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Clarification of Attorneys Fees and Damages Under Consumer Fraud Act

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Clarification of Attorneys Fees and Damages Under Consumer Fraud Act

by Betsy G. Ramos , Esq.

In several recent Consumer Fraud Act cases, New Jersey courts have clarified the law concerning the award of attorneys fees, expert fees, and treble damages. Although two of the cases dealt with claims involving homeowner improvement construction contracts, the court’s rulings extend beyond these types of contracts.

In Branigan v. Level on the Level, the Appellate Division found that the plaintiff homeowners were entitled to recover against the contractor defendant under the Consumer Fraud Act for the contractor’s violation of the home improvement practices regulations which required that the home improvement contract set forth the starting and ending date of the work. The contractor’s failure to set forth the starting and completion dates was a violation of these regulations. The court held that a violation of a regulation, even a technical one, constitutes a violation of the Act. But, treble damages are not awarded unless there is a causal link between the violation and damages. In this case, the homeowner failed to prove any damages flowing from the failure to specify starting and completion dates. However, the court found that the homeowner can still recover attorneys fees, filing fees and costs, if the plaintiff can prove an unlawful practice, even if the plaintiff cannot show any ascertainable loss. The court pointed out that the fundamental purpose of the Act is that a plaintiff should be able to pursue consumer fraud actions without experiencing financial hardship. The Appellate Division remanded the case back to the trial court to determine an appropriate award of attorneys fees with the cautionary instruction that the court should consider the relevance of the amount of damages recovered to the amount of attorneys fees to be awarded.

In another Appellate Division case, Josantos Construction v. Bohrer, the court again found a violation of the Consumer Fraud Act based upon a violation of the home improvement practices regulations. In this case, the contractor violated the Act by requesting the homeowner to sign a Certificate of Completion before the home improvement was completed in accordance with the contract. The court, however, limited the recovery of treble damages to only those construction defects causally connected to the breach of the Act. The court also refused to permit the homeowner to recover expert witness fees. While the court noted that the Consumer Fraud Act allows “reasonable costs of suit,” it found that this term did not encompass expert witness fees.

In a recent Supreme Court case, Lettenmaier v. Lube Connection, the court dealt with the issue as to whether attorneys fees should be included in the amount of controversy in calculating the $10,000 jurisdictional limit of the Special Civil Part of the Superior Court. In this case, the plaintiff had sued Lube Connection as a result of maintenance work done on the plaintiff’s car. The plaintiff was awarded $9240 ($3080 trebled) by the trial court which then capped her attorneys fees at $760. The Supreme Court decided that counsel fees are not part of the “amount in controversy” in calculating the $10,000 jurisdictional limit for access to the Special Civil Part. The court noted that to include counsel fees in the “amount in controversy” would foreclose consumer fraud victims from pursuing their claims expeditiously in the Special Civil Part by forcing them to choose between the expense and delay for a Superior Court action to possibly foregoing counsel fees. Thus, the Court held that counsel fees awarded under the Consumer Fraud Act are excluded from the calculation of the jurisdictional limit of the Special Civil Part.

Based upon these recent cases, it is clear that the New Jersey courts will be more likely to award attorneys fees for Consumer Fraud Act violations, even technical violations. However, plaintiffs may not be able to obtain large awards of fees if the damages recovered are minimal. Further, the court has limited the amount of treble damages that plaintiffs may obtain by limiting the award of treble damages to only those damages flowing directly from a violation of the Act. The court has also ruled that expert costs are not recoverable. On the other hand, the court has permitted plaintiffs to now recover the full amount of their attorney fees, even if the award would exceed the jurisdictional limit of the Special Civil Part.

This article was written by Betsy G. Ramos, Esq., Chairperson of Capehart Scatchard’s Litigation Department. Should you have questions or like more information, please contact Ms. Liebman at 856.914.2052, by fax at 856.235.2786, e-mail at bliebman@capehart.com .

© 2000 Capehart & Scatchard, P.A., All Rights Reserved.

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