HAROLD M. HOFFMAN v. PALO ALTO LABORATORIES, INC

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3402-07T13402-07T1

HAROLD M. HOFFMAN, Individually and

in Behalf of the Class of Purchasers

of Paravol,

Plaintiffs-Appellants,

v.

PALO ALTO LABORATORIES, INC.,

Defendant-Respondent.

____________________________________________

 

Argued December 3, 2008 - Decided

Before Judges Stern, Payne and Lyons.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-8765-07.

Harold M. Hoffman, appellant, argued the cause pro se and as attorney for appellants, Class of Purchasers of Paravol.

Neil A. Tortora argued the cause for respondent (Norton, Arpert, Sheehy & Higgins, P.C., attorneys; Mr. Tortora and Douglas E. Arpert, on the brief).

PER CURIAM

Plaintiff, Harold M. Hoffman, individually and on behalf of a class of purchasers of Paravol, appeals an order entered on March 14, 2008, dismissing plaintiff's complaint with prejudice. The relevant facts and procedural history are as follows.

On November 26, 2007, plaintiff ordered Paravol, a male sexual enhancement product from defendant, Palo Alto Laboratories, Inc. To do so, he purchased a club membership, which provides a total of thirty-six shipments of the product. The first shipment was free with the payment of a $6.99 delivery charge. On November 27, 2007, plaintiff's order was processed and his credit card was charged $6.99 to cover the shipping charges. On November 28, 2007, the product was shipped to plaintiff. On November 29, 2007, plaintiff telephoned defendant and cancelled his club membership. On November 30, 2007, plaintiff filed the instant lawsuit.

Plaintiff's lawsuit alleges that defendant made certain advertisements, promises and representations to plaintiff and to other consumers of Paravol that guaranteed enhancement of male sexual performance. Plaintiff further alleged in paragraphs eight and nine of his complaint:

[u]pon information and belief, defendant's advertisements, promises and representations to New Jersey and other consumers as aforesaid, are false; deceptive; fabricated; constitute a misrepresentation; are replete with material omissions; constitute an unconscionable trade practice; constitute a sharp and deceitful marketplace practice, and are a false promise.

Upon information and belief, the Paravol product does not, and lacks capacity, to induce the results promised, advertised and represented by defendant.

Following these assertions, plaintiff's complaint then alleges five counts of violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, and one count of common law fraud.

On December 1, 2007, one day after the filing of the complaint, plaintiff received a delivery of Paravol from defendant. On December 5, 2007, defendant received the summons and complaint in this matter and, on January 25, 2008, defendant filed a motion to dismiss plaintiff's complaint. After the parties filed affidavits in connection with the then pending motion, as well as briefs, the trial court heard argument on March 14, 2008.

At oral argument before the trial court, defendant's counsel noted that its motion was brought pursuant to Rule 4:6-2(e). Counsel further noted that because affidavits containing materials outside of the record were presented and not excluded by the court, the motion must be treated as one for summary judgment. In response, plaintiff stated "[i]f that is the case then the court would consider material submitted by the plaintiff to the effect that the product has a potential health risk, which would strengthen the argument that it not be consumed."

Defendant's counsel argued that plaintiff's complaint failed to meet all of the three essential elements for a consumer fraud action: "[t]he unlawful practice element, the ascertainable loss element, and the causal relationship." Defense counsel also argued that there was no legitimate detrimental reliance on the statements that plaintiff contends were unlawful and, therefore, his common law fraud claim must fail as well.

In response, plaintiff's counsel argued that a consumer need not consume a product to have standing to sue under the Consumer Fraud Act and that his pleadings outlined a prima facie case of consumer fraud and common law fraud.

The trial court, after outlining the elements of consumer fraud and common law fraud, reviewed the standard to pass on a motion to dismiss for failure to state a claim upon which relief can be granted brought pursuant to Rule 4:6-2(e). It also reviewed the standard for passing on a motion for summary judgment, given that the initial Rule 4:6-2(e) motion, by rule, had to be treated as one for summary judgment under Rule 4:46, given the matters submitted to it outside of the pleadings. After a review of the submissions before it, the trial court concluded that plaintiff's complaint included "broad and conclusory statements about the product and advertisements" and that "[p]laintiff does not link any of these promises [by defendant] to his expectations based on advertising or explain how the products fail to live up to those expectations." The court found, therefore, plaintiff failed to prove the required elements of a Consumer Fraud Act violation and with respect to the common law fraud claim, failed to plead fraud in its particulars as required by Rule 4:5-8(a). In addition, the trial court found that there was merely "a belief [by plaintiff] that there was a possibility that the product might not perform as advertised." The trial court, after placing its findings of fact and conclusions of law on the record, entered an order dismissing plaintiff's complaint with prejudice. This appeal ensued.

On appeal, plaintiff argues that his pleading stated a cognizable claim; that it was error to dismiss his action with prejudice; and that under the summary judgment review standard, the trial court's order was also in error.

At the outset, we note that the trial court was correct in analyzing this case pursuant to Rule 4:46. While the initial motion was filed as a motion for failure to state a claim upon which relief can be granted pursuant to Rule 4:6-2(e), that same rule provides that

[i]f, on a motion to dismiss based on the defense numbered (e), matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided by R. 4:46, and all parties shall be given reasonable opportunity to present all material pertinent to such a motion.

Rule 4:6-2 mandates that once matters outside the pleadings are presented on a motion to dismiss for failure to state a claim upon which relief can be granted, the motion must be treated as one for summary judgment. In this case, defendant submitted two affidavits in support of its motion and plaintiff submitted one affidavit in support of his opposition. After reviewing the colloquy held during oral argument, the parties and the trial court were well aware that the motion was to be treated as one for summary judgment.

Reviewing the dismissal of a complaint on summary judgment, we apply the same legal standard as the trial court. Atlantic Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006). A court must determine "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue[s] in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); R. 4:46-2(c). If there is a genuine issue as to any material fact, or where credibility issues are presented, then summary judgment should be denied. Ibid.; R. 4:46-2(c). However, if the evidence "'is so one-sided that one party must prevail as a matter of law,'" then summary judgment should be granted. Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 202, 214 (1986)). On appeal, we apply the same standard. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

Turning to the counts of the complaint alleging violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, there are three elements which must be proven in order for a private plaintiff to be successful. The three elements are: (1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendant's unlawful conduct and the plaintiff's ascertainable loss. New Jersey Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 12-13 (App. Div.), certif. denied, 178 N.J. 249 (2003) (citing Cox v. Sears Roebuck & Co., 138 N.J. 2, 24 (1994)). N.J.S.A. 56:8-2 defines unlawful conduct as

[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise . . . whether or not any person has in fact been misled, deceived or damaged thereby[.]

We also note the five elements of common law fraud. They are: "(1) a material misrepresentation of the presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) a reasonable reliance thereon by the other person; and (5) resultant damages." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997).

As we have said earlier, the initial motion to dismiss filed pursuant to Rule 4:6-2(e) was required to be treated as one for summary judgment as provided by Rule 4:46. One part of that Rule, Rule 4:46-5(a) provides,

[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the pleading, but must respond by affidavits meeting the requirements of R. 1:6-6 . . ., setting forth specific facts showing there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered unless it appears from the affidavits submitted, for reasons therein stated, that the party was unable to present by affidavit facts essential to justify opposition, in which case the court may deny the motion, may order a continuance to permit additional affidavits to be obtained, depositions to be taken or discovery to be had, or may make such other order as may be appropriate.

Rule 1:6-6 provides that affidavits submitted in support of a motion must be made on personal knowledge "setting forth only facts which are admissible in evidence to which the affiant is competent to testify. . . ."

In this case, plaintiff submitted his own affidavit in opposition to the motion. The affidavit sets forth plaintiff's personal views with respect to the promises and representations made by defendant. His views appear to be based on plaintiff's research concerning one of the purported ingredients of Paravol. The affidavit does not set forth plaintiff's personal experience with the product Paravol. The research which plaintiff outlines regarding one of the alleged ingredients of Paravol constitutes inadmissible hearsay. See N.J.R.E. 801. Hearsay is not admissible evidence except as provided by the Rules of Evidence or other law. N.J.R.E. 802. We know of no Rule of Evidence or other law which would make the third-party out of court statements contained in plaintiff's affidavit competent evidence for purposes of a summary judgment motion.

Plaintiff was obligated by Rule 4:46-5 to come forward with competent proofs showing a genuine issue of material fact in order to defeat plaintiff's motion. He failed to do so. The trial court noted this when it stated "plaintiff does not link any of these promises to his expectation based on advertisement or explained how the products failed to live up to those expectations." The trial court went on to note "it is impossible that the plaintiff could have known whether or not the product lived up to its promised expectations." The trial court correctly recognized that plaintiff did not submit competent proofs to demonstrate either plaintiff's personal unsatisfactory experience with the product or medical or scientific proofs which may have demonstrated that the representations and promises made by defendant regarding Paravol were false. Without either type of those proofs, in competent form, summary judgment was appropriately entered in favor of defendant because no genuine issue of material fact would be found to exist.

We note that plaintiff did not request time to obtain scientific, medical, or other expert reports in opposition to the motion. Further, plaintiff had the product in his possession since December 1, 2007. He had ample opportunity to submit the product to experts to conduct such tests. Nor did plaintiff seek an adjournment of the motion specifically identifying further discovery that was still required.

Accordingly, given the posture of the motion, we find no error in the trial court's granting of summary judgment. While plaintiff may well have outlined a prima facie case in the pleadings, once the motion became one of summary judgment, it was no longer a question of whether the pleadings outlined a prima facie case, but whether there were competent proofs to create a genuine issue of material fact. Plaintiff failed to so demonstrate.

Because plaintiff was unable to demonstrate a genuine issue of material fact with respect to defendant's alleged unlawful conduct, the Consumer Fraud Act claims were appropriately dismissed. Likewise, because plaintiff was unable to demonstrate a genuine issue with respect to whether there was a material misrepresentation of a presently existing or past fact, summary judgment on the common law fraud count was appropriately granted by the trial court. We, therefore, affirm.

Affirmed.

 

We note plaintiff has before us two other cases alleging similar causes of action, Hoffman v. Hampshire Labs, Inc., No. A-3401-07T1, and Hoffman v. Asseenontv.Com, Inc., No. A-1840-07T1. We have reviewed those cases and find them factually and/or procedurally distinguishable.

We note, however, that plaintiff's pleadings, particularly with respect to the common law fraud count, were "on information and belief" (see paragraphs eight and nine of plaintiff's complaint). Rule 4:5-8(a) requires fraud to be pled with specificity.

(continued)

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A-3402-07T1

January 12, 2009