October 14, 2008
NOREEN LANZA, PLAINTIFF-APPELLANT,
SECRET GARDENS LANDSCAPING, INC. AND BRENT STEPHENS, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Gloucester County, L-1692-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 29, 2008
Before Judges Skillman and Graves.
Plaintiff appeals from the part of an order entered on April 13, 2007 that dismissed her claims under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -184, against defendant Brent Stephens. We reverse.
Defendant Secret Gardens Landscaping, Inc. was a corporation that performed various landscaping and remodeling services. Stephens was the president and chief executive officer of Secret Gardens.
On September 27, 2004, Secret Gardens submitted a proposal to plaintiff for remodeling and landscaping work on her property. The total price of this work quoted to plaintiff was $35,000. Plaintiff signed the proposal, and Secret Gardens performed the work.
After completion of performance, plaintiff filed suit against Secret Gardens and Stephens. In addition to asserting claims for breach of contract and negligence, plaintiff's complaint asserted various claims under the CFA. Those claims included an allegation that Secret Gardens had represented on its website that it was "EP Henry Certified," which was untrue, had failed to submit a contract that contained a start and end date for performance or a description of the work and principal products and materials to be used, and had failed to obtain all change orders to the contract in writing.
After completion of discovery, the case was brought before the trial court on cross-motions for summary judgment. In their motion, defendants argued that Stephens had no personal liability for any acts of Secret Gardens, including its alleged violations of the CFA.
The trial court granted the part of defendants' motion that sought the dismissal of all claims against Stephens, including plaintiff's CFA claims.*fn1 In so ruling, the court stated:
[T]he New Jersey Limited Liability Act does entitle members and managers of New Jersey Corporations to take advantage of that corporate structure that's afforded according to the statute, 42:2B-1. There is also ample case law that shows this court that the courts do not generally pierce the corporate veil absent fraud or injustice[.] . . . .
Upon my review of the instant matter before the court, it appears to this court that at all times, Brent Stevens [sic] acted as the CEO and president of Secret Gardens. At no time did I see an allegation that he was acting beyond the scope of his employment as the president and CEO with respect to the work that was being done.
Therefore, it is this court's determination that the corporate veil cannot be pierced.
Before the scheduled trial date, Secret Gardens notified the court that it had filed a bankruptcy petition.*fn2 The court subsequently entered an order dismissing plaintiff's claims against Secret Gardens based on the bankruptcy petition.
Our case law has long recognized that a corporate officer or employee who participates personally in a violation of the CFA or its implementing regulations may be held individually liable for the violation. See, e.g., New Mea Const. Corp. v. Harper, 203 N.J. Super. 486, 502-03 (App. Div. 1985); Kugler v. Koscot Interplanetary, Inc., 120 N.J. Super. 216, 251-57 (Ch. Div. 1972); see also Saltiel v. GSI Consultants, Inc., 170 N.J. 297, 305 (2001).
The record before the trial court on defendants' motion for summary judgment contained undisputed evidence that Stephens had participated personally in the alleged violations of the CFA committed in connection with the execution and performance of the home improvement contract between plaintiff and Secret Gardens. Stephens himself testified at his deposition that he was the one who prepared the contract submitted to plaintiff, inspected the work as it was being performed, and discussed the change orders with plaintiff. These actions by Stephens constitute the primary grounds for plaintiff's CFA claims. Therefore, Stephens would be liable for any violations of the CFA in which he participated personally.
Accordingly, the part of the April 13, 2007 order that dismissed plaintiff's CFA claims against Stephens is reversed, and the case is remanded to the trial court.