Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.J. Sup. Ct.: Attorneys’ fees denied for technical violation of New Jersey Consumer Fraud Act, (Sep 13, 2013)

By Edward L. Puzzo, J.D.

Attorneys’ fees cannot be awarded for a technical violation of the New Jersey Consumer Fraud Act without further proof of a bona fide ascertainable loss resulting from the violation, the New Jersey Supreme Court has ruled (Perez v. Professionally Green, LLC, September 12, 2013, Patterson, A.).

In a dispute arising from the installation of a swimming pool, Alex and Cathy Perez alleged, among other claims, that Swim-Well Pools had violated the New Jersey Consumer Fraud Act due to alleged deficiencies in their contract. At trial level, the court granted the plaintiffs partial summary judgment for a “technical violation” of the CFA: the absence of starting and ending dates for the project in the contract. As a result of this violation, the plaintiffs alleged an ascertainable loss in the form of their inability to use their pool during the summer of 2004. After presentation of plaintiff’s evidence, the trial court held that plaintiffs had failed to make a prima facie showing that Swim-Well’s technical violation of the CFA caused an ascertainable loss, and granted Swim-Well’s motion for involuntary dismissal.

Attorney Fees under CFA. Plaintiffs filed a post-trial motion for attorneys’ fees. The trial court ruled that because plaintiffs had not been able to prove ascertainable loss from the CFA violation, they were not entitled to recover attorneys’ fees under the CFA. The appellate court reversed, ruling that a CFA plaintiff need not prevail on an involuntary dismissal motion in order to establish a bona fide claim of ascertainable loss, a prerequisite to an award of attorneys’ fees.

The New Jersey Supreme Court overruled the appellate court. In addition to establishing a CFA violation, the Supreme Court stated, a private plaintiff must demonstrate that the violation resulted in an “ascertainable loss of moneys or property, real or personal.” After doing so, a plaintiff may be awarded attorneys’ fees. The claim of ascertainable loss must be capable of surviving a motion for summary judgment.

The trial court had considered plaintiffs’ evidence and the legitimate inferences that could be drawn in their favor and determined that no rational jury could find ascertainable loss. The trial court’s grant of involuntary dismissal, never appealed, was analogous to a grant of summary judgment, the court stated. Under either, a defendant will not prevail if the evidence, viewed in the light most favorable to the plaintiff, would permit a rational fact-finder to conclude that the plaintiff has sustained an ascertainable loss. The granting of this motion by the trial court confirms that no bona fide ascertainable loss exists. Thus an award of attorneys’ fees would directly contravene the CFA, the Supreme Court held.

The case is Civil Action No. A-66-11 069482.

Attorneys: Edward R. Grossi for Alex Perez and Cathy Perez. Jerald J. Howarth (Howarth & Associates) for Swim-Well Pools, Inc.

Companies: Professionally Green, LLC; Swim-Well Pools, Inc.

Cases: StateUnfairTradePractices NewJerseyNews