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Zorba Contractors, Inc. v. Housing Authority of The City of Newark

362 N.J. Super. 124, 827 A.2d 313 (App. Div. 2003)

CONSUMER FRAUD; JURIES—Jury trials are available in Consumer Fraud Act actions.

In a fifteen year old case with a convoluted procedural history, a public housing authority counterclaimed, in a collection action, asserting that a contractor’s “workmanship had been deficient and that it had submitted fraudulent change orders.” One of the claims was founded on the Consumer Fraud Act (CFA). Along the way, the lower court dismissed the housing authority’s claims on the ground that the housing authority was not a “person” as defined in the CFA. In an interlocutory appeal, the Appellate Division reversed, “concluding in a published opinion that the term ‘persons’ should be ‘expansively construe[d] ... to include a public authority when acting as a consumer.’” Eventually, when the CFA claim was to be heard, a question arose as to whether “there is a right to a jury trial in a private action under the Consumer Fraud Act (CFA).” The lower court was not sure and decided to empanel a jury at the suggestion of the housing authority, because “even if there was no right to a jury trial, the jury could be retained to make advisory findings.” The jury returned its verdict, finding that the contractor “had violated the CFA but that this violation was not a proximate cause of the damages claimed by the [housing authority].” Months later, the lower court “issued an oral decision which concluded that [the contractor’s] representations concerning its product violated the CFA and that those violations were a proximate cause of the [housing authority’] damages.” The judgment was substantial.

On appeal, the contractor argued that it had a right to a jury trial on the consumer fraud claim “and that the jury returned a binding verdict in [its] favor.” In a supplemental brief to the Appellate Division, the contractor argued “that the 1971 amendment to the CFA reflected an implied legislative intent to authorize trial by jury in private CFA actions and that there is a constitutional right to a jury trial because this [form of] statutory cause of action is closely related to common-law fraud, which was triable before a jury, and the relief that can be obtained in a private CFA action is primarily ‘legal’ in nature.” The Court set aside the constitutional argument because it felt it was not necessary to its disposition of the litigation. It then looked at two reported opinions that had previously considered the question and in neither case was an objection raised to placing the matter in front of a jury. In fact, in one case, the appellate controversy had to do with the nature of the jury charge. In that case’s concurring opinion, one justice did point out that “although this case was tried to a jury, no court has yet determined whether there exists a right to trial by jury for damage claims under the Consumer Fraud Act.”

The CFA originally was enforceable only by the Attorney General. “In 1971, the Legislature amended the Act to permit a private right of action through which the successful plaintiff received treble damages, reasonable attorneys’ fees, filing fees, and costs.” The 1971 amendment, however, did not expressly provide for jury trials and actions under the CFA by the Attorney General did not implicate the right to a trial by jury. The Court analyzed the history of the Law Against Discrimination which originally only provided for enforcement by the government. When that Act was amended to authorize private judicial actions, it also did not have a “specific provision concerning the remedies that could be pursued in a private judicial action.” The judicial history of that Act resulted in a conclusion that there was no right to trial by jury in private actions under the Law Against Discrimination. The difference, however, was that unlike the 1997 amendment to the Law Against Discrimination, “which did not include a specific remedies provision and therefore was construed ... to allow a private litigant simply to pursue the same equitable remedies as” could the government, “the 1971 amendment to the CFA specifically set forth the remedies that can be awarded in a private action.” Thus, under tests set forth under earlier cases, “the determination whether there is a right to a jury trial in a private CFA action turns on whether an action under [the CFA] ‘must be viewed more in the nature of an equitable than a legal cause of action,’ ..., or is ‘readily analogous to [a] conventional legal action[].’” The CFA “authorizes the award not only of ‘equitable’ but also ‘legal relief.’” If an action is “legal” in nature, “the right to [a] jury trial attaches. ... Consequently, the Legislature’s characterization of a cause of action as ‘legal’ may justify an inference that it intended to authorize a jury trial.” The Court also looked at the language of the CFA which “only allows a person who has suffered an ‘ascertainable loss of monies or property’ to maintain a private CFA action.” Thus, the “legislative objective in authorizing a private CFA action was to afford defrauded consumers an opportunity to obtain legal relief for such ‘ascertainable loss[es].’” With all of that in mind, the Court concluded that jury trials are available in CFA actions.


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