NJ Supreme Court Rules that NJ Consumer Fraud Act Applies to New-Home Interior Contractors

The New Jersey Supreme Court ruled last week that the Consumer Fraud Act and its treble-damages remedy can apply to contractors performing interior work on new homes. The ruling in Czar Inc. v. Heath , A-114-07 expands the already broad power of the statute.

In Czar v. Heath, the Heaths hired Czar Inc. to install kitchen cabinets, interior doors, moldings and chair rails in their home which was under construction. The homeowners were unhappy with the quality of the work and withheld $80,000 from the bill . Czar then sued the Heaths for the unpaid balance. The Heaths counter-claimed alleging violation of the Consumer Fraud Act.

The Court held that the Consumer Fraud Act, the Contractor’s Registration Act, the New Home Warranty Act, and the regulations promulgated pursuant to those statutes were designed to provide an integrated scheme of protections for homeowners. The contractor, which neither acted as the general contractor nor qualified as a builder of new homes, was engaged in the business of home improvements and subject to the remedies of the Consumer Fraud Act.

This decision is important for those in the kitchen, bath and construction industries. A plaintiff who successfully proves that a violation of the Act occurred will be entitled to treble damages and attorney’s fees.

—Peter J. Lamont, Esq., is a commercial litigation attorney with offices in Hawthorne, NJ, as well as Massapequa, NY. His practice focuses on the representation of small- to large-size companies in the building and design industry, as well as individual designers and architects. To contact him with questions and suggestions on topics for future articles, please email him at plamont@peterlamontesq.com or call him at (973) 949-3770.