Fee Awards Under New Jersey Consumer Fraud Act Permitted Despite Failure to Show Ascertainable Loss at Trial

Defense attorneys, beware: your client’s technical violation of the New Jersey Consumer Fraud Act may result in its having to pay the plaintiff’s lofty legal bill despite the plaintiff’s failure to demonstrate any injury. The New Jersey Appellate Division recently held that plaintiffs who show a technical violation of the NJCFA but fall short of demonstrating an ascertainable loss at trial may still be entitled to counsel fees.

The plaintiffs entered into a contract for the installation of a swimming pool. After disputes arose, the plaintiffs filed suit, alleging, in part, that the contractor’s failure to identify the construction start and end dates violated the NJCFA. The plaintiffs moved for summary judgment on the NJCFA claim. The trial court found that there was no genuine dispute that the contractor had violated the statute and granted summary judgment to the plaintiffs on that issue. But the trial court also found that there was a triable factual issue as to whether the plaintiffs suffered an ascertainable loss. At trial, however, the trial court dismissed the NJCFA claim at the end of the plaintiffs’ case based on insufficient evidence of an ascertainable loss. The trial judge then denied the plaintiffs’ fee application.

The Appellate Division reversed the denial of the fee application, holding that a plaintiff who establishes a technical violation of the NJCFA and shows a triable issue of ascertainable loss on a summary judgment motion may be awarded counsel fees, even when the plaintiff’s claim is dismissed after the presentation of its case for insufficient evidence of ascertainable loss.
The Appellate Division explained that to be entitled to attorneys’ fees after establishing a NJCFA violation a plaintiff is not required prove an ascertainable loss; rather, a plaintiff must show only a “bona fide claim of ascertainable loss.” The Appellate Division reasoned based on prior case law that surviving a defense summary judgment motion on the ascertainable-loss issue sufficed to show a “bona fide claim of ascertainable loss.” In addition, the Appellate Division explained that the trial court’s finding that a triable issue existed on the ascertainable-loss issue in deciding the plaintiffs’ summary judgment motion also was sufficient to show a “bona fide claim of ascertainable loss.” Moreover, the Appellate Division found that the fact that the claim was dismissed at trial did not deprive the plaintiffs of an award of attorneys’ fees, rejecting the assertion that a plaintiff must “overcome the double hurdle of surviving both a summary judgment and a motion for involuntary dismissal to demonstrate a bona fide claim of ascertainable loss.”