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Blatchford v. Kelly

A-5947-07T1 (N.J. Super. App. Div. 2009) (Unpublished)

CONSUMER FRAUD ACT — Once a consumer is restored to its original position, its suffers no additional loss beyond the purchase price; therefore, a consumer in that position cannot prove an “ascertainable loss” and thus is only entitled to reimbursement of the purchase price and not to a trebling of damages.

An individual purchased a boat from a dealer. He later discovered that extensive repairs were needed to restore the boat to its proper condition. He revoked his acceptance pursuant to the Uniform Commercial Code (UCC) under a provision permitting revocation where a nonconformity substantially impairs the value of a product. He sued the dealer when it refused to refund the purchase price and take back the boat. He also claimed that the dealer violated the New Jersey Consumer Fraud Act (CFA).

A jury submitted a verdict in favor of the consumer. It found that he justifiably revoked his acceptance of the boat and was entitled to a refund. The jury also found that the boat dealer’s conduct in refusing to take back the boat was unconscionable and a violation of the CFA. It found, however, that the dealer had not violated the CFA when it initially sold the boat. Rejecting the jury’s damage award, the lower court awarded additional damages and then trebled the damages pursuant to the CFA. It also awarded the individual counsel fees and costs. Both sides appealed.

On appeal, the Appellate Division reversed, holding that the buyer was only entitled to reimbursement of the purchase price on his revocation claim, and was not entitled to a trebling of damages because he failed to prove an “ascertainable loss” as required by the CFA. The Court ruled that once he was restored to his original position, he suffered no additional loss beyond the purchase price. It upheld the lower court’s ruling with regard to counsel fees and costs because the jury found a CFA violation in connection with the boat owner’s post-revocation actions. The Court also rejected the dealer’s argument that the lower court had erred in permitting the jury to consider the issue of revocation since it had already dismissed that claim in an earlier order. The Court held that the “law of the case” doctrine, which states “where there is an unreversed decision of a question of law or fact made during the course of litigation, such decision settles that question for all subsequent stages of the suit” was not mandatory and did not need to be mechanically applied in all cases when applied to interlocutory orders. The Court also noted that although the record did not contain the lower court’s reasons for allowing the buyer to proceed with his UCC claims, the boat dealer was not prejudiced by presentation of such claims.

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