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Skeer v. Emk Motors Inc.

Decided: December 8, 1982.

MARTIN H. SKEER AND SUSAN SKEER, PLAINTIFFS-RESPONDENTS, JAMES R. ZAZZALI, ATTORNEY GENERAL OF NEW JERSEY, INTERVENOR-APPELLANT,
v.
EMK MOTORS, INC., A NEW JERSEY CORPORATION, DEFENDANT-RESPONDENT



On appeal from the Union County District Court.

Ard, King and McElroy. The opinion of the court was delivered by King, J.A.D.

King

[187 NJSuper Page 466] This case presents the question whether § 7 of the Consumer Fraud Act, N.J.S.A. 56:8-19 (L. 1971, c. 247, § 7) mandates imposition of treble damages, attorney's fees and costs.*fn1

After a bench trial the Law Division Judge held that defendant, a garage owner, was liable under the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., and awarded compensatory damages of $1,091.21. The judge refused to award treble damages but forwarded a copy of the complaint to the Attorney General "to permit him to intervene or move for further relief." The Attorney General intervened, argued that the Consumer Fraud Act mandated the imposition of treble damages, failed to convince the Law Division judge, and now appeals. We agree with the Attorney General's position and reverse.

The Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., was aimed at preventing the use of "any deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of any material fact" with the purpose of inducing another to rely in connection with the sale or advertisement of any merchandise. N.J.S.A. 56:8-2. The Attorney General has promulgated regulations to enforce that aim. N.J.S.A. 56:8-4.

The trial judge found that defendant had committed deceptive practices in violation of the automobile repair regulations promulgated pursuant to the act. Specifically, a dealer may not begin work for compensation without securing a "specific written authorization from the customer" stating the nature of the repair and providing the customer with a written estimate. N.J.A.C. 13:45A-7.2. The judge found that defendant violated this regulation. Defendant does not dispute that finding on this appeal.

N.J.S.A. 56:8-19 provides:

Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest. In all actions under this section the court shall also award reasonable attorneys' fees, filing fees and reasonable costs of suit. [Emphasis suupplied]

Relying upon Daaleman v. Elizabethtown Gas Co., 150 N.J. Super. 78 (App.Div.1977), rev'd on other grounds 77 N.J. 267 (1978), the judge held that this section did not mandate an award of treble damages. He also refused to award attorneys' fees and costs.

In Daaleman retail customers brought an action against a gas company pursuant to the Consumer Fraud Act. This court found that the trial court had jurisdiction to entertain the complaint but should have stayed the action so that the Board of Public Utilities Commissioners could exercise primary jurisdiction and adjudicate on the merits. We said that if the Board decided that the gas company had violated the act, the trial judge should then decide the issue of the customers' right to damages. Id. at 83-84.

Writing for this court, Judge Pressler there said, in dictum:

While we anticipate no serious problem in respect of an award of counsel fees, and recognize further that provision of such an award is a significant impetus to the prosecution of public interest litigation, we do appreciate that an award of treble damages might well be counterproductive to the interests of the very consumer class seeking vindication in this action. As the trial judge suggested, and as Elizabethtown here urged, such an award would simply be passed on to the consumers by increased rates charged to them. We are not persuaded that that result must necessarily follow and that the award could not be so molded so as to avoid it. In any event, the treble damage award is not mandated by the Consumer Fraud Act but only authorized by it, and we are confident that if the action is returned to the court, the parties will present such proofs as to the consequences of such an award as to permit the court to rationally exercise its discretion in this regard. [150 N.J. Super. at 84-85]

On appeal, the Supreme Court reversed on the ground that the defendant gas company was not subject to the provisions of the Consumer Fraud Act at all, holding that the regulatory agency, the Board, had exclusive jurisdiction ...


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