Court Opinion

ID: 3162775
Source: CourtListenerOpinion
Date Created: 2015-12-15 21:00:31.761796+00
Date Added: 2024-06-11T12:03:09.933021
License: Public Domain

NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                               _____________

                                    No. 15-1343
                                   _____________

                              TIJUANA JOHNSON,
              on behalf of herself and other persons similarly situated,
                                                Appellant

                                           v.

    WYNN'S EXTENDED CARE, INC.; NATIONAL CASUALTY COMPANY
                        _____________

                  On Appeal from the United States District Court
                            for the District of New Jersey
                         District Court No. 1-12-cv-00079
                  District Judge: The Honorable Renee M. Bumb

                 Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
                                 October 9, 2015

             Before: FUENTES, SMITH, and BARRY, Circuit Judges

                             (Filed: December 15, 2015)
                              _____________________

                                     OPINION
                              _____________________

SMITH, Circuit Judge.

      Tijuana Johnson entered into a “Used Vehicle Service Contract” with


 This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Wynn’s Extended Care, Inc. in February 2011.           In May of that same year,

Johnson’s car needed repairs that she claims were covered by the service contract.

Wynn, however, refused to authorize the repairs. After negotiations broke down,

Johnson filed a class action suit in state court alleging that the service contract

violated several state statutes.1 Wynn subsequently agreed to pay for the necessary

repairs. Johnson does not dispute that her car was fixed. Johnson, however,

alleges additional losses including the loss of use of her car for five months as well

as losses resulting from having to pay insurance and towing costs while the car was

being fixed.2

      Our review is limited to one question: whether the provision waiving

attorney’s fees in Wynn’s service contract violated the New Jersey’s Truth in

Consumer Contract Warranty and Notice Act (“TCCWNA”). While this case

initially involved several additional claims, Johnson’s second amended complaint

only pled violations of the TCCWNA and the New Jersey Consumer Fraud Act,

thus limiting the scope of this case to potential violations of those two statutes.

The parties then stipulated to the dismissal of all claims under the Consumer Fraud

Act with prejudice. Thus only the TCCWNA claims remain open on appeal.

1
 This case was later properly removed to federal court under the Class Action Fairness
Act. 28 U.S.C. § 1332(d).

                                          2
      While Johnson attempts to make several arguments on appeal, she squarely

presented only one such argument to the District Court when opposing Wynn’s

motion to dismiss. She argued that the service contract violated the TCCWNA

because it contained a provision waiving attorney’s fees and splitting costs.3 By

not raising any other arguments before the District Court, we find that Johnson

forfeited her right to raise them on appeal.4 See Shell Petroleum, Inc. v. United

States, 182 F.3d 212, 218 (3d Cir. 1999) ([A] party still must unequivocally put its

position before the trial court at a point and in a manner that permits the court to

consider its merits.”); Harris v. City of Phila., 35 F.3d 840, 845 (3d Cir. 1994)

(“This court has consistently held that it will not consider issues that are raised for

the first time on appeal.”).

      Turning to the merits of Johnson’s TCCWNA claim, we hold that the

District Court erred in dismissing this claim at the pleading stage. To find a

violation of the TCCWNA, Johnson had to allege that the service contract

2
  This case is therefore distinguishable from Campbell-Ewald Co. v. Gomez, 768 F.3d
871 (9th Cir. 2014), cert. granted, 135 S. Ct. 2311 (May 18, 2015) (No. 14-857), since
Johnson was not granted complete relief.
3
   Unlike the District Court, we interpret the service contract’s provision waiving
attorney’s fees as an actual waiver, not simply as a restatement of the American Rule.
The plain language of the contract leads us to this conclusion: “[e]ach party shall pay the
fees of its own attorneys . . . .” (emphasis added).
4
  The Court notes that even if Johnson’s TCCWNA claim based on alleged violations of
the Plain Language Act (“PLA”) were not waived, it would still fail. As the District
Court found, the service contract was written in a simple, clear, and understandable way.
It thus did not violate the PLA.
                                            3
presented to her by Wynn “include[d] any provision that violates any clearly

established legal right of a consumer . . . as established by State or Federal law.”

N.J.S.A. § 56:12-15. Drawing all reasonable inferences in favor of the plaintiff,

we conclude that the service contract’s provision waiving attorney’s fees and

splitting costs violates a clearly established legal right under New Jersey law.

      This is so because the New Jersey Supreme Court has clearly held that

clauses preventing the recovery of attorney’s fees and costs, when mandated by

statute, are unconscionable. See Delta Funding Corp. v. Harris, 912 A.2d 104,

114 (N.J. 2006) (“Like the attorney’s fees provision discussed above, the

[provision requiring the appealing party to bear costs] is unconscionable to the

extent that it would bar Harris from being awarded costs if she prevailed on her

appeal.”). In this case, both the CFA and the TCCWNA mandate the provision of

attorney’s fees and costs for the prevailing party. N.J.S.A. § 56:8-19 (“In all

actions under [the Consumer Fraud Act], . . . the court shall also award reasonable

attorneys’ fees, filing fees and reasonable costs of suit.”); N.J.S.A. § 56:12-17

(“Any person who violates the provisions of [the TCCWNA] shall be liable to the

aggrieved consumer for a civil penalty of not less than $100.00 or for actual

damages, or both at the election of the consumer, together with reasonable

attorney’s fees and court costs.”); N.J.S.A. § 56:12-16 (stating that under the

                                          4
TCCWNA “[n]o consumer contract . . . shall contain any provision by which the

consumer waives his rights under this act”).

       Johnson’s TCCWNA claim is therefore sufficient to survive a motion to

dismiss.5 Accordingly, we will reverse the judgment of the District Court only

with respect to the alleged violation of the TCCWNA discussed above and will

remand for further proceedings.

5
  We also note that concerns regarding the enforceability of consumer contracts in New
Jersey as a result of a potential ruling in favor of the plaintiff are unfounded. See, e.g.,
Jacob v. Norris, McLaughlin & Marcus, 607 A.2d 142, 154 (1992) (“[I]f the illegal
portion does not defeat the central purpose of the contract, we can sever it and enforce the
rest of the contract.”).
                                             5