In an unpublished opinion, the New Jersey Appellate Division upheld a trial court's order of specific performance in a commercial real estate transaction involving a car wash. During the due diligence period, the buyer of the car wash discovered some soil contamination and the parties entered into an amendment to the contract providing that the seller would remediate the known contamination as well as, "any additional contamination that may be discovered." When seller's contractor discovered that the ground water was contaminated in addition to the soil, seller sought to void the rider for lack of consideration. However, both the trial and appellate courts disagreed, finding that the buyer had a right to cancel the contract based upon the discovery of the initial contamination and that, "[a]n agreement to refrain from exercising a legal right is a form of consideration." Likewise, the court rejected seller's argument that it only had a duty to address the soil contamination under the terms of the amendment since no such limitation was explicitly stated therein. Consequently, the Appellate Division enforced the trial judge's order of specific performance. (Miguel A. Hector v. Super Car Wash Limited Liability Company, et. al.)
The New Jersey Consumer Fraud Act ("CFA") places many responsibilities upon a home improvement contractor which, if violated, render the contract null and void. However, if the CFA violations are only "technical" and "inadvertent" in nature, then the contractor can still recover monies for unpaid work performed under a theory of quantum meruit. This was specifically the situation presented to the court in CB Construction, Inc. v. Jill Panico, which was decided on June 26th. There, the Appellate Division affirmed an award in favor of a contractor despite three technical violations of the CFA. Moreover, even though the technical CFA violations did entitle the homeowner to recover attorney fees, the trial court substantially reduced such fees to only 10% of what was requested by the homeowner defendant. As stated by the trial judge, "The litigation could have been resolved in the Special Civil Part at minimal legal expense to the parties, but for Defendant's decision to utilize the CFA as a sword in an effort to win a large judgment and attorneys' fees award. Defendant made the decision to transform this case from a simple dispute over a book account, into, relatively speaking, a "high stakes" multi-count, multi issue dispute. That defendant failed on almost all of her factual defenses and legal theories must also weigh heavily on this court as it tries to determine a fair and proportionate counsel fee award." The appellate court upheld this substantial reduction. (CB Construction, Inc. v. Jill Panico)
Peter J. Vazquez, Jr.