New Jersey Supreme Court To Clarify Whether TCCWNA Claim Can Be Based On An Omission

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

Contract(pd)In a recent post, I wrote about New Jersey's Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). It has become exceedingly popular with the plaintiffs' bar and now appears frequently (usually along with another favorite, the New Jersey Consumer Fraud Act) in putative consumer class action complaints. The New Jersey Supreme Court is now going to weigh in on one of the unsettled portions of this newly-popular law — whether a TCCWNA claim can be based on an alleged omission in a contract as opposed to an affirmative misstatement.

The case discussed in my prior post — Matijakovich P.C. Richard & Son — involved the purchase and delivery of a washing machine. Although the washing machine was delivered on time, plaintiff sued because the contract with the seller did not contain language disclosing defendant's obligation in case of delay. TCCWNA provides that "[n]o seller . . . shall in the course of his business offer to any consumer or prospective consumer or enter into any written consumer contract  .  .  .  which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller." Defendant moved to dismiss the complaint, arguing that a TCCWNA claim cannot be based on an omission. It argued that TCCWNA prohibits a seller from entering into a consumer contract that includes an illegal term, therefore it applies only to affirmative statements, not omissions of allegedly required language. The district court noted that the New Jersey Supreme Court had not yet ruled on this issue, but relied on federal case law to grant the motion and dismiss the complaint.

A similar scenario played out in another recent decision from the U.S. District Court for the District of New Jersey,Truglio v. Planet Fitness, Inc. In that case, plaintiff alleged that the contract she entered into with her health club violated TCCWNA by failing to (1) conspicuously set forth her total payment obligations and (2) set forth that a bond had been filed with the Director of the Division of Consumer Affairs. The district court dismissed this portion of the complaint. Like the Matijakovich court, the district court noted that the New Jersey Supreme Court had not yet ruled on the issue, but it relied on the same federal law as the Matijakovich court for the proposition that an alleged omission cannot serve as the basis for a TCCWNA claim.

Both of these courts looked for guidance from the New Jersey Supreme Court and found none. This may soon change. The New Jersey Supreme Court just granted certification in two cases — Bozzi v. OSI Restaurant Partners, LLC and Dugan v. TGI Friday’s, Inc. — that should resolve the question of whether a TCCWNA claim can be based on an alleged omission. I wrote about Dugan here, but both cases involved restaurants not including drink prices on their menus, and both appeals question whether class certification is appropriate under TCCWNA in light of this omission. (The Dugan case also has a second question about whether class certification is appropriate where a restaurant charges different prices for drinks depending on where they are purchased (i.e., at the bar vs. at a table).) It will be many months before we get an answer from the Supreme Court in these cases, but this case will be closely watched by both plaintiffs' and defense counsel so stay tuned.

As Real Estate Market Continues To Struggle, A Ray Of Sunshine Emerges From, Of All Places, Florida

by:  Peter J. Gallagher

The most recent Case-Shiller index suggests that home prices ticked up in May ("U.S. Housing Prices Rise Slightly, But Remain Weak").  While this might sound like good news, experts were hardly celebrating.  Most attributed the rise in the composite index to "seasonal factors" (i.e., demand is typically strongest in the Spring) and pointed to other negative signs – "contract cancellations, tightened lending standards and sales of new homes in June" — as better examples of the overall health of the market. 

Against this grim news comes surpisingly good news from the usually bad news rich housing market of Florida.  In "Affluent Buyers Reviving Market For Miami Homes," the New York Times notes that sales in Miami, particularly on higher end properties, are up more than 16%, with more than two-thirds of those sales being all cash deals.  While this revival is obviously limited to the wealthy, it is at the very least a small ray of hope in an otherwise downtrodden real estate market.

News Brief On The Housing Market (Spoiler Alert: It Is Not Good News)

by:  C. John DeSimone, III

Like George Costanza, apparently housing prices do not object to double dipping.  According to the S&P/Case-Shiller index of home prices in 20 cities, home prices hit a new low in February 2011, nearly surpassing the prior low set in April 2009.  Prices are therefore at the second trough of a “double dip” decline, approximately 30% off of their historic high reached in April 2006.  Check out "Home Prices In Double Dip" on CNN for more information and graphical proof of the disturbing trend.