Elias Kort, et. al. v. Creative Solutions and Services, LLC, et. al, Docket No. A-2645-10T3 (Decided November 1, 2011)

Individual liability imposed under the Consumer Fraud Act.

In yet another decision addressing the scope of personal liability under the New Jersey Consumer Fraud Act (“CFA”), the Superior Court of New Jersey, Appellate Division, reversed a trial court’s decision to not impose personal liability on the owner of a residential construction company organized as an LLC. In imposing personal liability, the Appellate Division noted that the owner “participated directly in the regulatory violations. He executed a home improvement contract that omitted required provisions as listed previously. He allegedly represented to plaintiffs that Creative Solutions was a small family business, thus indicating his personal responsibility for the contents of the contract. Moreover, as president of the company, and in the absence of contrary evidence, he could be held liable for setting the unlawful company policies with respect to the missing contract provisions.” Despite the foregoing, the court affirmed that there was no ascertainable loss as a result of the regulatory violations and that the $197,225.32 in damages was a result of the contractor’s failure to complete its scope of work. Consequently, treble damages were not imposed. However, the CFA violations did entitle the plaintiffs to recover their attorney fees since the “failure to prove an ascertainable loss caused by the Consumer Fraud Violation is not a bar to their recovery of attorneys’ fees and costs under the Act.”

Case Law Alert - 2nd Qtr 2012