Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.J. Sup. Ct.: Homeowners may recover attorneys’ fees and costs under New Jersey Consumer Fraud Act despite jury finding that they suffered no ascertainable loss, (Jul 18, 2013)

By Tobias J. Gillett, J.D., LL.M.

A trial court erred in denying a motion for attorneys’ fees and costs filed by homeowners following a jury verdict finding that they suffered no ascertainable loss under the New Jersey Consumer Fraud Act from a contractor’s refusal to complete remodeling work on their home, a New Jersey Appellate Division court has ruled (LoGatto v. Lipsky, July 17, 2013, Per curiam). However, the appellate court denied the homeowners’ appeals challenging the trial court’s denial of their motion for a full refund of the money they paid the contractor, and the jury’s verdict concluding that they had not suffered an ascertainable loss.

In 2008, Michael and Coreen LoGatto accepted a proposal from David Lipsky, doing business as High Ridge Homes, to perform remodeling work on their home. Lipsky did not prepare a written contract as required by New Jersey law. In 2009, Lipsky informed the LoGattos that he would need an additional $78,469.37 to complete the work. When they were unable to reach agreement, Lipsky left the job, and the LoGattos arranged for its completion.

The LoGattos filed suit against Lipsky for the costs of completion. The court granted the LoGattos’ motion for summary judgment on the issue of Lipsky’s liability for their CFA claims, finding that Lipsky had committed technical violations of the CFA, such as failing to have a written contract. The judge denied Lipsky’s motion for involuntary dismissal on the claims, finding that there was a jury question as to whether the LoGattos had sustained an ascertainable loss. The court denied the LoGattos’ motion to require Lipsky to refund all of the money he received from them, and the jury found that the LoGattos had not suffered an ascertainable loss. The judge denied the LoGattos’ post-trial motions for reconsideration, attorneys’ fees and costs, and damages notwithstanding the verdict, and the LoGattos appealed.

Attorneys’ fees and costs. The appellate court reversed the lower court’s denial of the LoGattos’ motion for attorneys’ fees and costs. The court observed that under the New Jersey Supreme Court’s holding in Weinberg v. Sprint Corp., 173 N.J. 233 (2002), a consumer-fraud plaintiff could not recover fees for claims for ascertainable loss that were “dismissed on summary judgment because ascertainable loss cannot be proven as a matter of law or the plaintiff has failed to present a prima facie case.” However, a plaintiff who lost on the issue of ascertainable loss before a finder of fact was entitled to attorneys’ fees and costs. Since the trial court had denied the LoGattos’ motion “because they failed to convince the jury that they had suffered an ascertainable loss,” the court remanded the case for disposition of the fee motion.

Refund claim. However, the court rejected the LoGattos’ claim for a full refund of the money they paid Lipsky. The LoGattos’ claim relied on a provision requiring “a refund of all moneys acquired by means of any practice declared herein to be unlawful” that was enacted as part of a standalone food labeling statute intended to supplement the CFA. The court determined that the provision applied only to the food labeling provisions, not the entire CFA. Moreover, the court found that “the LoGattos received at least the value of the work they paid for, so a refund would be a windfall not warranted by notions of fairness, the CFA, or the jury’s finding that they suffered no ascertainable loss.”

Jury verdict. Finally, the court concluded that the jury’s verdict was not “against the weight of evidence and a manifest injustice.” Although the LoGattos had testified that they paid more to the contractor who finished the job than the $10,621.50 of the original proposal price remaining unpaid to Lipsky, the LoGattos had provided no documentary evidence to support their testimony, and the jury was not required to believe it. Moreover, the proposal originally given by Lipsky had indicated that some of the costs were estimates, and therefore the jury could have found the LoGattos did not suffer an ascertainable loss for that reason as well.

The case is No. A-3475-11T4.

Attorneys: Michael R. Scully (Michael R. Scully, L.L.C.) for Michael Logatto. William C. Bochet (Muscarella, Bochet, Edwards & D’Alessandro, P.C.) for David Lipsky, d.b.a. High Ridge Homes.

Companies: High Ridge Homes

Cases: StateUnfairTradePractices NewJerseyNews