NJ Supreme Court Narrowly Defines “Aggrieved Consumer.” End Of The Road For One Type Of “No Injury” Class Action?

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Contract(pd)
I have written a number of times about New Jersey's Truth in Consumer Contract, Warranty and Notice Act (TCCWNA). (Here, here, and here for example.) This statute, which was largely ignored after it was enacted in 1981, became increasingly popular in recent years as part of so-called no injury class actions. (So-called mostly by defense counsel, not plaintiff's counsel.) Its popularity may now have come to an end, however, because the New Jersey Supreme Court recently issued its opinion in the highly-anticipated case, Spade v. Select Comfort Corp., which answered two questions certified to it by the U.S. Circuit Court of Appeals for the Third Circuit, one of which appears to hamper, at the very least, the ability of plaintiffs to sue for alleged violations of the act.

By way of brief background, the TCCWNA was enacted to prevent deceptive practices in consumer contracts by prohibiting the use of illegal terms or warranties. It provides:

No seller . . . shall in the course of his business offer to any consumer or prospective consumer or enter into any written  consumer contract  .  .  .  or display any written . . . notice or sign . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller . . . as established by State or Federal law at the time the offer is made . . . or the . . . notice or sign is given or displayed.

To state a claim under the TCCWNA, a plaintiff must prove four elements: (1) that it is a consumer; (2) that defendant is a seller; (3) that the seller offered a consumer contract containing a provision that violated a legal right of the consumer or a responsibility of the seller; and (4) that it was an "aggrieved consumer." Any party found to have violated the TCCWNA is liable for a civil penalty of not less than $100, actual damages, or both, and reasonable attorneys' fees and court costs.

The questions certified to the Supreme Court in Spade arose out of two cases that had been consolidated by the district court. Each involved plaintiffs who ordered furniture pursuant to contracts that violated certain regulations promulgated by New Jersey's Division of Consumer Affairs. The regulations require, among other things, that furniture sellers deliver furniture to customers by or before the promised delivery date or provide written notice that they will not be able to do so. Sellers must also provide notice to the purchaser that if the delivery is late, the consumer has the option of canceling the order and receiving a full refund, or agreeing to accept delivery at a specified later date. The regulations also prohibit sellers from including certain language in their contracts, such as "all sales final," "no cancellations," and "no refunds." In Spade, plaintiffs alleged that the contracts they entered into with defendants did not contain language required by these regulations, contained language prohibited by these regulations, or both. Notably, however, plaintiffs received their furniture deliveries on time.  

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This Is The Landlord-Tenant Equivalent Of Accusing Your Spouse Of Stealing The Covers

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Cold (pd)And, incidentally, it ends the same way. (At least the same way it always ends for me.) No. You are wrong. Your spouse did not steal the covers.

In Loiacano v. Salemne, defendants stopped paying rent to their landlord. The landlord sued to evict them for non-payment. Defendants responded by requesting a "Marini hearing." In New Jersey, tenants are almost never allowed to withhold rent from their landlords. But, in Marini v. Ireland, the New Jersey Supreme Court recognized an exception to this rule. If a landlord refuses to make repairs that are necessary to keep the property habitable, then the tenant can make the repairs and withhold an amount from their monthly rent that is equal to the costs of the repairs. If a tenant does this and is then sued for non-payment, the court conducts a "Marini hearing" to determine whether the tenant was justified in doing so. 

What made Loiacano unique was that defendants were not claiming that the landlord did anything wrong or failed to make any repairs. Instead, they claimed that they withheld "two months' rent on the basis that their downstairs neighbor was manipulating the heat in their apartment." It wasn't even the downstairs neighbor herself who was allegedly doing this. Instead, it was her boyfriend, "identified only as 'Ray.'" Defendants, who had a "contentious relationship" with Ray, alleged that he would "manipulate[] the heat [in the first-floor apartment] so that there would be no heat in defendants' second floor apartment." 

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Refer(ral) Madness: Court Nixes Fee Sharing For Lawyer Who Referred Case To Lawyer Who Referred Case To Lawyer Who Handled Case

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Ripped dollar (pd)
Under New Jersey law, lawyers can, in some instances, share fees with lawyers at a different firm to whom they refer a case. But what happens when Lawyer A refers a case to Lawyer B who then refers the case to Lawyer C? Can Lawyers A and B share in the recovery that Lawyer C achieves for the client? This was the question the Appellate Division faced in Weiner & Mazzei, P.C. v. The Sattiraju Law Firm, PC. The answer, in that case, was "no," but there are instances where this type of three-way sharing would be appropriate.

In Weiner & Mazzei, a lawyer was contacted by a family friend in need of advice on a possible workplace injury/change of employment case. The lawyer advised the family friend that he appeared to have a valid claim and referred the family friend to an attorney who specialized in that area of law. The first lawyer claimed that he told the family friend that the second lawyer would take the case on contingency and that the first lawyer would be paid a referral fee. The family friend denied ever being told about the referral fee.

After speaking with the first lawyer, however, the second lawyer also refused the case but agreed to refer it to defendant, a law firm with at least one certified civil trial attorney. The second lawyer had a standing referral agreement with defendant and defendant agreed to abide by the usual one-third referral fee contained in that agreement.

Defendant prosecuted the client's employment case and eventually reached a confidential settlement with the client's former employer. Plaintiffs — the first and second lawyers — sued, claiming they were jointly entitled to one-third of defendant's fee. Defendant moved for summary judgment, which was originally denied, but was later granted upon reconsideration. Plaintiffs appealed.

 

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Entrepreneurial Inmate Loses Lawsuit

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Jail (pd)While pro se lawsuits by prisoners are not unusual, you don't see ones like Tormasi v. Hayman every day.

In Tormasi, plaintiff sued several officials from the prison in which he was serving a life sentence. In the lawsuit, he claimed that they improperly seized his intellectual property assets and corporate records. As the Appellate Division explained: "During his incarceration, plaintiff acquired various intellectual property assets, which he assigned to Advanced Data Solutions Corporation (ADS) in exchange for sole ownership of the corporation." At some point during his incarceration, prison officials seized plaintiff's personal property, including: "1) miscellaneous corporate paperwork related to ADS . . 2) patent-prosecution documents; 3) an unfiled provisional patent application; 4) several floppy diskettes; and 5) various legal correspondence." Plaintiff sued in federal court, asserting a claim under the Takings Clause of the Fifth Amendment to the U.S. Constitution, various federal civil rights claims, and a state law claim for inverse condemnation.

 

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Divorce Equality Comes To New Jersey

by:  Peter J. Gallagher (@pjsgallagher)

When asked about same-sex marriage, the musician/politician/author Kinky Friedman is quoted as having said: “I support gay marriage. I believe they have a right to be as miserable as the rest of us.” In a recent decision, Groh v. Groh, a New Jersey trial court ruled that, if same-sex partners are "as miserable as the rest of us" (present company excluded, natch), they can now get a divorce for the same reason as "the rest of us" — irreconcilable differences. Interestingly, while Groh dealt with the often divisive issue of same-sex marriage (or, more accurately, divorce), it was a lesson in the much less divisive practice of statutory interpretation.  

In Groh, plaintiff and defendant entered into a civil union only to file competing claims to dissolve the civil union five years later on the no-fault grounds of irreconcilable differences. The parties entered into a written settlement agreement that resolved all of their differences, and “sought to conclude the proceedings via dual judgment of dissolution.” However, N.J.S.A. 2A:34-2.1, which sets forth the grounds upon which the dissolution of a civil union can be based, does not include irreconcilable differences. Accordingly, the court had to decide whether it could grant the dissolution on those grounds.

 

 

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It Was Not Fun To Stay (Swim) At The YMCA For This Plaintiff Or His Counsel

by: Peter J. Gallagher (@pjsgallagher)

 

A "garden variety slip and fall case" led to an instructive Appellate Division opinion on exculpatory clauses and the requirements of the New Jersey Court Rules governing appellate practice. The plaintiff prevailed on its appeal and had its lawsuit against defendant, which had been dismissed by the trial court, reinstated; but his counsel had to endure a scolding from the Appellate Division in the process.

In Walters v. YMCA, Plaintiff sued for injuries suffered after he slipped on the steps leading from an indoor pool at the YMCA in Newark, New Jersey. The YMCA did not deny that plaintiff slipped, but argued that plaintiff's claims were barred by a broad exculpatory clause in his membership agreement, which purported to hold the YMCA harmless for "any personal injuries or losses sustained . . . on  any YMCA premises or as a result of a YMCA sponsored activit[y]."  The trial court granted the motion and plaintiff appealed.

The Appellate Division reversed, holding that the exculpatory clause was "unenforceable as against public policy" because enforcing it would "eviscerate the common law duty of care owed by defendant to its invitees." The Appellate Division distinguished Walters from a prior decision, Stelluti v. Casapenn Enters., Inc., in which the New Jersey Supreme Court held that an exculpatory clause shielded a health club from injuries sustained by a plaintiff when the handlebars of her stationary bike dislodged and caused her to fall during a spinning class. In that case, the inherently risky nature of the plaintiff's physical activity was "the key consideration . . . to justify enforcing the exculpatory clause at issue." In Walters by contrast, the type of accident — slipping and falling while walking on stairs — "could have occurred in any business setting." Accordingly, the "inherently risky nature of defendant's activities as a physical fitness club was immaterial" to the Appellate Division's analysis.

 

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Handicapped Access: What Is A Condo Association’s Obligation To Its Members?

"Now more than ever, community associations, especially those managing age-restricted developments, must be familiar with the various statutory controls concerning handicapped accessibility. In a time when many are looking to cut costs, the last thing an association needs is to be assessed civil penalties after being found in violation of an anti-discrimination statute. Rather, an association must collectively understand its obligations, options and appropriate responses when crafting a response to a complaint of deficient handicapped access."

So begins an article, entitled  Handicapped Access: What is an Association’s Obligation to its Members?, written by Steven P. Gouin in Community Trends magazine.  Click on the link for more details on this important issue.