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)
The New Jersey Consumer Fraud Act ("CFA") protects homeowners from (among other things) unconscionable commercial practices of residential contractors, including those who threaten to file criminal charges if they are not paid. A recent Appellate Court decision involved a homeowner who withheld payment to an HVAC contractor who failed to repair an air conditioning system after three service calls. The contractor then proceeded to threaten the homeowner with the filing of criminal charges, and then (when payment wasn't made) actually filed charges for theft of services with the local police department. The charges were eventually dismissed by the municipal court, and the homeowner was ultimately successful on a CFA claim in Superior Court.
On appeal, the Appellate Division upheld the finding of a CFA violation but remanded the case back to the trial court to revisit the award of only $19,800 in attorney fees and costs. In doing so, the court noted the specific conduct of the contractor stating, "[the contractor] admitted that [it] has a history of instituting criminal actions as a means of collecting its unpaid invoices. This outrageous abuse of our criminal justice system is precisely the type of unconscionable commercial practice the CFA was designed to protect consumers from and deter unscrupulous commercial entities from engaging in." Accordingly, the matter was remanded to the trial court to revisit the amount of attorney fees and costs awarded. (Jeffrey S. Jacobs v. Mark Lindsay and Son Plumbing & Heating, Inc., et. al.)
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: