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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After You Break Up, Dont Expect To Get Paid For Those Home Repairs You Did For Your Girlfriend While You Were Dating

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

Tools (pd)Nothing says romance like asking your girlfriend to sign a contract before you agree to help her fix up her house. Nonetheless, this is essentially the take-home message from the Appellate Division's decidedly unromantic decision in Sukenik v. Dizik.

In Sukenik, plaintiff and defendant dated for approximately 18 months. "Beginning in January 2014, they spent every weekend and holiday together, with plaintiff frequently staying overnight in defendant's home." Eventually, plaintiff moved into defendant's home.

Plaintiff claimed that while he and defendant were dating, he "spent substantial sums not only on mutual expenses such as vacations and dinners, but also on needed improvements to defendant's home and property because the home was in poor condition." He testified that he spent more than $8,000 on materials. He also "contributed his labor, which he valued at $3,000." Unfortunately for plaintiff, "the relationship ended shortly after he underwent kidney surgery on June 18, 2015, when defendant demanded he move out of her home." Two weeks later, plaintiff sued, seeking to recoup the costs of the materials and labor he contributed to the repairs on defendant's home. Defendant denied liability, arguing that the improvements plaintiff made to her home were unconditional gifts.

Plaintiff was the only witness to testify at trial. After his testimony, defendant moved for involuntary dismissal. The trial court granted the motion, and plaintiff appealed.

Continue reading “After You Break Up, Dont Expect To Get Paid For Those Home Repairs You Did For Your Girlfriend While You Were Dating”

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.

Lease “Signed Under Protest” Not Binding (And Have You Ever Heard Of “Grumbling Acceptance”?)

Sign contract(Pd)
What happens if a tenant signs a lease but writes "signed under protest" under the signature? According to the Appellate Division, it means the lease is not binding. More importantly, perhaps, the Appellate Division has never heard of the contract theory known as "grumbling acceptance." If this is one that you did not cover in law school, join the club.

In Bergenline Property Group, LLC v. Coto, defendant was a longtime tenant of premises owned by plaintiff. There was an oral lease between the parties for most of the tenancy. But, in 2013, plaintiff served a notice to quit on defendant, requiring defendant to sign a written lease and pay a security deposit or vacate the property. Defendant refused and plaintiff served another notice to quit, requiring defendant to vacate the property for refusing to agree to reasonable changes to the terms of the lease. Defendant did not vacate and plaintiff filed an eviction complaint.

At the hearing on plaintiff's eviction complaint, the parties agreed to allow the court to determine the reasonableness of several provisions in the proposed lease and modify the lease as necessary. The court did just that, issuing a written opinion that modified some of the terms of the lease. Despite defendant's prior agreement to be bound by the court-modified lease, defendant refused to sign it. Plaintiff then moved for a judgment of possession. At the hearing on that request, the court gave defendant another chance to sign the lease. In response, Defendant first delivered a lease with a signature that was not witnessed and a post-dated check for the security deposit. Plaintiff refused to accept both. Defendant then delivered a lease, signed by defendant and witnessed by defendant's counsel, and a money order for the security deposit. However, directly below defendant's signature on the lease appeared the words "signed under protest." Plaintiff refused to accept this lease as well, but gave defendant one more chance to come to plaintiff's counsel's office and sign the lease. Defendant was apparently driven to plaintiff's counsel's office, but refused to leave the car or execute a new lease.

Plaintiff then renewed its request for a judgment of possession. Defendant opposed the motion, arguing, among other things, that the "signing under protest" language did not change the document, and stating, "parenthetically," that if plaintiff was "offended" by that language, plaintiff could strike it. The court entered the judgment of possession, finding that, by placing the "signing under protest" language on the lease, there was no meeting of the minds, and therefore no binding contract. As a result, defendant failed to sign the lease and violated the court's order requiring her to do so.

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Supreme Court Issues Important Decision On Truth In Lending Act

by: Peter J. Gallagher (@pjsgallagher)

Please check out an article I wrote for law360.com on the U.S. Supreme Court's  recent decision in Jesinoski v. Countrywide Home Loans. Here is the opening paragraph:

On Jan. 13, 2015, the U.S. Supreme Court released its opinion in Jesinoski v. Countrywide Home Loans (No. 13-684) and resolved a circuit split on an important issue arising under the Truth in Lending Act, 15 U.S.C. §1601-1677 (“TILA”). Under TILA, a borrower has the right to rescind certain loans for up to three years after the loan is consummated. To exercise this right, borrowers must “notify the creditor” of their intention to rescind the loan within three years. The question in Jesinoski was whether a borrower satisfies this requirement by sending written notice to a lender of its intent to rescind or whether the borrower must file a lawsuit within the three-year statutory period. In recent years, a circuit split had developed over this issue. In Jesinoski, the Supreme Court resolved this split, holding that written notice is sufficient.

Check out the rest of the article here.