On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1834-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad and R. B. Coleman.
Plaintiff Scott De Pompe appeals from (1) a June 16, 2009 order dismissing his claim against defendants Weichert Realtors (Weichert) and Jean Tozzi, a licensed realtor working with Weichert, for violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and (2) a January 27, 2010 order denying plaintiff's motion for reconsideration. After careful consideration of the relevant case law and the record, we reverse the order entered by the trial judge dismissing the CFA count and remand for further proceedings.
I. In April 2004, Daniel Tullo, the owner of a single family residence in Washington Township, (the property) entered into a real estate listing agreement and commission agreement with Weichert and Tozzi. In connection with the agreements, Tullo provided Tozzi with (1) a "Multiple Listing System Property Profile Sheet," which indicated that the property was not in a flood zone; (2) a "Seller's Property Disclosure Statement" where Tullo disclosed that he was not aware of any flooding problems affecting the property; and (3) a federal emergency management agency standard flood hazard determination prepared by third-party defendant Transamerica Flood Hazard Determination, Inc. (Transamerica), dated June 12, 2000, which indicated the property was not in a flood hazard area. Based on these representations and disclosures, Weichert submitted the listing to the Garden State Multiple Listing System, representing that the property was not in a flood zone.
In May 2004, plaintiff entered into a contract with Tullo to purchase the property and acquired a flood hazard determination from defendant Accu-Search, Inc. (Accu-Search), confirming that the property was not in a flood hazard area. On June 29, 2004, plaintiff purchased the property.
Two years after purchasing the property, while in the process of
refinancing his mortgage, plaintiff obtained an updated flood hazard
determination from Charles Jones, Inc. (Charles Jones). The report
from Charles Jones indicated that the property was located in a flood
hazard area. Plaintiff submits that the receipt of the Charles Jones
flood search is the first time he was made aware that the property is
in a flood zone. Defendant Data Trace, LLC (Data Trace)*fn1
thereafter confirmed that the property was in a flood hazard area. By letter
dated November 29, 2006, Mike Lidestri, a business analyst/flood
administrator for Data Trace admitted that after rechecking the flood
hazard status of the property, Data Trace had concluded the June 2,
2004 determination by Accu-Search was incorrect and the lot is in a
special flood hazard area.
Thereafter, on June 23, 2009, plaintiff filed a complaint against Tullo for rescission (count one); Weichert, Tullo and Tozzi, for common law fraud (count two); against Weichert and Tozzi for violation of CFA (count three); and against Accu-Search and its successor, Data Trace for negligence (count four). Weichert, Tozzi, Accu-Search and Data Trace filed answers, separate defenses and crossclaims. Tullo filed an answer and third-party complaint against Transamerica, settled that claim, and in March 2009, filed a stipulation of dismissal without prejudice.*fn2 On May 15, 2009, Weichert and Tozzi filed a motion to dismiss the third count of the complaint for failure to state a cause of action. By letter dated May 21, 2009 addressed only to counsel, plaintiff demanded Weichert and Tozzi withdraw their motion to dismiss pursuant to Rule 1:4-8 (Frivolous Litigation), arguing that the case on which Weichert and Tozzi relied, Neveroski v. Blair, 141 N.J. Super. 365 (App. Div. 1976), had been superseded by statutory amendment in 1976, N.J.S.A. 58:8-2, and that real estate salespersons were subject to the CFA.*fn3
On June 16, 2009, the trial judge, in a written opinion, granted Weichert and Tozzi's motion to dismiss count three with prejudice for failure to state a cause of action under the CFA. In the attached statement of reasons, the judge explained the services rendered by Weichert and Tozzi fell under the "learned professions" exception to the CFA and that real estate salespersons were exempt from the CFA as articulated in Neveroski.*fn4
On January 12, 2010, plaintiff filed a cross-motion for reconsideration of the June 16, 2009 order dismissing count three. The trial judge denied the cross-motion, explaining:
The reasons cited by the Plaintiff do not sufficiently establish that the court has expressed its decision upon a palpably incorrect or irrational basis. The court did not overlook the fact that the Neveroski case was written before the words "real estate" were added to the definition of "merchandise" in the Consumer Fraud Act. The court decided the issue of whether the learned profession exemption under the Consumer Fraud Act applied to realtors, and in deciding this issue, the court did not base its decision on incorrect reasoning. Moreover, the Plaintiff's motion for reconsideration is untimely under R. 4:49-2.*fn5
On June 17, 2010, plaintiff filed a notice of appeal from the orders entered on June 16, 2009 (dismissing the CFA claim) and January 27, 2010 (reconsideration). On November 5, 2010, Weichert and Tozzi filed a motion for summary disposition. We denied the motion on December 22, 2010.
II. The CFA makes the following acts unlawful, in connection with sale or advertisement of ...