provided that the Director’s schedule controls the
universe of permitted fees for non-consensual towing and related storage
services. See Ardan, 231 N.J. at 613. The “expectations of the parties” do not
come into play on the retroactivity here. See ibid.
15
Accordingly, we conclude that the 2018 legislation amending the
Towing Act does not have retroactive effect and has no application in the
present matter.
II.
We turn now to briefly summarize the facts and procedural histories as
they were addressed by the Appellate Division in its consolidated opinion
involving these three matters.
A.
In Pisack v. B&C Towing, Inc., the Newark police contacted defendant
B&C Towing, Inc. (B&C), to tow plaintiff Pisack’s illegally parked vehicle.
455 N.J. Super. at 234. Although the vehicle belonged to plaintiff, her son was
the primary driver, and he was the one who had parked it illegally. Ibid.
Plaintiff’s son retrieved the vehicle from B&C and paid the fee. Ibid. B&C
charged $152.45 for the non-consensual service. Ibid. After plaintiff’s son
paid the fee, defendant provided him with an invoice that itemized the charges
for towing, labor, an administrative fee, storage, and tax. Ibid.
Plaintiff filed a verified complaint in Superior Court against B&C,
alleging that the $50.00 administrative fee -- $25.00 of which was required by
the contract between the City of Newark and B&C, and $25.00 of which was
permitted by a city ordinance -- violated the Towing Act. Ibid. In addition,
16
plaintiff included consumer claims under the CFA and the TCCWNA. She
also filed for class certification. Id. at 235.
Following an unsuccessful motion to dismiss by defendant and ensuing
discovery phase, the matter proceeded on cross-motions for summary
judgment, with the court granting defendant summary judgment and
dismissing plaintiff’s complaint. Ibid. The motion court reasoned as follows:
Plaintiff is not entitled to sue under the TCCWNA because she had no
contractual relationship with defendant. Ibid. Next, the Towing Act requires
exhaustion of administrative remedies prior to bringing an action under the Act
in Superior Court, which plaintiff failed to do. Ibid. Third, defendant has
derivative immunity from suit under the Tort Claims Act (TCA)5 because the
towing company was performing the functions as directed by the police. Ibid.
Finally, with respect to the fees charged by defendant, all were authorized by a
city ordinance. Ibid. As the motion court explained, “N.J.A.C. 13:45A-31.5
provides that a fee for non-consensual towing will be presumed unreasonable
[only] if it exceeds the maximum amount that may be charged for the service
according to a schedule of fees set forth in municipal ordinance.”
In Pellegrino v. Nick’s Towing Services, Inc., plaintiff Pellegrino was
involved in a motor vehicle accident, after which her vehicle was towed at
5 N.J.S.A. 59:1-1 to 12-3.
17
police direction by defendant Nick’s Towing Services, Inc. Id. at 235.
Pellegrino was charged and paid $448.36 for that tow. Ibid. Defendant later
mailed her an invoice listing a flatbed/towing charge, yard charge,
crash/collision wrap charge, credit card surcharge, administrative fee, sweep
roadway/clean up charge, storage fee, and tax. Ibid.
Pellegrino filed a verified complaint on behalf of herself and others
similarly situated, alleging that the charges in the invoice violated the Towing
Act. She also brought claims under the CFA and TCCWNA. Id. at 235-36.
Defendant moved to dismiss the complaint for failure to state a claim upon
which relief may be granted pursuant to Rule 4:6-2(e). The court denied that
motion but also held that plaintiff may pursue her action only individually and
not on behalf of a class. Id. at 236. Contrary to the court’s ruling on Pisack’s
complaint, the motion court here did not regard Pellegrino’s failure to exhaust
administrative remedies as preventing her from bringing an action in court.
See ibid.
A third matter was consolidated in the appeal before the Appellate
Division. Id. at 232. In Walker v. All Points Automotive & Towing, Inc., a
member of the River Edge Police Department directed that Walker’s vehicle be
towed after discovering Walker’s vehicle registration had expired. Id. at 232
33. Defendant All Points Automotive & Towing, Inc. towed the vehicle to its
18
storage yard and charged Walker $290.85 for the non-consensual services,
which included, among other charges, $35.00 for an administrative fee
permitted by local ordinance. Id. at 233.
Walker filed a verified complaint against defendant, alleging that the
administrative fee violated the Towing Act and that the invoice presented by
defendant violated the TCCWNA. Walker’s complaint was dismissed on
summary judgment.6 Ibid.
B.
In a consolidated opinion, the Appellate Division reversed all three
motion court orders and remanded for further proceedings. Id. at 231-32. We
granted motions for leave to appeal filed by defendants B&C Towing and
Nick’s Towing. 236 N.J. 24, 25 (2018); 235 N.J. 477 (2018). No petition was
filed in the Walker matter.
The Appellate Division’s consolidated opinion addressed numerous
common issues presented in the matters that comprised the appeal: it
6 The Walker motion court concluded that the Towing Act requires exhaustion of administrative remedies and that plaintiff failed to attempt to resolve the present matter with the Director before filing his complaint. The court also determined that defendant acted lawfully when imposing a charge consistent with local ordinance because the court did not view the Towing Act as preempting municipal ordinances that impose local fees for non-consensual towing.
19
explained that the Towing Act does not require a preliminary exhaustion of
administrative remedies prior to filing a complaint in Superior Court, Pisack,
455 N.J. Super. at 242; it considered and rejected the argument that defendants
have derivative immunity under the TCA because the private towing
companies were directed by the local police to tow plaintiffs’ vehicles, id. at
244; it emphasized that the Towing Act expressly contemplates a CFA action,
id. at 245; and it addressed the pivotal question whether the pre-2018 Towing
Act limited the types of services for which a towing company can charge a fee
and held that towing charges must be consistent with the limitations provided
by the Act and its regulations, id. at 245-47.
In that last, and core, component of its holding, the Appellate Division
carefully reviewed and relied on the plain language of the pre-2018 version of
the Towing Act, which required the Director to “establish a schedule of private
property and other non-consensual towing and related storage services for
which a towing company may charge a service fee.” N.J.S.A. 56:13-14(a).
The Act then provided that it is
an unlawful practice for any private towing company or any other towing company that provides nonconsensual towing services . . . [t]o charge a fee for a private property or other non-consensual towing or related storage service not listed on the schedule of services for which a fee may be charged as established
20
by the director except as may be permitted by the director by regulation.
[N.J.S.A. 56:13-16(f)(1).]
The Director’s implementing regulations reinforced that command by
providing that “[a] towing company shall not charge any fee for private
property towing or other non[-]consensual towing and related storage services
not included in [the Director’s schedule].” N.J.A.C. 13:45A-31.4(e). Given
that statutory and regulatory language, the Appellate Division reached the
indisputable conclusion that “if a service is not listed on the Director’s
schedule, a towing company cannot charge for that service.” Pisack, 455 N.J.
Super. at 247. That sound interpretation of the plain language of the pre-2018
Towing Act is perfectly congruent with our reading of that legislation in
connection with our analysis of the retroactivity of the 2018 amendments to
the Act.
Finally, the Appellate Division addressed whether any of plaintiffs’
asserted claims can be pursued as class actions, holding that, depending on the
facts developed post-discovery, violations of the Towing Act and the CFA, as
well as the TCCWNA, may be challenged in a class action. Id. at 250.
We affirm the thorough and thoughtful decision of the Appellate
Division authored by Judge Gilson as to those issues, including the remand as
21
to the Towing Act and CFA claims, substantially for the reasons expressed in
the Appellate Division opinion. We address separately the Appellate
Division’s discussion of whether plaintiffs can pursue claims under the
TCCWNA.
III.
A.
The Appellate Division held that the TCCWNA provides a cause of
action for vehicle owners who received towing bills with prohibited charges.
Id. at 249.
The TCCWNA provides that
[n]o seller, lessor, creditor, lender or bailee shall in the course of his business offer to any consumer or prospective consumer or enter into any written consumer contract or give or display any written consumer warranty, notice or sign after the effective date of this act which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed. [N.J.S.A. 56:12-15.]
That provision further defines a consumer as “any individual who buys, leases,
borrows, or bails any money, property or service which is primarily for
personal, family or household purposes.” Ibid.
22
The Appellate Division first concluded that vehicle owners are
consumers within the meaning of the TCCWNA. Pisack, 455 N.J. Super. at
247. The court reasoned that vehicle owners are defined as consumers under
the Towing Act, and that the Towing Act and the TCCWNA should be
construed consistently. Id. at 247-48. According to the court, both the Towing
Act and TCCWNA are remedial legislation intended to protect consumers and,
as such, it is “logical to give consistent construction to terms used in both
statutes.” Id. at 248. Further, the court reasoned that a vehicle owner is a
consumer under the TCCWNA because such owners bail their vehicles to the
towing companies. Ibid. While acknowledging that bailment is generally
established by contract, the court noted that a formal contract is not needed.
Ibid. Thus, “when towing companies take a vehicle, they are doing so as
bailees.” Ibid. Therefore, vehicle owners are consumers under the
TCCWNA, which defines consumers as individuals who, inter alia, bail
property. Ibid.
Second, the appellate court concluded that the bills issued by the towing
companies constitute consumer contracts or notices within the meaning of the
TCCWNA. Id. at 249. The court reasoned that the TCCWNA is entitled to
broad construction given its remedial purpose and, as such, a writing need not
be a formal contract, warranty, notice, or sign to fall under the TCCWNA’s
23
reach. Id. at 248-49. Further, the court reasoned that the bills and invoices
given to vehicle owners are required to complete the consumer transaction
because the Towing Act regulations (1) assume that the towing companies will
issue a bill for non-consensual towing services and (2) require towing
companies to keep the invoices for such non-consensual towing services for
three years. Id. at 249 (citing N.J.A.C. 13:45A-31.4(i) to (k); N.J.A.C.
13:45A-31.9(a)(1)).
Finally, the court concluded that the prohibited charges billed by the
towing companies “are the type of deceptive consumer transaction that the
Legislature aimed to prevent under the TCCWNA.” Ibid. The court reasoned
that the inclusion of such prohibited charges in the bill deceived the vehicle
owners into thinking that such charges are enforceable. Ibid. However, the
charges were not permitted by the Towing Act and, therefore, violated a
clearly established right or responsibility under the TCCWNA. Ibid.
B.
We begin our review of this issue by examining the fundaments of a
TCCWNA action in order to assist our determination of whether the statute
was contemplated for use in this type of circumstance.
The Legislature enacted the TCCWNA “to prevent deceptive practices in
consumer contracts.” Dugan v. TGI Fridays, Inc., 231 N.J. 24, 68 (2017)
24
(quoting Kent Motor Cars, Inc. v. Reynolds & Reynolds Co., 207 N.J. 428,
457 (2011)); see also Spade v. Select Comfort Co., 232 N.J. 504, 515 (2018).
To assert a claim under the TCCWNA, a plaintiff must establish
first, that the defendant was a “seller, lessor, creditor, lender or bailee or assignee of any of the aforesaid”; second, that the defendant offered or entered into a “written consumer contract or [gave] or display[ed] any written consumer warranty, notice or sign”; third, that at the time that the written consumer contract is signed or the written consumer warranty, notice or sign is displayed, that writing contains a provision that “violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee” as established by State or Federal law; and finally, that the plaintiff is an “aggrieved consumer.”
[Spade, 232 N.J. at 516 (alterations in original) (quoting N.J.S.A. 56:12-15, -17).]
The TCCWNA issue in this appeal turns on whether plaintiffs can satisfy
the first two elements. If plaintiffs can establish those two elements, we do not
view the third or fourth elements as impediments. That said, we are
unpersuaded that plaintiffs satisfy the first two elements necessary for a
TCCWNA claim.
With respect to the first element, the owners of vehicles subjected to
non-consensual towing clearly were not buying, leasing, or borrowing any
money, property, or services from the towing companies. It would distort the
ordinary usage of such terms to view these defendant towing companies as
25
sellers, lessors, creditors, or lenders. The Appellate Division agreed but found
that the companies are “bailees” under the Act when they “take a vehicle.”
Pisack, 455 N.J. Super. at 248.
“The elements of ‘bailment’ are delivery of personal property by one
person to another in trust for a specific purpose, acceptance of such delivery,
and express or implied agreement to carry out the trust and return of the
property to the bailor.”7 Mattson v. Aetna Life Ins. Co., 124 F. Supp. 3d 381,
393 (D.N.J. 2015) (quoting Sgro v. Getty Petroleum Corp., 854 F. Supp. 1164
1174-75 (D.N.J. 1994)). Here, pursuant to direction by police officers, the
towing companies had lawful possession of the plaintiffs’ vehicles, but the
vehicles were towed at the direction of the police without the plaintiffs’
consent. Pisack, 455 N.J. Super. at 232. Thus, while the privately owned
towing companies contracted with the municipalities to perform towing
services, we do not view that as creating, in essence, an express or implied
contract between the vehicle owners and the companies for purposes of a
TCCWNA analysis.
7 See also Black’s Law Dictionary 174 (11th ed. 2019) (defining “bailment” as “[a] delivery of personal property by one person (the bailor) to another (the bailee) who holds the property for a certain purpose, usu. under an express or implied-in-fact contract”).
26
We acknowledge that New Jersey law is not fully settled with respect to
“whether, in addition to possession and control, a contract is essential to the
existence of a bailment.” McGlynn v. Parking Auth. of Newark, 86 N.J. 551,
557 (1981). There is a trend toward “deemphasiz[ing] the contractual feature
of the transaction and to emphasize the nature of the relationship between the
parties when one transfers possession of goods to another.” Ibid. (citing
Marsh v. Am. Locker Co., 7 N.J. Super. 81, 84 (App. Div.), aff’d o.b., 6 N.J.
81 (1950)); see also State v. Carr, 118 N.J.L. 233, 234 (Sup. Ct. 1937) (noting
bailment “is a relationship that ordinarily rests in contract” but acknowledging
“a class of bailments, quasi-contractual in nature” where one must keep
property “safely and restore it or deliver it to the owner”).
Here, no contract existed between the vehicle owners and the towing
companies when the companies towed the vehicles. Once the companies had
lawful possession of the vehicles, one could argue that they became the bailees
of the property, despite the lack of contract, and had to safely deliver the
property to the owner. See Carr, 118 N.J.L. at 234. However, it seems far
from clear that a non-consensual or involuntary bailment is what the
Legislature had in mind for purposes of authorizing a TCCWNA action that is
premised on the idea that it is a consumer contract remedy.
27
The purpose of the TCCWNA is “to prevent deceptive practices in
consumer contracts.” Dugan, 231 N.J. at 68 (emphasis added) (quoting Kent
Motor Cars, Inc., 207 N.J. at 457). “[T]he Legislature enacted the TCCWNA
to permit consumers to know the full terms and conditions of the offer made to
them by a seller or of the consumer contract into which they decide to enter.”
Shelton v. Restaurant.com, Inc., 214 N.J. 419, 442-43 (2013) (emphases
added). There was no “meeting of the minds” here between the vehicle owners
and the towing companies before the vehicles came into the companies’
possession. See Pisack, 455 N.J. Super. at 232. Plaintiffs here did not agree to
form a contractual relationship with defendants because they did not agree to
have their cars towed. Thus, while in certain circumstances the law may
recognize that a bailment exists without a contract -- imposing one out of
fairness and for the protection of the property -- we do not see its role in
supporting the existence of a TCCWNA claim. For bailment to constitute a
contract for purposes of such a claim, we believe that the Legislature likely
intended contractual bailments for purposes of the TCCWNA, if at all.
And, as for the second element of a TCCWNA claim, namely whether
defendants can be said to have offered or entered into a written consumer
contract or gave or displayed any written consumer warranty, notice, or sign, it
bears noting at the outset that the only writing exchanged between the
28
plaintiffs and the towing companies was the list of charges, which was
provided after the plaintiffs paid to retrieve their vehicles. See Shelton, 214
N.J. at 441-42. The Appellate Division determined that “[t]he bills issued by
the towing companies are consumer contracts and notices within the meaning
of the TCCWNA.” Pisack, 445 N.J. Super. at 249. The court reasoned that the
bills “act as the ‘writings required to complete the consumer transaction’”
because the Towing Act regulations require towing companies to issue a “bill”
for non-consensual towing services. Ibid. (quoting N.J.S.A. 56:12-1).
As remedial legislation, the TCCWNA is “entitled to a broad
interpretation.” Shelton, 214 N.J. at 442. However, the court’s interpretation
is quite expansive. The towing companies gave the “bills” to the vehicle
owners after they paid to retrieve their cars. We simply cannot accept that
such after-the-fact “bills” constituted a contract or notice to plaintiffs when
plaintiffs had already paid the amount demanded to recover their cars. That
could not constitute a “meeting of the minds.” The vehicle owners had no
choice but to pay the fee in order to retrieve their cars.
Given the contractual underpinning of the consumer remedy that the
TCCWNA is designed to accomplish, that cause of action is ill-suited as a
vehicle for plaintiffs to assert claims relating to their non-consensual
relationship with the towing companies.
29
Because we are persuaded that plaintiffs cannot meet the first two
elements of a TCCWNA cause of action, we need not delve deeply into the
other two elements.
Suffice it to say, as to the third element of a TCCWNA claim, that a
plain reading of N.J.S.A. 56:13-16(f)(1) of the Towing Act and its
accompanying regulation, N.J.A.C. 13:45A-31.4(e), makes clear that the
services and fees delineated by the Director encompassed the entire universe
of appropriate fees that could be charged by a towing company in the context
of such private non-consensual towings prior to the 2018 amendment. Thus,
“if a service is not listed on the Director’s schedule, a towing company cannot
charge for that service.” Pisack, 455 N.J. Super. at 247. Because the
defendant towing companies charged for services not listed on the Director’s
schedule, they violated the regulation. In violating the regulation, defendants
violated a “clearly established legal right” under the TCCWNA. Therefore,
charging a fee not permitted by N.J.A.C. 13:45A-31.4(a) and (e) can be a
violation under the TCCWNA if the other elements of the statute are met. See
Spade, 232 N.J. at 520.
Finally, as to the fourth element, we have no doubt that plaintiffs can
establish that they are aggrieved consumers. In Spade, we held that “[i]n the
absence of evidence that the consumer suffered adverse consequences as a
30
result of the defendant’s regulatory violation, a consumer is not an ‘aggrieved
consumer’ for purposes of the TCCWNA.” 232 N.J. at 524. But here,
plaintiffs paid the unlawful fees -- fees that were outside the scope of the
Director’s schedule in violation of N.J.A.C. 13:45A-31.4(a) and (e). Thus,
plaintiffs clearly suffered an “adverse consequence[]” because they paid more
than they would have had the towing companies followed the regulation. See
Spade, 232 N.J. at 524.
Notwithstanding their ability to establish the final two elements of a
TCCWNA claim, plaintiffs failed to establish elements one and two. They
therefore cannot state a cause of action under the TCCWNA.
Outcome: For that reason, we reverse the portion of the Appellate Division’s
judgment reinstating plaintiffs’ TCCWNA claims. We affirm the judgment of
the Appellate Division on all other points, substantially for the reasons set
forth in that court’s opinion. That includes the appellate court’s holding that
towing charges must be consistent with the limitations provided by the Act and
its regulations. Having determined that the 2018 amendments were intended to
apply prospectively, we agree with that court’s construction of the pre-2018
Act.
The judgment of the Appellate Division is affirmed in part and reversed
in part.
Plaintiff's Experts:
Defendant's Experts:
Comments: