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Roberts v. Cowgill

November 06, 1998


Before Judges Long, Kestin and Carchman.

The opinion of the court was delivered by: The opinion of the court was delivered by Kestin, J.A.D.

[9]    Submitted: September 15, 1998

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Cumberland County.

Plaintiffs appeal from the trial court's order declining to amend a judgment in favor of plaintiffs to provide for an award of treble damages and counsel fees under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -85 (the Act). We reverse.

The action stemmed from a contract for the construction of an addition to plaintiffs' home. Defendant Smith undertook to perform the work on behalf of his employer, Diversified Services, a family-owned business of defendant Cowgill. Plaintiffs sued, alleging common law fraud, breach of contract, negligence and violation of the Consumer Fraud Act. After a bench trial, the Judge, in an oral decision, found that, by reason of some inferior work, defendants had breached the contract. With allowances for certain credits, $1,625 in net damages was awarded to plaintiffs.

With regard to the consumer fraud claim, the trial Judge specifically found that defendants had engaged in no affirmative acts or knowing omissions that would constitute consumer fraud, see Cox v. Sears Roebuck & Co., 138 N.J. 2, 17-21 (1994), and that the poor quality of the work performed did not alone amount to a consumer fraud, id. at 19 ("sloppy workmanship falls short of an unconscionable commercial practice"). The Judge also found, however, that defendants had violated regulations promulgated pursuant to the Act, thereby, as a matter of law, having committed consumer fraud, id. at 17, a strict liability infraction. See Fenwick v. Kay American Jeep, Inc., 72 N.J. 372 (1977). Nevertheless, although the Judge also found the same $1,625 to be the ascertainable damages under the Act, see Cox, supra, 138 N.J. at 21-24, he declined to treble the award because he held that the ascertainable loss was not the result of the consumer fraud, i.e., the regulatory violations. The trial Judge also held "if treble damages don't flow then attorneys' fees can't flow."

Because there is "adequate, substantial and credible evidence" supporting the trial Judge's findings and Conclusions that defendants had committed no affirmative acts or knowing omissions which would constitute violations of the Act, we are obliged to defer to them. See Rova Farms Resort, Inc., v. Investors Ins. Co., 65 N.J. 474, 484 (1974). Likewise, the findings that defendants violated some regulations adopted under the Act governing home improvement practices are unassailable. The question whether the regulatory violations subject defendants to treble damages and attorneys' fees is one of law, in respect of which no special deference is to be accorded to the trial court's determinations. Manalapan Realty v. Manalapan Twp. Committee, 140 N.J. 366, 378 (1995).

Although the Judge found defendants had generally committed regulatory violations in drafting the contract and in obtaining permits, he specified only some of the acts or practices proscribed in N.J.A.C. 13:45A-16.2 which defendants had violated in connection with constructing the addition. There is no question that defendants violated N.J.A.C. 13:45A-16.2(a)(10)(i) (Building Permits), which provides:

"No seller contracting for the making of home improvements shall commence work until he is sure that all applicable state or local building and construction permits have been issued as required under state laws or local ordinances; . . . ."

Defendants failed to obtain the necessary permits prior to construction, and thus began construction in violation of this regulation. They subsequently obtained the necessary permits.

Additionally, defendants violated N.J.A.C. 13:45A-16.2(a)(12) (Home improvement contract requirements- - - -writing requirement), which provides as follows:

"All home improvement contracts for a purchase price in excess of $200.00, and all changes in the terms and conditions thereof shall be in writing. Home improvement contracts which are required by this subsection to be in writing, and all changes in the terms and conditions thereof, shall be signed by all parties thereto, and shall clearly and accurately set forth in legible form all terms and conditions of the contract, including, but not limited to, the following:"

"i. The legal name and business address of the seller, including the legal name and business address of the sales representative or agent who solicited or negotiated the contract for the seller; ii. A description of the work to be done and the principal products and materials to be used or installed in performance of the contract. The description shall include, where applicable, the name, make, size, capacity, model, and model year of principal products or fixtures to be installed, and the type, grade, quality, size or quantity of principal building or construction materials to be used. Where specific representations are made that certain types of products or materials will be used, or the buyer has specified that certain types of products are to be used, a description of such products or materials shall be clearly set forth in the contract;"

"iii. The total price or other consideration to be paid by the buyer, including all finance charges. If the contract is one for time and materials, the hourly rate for labor and all other terms and conditions of ...

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