Vogel v. Ridge Capital Development, LLC, Superior Court of New Jersey, Appellate Division, 2021 WL 3376974

Regulatory violations under the Consumer Fraud Act do not require proof of an intent to defraud.

This case involved renovation of all existing floors of a three-story townhouse, plus adding a fourth floor and a garage. On March 31, 2014, the parties entered into a contract for the work, which specified that time limits stated in the contract documents are of the essence and called for substantial completion of the work within 212 days. The project was not finished on time, and the plaintiffs did not move in until early June 2015. The plaintiffs brought claims under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and for breach of contract and unjust enrichment. The defendants brought a counterclaim seeking damages and enforcement of a construction lien authorized through arbitration pursuant to the Construction Lien Law, N.J.S.A. 2A:44A-1 to -38. The trial court dismissed all of the plaintiffs’ claims and granted the defendants judgment on the construction lien counterclaim. The essence of the ruling was that the delays and product substitutions were covered by the various change orders and that the defendants did not act with a deceitful or fraudulent purpose to support a CFA claim. The Appellate Division reversed dismissal of the CFA claims, holding that regulatory violations under the CFA do not require proof of an intent to defraud, and directing the trial court to conduct a regulation-by-regulation analysis of each claimed violation, noting that the plaintiffs will have to establish they suffered an “ascertainable loss” for each such violation in order to recover damages.

 

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