One of our complaints about New Jersey’s Consumer Fraud Act is that it is overly broad – encompassing many disputes that could resolved more efficiently by other means. So, it was nice to see a recent Appellate Division reverse a trial court CFA summary judgment for the plaintiff in the case of the house that is sliding down a hill.
The case, Akhtar v. JDN Properties at Florham Park, L.L.C., centers around a house in Florham Park that is gradually sliding down the hill it was built on because the soil under the home is not strong enough to support it. The house’s owners filed suit against the defendants before they even moved into the home since they were alerted to the house’s defect soon after purchasing it.
The trial court granted summary judgment to the plaintiffs, and awarded them $7.4 million in treble damages (triple their actual damages) and counsel fees under the state’s Consumer Fraud Act. The defendants appealed, and the Appellate Division reversed and sent the case back to the lower court for a trial with the reminder that “a simple breach of warranty or breach of contract is not per se unconscionable and alone does not violate the act.”
The dark cloud around this silver lining? The court notes that had there been a regulatory violation, summary judgment for the plaintiffs under the CFA (so including triple damages and attorneys’ fees) would be appropriate. Hence the need for CFA reform. Putting regulatory violation cases under the CFA treats defendants the same as fraudsters who are out intentionally scamming innocent parties.
The CFA must be treated as intended – as a weapon for punishing fraudsters, not as a balm for injured plaintiffs. If you agree, click here to sign our petition to the New Jersey Legislature asking for some common sense reforms that will make sure the Consumer Fraud Act fights fraud, not business.