January 14, 2019
appeal from an interlocutory order of the Superior Court of
New Jersey, Law Division, Sussex County, Docket No.
A. Peoples argued the cause for appellants (Horlacher &
Peoples, LLP, attorneys; Linda A. Peoples, of counsel and on
B. Shepps argued the cause for respondents (Mound, Cotton,
Wollan & Greengrass LLP, attorneys; Wendy B. Shepps, on
Jeffrey A. Koziar, Deputy Attorney General, argued the cause
for amicus curiae Office of the Attorney General (Gurbir S.
Grewal, Attorney General, attorney; Jason W. Rockwell,
Assistant Attorney General, of counsel; Jeffrey A. Koziar, on
Judges Sabatino, Haas and Mitterhoff
MITTERHOFF, J.S.C. (temporarily assigned).
interlocutory appeal arises from the trial court's June
11, 2018 order entering partial summary judgment dismissing
plaintiffs Jodi and Thomas Shaw's claims under the
Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 to
-210. Plaintiffs challenge the court's finding that home
inspectors are "learned professionals" and
therefore excluded from CFA liability.
narrow issue before us is whether semi-professionals such as
home inspectors should be deemed to be learned professionals.
Because this case necessarily required us to interpret the
scope of the "learned professional" exception to
the CFA, which is a statute that is enforced by the Attorney
General's office, and also because home inspectors are
regulated by the Attorney General's Division of Consumer
Affairs, we invited that office to participate as amicus
curiae. We issued that invitation in order to discern both on
a narrow basis the agency's view whether home inspectors
should be deemed "learned professionals," and on a
broader basis how and when the "learned
professional" exception should be applied by courts to
exempt individuals from CFA liability.
the CFA's remedial purpose and applying well-established
canons of statutory construction, we conclude that the
judicially created learned professional exception must be
narrowly construed to exempt CFA liability only as to those
professionals who have historically been recognized as
"learned" based on the requirement of extensive
learning or erudition. To the extent our prior decisions,
including Plemmons v. Blue Chip Insurance Services,
Inc., 387 N.J.Super. 551 (App. Div. 2006), have applied
the learned professional exception to
"semi-professionals" who are regulated by a
separate regulatory scheme, we are constrained, upon further
review, to depart from that reasoning as inconsistent with
the Supreme Court's decision in Lemelledo v.
Beneficial Management Corp. of America, 150 N.J. 255
(1997). As the Court explicitly held in Lemelledo,
the existence of a separate regulatory scheme will
"overcome the presumption that the CFA applies to a
covered activity" only when "a direct and
unavoidable conflict exists between application of the CFA
and application of the other regulatory scheme or
schemes." 150 N.J. at 270.
decision comports with the Attorney General's persuasive
interpretation of the CFA and addresses the Attorney
General's policy concern that an expansive interpretation
of the learned professional exception unduly curtails the
authority of the Attorney General and the Division of
Consumer Affairs to protect New Jersey consumers and limits
the redress available to private litigants.
because home inspectors are not historically recognized
learned professionals and because no direct and unavoidable
conflict exists between the CFA and the regulations governing
home inspectors, we conclude that the CFA applies to the
activities of licensed home inspectors. Therefore, we reverse
the trial court's summary judgment dismissal of the CFA
claim against defendants and remand for further proceedings.
April or May of 2015, plaintiff Thomas Shaw contracted to
purchase a property located on Overlook Court in Hampton
Township. Prior to purchasing the home, plaintiffs hired
defendant to conduct an inspection of the property.
Karen Kleinman, plaintiffs' real estate broker, contacted
defendant and requested he conduct a home inspection of
plaintiffs' property. In response, defendant had Thomas
Shaw sign a one-page pre-inspection agreement setting forth
the terms of the inspection. That same day, defendant
inspected the property, and on May 13, 2015, he emailed his
report to Jodi Shaw. Plaintiffs paid defendant $350 for the
report concluded that "[t]his structure appears to be
very well built utilizing quality materials and professional
workmanship. It is in need of only typical maintenance and
upgrading." In June 2015, plaintiffs proceeded with the
purchase of the property, allegedly in reliance upon
defendant's report, for the sum of $318, 000. Plaintiffs
allege that "[u]pon occupying the [p]roperty in June
2015, the Shaws quickly learned that the house was in fact in
poor condition, requiring a great deal of major
repairs." These allegedly required repairs include:
"replacement of the roof that leaked and was at the end
of its useful life, the repair of their front deck/porch
which collapsed when they moved in, the replacement of the
driveway and replacement of windows and sliding glass doors
to address leaks, drafts and rot from the leaks."
Plaintiffs allege they have "been forced to expend tens
of thousands of dollars" on repairs and "must
still, at a minimum," spend an estimated tens of
thousands of dollars on a mold issue in the home.
deposition, defendant acknowledged that he had observed some
problems with the home that he did not include in his report.
testified at his deposition that he became licensed as a home
inspector in January 2015. In order to become licensed,
defendant had to attend "hours of schooling,"
though he did not recall how many offhand. Defendant also did
not recall the name of the school he attended. In addition,
defendant had to serve forty hours of apprenticeship with a
licensed home inspector. Finally, in order to become
licensed, defendant had to take a State-mandated test. After
successfully completing the schooling and apprenticeship and
passing the test, defendant became a licensed home inspector.
Defendant's inspection of plaintiffs' home was his
first assignment as a licensed inspector. Defendant allowed
his home-inspector license to expire in April 2017; he now
works as a painter, which does not require a
their July 2016 complaint against defendant, plaintiffs
alleged claims sounding in negligence, violations of the CFA,
common law fraud, and breach of contract. After the parties
filed cross-motions for summary judgment, the trial court
issued two orders supported by a written statement of
reasons. The first order, which granted, in part,
defendant's motion for summary judgment by dismissing
with prejudice plaintiffs' CFA claims, is the only order
at issue in this appeal.
dismissing the CFA claims against defendant, the trial court
noted that "[t]here is no binding authority specifically
addressing whether home inspectors should be considered
semi-professionals exempt from the CFA." The court
observed that two unreported Law Division
decisions reasoned that "they should be
[considered learned professionals] because they are regulated
under N.J.A.C. 13:40[-1] et seq." The court found that
our decision in Herner v. Housemaster of America,
Inc., 349 N.J.Super. 89 (App. Div. 2002), which held
that a home inspector was liable under the CFA, did not
compel a conclusion in this case that the "learned
professionals" exclusion does not apply. First, the
court found Herner was factually distinguishable
because in that case the inspector's reports were
deliberately skewed in order to please the realtor, avoid
"killing deals," and have real estate agents
continue to recommend the home inspector.
the trial court found that Herner did not address
the semi-professional exception issue. The court reasoned,
Although the Home Inspection Licensing Act (N.J.S.A. 45:8-61
through 76), became effective July 8, 1998, the regulations
implementing N.J.S.A. 45:8-61 et seq. were not implemented
until 2006, after the decision in Herner.
See 33 N.J.R. 1318(a) N.J.A.C. 13:40 et seq. These
code sections highly regulate the home inspection profession,
such as further specifying the requirements for initial
licensure as a home inspector, including an approved course
of study of 180 hours, as prescribed by the Board, 40 hours
of unpaid field-based inspections in the presence of and
under the direct supervision of a licensed home inspector,
maintaining an errors and omissions policy in the minimum
amount of $500, 000 per occurrence, passing the Home
Inspector Examination, and an application fee. N.J.A.C.
13:40-15.6. These are the regulations that [the unpublished
opinions] cite to show that home inspectors are
semi-professionals. Unlike Herner, which was decided
before the 2006 regulations, both of the unpublished cases
were decided after the 2006 regulations implementing N.J.S.A.
45:8-61 et seq. Although the unpublished cases are not
binding on the court and are not cited as authority by the
court, because home inspectors have become regulated since
the Herner decision, they should be treated as
semi-professionals exempt from the Consumer Fraud
our decision in Plemmons, the court concluded that
defendant's status as a semi-professional exempts him
from liability under the CFA. Accordingly, the court granted
defendant's motion for summary judgment dismissing
plaintiffs' CFA claims with prejudice.
we granted plaintiffs' motion for interlocutory review,
limited to the issue whether home inspectors are
"learned professionals" exempt from CFA liability.
As we have noted, the Attorney General accepted our
invitation to participate in this appeal as amicus curiae.
appeal, plaintiffs contend the trial court erred in finding
that home inspectors are learned professionals. In that
regard, plaintiffs primarily rely on Herner, which
they assert is directly on point. Alternatively, plaintiffs
urge us to find that because a home inspection is a service
that is rendered in connection with the sale of real estate,
defendant's liability is supported by the 1976 amendment
to the CFA adding 'the sale or advertisement of . . .
real estate" to the provision of N.J.S.A. 56:8-2.
See Papergraphics Intern., Inc. v. Correa, 389
N.J.Super. 8, 12 n.1 (App. Div. 2006) ("The holding in
Neveroski was abrogated by the 1976 statutory
amendment adding 'the sale or advertisement of . . . real
estate' to the provision of N.J.S.A. 56:8-2."
(alteration in original)); Arroyo v. Arnold-Baker &
Assocs., Inc., 206 N.J.Super. 294, 296-97 (Law Div.
1985) (holding that the amendment to add the sale or
advertisement of real estate to the CFA made real estate
brokers, agents and salespersons subject to the CFA).
argues that the trial court correctly analyzed and applied
our decision in Plemmons and correctly concluded
that home inspectors are "learned professionals"
exempt from CFA liability because they are subject to
regulation by the Home Inspector Advisory
Attorney General urges us to reject the extension of the
so-called "learned professional" exception to
encompass "semi-professionals" such as home
inspectors. The Attorney General notes that the unwarranted
expansion of the "learned professional" exception
to semi-professionals lacks any support in the plain text or
purpose of the CFA. To adopt the trial court's reasoning,
the Attorney General argues, would unduly limit the CFA,
which the Legislature intended to be one of the nation's
strongest consumer protection laws. The trial court's
broad interpretation of the exception, the Attorney General
argues, significantly curtails the authority of the Attorney
General and the Division of Consumer Affairs
("Division") to protect New Jersey consumers and
limits the redress available to private litigants.
to the decision below, the Attorney General argues that the
fact that home inspectors are subject to other statutory and
regulatory requirements, which are enforced by a professional
board located within the Division, does not excuse them from
compliance with the CFA. In that regard, the Attorney General
notes that the Legislature made clear that the rights,
remedies and prohibitions of the CFA are "cumulative of
any other statutory right, remedy or prohibition."
N.J.S.A. 56:8-2.13. The Attorney General argues that as the
Supreme Court held in Lemelledo, another statutory
scheme will displace the CFA only when "a direct and
unavoidable conflict exists between the application of the
CFA and application of the other regulatory scheme or
schemes." 150 N.J. at 270. In this case, the Attorney
General avers that because there is no "direct and
unavoidable conflict" between the CFA and the statutes
and regulations specific to home inspectors, the trial court
erred in concluding that the home inspector regulations
preclude the application of the CFA to home inspectors.
trial court reached its result, the Attorney General asserts,
by expanding the judicially created "learned
professional" exception to the CFA well beyond the
narrow parameters in Macedo v. Dello Russo, 178 N.J.
340 (2004). The expansion of the "learned
professional" exception to home inspectors - who are not
even required to have a college degree - stretches the
exception far beyond its limited origin. The Attorney
General argues that the exception (which itself lacks a basis
in the statutory text) should be limited to the narrow class
of professionals identified in Macedo as exempt from
the CFA for historical reasons: physicians, attorneys, and
similar learned professionals who were not permitted to
advertise at all when the Legislature enacted the 1960
precursor to the CFA, creating liability for fraud in
advertising. Nothing in Macedo, the Attorney General
argues, requires or even supports a CFA exemption for home
inspectors on the ground that a licensure regime for home
inspectors was established decades later.
licensed semi-professionals such as home inspectors are
entitled to the judicially created "learned
professional" immunity turns on the statutory
interpretation of two statutes: the CFA and the Home
Inspection Professional Licensing Act ("HIPLA"),
N.J.S.A. 45:8-61 to -81. We review these issues of statutory
construction de novo. Cashin v. Bello, 223 N.J. 328,
335 (2015). In considering whether the Legislature intended
to exempt home inspectors and other
"semi-professionals" from liability under the CFA,
we adhere to well-established principles of statutory
Legislature's intent is the paramount goal when
interpreting a statute and, generally, the best indicator of
that intent is the statutory language." DiProspero
v. Penn, 183 N.J. 477, 492 (2005). In considering the
statutory language, "an appellate court must read words
'with[in] their context' and give them 'their
generally accepted meaning.'" Cashin, 223
N.J. at 335 (alteration in original) (quoting N.J.S.A.
1:1-1); see also DiProspero, 183 N.J. at 492
("We ascribe to the statutory words their ordinary
meaning and significance, and read them in context with
related provisions so as to give sense to the legislation as
a whole." (citations omitted)).
statute's plain language lends to only one
interpretation, a court should not consider "extrinsic
interpretative aids." DiProspero, 183 N.J. at
492 (quoting Lozano v. Frank DeLuca Const., 178 N.J.
513, 522 (2004)). "On the other hand, if there is
ambiguity in the statutory language that leads to more than
one plausible interpretation, we may turn to extrinsic
evidence, 'including legislative history, committee
reports, and contemporaneous construction.'"
Id. at 492-93 (quoting Cherry Hill Manor Assocs.
v. Faugno, 182 N.J. 64, 75 (2004)).
Attorney General argues that there is nothing in the text or
the purpose of the CFA that would support a blanket exception
for semi-professionals based solely on the existence of a
separate regulatory scheme that also regulates the subject
industry. We agree.
outset, the CFA does not explicitly provide an exception for
or even mention learned professionals. Moreover, the CFA is
designed to prohibit unlawful conduct or practices, defined
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
stated purpose of the act is "to prevent deception,
fraud, or falsity, whether by acts of commission or omission,
in connection with the sale or advertisement of merchandise
and real estate." Fenwick v. Kay American
Jeep, Inc., 72 N.J. 372, 376-77 (1977). The CFA
defines "merchandise" as "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) (emphasis added). The services of a home inspector
fall squarely within the definition of merchandise under the
has three main purposes: to compensate the victim for his or
her actual loss; to punish the wrongdoer through the award of
treble damages; and by way of the counsel fee provision, to
attract competent counsel to counteract the community scourge
of fraud by providing an incentive for an attorney to take a
case involving a minor loss to the individual.
[Real v. Radir Wheels Inc., 198 N.J. 511, 520-21
(2009) (quoting Lettenmaier v. Lake Constr., Inc.,
162 N.J. 134, 139 (1999)).]
initially designed to combat 'sharp practices and
dealings' that lured customers into purchases through
fraudulent or deceptive means, the CFA is no longer aimed
solely at 'shifty, fast-talking and deceptive
merchant[s].'" Suarez v. Eastern Int'l
Coll., 428 N.J.Super. 10, 31 (App. Div. 2012)
(alteration in original) (quoting Cox v. Sears Roebuck
& Co., 138 N.J. 2, 16 (1994)). The CFA's
remedial goal "is to establish 'a broad business
ethic,' promoting a standard of conduct that contemplates
'good faith, honesty in fact and observance of fair
dealing.'" Ibid. (quoting Mechinsky v.
Nichols Yacht Sales, Inc. 110 N.J. 464, 472 (1988)).
Accordingly, liability under the act will lie even if the
prohibited conduct is committed in good faith. Ibid.
originally enacted, the Attorney General had exclusive
authority to enforce the CFA. Thiedemann v. Mercedes-Benz
USA, LLC, 183 N.J. 234, 245 (2005). In 1971, however,
the Legislature amended the CFA to provide for a private
cause of action to "[a]ny person who suffers any
ascertainable loss of moneys or property, real or
personal," as a result of a deceptive practice. N.J.S.A.
56:8-19. If successful, the private litigant can recover
treble damages, attorney's fees, and costs.
Ibid. The Legislature has expressly provided that
the "rights, remedies and prohibitions" created by
the CFA are "in addition to and cumulative of any other
right, remedy or prohibition accorded by the common law or
statutes of this State." N.J.S.A. 56:8-2.13.
"evinces a clear legislative intent that its provisions
be applied broadly in order to accomplish its remedial
purpose, namely, to root out consumer fraud."
Lemelledo, 150 N.J. at 264; see also Czar, Inc.
v. Heath, 198 N.J. 195, 208-09 (2009) (rejecting
"crabbed" approach to the CFA in favor of a
faithful adherence to the CFA's broad remedial purposes);
Cox, 138 N.J. at 15 (holding that the CFA must be
construed liberally in favor of consumers).
it is well-established that "where the purpose of
legislation is remedial and humanitarian, any exemption must
be narrowly construed, giving due regard to the plain meaning
of the language and the legislative intent." Serv.
Armament Co. v. Hyland, 70 N.J. 550, 559 (1976) (citing
Phillips v. Walling, 324 U.S. 490, 493 (1945));
see also Nini v. Mercer Cty. Cmty. Coll., 202 N.J.
98, 112 (2010) ("[A]n interpretation that throws
contract employees into the over-seventy exception at once
narrows what should be the expansive coverage of remedial
legislation like the [New Jersey Law Against Discrimination],
and expands an exception in contravention of applicable
principles of statutory construction."); Young v.
Schering Corp., 141 N.J. 16, 29 (1995) ("As an
exception to the general remedial scheme of [the New Jersey
Conscientious Employee Protection Act], the waiver provision
must be construed narrowly."); Marx v. Friendly Ice
Cream Corp., 380 N.J.Super. 302, 310 (App. Div. 2005)
("Based upon the Legislature's remedial purpose in
enacting a minimum wage law, we have held that all exemptions
to N.J.S.A. 34:11-56a4 should be construed narrowly and that
the employer has the obligation to prove that an employee
meets the criteria for ...