$200,000 Consumer Fraud Judgment Overturned

In an unpublished decision issued earlier this week, the Appellate Division reaffirmed that mere puffery regarding a contractor does not amount to an actionable statement under New Jersey Consumer Fraud Act. (“CFA”) The judgment had been entered against Jeff Sands (“Sands”), who met with the Plaintiffs as a result of them contacting Stanley’s Home Improvement LLC (“Stanley’s”).  Sands took notes during the meeting, gave his sales pitch about the great work that Stanley’s did and the company’s terrific reputation, but indicated that someone else would be in touch with the Plaintiffs in order to give them a cost estimate.
 
After the Plaintiffs decided to hire Stanley’s, Fed Zappolo (“Zappolo”) met with Plaintiffs and provided them a cost estimate of $28,000.  Although Zappolo introduced himself as Stanley’s foreman, the agreement given to the Plaintiffs to sign was with Zappolo’s company named Fred Allen Builders, not Stanley’s.  When Fred Allen Builders failed to complete the work, the Plaintiffs contacted Sands who advised that he was no longer with Stanley’s and that they had gone out of business.  Eventually, the Plaintiffs were forced to hire another contractor at a cost of $39,600 to complete the unfinished work and correct the deficient work.
 
The trial court entered a judgment against all of the defendants, including Sands individually, for over $200,000.  Sands was the only party to appeal, and the court agreed that there was no basis to find that Sands violated the Consumer Fraud Act.  The court noted that being an officer of a business entity, without more, does not amount to liability under the CFA.  Instead there must be an affirmative act, knowing omission or administrative violation personally committed by an individual.  Here, the court determined that Sands’ statements in his sales pitch that Stanley’s stood by their work, had a terrific reputation, etc. were mere puffery and did not provide a basis for liability under the CFA.  Consequently, the over $200,000 judgment was vacated as to Mr. Sands.  (Pellegrino v. Fred Allen Builders, et. al.)