October 27, 2011
CHARLES LARKEY, JR., PLAINTIFF-APPELLANT, AND MISTY LARKEY, PLAINTIFF,
BLESS ROOFING, STEVE HARVEY, AND RONALD YACOVELLI, DEFENDANTS, AND REMAX REALTORS (ALL PROS) AND ROBERT WALTON, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-1791-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 4, 2011
Before Judges Yannotti, Espinosa and Kennedy.
Plaintiff Charles Larkey, Jr. (Larkey) appeals from an order entered by the trial court on September 10, 2010, granting summary judgment, dismissing his complaint for consumer fraud, common law fraud, "violation of the covenant of good faith and fair dealing" and negligence against a realtor and a real estate agency that represented the seller of a house plaintiff and his wife purchased in Clayton, New Jersey in 2008. We affirm essentially for the reasons set forth by Judge Anne McDonnell, and we add only the following comments.
On October 24, 2008, plaintiffs Charles and Misty Larkey filed a
complaint asserting claims against Bless Roofing, Steve Harvey, Remax
Realtors (All Pros) ("Remax"), Robert Walton and Ronald Yacovelli. The
complaint asserted that on April 3, 2008, the "plaintiffs"*fn1
entered into a contract with Ronald Yacovelli to purchase a
residential property in Clayton, New Jersey. Plaintiffs claimed that
Yacovelli "failed to disclose the water damage to the roof and home"
and that Robert Walton, an agent for the selling realtor, Remax,
allowed the property to be sold "knowing there was damage to the
roof/home" and "intentionally concealed improper conditions of the
home." Plaintiffs asserted
that Bless Roofing, and its agent, Steve Harvey, "fraudulently and
negligently certified a faulty roof and has [sic] since failed to
stand by the warranty and contract provided therein." Plaintiffs
alleged they were unaware of the defects before purchasing the home
and only discovered a "defect" after moving into the premises. The
facts before the trial court on summary judgment are set forth below.
On April 3, 2008, Larkey entered into a contract with Ronald Yacovelli to purchase property in Clayton, New Jersey. The purchase price was $148,000 and the contract allowed Larkey to undertake a home inspection of the property at his own expense. Although the property was sold "as is," the contract further provided that if plaintiff undertook such an inspection and discovered "deficiencies" he retained the right to declare the contract terminated unless the seller agreed to make such repairs at its own cost and expense prior to closing.
Although plaintiff was aware of his right to be represented by counsel and to undertake his own home inspection, he elected to do neither. Rather, he chose to rely on an earlier inspection of the home made for another potential purchaser by JFM Inspections, Inc. (JFM). Plaintiff's realtor provided JFM's report to the plaintiff and neither Walton nor anyone else at Remax Realtors (All Pros) (Remax) made any representations to Larkey respecting the condition of the roof. All relevant communications respecting the condition of the property occurred exclusively between William Kempton of Century 21 Hearst Realty, Inc., Larkey's real estate agent, and Walton of Remax, the seller's realtor.
The home inspection report prepared by JFM noted "immediate concerns/defects" respecting the roof and the flashing. It noted that the flat roof has a low point which "represents a ponding area" and the adjacent fascia is "loose and not sealed." The report then "recommend[ed] a follow-up roof certification for the roof system by a licensed roofer" and a "follow-up investigation by a licensed roofer to determine whether the chimney needs to be flashed."
Larkey reviewed the report and recalled that "in here somewhere it says a re-certification should be done and [the roof] should be checked to make sure it meets town code." Larkey never discussed the roof with Walton but instead relied upon his own realtor to relay his concerns about the roof.
On April 11, 2008, Kempton sent to Walton a facsimile which read, in pertinent part: "Please find in this transmission the buyer's request for repairs. Based on our conversation, you indicated that the seller would take care of the roof...[.]"
Included with the facsimile, was a formal "repair request form" which stated, in pertinent part: "Based on the home inspection performed by JFM Inspections, Inc. on 3/21/08, I'm requesting the following repairs done by a certified contractor: (1) roof inspected and certified."*fn2 Kempton followed this up with a second communication to Walton on April 22, 2008, which stated, in part, "please respond in writing to indicate the repairs that the buyers are requesting (i.e. roof, crawl space electrical) will be done..."
Prior to closing, Bless Roofing provided a written "roof certification" respecting the property. The certification stated:
The roof located at . . . in Clayton has been inspected by Bless Roofing Co. It is my professional opinion that I certified [sic] that the roof has no leaks and no water damage. I hereby issue a [two year] warranty on this roof.
Larkey received and relied upon Bless Roofing's representation that it would "stand behind the roof for two years" and the receipt of that certification made him feel comfortable enough to proceed with the transaction.
In September 2008, after a rain, Larkey saw some leakage in an upstairs bedroom. He immediately called Bless Roofing and its representative went to the house and fixed the leak without charge in accordance with the warranty. The roof never leaked again. Nonetheless, plaintiffs brought this suit against defendants after learning from Steven Harvey of Bless Roofing that he had not actually inspected the roof prior to closing but issued the certification as an accommodation to Walton. Further, in September 2008, plaintiffs received an inspection report from Jared Contracting identifying "trouble areas" in the roof which could cause "potential serious leaks." The plaintiffs subsequently received estimates from other roofers to replace the entire roof.
Plaintiffs settled their claims against the seller, Yacovelli, and their claims against Bless Roofing and Steve Harvey were dismissed for lack of prosecution. Remax and Walton moved for summary judgment prior to trial. In granting the motion, Judge McDonnell explained:
In this case there is no evidence of any conversations or representations by Walton to the Plaintiffs.
Rather, the significant communication appears to be the [fax] from Mr. Kempton, the buyer's agent, to Mr. Walton. And I've read that into the record and it's clear that what is requested in the [fax] is that the seller address certain concerns and the attached document signed by the Plaintiff requests that there be a roof inspection and certification. And, indeed, that is what was provided to them.
Not only was it provided to them, when there was a leak, one leak in the property, the entity that certified the roof came out and repaired it at no cost to the Plaintiff.
So that for purposes of the Consumer Fraud Act, I find that there is not a prima facie case. There's no real issue of material fact. Plaintiff has not sustained an ascertainable loss. All of the evidence with respect to the condition of the roof goes to the potential for leaks, and clearly, any roof that is a flat roof is a constant potential for leaks.
So that I am satisfied that the movants are entitled to Summary Judgment on the Consumer Fraud Act.
She added that there is no evidence of any "material misrepresentations" that would support a claim of fraud, no evidence of any "contract" between the parties and no evidence of negligence because there is "no evidence of any representation" made to Larkey by Remax or Walton. The court entered an order dated September 10, 2010, granting summary judgment to Remax and Walton. This appeal followed.
On a motion for summary judgment, the court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); see also R. 4:46-2(c). In granting a motion for summary judgment, the court must find the evidence in the record "'is so one-sided that one party must prevail as a matter of law[.]'" Brill, supra, 142 N.J. at 540 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).
On appeal, we observe the same standards. See Estate of Hanges v. Met. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010). We accord no special deference to a trial judge's assessment of the documentary record, as the decision to grant or withhold summary judgment does not hinge upon a judge's determination of the credibility of testimony in court, but instead amounts to a ruling on a question of law. See Manalapan Realty, L.P. v. Manalapan Twp. Comm. 140 N.J. 366, 378 (1995) (noting that no "special deference" applies to a trial court's legal determination).
We begin our analysis with a consideration of plaintiff's claims under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. The CFA makes the following acts unlawful, in connection with sale or advertisement of merchandise or real estate:
The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, 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]
The term "merchandise" is defined in the CFA to "include any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale."
Violations of the CFA can arise in three different settings: (1) "[a]n affirmative misrepresentation, even if unaccompanied by knowledge of its falsity or an intention to deceive"; (2) "[a]n omission or failure to disclose a material fact, if accompanied by knowledge and intent"; and (3) "'violations of specific regulations promulgated under the [CFA],'" which impose strict liability. Monogram
Credit Card Bank of Georgia v. Tennesen, 390 N.J. Super. 123, 133 (App. Div. 2007) (internal citations omitted).
In addition to proving unlawful conduct by the defendant, a plaintiff must show that he or she suffered an "ascertainable loss" and a causal relationship between such ascertainable loss and the unlawful conduct of the defendant. N.J.S.A. 56:8-19.
In Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009), the Supreme Court explained:
In analyzing claims under the CFA, we have found that there are only three elements required for the prima facie proofs:
1) unlawful conduct by defendant;
2) an ascertainable loss by plaintiff; and
3) a causal relationship between the unlawful conduct and the ascertainable loss. Int'l Union of Operating Eng'rs Local No. 68 Welfare Fund v. Merck & Co., Inc., 192 N.J. 372, 389 (2007)...
The ascertainable loss requirement acts as an "integral check upon the balance struck by the CFA between the consuming public and the sellers of goods." Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 251 (2005).
Although the term "ascertainable loss" is not defined in the CFA, our Supreme Court has ascribed to it the common notion of "ascertain," i.e., "to make (a thing) certain; establish as a certainty; determine with certainty ...[.]" Thiedemann, supra, 183 N.J. at 248 (2005) (quoting Webster's Third International Dictionary, 126 (1981)). While the loss does not have to have been paid out of pocket by the consumer, it still must be "quantifiable or measurable." Ibid. An "estimate of damages, calculated within a reasonable degree of certainty," will suffice. Id. at 249 (quoting Cox v. Sears Roebuck & Co., 138 N.J. 2, 22 (1994)). The evidence of loss must not be "hypothetical or illusory." Id. at 248.
The Court in Thiedemann recognized a plaintiff's burden of demonstrating such a "quantifiable or measurable" loss in order to present his CFA claims to a jury. The Court instructed that a private plaintiff under the CFA "must produce evidence from which a factfinder could find or infer that the plaintiff suffered an actual loss." Thiedemann, supra, 183 N.J. at 248 (emphasis added). "[B]y the time of a summary judgment motion, it is the plaintiff's obligation to be able to make such a demonstration or risk dismissal of the cause." Id. at 249.
Giving plaintiffs the benefit of all reasonable factual inferences, we find no evidence of unlawful conduct by defendants Walton and Remax. Plaintiffs elected to rely upon the JFM inspection and asked the seller to have the "roof inspected and certified." They received from Bless Roofing a "certification" that "the roof has no leaks and no water damage." They also received a two-year warranty on the roof. No bills or documents were produced showing that repairs had been made to the roof or that work had been done on the roof before closing. Larkey declared he was comfortable with and relied on the Bless Roofing certification. Neither Walton nor anyone else at Remax made any misrepresentations to him about the property or the roof.
Further, plaintiffs suffered no "ascertainable loss" as that term is used in the CFA. When plaintiffs noticed a leak in an upstairs bedroom ceiling, they called Bless Roofing which promptly repaired the leak. Defects that arise and are addressed by warranty, at no cost to the consumer, do not provide the predicate "ascertainable loss" that the CFA expressly requires. Thiedemann, supra, 183 N.J. at 251.
As to a claim of fraud, plaintiffs must demonstrate "a material representation of a presently existing or past fact, made with knowledge of its falsity and with the intention that the other party rely thereon, resulting in reliance by that party to his detriment." Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 624 (1981). Equitable fraud does not require proof of scienter; rather it requires only that plaintiff prove reasonable reliance on a material misrepresentation of fact. See Daibo v. Kirsch, 316 N.J. Super. 580, 588 (App. Div. 1998).
For reasons already expressed, we find no evidence of material misrepresentations of fact by Walton or Remax. Plaintiffs received a roof certification and warranty and Bless Roofing promptly honored the warranty during the single instance of a ceiling leak after closing. Likewise, we find no evidence of negligence or breach of any covenant of fair dealing.