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Multiverse, Inc. v. Scarab

January 20, 2009


On appeal from the Superior Court of New Jersey Law Division, Special Civil Part, Morris County, Docket No. DC-102-07.

Per curiam.


Argued October 22, 2008

Before Judges Rodríguez and Lyons.

Plaintiff Multiverse, Inc. (Band) appeals from a judgment in favor of Ren Scarab as Just Rock PR (Scarab), the United States Publicity Director for Just Rock PR, an entity that books tours and provides publicity for rock bands in the United States, Europe and Japan.

In December 2005, the Band contracted with Scarab to book twelve shows during July 2006 and to provide publicity services in order to promote the Band and the tour. Scarab represented that revenue earned on the proposed tour would at least cover the costs of the tour. Scarab submitted an initial invoice for payment followed by monthly invoices from February through June 2006, totaling $3,338. The Band paid these invoices.

By June 2006, the Band concluded that there was no way that it would break even on its investment because Scarab had booked only four shows. Therefore, John Kimball, President of the Band and father of one of its members, sent Scarab an e-mail advising him of the Band's decision not to go forward with the tour and demanding a full refund of the $3,338 paid. Scarab confirmed he would cancel the booked shows and that "booking fees already paid for unbooked shows [would] be processed and refunded accordingly."

There was no refund. Therefore, the Band sued Scarab alleging breach of contract and violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. Scarab answered and denied the allegations. The Band served Scarab with a demand to produce documents. There was no response. The Band moved to strike the answer and separate defenses. There was no opposition to the motion. The judge granted the motion. Because there was no motion to restore, nor production of the documents, the Band moved to strike with prejudice. The judge granted the motion.

Following a proof hearing, the judge entered a judgment for $3,338. However, the judge declined to treble the damage amount because the record did not support a finding that there had been an unlawful practice or regulatory violation pursuant to CFA. The Band moved for reconsideration, requesting interest, treble damages and counsel fees. The judge denied the motion because he found that the actions of Scarab: in failing to adhere to the contract (price quota), [did not] rise to the level of an unlawful consumer practice. Nor was the defendants' failure to comply with the notice to produce documents the type of omission contemplated by the [CFA].

The Band appeals contending that the judge erred in denying treble damages and prejudgment interest. We disagree on the first point, but agree on the second.

In 1960, the Legislature passed the CFA to "protect the consumer against imposition and loss as a result of fraud and fraudulent practices by persons engaged in the sale of goods and services." Scibek v. Longette, 339 N.J. Super. 72, 77 (App. Div. 2001) (quoting Fenwick v. Kay Am. Jeep, Inc., 136 N.J. Super. 114, 117 (App. Div. 1975), rev'd on other grounds, 72 N.J. 372 (1977). In light of its remedial purpose, the CFA should be liberally construed in favor of the consumer in order to accomplish its dual objectives of deterrence and protection. Lettenmaier v. Lube Connection, Inc., 162 N.J. 134, 139 (1999); Joe D'Egidio Landscaping, Inc. v. Apicella, 337 N.J. Super. 252, 258 (App. Div. 2001).

The relevant sections of the CFA to this appeal are N.J.S.A. 56:8-2 and -19. They provide:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such persons as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice . . . . [N.J.S.A. 56:8-2 (emphasis added).]

Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest. In all actions under this section, including those brought by the ...

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