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Beck v. Gomez

A-1440-06T1 (N.J. Super. App. Div. 2007) (Unpublished)

CONSUMER FRAUD ACT; ATTORNEY’S FEES — A party who establishes a violation of the Consumer Fraud Act is entitled to an award of reasonable attorney’s fees, filing fees, and reasonable costs of suit even if that party failed to establish an ascertainable loss attributable to the violation.

A homeowner contracted to have a pre-fabricated swimming pool installed in her backyard. She visited the manufacturer’s website, chose a pool, and upon calling the manufacturer, was introduced to the installer. She was advised that the installer was trained and certified. The homeowner showed the installer where she wanted the pool, which was in the middle of her yard. The installer placed stakes in the location she wanted, and was later faxed a copy of the property’s survey. All required permits were acquired. The permit applications contained a sketch of the proposed pool. No manufacturer’s representative oversaw the installation. Before final inspection and issuance of a certificate of occupancy, the installer received full and final payment. Subsequently, the municipality advised that the pool had been placed in an easement area for a sewer line and within a setback required by the zoning ordinance. The homeowner and her husband opted to secure a variance to move the sewer line rather than move the pool even though the installer allegedly indicated he would move free of charge. The homeowners allegedly were not timely in complying with the terms of the variance and were fined.

The homeowners sued the manufacturer and installer. A default judgment was obtained against the manufacturer. The homeowners alleged that the installer violated the Consumer Fraud Act (CFA). The lower court found that the CFA was violated by the installer when he requested and accepted final payment before the final inspection and issuance of the certificate of occupancy, but concluded that the homeowners failed to establish an ascertainable loss caused by that violation. It also reasoned that the misplacement of the pool was not related to the manufacturer’s failure to have a representative on location. The lower court noted that the homeowner, herself, had selected the site for the pool and did not seek or request assistance from, or supervision by, a representative of the manufacturer. The lower court also concluded that the homeowner’s delay in complying with the conditions of the variance led to the issuance of a summons and imposition of the fine, and that the installer’s regulatory violation had occurred after the pool was in the ground, making such violation an insubstantial factor in bringing about the homeowner’s loss. Therefore, the Court found that the homeowner was entitled to contract damages, but not the treble damages available to consumers who suffer an ascertainable loss as a consequence of a violation of the CFA. It additionally concluded that equitable principles barred the homeowner’s claim for attorneys’ fees, filing fees, and costs of suit under the CFA, as it found that the homeowner was aware of, but did not invoke, her right to defer final payment until after the certificate of occupancy was issued.

On appeal, the Appellate Division affirmed the CFA violation and the lower court finding of no ascertainable loss such as to only support contract damages but not treble damages. Therefore, it reversed the lower court on the denial of costs and fees under the CFA. The Court stated that a party who establishes a violation of the CFA is entitled to an award of reasonable attorneys’ fees, filing fees, and reasonable costs of suit even if the party fails to establish an ascertainable loss attributable to the violation. It noted that this remedy is made available regardless of success in proving ascertainable loss so as to encourage consumers to pursue a private right of action without risking liability for fees upon failure to establish an ascertainable loss. Consequently, the Court remanded, to the lower court, the task to determine the amount of the fee recoverable given that the homeowner was litigating both contract claims and violations of the CFA.

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