Case Law Summaries

Lombardi Kitchen and Bath Concepts, Inc. v. Johnson

• Opinion Date: September 26, 2000
• Real Property Law
• E-Mail

CONSUMER FRAUD; CONTRACTORS—A contractor’s failure to obtain a building permit and final inspections is an unconscionable commercial practice violative of the Consumer Fraud Act.

A home contractor renovated a second floor bathroom. He was not paid in full upon completion of the job. About two months later, the homeowner discovered that the contractor had installed a leaking shower which had caused water damage to the room below. When the contractor sued to recover the balance owed on the contract, the homeowner counterclaimed for damages. Prior to trial, the homeowner learned that the contractor had never obtained a building permit before commencing renovations, did not obtain a certificate of occupancy, and that no final inspection had been performed. At trial, the homeowner sought to amend its counterclaim to assert a claim under the Consumer Fraud Act but its motion was denied. Judgment was granted in favor of the contractor for substantially all of its claim. On appeal, the Appellate Division pointed out that the contractor’s failure to obtain the permit and to obtain a final inspection constituted an “unconscionable commercial practice.” It also noted that case law deprives even a technically violating repairman of any enforcement capacity. Acts in violation of the Consumer Fraud Act make contracts void and prevent enforcement because it is a condition precedent to enforcement that the requirements of the Consumer Fraud Act be observed. Further, the Consumer Fraud Act, “like most remedial legislation, ... should be construed liberally in favor of consumers.” Lastly, the Appellate Division presumed that had the contractor complied with the Construction Code, a final inspection of the premises would have revealed the defects in the renovations and permitted the contractor the opportunity to remedy those defects. As a result, since the contractor had admitted its violations of the Consumer Fraud Act’s administrative regulations the Court could find no basis for the lower court’s decision denying the homeowner’s motion to amend its counterclaim. The matter was remanded to the lower court with directions to award treble damages and attorney’s fees to the homeowner.

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