The opinion of the court was delivered by: Jerome B. Simandle United States District Judge
[relates to Docket Items 54 & 59]
This diversity action arises out of a seemingly modest home improvement project gone very wrong. In 2002, Plaintiffs Andrea and Guy Petinga contacted Defendant Sears, Roebuck and Company ("Sears") about purchasing a central air conditioning system for their home in Atlantic City, New Jersey. A representative from Sears convinced Plaintiffs to replace their heating system in addition to installing a new air conditioning system, and, after the parties entered into a contractual agreement for the purchase and installation, a subcontractor employed by Sears commenced work at the Petinga residence. The project, which Plaintiffs allege was supposed to take days to complete, stretched on for more than a year, and resulted, according to Plaintiffs, in substantial property damage and a dysfunctional heating and air conditioning system. The project also led to this lawsuit, which Plaintiffs commenced in October 2005.
Presently before the Court are Defendant's motion for partial summary judgment [Docket Item 54] and Plaintiffs' cross-motion for partial summary judgment [Docket Item 59]. For the reasons explained below, the Court will grant in part and deny in part each of the parties' cross-motions.
Plaintiffs Andrea and Guy Petinga own a two-story residence located in Atlantic City, New Jersey. (A. Petinga Dep. at 7.) The residence is divided into two apartments, and Plaintiffs have historically resided in the downstairs apartment while renting out the upstairs apartment. (Id. at 8.) Before the events underlying this dispute took place, the house had no central air conditioning system, although Plaintiffs had installed air conditioning units in various windows of the house. (Id. at 9.)
In October 2002, Plaintiffs read an advertisement placed by Sears in the Atlantic City Press for the sale and installation of central air conditioning systems, and Mrs. Petinga contacted Sears in order to obtain a proposal for the installation of such a system in the Petinga residence. (Id. at 9-11; Sisselman Cert. Ex. C at 2-3.) On October 28, 2002, in response to Mrs. Petinga's inquiry, Sears sent its agent, Rich Vogel, to the Petingas' residence. (Sisselman Cert. Ex. C at 2.) Mr. Vogel inspected the property and discussed with the Petingas the possibility of installing an air conditioning system with two separate condenser units -- one for the upstairs apartment of the house and one for the downstairs apartment. (G. Petinga Dep. at 35-36.)
Additionally, during his inspection, Mr. Vogel stated to the Petingas that their existing heating system was "antiquated" and "not efficient" and advised the Petingas that it would be more "economical" to install an upgraded heating system as well while the air conditioning system was being installed. (Id. at 39.) Mr. Vogel informed Plaintiffs that they would need to purchase a 100,000-BTU gas forced-air furnace in order to heat the house's downstairs unit and an 80,000-BTU gas forced-air furnace in order to heat the upstairs unit. (Sisselman Cert. Ex. C at 2-3.) Although Plaintiffs now state that they "had no complaints about the heat, reliability or cost of operating the original heating system," (A. Petinga Decl. ¶ 4), they agreed to purchase an upgraded heating system in addition to the central air conditioning system. (G. Petinga Dep. at 40.)
On October 28, 2002, the day of Mr. Vogel's visit to the Petinga residence, the Petingas entered into a contract with Sears for the purchase and installation of a new heating and air conditioning system for the house for $13,316.00. (Sisselman Cert. Ex. B at 1.) While the parties' written contract did not set forth the start and completion dates for the installation, according to Plaintiffs' undisputed evidence, the parties orally agreed that the work would commence on or about January 2, 2003. (Sisselman Cert. Ex. C at 3-4.) Mr. Vogel represented to Plaintiffs that the installation work on the first floor would take between three and four days to complete, and that the installation work on the second floor would take between two and three days to complete. (Id. at 4.)
Installation work commenced on or around February 25, 2003, and numerous problems ensued. (Compl. ¶ 53.) The first subcontractor Sears hired to perform the installation work, Lester Biggs ("Mr. Biggs") of Biggs Heating and Air Conditioning ("Biggs"), began working at the Petinga residence before having applied for the necessary permits for the work from Atlantic City, falsely stating to the Petingas that he had obtained all of the required permits. (Sisselman Cert. Ex. C at 11.) Mr. Biggs and his employees worked on the installation for fourteen days between February 25, 2003 and March 25, 2003. (Sisselman Cert. Ex. C. at 12.) During this time, Plaintiffs allege, Mr. Biggs and his employees filled the house with smoke and heater fumes, left holes in exterior walls, and caused damage to the deck. (Sisselman Cert. Ex. C. at 12-13.) On March 17, 2003, Mr. Biggs disclosed for the first time to the Petingas that he had not, in fact, obtained the necessary permits for the work, and that he would return in two days when he obtained the permits. (Id. at 14.) On March 19, 2003, Mr. Biggs applied for the electrical and construction permits from the Atlantic City Division of Construction ("DOC"), (id.), but the DOC rejected the electrical and construction applications on March 28, 2003 and April 3, 2003, respectively, on account of the fact that they were "incomplete and inadequate for review." (Babb Cert. Ex. E at 6-7.) According to Plaintiffs, Mr. Biggs thereafter "disappeared with out explanation." (Pls.' Statement of Undisputed Material Facts ("SUMF") ¶ 14.)
On April 25, 2003, Sears contacted Plaintiffs to inform them that a second contractor, George Markey of Ocean Air Heating and Air Conditioning ("OAHAC"), would be completing the installation work. (Sisselman Cert. Ex. C at 17.) According to Plaintiffs, both Sears and OAHAC falsely represented to Plaintiffs on multiple occasions that OAHAC had re-submitted the permit applications to the DOC (when in fact it had not), while in fact the applications would not be submitted until June 18, 2003. (Id. at 17-19.) In applying for a permit, OAHAC informed the DOC that it would be "reinstalling gas furnaces and ductwork in a more professional manner and bringing the job to code," as well as "making sure the air conditioning is working properly and efficiently." (Babb Cert. Ex. E at 19) (emphasis added). The DOC issued the permits on July 25, 2003. (Babb Cert. Ex. E at 20.)
OAHAC commenced the task of undoing Biggs' faulty work and reinstalling the system, inflicting considerable damage to the Petinga residence, as is set forth in the margin, in the process.*fn2 Thereafter, OAHAC's installation failed six inspections by the DOC between August and December, 2003, (Babb Cert. Ex. E at 9-15, 23, 25-26), and, owing to a hole that OAHAC (allegedly) improperly punched in the wall of the heating unit, Atlantic City has to date refused to issue a certificate of occupancy for the first-floor apartment of the Petinga residence.*fn3 (Babb Cert. Ex. E at 12.)
Additionally, Plaintiffs allege, the heating and air conditioning systems that were installed do not function properly, due, first, to the fact that the heating system was not suited for a building the size of the Petinga residence, and, second, to the fact that the air conditioning system was improperly installed. As to the former, Plaintiffs assert that the 100,000-BTU heating unit Mr. Vogel urged the Petingas to install is oversized for their space, (Sisselman Cert. Ex. C at 23); the impact of an oversized heating unit, according to Plaintiffs, is that the system cycles on and off too frequently, "never maintain[s] the desired space temperature properly," and results (perhaps unexpectedly) in "chronic inadequate heat in the first floor of their residence." (Babb Cert. Ex. A at 4.)
With regard to the improper installation of the air conditioning system, Plaintiffs' evidence indicates that the subcontractors responsible for installing the air conditioning condensing units failed to comply with guidelines regarding the required clearances for the amount of free space around such units. (Id.) Because condensing units "require a certain amount of free space above and around their sides to allow proper airflow," the impact of the improper installation in the Petinga residence is that the units' cooling capacity has been compromised, the manufacturer's warranty has been voided, and the life expectancy of the equipment has been reduced. (Id. at 4-5.)
Plaintiffs filed this action against Sears on October 27, 2005, alleging that Sears violated New Jersey's Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 et seq. (Count I); committed fraud (Count II); breached the implied warranty of fitness of purpose (Count III); breached the parties' contract (Count IV); and was negligent and grossly negligent (Counts V and VI).*fn4 Sears filed a Third-Party Complaint [Docket Item 10] against Mr. Biggs, Biggs, Mr. Markey, and OAHAC, and these Third-Party Defendants filed crossclaims against each other and the Petingas and counterclaims against Sears [Docket Items 13 and 19]. On February 18, 2009, Sears filed the motion for partial summary judgment presently under consideration [Docket Item 54], and Plaintiffs filed their cross-motion for partial summary judgment together with their opposition brief [Docket Item 59].
Summary judgment is appropriate when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In deciding whether there is a disputed issue of material fact, the court must view the evidence in favor of the non-moving party by extending any reasonable favorable inference to that party; in other words, "the nonmoving party's evidence 'is to be believed, and all justifiable inferences are to be drawn in [that party's] favor.'" Hunt v. Cromartie, 526 U.S. 541, 552 (1999) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).
The standard by which the Court decides a summary judgment motion does not change when, as here, the parties file cross-motions.*fn5 See In re Cooper, 542 F. Supp. 2d 382, 385-86 (D.N.J. 2008). When ruling on cross-motions for summary judgment, the court must consider the motions independently, Williams v. Philadelphia House Auth., 834 F. Supp. 794, 797 (E.D. Pa. 1993), aff'd, 27 F.3d 560 (3d Cir. 1994), and view the evidence on each motion in the light most favorable ...