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NJ Supreme Court Holds Residential Contractor Liable for Consumer Fraud After Misrepresenting Qualifications & Experience

September 29, 2015 Posted in Community Association Law

Between Angie’s List, Craig’s List and the fact a Google search of “contractors in New Jersey” yields about 51.5 million results, it can be difficult for even the most diligent community association to make a decision on hiring a skilled team to perform renovations or improvements. For the most part, community associations are best-advised to rely on personal recommendations, word-of-mouth and intuition when hiring the best man for the job.

However, as was recently reiterated by the New Jersey Supreme Court, associations should also be able to positively rely on the assertions made by the contractor himself prior to starting the job – including his experience, qualifications and background – or he could face significant liability under state consumer protection laws.

What Happened in the Case?

In Hudson Harbour Condo. Ass’n v. Oval Tennis, Inc., a condominium association voted to install an outdoor tennis court for the private use of its residents and their guests. After speaking with several potential contractors, the association opted to go with the defendant in the case, Oval Tennis, Inc. Since the property already had a concrete slab in place, the association communicated that it would like to install a specific type of open-air tennis court known as an “open-celled Premier Court.”

During contract negotiations, Oval Tennis asserted that it was a licensed installer of Premier Court products, had extensive experience installing the particular open-celled design and employed technicians specifically trained to work with Premier Court products.

Despite these assertions, Oval Tennis proceeded with the project and installed the wrong type of tennis court in the Hudson Harbour community. Instead of installing the open-celled design, which is appropriate atop a concrete slab, Oval Tennis installed the closed-celled design – resulting in significant issues with the court almost immediately.

Litigation Ensues

Shortly after completion of the project, residents began noticing issues with the court, including holes, blisters near the net, bubbling and delaminating of the court surface area. According to the association’s argument in the lawsuit, the open-celled design would have allowed the surface to breathe atop the concrete slab. Instead, by completely restricting air flow with the closed-cell design, the surface began to quickly deteriorate under the unfavorable conditions.

In sum, the association contended that the shoddy work and apparent inexperience of Oval Tennis amounted to both a breach of contract and a violation of the New Jersey Consumer Fraud Act. At trial, the Consumer Fraud Act claims were dismissed outright, and the association appealed.

After reaching the Supreme Court, it concluded that the association had, in fact, made a prima facie case for a consumer protection violation, which requires:

  • Unlawful conduct by the defendant;
  • Ascertainable loss by the plaintiff, and;
  • Causation between the unlawful conduct and the ascertainable loss.

With regard to the first element, the court easily found that Oval Tennis was unlawful by asserting its skill in Premier Court products – particularly with regard to the open-celled design. More specifically, the court relied on the fact the technician testified at trial that he did not know the difference between an open-celled and a closed-celled design, and had never been formally trained in installing Premier Court products.

From there, the court concluded that a reasonable jury could have found liability under the Consumer Fraud Act and remanded the case for reconsideration accordingly.

Contact a Knowledgeable New Jersey and New York Community Association Law Attorney Right Away

If you are facing difficulty with a contractor or believe a contractor may have misrepresented his skill and ability, please do not hesitate to contact Griffin Alexander, P.C. to discuss your case right away!

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