NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2546-16T4 A-5399-16T3 A-5668-16T3
BERNICE PISACK, on behalf of herself and all others similarly situated,
Plaintiff-Appellant/ Cross-Respondent, APPROVED FOR PUBLICATION v. June 14, 2018 B & C TOWING, INC., APPELLATE DIVISION Defendant-Respondent/ Cross-Appellant,
and
MARIE J. CAVALCHIRE and ALAN ANTHONY YOUNG,
Defendants,
B & C TOWING, INC.,
Defendant/Third-Party Plaintiff- Respondent/Cross-Appellant,
v.
THE CITY OF NEWARK,
Third-Party Defendant-Respondent. EPTISAM PELLEGRINO, on behalf of herself and all others similarly situated,
Plaintiff-Appellant,
NICK'S TOWING SERVICE, INC.,
Defendant-Respondent,
NICHOLAS TESTA and SUSAN TESTA,
Defendants. _______________________________
CHRISTOPHER WALKER, on behalf of himself and all others similarly situated,
ALL POINTS AUTOMOTIVE & TOWING, INC.,
THOMAS LOCICERO,
Defendant. _______________________________
Argued April 24, 2018 – Decided June 14, 2018
Before Judges Reisner, Hoffman, and Gilson.
2 A-2546-16T4 On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-6501-13, and Bergen County, Docket Nos. L-1606-17 and L-7929-13.
Andrew R. Wolf argued the cause for appellant/cross-respondent in A-2546-16 and appellant in A-5668-16 (The Wolf Law Firm, LLC, and Christopher J. McGinn, attorneys; Matthew S. Oorbeek, on the briefs).
Andrew R. Wolf argued the cause for appellant in A-5399-16 (The Wolf Law Firm, LLC, and Edwyn D. Macelus, attorneys; Matthew S. Oorbeek, on the briefs).
Gabriel H. Halpern argued the cause for respondent/cross-appellant in A-2546-16 (Pinilis Halpern, LLP, attorneys; Gabriel H. Halpern, of counsel and on the brief).
Steven F. Olivo, Assistant Corporation Counsel, argued the cause for respondent in A-2546-16 (Kenyatta K. Stewart, Corporation Counsel, attorney; Steven F. Olivo, on the brief).
Jeremy B. Stein argued the cause for respondent in A-5399-16 (Hartmann Doherty Rosa Berman & Bulbulia, LLC, attorneys; Paul S. Doherty, III, and Jeremy B. Stein, on the brief).
Brian T. Giblin, Sr., argued the cause for respondent in A-5668-16 (Giblin & Gannaio, attorneys; Brian T. Giblin, Sr., and Brian T. Giblin, Jr., on the brief).
The opinion of the court was delivered by
GILSON, J.A.D.
These three appeals involve the non-consensual towing of
vehicles and raise questions concerning the Predatory Towing
3 A-2546-16T4 Prevention Act (Towing Act), N.J.S.A. 56:13-7 to -23, the Consumer
Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the Truth-In-Consumer
Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to
-18. Accordingly, we issue a consolidated opinion to address the
common questions presented by these appeals.
Having reviewed the language and legislative history of the
Towing Act and its implementing regulations, we hold that: (1) the
Towing Act does not require the exhaustion of administrative
remedies before the Division of Consumer Affairs (Division) or
dispute resolution procedures established by municipalities that
have towing ordinances; (2) the Tort Claims Act (TCA) does not
provide immunity against claims based on the fees companies charge
for non-consensual towing of vehicles; and (3) the Towing Act and
its regulations limit the services for which a towing company can
charge. We also hold that the TCCWNA applies to the non-consensual
towing of vehicles because the bills issued by towing companies
are contracts and notices within the definition of the TCCWNA.
Finally, we hold that class actions may, in the right
circumstances, be appropriate for claims under the Towing Act, the
CFA, and the TCCWNA.
Accordingly, we reverse the orders on appeal in each of these
three cases and remand for further proceedings. Specifically, in
Walker, we reverse a July 24, 2017 order granting summary judgment
4 A-2546-16T4 to defendants and remand for further proceedings; in Pisack, we
reverse a January 13, 2017 order denying plaintiff's motion to
certify a class and granting defendants' cross-motion for summary
judgment, and we remand for further proceedings; and in Pellegrino,
we reverse a June 5, 2017 order striking plaintiff's request to
certify a class action and remand to allow class discovery.
I.
Each of these appeals involves certain common facts. None
of the three named plaintiffs consented to the towing of their
vehicles. Instead, the vehicles were towed from public roads at
the direction of the police. Plaintiffs then were charged for the
non-consensual towing of their vehicles by privately-owned towing
companies that had contracts with the local municipalities to
provide such towing and storage services.
Beyond those common facts, the three cases arise out of
different factual backgrounds and involve different procedural
histories. Thus, we will summarize the relevant facts and
procedural history of each case to give context to the issues.
Walker
In the early morning hours of December 29, 2012, Christopher
Walker was driving his vehicle in River Edge when he was stopped
by a police officer. The officer observed the vehicle was not
registered. Thus, the officer issued Walker a summons and directed
5 A-2546-16T4 that the vehicle be towed and held until Walker registered the
vehicle. Defendant All Points Automotive & Towing, Inc. (All
Points Towing), which had a contract with River Edge, towed
Walker's vehicle.
Walker registered the vehicle later that same day, which was
a Saturday, and tried to pick up the vehicle from All Points Towing
before it closed for business at 1 p.m. Walker contends that the
police authorized the release of his vehicle on December 29, 2012,
but All Points Towing refused to release the vehicle to him because
they were closing for the remainder of the weekend. In contrast,
All Points Towing maintains that the police did not authorize the
release of the vehicle until the following Monday, December 31,
2012.
On December 31, 2012, Walker retrieved his vehicle, and All
Points Towing charged him $290.85. Walker was given a bill that
listed the charges as: Towing Charge $125; Storage $120; "Admin"
$35; Tax $10.85; and Total $290.85. Walker paid the bill in cash
without disputing the charges.
In October 2013, Walker filed a complaint on behalf of himself
and similarly situated individuals against All Points Towing and
its owner. Walker alleged that the Towing Act did not permit an
administrative charge for the non-consensual towing of a vehicle
that was not involved in an accident. Walker contended that the
6 A-2546-16T4 administrative charge violated the Towing Act, the CFA, and the
TCCWNA. Walker also asserted that All Points Towing unlawfully
failed to release his vehicle after normal business hours as
required by the Towing Act and its regulations. Thus, Walker
asserted that a class action should be certified.
The case effectively was stayed while Walker was on active
military service. See R. 1:13-6. Following the completion of
discovery, defendants moved for summary judgment. Walker had not
filed a motion to certify the class. The trial court heard oral
argument and, on July 24, 2017, issued a written opinion and
entered an order granting defendants summary judgment.
In Walker's case, the court granted defendants summary
judgment on two grounds. First, the court found that Walker had
failed to administratively resolve his dispute. In that regard,
the court held that the Towing Act regulations required vehicle
owners who disputed charges imposed by a towing company for
non-consensual towing services to use good faith efforts to resolve
the dispute before filing a lawsuit. The court also held that if
those good faith efforts failed, the vehicle owner then must either
go to the Division to seek reimbursement of the disputed amount,
or avail himself or herself of the dispute resolution mechanisms
established by the municipality. Second, the court reasoned that
7 A-2546-16T4 the administrative fee was allowed by the River Edge towing
ordinance and, therefore, was a permitted fee.
The trial court never addressed Walker's claim that defendant
unlawfully failed to release his vehicle after hours. The trial
court also did not clarify whether Walker could refile his lawsuit
after he exhausted his administrative remedies.
Pisack
On June 25, 2013, the son of Bernice Pisack illegally parked
her car on a public street in Newark. The Newark Police contacted
B & C Towing, Inc. (B&C Towing) and directed it to tow Pisack's
vehicle to its lot. B&C Towing had a contract with Newark to
provide such towing services.
Later that day, Pisack's son went to B&C Towing's lot and
retrieved the vehicle. He was given a bill for $152.45, which
listed the charges as: Towing $65; Labor (recovery) $25;
Administrative Fee $50; Storage $10; and Tax $2.45. Under B&C
Towing's contract with Newark, B&C Towing retained $25 of the
administrative fee and remitted the remaining $25 to Newark. The
son paid the bill without contesting the charges.
In October 2013, Bernice Pisack filed a proposed class action
against B&C Towing and its owners, alleging violations of the
Towing Act, the CFA, and the TCCWNA. Specifically, Pisack
challenged the labor charge and the administrative fee.
8 A-2546-16T4 B&C Towing moved to dismiss the complaint, but in an order
entered on March 28, 2014, the trial court denied that motion.
B&C Towing then filed an answer and asserted a third-party
complaint against Newark. Thereafter, the claims against Newark
were severed and transferred to another vicinage.
Following discovery, Pisack filed a motion to certify the
class, and B&C Towing cross-moved for summary judgment. After
hearing oral argument on the motions, the trial court entered an
order on January 13, 2017, granting summary judgment to defendants
and denying plaintiff's motion as "moot."
The court explained its reasons on the record and identified
four grounds for its decision: (1) the TCCWNA was inapplicable
because there was no contract between Pisack and B&C Towing; (2)
Pisack failed to exhaust administrative remedies before pursuing
a court action; (3) the fees charged by B&C Towing were permitted
under Newark's towing ordinance; and (4) B&C Towing was entitled
to derivative immunity under the TCA because the towing was
performed at the direction of the police.
Pellegrino
On November 28, 2015, Eptisam Pellegrino was involved in a
motor vehicle accident in East Rutherford. At the direction of
the East Rutherford Police, Nick's Towing Service, Inc. (Nick's
Towing), towed Pellegrino's vehicle. Three days later, Pellegrino
9 A-2546-16T4 contacted Nick's Towing to inquire about the charges related to
the towing and storage services. She was informed that the charges
totaled $448.36, and she authorized Nick's Towing to charge her
credit card.
Thereafter, Nick's Towing sent Pellegrino an itemized bill,
which listed the charges as: Flatbed/Towing $125; Yard Charge $40;
Crash/Collision Wrap $60; Credit Card Surcharge $13.06;
Administrative Charge $40; Sweep Roadway/Cleanup $30; Storage Fee
$120; and Sales Tax $20.30.
In March 2017, Pellegrino filed a complaint on behalf of
herself and similarly situated individuals against Nick's Towing
and its owners. Pellegrino alleged that the yard charge, the
credit card surcharge, the administrative charge, and the storage
fee violated the Towing Act, the CFA, and the TCCWNA.
Without engaging in discovery, defendants filed a motion to
dismiss Pellegrino's complaint. Alternatively, defendants sought
to deny class certification. The trial court heard oral argument
and, on June 5, 2017, issued a written opinion and entered an
order ruling that Pellegrino could pursue her claims only in her
individual capacity and not on behalf of a class. The court also
denied the remainder of the motion to dismiss.
The court found that Pellegrino could not satisfy the standard
for class certification because the questions of law and fact
10 A-2546-16T4 affecting the class did not predominate over those affecting
individual members of the proposed class. We granted plaintiff's
motion for leave to appeal the interlocutory order of June 5,
2017.
II.
To summarize, plaintiffs appeal from three orders. Walker
appeals from a July 24, 2017 order granting summary judgment to
defendants. Pisack appeals from a January 13, 2017 order denying
class certification and granting summary judgment to defendants.
On leave granted, Pellegrino appeals from a June 5, 2017
interlocutory order denying her request to certify a class and
allowing her to proceed only on her individual claims.
Collectively, the appeals raise four legal issues: (1)
whether the Towing Act requires the exhaustion of administrative
remedies and dispute resolution procedures before a civil suit can
be filed in court; (2) whether towing companies that engage in
non-consensual towing at the direction of the police are immune
from liability under the TCA for claims related to the fees they
charge; (3) whether the Towing Act limits the types of services
for which a towing company can charge a fee for the non-consensual
towing of a vehicle; and (4) whether the TCCWNA applies to the
non-consensual towing of vehicles. The appeals also raise a fifth
fact-based issue of whether certain claims for violations of the
11 A-2546-16T4 Towing Act, the CFA, and the TCCWNA can be pursued as class
actions.
To put these issues in context, we will start with an overview
of the relevant statutes, which include the Towing Act, the CFA,
and the TCCWNA. We will then address the four legal issues.
Thereafter, we will analyze the class action issue. Finally, we
will apply our holdings to each case and also discuss any issues
specific to the individual cases.
A. The Relevant Statutes
1. The Towing Act
When enacting the Towing Act in 2008, the Legislature declared
that it was "in the public interest to create a coordinated,
comprehensive framework to establish and enforce minimum standards
for tow truck operators." N.J.S.A. 56:13-8(e). The Legislature
also declared that the purpose of the Towing Act was to prevent
predatory towing practices, which included "charging unwarranted
or excessive fees, . . . or overcharging consumers for towing
services provided under circumstances where the consumer has no
meaningful opportunity to withhold consent[.]" N.J.S.A.
56:13-8(b).
The Towing Act primarily focuses on the towing of motor
vehicles from private property and the non-consensual towing of
motor vehicles from public roadways. See N.J.S.A. 56:13-9. The
12 A-2546-16T4 Towing Act defines "non[-]consensual towing" as "the towing of a
motor vehicle without the consent of the owner or operator of the
vehicle." Ibid. The Towing Act's regulations add that
"'[n]on-consensual towing' includes towing a motor vehicle when
law enforcement orders the vehicle to be towed whether or not the
owner or operator consents." N.J.A.C. 13:45A-31.2. These appeals
involve non-consensual towing of vehicles from public roadways.
The Towing Act requires the Director of the Division of
Consumer Affairs (Director) to establish, by regulation, a
schedule of the services for which a towing company can charge
fees in connection with the non-consensual towing of a motor
vehicle. N.J.S.A. 56:13-14(a). The Towing Act also provides that
the fees charged "shall be reasonable and not excessive" and
defines "presumptively unreasonable and excessive" fees. N.J.S.A.
56:13-14(b). A fee is presumed to be unreasonable if it is more
than twenty-five percent greater than fees charged to consumers
who consent to the tow, or more than fifty percent higher than
fees charged by towing companies in the municipality from which
the vehicle was towed. Ibid.; N.J.A.C. 13:45A-31.5(a)(1) to (2).
The Director has promulgated regulations establishing a
schedule of permitted services for non-consensual towing and
storage. Under the regulations, a towing company can charge fees
for two types of tows: (1) a basic tow, and (2) a tow following
13 A-2546-16T4 an accident. N.J.A.C. 13:45A-31.4(a). A "[b]asic tow" is defined
as the non-consensual towing of a vehicle that has not been
involved in an accident and all "ancillary services," such as
hooking up the vehicle to the tow truck, transporting the vehicle,
and issuing documents for the release of the vehicle. N.J.A.C.
13:45A-31.2. Towing companies can charge only a flat fee for a
basic tow. N.J.A.C. 13:45A-31.4(a)(1).
When towing a vehicle involved in an accident, companies can
charge for additional services listed in the regulations, provided
that those services are "actually performed." N.J.A.C.
13:45A-31.4(a)(2). For example, a company can charge a flat
"administrative fee" if the company's employees have to make more
than three trips to the stored vehicle. N.J.A.C.
13:45A-31.4(a)(2)(xii).
The Towing Act then declares that
[i]t shall be an unlawful practice for any . . . towing company that provides non-consensual towing services: . . . (1) [t]o charge a fee for a . . . towing or related storage service not listed on the schedule of services for which a fee may be charged as established by the [D]irector except as may be permitted by the [D]irector by regulation; or (2) [t]o charge an unreasonable or excessive fee[.]
[N.J.S.A. 56:13-16(f).]
14 A-2546-16T4 The Towing Act also states that any violation of its
provisions "is an unlawful practice and a violation of [the CFA]."
N.J.S.A. 56:13-21(a). The Towing Act further provides:
In addition to any penalties or other remedies provided in [the CFA], the [D]irector may order a towing company that has billed a consumer for any non[-]consensual towing or related storage an amount determined by the [D]irector to be unreasonable to reimburse the consumer for the excess cost with interest.
[N.J.S.A. 56:13-21(b).]
Finally, the Towing Act imposes several requirements on
towing companies. Those requirements include: (1) prescribed
business hours for storage facilities so that owners can pick up
their vehicles, including "reasonable accommodations for
after-hours release of stored motor vehicles," N.J.S.A.
56:13-15(a)(1), (b); (2) record-keeping and making those records
available to the Division, N.J.S.A. 56:13-17; and (3) maintaining
minimum levels of liability insurance, N.J.S.A. 56:13-12.
(a) The Amendment to the Powers of Municipalities to Regulate Towing
Before the enactment of the Towing Act, municipalities had
authority to adopt ordinances or resolutions to regulate towing
companies. N.J.S.A. 40:48-2.49 to -2.54. Municipalities were
authorized to: (1) establish "schedule[s] of fees or other charges"
that towing companies could charge, N.J.S.A. 40:48-2.49(a); (2)
15 A-2546-16T4 designate a municipal officer or agency to enforce the ordinance
or resolution, N.J.S.A. 40:48-2.49(c); and (3) adopt a procedure
to receive complaints and resolve disputes arising from the towing
and storage of motor vehicles, N.J.S.A. 40:48-2.54(b).
When the Legislature enacted the Towing Act, it also amended
the statutory authority of municipalities to regulate towing of
motor vehicles. N.J.S.A. 40:48-2.49. Specifically, that
amendment clarified that the Towing Act applied to all municipal
towing ordinances and regulations. Ibid. In addition, the
amendment stated that the charges for towing services established
by municipalities were limited by the schedule of towing and
storage services established by the Director under the Towing Act.
Ibid. In that regard, N.J.S.A. 40:48-2.49 was amended to include
the following provision:
Nothing in this section shall be construed to authorize a municipality to establish charges for services that are not included in the schedule of towing and storage services for which a towing company may charge a service fee established by the Director of [the Division of] Consumer Affairs pursuant to [the Towing Act]. Nothing in this section shall be construed to exempt an operator from complying with the requirements of [the Towing Act].
16 A-2546-16T4 2. The CFA
As already noted, the Towing Act expressly states that any
violation of that Act "is an unlawful practice and a violation of
[the CFA]." N.J.S.A. 56:13-21(a).
The CFA "provides relief to consumers from 'fraudulent
practices in the market place.'" Lee v. Carter-Reed Co., 203 N.J.
496, 521 (2010) (quoting Furst v. Einstein Moomjy, Inc., 182 N.J.
1, 11 (2004)). It affords a consumer legal relief, equitable
relief, treble damages, and counsel fees. N.J.S.A. 56:8-19. To
proceed with a private cause of action under the CFA, a consumer
must "show that the merchant engaged in an 'unlawful
practice,' . . . and that [he or] she 'suffer[ed] [an]
ascertainable loss . . . as a result of the use or employment' of
the unlawful practice." Lee, 203 N.J. at 521 (quoting N.J.S.A.
56:8-2, -19). Thus, to obtain relief under the CFA, a consumer
must prove: "1) unlawful conduct by defendant; 2) an ascertainable
loss by plaintiff; and 3) a causal relationship between the
unlawful conduct and the ascertainable loss." Manahawkin
Convalescent, LP v. O'Neill, 217 N.J. 99, 121 (2014) (quoting
Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)); see
also Dugan v. TGI Fridays, Inc., 231 N.J. 24, 51 (2017) ("An
'unlawful practice' contravening the CFA may arise from (1) an
17 A-2546-16T4 affirmative act; (2) a knowing omission; or (3) a violation of an
administrative regulation.").
An "ascertainable loss" is one that is "quantifiable or
measurable" and not "hypothetical or illusory." Lee, 203 N.J. at
522 (quoting Thiedemann v. Mercedes-Benz, USA, LLC, 183 N.J. 234,
248 (2005)). Finally, the consumer need not prove reliance to
establish causation under the CFA. Instead, "a consumer merely
needs to demonstrate that he or she suffered an ascertainable loss
'as a result of' the unlawful practice." Ibid. (quoting N.J.S.A.
56:8-19).
3. The TCCWNA
The TCCWNA applies to contracts, warranties, notices, and
signs between a consumer and a "seller, lessor, creditor, lender
or bailee." N.J.S.A. 56:12-15. Its purpose "is to prevent
deceptive practices in consumer contracts by prohibiting the use
of illegal terms or warranties in consumer contracts." Kent Motor
Cars, Inc. v. Reynolds & Reynolds, Co., 207 N.J. 428, 457 (2011).
In enacting the TCCWNA, the Legislature "did not recognize any new
consumer rights but merely imposed an obligation on sellers to
acknowledge clearly established consumer rights and provided
remedies for posting or inserting provisions contrary to law."
Dugan, 231 N.J. at 68 (citation omitted); see also Shelton v.
Restaurant.com, Inc., 214 N.J. 419, 432 (2013) (explaining that
18 A-2546-16T4 the TCCWNA's purpose was to strengthen the provisions of the CFA).
A plaintiff bringing a claim under the TCCWNA must establish that
he or she is an "aggrieved consumer," and the defendant violated
a "clearly established legal right" or "responsibility." N.J.S.A.
56:12-15, -17; Dugan, 231 N.J. at 69.
B. The Legal Issues
Our standard of review of legal issues is de novo. Verry v.
Franklin Fire Dist. No. 1, 230 N.J. 285, 294 (2017). Moreover,
in Walker and Pisack, where the trial court granted summary
judgment motions, we conduct a de novo review, using the same
standard as the trial courts. Davis v. Brickman Landscaping,
Ltd., 219 N.J. 395, 405 (2014). Accordingly, we determine whether,
viewing the facts in the light most favorable to the non-moving
party, the moving party has demonstrated that there are no genuine
disputes as to any material facts and, therefore, is entitled to
judgment as a matter of law. R. 4:46-2(c); Davis, 219 N.J. at
405-06 (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J.
520, 540 (1995)).
1. Whether the Towing Act Requires the Exhaustion of Administrative Remedies
Defendants contend that before a vehicle owner can pursue a
claim in court, he or she must exhaust his or her administrative
remedies. Defendants then argue that the Towing Act authorizes
19 A-2546-16T4 the Director to order towing companies to reimburse consumers for
unreasonable or excessive fees and costs. N.J.S.A. 56:13-21.
Defendants also argue that the Towing Act authorizes the Director
to establish regulations. Further, in those regulations the
Director requires the parties to use "good faith efforts" to
resolve a dispute, and if the parties are unable to reach a
resolution, the Director may determine whether unreasonable fees
were charged and order the towing company to reimburse the consumer
with interest. N.J.A.C. 13:45A-31.4(f). In Walker and Pisack,
the trial courts accepted that argument and held that plaintiffs
had failed to exhaust their administrative remedies and,
therefore, defendants were entitled to summary judgment. Neither
court stated whether plaintiffs could refile their complaints
after they exhausted the administrative remedies.
The Towing Act does not mandate administrative remedies. The
Towing Act itself uses only the word "may." N.J.S.A. 56:13-21(b).
Specifically, the provision defining "unlawful practice" states:
In addition to any penalties or other remedies provided in [the CFA], the [D]irector may order a towing company that has billed a consumer for any non[-]consensual towing or related storage an amount determined by the [D]irector to be unreasonable to reimburse the consumer for the excess cost with interest.
20 A-2546-16T4 That language is permissive. Moreover, that is not the type of
language the Legislature uses to require the exhaustion of
administrative remedies before filing suit. See Jersey Cent.
Power & Light Co. v. Melcar Util. Co., 212 N.J. 576, 588 (2013)
(finding that the Legislature created two categories of disputes
under an act by using the word "shall" to indicate mandatory
alternative dispute resolution and "may" for permissive).
Without specific statutory authority, the Director cannot
create an administrative remedy that would foreclose plaintiff
from pursuing a claim in court. See Circus Liquors, Inc. v.
Governing Body of Middletown Twp., 199 N.J. 1, 12-13 (2009)
(explaining that the head of an administrative agency "may exercise
powers that are expressly granted by statute" and that, there, the
Legislature granted the agency head "express authority to revoke,
or to suspend, licenses").
Furthermore, the regulations under the Towing Act do not
create mandatory administrative remedies. At one point in the
regulations, the Director uses the word "shall," but later uses
the word "may." N.J.A.C. 13:45A-31.4(f). Read in full context,
that provision does not create mandatory administrative remedies.
Instead, the regulatory provision encourages the parties to act
in good faith to resolve any dispute and gives the Director the
authority to order a towing company to reimburse the consumer for
21 A-2546-16T4 any unreasonable or excessive fees or charges. Specifically, the
regulations provide:
If a towing company charges a consumer a fee for a private property or other non-consensual towing service that is disputed by the consumer, the parties shall use good faith efforts to resolve the dispute. If the parties are unable to resolve the dispute and the Director determines the fee to be unreasonable under N.J.A.C. 13:45A-31.5, the Director may order the towing company to reimburse the consumer for an amount equal to the difference between the charged fee and a reasonable fee, plus interest, as calculated pursuant to [these regulations].
[N.J.A.C. 13:45A-31.4(f).]
That regulatory language does not create administrative
remedies that preclude an aggrieved vehicle owner from pursuing a
claim in court. The word "shall" is used in connection with the
direction that the vehicle owner and towing company use good faith
efforts to try to resolve a dispute. There is no mandatory
language requiring further administrative dispute resolution
efforts. See Jersey Cent. Power & Light, 212 N.J. at 588 (quoting
Aponte-Correa v. Allstate Ins. Co., 162 N.J. 318, 325 (2000),
"Where a statutory provision contains both the words 'may' and
'shall,' it is presumed that the lawmaker intended to distinguish
between them, 'shall' being construed as mandatory and 'may' as
permissive.").
22 A-2546-16T4 In addition, the statutory provision that gives the Director
the permissive –– "may" –– authority to order a reimbursement also
states that it "is an unlawful practice and a violation of [the
CFA]" to violate any provision of the Towing Act. N.J.S.A.
56:13-21(a). That statutory provision further provides that the
Director's authority to order a reimbursement is "[i]n addition
to any penalties or other remedies provided in [the CFA]."
N.J.S.A. 56:13-21(b). Consequently, the Legislature contemplated
that vehicle owners could file their CFA claims in court, and
nothing in the Towing Act or its regulations limits that right.
2. Whether Towing Companies Have Derivative Immunity Under the TCA
In Pisack, the trial court held that the towing company and
its manager and owner had derivative immunity under the TCA. The
court reasoned that because the towing company was directed by the
Newark Police to tow plaintiff's illegally parked car, the towing
company was effectively "deputized under the law" to perform a
governmental function and, therefore, was afforded immunity under
the TCA. We disagree.
The TCA creates certain limited exceptions to the sovereign
immunity enjoyed by governmental entities. Vanchieri v. N.J.
Sports & Exposition Auth., 104 N.J. 80, 85-86 (1986). Accordingly,
the TCA applies to governmental entities and their employees. It
23 A-2546-16T4 expressly excludes "independent contractors" from the definition
of employees. N.J.S.A. 59:1-3. The TCA applies to private
entities in limited circumstances only where those private
entities act under the control and supervision of a public entity
to perform a governmental service. Vanchieri, 104 N.J. at 86;
Crystal Ice-Bridgeton, LLC v. City of Bridgeton, 428 N.J. Super.
576, 586 (App. Div. 2012).
Here, Pisack is not complaining about the authority of the
police to move her illegally parked car. Instead, she complains
about certain of the towing charges. The police did not supervise
the towing charges. Moreover, the municipal ordinance allowing
towing and storage charges does not insulate from challenge a
towing company's actual charges. Indeed, the statute that
authorizes municipalities to regulate towing services requires
each municipality to provide a dispute resolution procedure,
effectively recognizing that towing companies will sometimes
overcharge or charge for services that are not permitted. N.J.S.A.
40:48-2.54. Furthermore, Pisack did not sue Newark. She sued a
privately-owned towing company that charged her for towing her
car.1
1 As previously noted, B&C Towing's third-party complaint against Newark was severed. Hence, the order on appeal did not address that complaint, and did not address the $25 administrative fee
24 A-2546-16T4 In the Towing Act, the Legislature expressly stated that a
violation of that Act "is an unlawful practice and a violation of
[the CFA]." N.J.S.A. 56:13-21(a). Accordingly, the Legislature
recognized that vehicle owners could pursue claims for violations
of the Towing Act. The Legislature did not address sovereign
immunity or the TCA in the Towing Act. To accept the argument
that towers are protected by sovereign immunity would render the
Towing Act inapplicable any time the police directed a vehicle to
be towed. Such a construction would be inconsistent with the
plain language of the Towing Act and undermine its purpose, and
is not required by the TCA. Thus, we hold that there is no
derivative immunity under the TCA for alleged violations of the
Towing Act committed by a privately-owned towing company.
3. Whether the Towing Act Limits the Types of Services for Which a Towing Company Can Charge a Fee
As already noted, the Towing Act requires the Director to
establish a "schedule" of towing and related storage services for
which a towing company may charge a fee in connection with
non-consensual towing. N.J.S.A. 56:13-14. The Towing Act then
provides that it is an "unlawful practice" for any towing company
that B&C Towing collected on behalf of Newark, as opposed to the fee the company collected as its own charge. Hence, we also do not address Newark's administrative fee, an issue not before us.
25 A-2546-16T4 to charge a fee "not listed on the schedule of services"
established by the Director. N.J.S.A. 56:13-16(f)(1).
The Director has issued a schedule of permitted services.
N.J.A.C. 13:45A-31.4. That schedule provides:
(a) A towing company that engages in . . . non-consensual towing may charge fees for the following services:
1. Basic tow, which shall be a flat fee; and
2. In the case of a motor vehicle involved in an accident the following additional services, if actually performed:
i. Waiting time in excess of 15 minutes, which shall be calculated based upon each 15 minutes spent at the site from which a motor vehicle will be towed, with fewer than 15 minutes rounded up to 15;
ii. Brush cleaning, including collection of debris that can be picked up by hand, which shall be a flat fee;
iii. Site clean-up, which shall be calculated based upon the number of bags of absorbent used;
iv. Winching, which shall be based upon each one-half hour spent performing winching;
v. The use of window wrap, which shall be a flat fee;
vi. Tarping, which shall be a flat fee;
26 A-2546-16T4 vii. Transmission disconnect, a flat fee, which shall be charged only if a motor vehicle is locked and the towing company is unable to obtain the keys for the motor vehicle;
viii. Use of a flat bed tow truck, a flat fee, which shall be charged if a motor vehicle can be transported only by a flat bed tow truck;
ix. Use of special equipment other than the first tow truck to recover a motor vehicle that cannot be recovered by winching or pieces of a motor vehicle that cannot be moved by hand, which may be both a labor and an equipment charge billed in half-hour increments;
x. Decoupling;
xi. Storage at a towing company's storage facility;
xii. More than three trips to the motor vehicle in storage, which may be invoiced as an administrative fee, which shall be a flat fee; and
xiii. Releasing a motor vehicle from a towing company's storage facility after normal business hours or on weekends, which shall be a flat fee.
[N.J.A.C. 13:45A-31.4(a).]
The regulations also provide that a towing company may charge
for "tolls it incurs driving to the site from which a motor vehicle
will be towed and while towing the motor vehicle from that site
27 A-2546-16T4 to the towing company's storage facility." N.J.A.C.
13:45A-31.4(c). Finally, the regulations state that "[a] towing
company shall not charge any fee for . . . non[-]consensual towing
and related storage services not included in [the schedule] above."
N.J.A.C. 13:45A-31.4(e).
In short, if a service is not listed on the Director's
schedule, a towing company cannot charge for that service. In
addition, any fee for a permitted service must be charged
consistent with the requirements and limitations in the Towing Act
and its regulations.
4. Whether Plaintiffs Can Pursue Claims Under the TCCWNA
The parties dispute whether the vehicle owners were consumers
within the meaning of the TCCWNA. The parties also dispute whether
the bills issued by defendants constitute a "consumer contract"
under the TCCWNA.
A "consumer" is defined under the TCCWNA as "any individual
who buys, leases, borrows, or bails any money, property or service
which is primarily for personal, family or household purposes."
N.J.S.A. 56:12-15. "[New Jersey] courts have examined the
interaction between the parties and the nature of the contract or
other writing in order to determine whether a plaintiff is entitled
to relief under the TCCWNA." Dugan, 231 N.J. at 69.
28 A-2546-16T4 Here, the vehicle owners meet the definition of a consumer.
The Legislature defined a vehicle owner under the Towing Act as a
"consumer." See N.J.S.A. 56:13-9 ("'Consumer' means a natural
person. . . . 'Towing' means the moving or removing . . . of a
consumer's motor vehicle that is damaged as a result of an accident
or . . . is parked illegally or otherwise without authorization
. . . ."); N.J.S.A. 56:13-21(b) (authorizing the Director to order
a towing company to reimburse a "consumer" for unreasonable towing
charges). Like the Towing Act, the TCCWNA is remedial legislation
intended to protect consumers. It is therefore logical to give a
consistent construction to terms used in both statutes.
Accordingly, if vehicle owners are consumers under the Towing Act,
they also should be considered consumers under the TCCWNA.
Furthermore, the word "bails" is applicable to a vehicle
owner. A bailment is "a delivery of personal property by one
person (the bailor) to another (the bailee)." Black's Law
Dictionary 136 (7th ed. 1999). In addition, a "bailee" is someone
"who receives personal property from another as a bailment." Ibid.
While a bailment is generally established by a contract, a bailment
can be created without a formal written contract. See McGlynn v.
Parking Auth. of Newark, 86 N.J. 551, 556-59 (1981) (discussing
bailments and reasoning that the better approach is to focus on
the relationship of the parties in defining the rights and duties
29 A-2546-16T4 of the parties). Consequently, when towing companies take a
vehicle, they are doing so as bailees and vehicle owners are
consumers as defined by the TCCWNA.
The TCCWNA does not define "consumer contract." Our Supreme
Court, however, has looked to the Plain Language Act, N.J.S.A.
56:12-1 to -13, for an applicable definition. Shelton, 214 N.J.
at 438. Under the Plain Language Act, a "[c]onsumer contract"
includes "a written agreement in which an individual . . .
[c]ontracts for services including professional services . . .
[or] [e]nters into a service contract . . . for cash or on credit
and the money, property or services are obtained for personal,
family or household purposes." N.J.S.A. 56:12-1. Significantly,
that definition "includes writings required to complete the
consumer transaction." Ibid.
The TCCWNA is "entitled to a broad interpretation to
facilitate its stated purpose." Shelton, 214 N.J. at 442.
Accordingly, the writing need not be formally labeled as a
contract, warranty, notice, or sign to fall within the TCCWNA's
ambit. In Shelton, the Court considered whether "a printed
announcement" on restaurant gift certificates relating to "the use
of the certificates" brought "the transaction within the scope of
the TCCWNA." Id. at 441-42. In that regard, the Court concluded
30 A-2546-16T4 that the printed announcement was a "notice" as contemplated by
the TCCWNA. Id. at 442.
The bills issued by the towing companies are consumer
contracts and notices within the meaning of the TCCWNA. The
regulations to the Towing Act assume that towing companies will
issue a "bill" for non-consensual towing services, and that bill
"shall include a list of all services provided." N.J.A.C.
13:45A-31.4(i) to (k). Moreover, the regulations require towing
companies to keep "[i]nvoices . . . for non-consensual towing
services" for three years. N.J.A.C. 13:45A-31.9(a)(1).
Accordingly, those bills and invoices act as the "writings required
to complete the consumer transaction." N.J.S.A. 56:12-1. Indeed,
a vehicle owner given such a bill will rely on that bill as the
justification for the services charged.
The inclusion of prohibited charges in the bill "deceives a
consumer into thinking that they are enforceable." Dugan, 231
N.J. at 68 (citation omitted). Charges not permitted by the Towing
Act violate a "clearly established legal right" or
"responsibility." Finally, if the vehicle owner paid for
unauthorized services, the owner has suffered an ascertainable
loss. Accordingly, towing bills with prohibited charges are the
type of deceptive consumer transaction that the Legislature aimed
to prevent under the TCCWNA.
31 A-2546-16T4 5. Whether Plaintiffs Have Asserted Certain Claims That Can Be Pursued As Class Actions
Rule 4:32-1 sets forth the requirements for class
certification. New Jersey courts have "consistently held that the
class action rule should be liberally construed." Dugan, 231 N.J.
at 46 (quoting Lee, 203 N.J. at 518). To certify a class, there
are "four initial requirements, frequently termed 'numerosity,
commonality, typicality and adequacy of representation.'" Id. at
47 (quoting Lee, 203 N.J. at 519). Specifically, Rule 4:32-1(a)
provides:
One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
If those initial requirements are satisfied, the court then
considers whether "the questions of law or fact common to the
members of the class predominate over any questions affecting only
individual members, and that a class action is superior to other
available methods for the fair and efficient adjudication of the
controversy." R. 4:32-1(b)(3).
Predominance exists if "the proposed class is 'sufficiently
cohesive to warrant adjudication by representation.'" Dugan, 231
32 A-2546-16T4 N.J. at 48 (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88,
108 (2007)). To establish predominance, however, a "plaintiff
does not have to show that there is an 'absence of individual
issues or that the common issues dispose of the entire dispute,'
or 'that all issues [are] identical among class members or that
each class member [is] affected in precisely the same manner.'"
Lee, 203 N.J. at 520 (alterations in original) (quoting Iliadis,
191 N.J. at 108-09).
Depending on the facts developed after discovery, violations
of the Towing Act, as well as the related claims under the CFA and
the TCCWNA, may be appropriate for class certification. For
example, claims against a towing company that uniformly charges a
relatively modest fee for a service or services not permitted
under the Towing Act and its regulations, may be well suited for
class certification. One consumer may not think it worthwhile to
pursue such a claim, but if there are hundreds of such aggrieved
consumers, a class may be appropriate. See, e.g., Bosland, 197
N.J. at 560-61 (explaining that the CFA affords a remedy for
plaintiffs of a class with "nominal" claims that otherwise "might
go unvindicated").
33 A-2546-16T4 C. The Application of Our Holdings to Each Case
1. Walker
In Walker, the trial court granted summary judgment to
defendants on the grounds that plaintiff failed to exhaust his
administrative remedies and failed to use the dispute resolution
procedures afforded by the Director or the municipality. Since
we hold that those administrative procedures are not mandatory,
we reverse the July 24, 2017 order granting summary judgment to
defendants. We remand for further proceedings.
The trial court also held that the $35 administrative fee,
challenged by plaintiff, was permissible under the municipality's
towing ordinance. Walker's vehicle was not involved in an
accident; rather, his vehicle was towed after he was stopped and
the police observed that his vehicle was not registered. Under
the Towing Act's regulations, an administrative fee is only
permitted if a vehicle is towed after an accident and then only
if employees of the towing company make more than three trips to
the vehicle in storage. N.J.A.C. 13:45A-31.4(a)(2)(xii).
Moreover, a municipality does not have the authority to allow
charges for services that are not listed under the Towing Act's
regulations. See N.J.S.A. 40:48-2.49.
Thus, defendants were not permitted to charge an
administrative fee, and that charge violated the Towing Act, the
34 A-2546-16T4 CFA, and the TCCWNA. On remand, we direct that summary judgment
be granted in favor of plaintiff on those individual claims.
Walker also asserted that defendants unlawfully failed to release
his vehicle after normal business hours as required by the Towing
Act and its regulations. The trial court did not address that
issue; it shall address the merits on remand. We further direct
that Walker be permitted to file a motion to certify a class.
Since no record was developed on that issue, we do not address
whether a class should be certified.
2. Pisack
In Pisack, the trial court granted summary judgment to
defendants on four grounds: (1) the TCCWNA was inapplicable because
there was no contract between Pisack and B&C Towing; (2) Pisack
failed to exhaust administrative remedies before pursuing a court
action; (3) the fees charged by B&C Towing were permitted under
Newark's towing ordinance; and (4) B&C Towing was entitled to
derivative immunity under the TCA. We reverse the January 13,
2017 order granting summary judgment to defendants.
We hold that the TCCWNA is applicable and plaintiff can pursue
a claim under that Act. We also hold that plaintiff did not have
to exhaust administrative remedies and that B&C Towing and its
owners were not entitled to derivative immunity under the TCA. We
35 A-2546-16T4 also reverse the trial court's decision that the fees charged by
B&C Towing were permitted under Newark's towing ordinance.
With regard to the fees charged, Pisack challenged the
administrative fee and labor charge. The Towing Act and its
regulations only permit a labor charge for a tow following an
accident, in which "special equipment" was used to tow the vehicle,
or the vehicle was not able to be "recovered by winching."
N.J.A.C. 13:45A-31.4(a)(2)(ix). Further, as already noted, the
Towing Act's regulations permit an administrative fee only if a
vehicle is towed after an accident. Pisack's vehicle was towed
because it was parked illegally. Thus, both the labor charge and
the administrative fee were charged in violation of the Towing
Act, the CFA, and the TCCWNA. Moreover, Newark, as a municipality,
does not have the authority to allow a charge for services that
are not listed under the Towing Act's regulations. N.J.S.A.
40:48-2.49. We, therefore, remand with the direction that summary
judgment be entered in favor of Pisack on those individual claims.
The trial court in Pisack never addressed the question of
class certification. Instead, the court denied plaintiff's motion
as "moot" because the court had granted summary judgment to
defendants. We, therefore, also remand this matter with the
direction that the court address plaintiff's motion for class
36 A-2546-16T4 certification on the merits. As that issue was not addressed, we
express no view as to whether a class should be certified.
3. Pellegrino
In Pellegrino, the trial court entered an order holding that
plaintiff could pursue her claims only in her individual capacity
and not on behalf of a class. Because that decision was made
before Pellegrino was permitted to take any discovery, including
class-related discovery, we reverse the portion of the June 5,
2017 order dismissing plaintiff's claims for a class action. We
remand with the direction that the court permit class-related
discovery and then allow Pellegrino to file a motion for class
certification. Again, because no record was developed, we do not
decide whether a class should be certified.
Because we are remanding the claims in Pellegrino, we give
some guidance on the disputed charges. Plaintiff challenges the
yard charge, credit card surcharge, administrative fee, and
storage fee overcharge. The Towing Act and its regulations do not
permit a "yard charge" or a "credit card surcharge." Thus, those
charges are violations of the Towing Act, the CFA, and the TCCWNA.
Pellegrino was involved in an accident, and thus an
administrative fee and storage fee can be charged, provided the
services were "actually performed" in compliance with the Towing
Act's regulations. N.J.A.C. 13:45A-31.4(a)(2). Accordingly, on
37 A-2546-16T4 remand the parties will need to engage in discovery concerning
those fees.
In summary, all three orders on appeal are reversed and the
matters are remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
38 A-2546-16T4