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Jones v. Dickerson

A-0874-02T1 (N.J. Super. App. Div. 2003) (Unpublished)

CONTRACTORS—An insured homeowner is not a party to a repair agreement between a contractor and the insured’s carrier and cannot not be awarded damages from the contractor based upon a breach of that contract.

A house was damaged by fire and the owner contacted a contractor. The contractor prepared an estimate and submitted it to the owner’s insurance company. No contract was ever executed between the owner and the contractor even though the owner saw a copy of the contractor’s proposal work began. The owner claimed that the contractor “failed to complete the required work and inadequately performed the work that was completed.” A suit was filed for “breach of contract, negligence and a violation of the New Jersey Consumer Fraud Act.” A default was entered, and the lower court took testimony at a proof hearing. It then rejected the owner’s contract claim because there was no signed agreement. It acknowledged that the contractor could not make a claim for monies above and beyond what had already been paid because there was no written agreement, but that this also meant that the owner had no contract claim.

The owner pursued its remaining claims, asserting that it was entitled to damages on a quantum meruit basis. In attempting to show that it had a loss equal to the difference between the value of the work that the contractor had actually performed and the cost to do the work, the owner submitted the insurer’s “replacement cost estimate” based upon the depreciated replacement cost of the damaged property. Both the lower court and the Appellate Division agreed that there was no relationship between the insurance company’s calculations and what it would cost the owner to repair the damaged property.

As to the Consumer Fraud Act claim, the Court agreed with the lower court that the owner did not prove an ascertainable loss.

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