JUAN PENA VS. JOSE GOMEZ, ETC. (DC-013546-17, UNION COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1089-18T4

JUAN PENA and MILAGROS
PENA,

Plaintiffs-Appellants,

v.

JOSE GOMEZ, t/a
JURGO CONSTRUCTION,

Defendant-Respondent.
____________________________

Submitted October 29, 2019 – Decided February 7, 2020

Before Judges Messano and Susswein.

On appeal from the Superior Court of New Jersey,
Law Division, Union County, Docket No. DC-013546-
17.

Andril & Espinosa, LLC, attorneys for appellants
(Antonio R. Espinosa, on the brief).

Respondent has not filed a brief.

PER CURIAM
 This appeal arises from a civil action for breach of contract, consumer

fraud, and common law fraud brought in the Special Civil Part against a home

improvement contractor. After performing some work, the contractor

abandoned the project, forcing plaintiffs, Juan and Milagros Pena, to hire

replacement contractors to complete the work and repair damage the first

contractor caused. The trial court entered default judgment against defendant,

Jose Gomez, and, after convening a proof hearing, found breach of contract.

However, for reasons not explained on the record, the trial court did not find

consumer fraud. Similarly, the trial court denied plaintiffs' motion for

reconsideration without elaborating on its conclusion that defendant did not

commit consumer fraud.

After reviewing the record in light of the applicable legal standards, we

conclude that the Special Civil Part judge was clearly mistaken in refusing to

reconsider whether defendant violated the Consumer Fraud Act (CFA), N.J.S.A.

56:8-1 to -210. Exercising original jurisdiction, we further conclude plaintiffs

have established that defendant committed a consumer-fraud violation.

Accordingly, plaintiffs are entitled to attorneys' fees and treble damages in the

amount of $15,000, which is the jurisdictional limit of the Special Civil Part. R.

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6:1-2(a)(1). We remand this matter to the trial court for the sole purpose of

determining the amount of attorneys' fees in accordance with Rule 4:42-9(a)(8).

I.

We derive the following facts from the record on appeal. In early June

2013, plaintiffs hired defendant to replace their roof, remodel their front porch,

fix the foundation, and make various other home improvements at a total cost of

$20,000. The contract specified a payment schedule that provided plaintiffs

would pay defendant an initial sum of $10,000 upon signing the contract. The

contract clearly stated that the next installment of $5000 was not due until

defendant completed work on the foundation and roof. The homeowners would

next pay $4000 once defendant finished the basement and porch. The contract

provided that the homeowners would tender the final $1000 installment only

after defendant completed all remaining work. Defendant agreed to complete

all work on the home by July 12, 2013.

On June 5, 2013, plaintiffs made the first installment payment, and

defendant began work on the roof and porch. Plaintiff testified that defendant

performed poorly, leaving seams in the roof that permitted water to seep into the

home. Plaintiff also testified that defendant demolished the porch but did not

perform work to rebuild it. Instead, defendant refused to continue work on the

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home unless he received additional payment. Plaintiffs refused to make any

additional payments outside the agreed-upon installment schedule, and on July

19, 2013, they sent defendant a letter notifying him that they intended to find a

substitute contractor and seek damages.

On September 23, 2013, plaintiffs contracted with a substitute contractor

to replace the roof and repair the damage caused by defendant at a cost of

$12,500. Plaintiffs paid a substitute porch contractor $3985.46 for labor and

materials, and they paid $5600 to a painting contractor to address the water

damage the roof leak caused. In total, plaintiffs paid $22,085.46 to three

contractors to complete the improvements and to repair the damage defendant

had caused.

Defendant did not contest the suit filed by plaintiffs in the Special Civil

Part, prompting the trial court to enter default judgment. Subsequently, the court

conducted a proof hearing at which plaintiff, Milagros Pena, testified. The court

admitted into evidence a copy of the contract between plaintiffs and defendant,

plaintiffs' letter advising defendant of their intent to seek damages, and the

contract with a substitute contractor.

At the conclusion of the proof hearing, the trial court found that defendant

breached the contract and ordered defendant to return the down payment of

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$10,000. As to consumer fraud, the trial court noted only, "there is no consumer

fraud, there's no case for consumer fraud." The court gave no further

explanation for rejecting this part of plaintiffs' suit.

Plaintiffs filed a motion for reconsideration pursuant to Rule 4:49-2. The

trial court denied plaintiffs' motion for reconsideration without holding a

hearing or providing a statement of reasons. Plaintiffs now appeal from that

ruling.

II.

Plaintiffs present two matters for our consideration. First, plaintiffs

contend that the trial court erred in denying their motion for reconsideration of

the court's prior ruling at the proof hearing that plaintiffs had failed to present

evidence establishing defendant violated the CFA. Second, plaintiffs argue the

proofs they submitted at the proof hearing and through the reconsideration

motion clearly establish defendant violated the CFA, warranting treble damages

and attorneys' fees. We turn first to the plaintiffs' contentions regarding the

motion for reconsideration before addressing the substance of plaintiffs'

consumer-fraud claim.

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 III.

Rule 4:49-2 governs motions for reconsideration. The Rule serves a

limited purpose aimed at permitting courts to correct their own mistakes:

Reconsideration should be utilized only for those cases
which fall into that narrow corridor in which either [(]l)
the Court has expressed its decision based upon a
palpably incorrect or irrational basis, or [(]2) it is
obvious that the Court either did not consider, or failed
to appreciate the significance of probative, competent
evidence.

[D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div.
1990); accord Cummings v. Bahr, 295 N.J. Super. 374,
384 (App. Div. 1996).]

"In short, a motion for reconsideration provides the court, and not the litigant,

with an opportunity to take a second bite at the apple to correct errors inherent

in a prior ruling." Medina v. Pitta, 442 N.J. Super. 1, 18 (App. Div. 2015); see

also Lahue v. Pio Costa, 263 N.J. Super. 575, 598 (App. Div. 1993) ("The basis

[for a motion for reconsideration], thus, focuses upon what was before the court

in the first instance." (citing D'Atria, 242 N.J. Super. at 401)).

"The decision to deny a motion for reconsideration falls 'within the sound

discretion of the [trial court], to be exercised in the interest of justice.'" In re

Belleville Educ. Ass'n, 455 N.J. Super. 387, 405 (App. Div. 2018) (alteration in

original) (quoting Cummings, 295 N.J. Super. at 384). "An abuse of discretion

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'arises when a decision is "made without a rational explanation, inexplicably

departed from established policies, or rested on an impermissible basis."'"

Pitney Bowes Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378, 382

(App. Div. 2015) (quoting Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571

(2002)).

In this instance, the trial court denied plaintiffs' motion for reconsideration

without providing an explanation. Nor did the court provide an explanation for

its earlier finding that plaintiffs had not established consumer fraud. We are

therefore constrained to hold that the trial court was clearly mistaken in rejecting

plaintiffs' motion for reconsideration of their consumer-fraud complaint,

especially since the contract on its face reveals a regulatory violation of the CFA

and evidence of CFA violations was uncontroverted at the proof hearing.

Although we conclude plaintiffs' consumer-fraud claim warrants

reconsideration, we do not find it necessary to remand this matter to the trial

court to undertake that assessment. Rather, to avoid further delay and cost, and

because the facts needed to establish a basis for relief under the CFA were

adduced at the proof hearing, we exercise original jurisdiction to correct these

errors. R. 2:10-5; Price v. Himeji, LLC, 214 N.J. 263, 294–96 (explaining that

Rule 2:10-5 "allow[s an] appellate court to exercise original jurisdiction to

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eliminate unnecessary further litigation but discourage[s] its use if factfinding

is involved." (alteration in original) (quoting State v. Santos, 210 N.J. 129, 142

(2012)).

IV.

The CFA affords "relief to consumers from 'fraudulent practices in the

market place.'" Lee v. Carter-Reed Co., 203 N.J. 496, 521 (2010) (quoting Furst

v. Einstein Moomjy, Inc., 182 N.J. 1, 11 (2004)). The CFA provides:

Any person who suffers any ascertainable loss of
moneys or property, real or personal, as a result of the
use or employment by another person of any method,
act, or practice declared unlawful under this act . . . may
bring an action . . . in any court of competent
jurisdiction.

[N.J.S.A. 56:8-19.]

"Thus, to state a claim under the CFA, a plaintiff must allege each of three

elements: (1) unlawful conduct by the defendants; (2) an ascertainable loss on

the part of the plaintiff; and (3) a causal relationship between the defendants'

unlawful conduct and the plaintiff's ascertainable loss." N.J. Citizen Action v.

Schering-Plough Corp., 367 N.J. Super. 8, 12–13 (App. Div. 2003). Plaintiffs

successfully alleging consumer-fraud violations are entitled to treble damages

for losses resulting from the violations, as well as the "award [of] reasonable

attorneys' fees, filing fees and reasonable costs of suit." N.J.S.A. 56:8-19.

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 "An 'unlawful practice' contravening the CFA may arise from (1) an

affirmative act; (2) a knowing omission; or (3) a violation of an administrative

regulation." Dugan v. TGI Fridays, Inc., 231 N.J. 24, 51 (2017). A plaintiff is

not required to show intent where the claimed consumer-fraud violation is a

regulatory violation. Ibid.

Turning to the facts of this case, plaintiffs contend that defendant

committed an unlawful practice by violating several regulatory requirements of

the CFA. We conclude from the record before us that plaintiffs have presented

evidence establishing that defendant committed violations of the CFA, including

violations of the regulatory provisions in N.J.A.C. 13:45A-16.2.

Next, plaintiffs maintain they suffered an ascertainable loss from

defendant's unlawful conduct. To establish an ascertainable loss, plaintiffs must

"demonstrate a loss attributable to conduct made unlawful by the CFA."

Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 246 (2005) (citing

Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 473 (1988)). The loss

must be "'quantifiable or measurable,' not 'hypothetical or illusory.'"

D'Agostino, 216 N.J. at 185 (quoting Thiedemann, 183 N.J. at 248). In a case

involving a home-improvement contract, the cost of repairing damages resulting

from a defendant's unlawful practices may constitute the appropriate measure of

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a plaintiff's ascertainable loss. See, e.g., Cox v. Sears Roebuck & Co., 138 N.J.

2, 22–24 (1994) (concluding that the plaintiff's loss "amounted to the cost of

repairing" damages resulting from the defendant's unlawful practices).

Here, plaintiffs presented uncontroverted evidence that they paid

substitute contractors to complete the work and repair damage defendant caused.

That is sufficient to establish an ascertainable loss within the meaning of the

CFA.

Finally, plaintiffs are required to demonstrate "a causal relationship

between the [defendant's] unlawful conduct and [their] ascertainable loss."

Schering-Plough Corp., 367 N.J. Super. at 12–13 (App. Div. 2003). Our review

of the record leads us to conclude that there was a causal relationship between

the violations of the CFA and the ascertainable loss. Had defendant complied

with the CFA, plaintiffs would not have had to pay substitute contractors to

repair the damage defendant caused.

V.

We hold that plaintiffs have proven all the requisite elements of their

consumer-fraud claim. Accordingly, we exercise our original jurisdiction to

award treble damages of $15,000, which is the jurisdictional limit of the Special

Civil Part. See Nieves v. Baran, 164 N.J. Super. 86, 91–92 (App. Div. 1978)

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(holding that the jurisdictional limit under the predecessor to the Special Civil

Part applies to treble damages under the CFA); R. 6:1-2(c) (deeming waived any

amount recoverable on a claim in excess of the jurisdictional limit of the Special

Civil Part). We also hold pursuant to the fee-shifting provision of the CFA

(N.J.S.A. 56:8-19) that plaintiffs are entitled to reasonable attorney fees. See

Delta Funding Corp. v. Harris, 189 N.J. 28, 41 (2006) ("An award of attorney's

fees and costs to prevailing plaintiffs is mandatory under [the CFA]."). That

award is not subject to the $15,000 jurisdictional limit. See Lettenmaier v. Lube

Connection, Inc., 162 N.J. 134, 144 (1999) ("[C]ounsel fees awarded under the

[CFA] . . . are excluded from the calculation of the jurisdictional limit of the

Special Civil Part.").

We remand the matter to the trial court for entry of a judgment in favor of

plaintiffs of $15,000 and a reasonable amount of attorneys' fees pursuant to Rule

4:42-9.

Reversed and remanded for proceedings consistent with this opinion. We

do not retain jurisdiction.

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