DeSimone v. Springpoint Senior Living, Inc., involves claims brought under the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1 to-227, against the defendants, the owners and operators of several continuing care retirement communities (“CCRC”) in New Jersey. The defendants advertised to potential residents and their families that to enter its CCRCs, a resident must pay monthly charges and a one-time entrance fee. Residents had the option of paying more money up front for a refundable entrance fee, which allowed the resident’s family to receive a refund up to 90 percent of the entrance fee in the event the resident died. This refund would only be paid once a new resident signed an agreement to take possession of the decedent’s residential unit.
The plaintiff’s mother was a resident of one of the defendants’ CCRCs. The defendants provided the plaintiff’s mother and her representative with a written disclosure statement as well as a copy of the resident and care agreement. The resident and care agreement stated that in the event of a resident’s death, the resident’s estate would receive “a refund of the entrance fee equal to the lesser of the original entrance fee or the subsequent resident’s entrance fee,” less certain enumerated costs. By contrast, the written disclosure made no mention of this “lesser of” term.
The plaintiff’s mother passed away and plaintiff then sought a 90 percent refund of his mother’s entrance fee. He was informed that the subsequent resident who took possession of his mother’s unit paid a lower entrance fee, and thus, the 90 percent refund was calculated pursuant to the “lesser of” term quoted above. The plaintiff then filed a lawsuit alleging, among other things, CFA violations related to advertisements made by the defendants about the 90 percent refund plan.
During the litigation, the plaintiff contended that the damages included the right to a refund under N.J.S.A. 56:8-2.11, which is a provision of the Truth in Menus Act (“TMA”), N.J.S.A. 56:8-2.9 et seq. Defendant moved for partial summary judgment, arguing that the TMA’s refund provision did not apply to the entire CFA generally or the plaintiff’s CFA claims specifically, but instead, strictly applied to claims arising from consumer fraud in restaurant menus. After the Appellate Division denied leave to file an interlocutory appeal of the trial court’s denial of the defendants’ motion, the New Jersey Supreme Court granted certification to address this important issue.
Extension of the TMA’s refund remedy to the entire CFA is problematic because it could potentially provide private CFA plaintiffs with windfalls that are entirely disconnected from any ascertainable loss. Accordingly, NJCJI filed a motion for leave to appear before the New Jersey Supreme Court as amicus curiae supporting the defendant’s position in the matter. In support of its motion, NJCJI highlighted the plaintiff’s mistaken reliance on dicta and the divergence between the remedy sought by plaintiff and the CFA’s broader statutory scheme.
On July 25, 2023, the Supreme Court granted NJCJI permission to appear as amicus curiae in this case. NJCJI’s brief in this matter can be found here. NJCJI’s in-house counsel, Alex R. Daniel, Esq., is representing NJCJI in the matter.