January 19, 2012 by Carl G. Archer, Esq..

This article is especially important given my prior posts on consumer vigilante justice, referenced here and here.

All of us have had situations in our lives where we have been inconvenienced or damaged by some sort of situation due to another’s negligence. A totally understandable first instinct is revenge- and if you’re the litigious sort (or if you’re a lawyer), the court system seems like a natural place to seek redress.

If you’re mad about something that happened to you and you want to sue, I understand. You have suffered some sort of damage and/or injury and you want to be compensated for it. That’s one thing.

But don’t file a lawsuit to “make a point.” Some people want to get their money, and to prove something as well. The problem is that people and companies have this annoying tendency not to see your “point” because you’re trying to extract money from them. If you end up being able to make a point (through the media or whatever) after you win, then terrific. However, you need to win (and make yourself some money) first; losing your case would make the wrong kind of point.

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January 10, 2012 by Carl G. Archer, Esq..

I’m not entirely sure that all of our readers will be comfortable with the course of action I am advocating for in this article. But what I do know is that I’ve seen it work, and it might be an effective way for you to get a company’s attention if you’re feeling ignored as a consumer.

Small claims court is a wonderful thing for most people. Little conflicts get ironed out with relative ease when two people sit down, with the help of mandatory NJ mediation, and finally listen to one another.

Listening and communication are the keys to dispute resolution. If a party is not listening, there will be no agreement on anything. You probably already know this on some level, because you have called customer service for some company or talked to a representative of a store, and finished by saying “Am I talking to a wall?” I am here to suggest an alternative: sue companies you’re annoyed with, get them into small claims court, and don’t be surprised if you get the results you’re looking for.

To be clear: you can’t sue a company without a good reason, and an attorney can’t advise you to do so- there are court rules, ethical rules, and just plain common sense principles that prevent that from happening. However, if there is a real cause of action, you might be able to use the court system to your advantage.

I will cover the process by which you might do this in my next post.

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December 13, 2011 by Carl G. Archer, Esq..

This article was featured in a recent issue of the Mercer County Woman. It was written by Brian A. Mills, a partner with the firm.

A recent Court decision has extended the reach of New Jersey’s Consumer Fraud Act,
(the “CFA”) through the corporate shield and into the pockets of the individual owners and
employees of the company with whom a consumer has a contract. In the wake of this important decision, the corporate or LLC structure alone is insufficient to protect business owners and employees from personal exposure for business liabilities arising under the CFA.

The case Allen v. V and A Brothers, Inc., 414 N.J.Super. 152 (App.Div 2010), was brought
by homeowners against a landscape contracting corporation, its sole individual shareholder
and two of its employees alleging breach of contract and consumer fraud in connection with
the construction of a retaining wall on their home. In holding the three individuals liable
for damages in excess of $600,000, the Court interpreted the Consumer Fraud Act to permit
the imposition of damages against the individual owner and employees of a company even
though the contract was with a corporation and even though no individual was deemed to have
committed any wrong “affirmative act.” The individuals were deemed personally liable for the
damages by virtue of the company’s failure to adhere to certain “technical requirements” under
the CFA. The Court stated that it is not necessary to pierce the corporate veil in order to impose personal liability.

The CFA was adopted in 1960 as remedial legislation to be liberally construed in favor of
consumers to punish “unconscionable commercial practices.” In short, the consumer is entitled
to the benefit of every doubt whenever a potential CFA claim or issue arises. The act is intended to “increase the attractiveness of consumer actions to attorneys” by allowing a consumer to recover damages equal to 300% of their actual losses plus attorney fees in prosecuting the case. In essence, the legislation removes the cost-prohibitive barrier to bringing a lawsuit against a business where the damages are trivial. Lawyers for consumers are likely to bring small cases knowing the Court will force the defendant to foot the bill for the plaintiff’s lawsuit. Moreover, damages awarded under the CFA are not covered by insurance.

Further, the New Jersey Division of Consumer Affairs has enacted a number of regulations
elaborating on the CFA obligations of providers of certain types of goods and services. Taken
together, the CFA statutes and regulations bring almost any business that does business
with consumers within the sights of the CFA and its remedial objectives designed to punish
businesses for actions deemed unconscionable.

Most significantly, what is deemed an unconscionable business practice under the CFA and
its regulations may not be obvious to business owners. For instance, the regulations enacted
pursuant to the CFA make special provision and impose specific obligations on the following
types of businesses- mail order businesses, retailers of meats, furniture and household furnishing retailers, internet dating services, prepaid calling cards, home appliance repair services, sellers of animals, home improvement contractors, food and dining establishments, automobile and watercraft dealers and repair facilities, tire retailers, toy stores, health clubs, towing companies, realtors, ticket sales, and sellers of motorized wheelchairs. Seemingly benign things such as failing to provide a starting and ending date for a construction project, certain disclosures or insurance information on a construction contract are “technical violations” of the CFA and deemed unconscionable business practices.

In addition, duties are imposed on all retailers with respect to refund policy, marketing by
facsimile, disclosure of unit pricing and advertising generally.

Benjamin Franklin may have been speaking directly to consumer businesses in New Jersey
when he said “an ounce of prevention is worth a pound of cure.” Preventative measures are the key to avoiding exposure to significant liability under the CFA which, under the Court’s recent decision, now extends to the owners and employees of the business as well.

Accordingly, it is now more important than ever for businesses that transact with consumers to
take steps to ensure it does not run afoul of the CFA. Business owners and managers should
consult with an attorney familiar with the requirements of the CFA to conduct a CFA audit and
review contracts, advertising and business practices for potential areas of exposure.

And CFA considerations aside, regular review of a business’ terms and conditions is an
essential exercise. What could be more important that defining the scope and parameters of the relationship between a business and its customers? Ensuring the customer’s expectations are consistent with the business’ offer is one of the most important keys of business and is also a way to avoid CFA claims.

Maselli Warren, P.C. has taken the Allen v. V and A Brothers, Inc, case to the New Jersey
Supreme Court on behalf of the individuals deemed liable for the company’s CFA violations. A
successful appeal would be a tremendous and important victory for business in New Jersey.

As always, please feel free to leave comments or questions, and also check out our Facebook and Twitter feeds.

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February 26, 2009 by Peter B. Paris, Esq.

Homeowners who are contemplating or undergoing major home-improvement projects must know their rights when dealing with contractors.  The first step is SIGN A CONTRACT.  Long gone are the days of handshake deals with the local contractor.  It is imperative that homeowners insist on obtaining a detailed bid and contract before any work begins and certainly before writing any checks.

We all know that major renovations often encounter “unanticipated” construction problems.  Usually, these “unanticipated” issues should have been anticipated by a careful contractor and accounted for in the contract.  Unfortunately, many contractors take advantage of homeowners by underbidding the job, securing the contract, beginning work, and then trying to coerce homeowners into paying more money for “unanticipated” problems.  By doing so, they are essentially altering the contract in midstream – and it always means more money. 

Homeowners take one look at their incomplete house – with a dumpster in the front yard, drywall stacked against the walls, and holes in the roof — and say to themselves, “I guess we have to pay the extra money.  What else can we do?” 

While that reaction is understandable, homeowners must understand that you signed a contract for a reason.  If there are “unanticipated” problems with the job, it’s not your fault.  It is the fault of the contractor, who is supposed to have the expertise to anticipate the necessary work, and to be able to estimate beforehand what the job will take and what it will cost.  If the contractor is wrong about the estimates, and completing the job ends up costing more than the contract price, it is the contractor, not the homeowner, who must bear those extra costs. 

For example, in a recent New Jersey case, a contractor agreed to remove and replace the homeowners’ roof as well as other smaller tasks.  The parties signed a contract.  Soon after, the contractor told the homeowners that the contract was not priced correctly and tried to get them to sign a new contract which was for the same price but called for less work to be done.  The homeowners signed this new contract and made a downpayment. 

But when the contractor felt the job was completed, the homeowners disagreed, saying that the contractor had promised to do a lot more work under the original contract.  The contractor then had the nerve to try to get the homeowners to sign a THIRD contract to complete the work he had promised to do in the original contract, but had omitted from the second contract.  The homeowners were smart, and they refused to pay the balance of the second contract and did not sign the third. 

To add insult to injury, the contractor sued the homeowners for the balance on the second contract.  The homeowners counter-sued under New Jersey’s Consumer Fraud Act.  The Court was not amused, finding in favor of the homeowners.  The contractor was not allowed to change the original contract, because he bears the risk of underbidding the job, not the homeowners.  As the court stated, “If in fact a job is underbid, it is the bidder who bears that risk…This is a horribly botched job, which begins with an underbidding and then continues with a … lack of finishing or having an acceptance signed by the homeowners.”  Thus, the homeowners were justified in withholding payment on the balance of the contract.   And, the court awarded treble damages under the Consumer Fraud Act.  That is, the contractor had to pay three times the costs to fix the shoddy work and complete the original job. 

If you are remodeling or building a home, and your contractor has changed the contract in midstream, you may be the victim of consumer fraud.  Under the Consumer Fraud Act, and you may be entitled to compel the contractor to pay you three times the amount it takes to finish the job.   

Contact Peter B. Paris, Esq. at Maselli Warren if your contractor has violated your rights under the Consumer Fraud Act.

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