Opinion
DOCKET NO. A-3080-12T1
2013-10-10
WILLIAM E. BOOS, Plaintiff-Appellant, v. LAURA BESSEN NICHTBERGER, Defendant, and CARFAX, INC., Defendant-Respondent.
H. Benjamin Sharlin argued the cause for appellant (Maselli Warren, P.C., attorneys; Paul J. Maselli, of counsel and on the brief; Mr. Sharlin, on the brief). Khaled J. Klele argued the cause for respondent (Riker Danzig Scherer Hyland & Perretti, LLP, attorneys; Mr. Klele, of counsel and on the brief; Kellen F. Murphy, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano, Sabatino, and Rothstadt.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. DC-4593-12.
H. Benjamin Sharlin argued the cause for appellant (Maselli Warren, P.C., attorneys; Paul J. Maselli, of counsel and on the brief; Mr. Sharlin, on the brief).
Khaled J. Klele argued the cause for respondent (Riker Danzig Scherer Hyland & Perretti, LLP, attorneys; Mr. Klele, of counsel and on the brief; Kellen F. Murphy, on the brief). PER CURIAM
Plaintiff William Boos appeals the Special Civil Part's entry of summary judgment, dismissing his negligence action against defendant Carfax, Inc. ("Carfax"). Plaintiff claimed that Carfax negligently disseminated a misleading report about his automobile. Plaintiff contends that, as a result of Carfax's alleged mischaracterization of the damage to his car in a motor vehicle accident, he received a reduced trade-in value for the vehicle from a car dealership. Although the motion judge recited numerous reasons for granting Carfax summary judgment, we affirm his order on the sole basis that plaintiff failed to present a genuine issue of material fact showing that Carfax was a proximate cause of his loss.
I.
The pertinent facts are relatively uncomplicated. We summarize them in a light most favorable to plaintiff as the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
On April 6, 2011, plaintiff's wife was driving his 2010 Cadillac Escalade ESV in Lawrence Township when she was rear-ended by Laura Bessen Nichtberger's vehicle while stopped in traffic. According to the report of the police officer who investigated the accident, the Cadillac "had damage to the rear bumper from the initial impact. No damage was visible on the front of [the] vehicle[.]"
The police report indicated that the collision involved three vehicles. The report stated that the third vehicle, driven by Nichtberger, hit the second vehicle, driven by plaintiff's wife, after Nichtberger had apparently misjudged the distance in front of her. When the Cadillac was hit in the rear, the force of the collision apparently caused the Cadillac to push forward into the rear of the first vehicle, driven by Alison Chmielewski. According to the police report, Chmielewski's vehicle was not damaged, while Nichtberger's car sustained damage to the front bumper and grille.
Although Nichtberger and Chmielewski were both named as co-defendants in the lawsuit along with Carfax, plaintiff voluntarily dismissed his claims against Chmielewski. Plaintiff subsequently filed a stipulation of dismissal with prejudice as to Nichtberger after Nichtberger's own motion for summary judgment was denied.
Plaintiff disputes that his Cadillac ever came into contact with Chmielewski's vehicle. He also contends that the damage to his rear bumper was minimal, necessitating only repairs to the rear bumper cover and a trailer hitch at an estimated cost of $1,273.62.
Carfax is a data compilation service that provides vehicle history information for parties looking to buy and sell used cars and trucks. A typical Carfax vehicle history report may include title information, flood damage history, odometer readings, number of owners, total loss accident history, and accident indicators.
In his certification filed in support of its motion for summary judgment, Vince Luckey, Carfax's manager of product support and data escalations, explained that his company uses information from "numerous third-party sources that it has relationships with" to compile its vehicle history reports. Such sources include "motor vehicle agencies, rental and fleet vehicle companies, consumer protection agencies, state inspection stations, fire and police departments, manufacturers, inspection companies, service and repair facilities[,] etc."
Luckey further certified that because his company reports only information that it receives from its sources, Carfax "cannot report vehicle information if the information was not reported to [it]." According to Luckey, if Carfax does not have a relationship with a particular source, the company cannot report any vehicle information that such a source may have. As a result of these limitations, Luckey explained, "each Carfax [r]eport contains clear and unambiguous disclaimers that state that the Carfax [r]eport only contains the vehicle information that has been reported to Carfax."
The standard format of a Carfax vehicle report contains the following pertinent disclaimer language:
This CARFAX Vehicle History Report is based only on information supplied to CARFAX and available as of [date] at [time]. Other information about this vehicle, including problems, may not have been reported to CARFAX. Use this report as one important tool, along with a vehicle inspection and test drive, to make a better decision about your next used car.This disclaimer language appears to be presented in the same size and font as the substantive contents of the vehicle history report itself.
. . . .
Not every accident or damage event is reported and not all reported are provided to CARFAX. Details about the accident or damage event when reported to CARFAX (e.g. severity, impact location, airbag deployment) are included on the Vehicle History Report. CARFAX recommends you obtain a vehicle inspection from your dealer or an independent mechanic.
. . . .
CARFAX DEPENDS ON ITS SOURCES FOR THE ACCURACY AND RELIABILITY OF ITS INFORMATION. THEREFORE, NO RESPONSIBILITY IS ASSUMED BY CARFAX OR ITS AGENTS FOR ERRORS OR OMMISSIONS IN THIS REPORT. CARFAX FURTHER EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.
On March 12, 2012, a Carfax vehicle history report was generated for plaintiff's Cadillac, although plaintiff himself did not purchase the report. In particular, the Carfax report stated: "Accident reported[.] It hit another motor vehicle[.] Rear area primarily damaged[.] Involving rear impact[.]" The report was purchased from Carfax by a car dealership, Coleman Buick GMC Cadillac ("Coleman").
Coleman was not named as a defendant or a third-party defendant in this litigation.
Before completing the transaction with plaintiff, Coleman performed an inspection and appraisal of the Cadillac. According to plaintiff, he explained to the dealership's representative the details of the accident and the nature of the repairs that were performed. The dealership determined that the Cadillac's trade-in value should be reduced by $2000 from its customary value. According to plaintiff, Coleman's sales manager, Chris Covino, told him that the basis for the diminution in value was "the accident itself, and the March 12, 2012 Carfax report." However, a letter to Boos on Coleman letterhead from Covino dated August 9, 2012 did not mention the Carfax report. It stated only the following:
On March 17th 2012 you traded a 2010 Cadillac Escalade ESV into us. Unfortunately, we were not able to give you the potential full value of the Escalade due
to the fact that the vehicle was involved in an accident. This accident decreased the value of the vehicle by $2000[.]
[Emphasis added.]
In his Special Civil Part complaint against Carfax, plaintiff alleged that the company negligently "failed to include material information in its report, including, but not limited to, information regarding the subsequent repair of the vehicle and the condition of the vehicle and as a result, the report was misleading as to the value of the vehicle." Plaintiff further alleged that Carfax knew or should have known that the "omission of material information in its report" would have an adverse effect on the value of the vehicle, because potential buyers of the vehicle would rely on the accuracy of its report. Amplifying this theme, the complaint concluded that "[b]y merely reporting that the vehicle was the subject of a collision, and failing to provide other material information, [d]efendant Carfax, Inc. acted negligently."
Plaintiff did not plead claims of trade libel or product disparagement, which require proof that the defendant made derogatory comments about a plaintiff's property "designed to prevent others from dealing with him or otherwise to interfere with [his] relations with others." Patel v. Soriano, 369 N.J. Super. 192, 246-47 (App. Div.), certif. denied, 182 N.J. 141 (2004).
Carfax denied any liability to plaintiff, raising an assortment of factual and legal arguments. It disavowed any duty of care to plaintiff, who had not purchased the Carfax report and with whom Carfax had no privity of contract. Carfax further denied breaching any alleged duty, pointing to the language in its disclaimer that states, in essence, that Carfax does not vouch for the accuracy of information it obtains about vehicles from other sources. Carfax also denied plaintiff's claim that the Cadillac report was misleading or had omitted any material facts. Further, Carfax maintained that it was not the proximate cause of plaintiff's alleged $2000 loss.
Carfax moved for summary judgment, relying upon these various defenses and arguments. In opposing the motion, plaintiff submitted a report from an automotive expert, Terry Shaw, generally criticizing Carfax's methods of doing business and, more specifically, the report it issued concerning plaintiff's Cadillac. Among other things, Shaw's report observed that "the Carfax accident report is not susceptible of being understood" and "alludes to more than just [a] primary, rear impact accident." Upon receiving such a Carfax report, according to Shaw, "the prospective customer would assume that much more than a replaced bumper and hitch cover were the sole items damaged in the accident," when in actuality, he stated, the "repair was in essence nothing more than a scratched rear bumper." Shaw further noted that "[t]he initial physical property damage diminished value was caused by Nichtberger, [then] enhanced by the Carfax report." Further, Shaw stated that the accident history section of the Carfax report was "vague and easily [misunderstood]."
As noted in Carfax's appellate brief, plaintiff apparently submitted this expert report after the discovery end date for this case had lapsed. Rule 6:4-5 governs the time for completion of discovery proceedings in Special Civil cases, and states that discovery "shall be completed as to each defendant within 90 days of the date of service of that defendant's answer, unless on motion and notice, and for good cause shown, an order is entered . . . enlarging the time for such proceedings to a date specified in the order." Here, Carfax filed its answer to plaintiff's first amended complaint on July 12, 2012. Thus, the discovery end date in this matter should have been on or about October 10, 2012. There is no indication that plaintiff moved to extend the discovery period. Shaw's expert report was included with plaintiff's opposition to Carfax's summary judgment motion and was dated November 26, 2012. Despite its apparent lateness, we have considered the substance of the report in our review of the issues on appeal.
Upon considering the parties' submissions and oral argument, the motion judge granted Carfax summary judgment based upon several independent reasons. As a threshold matter, the judge found that Carfax owed no duty of care to plaintiff, who had not purchased its report and with whom Carfax had no "special relationship." The judge rejected Shaw's expert views advocating the recognition of such a duty. Moreover, the judge rejected plaintiff's theory that Carfax was the proximate cause of his alleged $2000 loss on the Cadillac trade-in. The judge observed that the reduction in value had been produced by the accident itself, and not by what Carfax had reported about the accident. The judge also found significant the language in the disclaimer, which further weakened plaintiff's supposition that the dealership had relied upon the Carfax report to his disadvantage.
This appeal followed, in which plaintiff urges that we reverse summary judgment and allow him to proceed to trial. Plaintiff argues that we recognize, as a matter of first impression under New Jersey law, a duty by Carfax to be accurate in reporting information about used cars in the possession of private owners. Plaintiff submits that Carfax reports have become a routine and pervasive aspect of used car sales and trade-ins in the United States, and that Carfax consequently should be held to a standard of reasonable care when disseminating its reports. Carfax opposes plaintiff's common-law contentions, and also argues that imposing liability upon it in these circumstances would chill its constitutionally-protected rights of free speech.
Our research indicates that Carfax has been the subject of a class action lawsuit in Ohio, and other litigation in Florida, but no court apparently has yet imposed a duty of care upon Carfax owed to non-purchasers of its reports.
II.
Although this litigation raises a host of substantial issues concerning the existence and scope of any duty owed by Carfax, breach, the enforceability of the report's disclaimer, free speech, and public policy, the summary judgment order on appeal can be upheld on a relatively simple and straightforward basis. In particular, we concur with the motion judge that there is no genuine issue of material fact presented here on the vital element of proximate cause.
In order to prove a claim of negligence successfully, a plaintiff must demonstrate: (1) a duty of care owed to the plaintiff by the defendant; (2) that defendant breached that duty of care; and (3) that plaintiff's injury was proximately caused by defendant's breach. Endre v. Arnold, 300 N.J. Super. 136, 142 (App. Div. 1997). The burden of proving a negligence claim rests with the plaintiff. See Reichert v. Vegholm, 366 N.J. Super. 209, 213 (App. Div. 2004). As part of that burden, it is vital that plaintiff establish that his or her injury was proximately caused by the unreasonable acts or omissions of the defendant. Camp v. Jiffy Lube No. 114 , 309 N.J. Super. 305, 309-11 (App. Div.), certif. denied, 156 N.J. 386 (1998). The motion judge correctly found that such proximate causation cannot be proven on the circumstances in this record, even giving plaintiff all reasonable factual inferences.
Proximate causation is a "combination of 'logic, common sense, justice, policy and precedent' that fixes a point in a chain of events, some foreseeable and some unforeseeable, beyond which the law will bar recovery." People Express Airlines, Inc. v. Consol. Rail Corp., 100 N.J. 246, 264 (1985) (quoting Caputzal v. Lindsay Co., 48 N.J. 69, 77-78 (1966)). In order to determine whether proximate cause has been established, the proper inquiry is "'whether the specific act or omission of the defendant was such that the ultimate injury to the plaintiff' reasonably flowed from defendant's breach of duty." Clohesy v. Food Circus Supermkts., 149 N.J. 496, 503 (1997) (quoting Hill v. Yaskin, 75 N.J. 139, 143 (1977)). See also Model Jury Charge (Civil), 6.10, "Proximate Cause — General Charge to Be Given in All Cases" (1998) ("The basic question for you to resolve is whether [name of plaintiff]'s injury/loss/harm is so connected with the negligent actions or inactions of [name of defendant] that you decide it is reasonable . . . that [name of defendant] should be held wholly or partially responsible for the injury/loss/harm"). The defendant's conduct must be, at the very least, a "substantial factor" in producing the claimed loss. See James v. Arms Tech., Inc., 359 N.J. Super. 291, 311 (App. Div. 2003) (observing that "a tortfeasor will be held accountable if its negligent conduct was a substantial factor in causing the injury even when there are other 'intervening causes which were foreseeable or were normal incidents of the risk created.'") (quoting Rappaport v. Nichols, 31 N.J. 188, 203 (1959)).
Here, the record is bereft of legally competent and sufficient proof that the Carfax report was a substantial factor in producing the $2000 diminution in trade-in value for plaintiff's used Cadillac. To begin with, there is no evident falsehood or misreporting in the Carfax report. The report fairly conveys the gist of the police accident report, i.e. that the Cadillac was struck from the rear in an April 6, 2011 car accident and sustained damage to its rear end. Although more information might theoretically have been included in the Carfax summary, there is no reason to presume that such additional information would have altered the outcome of the trade-in transaction, in which the dealership had a first-hand opportunity to inspect the Cadillac itself. The reference in the Carfax report to the front end of the Cadillac hitting another vehicle, a fact that plaintiff disputes, is inconsequential because the primary damage noted in the Carfax report was to the Cadillac's rear end. There is no mention in the report of any significant damage to the front end.
The dealership's decision to offer $2000 less to plaintiff for his trade-in clearly stems from the April 2011 automobile accident. Although plaintiff argues that the Carfax report itself was also a contributing factor to the $2000 discount, that argument overlooks the critical point that plaintiff was not forced to sell his Cadillac to the dealership at that reduced sum. If plaintiff considered the $2000 discount unfair, he simply could have refused to trade it in at that price. There is no proof in the record that plaintiff attempted to have the car appraised by a third party in an effort to show that the $2000 discount was excessive. Nor did plaintiff try to sell the car himself to another buyer, or attempt to trade it in at another dealership.
Plaintiff asserts that it would have been futile to attempt to sell the Cadillac to someone else because he assumes that all potential buyers would obtain a Carfax report for the car and be negatively influenced by the report. There is no foundation for that sweeping assumption. Moreover, plaintiff did not contact Carfax before agreeing to the trade-in transaction, and try to persuade Carfax to issue a corrected report that responded to his criticisms. It is speculative to assume that Carfax would ignore all such requests for a correction, once shown the alleged errors. Indeed, as an enterprise whose commercial existence depends upon the reliability of its reports, there would be a market incentive for Carfax to make appropriate corrections when errors are called to its attention.
In fact, the sample Carfax vehicle history report included in the appendix includes a passage, "Tell us what you know about this vehicle," suggesting that Carfax would invite such proposed corrections if presented by someone who came into possession of the report.
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For these many reasons, there is no genuine issue on this record that Carfax was a "substantial factor" in generating plaintiff's alleged loss, James, supra, 359 N.J. Super. at 311, or that the loss was "so connected" to Carfax's actions or inactions to support a viable chain of causation. Cf. Model Jury Charge (Civil), 6.10, "Proximate Cause — General Charge to Be Given in All Cases" (1998).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION