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Roberts v. Cowgill

316 N.J. Super. 33, 719 A.2d 668 (App. Div. 1998)

CONSUMER FRAUD ACT; CONTRACTS—A court is not bound by strict contract principles in determining if a loss has been incurred for which the Consumer Fraud Act will award treble damages, costs, and attorney’s fees.

In constructing an addition to a home, the contractor violated a substantial number of administrative regulations under the Consumer Fraud Act. As a result, it committed unlawful practices under the Act. Thus, the homeowner met the requirement under the Administrative Code for entitlement to treble damages and attorneys’ fees. This left the question as to whether the homeowner suffered a compensable “ascertainable loss” by reason of the contractor’s violations. While the Attorney General need not prove that a victim was damaged by the unlawful practice to warrant an award of treble damages, a private plaintiff must show an “ascertainable loss.” The lower court found an ascertainable loss, but held that a victim must also show that the ascertainable loss was caused by the unlawful practice. The Appellate Division, however, saw this differently. It found that the contractor billed the homeowner for final payment before a certificate of occupancy was received. Moreover, the project was characterized by a history of interim inspection disapprovals and, even as late as the time of trial, the homeowner still had not received a certificate of occupancy, fire approval, or interim framing approval for the addition. Each of these items required either additional construction or the making of necessary repairs that, in the Appellate Division’s opinion, were caused by the unlawful practices. Moreover, the Appellate Division ruled that the lower court’s determination disregarded the underlying intention of the Consumer Fraud Act. In an ordinary breach-of-contract case, the function of damages is simply to make the injured party whole, and courts do not assess penalties against the breaching party. Here, although one purpose of the legislation is clearly remedial in that it seeks to compensate a victim’s loss, the Act also punishes the wrongdoer by awarding a victim treble damages, attorneys’ fees, filing fees, and costs. Thus, in determining whether a complainant has established a loss under the Act, a Court is to be guided by, but not bound to, strict contract principles. In addition, even if a complainant were not entitled to treble damages, attorneys fees can still be awarded. The two remedies are independent of each other. The fundamental remedial purpose of the Act dictates that plaintiffs should be able to pursue consumer-fraud actions without experiencing financial hardship. Once a grievant establishes an unlawful practice under the Act, it is entitled to attorneys’ fees. Therefore, the case was reversed and remanded for determination of attorneys’ fees and for the calculation of treble damages.


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