June 23, 2010
DAVID PREZANT, PLAINTIFF, AND LAURA COSTA D/B/A DESIGNER SHOWCASE, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
PETER JEGOU AND CAROL JEGOU, DEFENDANTS-RESPONDENTS/CROSS-APPELLANTS.
On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-819-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 4, 2009
Before Judges Wefing, Grall and Messano.
A jury considered claims of a general contractor/interior decorator, plaintiff Laura Costa, doing business as Designer Showcase, and counterclaims of the homeowners who retained her to oversee the construction of their home and used her services in decorating its interior. The defendant homeowners are Peter and Carol Jegou. The jurors found that the Jegous breached an agreement to pay Costa $34,000 and that Costa violated the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, by falsely representing the nature and value of the furnishings she sold to them. The jurors awarded Costa $34,000 for breach of contract and the Jegous $34,000 for the violation of the CFA. The jurors rejected Costa's claim that she was entitled to reimbursement beyond the $34,000 due under the parties' agreement. Final judgment was entered as follows: in favor of Costa, $34,000; in favor of the Jegous, $102,000 plus $30,465.08 for fees and costs, including $3000 for the Jegous' expert appraiser.*fn1
On appeal, Costa contends that she established her entitlement to reimbursement beyond the amount stated in the agreement breached by the Jegous. She also argues that the Jegous failed to prove a violation of the CFA entitling them to damages in the amount of $34,000, and that even if they did, the judge erred by requiring her to contribute to fees the Jegous paid their expert.
On their cross-appeal, the Jegous seek reversal of the award in favor of Costa for breach of contract and enhancement of the damages awarded to them for violation of the CFA. They contend that the damages do not fully compensate them for their loss of the benefit of their bargain.
Because the Jegous did not present evidence adequate to give the jurors a reasonable basis for quantifying the loss they sought to recover, we reverse and vacate the damage award in their favor. We further conclude that our decision to vacate the damage award warrants a remand to permit the trial judge to reassess the award of fees and costs.
By letter dated January 5, 2001, Costa was retained by Peter and Carol Jegou to advise on all phases of construction and "overall design, kitchen, tiles/marble, floors, fixtures, trim and details, painting, wood floors and landscaping." Compensation in the amount of $1.00 was to be paid upon execution of the agreement; the arrangement was acceptable to Costa because she was to receive fifty percent of the profits from the construction. Work on the project commenced in March 2002, but in December 2002 the contractor was discharged before the work was completed. The original contract price was $1,501,500. According to Costa, all but $558,000 was paid to the first contractor. According to Mr. Jegou, the balance due was $508,000.
A second contractor was retained to complete the work for the balance due on the original contract. According to Mr. Jegou, the new contractor was to share fifty percent of the profit from the remainder of the project with Costa. During the second stage of the project, some contractors were paid by Costa through an account in her name to be funded by the Jegous and other contractors and vendors were paid by the Jegous. According to Costa, on occasion the account funded by the Jegous did not have sufficient funds, and as a consequence she paid a total of $150,000 from her personal accounts. Her records of those expenditures were incomplete because documentation was lost in a fire that destroyed her car on May 2, 2003.
In June 2003, the Jegous moved into their new home under a temporary certificate of occupancy; the permanent certificate was issued that fall. Costa, however, continued to provide services as an interior decorator after the Jegous took occupancy. Subject to the Jegous' approval, she selected furnishings, china and other decorative items, which she brought to their home. They purchased some and rejected others. On occasion, Costa gave the Jegous items she selected for their home as gifts.
According to the Jegous, they relied on Costa in selecting their furnishings. They explained that Costa, who was born and educated in Switzerland, had told them she grew up with and lived with her family's antiques. She said she traded in antiques on a regular basis in Europe and had many connections in Europe and the United States. In addition, she had taken courses in restoration and, due to her expertise, had done restoration work for Sotheby's and appraised and authenticated artifacts for an insurance company. There was no evidence that any of those representations were false.
The Jegous further testified that Costa advised them that their home furnishings should include several "very select pieces" - antiques and antiquities, which "would increase in value." Costa told them the pieces "would be a good investment" and their home "deserved... special antique pieces." Mr. Jegou recalled a discussion about a dining room table: Costa said, "I found this antique table from Switzerland that you absolutely have to have. It's an heirloom, it's an antique, it's worth an incredible amount of money, it's a great investment."
Mr. Jegou could not recall what he paid for the table. He had two checks, one for $11,600 and one for $23,532. The documentation, an invoice submitted with the check for $23,532, indicated that the Jegous were charged $8500 for the table, but Mr. Jegou gave no testimony relevant to the invoice or the price stated therein. There was no other testimony about the price paid by the Jegous for any piece of furniture, fixture, china, glassware, statue or painting purchased through Costa.
According to Mrs. Jegou, in September 2003 she was working with an insurer and needed information about the value of the items selected by Costa. The Jegous had asked Costa to provide receipts and certificates of authenticity related to the furnishings in the past but had not obtained them. When Costa came to her home on September 29, 2003, Mrs. Jegou, using her computer, typed a list as Costa dictated. That list does not include the price the Jegous paid for the objects. It describes thirty-one items and an "appraisal" of their value. When Mrs. Jegou met with the insurance agent, she was told she could keep the list for her records because the value of the furnishings stated did not exceed the policy coverage.
On the September 29, 2003 list, the dining room table was described and appraised as follows: "Louis 16th original 250 years old $75,000 - $100,000." The descriptions indicated the age of other items as well: an "Augusto Moreou Bronze Statue [s]igned, early 1900's"; a pair of "18th Century" urns; a lamp, "Original Directories 1790"; and imported hand-painted gold china, "125 years old."
Costa denied any participation in the preparation of the list. Nonetheless, she acknowledged that she signed the appraisal beneath a statement which provides, "The values are authentic as per the representation of Designer Showcase."
In November or December 2003, the Jegous agreed to allow Costa to have their home photographed and the pictures used in a book depicting Costa's work. In preparation for the photography session, Costa brought additional furnishings to the Jegous' house. She intended to remove those pieces when the project was completed.
Between December 2003 and February 12, 2004, disputes about ownership of and payments due for furnishings in the Jegous' home were added to the parties' disagreements about credits and debits for the construction work. By all accounts, their relationship deteriorated.
On February 12, 2004, the parties reached an agreement. According to Costa, the agreement addressed nothing other than furnishings and left unsettled the disputed payments to subcontractors and vendors involved in the construction of the residence. The Jegous asserted that the letter reflected the terms of a global settlement of all claims.
The terms of the February agreement were stated in a letter from Mr. Jegou and were accepted by Costa and her husband on February 14, 2004. The agreement provides for Costa/Designer Showcase to receive $44,000. The Jegous were to make payment in three installments of $10,000 and one of $14,000, with the final payment to be made by December 31, 2004. It was agreed that "[a]ny and all monies due [Costa or her] vendors as it relates to the Jegou home are deemined [sic] paid in full." In a separate paragraph, it was agreed that the Jegous would return furnishings listed on a schedule appended to the letter agreement and that "all other remaining items in the Jegou home are deemed to be paid in full or are the property of the Jegou's [sic]."
In addition to the foregoing, the agreement memorializes Costa's promise to use best efforts to provide "complete copies of any and all records for their home, including" bank statements, bills and payments from check books through December 31, 2003, and a request from the Jegous for Costa to "please provide certificates of authenticity or any documents related to all antiques purchased for our insurance company."
The first $10,000 installment on the agreement was paid on February 14, 2004 when the items that Costa was to retrieve were removed from the Jegous' home. The Jegous made no further payments. Mr. Jegou explained that Costa told him he could use the $34,000 owed to address problems with the construction.
In October 2004, a guest of the Jegous' familiar with antiques told them that their furnishings were not what they believed them to be. The Jegous contacted Sotheby's to obtain an appraisal but were not successful.
Neither party took further action for some time. Despite the Jegous' failure to pay $34,000 by December 31, 2004, Costa did not file her complaint until February 2007. After contacting Sotheby's, the Jegous took no other steps to ascertain whether the furnishings they purchased through Costa were antiques until Costa commenced the litigation.
After plaintiff filed her complaint, the Jegous retained an expert who appraised the value of six of the items included on the September 29, 2003 list. Using the lowest estimated value for these six items reflected on the September 29, 2003 list, the total value is $183,000. Using the highest value, the total is $213,000. In the expert's opinion, the six items have a total value of $24,191. The expert also testified that an antique is defined as an object one hundred years of age or older. She identified items among the six she appraised that were described on the September 29, 2003 list as more than one hundred years old but were not of that age. The dining room table was one of the items that the expert determined was not of sufficient age to qualify as an antique.
We turn to address the competing objections to the verdict in favor of Costa. With respect to Costa's claims, the jurors found that the parties reached an agreement whereby Costa would provide services to complete the construction of the Jegous' house and that they agreed to pay $558,000. The jurors determined that Costa did not establish a breach of that agreement or her entitlement to reimbursement for bills she paid from her own funds. The jurors also found, however, that the Jegous breached the February 12, 2004 letter agreement with Costa by failing to pay $34,000 of the $44,000 they had promised to pay. They awarded damages of $34,000.
On appeal, Costa argues:
THE JURY AWARD OF DAMAGES TO THE PLAINTIFF WAS INSUFFICIENT AND AGAINST THE WEIGHT OF THE EVIDENCE.
The Jegous take the position that Costa was not entitled to any award. They contend:
THE JURY'S VERDICT FINDING THAT DEFENDANTS OWED $34,000.00 TO PLAINTIFF IS CONTRARY TO DEFENDANTS' DEFENSE.
These arguments lack sufficient merit to warrant more than brief comment in a written opinion. R. 2:11-3(e)(1)(E). With respect to Costa's claims, reasonable jurors considering the evidence could find that the February 2004 agreement was intended to resolve all disputes, including the amount due related to construction as well as disputes about the furnishings. The home and the personal property are referenced in separate paragraphs of that agreement. There was undisputed evidence that the Jegous did not pay $34,000 of the $44,000 they agreed to pay to resolve the parties' disputes, and Costa had little beyond her testimony to support her claim that she made payments from her own funds that were not reimbursed or included in the agreement.
With respect to the Jegous' objections to the verdict in favor of Costa, they provide no authority to support the novel proposition that a litigant may not plead alternative grounds for recovery. Given the lack of authority, we see no reason to address that claim here. On this record, the jurors were free to reject the Jegous' defenses based on waiver and misrepresentation related to the agreement.
In short, the verdict on Costa's claims and the Jegous' defenses depended largely upon testimonial evidence that the jurors were entitled to credit and accept or discredit and reject. The parties have not shown any reason warranting this court's interference with the jury's determinations.
The CFA provides protection from unlawful practices in connection with the sale of merchandise. In pertinent part, N.J.S.A. 56:8-2 provides that "[t]he act, use or employment by any person of any... misrepresentation... in connection with the sale or advertisement of any merchandise or real estate,... 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.
A claim under the CFA raised by a private party has three elements: "1) unlawful conduct by defendant [on the claim]; 2) an ascertainable loss by [the claimant]; and 3) a causal relationship between the unlawful conduct and the ascertainable loss." Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009). "Each of the elements of the prima facie case is... a prerequisite to suit." Ibid.
The conduct covered by the CFA is broad. The term sale "include[s] any sale, rental or distribution, offer for sale, rental or distribution or attempt directly or indirectly to sell, rent or distribute." N.J.S.A. 56:8-1(e). Merchandise "include[s] any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale." N.J.S.A. 56:8-1(c).
The evidence in this case is sufficient to establish that Costa provided a service through which she selected furnishings for the Jegous' home and offered them for the Jegous to purchase. There was no dispute that this is what Costa did in connection with her business, Designer Showcase.
The unlawful practice the Jegous allege is affirmative misrepresentation - 1) furnishings that were not antiques were represented as such and 2) the furnishings were represented to be valuable because they were antiques. Facts asserted about the quality of a product or service are sufficient to establish a prohibited misrepresentation if the facts are false and material to the transaction. Gennari v. Weichert Co. Realtors, 148 N.J. 582, 605 (1997). Proof that the false statements were made with "knowledge of the falsity of the misrepresentation, negligence, or the intent to deceive" is not required. Ibid. In contrast to assertions of fact, "puffery" is not deemed to be a "misrepresentation of fact actionable under the CFA." See Rodio v. Smith, 123 N.J. 345, 352 (1991) (noting that "[h]owever persuasive, 'You're in good hands with Allstate,' is nothing more than puffery"); Dabush v. Mercedes-Benz USA, LLC, 378 N.J. Super. 105, 115 (App. Div.) (discussing an alleged misrepresentation about the capacity of a car's global positioning system), certif. denied, 185 N.J. 265 (2005).
The evidence of an actionable misrepresentation in this case is limited to Costa's representations that they were antiques. There was no evidence that any representation Costa made about her expertise, training or experience was false. The only evidence of a representation by Costa as to the actual value of the items is the list prepared on September 29, 2003. That information could not have been material to the Jegous' decision to purchase because the list was prepared after the transactions were complete.
There was evidence sufficient to permit the jurors to find that Costa told Mr. Jegou that the dining room table was an antique even though it was not an antique. Mr. Jegou testified to that representation and the Jegous' expert testified that the table was of more recent vintage. There was, however, no testimony that Costa specifically held out any other item as an antique - an object more than one hundred years old - prior to the Jegous' decision to purchase. With the exception of the table, the Jegous' only evidence of representations as to antiquity were recorded on the list prepared on September 29, 2003, after the purchases.
The remaining question is whether the Jegous established an "ascertainable loss" caused by a misrepresentation about the age of the table. The proof required to establish "ascertainable loss" is a loss that is a result of the unlawful practice. Bosland, supra, 197 N.J. at 557. To meet this burden, claimants must show that they have "suffer[ed] a definite, certain and measurable loss, rather than one that is merely theoretical." Id. at 558. In other words, the loss must be "quantifiable or measurable." Ibid.; see Cox v. Sears Roebuck & Co., 138 N.J. 2, 22 (1994) (concluding that evidence of the reasonable cost of repair was sufficient but proof that the money was spent to make the repairs was not required). It may include the lost benefit of a bargain that can be measured or quantified on the basis of evidence presented. See Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 15-16 (2004) (discussing proofs that would suffice to establish damages based upon lost benefit of a bargain).
The Jegous presented a theory of ascertainable loss based upon the benefit of the bargain they lost. There is no evidence that would permit the jurors to quantify or measure the benefit expected but not obtained when the Jegous purchased the table. Without doubt, the expectation that they were acquiring an "incredibly valuable" table is not quantifiable. Apparently recognizing that fact, at trial and on appeal, the Jegous contend that the benefit lost is the difference between the value for six items stated on the list dated September 29, 2003 and the value assigned to the same six items by their expert. But as noted above, the representations made on September 29, 2003 were made after the purchase. They are not probative of the Jegous' expectation when they purchased the table.
If there were evidence that Costa stated a specific value beyond the price, then there would be some basis in the evidence for the jurors to quantify the lost benefit of the bargain. Without that evidence, however, the Jegous did not establish the loss they alleged.
Had the Jegous presented a case based upon an ascertainable loss equivalent to the difference between what they paid for the table and its fair market value, then the jurors would have had a basis in the evidence to award damages. But they did not. The only evidence relevant to what was paid for the table was Mr. Jegous' testimony, which was both uncertain and in conflict with the exhibit documenting payment.
For the foregoing reasons, we conclude that the evidence was not adequate to permit the jurors to fix damages for lost benefit of the bargain. Because the Jegous sought an assessment of damages on that basis, we see no reason to afford them a second opportunity to establish damages on a different theory. Cf. Cummings v. Bahr, 295 N.J. Super. 374, 383 (App. Div. 1996) (discussing assertion of new theories for recovery on a motion for reconsideration of a grant of summary judgment). Accordingly, we vacate the award.
We note that the Jegous have argued that we should not consider Costa's objections to the damage award because she did not file a motion for a new trial on damages. Costa, however, does not claim that the damage award is against the weight of the evidence, which is a claim that must be raised in the trial court. R. 2:10-1. Rather, Costa's argument is that the evidence, viewed in the light most favorable to the Jegous, was inadequate to permit an award of damages for the lost benefit of their bargain.
We reject the Jegous' procedural objection. There is no question that the adequacy of evidence is an issue that should be raised by way of motion for judgment. See R. 4:40-1. But during the charge conference, Costa's attorney argued that the question of damages based on lost benefit of the bargain should not be submitted to the jury because the evidence did not support an award on that ground. Thus, a request for a determination that would have afforded the same relief as a motion for judgment on that issue was made. Pressler, Current N.J. Court Rules, comment 3 on R. 4:40-2 (2010) (citing Logan v. Twp. of N. Brunswick, 129 N.J. Super. 105, 108-09 (App. Div.), certif. denied, 66 N.J. 328 (1974)) (prerequisite motion not necessary where the party made a motion that would have afforded the same relief).
On this record, we hold that the evidence was insufficient to permit the jury to assess damages based upon lost benefit of the bargain. A ruling allowing them to do so had the clear capacity to produce an unjust result. R. 2:10-2.
We must consider whether the Jegous' failure to establish their entitlement to damages for the lost benefit of their bargain bars them from recovering fees and costs pursuant to N.J.S.A. 56:8-19. In this case, the Jegous produced evidence sufficient to permit the jurors to find a loss measurable by the price they paid for the table. Although the Jegous did not seek damages calculated with reference to that measure, the jurors could have found that they paid $8500 for the table. In fact, during the conference on the jury instruction, Costa's attorney admitted the evidence permitted that finding.
As interpreted by the Supreme Court, the CFA provides for an award of fees and costs so long as the claimant establishes a violation and has presented enough evidence to permit the jury to find an ascertainable loss. Upon presentation of proof sufficient to reach the jury, fees and costs pursuant to N.J.S.A. 56:8-19 should be awarded upon a finding of an unlawful practice even if the jury rejects the proofs and awards no damages. Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 247 (2005). In this case, the Jegous did not have sufficient evidence to establish damages based upon the lost benefit of their bargain. They did, however, present sufficient evidence - price paid for the table - to reach the jury on a different theory of ascertainable loss. Thus, under Thiedemann, an award of fees and costs pursuant to N.J.S.A. 56:8-19 is appropriate in this case.
Because our decision to vacate the damage award has an impact on the factors relevant to the amount of the award of fees and costs, Furst, supra, 182 N.J. at 20-24, we remand for reconsideration. On remand the judge should also consider whether the award of expert fees in this case is distinguishable from the award disapproved in Josantos Constr. v. Bohrer, 326 N.J. Super. 42, 47-48 (App. Div. 1999), or is inappropriate in light of that decision.
Affirmed in part; reversed in part; and remanded for reconsideration of fees and costs. We do not retain jurisdiction.