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Larkey v. Bless Roofing

A-1620-10T2 (N.J. Super. App. Div. 2011) (Unpublished)

CONSUMER FRAUD ACT; WARRANTIES — Defects that are addressed by a warranty at no cost to the consumer are not an ascertainable loss under the Consumer Fraud Act.

A buyer purchased a house without consulting an attorney or obtaining his own home inspection. Instead, he relied on an earlier inspection of the house made for another potential buyer. He obtained it from his broker. All communications regarding the property’s condition were exclusively between the buyer’s broker and seller’s broker. The home inspection report noted concerns about the roof. The buyer’s broker sent a fax to the seller’s broker asking for the roof to be inspected and certified by a roofing contractor. The seller provided the buyer with a roofer’s certification that he inspected the roof and, in his opinion, there were no leaks and there was no water damage. The roofer also issued a two-year warranty. The buyer purchased the house and, after a heavy rain, saw a leak in an upstairs bedroom. The buyer called the roofer, who fixed the leak free of charge, after which there were no leaks. The buyer then sued the seller, the roofer, and the brokers after learning that the roofer had not actually inspected the roof when it issued its certification. The buyer sued for violations of the Consumer Fraud Act, negligence, and violation of the covenant of good faith and fair dealing. The buyer then obtained an inspection report from another roofer. It identified “troubled” areas that could cause “potential serious leaks.” The buyer settled his claim against the seller and the claims against the roofer were dismissed. The brokers moved for summary judgment. The lower court granted their motion and dismissed the complaint.

The buyer appealed, but the Appellate Division affirmed, noting that in order to succeed with a Consumer Fraud Act claim, there must be an affirmative misrepresentation (even without knowledge of its falsity or intent to deceive), an omission or failure to disclose information (accompanied by knowledge and intent), and violations of specific regulations that impose strict liability under the Consumer Fraud Act. Once a violation is proven, one must also show an ascertainable loss and a causal relationship between the unlawful conduct and that loss. Here, the Court found no evidence of unlawful conduct by the brokers and no ascertainable loss by the buyer. The Court found that neither broker made any representations to the buyer as to the roof’s overall condition. The buyer asked for, and received, a certification that the roof had no leaks or water damage and received a two-year warranty. In addition, the Court found that the buyer did not suffer an ascertainable loss because when the buyer noticed the only leak, the roof was repaired by the roofer free of charge. The Court noted that defects that are addressed by a warranty at no cost to the consumer are not an “ascertainable loss” under the Consumer Fraud Act.

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