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In a recent case of first impression, the New Jersey Appellate Division held in the published decision of Alvin Singer v. Toyota Motor Sales, U.S.A., Inc., d/b/a Lexus, 2023 WL 4278764 that a motor vehicle recall notice alone did not qualify as a sufficient vehicle “nonconformity.” Under the New Jersey Lemon Law Statute, a nonconformity is defined as a “defect or condition which substantially impairs the use, value or safety of a motor vehicle.” N.J.S.A. 56:12-30. Even where a vehicle remains out of service for an “unreasonable amount of time,” and well beyond the twenty-day statutory period set forth by the Lemon Law, a nonconformity is not automatically established.
In Singer, Alvin Singer (“Singer”), a permanent resident of New Jersey, had leased a Lexus LS 500 (“the vehicle”). While residing in Florida for the winter months, he learned that Toyota had issued recall “20LA01” regarding his vehicle’s fuel pump. The recall notice was issued on January 13, 2020 and the estimated the date for completion of Singer’s vehicle was late May 2020. In the interim, Singer’s vehicle remained at a Lexus dealer near Boca Raton, Florida. When Singer returned to New Jersey in late March 2020, his vehicle was shipped to Lexus of Englewood to await its recall repairs. During the time in which Singer’s vehicle was out of service, Lexus provided him with a loaner vehicle.
On June 24, 2020, the fuel pump on Singer’s vehicle was replaced, nearly one month beyond the estimated deadline set forth in the recall notice. Thereafter, Singer was advised that the recall work was completed and that his vehicle was ready to be picked up. However, Singer refused to pick-up his vehicle, instead claiming that it was now a “lemon.” In fact, before learning that the recall on his vehicle had been closed, Singer ceased making payments towards his lease in February 2020. Accordingly, Lexus repossessed the vehicle in December 2020 after an inspection by its experts revealed no mechanical issues.
Singer filed a complaint against Toyota in New Jersey Superior Court, Law Division, asserting violations of the New Jersey Lemon Law, N.J.S.A. §56:12-29-49, breach of warranty and violations of the New Jersey Consumer Fraud Act, N.J.S.A. §56:8-1, et seq. On motion for summary judgment filed by Toyota, the Court found the Lemon Law claim was insufficient without evidence of a defect beyond the recall notice, let alone any indication that the vehicle was impacted by issues related to the potential defect for which the recall notice was intended to cure. The Court also reasoned that the delays in closing the recall were not within Toyota’s control given the unavailability of parts, which Toyota had argued was due to the COVID pandemic.
On appeal, Singer argued that the amount of time within which the vehicle was out of service was unreasonable and required Toyota to provide him with a new vehicle or a full refund. He further claimed that because the period of time that he did not have the vehicle was greater than the twenty-day statutory period, he was entitled to a presumption that the delay in repairs was unreasonable.
The Appellate Division affirmed the Superior Court decision, and declined to apply the Lemon Law based solely on the existence of a recall, especially where a vehicle is unimpacted by the potential defects a recall is designed to eliminate. Further, the Court noted that the reverse outcome would create the “absurd result” whereby a recall notice could render any vehicle a lemon. To add insult to injury, the Court also rejected Singer’s right to avail himself of the Lemon Law as he used the vehicle primarily for commercial purposes, a category that is specifically excluded by the statute.