A Contractor’s Repair Estimate Provides Evidence of an Ascertainable Loss Under the New Jersey Consumer Fraud Act

The New Jersey Consumer Fraud Act (“CFA”) allows parties to recover damages if they have suffered an ascertainable loss. See N.J.S.A. 56:8-19. In the recent decision from the New Jersey Appellate Division, Pope v. Craftsman Builders, Inc., the court considered the type of evidence that can provide proof of an ascertainable loss in the context of a CFA claim involving a construction project.

The plaintiff homeowners hired the defendant contractor to renovate their home, which had been built in the 1840s. During the course of construction, the defendant issued a couple of change orders and the township issued a notice of violation that temporarily suspended work on the project. When a certificate of occupancy was ultimately issued and the plaintiffs were allowed back into the house, they noticed a number of issues with the work performed by the defendant notwithstanding the fact that the defendant had been fully paid to complete the project. The plaintiffs hired another contractor, Ciccotti Construction, to complete the work and repair the defective work performed by the defendant.

Eventually, the plaintiffs sued the defendant, asserting, among other claims, that the defendant violated the CFA. The principal of Ciccotti Construction testified as a fact witness for the plaintiffs. The trial court held that the plaintiff failed to demonstrate an ascertainable loss. On appeal, the Appellate Division disagreed and found that Ciccotti Construction’s estimate to complete the project was sufficient to constitute an ascertainable loss.

The Court’s ruling in Pope that the cost to complete and repair the work performed by the defendant was an ascertainable loss is relatively unremarkable. The interesting aspect of the ruling is that the evidence of the cost to complete the work was provided by a fact witness. In many instances, evidence of the cost to repair is provided by an expert witness because issues relating to the need for and reasonableness of any repairs have been found to raise expert issues. See, e.g., Roberts v. Cowgill. While the use of an expert may still be the preferred practice, particularly in a complex construction litigation, the Pope decision makes clear that an expert will not be necessary in every construction case to establish damages and that fact evidence regarding the cost to repair or complete work may be sufficient.

Damian V. Santomauro is a Director in the Gibbons Business & Commercial Litigation Department.
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