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Hoffman v. Macy’s, Inc.

A-6131-08T3 (N.J. Super. App. Div. 2010) (Unpublished)

CONSUMER FRAUD ACT — To sustain an award under the Consumer Fraud Act or for common law fraud, a private complainant must show that it suffered an ascertainable loss as a result of the alleged unlawful conduct; i.e., it must produce specific proof to support or infer a quantifiable loss as a result of the transaction.

A department store advertised a one-day sale during which a customer purchased an espresso machine. The store allegedly promised that certain items could be purchased at a price below the “regular price” and below the “previous sale price.” The store explained that the term “previous sale price” was intended to identify the Manufacturer’s Suggested Retail Price (MSRP) for the item in question. The customer alleged that when buying the espresso machine he was told, verbally and in writing, that the sale price was well below its regular price and well below its MSRP.

The customer sued the store, alleging violations of the New Jersey Consumer Fraud Act (CFA) and for common law fraud. The customer claimed that the department store had never previously sold the espresso machine at its “regular price” and that the actual MSRP was well below the MSRP price represented by the store. The store filed a motion to dismiss for failure to state a claim upon which relief could be granted.

In granting the department store’s motion to dismiss, the lower court found that the customer had failed to illustrate how the alleged price misrepresentation violated the CFA or how he was affected by the alleged misrepresentation. Additionally, the court found the customer failed to show the ascertainable loss required for relief under the CFA. As the customer did not allege the coffeemaker was in some way defective and that it did not function properly, and did not factually illustrate his claim of an ascertainable loss based on receiving less than promised, the Court found the customer had no claim for a measurable loss. Lastly, the Court dismissed the common law claim of fraud for the failure to allege damages.

The consumer appealed, but the Appellate Division affirmed substantially for the reasons cited by the lower court relating to the customer’s failure to demonstrate an ascertainable loss, a deficiency that the Court said rendered both statutory and common law claims of fraud subject to dismissal. The Court first stated that to be entitled to damages under the CFA or for common law fraud, a private complainant must show that she or he suffered an ascertainable loss as the result of unlawful conduct – that is she or he must produce specific proof to support or infer a quantifiable loss as the result of the transaction. Here, the Court concluded that the customer’s claim that the store failed to deliver on its promise of various items at a highly discounted price, if proven, would not result in an ascertainable loss under the CFA and would not demonstrate loss under common law fraud.

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