D. WYATT STONE AND STONE FOUNDATION, LLC. v. KAHR PROPERTIES

This case can also be found at 198 N.J. 474, 968 A.2d 1190.
(NOTE: The status of this decision is unpublished.)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6137-06T16137-06T1

D. WYATT STONE AND STONE

FOUNDATION, LLC,

Plaintiffs-Respondents/

Cross-Appellants,

v.

KAHR PROPERTIES, LLC,

RICHARD KAHR, AND

MELJO LLC,

Defendants-Appellants/

Cross-Respondents,

and

MELODIE KAHR

AND JOSHUA KAHR,

Defendants.

 

Argued November 5, 2008 - Decided

Before Judges Winkelstein, Fuentes and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Burlington County, L-3490-04.

Debra Foca argued the cause for appellants/cross-respondents.

Patrick D. Tobia argued the cause for respondents/cross-appellants (Schwartz Simon Edelstein Celso & Kessler, attorneys; Mr. Tobia, of counsel and on the brief).

PER CURIAM

Defendants appeal from a final judgment dated June 11, 2007, memorializing a jury verdict in favor of plaintiff in the amount of $345,519.57, plus attorneys' fees and costs, for defendants' violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. Defendants argue on appeal that the CFA does not apply to them; plaintiff did not prove an ascertainable loss; the trial court's jury instructions and verdict sheet were erroneous; the jury's verdict was inconsistent; and the trial court did not adequately cure plaintiff's prejudicial behavior during trial. We reject defendants' arguments and affirm.

I

The trial was conducted from March 6 through March 21, 2007. Because the parties' versions of the facts differ, we recite the facts based on each witness's testimony. All references to plaintiff in this opinion are to plaintiff D. Wyatt Stone.

A

D. Wyatt Stone

Plaintiff is in the business of buying high-end residential properties, renovating them, and selling them for profit. He has had over twenty years experience in real estate investment. In August 2003, plaintiff's realtor, defendant Melodie Kahr, advised him that 27 Park Avenue in Burlington would be a good investment. Although plaintiff had not asked her to look for properties in Burlington for him, he nonetheless liked the house, and he purchased it on September 26, 2003 for $500,000, intending to renovate it and sell it the following spring.

When plaintiff first visited the property, Ms. Kahr's husband, defendant Richard Kahr, was there. Mr. Kahr told plaintiff "it was a great deal, he'd do it himself if he could afford it." Plaintiff was aware that Mr. Kahr owned several properties in Burlington that he had renovated and either resold or rented. During the property visit, Mr. Kahr offered to do the renovations for plaintiff. Ms. Kahr told plaintiff that her husband "had a large work crew in the area, that he owned a lot of buildings and had much experience in renovation." Mr. Kahr agreed to begin the renovations in October 2003 and complete the project in six months. Plaintiff purchased the house based on Mr. Kahr's agreement to do the work.

Mr. Kahr subsequently provided plaintiff with an initial "Budget Estimate" for the project of $150,000, leaving some items open for discussion and indicating that a contract would follow. The estimate was prepared on the letterhead of defendant Meljo, LLC, a company owned by Ms. Kahr. Mr. Kahr provided a second "Budget Estimate," also prepared on Meljo letterhead, providing for a six-month time frame within which to complete the renovation work, a twenty percent profit, and a total project cost of $169,500, with an additional $35,500 estimated for additional items to be discussed between the parties; the estimate again indicated that a "contract will follow." Plaintiff expected a ten to twenty percent increase in the budget, as was customary in the business. At Mr. Kahr's request, plaintiff advanced the $20,000 profit, so that Mr. Kahr could "defray his income taxes." Although plaintiff never received a written contract from defendants, he did not believe a contract was necessary because he trusted Ms. Kahr. The parties ultimately stipulated that a verbal contract existed.

Because Mr. Kahr managed several other properties, plaintiff wanted to keep the documentation and accounting for 27 Park Avenue separate. Thus, Mr. Kahr agreed to form a separate LLC and open a separate checking account designated solely for the 27 Park Avenue project.

During a site inspection shortly after the project began, plaintiff observed "shoddy craftsmanship," including peeling exterior paint, and floors cut up by a jigsaw. Plaintiff expressed his concern to Mr. Kahr, who indicated that he would fix the problems.

Despite his dissatisfaction with the work, as of December 8, 2003, plaintiff had paid defendants $120,000; by February 14, 2004, he had paid $160,000; and as of March 10, 2004, plaintiff had paid over $235,000. Plaintiff agreed to an increased contract price of approximately $236,000.

In November or December 2003, plaintiff asked Mr. Kahr to provide him with invoices and receipts for the expenses associated with the project. Mr. Kahr did not comply with that request, but instead provided a check register that did not reflect payments exclusively for 27 Park Avenue; Mr. Kahr did not establish a separate LLC or checking account for plaintiff's project. Because plaintiff was concerned that a number of the listed payments did not appear to be related to his property, he requested invoices representing the payments reflected in the check register. Mr. Kahr did not supply those invoices.

Following a site inspection in early 2004, when it became apparent to plaintiff that the project could not be completed within the six months agreed to, plaintiff gave defendants a sixty-day extension to complete the work. By May 2004, the project was still not complete, yet Mr. Kahr continued to request more money from plaintiff. Plaintiff refused to pay the additional sums because the March 2004 completion date had passed, the construction was incomplete, and the amount Mr. Kahr requested was in excess of what the parties had agreed upon to complete the project.

Consequently, plaintiff contacted Ms. Kahr, who agreed to take over the accounting for the project and provide plaintiff with the invoices he had requested. Plaintiff fired Mr. Kahr, but kept his foreman, David Schugardt, on the job as project manager. Plaintiff loaned Ms. Kahr $35,000 to finish the project, which she did not repay. Nor did she provide plaintiff with the invoices he had requested. Instead, she gave him additional checks, informing him that, "we don't have invoices, we don't keep invoices, my husband doesn't work that way, he works off checks." Plaintiff remained unable to determine which payments were for his property.

In a letter to Ms. Kahr dated September 14, 2004, plaintiff explained that he hired Mr. Kahr based upon Ms. Kahr's personal recommendation and he was promised that a separate LLC would be created with its own checking account limited to his project. He claimed that although he had paid $235,000 to defendants, he had only been provided with $51,000 in invoices and the checks he had been given did not indicate if they were for expenses solely for 27 Park Avenue. Plaintiff also identified $70,500 in expenses he paid to finish the project, in excess of the $236,285 budget that he had agreed to.

Plaintiff never received a response to his letter. Instead, in October 2004, the Kahrs filed a construction lien against 27 Park Avenue. After the lien was discharged, plaintiff sold the property on January 19, 2005, for $875,000.

Plaintiff testified that his damages were $182,000. He arrived at that figure by subtracting the amount of the contract, $236,000, from the total amount of money he paid into the project, which he testified was $414,000. He deducted $51,000, representing the amount he paid for the kitchen, a project he agreed was outside the scope of the contract. After applying these deductions, plaintiff arrived at a figure of $127,000, to which he added the $35,000 loan he made to Ms. Kahr, and the $20,000 profit he advanced to Mr. Kahr.

B

Samantha Roland

Samantha Roland, plaintiff's assistant, handled finances, billing and general record keeping associated with plaintiff's properties, including 27 Park Avenue. In December 2003, at plaintiff's request, Roland contacted Mr. Kahr and requested an accounting of the expenditures for the project. Mr. Kahr told her that he was setting up a computer system to track expenditures, and would provide her with the information as soon as the system was up and running. Roland continued to request this information in January and February 2004. She did not receive a response until March 10, 2004, when Mr. Kahr faxed her a check register purporting to show expenditures for 27 Park Avenue. Roland was unable to determine which checks reflected payments made by defendants solely in connection with 27 Park Avenue. Roland requested that Mr. Kahr provide her with documentation specifying only the work done and paid for with respect to plaintiff's property, but he never did.

After Ms. Kahr took over the project, she gave plaintiff checks and invoices associated with 27 Park Avenue. Based on those documents, Roland prepared a summary of all payments made to Kahr Properties, which totaled $235,000. Roland also prepared a spreadsheet labeled "questionable expenses," which included expenses for payments unrelated to 27 Park Avenue.

C

David Schugardt

David Schugardt had been employed as a construction manager for over twenty years by Kahr Properties, Meljo and other entities owned and operated by defendants. He renovated approximately fifteen houses per year for defendants. Schugardt saw 27 Park Avenue for the first time in the fall of 2003 when he walked through the property with Mr. Kahr. Mr. Kahr told him that plaintiff had hired him to renovate the property with the intention of hiring him as a contractor on a regular basis to renovate other properties plaintiff planned to purchase, renovate and resell, as long as plaintiff was satisfied with Kahr's work at 27 Park Avenue.

Schugardt began working part-time on 27 Park Avenue in the winter of 2003. By that time, workers had already begun painting the exterior of the house. Schugardt expressed concern to Mr. Kahr because the weather at the time was cool and damp, which was an inopportune time to paint the exterior. In fact, the paint peeled, and the exterior ultimately had to be scraped and repainted. In April 2004, Mr. Kahr asked Schugardt to work on the project full-time as the project manager. Prior to that time, Mr. Kahr had been acting as the project manager.

When Schugardt took over as project manager, he realized that the project would not be completed in the six-month time frame agreed to by the parties. He described the physical condition of the property in April 2004 as "[p]retty tore up, there [were] walls tore up, floors tore up, trim tore up, framing that was half finished, [demolition] that was half finished, plumbing, electric not finished." Schugardt estimated that another four to five months would be necessary to complete the project.

Schugardt spent almost an entire month repairing the walls and floors that had been damaged while installing electrical and plumbing work. To repair the damaged floors, he had to tear out the wood floors on the third floor to repair and replace the wood floors on the first and second floors. He then carpeted the third floor. The new roof had been poorly installed, requiring repair. Numerous renovations had not been completed, including, but not limited to, gutter down spouts, exterior painting, shutter repairs, electric, plumbing, demolition, interior painting, refinishing floors, and kitchen and laundry room renovations. Plaintiff decided to complete the bathroom renovations himself and hired subcontractors to do that work. Plaintiff paid Schugardt directly for the work Schugardt completed from May through October 2004.

D

Melodie Kahr

Ms. Kahr met plaintiff in 2002, when they were introduced by a mutual friend. After that first meeting, plaintiff began calling her and asking for her advice regarding various properties he owned. In 2003, Ms. Kahr began representing plaintiff in a variety of real estate transactions.

Ms. Kahr told plaintiff that she and her husband owned several properties in Burlington; a town that they considered to be "up and coming and being rehabbed." Plaintiff asked her to look for property for him in Burlington, but she refused because she "never took clients down there. . . . That was not what I did, it was family, it was personal, never bought or sold anything for a client in Burlington . . . that's our family business." Nevertheless, Ms. Kahr showed plaintiff two properties in Burlington, including 27 Park Avenue. After plaintiff purchased the property, he asked her if Mr. Kahr would be interested in doing the renovations. Although she explained that her husband did not do work for her clients, she gave plaintiff his phone number.

In May 2004, seven months after her husband began managing the renovations at 27 Park Avenue, plaintiff told her, "the house was more money than he wanted to spend" and he wanted to sue her husband. As a result, Ms. Kahr took over the financial responsibilities of the project; and Schugardt took over as project manager. Ms. Kahr provided plaintiff with a box filled with checks and invoices, representing the payments related to 27 Park Avenue. Ms. Kahr, however, never reviewed those checks and invoices to confirm that every expense was for plaintiff's property. Neither Ms. Kahr nor her husband told plaintiff that they would establish a separate LLC, with a separate checkbook, exclusively for 27 Park Avenue. Ms. Kahr put approximately $90,000 of her own personal funds into the project.

Ms. Kahr owns several companies, including defendants Kahr Properties and Meljo. The companies were in the business of buying, renovating and reselling residential properties, including single family homes as well as apartment buildings. While defendants were working on plaintiff's project, Meljo purchased and sold two other properties.

E

Richard Kahr

Mr. Kahr manages the companies his wife owns. He finds properties to purchase, oversees the renovations, hires subcontractors, and manages the companies' rental properties. He incorporated Kahr Properties in 2003 to exclusively handle renovation projects after plaintiff retained him for the 27 Park Avenue project. He opened a new checking account for the company using plaintiff's initial payment of $35,000. But, he wrote checks from the account for other projects that he and his wife owned and operated.

Defendants have renovated properties for family and for other buyers. One of the companies, Regency Development, had received a government contract to renovate housing in Camden. Mr. Kahr had never done a project as costly as the 27 Park Avenue property. Yet, he admitted to managing another company owned by his wife and son, Kahr Real Estate Development, which advertised that it was "actively looking for properties in the $250,000 - $1,500,000 range." An article in the Wall Street Journal's "Guide to Property" identified Mr. Kahr as a real estate developer who, since 1998, had purchased and renovated nineteen residential and mixed-use buildings in Burlington.

Mr. Kahr claimed that plaintiff solicited him for the project. He originally estimated the work to cost $150,000. He admitted that he and plaintiff had a "contractual understanding," explaining that "[they] were going to keep revising the work that we [] agreed upon would be necessary for the job, and on top of that, he was going to give me ten percent towards my overhead over and above the cost and ten percent profit." Mr. Kahr claimed, however, that he never promised plaintiff a separate LLC and checkbook.

After the renovations began, he discovered there was "twice as much [work] as we originally thought." He explained that, among other things, concrete was needed on the basement walls to waterproof the basement; a new gas line needed to be installed; a new support system needed to be installed throughout the house; all the radiators had to be removed; the kitchen had to be reframed; and all the exterior walls needed to be insulated. The reason Mr. Kahr submitted a request to plaintiff on May 17, 2004, for an additional $30,000 beyond the $236,000 budget, was to repair a collapsed sewer line, frozen water pipes, and an oil burner that shut down during construction. Mr. Kahr also claimed that plaintiff requested additional renovations that were not originally contemplated in the budget, including relocation of the air conditioning units, repainting the garage, and repainting the windows.

Mr. Kahr admitted that he originally agreed to complete the project in six months, but he later realized that it could not be completed within that time frame in light of the structural problems he uncovered. Nevertheless, he never told plaintiff that the completion date needed to be extended. Contrary to plaintiff's testimony, he denied telling plaintiff that the project would be completed on time and on budget. He also failed to respond to plaintiff's correspondence of March 21, 2004, which summarized the budget and expenses as of that date, to inform plaintiff that the budget would need to be increased and that the project would not be completed on time, even with the sixty-day extension plaintiff provided.

With respect to plaintiff's request for an accounting of expenses, Mr. Kahr stated that he "didn't know exactly what they wanted," so he supplied plaintiff with his check register showing "every check that [he] wrote," including checks that were not related to 27 Park Avenue. He did not have any bills because he did not require them from his subcontractors; he simply paid the subcontractors after their work was complete.

He claimed that he told plaintiff's assistant which checks did not relate to 27 Park Avenue. He admitted that the phone payments were for both his office phones and cell phone, which were not exclusively used for plaintiff's project.

II

Against this factual background, we first address defendants' primary argument, that the CFA does not apply to the transaction between plaintiff and defendants.

The CFA, in part, provides as follows:

The 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 or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice . . . .

[N.J.S.A. 56:8-2.]

The CFA includes the following definitions:

(c) The term 'merchandise' shall include any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale;

(d) The term 'person' as used in this act shall include any natural person or his legal representative, partnership, corporation, company, trust, business entity or association . . . ;

(e) The term 'sale' shall include any sale, rental or distribution, offer for sale, rental or distribution or attempt directly or indirectly to sell, rent or distribute. . . .

[N.J.S.A. 56:8-1.]

N.J.A.C. 13:45A-16 provides procedures for the regulation and content of home improvement contracts. N.J.A.C. 13:45A-16.1(a). The regulations apply to all "sellers" and "home improvement contractors" as defined under the regulations. N.J.A.C. 13:45A-16.1(b). A "seller" is defined as "a person engaged in the business of making or selling home improvements and includes corporations, partnerships, associations and any other form of business organization or entity, and their officers, representatives, agents and employees." N.J.A.C. 13:45A-16.1A. The regulations define a "home improvement contract" to include both oral and written agreements "between a seller and an owner of residential or noncommercial property . . . and includes all agreements under which the seller is to perform labor or render services for home improvements, or furnish materials in connection therewith." Ibid.

Defendants argue that the CFA does not apply to them because they are not involved in the "sale or advertisement of merchandise or real estate." We disagree.

The term "merchandise" includes any "services . . . offered directly or indirectly to the public for sale." N.J.S.A. 56:8-1. The CFA applies to any person or entity in the business of making or selling home improvements. N.J.A.C. 13:45A-16.1A. Defendants' testimony establish that they were involved in the sale or advertisement of home improvement services, either directly or indirectly to the public. Mr. Kahr testified that he manages several real estate investment and management companies that his wife owns, including Kahr Properties and Meljo. He admitted that he locates the properties to purchase, oversees the renovations, hires subcontractors, and manages the rental properties retained by the companies. Both Mr. and Mrs. Kahr admitted that Kahr Properties and Meljo were incorporated for the purpose of buying, renovating and reselling residential properties. While defendants were working on plaintiff's project, Meljo purchased two other properties, renovated them and resold them within three to five months after they were purchased.

Mr. Kahr admitted that the companies do work for other buyers, and not just family; defendants manage several rental properties in the Burlington area. Mr. Kahr also testified that he managed a company owned by his wife and son, Kahr Real Estate Development, which advertised that it was "actively looking for properties in the $250,000 - $1,500,000 range." Moreover, an article in the Wall Street Journal's "Guide to Property" identified Mr. Kahr as a real estate developer who, since 1998, had purchased and renovated nineteen residential and mixed-use buildings in Burlington. Thus, defendants' arguments that they only performed these renovations for family, did not offer their services to the public, and were not in the business of selling home improvements are contradicted by the record.

We also reject defendants' argument that plaintiff is not the type of consumer the CFA intends to protect. The statutory definition of a "person" protected under the CFA includes individuals as well as business entities. N.J.S.A. 56:8-1. A business entity can be, and frequently is, a consumer in the ordinary meaning of that term; and, because a business entity is a "person" entitled to recover under the statute, it is entitled to protection under the CFA. Hundred E. Credit Corp. v. Eric Schuster Corp., 212 N.J. Super. 350, 355-56 (App. Div.), certif. denied, 107 N.J. 60 (1986). "There is . . . no justification to limit the [CFA] . . . to sales and advertising of merchandise for 'personal, family or household use.' Such a reading would fly in the face of the statutory definitions of 'merchandise' and 'person' entitled to sue." Id. at 356.

Consequently, the trial court did not err in denying defendants' motion for a new trial on the basis that the CFA did not apply.

III

Next, we turn to defendants' argument that plaintiff should be equitably estopped from asserting a CFA violation. That argument is without merit.

Defendants claim that plaintiff should be equitably estopped from asserting a CFA violation because plaintiff's own actions, by not demanding a written contract, contributed to the violation. Defendants rely on D'Egidio Landscaping, Inc. v. Apicella, 337 N.J. Super. 252, 257 (App. Div. 2001), in which we applied the doctrine of equitable estoppel to deny a homeowner protections offered by the CFA, where the homeowner refused to sign a contract prepared by the plaintiff because of their close and long-standing relationship. Id. at 255-56. We stressed the limited applicability of our decision to the unique circumstances presented. Id. at 258-59.

Here, plaintiff did not refuse to sign a written contract. Nor did the parties have the close, longstanding relationship that the parties had in D'Egidio, supra. Although plaintiff was also in the home improvement business, his failure to insist on a written contract does not rise to the level of conduct warranting application of equitable estoppel. Notably, defendants provided plaintiff with two "Budget Estimates" for the project that stated a "contract will follow." Defendants never supplied that contract.

IV

We next turn to defendants' argument that because the trial court dismissed plaintiff's common law fraud claim, it erred by not dismissing plaintiff's CFA cause of action. We disagree.

To establish a cause of action under common law fraud, a plaintiff must demonstrate that: (1) the defendant made a material misrepresentation or omission of fact; (2) knowing the misrepresentation to be false or the omission to be material, and intending the other party to rely on it; and (3) the other party did in fact rely on the misrepresentation or omission to its detriment. Varacallo v. Mass. Mut. Life Ins. Co., 332 N.J. Super. 31, 43 (App. Div. 2000). Therefore, to be successful in a common law fraud claim, a plaintiff must prove that the defendant knowingly made a material misrepresentation or omission of fact with the intent to induce the plaintiff's reliance. Common law fraud must be established by clear and convincing evidence; a claim under the CFA only requires proof by the preponderance of the evidence. See Gennari v. Weichert Co. Realtors, 288 N.J. Super. 504, 541 (App. Div. 1996), aff'd, 148 N.J. 582 (1997).

The CFA requires intent when the alleged violation involves a concealment, suppression, or omission. N.J.S.A. 56:8-2. A plaintiff, however, may also recover under the CFA for a defendant's affirmative acts in using deception, fraud, false pretense, false promise or misrepresentation, without proving an intent to deceive. Id.; see also Cox v. Sears Roebuck & Co., 138 N.J. 2, 16 (1994) (CFA designed to protect the public even when merchant acts in good faith).

Here, on defendants' motion, the trial court dismissed the common law fraud claim at the close of the testimony. The judge found no evidence from which a jury could conclude that there was an intent to deceive "by clear and convincing evidence." The court expressly based its decision on the heightened burden of proof. Therefore, it was not error for the court to dismiss the common law fraud claim but nonetheless submit the CFA claim to the jury under the preponderance of the evidence burden of proof.

V

Next, we address defendants' argument that plaintiff failed to prove an ascertainable loss, which is necessary to establish a CFA claim. That argument too is without merit.

N.J.S.A. 56:8-19 provides that only a person who has suffered an "ascertainable loss of moneys or property" as a result of an unlawful practice in violation of the CFA may maintain an action under the CFA. This provision requires a plaintiff to prove that the consumer fraud caused his loss. Cox, supra, 138 N.J. at 23. To demonstrate a loss, the plaintiff must supply an estimate of damages, calculated within a reasonable degree of certainty. Id. at 22. In the home improvement context, a plaintiff's loss is measured by the cost of repairing the defendant's errors. Id. at 22-23.

Here, that plaintiff suffered an ascertainable loss as a result of defendants' CFA violation was supported by the evidence. Plaintiff testified that his loss amounted to $182,000, representing the total amount he paid for the renovation project ($414,000) minus the $236,000 he agreed to pay defendants under the contract. In his estimate of damages, plaintiff included the $35,000 he loaned Ms. Kahr to complete the project, as well as the $20,000 profit he advanced to Mr. Kahr in 2003, a payment he testified he would not usually make until the project was complete. He deducted from the total the $51,000 he paid towards the kitchen renovation, a project he agreed was outside the scope of the agreement. Plaintiff testified that, with the exception of the loan and profit payment, his calculation of damages consisted of the money he spent to repair defendants' faulty construction.

Although defendants claim that the project was more work than what was originally expected and that plaintiff continually changed the plans, the jury apparently credited plaintiff's testimony that he was required to spend additional sums above and beyond the contract price to repair and complete defendants' work. For example, Schugardt testified that defendants had improperly painted the exterior of the house in the cold damp winter months, causing the paint to peel and requiring scraping and repainting the house; the wood floors on the first and second floor had to be repaired because defendants' crew cut into them with a jigsaw to install plumbing and electrical wiring; and the roof, which was poorly installed, had to be fixed.

In sum, plaintiff provided a reasonable calculation of damages in the amount of $182,000; the jury returned a verdict for plaintiff in the amount of 118,873.19, apparently rejecting some of plaintiff's claims while accepting others. Sufficient credible evidence in the record supports the jury's verdict that plaintiff suffered an ascertainable loss as a result of defendants' violation of the CFA.

VI

Defendants' next argument is that the court erred in its CFA jury charge. Defendants take issue with the court's introductory paragraph of the charge, stating, "The plaintiffs here allege that defendants committed what is commonly known as consumer fraud and allege that the defendants . . . ." The court completed the paragraph by listing a description of ten separate acts of defendants that plaintiff alleged were CFA violations. Such a description of the alleged conduct that a plaintiff claims constitute CFA violations is expressly contemplated by the model jury charge, which instructs the trial court to "insert description of conduct." Model Jury Charge 4.43A (Civil).

Nor was it error for the court to instruct the jury that it "must decide whether plaintiffs have shown or proven [an unlawful commercial practice] . . . in connection with how defendants [acted] when failing to account for plaintiff's monies . . . ." The model jury charge instructs the court to summarize the conduct that allegedly violated the CFA, which is exactly what the trial court did. Model Jury Charge 4.43C (Civil).

Defendants also claim it was error for the court to insert the phrase "and/or renovations to the property" in the charge explaining the first alternative of liability under the CFA. The court instructed the jury as follows: "Specifically, the defendants allegedly used by means of an affirmative act, an unconscionable business commercial practice in connection with the sale/advertisement of any real estate and/or renovations to the property." This language reflects the CFA's regulations, specifically N.J.A.C. 13:45A-16, which applies to home improvement contracts. The use of the additional language did not alter the meaning of the statute, but merely clarified the conduct to which the CFA applies.

Defendants claim it was error for the trial court to omit the definition of the term "seller" in the paragraph explaining the third alternative to liability under the CFA's Home Improvement Practices regulations, N.J.A.C. 13:45A-16.1A. Under the regulations, a "seller" is defined as "a person engaged in the business of making or selling home improvements and includes corporations, partnerships, associations and any other form of business organization or entity, and their officers, representatives, agents and employees." N.J.A.C. 13:45A-16.1A. Defendants claim that if this definition had been included in the charge, the jury would have determined that defendants were not sellers under the regulations and the CFA would not apply. Although the definition of "seller" was applicable in this case, the trial court's omission of that definition in the jury instruction did not constitute harmful error. See R. 2:10-2; Mogull v. CB Commercial Real Estate, 162 N.J. 449, 464-66 (2000) (error in the jury charge will not require reversal on appeal unless it was misleading, confusing or ambiguous and clearly capable of producing an unjust result). Defendants' testimony established that they were engaged in the business of making or selling home improvements and inclusion of the definition of "seller" would not have changed the jury verdict.

VII

Defendants' next argument is that the court erred by submitting general interrogatories to the jury, rather than special interrogatories, which the New Jersey Supreme Court has recommended in CFA claims. That argument is also without merit. The New Jersey Supreme Court has suggested that a trial court frame special interrogatories to the jury in a CFA case. Cox, supra, 138 N.J. at 20-21. The Court noted that

[t]he jury's findings, as revealed on the verdict sheet, were somewhat general. To ensure that the conduct that a jury concludes amounts to consumer fraud is in fact unlawful under the Act, we recommend that trial courts frame special interrogatories to the jury. For example, in addition to asking a jury what conduct violated the Act, a verdict sheet might also ask whether the unlawful conduct involved an affirmative act, a knowing omission, or a violation of a regulation. Likewise, requiring a jury to identify the regulations that a consumer-fraud defendant has violated would further refine the verdict.

[Ibid.]

Nevertheless, the Court upheld the jury's verdict. Id. at 7.

Accordingly, although the New Jersey Supreme Court recommends special interrogatories, their use is not mandatory. The failure of the trial court here to follow the recommendation in Cox does not constitute error capable of producing an unjust result. The verdict sheet was not misleading, confusing or ambiguous. See Mogull, supra, 162 N.J. at 467 (interrogatories are not grounds for reversal unless they are "misleading, confusing or ambiguous."). The failure to frame more specific interrogatories does not require a new trial.

VIII

Next, we briefly discuss defendants' argument that the jury verdict was inconsistent in that the jury found a violation of the CFA, but no breach of contract. That argument is without merit.

The CFA does not require a breach of contract to prove a consumer fraud violation. Rather, the CFA prohibits "any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression or omission of any material fact . . . in connection with the sale or advertisement of any merchandise or real estate . . . ." N.J.S.A. 56:8-2. An unlawful commercial practice includes more than a breach of contract. In fact, under the CFA's regulations applying the CFA to home improvement contracts, a violation of the CFA occurs where a contractor fails to provide a written contract. N.J.A.C. 13:45A-16.2. And here, defendants failed to provide plaintiff with a written contract. No breach of contract is necessary. See Jiries v. BP Oil, 294 N.J. Super. 225, 227 (App. Div. 1996) (breach of contract claim abandoned prior to trial, which proceeded only on statutory consumer fraud claim).

IX

Finally, we turn to defendants' argument that they are entitled to a new trial because the trial court erred in addressing plaintiff's conduct during the trial. Defendants argue that the court erred in failing to give the jury a curative instruction after an incident during a sidebar conference, when plaintiff commented to defense counsel "Shame on you." When the comment was brought to the court's attention, the judge explained that he would dismiss the jury and warn plaintiff that his actions could result in a mistrial. Defense counsel did not object to this approach, request a curative instruction, or move for a mistrial. Nor does the record show that plaintiff's remark had the capacity to improperly influence the jury, causing it to reach a verdict inconsistent with the evidence.

Defendants also claim that after the jury verdict was read, the jury foreman turned to plaintiff's counsel and said "I did it for you." The transcript does not reflect any such statement, and the trial court, in listening to the relevant portions of the recorded court proceeding, heard no such remark.

Affirmed.

 

The jury found no liability as to defendant Melodie Kahr. Plaintiff filed a cross-appeal from that portion of the verdict but has indicated that he does not wish to pursue the cross-appeal unless the judgment against the remaining defendants is set aside. In light of our affirmance, we do not address the cross-appeal. Furthermore, because plaintiff failed to brief that issue, it is deemed waived. See Pressler, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2009); Zavodnick v. Leven, 340 N.J. Super. 94, 103 (App. Div. 2001) (failure to present any argument relating to cross-appeal deemed abandonment thereof).

(continued)

(continued)

29

A-6137-06T1

December 16, 2008