GUNDELL v. SLEEPY'S, LLC et al

Filing 153

MEMORANDUM OPINION filed. Signed by Judge Robert Kirsch on 8/28/2023. (mlh)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JEFFREY GUNDELL, on behalf of himself
and others similarly situated,

Plaintiff,

Civil Action No. 15-7365 (RK) (DEA)
V.

MEMORANDUM OPINION

SLEEPY'S,LLC,etaL,
Defendants.

KIRSCH, District Judge
This matter comes before the Court upon an Order to Show Cause (ECF No. 146) as to

why Count II of the Third Amended Complaint ("TAC") should not be dismissed in light of Judge
QuraishFs Opinion (the "Opinion", ECF No. 114) granting summary judgment for defendants on
Counts I and III of the TAG. Having carefully considered the parties' submissions (ECF Nos. 147,
148, 151) and for the reasons that follow, the Court will enter summary judgment in favor of
Defendants and dismiss Count II of the TAG.

I. PROCEDURAL BACKGROUND1
This putative class action lawsuit arises from two provisions in Defendants' consumer
contracts which Plaintiff alleges violate the Tmth-in-Consumer Contract, Warranty and Notice Act
("TCCWNA"), N.J.S.A. 56:12-14 etseq., the New Jersey Consumer Fraud Act ("CFA"), N.J.S.A.
56:8-1 etseq., and the Furniture Delivery Regulations ("FDR"), N.J.A.C. 13:45A-5.1 et seq.

1 As the facts of this case have been described at length in prior Opinions, (see ECF Nos. 66, 1 14, 117),
the Court dispenses with a detailed recitation of the factual background and describes only the facts
relevant to the sole issue before the Court.

Count I sought to certify an injunctive or damages class pursuant to Federal Rule of Civil

Procedure 23(b)(2) or 23(b)(3) for Defendants' alleged violations of the TCCWNA, CFA, and
FDR. The alleged violations in Count I stem from Defendants' inclusion of a "Limitation of
Liability" and a "no refunds" provision in its sales contracts. (TAG ^[ 53-83.) Count II sought
certification of a Rule 23(b)(2) class and entry of declaratory judgment pursuant to N.J.S.A. 2A: 1650 et seq. that the same "Limitation of Liability" provisions in its sales contracts are null and void
because they deprive Plaintiff and putative class members of their rights to seek redress for
violations of the TCCWNA, CFA, and FDR. (TAG ^ 84-94.) Count HI sought to certify a Rule
23(b)(2) class and render declaratory relief that Defendants violated the CFA and FDR, as well as
injunctive relief reqmring Defendants to provide notice to the class describing options for remedies
under the respective statutes. (TAG ^ 95-118.)
The Honorable Zahid N. Quraishi, U.S.D.J., granted Defendants' motion for summary
judgment on Counts I and III. The Court held that Defendants had "strictly complied with the
language required by the FDR and are therefore not in violation of the CFA." (the "Opinion," ECF
No. 114 at 9.) The Court further found that "Plaintiff cannot proceed with his TCCWNA claim"
because he was not an "aggrieved consumer" and because "the contract between Plaintiff and
Defendant Sleepy's does not have any prohibited language such as 'all sales final', no
cancellations', or 'no refunds,' as enumerated in Spade" (Id. at 11 (citing Spade v. Select Comfort
Corp., 232 N.J. 504, 516 (N.J. 2018)).) Judge Quraishi denied Defendants' motion for summary
judgment as to Count H, however, on the grounds that Defendants "ma[d]e no arguments
specifically directed to Count Two" and therefore failed to meet their burden of persuasion. (M at

12.)

Plaintiff and Defendants separately sought reconsideration on different portions of the
Opinion. Shortly thereafter, the case was reassigned to the Undersigned. On reconsideration, this
Court found no basis to disturb Judge Quraishi's findings of law and fact, and accordingly denied
Plaintiffs reconsideration motion as to Counts I and III. (ECF No. 142.) In a separate
Memorandum Order, the Court denied Defendants' request to reconsider the denial of summary
judgment on Count II based on Judge Quraishi's determination that the issue had not been
sufficiently briefed. (ECF No. 146 at 4.) Noting, however, that the three counts of the TAG
significantly overlap, the Court ordered the parties to submit additional briefing on what, if
anything, remained as to Count II of the TAC given the Opinion. The parties timely obliged.

II. LEGAL STANDARD
The issue at bar is whether the prior grant of summary judgment has rendered the remaining
Count of the TAG a nullity. To that effect, the so-called "law of the case" doctrine is clearly
implicated, which "limits relitigation of an issue once it has been decided in an earlier stage of the
same litigation." Hamilton v. Leavy, 322 F.3d 776, 786 (3d Cir. 2003) (internal quotation marks
and citation omitted). The doctrine protects "traditional ideals such as finality, judicial economy[,]
and jurispmdential integrity." In re City of Phila. Litig., 158 F.3d 711, 717-18 (3d Cir. 1998).
While a court is not precluded from reconsidering a previously decided issue, it must nevertheless
take care to do so only in "extraordinary circumstances such as where: (1) new evidence is
available; (2) a supervening new law has been announced; or (3) the earlier decision was clearly
erroneous and would create manifest injustice." Id. at 718. Since reconsideration has already been
denied with respect to this Opinion, the sole issue at bar is purely to interpret the Opinion as it
relates to Count H of the TAG. However, where no material issues of fact exist, the Court will

enter judgment in favor of Plaintiffs. See Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir.
2010); see also Fed. R. Civ. P. 56(a).
Although neither party raises any issue of due process, it is also important to make
clear — given the impetus behind this decision is the Court's Order to Show Cause — that
dismissal of Count II or entry of judgment for Defendants can neither be classified as sua sponte
entry of summary judgment nor a grant of summary judgment to a non-movant. While both actions
are within the Court's power, see Gibson v. Mayor and Council of City of Wilmington, 355 F.3d
215, 222-223 (3d Cir. 2004), they typically implicate issues of notice that do not exist here. See
id. at 222-225; DL Resources, Inc. v. FirstEnergy Solutions Corp., 506 F.3d 209, 223-24 (3d Cir.
2007). In this case, Defendants originally moved for summary judgment on February 19, 2021.
Partial judgment was then entered on November 30, 2022. This Order to Show Cause was issued
on June 26, 2023 because the Court was contemplating entering judgment in favor of Defendants
on Count H and dismissal of Plaintiff's complaint. The Court gave Plaintiff a month to fully brief
the issue, {see ECF Nos. 146, 150), and the record has been fully developed for over a year.

III. DISCUSSION
As previously discussed, the TAG asserts that the "limitation of liability" and "no refund"
provisions of Defendants' sales documents violate consumers' statutory rights under the
TCCWNA, FDR, and CFA. Counts I and III assert violations of the TCCWNA, the, FDR, and the
CFA. Count II seeks declaratory judgment that the two provisions are null and void as against
public policy pursuant to the TCCWNA, FDR, and CFA. {See TAG at ^86-94.) Judge Quraishi's
Opinion, which granted summary judgment in favor of Defendants on Counts I and III, held that
Defendants did not violate the FDR or CFA, and further that Plaintiff "is not an aggrieved
consumer and thus cannot proceed with his TCCWNA claim." (Op. at 9, 11.) It therefore follows

4

that if Count II is premised entirely on the same alleged violations of the TCCWNA, FDR, and
CFA that the Court rejected, judgment on Count II should also be granted for Defendants, and the
TAG should be dismissed.
Plaintiffs first argument against this conclusion asserts that components of his FDR, CFA,
and TCCWNA claims are still live as they pertain to the "no refund" provision. (ECF No. 147 at
4.) Specifically, Plaintiff argues that the Court "only detennined that the sales invoice contained
the language required by N.J.A.C. 13:45A-5.2(a) and -5.3(a)" but not whether the "no refund"
clause violated Section 5.3 (c). (Id. at 6.)
Plaintiffs contention overlooks the many sections of the Opinion that addressed and
foreclosed any claim under N.J.A.C. 13:45A-5.3(c). The Opinion first described the written notice
obligations that sellers must provide in their contracts pursuant to the FDR, specifically sections
13:45A-5.1(a), -5.2(a), and -5.3(a). (Op. at 5-8.) Notably, the Court quoted, twice and in full,
N.J.A.C. 13:45A-5.3(c), which renders "null and void and unenforceable" contracts or sales
agreements containing "any terms, such as 'all sales final/ 'no cancellations' or 'no refunds',

which violate or are contrary to the rights and responsibilities provided" under the statute. (Op. at
6, 8.) Following its recitation of the contract language requirements imposed by the statute, the
Court evaluated Defendants' sales documents and concluded that "Defendants strictly complied
with the language required by the FDR," and further that Defendants were "not in violation of the
CFA." (Id. at 9.)
After rejecting Plaintiffs claim under the FDR and CFA as it related to N.J.A.C. 13:45A5.3 (c), the Court addressed the provision again in its TCCWNA analysis. After finding Plaintiff
"not aggrieved by untimely, nonconforming delivery," the Court added:
Even if delivery was untimely, the contract between Plaintiff and
Defendant Sleepy's does not have any prohibited language such as

"all sales final", "no cancellations", or "no refunds" as enumerated

in [Spade v. Select Comfort Corp., 232 N.J. 504, 519 (2018)]. To the
contrary, the contract specifically provides for refunds and
cancellations for untimely delivery or damaged/nonconforming
goods.

(Op. at 11.)
To summarize, the Opinion addressed and soundly rejected Plaintiff's claim under
N.J.A.C. 13:45A-5.3(c). While the contract may have contained the phrase "no refund," Judge
Quraishi concluded that the provision did not violate N.J.A.C. 13:45A-5.3(c), and more broadly,
the FDR, CFA, or TCCWNA given the presence of contractual language that contained the
required offering of a full refund under certain circumstances. This Court has ah-eady reviewed
and defers to Judge Quraishi's reasoning on Plaintiffs reconsideration motion and declines to
revisit Plaintiffs attempted "gotcha" game that relies so heavily on cherry-picked and
decontextualized phraseology.
Plaintiff raises two more claims in Count II which he purports survive the Court's summary
judgment Opinion. First, Plaintiff argues that the TCCWNA claim as it relates to the "no refunds"
provision is still live because "a consumer need not be an 'aggrieved' consumer . . . [to] establish
a violation under Section 15" of the TCCWNA. (ECF No. 147 at 10-12.) Second, Plaintiff argues
that his TCCWNA claim as it relates to the "limited liability" provision is still live because it was
not discussed in the Opinion. (Id. at 13.) Both of Plaintiff's claims fail because they rely on the
erroneous proposition that they survive despite the Court's holding that Plaintiff "[could not]

2 For reference, the "no refund" phrase Plaintiff complains of is immediately bookended by language that
clarifies the limited circumstances in which no refund will be issued. The sentence containing the disputed

phrase immediately qualifies that "no refund will be offered after delivery, with the exception of partial
adjustments in accordance with Sleepy's Price Guarantee Policy . ..." (ECF No. 147 at 5.) The preceding
sentence states: "If your merchandise cannot be delivered by the date noted on your invoice Sleepy's will

offer the option of an alternate delivery date or a prompt, full refund." (Id. (emphasis added).) The existence
of such immediate qualifying language, in conjunction with the many areas of the contract that contain the

language required by law detailing the circumstances where a full refund will be issued, renders Judge
Quraishi's finding that the contract did not violate N.J.A.C. 13:45A-5.3(c) or Spade entirely reasonable.

proceed with his TCCWNA claim" because he was not an "aggrieved consumer." The Court
addresses each claim in turn.
Plaintiff argues that a consumer may bring a cause of action under the TCCWNA without
being "aggrieved." {See id. at 9-11.) This contention relies on a strained reading of the TCCWNA
that is entirely divorced from the New Jersey Supreme Court's decisions on this matter. In Spade,
the New Jersey Supreme Court wrote, "[a] plaintiff pursuing a TCCWNA cause of action must
prove four elements . . ."the fourth element being "that the plaintiff is an 'aggrieved consumer.'"
Spade, 232 N.J. at 516 (citing N.J.S.A. 56:12-15, -17); see also id. at 521-23 (discussing the
difference between "consumers" and "aggrieved consumers," only the latter of which "ha[ve] been
banned by a violation ofN.J.S.A. 56:12-15" and are therefore "entitled to a remedy under the
TCCWNA"). Less than two years after Spade was decided, the New Jersey Supreme Court restated
that these same four elements are required "[t]o assert a claim under the TCCWNA." Pisack v.

B&C Towing, Inc., 240 N.J. 360, 379 (2020) (citing Spade at 516).
Because all four elements apply to every TCCWNA cause of action, Judge Quraishi's
holding that Plaintiff was not an "aggrieved consumer" foreclosed all of Plaintiff s claims under
the TCCWNA. There was no need to consider remaining factors once the Court found that a
necessary element had not been proven. See Pisack v. B&C Towing, Inc., 240 N.J. 360, 384 (2020)
(finding that plaintiffs could not state a cause of action under the TCCWNA for failing to establish
elements one and two). Likewise, since each claim would require a finding that Plaintiff was an
"aggrieved consumer," the Court did not need to specifically itemize each allegedly violative
provision of the sales document in order to foreclose each claim. Thus, Plaintiffs remaining
argument — that the limitation of liability provision is still live because it was not discussed (ECF
No. 147 at 13)—also fails.

IV. CONCLUSION
Accordingly, the Court finds that entry of judgment in favor of Defendants on Counts I and
Ill also warrants summary judgment in favor of Defendants on Count II. As no Count remains, the
TAG is dismissed. Plaintiff's outstanding motion for reconsideration on the Court's denial of class
certification as to Count II is dismissed as moot. An appropriate Order accompanies this Opinion.

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ROBERT KlRSCH
UNITED STATES DISTRICT JUDGE
Dated: August 28, 2023