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Pron v. Carlton Pools, Inc.

373 N.J. Super. 103, 860 A.2d 973 (App. Div. 2004)

CONSUMER FRAUD ACT—If, at the end of the plaintiff’s Consumer Fraud Act case, the court orders a voluntary dismissal for failure to show an ascertainable loss, the defendant is not liable for attorneys fees.

A customer contracted with a pool installer for the construction of a pool. About a year after the job was finished, a pool maintenance company told the customer that the pool’s plaster finish was substandard and the pool would need to be replastered. The pool installer then sent representatives to inspect the pool. After inspecting the pool, it concluded that the pool’s finish was not defective. Regardless, the customer sued the installer for breach of contract, breach of warranty, and unjust enrichment. The customer also brought a Consumer Fraud Act (CFA) claim against the pool installer. The customer alleged that the pool installer advertised that it did not use subcontractors in the construction of its in-ground pools, but that subcontractors had been used.

During trial, the pool installer’s director of operations testified that two subcontractors were used in connection with installation of its customer’s pool, an electrician and a gas plumber. The director, however, testified that no subcontractors were used in the actual construction of the pool. Rather, they only worked on the pool’s lighting and heating. The installer than moved for a directed verdict on the contract, warranty, and unjust enrichment claims. The lower court granted the motion, finding that the customer did not establish a prima facie case that the installer’s materials or workmanship were defective in any way to cause the problems with his pool, and that the installer did not breach its contract or warranty. It also found that the use of subcontractors was a technical violation of the CFA. However, the lower court concluded that the customer did not suffer any ascertainable loss as a result of the violation because the use of the subcontractors was unrelated to the alleged problems with the pool. Having found a technical violation of the CFA, the lower court awarded the customer attorneys’ fees to the customer.

The Appellate Division disagreed and reversed the lower court’s award attorneys’ fees. It held that in a CFA case where the defendant obtains a motion for involuntary dismissal at the end of the plaintiff’s case for failure to prove an ascertainable loss, and the defendant is not required to present its defense to the plaintiff’s claim because the fact finder was never called on to decide whether an ascertainable loss has been proven. Therefore, the plaintiff is not entitled to recover attorneys’ fees. In this case, the lower court granted an involuntary dismissal at the end of the customer’s case, finding that the customer had shown no ascertainable loss and no right to relief. For that reason, the Appellate Division held that the customer was not entitled to recover attorneys’ fee.

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