In an unpublished decision that was issued today, the Appellate Division reversed a trial court's award of $50,832.17 to a stucco subcontractor and dismissed the subcontractor's claim for the unpaid contract balance with prejudice.  The two-judge appellate panel did not disturb the trial court's finding that the general contractor did, in fact, breach its contract with the subcontractor.  However, despite the breach of contract, the court reversed the Law Division judge and held that the subcontractor could not recover any damages whatsoever since the subcontractor failed to prove what portion of the monies owed constituted lost profit.    The appellate panel stated that the trial court, "omitted, however, the second step:  calculating 'the difference between the contract price and the cost of performance or production'."  This ruling confirms that the burden of proving lost profits is on the party seeking damages, and evidence must be presented that is sufficient to enable the court to identify what portion of the monies due represent the subcontractor's profit.  (Professional Stone, Stucco & Siding Applicators, Inc. v. JMOC Builders, Inc.)

In an unpublished trial court opinion released today, a Superior Court Judge in Bergen County dismissed the claims of a condominium association against the sponsor/developer of the condominium complex related to construction defects that were discovered by the Association.  After dismissing the Association's contractual claims based on the statute of limitations, the Court found that all other claims asserted by the Association, including claims under the New Jersey Consumer Fraud Act ("CFA") were barred by the ten-year statute of repose.  Noting that the New Jersey judiciary has shown, "an unwillingness to recognize a fraud exception to the statute of repose," the court held the CFA claims were subject to the statue of repose, were not filed within ten years after the TCO was issued, and therefore were barred by the statute of repose.  (Vela Townhomes Condominium Assoc. Inc. v. Rosen Partners LLC)

In a recent case decided on January 24, 2019, the New Jersey Supreme Court confirmed that the State's Consumer Fraud Act ("CFA") can apply in business to business transactions.  Noting that the CFA has been continuously expanded by the State's Legislature over the years, the Court found that the sale of a custom-manufactured all wheel drive truck and tow body was included in the definition of "Merchandise" under the CFA and therefore the CFA claim was wrongfully dismissed by the trial court.  The Court noted that so long as, "any member of the public could purchase the product or service," it would be covered under the CFA, "regardless of whether such a purchase is popular."  The Court also provided future guidance by setting forth four factors to consider in determining whether the nature of a business-to-business transaction would subject a seller to liability under the CFA.  The factors are as follows:

1. The complexity of the transaction, taking into account any negotiation, bidding, or request for proposals process;
2. The identity and sophistication of the parties, which includes whether the parties received legal or expert assistance in the development or execution of the transaction;
3. The nature of the relationship between the parties and whether there was any relevant underlying understanding or prior transactions between the parties; and
4. The public availability of the subject merchandise.

Given these factors, many transactions that do not involve what most business owners would understand as a traditional consumer will nevertheless be subject to the provisions of the Consumer Fraud Act.  (All The Way Towing, LLC v. Bucks County International, Inc. )

In, New Jersey there is a difference between real and personal property.  Real property is land and includes items that are affixed to the land, usually buildings and other improvements.  Personal property is anything else.  However, there is a third category of property that falls in between real and personal property.  Items that fall within this third category are called fixtures.  Fixtures often start out as personal property and become so attached to the real estate that they essentially become part of the real estate while still holding a separate identity. 

When buying or selling property, it is important to understand whether something is a fixture that will stay on the property after closing, or personal property that the seller can remove.  A purchaser may view the property and assume that the window treatments, wall-mounted television, or swing set is included with the property.  On the other hand, the seller may be intending to take these items with them when they move.

When assessing whether or not property is a fixture, courts look at several factors.  These factors include the following:

• The homeowner's intent when the personal property was installed, i.e. whether or not the homeowner intended the property to permanently become part of the real estate;
  
• How the homeowner attached the property, i.e. screwing it into the wall;
  
• Whether or not the property was meant to be used with the real estate, i.e. built-in electronics or wall-to-wall carpeting;
  
• What the contract between the parties says; and
  
• Whether or not the buyer considered the property when the offer was made.

In or to avoid any misunderstandings, it is important that buyers and sellers make sure that their contracts clearly set forth what is included in the sale so that there are no misunderstandings and everyone has the same expectation regarding what will remain with the property at closing.