When finding and hiring contractors to perform construction work, property owners rely on information provided by the contractor, especially relating to the experience, skill and specialized knowledge they possess to perform the requested job. But, what happens when the contractor does not have the adequate experience and knowledge to perform the work properly? According to the New Jersey Supreme Court Appellate Division, such a contractor may be liable to the owner for consumer fraud, which provides for triple damages as well as recovery of attorneys’ fees and costs of suit.

Wanting an outdoor tennis court, the Hudson Harbour Condominium Association hired Oval Tennis, Inc. to install an open-celled Premier Court (specific brand of tennis court) on an existing concrete slab. Oval, an “experienced” tennis court installer, represented to the Association that it was a certified Premier Court installer, was familiar with the requirements of the job, possessed sufficient experience to properly install the court and employed trained technicians to perform the work. Despite the contract calling for an open-cell court and Oval’s representations, Oval installed a closed-cell, non-breathable court, which was unsuitable for the concrete surface it was installed upon.

Immediately after installation, the Association started noticing problems with the new court, which included blisters near the net, holes, ripples, bubbling and delaminating of the court surface. These conditions were a direct result of Oval’s failure to install the court with the contracted open-cell surface material, which would allow vapor to push through the breathable court surface. Instead, the closed-cell surface did not allow vapor to pass through, ultimately resulting in a buildup of vapor and moisture trapped underneath the court which caused the problems on the surface.

The Association sued Oval for, among other things, breach of contract and violations of the New Jersey Consumer Fraud Act (the “CFA”). A jury trial ensued, and after the close of the Association’s evidence and a verdict for breach of contract, with an award of damages in the amount of the contract price, the CFA claims were dismissed. An appeal followed concerning the dismissal of the CFA claims.

The Appellate Division reversed the trial court’s dismissal of the consumer fraud claims, finding that the evidence presented made out a prima facie case under the CFA. Hudson Harbour Condo. Ass’n v. Oval Tennis, Inc., 2015 N.J. Super. Unpub. LEXIS 1811 (App. Div. July 29, 2015).

To make out a prima facie case under the CFA, a plaintiff must present evidence of:

  • Unlawful conduct by defendant;
  • An ascertainable loss by plaintiff; and,
  • A causal relationship between the unlawful conduct and the ascertainable loss.

A misrepresentation is actionable under the CFA only if it is material to the transaction, false in fact and induces the buyer to purchase. Moreover, oral misrepresentations are covered by the CFA to the same extent as written misrepresentations.

Intent to mislead, however, is not an essential element to make out a claim for an affirmative misrepresentation. A practice can be unlawful even if no person was, in fact, misled or deceived by it. The prime ingredient is the mere “capacity to mislead” and therefore plaintiff need not prove that defendant acted with the intent to mislead.

The Court had no trouble finding that sufficient, credible evidence supported a prima facie case that Oval engaged in “unlawful conduct” in violation of the CFA. Oval represented to the Association that it was an experienced tennis court installed with sufficient skill and knowledge to install an open-cell court. At trial, however, Oval’s owner admitted that he did not know the difference between an open-cell and closed-cell tennis court. That was enough for the issue of whether Oval engaged in deceptive conduct under the CFA to reach the jury.

For any questions regarding this recent decision, it is recommended that you consult with experienced counsel.