Michael Hanus v. Audi of America, Inc. ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2343-23
MICHAEL HANUS, HANUS &
PARSONS LLC,
Plaintiffs-Respondents,
v.
AUDI OF AMERICA, INC.,
Defendant-Appellant.
_______________________________
Argued August 27, 2024 – Decided September 4, 2024
Before Judges Gooden Brown and Vinci.
On appeal from an interlocutory order of the Superior
Court of New Jersey, Law Division, Monmouth
County, Docket No. L-3057-22.
Steven A. Andreacchi argued the cause for appellant
(Biedermann Hoenig Semprevivo, attorneys; Steven A.
Andreacchi and Lucy M. Reynoso, on the briefs).
Jonathan Rudnick argued the cause for respondent (The
Law Office of Jonathan Rudnick, LLC, attorneys;
Jonathan Rudnick, on the brief).
PER CURIAM
By leave granted, defendant Audi of America, Inc. (Audi) appeals from
the March 1, 2024 order denying its motion for summary judgment on plaintiffs'
claim pursuant to the New Jersey Motor Vehicle Warranty Act, N.J.S.A. 56:12-
29 to -49, commonly known as the Lemon Law. Because the undisputed facts
establish plaintiffs used the motor vehicle at issue primarily for commercial
purposes, we reverse.
We glean these facts from the motion record. Michael Hanus is the
managing partner and majority shareholder of Hanus & Parsons LLC (H&P). In
August 2020, H&P as lessee and Hanus as co-lessee entered into a thirty-six-
month lease agreement with Audi for a 2020 Audi S7 (the vehicle).
Hanus leased the vehicle in the name of H&P "[b]ecause [he] intended to
use it for business purposes." He "needed a vehicle both for [his] business,
primarily for [his] business, and then for [his] personal use, and [he] leased it
under [H&P]." Hanus characterized his use of the vehicle as "[m]ore business"
than personal. He did not consider the vehicle a "family car." Hanus used the
vehicle to commute to and from H&P Monday through Friday, occasionally visit
clients, and drive to the Monmouth County Courthouse. He generally did not
use the vehicle on weekends. According to Hanus, he would not "put [his] kids
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in" the vehicle "[b]ecause of the issues that [he] had with it." Instead, he used
another larger vehicle when he was driving with his family.
H&P paid all amounts due in connection with the lease agreement,
including the down payment, all amounts paid at the time of the lease signing,
and all monthly lease payments. The vehicle was insured under a policy of
insurance issued to both H&P and Hanus as insureds. H&P paid the insurance
premiums for the policy. The New Jersey Motor Vehicle Commission leased
vehicle registration card listed H&P as lessee, and H&P paid the annual
registration fees. The vehicle was equipped with a commercial E-ZPass
transponder associated with an account maintained and paid for by H&P. H&P
also paid all fuel costs as well as all maintenance and repair costs for the vehicle.
According to Hanus, H&P declared the lease payments as business
expense deductions on its corporate tax returns with a small mandatory
chargeback to Hanus for personal use. H&P declared business use deductions
for the lease payments of approximately seventy-five percent in 2020, seventy-
three percent in 2021, forty-five percent in 2022, and seventy-one percent in
2023. In the aggregate, H&P claimed business use deductions amounting to
sixty-six percent of the total lease payments for the vehicle. H&P also declared
business use deductions for the insurance premiums, registration fees, fuel
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expenses, repair and maintenance costs, and E-ZPass charges incurred in
connection with the vehicle.
In November 2022, plaintiffs filed their complaint in this action alleging
they "experienced significant difficulties with the performance of the vehicle
rendering the vehicle a lemon under the" Lemon Law.1 After the completion of
discovery, Audi moved for summary judgment. Relying on our recent decision
in Singer v. Toyota Motor Sales, U.S.A., Inc., 476 N.J. Super. 121 (App. Div.
2023), Audi argued, in part, plaintiffs cannot assert a cognizable Lemon Law
claim because the vehicle was used primarily for commercial purposes.
On March 1, 2024, following oral argument, the trial court denied Audi's
motion in an oral opinion. The court found:
The testimony that I have from [Hanus] is, he used the
car to drive to and from work. He did[ no]t use it for
family purposes to bring his family to places, because
number one, they had other bigger vehicles. But, also
because he did[ not] feel comfortable . . . having his
kids in the car, because the car did[ not] always start.
The court noted "driving to work . . . is generally not a work purpose" and,
based on the facts presented, the court did "not feel comfortable determining [on
a motion for summary judgment] that driving the car to work and back home
1
Plaintiffs asserted other claims that are not the subject of this appeal.
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from work is a work purpose that would make it not fall within . . . . the Lemon
Law."
We granted Audi's motion for leave to appeal the denial of its motion for
summary judgment on plaintiffs' Lemon Law claim. On appeal, Audi argues the
undisputed facts establish the vehicle was used primarily for commercial
purposes and it was entitled to summary judgment on plaintiffs' Lemon Law
claim. Plaintiffs contend "[t]he issue[] of professional use as opposed to
nonprofessional use is a matter of fact for the jury" and Audi's motion was
properly denied on that basis.
We review a trial court's decision on a summary judgment motion "de
novo under the same standard as the trial court." Templo Fuente De Vida Corp.
v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016).
[I]f the evidence of record—the pleadings, depositions,
answers to interrogatories, and affidavits—"together
with all legitimate inferences therefrom favoring the
non-moving party, would require submission of the
issue to the trier of fact," then the trial court must deny
the motion. On the other hand, when no genuine issue
of material fact is at issue and the moving party is
entitled to a judgment as a matter of law, summary
judgment must be granted.
[Steinberg v. Sahara Sam's Oasis, LLC, 226 N.J. 344,
366 (2016) (citations omitted) (quoting R. 4:46-2(c)).]
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Whether a genuine issue of material fact exists depends on "whether the
competent evidential materials presented, when viewed in the light most
favorable to the non-moving party in consideration of the applicable evidentiary
standard, are sufficient to permit a rational factfinder to resolve the alleged
disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins.
Co. of Am., 142 N.J. 520, 523 (1995).
In Singer, we concluded the Lemon Law "distinguishes passenger
automobiles and commercial automobiles, excluding the latter from coverage."
476 N.J. Super. at 133. "In determining whether a vehicle is commercial or
personal in nature, courts look to types of insurance and whether the vehicle was
claimed on personal tax returns." Ibid.
The plaintiff in Singer leased the vehicle solely in his own name and used
it "mostly for business purposes: selling insurance and visiting clients." Id. at
127. The plaintiff testified he "took business deductions or credits on his income
taxes for the" vehicle. Id. at 133. Based on those facts, we concluded the vehicle
"was used mostly for commercial purposes" and, as a result, plaintiff could not
"demonstrate a cognizable Lemon Law claim." Ibid.
The facts of this case are more compelling. Here, plaintiffs leased the
vehicle in the name of the commercial entity, H&P, as lessee and Hanus as co-
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lessee. Hanus testified he leased the vehicle in the name of H&P "[b]ecause [he]
intended to use it for business purposes" and it was leased "primarily for [his]
business . . . ." His use of the vehicle was "[m]ore business" than personal and
he did not consider the vehicle as a "family car."
Further supporting the conclusion that the vehicle was used primarily for
commercial purposes, H&P paid all the costs of the lease, including all lease
payments, and plaintiffs declared those costs as business expenses on H&P's
income tax returns. H&P also paid all insurance premiums, registration fees,
fuel expenses, repair and maintenance costs, and E-ZPass charges for the
vehicle.
We are not persuaded by the implication that Hanus would have used the
vehicle for personal use more often absent the alleged defects. Hanus testified
that plaintiffs leased the vehicle primarily for business purposes and that is how
the vehicle was used. The fact that Hanus rarely, if ever, used the vehicle to
transport his family on weekends or outside of business hours further supports
the conclusion that the vehicle was used primarily for commercial purposes.
"[W]hen the evidence is utterly one-sided," a judge may "decide that a
party should prevail as a matter of law." Gilhooley v. Cnty. of Union, 164 N.J.
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533, 546 (2000) (citing Brill, 142 N.J. at 540). That is the case here. Summary
judgment should have been granted dismissing plaintiffs' Lemon Law claim .
The March 1, 2024 order denying Audi's motion for summary judgment
on plaintiffs' Lemon Law claim is reversed. Remanded for further proceedings
on plaintiffs' remaining claims. We do not retain jurisdiction.
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