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Perez v. Professionally Green, LLC

A-2850-09T3 (N.J. Super. App. Div. 2011) (Unpublished)

CONSUMER FRAUD ACT; ATTORNEYS FEES — A Consumer Fraud Act claimant does not need to overcome the double hurdle of surviving both a summary judgment motion and a motion for involuntary dismissal to demonstrate a bona fide claim of ascertainable loss, because so long as the claim was bona fide, though not allowed, the consumer is entitled to recover attorneys’ fees when there has been a violation of the Consumer Fraud Act.

The owners of a residence contracted with an engineering company “to prepare plans for the installation of an in-ground swimming pool” and then contracted with a swimming pool contractor to install the pool. Subsequently, they contracted with a landscaper for work around the pool and with a fencing company to enclose the pool.

Construction disputes arose and the homeowners sued the various suppliers. As part of their claim, they alleged breaches of New Jersey’s Consumer Fraud Act (CFA), specifically against the swimming pool installation company, the landscaping company, and the fencing company. In addition, they made the same CFA allegations against principals of those three companies, in each case alleging that they “suffered an ascertainable loss caused by the violations.”

The lower court found that the swimming pool installation company and the landscaper had failed to “include start and end dates in their contracts.” Consequently, as a violation of the administrative regulations, they were deemed to have violated the CFA. There is case law that holds that even if there are no ascertainable damages, when a party violates the CFA, the law may provide that the consumer is entitled to attorneys’ fees under certain circumstances. Nonetheless, the lower court denied that application, rejecting precedential law that actually “permits recovery of attorneys’ fees and costs [even] when the issue of ascertainable losses is dismissed as a matter of law.”

The homeowners appealed, arguing that the lower court had relied on the “wrong” case because that case was based on “technical reasoning rather than legislative intent.” Specifically, it asserted that the CFA has the objective “of expanding protection for New Jersey consumers and enabling them to pursue consumer fraud actions without experiencing financial hardship.

To the Appellate Division, the appeal required it “to decide whether a plaintiff who proves a technical violation of the CFA and demonstrates a triable issue of ascertainable loss on a summary judgment motion, but fails to present sufficient proofs to avoid an involuntary dismissal at the close of his or her proofs at trial, has standing to recover attorneys’ fees.” It reviewed this issue de novo.

The swimming pool installer argued that the homeowners had not survived the summary judgment motion. It conceded that the New Jersey Supreme Court defined a “bona fide claim of ascertainable loss to mean one “which is supported by sufficient evidence to withstand a motion for summary judgment[, ...] but maintain[ed] that because [the homeowners] did not move for summary judgment on the CFA claim based on the absence of start and end dates in its contract, [they could not have been] deemed to have survived such a motion.” The Court disagreed.

According to the Court, the homeowners “moved for and were awarded partial summary judgment on that very issue.” It found that the swimming pool installer had “offered no reason for distinguishing the situation where a CFA plaintiff survives a summary judgment motion on the issue of ascertainable loss, from the situation where the plaintiff successfully moves for partial summary judgment on a technical violation of the CFA and demonstrates a triable issue as to ascertainable loss.” According to the Court, had the lower court “determined there was no triable issue as to whether [the homeowners] suffered an ascertainable loss, [the homeowners] would have not been granted partial summary judgment.” Consequently, it found the swimming pool installation company’s argument to be “unpersuasive.”

The Court went on to reverse the lower court’s ruling with respect to attorneys’ fees. It pointed out that “[t]he CFA has been characterized as one of the strongest consumer protection laws in the nation, ..., with a history ‘of constant expansion of consumer protection.’” Thus, “[b]ecause the CFA is remedial, it should be construed liberally in favor of consumers,” though not without limits. The Court then went on to compare and contrast the case proffered by the homeowners as precedential law against the case relied upon by the lower court. It concluded that “[t]he Supreme Court reasoned that ‘if [a] plaintiff ultimately loses on his damage claim but does prove an unlawful practice under the [CFA], [t]he [CFA’s] remedial purposes are promoted thereby and the Legislature’s requirement of ascertainable loss for a private cause of action is respected.’” The Court refused to read the existing case law “as requiring a CFA plaintiff to overcome the double hurdle of surviving both a summary judgment and a motion for involuntary dismissal to demonstrate a bona fide claim of ascertainable loss.”

Based on the Court’s reasoning, it was satisfied that the homeowners had demonstrated a bona fide ascertainable loss and was thus entitled to an award of attorneys’ fees and costs.

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