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Wenger v. Cardo Windows


March 16, 2009


On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4924-07.

Per curiam.


Submitted February 25, 2009

Before Judges Cuff and Baxter.

In this appeal, we review an order that granted summary judgment to defendant, Castle "The Windows People,"*fn1 thereby dismissing the class action complaint filed by plaintiffs, Christopher and Jennifer Wenger,*fn2 in which they alleged that the contract they signed for the purchase of replacement windows violated various consumer protection statutes. We conclude that plaintiffs presented sufficient facts to have survived the dismissal of the majority of their claims, and that the grant of defendant's motion concerning those claims was therefore error.

In particular, the Law Division erred when it rejected plaintiffs' claims arising under the Truth-in-Consumer Contract, Warranty and Notice Act; the Home Repair Financing Act; the Door-to-Door Home Repair Sales Act of 1968 and the Federal Trade Commission's cooling-off rule. We affirm the dismissal of plaintiffs' claims arising under the Consumer Fraud Act and its supplemental provisions, the Home Improvement Contractor Registration Act and the Home Improvement Practices regulations. We also reverse the denial of plaintiffs' motion for class certification, because that denial was premised upon the incorrect determination that defendants violated no applicable statutes or regulations. On remand, after the completion of discovery, the judge is directed to reconsider the class certification motion on the merits.


In March 2007, plaintiffs received from defendant a postcard advertising the sale of replacement windows. Plaintiffs responded by calling defendant and requesting that a sales representative come to their Monroe Township home to demonstrate defendant's products.

On March 17, 2007, one of defendant's salesmen went to plaintiffs' home to make the requested presentation. At the conclusion of the presentation, plaintiffs signed a "Purchase Agreement" in which they agreed to purchase twenty custom-made replacement windows for the price of $10,700. The sales representative offered plaintiffs the opportunity to borrow the entire purchase price of the windows and the cost of installation, to be repaid over a period of sixty months with interest, to which plaintiffs agreed by signing a document entitled "Castle Straight Talk Financing."*fn3 The salesman provided plaintiffs with a copy of these two documents and a third document entitled Notice of Cancellation, before he left their home.

On March 21, 2007, plaintiffs decided to cancel the transaction. They signed the Notice of Cancellation and mailed it to defendant. On or about March 29, 2007, more than a week after plaintiffs mailed the cancellation notice, one of defendant's representatives arrived at plaintiffs' home to measure the windows. Plaintiff was surprised by the man's arrival in light of the contract cancellation plaintiffs had mailed, but permitted him to enter their home. After taking measurements, the representative presented plaintiffs with several additional documents to sign. Plaintiff claimed to have signed the documents and asserts he was never provided with copies. The record does, however, contain a March 29, 2007 credit application to finance a $10,700 loan at an interest rate of 13.24% for sixty months.

On April 5, 2007, plaintiff telephoned defendant and spoke with a representative, Anthony Cardillo, regarding the cancellation. Cardillo informed plaintiff that he could not cancel the contract. Over the telephone, Cardillo offered to reduce the price of the windows from $10,700 to $9,700. When plaintiff agreed to that change, Cardillo prepared and mailed to plaintiffs a document entitled Change Order. No other documents were mailed to plaintiffs. The Change Order listed a reduced contract price of $9,700 at an annual interest rate of 13.24%. Plaintiff executed the Change Order on April 7, 2007, and promptly mailed it back. Notably, the Change Order specified, "Customer agrees that he has not nor will not attempt to cancel this order."

On April 10, 2007, a roofing contractor was performing work at plaintiffs' home. He informed plaintiffs that their bay windows should be replaced only with pre-constructed, single-unit bay windows. He also advised them that bay windows should be secured from the sides of the windows rather than from the top and bottom. That same day, plaintiff telephoned defendant and spoke to Cardillo about the advice he received from the roofer. Cardillo referred plaintiff to one of defendant's engineers, who informed plaintiff that defendant could not provide a one-piece, pre-constructed bay window and that defendant would install all the windows by screwing them into the top and bottom of the window frame. Immediately thereafter, plaintiff left a message for Cardillo informing him that he was canceling the contract.

Plaintiff called Cardillo again the following morning, April 11, 2007. Plaintiff reiterated his earlier message that he was canceling the contract because defendant could not provide the appropriate bay windows and because the windows would be installed in an unacceptable manner. During that conversation, Cardillo agreed that plaintiffs could cancel the order for the six bay windows but he refused to accept the cancellation of the entire order. That same day, plaintiff sent a letter to defendant by regular and certified mail reiterating and confirming that he had canceled the order. In that letter, plaintiff requested copies of all the documents that were signed on March 29, 2007, but he never received a response.

On April 24, 2007, defendant filed a small claims complaint against plaintiffs seeking $3,000 in damages for breach of contract. Plaintiffs filed an eight-count class action complaint in the Law Division on June 1, 2007, as well as a motion to transfer the small claims matter to the Law Division. In response, defendant dismissed its small claims complaint on June 18, 2007. On July 13, 2007, defendant filed a motion to dismiss plaintiffs' complaint, pursuant to Rule 4:6-2(e), for failure to state a claim upon which relief can be granted. Plaintiffs filed a motion for class certification on October 3, 2007.

On January 28, 2008, the motion judge issued a written decision and order dismissing plaintiffs' complaint with prejudice on the following grounds:*fn4 1) the Door-to-Door Home Repair Sales Act did not apply to the parties' transaction; 2) plaintiffs failed to show that they suffered an "ascertainable loss" under the Consumer Fraud Act; 3) plaintiffs did not fall within the definition of "consumer" under the Truth-in-Consumer Contract, Warranty and Notice Act; and 4) because defendant did not violate any statute or regulations, plaintiffs' motion for class certification was denied "as a matter of law."


We review the trial court's grant of summary judgment de novo. See Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Employing the same standard the trial court uses, ibid., we review the record to determine whether there are material factual disputes and, if not, whether the undisputed facts viewed in the light most favorable to plaintiff nonetheless entitle defendants to judgment as a matter of law. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).


The purpose of the Door-to-Door Home Repair Sales Act of 1968 (DDHRSA), N.J.S.A. 17:16C-95 to -103, is to allow consumers who have been induced to execute a home repair contract for goods and services a reasonable period of time to reconsider and rescind the contract, as they are often pressured into signing such contracts "through the unsolicited and often unethical persuasion of certain door-to-door sellers." N.J.S.A. 17:16C-97. To that end, the purchaser is allowed to rescind the contract at any time before "5 p.m. of the third business day following the day on which the home repair contract is executed[.]" N.J.S.A. 17:16C-99(a)(1). The DDHRSA's rescission provision does not apply to mail order sales, telephone sales, catalog sales where an order is placed by mail or telephone, or sales in which the owner has requested the home repair contractor to enter into the sale at a place other than the home repair contractor's place of business[.] [N.J.S.A. 17:16C-99(c).]

It does, however, apply to sales in which the owner has requested the home repair contractor to conduct a demonstration or exhibition at a place other than the home repair contractor's place of business and has not also requested to enter into a sale at the place at the same time he has requested such demonstration or exhibition. [Ibid.]

We turn to an analysis of whether the judge erred when he granted defendant's summary judgment motion on plaintiff's DDHRSA claim. It is not entirely clear from the judge's opinion why he held the DDHRSA inapplicable, but his conclusion appears to be predicated on the fact that plaintiffs requested that defendant enter into the sale at a location other than defendant's place of business, executed a second agreement when defendant's representative arrived at plaintiffs' home to take measurements, and thereafter amended the agreement over the telephone.

Defendant argues that the home demonstration rescission rule is inapplicable for two reasons: 1) plaintiffs initiated the product presentation at their own home, and were not "passive victims" of the unsolicited and unethical persuasion the Legislature sought to eliminate when it enacted DDHRSA; and 2) plaintiffs made their request to enter into a sale at the same time the home demonstration occurred, rather than at the time they requested the home demonstration, thereby falling outside the ambit of the DDHRSA.

We must therefore decide whether plaintiffs raised a genuine issue of material fact on the question of whether either the March 17, 2007 contract, or the April 7, 2007 Change Order, were executed under the circumstances set forth in N.J.S.A. 17:16C-99(c) that trigger the provisions of DDHRSA. If so, plaintiffs were entitled, pursuant to N.J.S.A. 17:16C-99(a) and (c), to cancel such contract, provided they did so before 5:00 p.m. of the third business day following the day on which the contract was executed. They would also be entitled to notices and documents in the form specified by DDHRSA. See N.J.S.A. 17:16C-100.*fn5 As we analyze these two contracts, we remain mindful that the DDHRSA is "remedial legislation" that must be "liberally construed." N.J.S.A. 17:16C-96.

Plaintiffs do not dispute defendant's contention that because they were the ones who initiated the March 17, 2007 sales call, the resulting contract was a product of plaintiffs' request that defendant "enter into the sale at a place other than [defendant's] place of business[.]" N.J.S.A. 17:16C-99(c). Therefore, unless plaintiffs come within the "but it does apply to" saving language of that same paragraph, plaintiffs are not entitled to the rights provided by DDHRSA.

Before turning to an analysis of the statutory language, we review plaintiffs' arguments about the DDHRSA. Notably, plaintiffs' brief is devoted largely to a discussion of why the form documents defendants presented to them violate the DDHRSA requirements: the typeface was too small; the description of the goods sold was too vague; and defendant did not provide plaintiffs with the required number of copies of the sales receipt. Plaintiffs' argument concerning why they fall within DDHRSA's sweep is limited to the following statement: "Under the plain meaning of DDHRSA, a 'door-to-door' sale occurred when plaintiffs requested a product demonstration in their home that was later converted into a sales presentation."

The "but it does apply to" section of N.J.S.A. 17:16C-99(c) is certainly not the clearest or most easily understood legislative language we have seen. The only reported opinion to have ever construed N.J.S.A. 17:16C-99(c) was the 1982 County District Court opinion in Swiss v. Williams, 184 N.J. Super. 243, 249-50 (Cty. Dist. Ct. 1982), which was reversed on other grounds by Skeer v. EMK Motors, Inc., 187 N.J. Super. 465, 473 (App. Div. 1982). We do not choose to rely on the opinion in Swiss.

The relevant portion of N.J.S.A. 17:16C-99(c), which we have quoted above, requires a consumer to satisfy two criteria in order to be entitled to the rescission remedy of N.J.S.A. 17:16C-99(a)(1). First, the property owner must request an in-home product demonstration. Plaintiffs satisfy that requirement in light of the March 17, 2007 in-home demonstration that they requested. N.J.S.A. 17:16C-99(c). Second, the contract must be requested by the property owner at a time other than the time the property owner calls to request the demonstration. Ibid. In other words, if the consumer has already made up his mind to purchase the product even before the home demonstration occurs, then the consumer has not been a victim of the "unethical persuasion," N.J.S.A. 17:16C-97, the Legislature sought to prohibit when it enacted DDHRSA.

Here, plaintiffs' request to enter into the sales contract was made on March 17, 2007, which was a time other than the occasion on which they called defendant to request the home demonstration. Thus, we conclude plaintiffs raised a genuine issue of material fact on whether their transaction triggered the language of N.J.S.A. 17:16C-99(c). That being so, plaintiffs are potentially entitled to the rescission and cancellation remedy of N.J.S.A. 17:16C-99(a)(1). They are also potentially entitled to the other rights enumerated in N.J.S.A. 17:16C-100, including the right to receive an itemized receipt and a notice of cancellation in specified statutory language. See N.J.S.A. 17:16C-100. We thus reverse the summary judgment dismissal of the second count of plaintiffs' complaint and remand for further proceedings.


Like the DDHRSA, the Federal Trade Commission (FTC) "cooling-off rule," 16 C.F.R. 429.1, gives consumers a three-day right to cancel sales contracts entered into at a place other than the seller's place of business, and imposes a duty on sellers to provide consumers with written notice of their right to cancel the contract. Specifically, in connection with any "door-to-door sale," it constitutes an unfair and deceptive act or practice for any seller to:

(a) Fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, e.g., Spanish, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold face type of a minimum size of 10 points, a statement in substantially the following form:

"You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right."

[16 C.F.R. 429.1.]

Therefore, the motion judge was required to decide if plaintiffs raised a genuine issue of material fact on whether the transaction between plaintiffs and defendant qualified as a "door-to-door sale" under the FTC rule. Generally, the FTC defines a "door-to-door sale" as

A sale, lease, or rental of consumer goods or services with a purchase price of $25 or more, whether under single or multiple contracts, in which the seller or his representative personally solicits the sale, including those in response to or following an invitation by the buyer, and the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller (e.g., sales at the buyer's residence[.)]

[16 C.F.R. 429.0(a) (emphasis added).]

In this case, the sale was made at the buyers' residence "in response to an invitation buy the buyer," ibid., and thus appears to satisfy this portion of the definition of "door-to-door sale."

However, the FTC rule, like the DDHRSA, exempts a number of transactions from its definition of a "door-to-door sale." Specifically, a transaction "[i]n which the buyer has initiated the contact and specifically requested the seller to visit the buyer's home for the purpose of repairing or performing maintenance upon the buyer's personal property" does not fall within the purview of the FTC unless, "in the course of such a visit, the seller sells the buyer the right to receive additional services or goods other than replacement parts necessarily used in performing the maintenance or in making the repairs[.]" 16 C.F.R. 429.0(a)(5). The judge did not specifically address plaintiffs' 16 C.F.R. 429.1 claim, and therefore he did not determine whether the transaction at issue potentially constitutes a "repair[] or perform[ance] of maintenance" nor did he determine whether defendants sold to plaintiffs any "additional goods or services" beyond those that were already contemplated by plaintiffs when they requested the home demonstration. See Ibid.

Consequently, we reverse the dismissal of plaintiffs' "cooling-off" claims contained in counts three and seven, and remand to the Law Division. On remand, the judge is directed to determine whether there is a genuine issue of material fact on these questions, in which case summary judgment should be denied, or whether, instead, defendants are entitled to judgment as a matter of law. Brill, supra, 142 N.J. at 540.


We turn next to plaintiffs' claims under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and plaintiffs' related claims under the Contractors' Registration Act (CRA), N.J.S.A. 56:8-136 to -152; and the Home Improvement Practices regulations, N.J.A.C. 13:45A-16.1 to -16.2. The judge addressed the former but not the two latter provisions. He concluded that plaintiffs' CFA claim should be dismissed because plaintiffs failed to demonstrate the "ascertainable loss" that is required by a section of the CFA, namely N.J.S.A. 56:8-10. See also Bosland v. Warnock Dodge, ___ N.J. ___, ___ (2009) (slip op. at 14).

In Bosland, the Court defined the term "ascertainable loss" as "a definite, certain and measurable loss, rather than one that is merely theoretical." Id. at 18. Plaintiffs point to their expenditure of $500 in counsel fees to defend the small claims action as an ascertainable loss, and rely on BJM Insulation & Construction, Inc. v. Evans, 287 N.J. Super. 513, 517 (App. Div. 1996). There, we reviewed the claim made by the plaintiff, a home improvement contractor, that the defendant homeowner had suffered no ascertainable loss under the CFA because the defendant had succeeded in defending against the plaintiff's breach of contract claim by proving a violation of the CFA and DDHRSA statutes. Id. at 515, 517. We held that incurring a reasonable counsel fee "associated with raising a meritorious claim under the [CFA] is . . . . [a]s ascertainable a loss as any other out-of-pocket expense resulting from a violation of the Act's terms, specially treated only in the respect that it is not subject to the trebling for which other losses qualify." Id. at 517.

We do not view our decision in BJM as controlling. There, the defendant incurred counsel fees in her successful defense of the plaintiff contractor's lawsuit. In other words, the defendant homeowner prevailed on the merits of her CFA claim. Ibid. Here, plaintiffs' counsel fees were not associated with a "meritorious claim." Unlike BJM, there was never a decision on the merits that favored plaintiffs. Thus, the counsel fees they expended do not constitute an "ascertainable loss." The dismissal of their CFA claim was therefore correct. Bosland, supra, ___ N.J. at ___ (slip op. at 14).


Next, we consider the dismissal of plaintiffs' claims under the Home Repair Financing Act (HRFA), N.J.S.A. 17:16C-93 to -103. The record, in its present undeveloped state, does not permit us to determine whether the judge was correct when he concluded that, because plaintiffs signed a financing agreement with a "third-party lender," GE Money Bank, rather than with defendant directly, the provisions of the HRFA were not triggered. On remand, the judge is directed to specifically determine whether the "Castle Straight Talk Financing" document and the April 1, 2007 Change Order, both of which discuss financing terms, trigger the provisions of the HRFA.


Last, we consider plaintiffs' claims under the Truth-in-Consumer Contract Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, which the motion judge dismissed upon a finding that plaintiffs were not "consumers" as defined by N.J.S.A. 56:12-15. That statute defines a consumer as "any individual who buys . . . any property . . . which is primarily for personal, family or household purposes." N.J.S.A. 56:12-15. The judge also held that the provisions of TCCWNA were not triggered because "defendants did not violate any laws." The judge was referring to a portion of TCCWNA that establishes liability whenever a seller offers a consumer contract, the provisions of which "violate[] any clearly established legal right of a consumer or responsibility of the seller . . . as established by State or Federal law[.]" Ibid.

The judge's conclusion that plaintiffs did not satisfy the TCCWNA definition of consumer was error. Plaintiffs raised a genuine issue of material fact about whether they "[bought] . . . property . . . for . . . household purposes," as required by N.J.S.A. 56:12-15. Therefore, we reverse the grant of defendant's summary judgment pertaining to the provisions of TCCWNA.


To recapitulate, we affirm the dismissal of plaintiffs' CFA claim and the related claims plaintiffs advanced under the Home Improvement Contractors Registration Act and the Home Improvement Practices regulations (counts four and six). We reverse the grant of summary judgment on the following claims:

1) HRFA (count one); 2) DDHRSA (count two); 3) the FTC Cooling-Off Period regulation (counts three and seven) and 4) TCCWNA (counts five and eight).

The judge's denial of plaintiffs' motion for class certification was premised on his conclusion that "because defendants have not violated any laws, plaintiffs' motion for class certification [must be] denied as a matter of law." We have determined that the judge's dismissal of counts one, two, three, five, seven and eight was error, and we have reversed the grant of summary judgment to defendant on those claims. On remand, the judge should reconsider his denial of plaintiffs' motion for class certification. We express no opinion on the merits of that motion.

Affirmed in part, reversed in part, and remanded. We do not retain jurisdiction.

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