On appeal from Superior Court of New Jersey, Law Division, Cape May County, L-270-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 13, 2010
Before Judges Lisa, Reisner and Alvarez.
This appeal concerns several claims under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195, based on a condominium developer allegedly having filed false affidavits of title in the course of selling the units to several purchasers. The purchasers and their mortgage lenders appeal from a February 20, 2009 order denying their motion for entry of final judgment by default on their CFA claims. We reverse and remand.
This case has a complicated history, however, most of the litigation was settled while this appeal was pending, leaving only the CFA claims.*fn1 Hence that is the only issue we address.
The CFA claims concern defendants Jon Paxton (Paxton) t/a Paxton Construction, a general contractor, and Cresse Development, L.L.C., the owner and developer of the condominium construction project (collectively, the Cresse defendants). Paxton was also the managing member of Cresse Development.
In 2004, Paxton Construction contracted with ABJ Sprinklers to install automatic fire sprinklers at the construction project, which consisted of one commercial unit and four residential units. ABJ completed the job around February 15, 2005. Between February 25, 2005, and March 4, 2005, Cresse sold units to three residential buyers and on March 11, 2005, Cresse sold the commercial unit to Park Place Management.
Prior to each of the closings, Cresse conveyed to the buyers an affidavit of title signed by Paxton, representing among other things that "[n]o judgment or other lien, including a Notice of Unpaid Balance or Lien Claim under the Construction Lien Law, has been filed against [the property]." The affidavit also attested: "There are no pending lawsuits or judgments against it or other legal obligations which may be enforced against this property." Further, the affidavit stated:
We are not aware that anyone has filed or intends to file a mechanic's or construction lien or building contract relating to this property. No one has notified us that money is due and owing for construction, alteration or repair work on this property.
However, contrary to the statements in the affidavit, Cresse had not paid ABJ for its work, and as a result, ABJ filed a construction lien against the property on March 8, 2005, followed by a lawsuit against Cresse and the owners. The owners filed a cross-claim against the Cresse defendants, who defaulted. The judge entered default judgment against the Cresse defendants on several other causes of action, entered a $92,631.45 lien in favor of ABJ against the owners' property, and entered judgment in the same amount against the Cresse defendants and in favor of the owners. However, the judge rejected the owners' CFA claims for treble damages and counsel fees. The judge focused on Cresse's delay in filing the Master Deed until July 20, 2005. That filing, in turn would have triggered a title search that would have revealed the filed construction lien. He reasoned that the late filing of the Master Deed "was mere negligence." The owners appealed.
During the course of the appeal, we granted the owners' motion to supplement the record with an excerpt from the transcript of Paxton's deposition, taken after entry of the judgment on appeal. In that deposition, Paxton admitted that at the time the affidavits were signed, he knew that there was an ongoing dispute between Cresse and ABJ over the amount of money owed for the sprinkler work. He further ...