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Hagan v. Castro

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 13, 2007

LUCY HAGAN, PLAINTIFF-APPELLANT,
v.
PETER CASTRO, CENTURY 21 ATLANTIC REALTY AND ROCKLAND MANAGEMENT, INC., ABE FROST, DEFENDANTS-RESPONDENTS, AND DEFENDANT.

On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-3035-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 15, 2007

Before Judges Lisa, Holston, Jr. and Grall.

Plaintiff Lucy Hagan appeals following a jury trial on her complaint alleging a violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -166, common law fraud, breach of contract, unjust enrichment, negligence and gross negligence arising from her rental of commercial property for use as a hair salon. The defendants are Peter Castro, a real estate agent employed by Century 21 Atlantic Realty (Century 21), Century 21, Rockland Management, Inc. (Rockland), the owner of the leased premises, and Abe Forst, a shareholder of Rockland. All claims other than those asserting negligence on the part of Castro and Century 21 and breach of contract by Rockland were dismissed by the court. The jurors found plaintiff thirty percent and defendants Castro and Centruy 21 seventy percent negligent and fixed damages at $65,000. They also determined that Rockland breached the lease and fixed damages at $35,000.

Defendants moved for a new trial or remittitur. The court remitted both damage awards, reducing the judgment against Castro and Century 21 to $6065.15 and the judgment against Rockland to $4665.50.*fn1

I.

This case presents a preliminary question as to our jurisdiction to consider this appeal. We must consider appeals from final orders of a trial court, but a decision to exercise jurisdiction to review an interlocutory order is left to the discretion of this court, which is to be exercised "in the interest of justice." R. 2:2-3(a)(1); R. 2:2-4. This court cannot ignore its responsibility to determine whether interlocutory review is warranted because the parties agree to an appeal from the interlocutory order or the appellant or the trial court erroneously characterizes the order as final. See Hudson v. Hudson, 36 N.J. 549, 553 (1962) (agreement); Hogoboom v. Hogoboom, ___ N.J. Super. ___, ___ (App. Div. 2007) (slip op. at 10-11) (agreement); Parker v. City of Trenton, 382 N.J.

Super. 454, 457 (App. Div. 2006) (filing of notice appeal from an order that was interlocutory); Leonardis v. Bunnell, 164 N.J. Super. 338, 340 (App. Div. 1978) (erroneous certification of finality pursuant to Rule 4:42-2), certif. denied, 81 N.J. 265 (1979).

An order of remittitur is not a final order unless the plaintiff accepts the reduced award. When a remittitur is ordered and "the plaintiff declines the reduction, [the plaintiff] must submit to a new trial as to damages." Fertile v. St. Michael's Med. Ctr., 169 N.J. 481, 496 (2001) (quoting Taweel v. Starn's Shoprite Supermarket, 58 N.J. 227, 231 (1971)); see id. at 499 (disapproving dicta from Taweel on other grounds). An order granting a new trial on damages is not final. See Lanzet v. Greenberg, 126 N.J. 168, 171 (1991) (noting this court's grant of leave to appeal from an order narrowing the scope of damages to be considered on a new trial on damages); Olah v. Slobodian, 119 N.J. 119, 129 (1990) (describing a decision of this court requiring retrial as interlocutory and granting leave to appeal).

A grant of remittitur is an alternative to a grant of a new trial. It authorizes entry of a final judgment in the reduced amount only if the plaintiff consents. "Remittitur is designed to bring excessive damages awarded by a jury to the level that the court knows is within the limits of a proper verdict and thereby avoid the necessity of a new trial." Fertile, supra, 169 N.J. at 491; see Baxter v. Fairmont Food Co., 74 N.J. 588, 595 (1977). The effect of a remittiur is to "den[y] a defendant a new trial [on damages where required] if a plaintiff consents to a specified reduction in the jury award." Fertile, supra, 169 N.J. at 491. When the plaintiff declines to accept, the defendants are entitled to a new trial on damages, not an automatic reduction. When the plaintiff accepts a remittitur, the plaintiff has no right of appeal except by way of cross-appeal in the event of an appeal by defendant. Baxter, supra, 74 N.J. at 594-96; see Winberry v. Salisbury, 5 N.J. 240, 255, cert. denied, 340 U.S. 877, 71 S.Ct. 123, 95 L.Ed. 638 (1950).

In this case the decision and orders on remittitur are ambiguous as to whether judgment was erroneously entered in the reduced amount, regardless of plaintiff's assent. In placing its ruling on the record, the trial court denied the motions for a new trial and granted the motions for remittitur. The order entered on the motion filed by defendants Castro and Century 21 provides that motion for a new trial is denied and, in the alternative, that judgment is entered in the amount of $6065.15. The order entered on Rockland's motion provides that the motion for a new trial is granted and, in the alternative, that remittitur is granted and judgment is entered in favor of Rockland in the amount of $4665.50. Because of this ambiguity, it is not clear that either plaintiff or defendants should have understood that plaintiff had the option to accept the reduced damage award or submit to a new trial on damages. On that basis, we conclude that this is an appropriate case for exercise of our discretion to grant leave to appeal on all issues. See R. 2:2-4; R. 2:5-6.

II.

Plaintiff raises the following issues on appeal:

I. IN THE CASE SUB JUDICE, THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY APPLYING A "DEFECTIVE CONDITION" STANDARD, AND FURTHER ERRED IN THE APPLICATION OF THE STANDARD THAT THE DEFECT WAS EASILY DISCERNABLE.

II. IN THE INSTANT MATTER PLAINTIFF ESTABLISHED THAT DEFENDANT REALTOR MADE AFFIRMATIVE MISREPRESENTATIONS REGARDING THE SQUARE FOOTAGE OF THE LEASEHOLD SPACE IN VIOLATION OF THE CONSUMER FRAUD ACT -- PLAINTIFF WAS NOT REQUIRED TO SHOW THE REALTOR'S KNOWLEDGE OF THE FALSITY OF HIS STATEMENTS OR AN INTENT TO DECEIVE THE PLAINTIFF.

III. DEFENDANT REALTOR FURTHER VIOLATED THE CONSUMER FRAUD ACT WHEN HE PURPORTEDLY MEASURED THE SHOP AND ADVISED PLAINTIFF THAT IT MEASURED 356 FEET.

IV. THE TRIAL COURT ERRED IN DISMISSING PLAINTIFF'S CONSUMER FRAUD CLAIMS AGAINST DEFENDANT LANDLORD.

V. THE TRIAL COURT ERRED IN LIMITING THE NEGLIGENCE CLAIMS AGAINST DEFENDANT REALTOR AND SUBSEQUENTLY DISMISSING [THE] PUNITIVE DAMAGE CLAIM AGAINST DEFENDANT REALTOR AS HIS CONDUCT PLAINLY DEMONSTRATED A WANTON AND WILLFUL DISREGARD FOR THE RIGHTS OF THE PLAINTIFF; THE TRIAL COURT ALSO ERRED BY DISMISSING [THE] NEGLIGENCE CLAIM AGAINST LANDLORD.

VI. SINCE THE JURY'S ASSESSMENT OF DAMAGES WAS NOT SO DISPROPORTIONATE TO THE PLAINTIFF'S LOSSES AND DAMAGES IT WAS IMPROPER FOR THE TRIAL COURT TO GRANT A REMITTITUR AS TO DAMAGES.

VII. THE JURY IN THE INSTANT MATTER HEARD THE TESTIMONY OF THE WITNESSES AND IN THEIR CAPACITY AS THE TRIER OF FACT ACCEPTED THE LAW AS EXPLAINED AND APPLIED IT TO THE FACTS BASED ON THE EVIDENCE AND MADE AN APPROPRIATE AWARD.

After review of the record in light of the arguments presented, we are convinced that the issues raised in Points I, IV and V of plaintiff's brief lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We address separately below the evidence and law relevant to plaintiff's objections to dismissal of her CFA claim and remittitur of the damage awards.

III.

Because plaintiff contends that the trial court erred in dismissing her claimed violation of the CFA at the close of her case, we consider the evidence and inferences in the light most favorable to plaintiff in order to determine whether there is adequate evidence to permit a verdict in her favor on that claim. Dolson v. Anastasia, 55 N.J. 2, 5 (1969); see R. 4:37-2(b).

Plaintiff is a beautician. She contacted Century 21 and met with Castro because she was interested in opening a hair salon in a store front on Bayway Avenue in Elizabeth that was available for rental. Castro was listed as the realtor.

Hair salons are regulated by the State and must have an area of at least 350 square feet. Plaintiff brought a pamphlet issued by the State with her when she first met with Castro. She also told him about the State's requirement. Castro assured plaintiff that he had years of experience and knew the requirements. He told her not to worry and said he knew exactly what she needed.

Plaintiff subsequently signed a lease for a one-year period commencing on July 5, 2000. Plaintiff did not draft the lease and did not know who did. Castro presented the lease to her. It includes a description in which the area is defined as "consisting of approximately 350 square feet." Plaintiff read the lease and had her attorney review it before signing. The landlord also signed.

Plaintiff subsequently undertook preparations to ready the leased premises for her business. She obtained permits for the electrical and plumbing work needed, purchased supplies, equipment and work stations. The work stations were delivered in September 2000.

Plaintiff became aware of a potential problem with the size of the premises when the work stations were delivered. The provider told her that he thought the area was smaller than required by the State. Plaintiff called Castro. He visited and measured the leased premises, using an instrument that plaintiff described as resembling a beeper. He calculated the area at 356 square feet and gave her a note that included the calculations. She relied on his expertise and continued work on the premises, some of which was done by plaintiff and others who helped her at no charge.

In March 2001 a State investigator measured the salon and calculated the area at 286 square feet. On that basis, and that basis alone, plaintiff's salon was found unsuitable and she was denied authorization to operate her business at that location. She sought a waiver, but that request was denied.

The trial court found plaintiff's evidence inadequate to permit the jury to find that Castro made an affirmative misrepresentation that induced plaintiff to execute the lease. The court found that the lease did not include an affirmative misrepresentation because it did not specifically describe the area as 350 square feet. The court found that any implicit representation as to area was at most a failure to disclose, not an actual misstatement. Because the court found that there was no evidence that Castro knew the actual size, the court concluded that neither he nor Century 21 could be found liable on the basis of failure to disclose. With respect to the inaccurate report on area that Castro gave plaintiff after he measured, the court concluded that Castro believed his measurement was accurate. The court also found that Castro made that representation after plaintiff had signed the lease, apparently concluding that it was not material.

The standard the trial court, and this court, must apply in determining whether a defendant is entitled to dismissal after the close of the plaintiff's case is well-established. The court may not resolve any factual dispute against the plaintiff, must accept all of the plaintiff's evidence as true and must afford the plaintiff the benefit of all favorable inferences. See Dolson, supra, 55 N.J. at 5. The trial court did not apply that standard.

Plaintiff's claim is that Castro violated N.J.S.A. 56:8-2, which defines unlawful practices prohibited by the CFA to include the "use or employment . . . of any . . . deception, fraud, false pretense, false promise [or] misrepresentation . . . in connection with the sale . . . of any . . . real estate . . . ." A rental is a "sale" within the meaning of the CFA.

N.J.S.A. 56:8-1. A misrepresentation is a "statement of fact" that is "material to the transaction," not true and made to induce to the transaction. Gennari v. Weichert Co. Realtors, 148 N.J. 582, 607 (1997). "One who makes an affirmative misrepresentation is liable even in the absence of knowledge of the falsity of the misrepresentation, negligence, or the intent to deceive." Id. at 605.

Plaintiff's testimony and evidence, if believed, would have permitted the jurors to find that a premises with an area sufficient to meet State standards was material to this transaction. She testified that she told Castro she needed an area of 350 square feet.

Plaintiff's evidence was also sufficient to permit the jurors to find an affirmative misrepresentation as to the size of the premises. Castro assured plaintiff that he knew the standards against which her hair salon would be measured, which was 350 square feet, and that it was a material condition. He then presented her with a lease that included a description of the area as "approximately 350 square feet." The actual area was 286 square feet. The question whether the description of the area was a statement of fact that was false -- viewed in the context of Castro's representations about his knowledge, plaintiff's description of her needs and the sixty-four square foot difference between what plaintiff sought and what she received -- also was a question of fact that reasonable jurors could have resolved in plaintiff's favor.

In addition, there was sufficient evidence to permit the jurors to find that Castro made a second misstatement when he measured the premises and told her its area was 356 square feet. That misstatement was material to plaintiff's continuation of her tenancy without protest, an act which was to her detriment. As plaintiff explained, she believed the measurement to be accurate when Castro presented her with notes showing the calculation. By summarily dismissing the significance of Castro's statement about his measurement on the ground that Castro believed it to be correct, the trial court not only took a factual question from the jurors but also erred when it concluded that plaintiff was required to establish that Castro knew the statement was false and could not establish that she relied on a misstatement made after she signed the lease but before she completed her work on the premises.

Thus, the CFA claim was erroneously dismissed on defendant's motion at the close of plaintiff's case. Plaintiff was entitled to proceed to the jury on her claim that Castro, and through him his employer Century 21, violated N.J.S.A. 56:8-2. Accordingly, we reverse and remand for a new trial on the question whether defendants Castro and Century 21 violated N.J.S.A. 56:8-2.

IV.

The authority to reduce damages awarded by a jury is limited to cases in which "the quantum of damages assessed by a jury . . . is so disproportionate . . . as to shock [the] conscience" and require a new trial on damages because "'it clearly and convincingly appears that there was a miscarriage of justice under the law.'" Baxter, supra, 74 N.J. at 596 (quoting R. 4:49-1(a)); see Fritsche v. Westinghouse Elec. Corp., 55 N.J. 322, 330 (1970). In considering plaintiff's claim that the trial court erred by granting a remittitur, we give deference to that court's "feel" for the case and opportunity to assess credibility but otherwise apply the same standard as the trial court -- whether the damage awarded is so clearly excessive in light of the evidence that the jurors must have made a mistake that resulted in a miscarriage of justice. Baxter, supra, 74 N.J. at 596-600. It is proper to conclude the jurors were so mistaken when there is no evidence to support the quantum of damages awarded. Id. at 599.

Plaintiff produced evidence of expenses for rent, a security deposit, labor, materials, supplies, permits, certificates and fees that the trial court calculated at a total of $13,300. Plaintiff does not dispute that total. Rather, she contends that the jurors properly included an amount to compensate her for time spent readying the premises for business and profits lost while that work was being done. She makes that argument without pointing to any evidence relevant to the value of the labor or lost profits.

"Damages need not be proved with precision where that is impractical or impossible." Borough of Fort Lee v. Banque Nat'l de Paris, 311 N.J. Super. 280, 291 (App. Div. 1998). Nonetheless, the record must "support[] a reasonable estimate of damages, based upon more than mere speculation . . . ." Ibid. (discussing proofs relevant to lost profits); see Cromartie v. Carteret Sav. & Loan, 277 N.J. Super. 88, 103 (App. Div. 1994) (same); see also Cox v. Sears Roebuck & Co., 138 N.J. 2, 11 (1994) (discussing proof of cost of repairs and insignificance of the fact that the repairs were not undertaken where proof of the estimated cost, calculated with reasonable certainty, was provided). Plaintiff points to no such evidence in this case.

It is apparent that the trial court did not substitute its view of the evidence relevant to damages for that of the jurors. Fertile, supra, 169 N.J. at 500. Instead, the court properly "remitt[ed] the award to the highest figure that could be supported by the evidence . . . ." Ibid. Accordingly, we affirm the remittitur. Because, as noted above, the court seemingly entered judgments in favor of plaintiff in the reduced amount without conditioning the reduction on her assent, we remand. Plaintiff must be given the option to accept the reduced damage award or submit to a new trial on damages.

Affirmed in part; reversed in part and remanded for further proceedings.


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