JUAN PENA VS. JOSE GOMEZ, ETC. (DC-013546-17, UNION COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1089-18T4
JUAN PENA and MILAGROS
PENA,
Plaintiffs-Appellants,
v.
JOSE GOMEZ, t/a
JURGO CONSTRUCTION,
Defendant-Respondent.
____________________________
Submitted October 29, 2019 – Decided February 7, 2020
Before Judges Messano and Susswein.
On appeal from the Superior Court of New Jersey,
Law Division, Union County, Docket No. DC-013546-
17.
Andril & Espinosa, LLC, attorneys for appellants
(Antonio R. Espinosa, on the brief).
Respondent has not filed a brief.
PER CURIAM
This appeal arises from a civil action for breach of contract, consumer
fraud, and common law fraud brought in the Special Civil Part against a home
improvement contractor. After performing some work, the contractor
abandoned the project, forcing plaintiffs, Juan and Milagros Pena, to hire
replacement contractors to complete the work and repair damage the first
contractor caused. The trial court entered default judgment against defendant,
Jose Gomez, and, after convening a proof hearing, found breach of contract.
However, for reasons not explained on the record, the trial court did not find
consumer fraud. Similarly, the trial court denied plaintiffs' motion for
reconsideration without elaborating on its conclusion that defendant did not
commit consumer fraud.
After reviewing the record in light of the applicable legal standards, we
conclude that the Special Civil Part judge was clearly mistaken in refusing to
reconsider whether defendant violated the Consumer Fraud Act (CFA), N.J.S.A.
56:8-1 to -210. Exercising original jurisdiction, we further conclude plaintiffs
have established that defendant committed a consumer-fraud violation.
Accordingly, plaintiffs are entitled to attorneys' fees and treble damages in the
amount of $15,000, which is the jurisdictional limit of the Special Civil Part. R.
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6:1-2(a)(1). We remand this matter to the trial court for the sole purpose of
determining the amount of attorneys' fees in accordance with Rule 4:42-9(a)(8).
I.
We derive the following facts from the record on appeal. In early June
2013, plaintiffs hired defendant to replace their roof, remodel their front porch,
fix the foundation, and make various other home improvements at a total cost of
$20,000. The contract specified a payment schedule that provided plaintiffs
would pay defendant an initial sum of $10,000 upon signing the contract. The
contract clearly stated that the next installment of $5000 was not due until
defendant completed work on the foundation and roof. The homeowners would
next pay $4000 once defendant finished the basement and porch. The contract
provided that the homeowners would tender the final $1000 installment only
after defendant completed all remaining work. Defendant agreed to complete
all work on the home by July 12, 2013.
On June 5, 2013, plaintiffs made the first installment payment, and
defendant began work on the roof and porch. Plaintiff testified that defendant
performed poorly, leaving seams in the roof that permitted water to seep into the
home. Plaintiff also testified that defendant demolished the porch but did not
perform work to rebuild it. Instead, defendant refused to continue work on the
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home unless he received additional payment. Plaintiffs refused to make any
additional payments outside the agreed-upon installment schedule, and on July
19, 2013, they sent defendant a letter notifying him that they intended to find a
substitute contractor and seek damages.
On September 23, 2013, plaintiffs contracted with a substitute contractor
to replace the roof and repair the damage caused by defendant at a cost of
$12,500. Plaintiffs paid a substitute porch contractor $3985.46 for labor and
materials, and they paid $5600 to a painting contractor to address the water
damage the roof leak caused. In total, plaintiffs paid $22,085.46 to three
contractors to complete the improvements and to repair the damage defendant
had caused.
Defendant did not contest the suit filed by plaintiffs in the Special Civil
Part, prompting the trial court to enter default judgment. Subsequently, the court
conducted a proof hearing at which plaintiff, Milagros Pena, testified. The court
admitted into evidence a copy of the contract between plaintiffs and defendant,
plaintiffs' letter advising defendant of their intent to seek damages, and the
contract with a substitute contractor.
At the conclusion of the proof hearing, the trial court found that defendant
breached the contract and ordered defendant to return the down payment of
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$10,000. As to consumer fraud, the trial court noted only, "there is no consumer
fraud, there's no case for consumer fraud." The court gave no further
explanation for rejecting this part of plaintiffs' suit.
Plaintiffs filed a motion for reconsideration pursuant to Rule 4:49-2. The
trial court denied plaintiffs' motion for reconsideration without holding a
hearing or providing a statement of reasons. Plaintiffs now appeal from that
ruling.
II.
Plaintiffs present two matters for our consideration. First, plaintiffs
contend that the trial court erred in denying their motion for reconsideration of
the court's prior ruling at the proof hearing that plaintiffs had failed to present
evidence establishing defendant violated the CFA. Second, plaintiffs argue the
proofs they submitted at the proof hearing and through the reconsideration
motion clearly establish defendant violated the CFA, warranting treble damages
and attorneys' fees. We turn first to the plaintiffs' contentions regarding the
motion for reconsideration before addressing the substance of plaintiffs'
consumer-fraud claim.
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III.
Rule 4:49-2 governs motions for reconsideration. The Rule serves a
limited purpose aimed at permitting courts to correct their own mistakes:
Reconsideration should be utilized only for those cases
which fall into that narrow corridor in which either [(]l)
the Court has expressed its decision based upon a
palpably incorrect or irrational basis, or [(]2) it is
obvious that the Court either did not consider, or failed
to appreciate the significance of probative, competent
evidence.
[D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div.
1990); accord Cummings v. Bahr, 295 N.J. Super. 374,
384 (App. Div. 1996).]
"In short, a motion for reconsideration provides the court, and not the litigant,
with an opportunity to take a second bite at the apple to correct errors inherent
in a prior ruling." Medina v. Pitta, 442 N.J. Super. 1, 18 (App. Div. 2015); see
also Lahue v. Pio Costa, 263 N.J. Super. 575, 598 (App. Div. 1993) ("The basis
[for a motion for reconsideration], thus, focuses upon what was before the court
in the first instance." (citing D'Atria, 242 N.J. Super. at 401)).
"The decision to deny a motion for reconsideration falls 'within the sound
discretion of the [trial court], to be exercised in the interest of justice.'" In re
Belleville Educ. Ass'n, 455 N.J. Super. 387, 405 (App. Div. 2018) (alteration in
original) (quoting Cummings, 295 N.J. Super. at 384). "An abuse of discretion
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'arises when a decision is "made without a rational explanation, inexplicably
departed from established policies, or rested on an impermissible basis."'"
Pitney Bowes Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378, 382
(App. Div. 2015) (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571
(2002)).
In this instance, the trial court denied plaintiffs' motion for reconsideration
without providing an explanation. Nor did the court provide an explanation for
its earlier finding that plaintiffs had not established consumer fraud. We are
therefore constrained to hold that the trial court was clearly mistaken in rejecting
plaintiffs' motion for reconsideration of their consumer-fraud complaint,
especially since the contract on its face reveals a regulatory violation of the CFA
and evidence of CFA violations was uncontroverted at the proof hearing.
Although we conclude plaintiffs' consumer-fraud claim warrants
reconsideration, we do not find it necessary to remand this matter to the trial
court to undertake that assessment. Rather, to avoid further delay and cost, and
because the facts needed to establish a basis for relief under the CFA were
adduced at the proof hearing, we exercise original jurisdiction to correct these
errors. R. 2:10-5; Price v. Himeji, LLC, 214 N.J. 263, 294–96 (explaining that
Rule 2:10-5 "allow[s an] appellate court to exercise original jurisdiction to
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eliminate unnecessary further litigation but discourage[s] its use if factfinding
is involved." (alteration in original) (quoting State v. Santos, 210 N.J. 129, 142
(2012)).
IV.
The CFA affords "relief to consumers from 'fraudulent practices in the
market place.'" Lee v. Carter-Reed Co., 203 N.J. 496, 521 (2010) (quoting Furst
v. Einstein Moomjy, Inc., 182 N.J. 1, 11 (2004)). The CFA provides:
Any person who suffers any ascertainable loss of
moneys or property, real or personal, as a result of the
use or employment by another person of any method,
act, or practice declared unlawful under this act . . . may
bring an action . . . in any court of competent
jurisdiction.
[N.J.S.A. 56:8-19.]
"Thus, to state a claim under the CFA, a plaintiff must allege each of three
elements: (1) unlawful conduct by the defendants; (2) an ascertainable loss on
the part of the plaintiff; and (3) a causal relationship between the defendants'
unlawful conduct and the plaintiff's ascertainable loss." N.J. Citizen Action v.
Schering-Plough Corp., 367 N.J. Super. 8, 12–13 (App. Div. 2003). Plaintiffs
successfully alleging consumer-fraud violations are entitled to treble damages
for losses resulting from the violations, as well as the "award [of] reasonable
attorneys' fees, filing fees and reasonable costs of suit." N.J.S.A. 56:8-19.
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"An 'unlawful practice' contravening the CFA may arise from (1) an
affirmative act; (2) a knowing omission; or (3) a violation of an administrative
regulation." Dugan v. TGI Fridays, Inc., 231 N.J. 24, 51 (2017). A plaintiff is
not required to show intent where the claimed consumer-fraud violation is a
regulatory violation. Ibid.
Turning to the facts of this case, plaintiffs contend that defendant
committed an unlawful practice by violating several regulatory requirements of
the CFA. We conclude from the record before us that plaintiffs have presented
evidence establishing that defendant committed violations of the CFA, including
violations of the regulatory provisions in N.J.A.C. 13:45A-16.2.
Next, plaintiffs maintain they suffered an ascertainable loss from
defendant's unlawful conduct. To establish an ascertainable loss, plaintiffs must
"demonstrate a loss attributable to conduct made unlawful by the CFA."
Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 246 (2005) (citing
Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 473 (1988)). The loss
must be "'quantifiable or measurable,' not 'hypothetical or illusory.'"
D'Agostino, 216 N.J. at 185 (quoting Thiedemann, 183 N.J. at 248). In a case
involving a home-improvement contract, the cost of repairing damages resulting
from a defendant's unlawful practices may constitute the appropriate measure of
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a plaintiff's ascertainable loss. See, e.g., Cox v. Sears Roebuck & Co., 138 N.J.
2, 22–24 (1994) (concluding that the plaintiff's loss "amounted to the cost of
repairing" damages resulting from the defendant's unlawful practices).
Here, plaintiffs presented uncontroverted evidence that they paid
substitute contractors to complete the work and repair damage defendant caused.
That is sufficient to establish an ascertainable loss within the meaning of the
CFA.
Finally, plaintiffs are required to demonstrate "a causal relationship
between the [defendant's] unlawful conduct and [their] ascertainable loss."
Schering-Plough Corp., 367 N.J. Super. at 12–13 (App. Div. 2003). Our review
of the record leads us to conclude that there was a causal relationship between
the violations of the CFA and the ascertainable loss. Had defendant complied
with the CFA, plaintiffs would not have had to pay substitute contractors to
repair the damage defendant caused.
V.
We hold that plaintiffs have proven all the requisite elements of their
consumer-fraud claim. Accordingly, we exercise our original jurisdiction to
award treble damages of $15,000, which is the jurisdictional limit of the Special
Civil Part. See Nieves v. Baran, 164 N.J. Super. 86, 91–92 (App. Div. 1978)
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(holding that the jurisdictional limit under the predecessor to the Special Civil
Part applies to treble damages under the CFA); R. 6:1-2(c) (deeming waived any
amount recoverable on a claim in excess of the jurisdictional limit of the Special
Civil Part). We also hold pursuant to the fee-shifting provision of the CFA
(N.J.S.A. 56:8-19) that plaintiffs are entitled to reasonable attorney fees. See
Delta Funding Corp. v. Harris, 189 N.J. 28, 41 (2006) ("An award of attorney's
fees and costs to prevailing plaintiffs is mandatory under [the CFA]."). That
award is not subject to the $15,000 jurisdictional limit. See Lettenmaier v. Lube
Connection, Inc., 162 N.J. 134, 144 (1999) ("[C]ounsel fees awarded under the
[CFA] . . . are excluded from the calculation of the jurisdictional limit of the
Special Civil Part.").
We remand the matter to the trial court for entry of a judgment in favor of
plaintiffs of $15,000 and a reasonable amount of attorneys' fees pursuant to Rule
4:42-9.
Reversed and remanded for proceedings consistent with this opinion. We
do not retain jurisdiction.
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