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Perez v. Weichert Realty, Inc.

A-6075-01T5 (N.J. Super. App. Div. 2004) (Unpublished)

CONSUMER FRAUD—The way a contractor reports how it accomplished a particular repair may support a claim under the Consumer Fraud Act.

A real estate agent hired a chimney sweep company to inspect and sweep a home’s chimney before sale. The sweep company claimed the chimney did not need cleaning, but that there was a gap between the flashing and the house. It claimed to have fixed the chimney by affixing straps to the house’s siding to keep the chimney in place until sealant holding the flashing cured. The house’s buyers claimed that the sweep company knew that the chimney was pulling away from the house and installed the strapping to make the chimney look safe. In essence, the buyers claimed that the sweep company cosmetically disguised the chimney’s structural problem by repairing only the flashing and by utilizing screws that were too short to affix the chimney to the house.

According to the buyers, several months after the sale, a former tenant of the house warned them of the chimney’s structural problems. As a result, they asked the sweep company to return and make an inspection. A company employee, other than the one who had previously inspected and repaired the chimney, discovered that the chimney had pulled away from the house and could be moved by hand. The employee recommended that the top half of the chimney be rebuilt, but this type of repair was too complex to be done by his company.

With that information, the buyers brought a consumer fraud claim against the chimney sweep company for misrepresenting or concealing the condition of the chimney. They alleged that the company knowingly omitted, from its description of the completed work in its work order, the material fact that the chimney was pulling away from the house. The lower court found that the buyers’ assertions did not rise to the level of a violation of the Consumer Fraud Act, and granted the sweep company’s motion for summary judgment. The lower court did not find a knowing misrepresentation by the sweep company, and held that “there may have been an omission, [the buyers’] allegations against the company were those of negligence.”

The Appellate Division disagreed, pointing out that unlawful consumer fraud practices can consist of affirmative acts, knowing omissions or regulation violations. The Court also held that an omission of any material fact could constitute consumer fraud, but only if a defendant intended to omit the material fact. According to the Court, at the time of the sweep company’s motion for summary judgment, there were enough facts to allow a jury to conclude that the company knew that the house was being sold and that it knew, from its inspection, that the chimney was unsafe and needed to be strapped to the house. For example, a jury could have concluded that instead of permanently securing the chimney to the house’s structure, as required, the company decided to conceal the structural defects by cosmetically flashing the chimney and strapping it to the house’s siding. According to the Court, if the strapping was there only while the flashing sealant cured, as the company argued, then why did its work order state, after discussing the flashing, that the chimney “should also be strapped to the house”? Since the company contended that the strapping was merely incidental to the flashing job, a jury could reasonably question why strapping was separately mentioned and referenced as being “also” necessary.

The Court felt that when the sweep company omitted any indication of the temporary nature of its work order, it was acting deceptively and had omitted a material fact. Furthermore, the fact that the chimney pulled away from the house only months after the sale could lead a reasonable jury to question the sweep company’s assertion that the flashing was to be permanent. For those reasons, the Court held there was a factual dispute as to the manner by which the company flashed and strapped the chimney and as to the way it reported its completion of the job. Those omissions could support a finding of deception, misrepresentation or a knowing omission of a material fact.

The buyers also argued that the company violated a provision of New Jersey’s Administrative Code which makes it unlawful to misrepresent that materials used in a home improvement project are of sufficient size, capacity, character or nature to do the job expected. They claimed that the company’s failure to describe, with particularity the work to be done and to list the materials to be used, constituted a violation. The Appellate Division held that to succeed on this claim, the buyers’ damages must have been a direct result of such a violation. It also held that neither the misstatement in the work order nor the absence of any specifics as to the materials that were used directly caused the buyers’ loss. It thought that the buyers’ alleged loss was caused by the sweep company’s cosmetic and deceptive repair of the structurally unsound chimney and neither by the sweep company’s representation that the chimney had been strapped to the house, nor by any technical defects in the company’s contract with the realtor or the homeowners.

Therefore, the Appellate Division affirmed the lower court’s decision to dismiss the buyers’ claim under New Jersey’s Administrative Code, while reversing the lower court’s grant of summary judgment on the consumer fraud claim.


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