HARMON v. AMERICAN HONDA MOTOR CO., INC.

CourtDistrict Court, D. New Jersey
DecidedJuly 12, 2023
Docket1:22-cv-06150
StatusUnknown

This text of HARMON v. AMERICAN HONDA MOTOR CO., INC. (HARMON v. AMERICAN HONDA MOTOR CO., INC.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HARMON v. AMERICAN HONDA MOTOR CO., INC., (D.N.J. 2023).

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

DAVID HARMON, et al., individually and on behalf of all similarly situated,

Plaintiffs, No. 1:22-cv-06150 v.

AMERICAN HONDA MOTOR CO., OPINION INC.,

Defendant.

APPEARANCES: Ross H. Schmierer KAZEROUNI LAW GROUP, A.P.C. 3000 Atrium Way, Suite 200 Mount Laurel, NJ 08054

Donovan Bezer LAW OFFICE OF DONOVAN BEZER 30 Park Avenue Lyndhurst, NJ 07071

On behalf of Plaintiffs and the Proposed Class.

Michael L. Mallow SHOOK, HARDY, & BACON, L.L.P 2049 Century Park East, Suite 3000 Los Angeles, CA 90067

On behalf of Defendant. O’HEARN, District Judge. INTRODUCTION This matter comes before the Court on Defendant American Honda Motor Co., Inc.’s (“Defendant”) Motion to Compel Arbitration. (ECF No. 7). The Court did not hear oral argument

pursuant to Local Rule 78.1. For the reasons stated herein, Defendant’s Motion is GRANTED. I. FACTUAL BACKGROUND Between July 2018 and June 2021, Plaintiffs David Harmon, Ivan Kosin, and Matthew Kosin (collectively, “Leasing Plaintiffs,” and together with Plaintiff Shirley Dunn, “Plaintiffs”) entered into automobile lease agreements with several of Defendant’s franchised dealers. (Compl., ECF No. 1, ¶¶ 54, 64, 69). Plaintiff Shirley Dunn entered into an automobile purchase agreement with one of Defendant’s franchised dealers on June 16, 2021. (ECF No. 1, ¶ 59). The lease agreements signed by Leasing Plaintiffs and the purchase agreement signed by Plaintiff Dunn included arbitration provisions.1 The provisions in the lease agreements contained the following language:

52. ARBITRATION: PLEASE READ THIS ARBITRATION PROVISION CAREFULLY TO UNDERSTAND YOUR RIGHTS. BY ELECTING ARBITRATION, YOU AGREE THAT ANY CLAIM THAT YOU MAY HAVE IN THE FUTURE MUST BE RESOLVED THROUGH BINDING ARBITRATION. YOU WAIVE THE RIGHT TO HAVE YOUR DISPUTE HEARD IN COURT AND WAIVE THE RIGHT TO BRING CLASS CLAIMS. YOU UNDERSTAND THAT DISCOVERY AND APPEAL RIGHTS ARE MORE LIMITED IN ARBITRATION.

1 Although not attached to the Complaint, the lease and purchase agreements are implicitly relied on by Plaintiffs in their claims. Defendant attached the agreements to its Motion as exhibits, (Exhs. A–D, ECF Nos. 7-3–7-6), and Plaintiffs do not dispute—and indeed, confirm—their authenticity by citing to Defendant’s exhibits in their Response. (See e.g., Plas.’ Br., ECF No. 13 at 5, 12, 15) (citing to the lease and purchase agreements attached to Defendant’s Motion). Arbitration is a method of resolving a claim, dispute or controversy without filing a lawsuit. By agreeing to arbitrate, the right to go to court is waived and instead claims, disputes or controversies are submitted to binding arbitration. This provision sets forth the terms and conditions of our agreement. YOU and HONDA agree and acknowledge that this Lease affects interstate commerce and the Federal Arbitration Act (“FAA”) applies. By signing the Arbitration Consent, YOU elect to have disputes resolved by arbitration. YOU, HONDA or any involved third party may pursue a Claim. “Claim” means any disputes between YOU, HONDA, or any third party relating to your account, this lease, or our relationship, including any application, the Vehicle, its performance and any representations, omissions or warranties. ****************************************************** HONDA means Lessor, Dealer, Honda Lease Trust, American Honda Finance Corporation (AHFC) American Honda Motor Co., Inc., Honda Finance Exchange, Inc., Acura Financial Services (AFS), Honda Financial Services (HFS), parents, subsidiaries, predecessors, successors, assignees, and officers, employees, representatives and agents. YOU means Lessee and Co-Lessee to this Lease. (Exhs. A–C, ECF Nos. 7-3–7-5 at 3, 7) (emphasis in original). The agreements also contained a separate acknowledgement of the arbitration provision, which Leasing Plaintiffs initialed: 15. ARBITRATION The parties agree that any unresolved disputes shall be submitted to arbitration in accordance with the Arbitration clause (Section 53). By initialing this Section, I am confirming that I have read this Section and the Arbitration clause, including the method of opting out of arbitration.

(Exhs. A–C, ECF Nos. 7-3–7-5 at 2, 3). Plaintiff Dunn’s purchase agreement similarly contained an arbitration clause that provided: AGREEMENT TO ARBITRATE ALL CLAIMS. READ THE FOLLOWING PROVISION CAREFFULLY, IT LIMITS YOUR RIGHTS, AND WAIVES THE RIGHT TO MAINTAIN A COURT ACTION, OR TO PURSUE A CLASS ACTION IN COURT AND IN ARBITRATION The parties to this agreement agree to arbitrate all claims, disputes, or controversies, including all statutory claims and any state or federal claims (“claims”) that may arise out of or relating to this agreement and the sale or lease identified in this agreement. By agreeing to arbitrate the parties understand and agree that they are giving up their rights to use other available resolution processes, such as a court action or administrative proceeding, to resolve their disputes. ****************************************************** THIS ARBITRATION PROVISION IS GOVERNED BY THE FEDERAL ARBITRATION ACT. THIS ARBITRATION PROVISION LIMITS YOUR RIGHTS, AND WAIVES THE RIGHT TO MAINTAIN A COURT ACTION OR PURSUE A CLASS ACTION IN COURT OR IN ARBITRATION. PLEASE READ IT CAREFULLY PRIOR TO SIGNING. (Exh. D, ECF No. 7-6 at 3) (emphasis in original). Defendant brings its Motion to Compel Arbitration (ECF. No. 7) pursuant to the above provisions. Prior to entering these agreements, Plaintiffs viewed the “Monroney stickers” attached to their vehicles listing charges for “Destination and Handling” ranging from $930.00 to $1,175.00, believing these fees to represent Defendant’s costs to deliver the vehicles to their respective dealerships.2 (ECF No. 1, ¶¶ 56-57, 61–62, 66–67, 71–72). Plaintiffs allege that Defendant, by neglecting to itemize or disclose the metric used to calculate the fees, arbitrarily inflates the purchase prices of its vehicles at the expense of New Jersey consumers. (ECF No. 1, ¶¶ 88–104). They allege that such conduct constitutes deceptive and unconscionable business practices in violation of the New Jersey Consumer Fraud Act ("NJCFA”), N.J. STAT. ANN. § 56:8-1, et seq., and has resulted in Defendant’s unjust enrichment. (ECF No. 1, ¶¶ 88-104). Accordingly, they brought this suit.

2 The Automobile Information Disclosure Act of 1958 (“AIDA”), 15 U.S.C. §§ 1231–1233, requires that automobile manufacturers affix a label disclosing, among other information, “the amount charged, if any, to such dealer for the transportation of such automobile to the location at which it is delivered to such dealer. . . .” 15 U.S.C. § 1232(f)(3). These labels are often called “Monroney stickers.” See, e.g., Weston v. Subaru of Am., Inc., No. 20-05876, 2022 WL 1718048, at *1 n.2 (D.N.J. May 26, 2022). On October 18, 2022, Plaintiffs initiated this putative class action, alleging (i) violations of the NJCFA and (ii) common law unjust enrichment. (ECF No. 1, ¶¶ 88-104). On December 14, 2022, Defendant filed the present Motion to Compel Arbitration, along with a concurrent Motion to Dismiss. (ECF Nos. 7, 8). Plaintiff filed a Response, (ECF No. 13), to which Defendant replied.

(ECF No. 15). II. LEGAL STANDARD Arbitration provisions are commonplace in consumer contracts and involve the waiver of a party’s right to have their claims and defenses litigated in court. See, e.g., Atalese v. U.S. Legal Servs. Grp., L.P., 99 A.3d 306, 309 (N.J. 2014). The Federal Arbitration Act (“FAA”), 9 U.S.C.

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HARMON v. AMERICAN HONDA MOTOR CO., INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/harmon-v-american-honda-motor-co-inc-njd-2023.