November 9, 2007
BARBARA BECK, PLAINTIFF-APPELLANT,
JASON GOMEZ, TRADING AS HEAT WAVE POOLS AND VIKING POOLS NORTHEAST, INC., DEFENDANTS-RESPONDENTS, AND HEAT WAVE POOLS, DEFENDANT.
On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-1611-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 11, 2007
Before Judges Fuentes and Grall.
This dispute arises from the installation of a prefabricated swimming pool at the home of plaintiff Barbara Beck. The defendants are Viking Pools (Viking), the manufacturer, and Jason Gomez, the installer.*fn1 Beck filed a complaint alleging that Gomez breached his contract and that both defendants violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. A default judgment was entered against Viking and was subsequently modified to preserve the question of damages for trial. Following a bench trial, the judge found that Gomez breached his contract with Beck and awarded contract damages in the amount of $39,072.05. Although the judge determined that both defendants violated the CFA, she concluded that Beck failed to establish an ascertainable loss caused by either violation. Finally, the judge concluded that equitable principles barred Beck's claim for "reasonable attorneys' fees, filing fees and reasonable costs of suit" pursuant to N.J.S.A. 56:8-19.
Beck appeals and contends that the judge erred by excluding three components of her alleged contract damages, finding no ascertainable loss attributable to defendants' violations of the CFA and denying counsel fees and costs pursuant to N.J.S.A. 56:8-19. Because the judge's findings on damages and ascertainable loss are supported by substantial credible evidence in the record and are not clearly mistaken, we affirm. See Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 475-76 (1988) (noting that the standard of review articulated in Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974), applies on review of judicial fact finding in an action alleging a violation of the CFA). We conclude, however, that Beck is entitled to recover reasonable attorneys' fees and costs pursuant to N.J.S.A. 56:8-19. Accordingly, we remand for a determination of the amount.
The following facts are pertinent to the issues raised on appeal. Interested in having an in-ground pool installed in her backyard, Beck visited Vikings' website. The posted advertisement described two options for installation, a "do-it-yourself" program and a "complete installation" program. "Complete installation" was described as follows:
Your Viking Pool can be installed by a local dealer or a mobile installation crew from one of our four manufacturing plants. They will work with you from beginning to completion, through all the stages of planning and design. A Viking representative will be there to provide a pool that is right for you and your backyard AND be sure the job is done right from start to finish. You can be swimming in as little as 14 days.
According to Beck, she was interested in a Viking Pool, in part, because she believed that a representative of Viking would oversee the installation. The pool she selected was "beautiful." It had "every kind of option you could think of," including a "mosaic tile of dolphins on the bottom." She contacted Viking, was given Gomez's name and phone number and was told that he was trained and certified.
Gomez met with Beck at her home. She showed him where she wanted the pool, which was in the middle of the yard and positioned to permit her to see the deep end from her kitchen window. Beck did not have a survey of the property available, but Gomez placed stakes to mark the location she selected. Beck then signed a contract for purchase and installation of a fiberglass pool for a total cost of $30,500 payable in installments as the work progressed. The work to be done by Gomez included digging, delivery of the pool, running plumbing lines and back filling. The pool, a pump, filter, heater, fiber optics, cleaning system and one load of stone were included in the contract price. Beck paid the deposit and, later that day, faxed a copy of the survey to Gomez. Several days later, Gomez completed applications for plumbing, electrical and building permits, which Beck signed. A sketch of the proposed pool, prepared by Gomez, was appended to the applications.
A construction permit was issued on June 5, 2000. It included a notice that final inspection was required before final payment to the contractor. Although the permit was posted in a window in their living room, neither Beck nor her husband read it.
Beck claimed that a representative of Viking Pools was present when the pool was delivered and he told her that he would oversee installation. Gomez's work was inspected by the municipality as it progressed. When Gomez finished his work, but before final inspection and issuance of a certificate of occupancy, he requested and received final payment. Gomez explained that the final inspection had to await completion of the cement decking around the pool and the subsequent installation of the required fencing; Beck had retained others to do that work. He recommended the delay in order to allow the pool to settle and Beck agreed. The concrete and fencing was installed in spring 2001.
In April 2001, the municipality advised Beck that her pool had been placed within an easement for the municipality's sanitary sewer that crossed her property, over a sewer line and within the setback required by the zoning ordinance. In addition, a portion of the fence surrounding the pool extended beyond her property line. There were manholes in the Becks' backyard along the sewer line. Beck and her husband considered their alternatives and opted to relocate the sewer line and obtain a variance, rather than move the pool from the location Beck had selected. Gomez claimed that when Beck contacted him about the problem, he offered to move the pool, concrete and fence at no cost to her, but she wanted to leave the pool where it was. According to Beck, Gomez never made that offer.
The board of adjustment approved the variance Beck required in order to keep the pool in its place. The variance was granted upon the condition that Beck acquire all necessary permits and approvals, relocate the sewer line, remove the encroaching portions of the fence, and add a buffer of plantings between her property and an adjacent property. The variance was approved on April 2, 2002.
On July 11, 2003, before the sewer line was moved, a summons was issued. After a trial in municipal court, during which Beck presented expert testimony, she was ordered to pay a fine.
A company owned in part by Beck's husband eventually placed the buffering plantings required by the variance. Beck did not obtain estimates or proposals from other contractors.
The trial judge found that testimony given by Beck and her husband was not credible on several points. Specifically, the judge did not believe their testimony about the following: their reasons for buying the Viking Pool; the presence of a representative of Viking at the time of delivery; their ignorance of the location of the sewer line and sewer easement; their unawareness of their right to defer final payment to Gomez pending issuance of all approvals; Beck's denial of Gomez's offer to remedy her problems by moving the pool and concrete; the value of the plantings and work performed by Mr. Beck's company; and the family's inability to use the pool pending final approval. The judge found that neither Beck nor her husband contacted Viking Pools to inquire about the absence of a representative at any point during the installation of their pool and concluded that Beck's delay in complying with the conditions, not the work done by Gomez, led to the issuance of the summons and the imposition of the fine.
The judge concluded that both defendants violated the CFA. The violations were 1) Viking Pool's liability for an unlawful practice, which was established by the default judgment and based upon the representation posted on its website and quoted above, and 2) Gomez's violation of N.J.A.C. 13:45A-16.2(a)(10)(ii), which consisted of his requesting and accepting final payment before the final inspection and issuance of the certificate of occupancy.
The judge concluded that Beck failed to establish that she sustained an ascertainable loss caused by Viking's violation of the CFA. The judge reasoned that the misplacement of the pool was not related to Viking's failure to have a representative on location. Beck selected the site for the pool. Gomez, not Viking, submitted the plan and installed the pool, and neither Beck nor her husband sought or requested assistance from or supervision by a representative of Viking at anytime. On that basis, the judge concluded that Viking's violation, which was established by the default judgment and based on the information about installation posted on the website, was not a substantial factor in bringing about Beck's loss.
Because Gomez's regulatory violation occurred after the pool was in the ground, the judge concluded that Beck's loss was caused by Gomez's improper performance of the contract and would not have been avoided if he had complied with the regulation. The judge reasoned that if Gomez had delayed his request for final payment until the cement work, fencing and final inspection were complete, as required by the regulation, Beck's loss, attributable to the location of the pool, its cement deck and the fence, would have been the same. Accordingly, the judge concluded that Beck was entitled to contract damages but not treble damages available to consumers who suffer an ascertainable loss as a consequence of a violation of the CFA.
The judge denied Beck's request for fees and costs pursuant to N.J.S.A. 56:8-19 on the ground that Beck and her husband were aware of but did not invoke their right to defer final payment until the certificate of occupancy was issued and on the ground that they testified untruthfully at trial.
In fixing Beck's contract damages, the judge disallowed recovery for several expenses. Concluding that the buffering plantings were required due to Beck's decision to leave the pool in place and not Gomez's performance of the contract, the judge did not include that expense in damages. Because the summons was issued only after a lengthy delay between issuance of the variance and compliance with its conditions, the judge denied recovery of the fee for Beck's expert testimony and the fine imposed on the summons.
On appeal Beck claims that the judge erred in excluding from contract damages the cost of plantings and the expenses she incurred as a consequence of the issuance of a summons. The arguments presented lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). The judge's findings are adequately supported by the record. R. 2:11-3(e)(1)(A); see Rova Farms, supra, 65 N.J. at 483-84.
Beck's claim of error based on the judge's determination that she did not prove an ascertainable loss as a result of either defendants' violation of the CFA also lacks merit. Where there is an "ample basis in the record to support the trial court's conclusion that defendant's conduct . . . did not cause plaintiff any ascertainable loss" it is error for this court to "substitut[e] its view of the record for that of the trial court . . . ." Meshinsky, supra, 110 N.J. at 475-76; see Fluehr v. City of Cape May, 159 N.J. 532, 543 (1999) (noting that the issue of proximate cause may be removed from the fact finder only when "reasonable minds cannot differ"). In this case, there is adequate support for the judge's rejection of Beck's evidence on causation. Meshinsky, supra, 110 N.J. at 475. No discussion beyond the brief comments that follow is warranted.
Based largely on an assessment of the credibility of Beck and her husband, to which we must defer, the judge concluded that Viking's website describing the installation options was not a substantial factor contributing to Beck's purchase of the pool from Viking or to its misplacement in her yard. See Rova Farms, supra, 65 N.J. at 483-84.*fn2 The judge's conclusion is not so clearly mistaken as to warrant our interference. Beck selected the site and the pool. As the judge found, Beck and her husband knew about the easement and sewer line, knew no Viking representative was overseeing the project and never asked for a representative to select the pool that was right for them or to ensure that the job was done right. See Feinberg v. Red Bank Volvo, Inc., 331 N.J. Super. 506, 512 (App. Div. 2000) (considering the consumer's role in contributing to his loss and concluding that the ascertainable loss was attributable to his conduct and not the violation); see also Bosland v. Warnock Dodge, Inc. ___ N.J. Super. ___, ___ (App. Div. 2007) (slip op. at 13) (agreeing with this portion of Feinberg). The judge did not believe their contrary testimony.
The conclusion that Gomez's failure to comply with the regulation prohibiting payment before issuance of a certificate of occupancy did not result in any ascertainable any loss is similarly supported by the record. When Gomez accepted final payment, his work was done and the pool was in its place; his violation of the regulation governing payment was irrelevant to the loss. See Josantos Constr. v. Bohrer, 326 N.J. Super. 42, 46-47 (App. Div. 1999) (allowing treble damages only for work not completed when payment was accepted in violation of the regulation); cf. Cox v. Sears Roebuck & Co., 138 N.J. 2, 20 (1994) (discussing failure to obtain preliminary permits that would have led to inspections of work in progress).
Although Beck's objections to damages and ascertainable loss lack merit, we agree that the judge erred in declining to "award reasonable attorneys' fees, filing fees and reasonable costs of suit" pursuant to N.J.S.A. 56:8-19. A plaintiff who establishes a violation of the CFA is entitled to an "award [of] reasonable attorneys' fees, filing fees and reasonable costs of suit" even if the plaintiff fails to establish ascertainable loss attributable to the violation. Ibid.; see Cox, supra, 138 N.J. at 24-25 (dicta); Performance Leasing Corp. v. Irwin Lincoln-Mercury, 262 N.J. Super. 23, 33-34 (App. Div.) (concluding that a jury verdict finding a violation of the CFA but no ascertainable loss did not preclude recovery of fees), certif. denied, 133 N.J. 443 (1993). The statutory remedy of reasonable fees and costs of suit is made available regardless of success in proving ascertainable loss so as to encourage consumer's to pursue a private right of action without risking liability for fees upon failure to establish an ascertainable loss. Weinberg v. Sprint Corp., 173 N.J. 233, 254 (2002). Because Viking's violation was established by a default judgment and Gomez's violation was established at trial, an award of "reasonable attorneys' fees, filing fees and reasonable costs of suit" was required. Ibid.; Cox, supra, 138 N.J. at 24-25.
This court has recognized that a consumer who establishes a violation may be equitably estopped from invoking the statutory remedies available to one who establishes a violation of the CFA. Joe D'Egidio Landscaping, Inc. v. Apicella, 337 N.J. Super. 252, 257 (App. Div. 2001). The judge relied, in part, upon D'Egidio to deny fees and costs in this case. In D'Egidio, we concluded that a litigant who induced a landscaper to violate a regulation that required a written contract could not receive either treble damages or attorneys' fees upon establishing the violation. Ibid. In this case, however, there was no evidence that Beck engaged in any conduct that caused or induced either violation of the CFA. We accept the judge's conclusion that Beck was aware of and acquiesced in Gomez's violation, but she did not bring it about. This case is similar to Scibek v. Longette, 339 N.J. Super. 72, 85 (App. Div. 2001), in which we concluded that the consumer's awareness of the CFA regulation violated did not bar him from obtaining the protection of the Act.
Based on the testimony of Beck and her husband that the judge found as being untruthful, the judge also concluded that an award of statutory fees and costs would not further the purposes of the CFA. We acknowledge that Weinberg stresses the importance of limiting private causes of action under the CFA to cases involving "a bona fide claim of ascertainable loss." 173 N.J. at 253. The Court, however, equated a "a bona fide claim of ascertainable loss" with one supported by sufficient evidence to withstand a motion for summary judgment. Id. at 254. In this case, there was no finding that plaintiff's evidence failed to meet that standard.
Without a clear basis for application of an equitable principle or statutory basis for precluding relief, the question of the wisdom of an award of fees required by N.J.S.A. 56:8-19 is for the Legislature. As we noted in Branigan v. Level on the Level, Inc., 326 N.J. Super. 24, 31 (App. Div. 1999), "[t]he Supreme Court has made it clear that the statute mandates an award of counsel fees and costs for any violation of the Act, even if that violation caused no harm to the consumer" and "[r]elief from this strict liability, if any, must be granted by the Legislature."
A judge, however, is not without authority to address concerns raised by a litigant's conduct in connection with prosecution of a claimed violation of the CFA. The "amount" of the fee recoverable pursuant to N.J.S.A. 56:8-19 "is within the sound discretion of the trial court, guided by those principles that run consistently through our caselaw when courts address the appropriate quantum of fees allowable pursuant to various fee-shifting statutes." Branigan, supra, 326 N.J. Super. at 31 (noting factors and listing instructive cases). Litigation conduct is relevant to the reasonableness of fees. See N. Bergen Rex Transp., Inc. v. Trailer Leasing Co., a Div. of Keller Systems, Inc., 158 N.J. 561, 573 (1999). Success is also relevant, and the judge may, indeed must, consider the fact that Beck was litigating contracting claims, for which no fees are available, as well as violations of the CFA. See Chattin v. Cape May Greene, Inc., 243 N.J. Super. 590, 610-617 (App. Div. 1990), aff'd, 124 N.J. 520 (1991) (addressing the fixing of a reasonable counsel fee in a case involving litigation of multiple claims, only some of which were subject to N.J.S.A. 56:8-19).
Affirmed in part; reversed in part and remanded.