On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. DC-1186-02.
Before Judges King, Newman and Holston, Jr.
The opinion of the court was delivered by: Holston, Jr., J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
In this Consumer Fraud Act (CFA) case, defendant, Carlton Pools, Inc., appeals from the May 12, 2003 order awarding plaintiff, Michael J. Pron, attorneys' fees in the amount of $16,848.01 for a technical violation of the CFA. The violation was defendant's misrepresentation in its advertising not to use subcontractors in the construction of an in-ground pool. Defendant also appeals the July 15, 2003 order denying its motion for reconsideration. We reverse.
On March 11, 2002, plaintiff, Michael J. Pron, filed a five-count complaint against defendant alleging breach of contract, breach of express warranties, breach of implied warranties, unjust enrichment and consumer fraud arising from defendant's construction of an in-ground pool at plaintiff's residence. A bench trial was conducted on March 4, 2003.
The following facts were testified to at trial. On April 13, 2000, plaintiff entered into a contract with defendant for the construction of a 650-square-foot plaster in-ground pool. Before entering into the contract, defendant's representative made a presentation regarding the construction of the pool. According to plaintiff, the representative"kept dwelling on the fact that the whole pool will be constructed by Carlton... [that] they would not sub any of the work out [and] use all their own employees." Defendant also provided plaintiff with a written advertisement that stated"[a]ll phases of your pool constructed by our own crews (No Sub-Contractors)." Plaintiff testified that this representation"was probably the biggest thing that got [him] to sign."
About a year after the construction, A & L Pools, a company plaintiff hired for maintenance on the pool, alerted plaintiff that the pool's plaster finish was substandard and would need to be replastered. There was etching, roughing and discoloration on the pool surface. Defendant sent two representatives to plaintiff's residence to inspect the pool. They conducted a sanding test and concluded that the pool's finish was not defective. Any change in the pool surface was seemingly due to improper application of chemicals, not to faulty materials or faulty construction of the pool surface.
During plaintiff's case-in-chief, Robert Olsen, director of operations for defendant, testified that two subcontractors were used in this project, an electrician and a gas plumber. Olsen, however, testified that no subcontractors were used in the"construction" of the pool. Rather, the subcontractors were used for the lighting and heating of the pool.
Following the presentation of plaintiff's evidence, defendant moved for a directed verdict on the contract, warranty and unjust enrichment claims. The court granted the motion.
The court found that"[p]laintiff did not establish a prima facie case that [d]efendant's materials or workmanship was defective in any way to cause the problems with [p]laintiff's pool, and that [d]efendant did not breach its contract or warranty with [p]laintiff."
The judge, then, sua sponte, found that"plaintiff demonstrated that [d]efendant misrepresented the material fact that it would not utilize subcontractors in connection with the construction of the pool at issue... but subcontractors were, in fact, used as part of the process." The court determined that defendant committed a technical violation of the CFA. However, the court concluded that plaintiff did not suffer any ascertainable loss as a result of this violation because the use of the subcontractors was unrelated to the discoloration, staining, etching and calcification of the plaster finish of the pool. The judge requested both parties to submit briefs concerning whether attorneys' fees and costs can be awarded for a violation of the CFA, even when no loss occurred.
In a written opinion, the judge, in finding an entitlement to attorneys' fees, quoted from Cox v. Sears Roebuck & Co., 138 N.J. 2, 24 (1994), where our Supreme Court stated:"a consumer-fraud plaintiff can recover reasonable attorneys' fees, filing fees, and costs if that plaintiff can prove that the defendant committed an unlawful practice, even if the victim cannot show any ascertainable loss and thus cannot recover treble damages." Since the judge was satisfied that defendant committed an unlawful practice in violation of the Act, the judge found plaintiff was entitled to recover attorneys' fees, filing fees and costs upon plaintiff's counsel filing a schedule of services with the court. By order dated May 12, 2003, the court awarded attorneys' fees, costs and expenses in the amount of $16,846.01.
Defendant filed a motion for a new trial. Defendant alleged that a new trial should be granted because it did not have an opportunity to present evidence to establish it did not commit a violation of the CFA. In a written opinion the judge noted that under R. 4:49-1(a), a motion for a new trial is granted only if there clearly and convincingly was a miscarriage of justice under the law. ...