ANTHONY D'AGOSTINO and DENISE D'AGOSTINO v. RICARDO MALDONADO

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6005-09T1

ANTHONY D'AGOSTINO

and DENISE D'AGOSTINO,

Plaintiffs-Respondents/

Cross-Appellants,

v.

RICARDO MALDONADO,

Defendant-Appellant/

Cross-Respondent,

and

LUIS A. RAMOS,

Defendant.

__________________________________________________________

July 25, 2011

 

Argued May 3, 2011 - Decided

 

Before Judges Graves, Messano and Waugh.

 

On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-0084-09.

 

Clifford J. Ramundo argued the cause for appellant.

 

Jason L. Bittiger argued the cause for respondents (Law Offices of Dennis A. Maycher, P.C., attorneys; Mr. Bittiger, on the brief).

 

 

PER CURIAM

Following a bench trial, the judge concluded that defendant Ricardo Maldonado violated the Consumer Fraud Act, N.J.S.A. 56:8-1 to -184 (the CFA), and entered judgment in favor of plaintiffs Anthony and Denise D'Agostino in the amount of $203,196. This "amount reflect[ed] . . . treble damages . . . of $150,694 . . ., as well as $50,590 in reasonable counsel fees, and $1,912 in costs." The judgment further set aside "[t]he conveyance from plaintiffs to defendant of title to . . . property located [in] Garfield [(the property)]." The judgment dismissed the balance of plaintiffs' claims.

Defendant now appeals contending: 1) the CFA does not apply to the facts of the case; 2) he did not commit "an unconscionable commercial practice"; 3) plaintiffs were equitably estopped from asserting any claim under the CFA; 4) the judge incorrectly determined damages; and 5) the amount of attorney's fees awarded reflects an abuse of the judge's discretion. Plaintiffs cross-appeal, arguing that the judge erred in calculating damages and in dismissing their common law fraud and breach of fiduciary duty claims.

We have considered the arguments raised in light of the record and applicable legal standards. We affirm in part, reverse in part, and remand the matter to the trial court for entry of an amended judgment in plaintiffs' favor.

I.

As the judge succinctly stated in her written opinion that accompanied the judgment, "This case involves an irregular mortgage rescue plan that went awry." Plaintiffs were married in 1992. Anthony worked in the financial field, at times attaining a salary of $250,000 per year, and Denise, who returned to the work force after having children, became the director of St. Mary's Cemetery.1

In 1993, Anthony inherited the property free of any mortgage. Anthony's grandfather had constructed two houses on the property; the "front house" consisting of three rental units, and the single-family "back house" where the couple and their children lived. Anthony maintained the front house and collected rent from the tenants.

In 2005, the couple began to experience "marital difficulties." Anthony "stepped out" of the marriage and resided with another woman. Denise and the children continued to live in the back house. Also in 2005, Anthony's employer declared bankruptcy, and he was unemployed for some of 2006. The couple's combined income dropped precipitously, causing "financial difficulties." The front house was cited for numerous housing code violations, the couple's credit card debt soared, and Anthony believed "time was of the essence." The couple decided to refinance a mortgage they had taken out at an earlier date.

In March 2007, Anthony persuaded Denise to secure a new mortgage in her name alone because his credit rating had "deteriorated." A quitclaim deed was executed adding Denise to the title of the property, and a mortgage in the amount of $325,000 was recorded on March 27, 2007.

Despite the refinancing, Denise and Anthony continued to experience financial difficulties. Although he collected rents from the front house, Anthony had difficulty finding work and used the money to cover his own personal expenses instead of paying the monthly mortgage. Under the terms of that mortgage, the monthly payment increased and soon exceeded the rent roll from the front house. In September 2007, Denise obtained a restraining order against Anthony that forbade his presence at the property. When Anthony went to the property to gather some belongings, the police, who accompanied him, arrested him for possession of an assault rifle, an old M-1 that Anthony claimed belonged to his grandfather.

By fall 2007, the new mortgage was in default. Plaintiffs were served with a foreclosure complaint on October 20, 2007, and default was entered in November. By December, the amount due on the mortgage was $360,000.

Anthony testified that plaintiffs received numerous "foreclosure rescue" letters in the mail, one of which was from defendant. Anthony responded to some of the solicitations and first spoke to defendant at the "end of November [or] early December." According to Anthony, defendant told him:

[He had] worked with people all of the time in this type of situation, and he helped people who were behind on their mortgages or in distress[], and he worked with them to get their mortgage . . . caught up. He would manage the property . . . for a certain fee, and then at the end of a certain amount of time, maybe a year or so, . . . I would pay him his fee and he would be out of the picture.

 

Anthony and defendant met at the property, defendant spoke to the tenants to determine what repairs needed to be made and plaintiffs gave defendant information regarding their mortgage. Defendant told Anthony, "[F]rom here on [out,] do not contact the lender. . . . I will take care of everything. . . . I'll act as your advisor in this matter."

Anthony claimed that at a second meeting he specifically told defendant he wanted the property placed "in trust for [his] children." Defendant stressed that the mortgage was in significant arrears and plaintiffs "ha[d] to get this done immediately."

Anthony agreed that defendant would make sure the property was fully rented; collect the monthly rent payments; make all the necessary repairs on the property and pay the mortgage. If there was a shortfall, defendant would cover those costs out of pocket, and, after one year's time, defendant would be paid $40,000 for his services. Anthony told Denise defendant's plan "might be a good idea."

On January 8, 2008, the bank sent Denise notice of its request to enter final judgment in the foreclosure action. On January 17, defendant came to the property with paperwork he had prepared for plaintiffs' signatures. He was accompanied by Luis A. Ramos, whom Anthony believed was defendant's friend, and who was actually a notary public attesting to plaintiffs' signatures.

Anthony did not read any of the documents prior to signing them "on the hood of a car in [front] of the house." Anthony believed Denise signed the documents in the back house. Plaintiffs never brought the documents to an attorney for review and never received copies of the documents after signing them. Anthony only signed documents on one occasion and believed he and Denise retained title to the property. "[He] would have never entered into an agreement had [he] know[n] [he] was . . . giving somebody else title to [his] house."

It is undisputed that the documents at issue were prepared by defendant who downloaded them from the Internet. Plaintiffs executed a "LETTER OF AGREEMENT," in which they acknowledged: that their mortgage contained "a due on sale clause"; that the mortgage would remain "in [their] names until it's paid off"; that defendant "ha[d] no intention of assuming said loan" and plaintiffs were holding him "harmless in the event the loan is called due or goes into default for any reason"; and that plaintiffs would vacate the property by January 31. Plaintiffs also executed a warranty deed to trustee conveying the property to defendant as trustee, and an "ACKNOWLEDGEMENT OF DEPOSIT," in which plaintiff's acknowledged receipt of $10 as "consideration" for the deed. In fact, no money exchanged hands, and the deed was never recorded.

Plaintiffs and defendant signed an "AGREEMENT AND DECLARATION OF TRUST," naming plaintiffs as beneficiaries of the trust, and defendant as trustee. Plaintiffs also executed an "ASSIGNMENT OF BENEFICIAL INTEREST IN TRUST," conveying their interests in the trust to defendant. Lastly, defendant executed an "OPTION AGREEMENT," that provided: "In consideration of $10.00, Ricardo Maldonado . . . grant[s] Anthony D Agostino . . . the option to purchase the . . . property for the purchase price of $400,000 . . . . Option term begins on January 17, 2008 and expires on January 17, 2009."2 However, the option could be exercised only by those who signed the agreement.

On March 28, 2008, defendant had plaintiffs execute a quitclaim deed to the property in which plaintiffs acknowledged receipt of $360,000 as consideration, and a power of attorney designating defendant as their attorney-in-fact regarding the property. Neither plaintiff recalled signing the deed or power of attorney, although Ramos testified that he was present when they did and he notarized their signatures. Defendant recorded the deed. Again, no money was exchanged.

In April or May, Anthony claimed he became aware of the quitclaim deed having been filed while in the courthouse with his divorce attorney. Over the ensuing months, Anthony offered "numerous times" to pay defendant his $40,000 fee, however, defendant declined the offer and told Anthony that pursuant to their option agreement, the property could only be repurchased for $400,000. Anthony admitted on cross-examination that he, in fact, never had $40,000 to pay defendant.

Although he tried to obtain a new mortgage for $400,000, Anthony was unable to do so. Facing the expiration of the one-year option agreement, on January 17, 2009, Anthony wrote defendant:

As per our agreement . . . [,] [i]f you will not grant me an extension on the option to buy back, I wish to have the property sold to the highest bidder [and the] proceeds put into a trust for my children, (less the monies that were put up by you up to $400,000) as we had agreed upon.

 

It is unclear whether defendant ever responded to this letter, but, on March 17, 2009, plaintiffs filed a verified complaint alleging violation of the CFA, common law fraud, negligent misrepresentation, civil conspiracy, and breach of fiduciary duty. Furthermore, the complaint sought declaratory relief quieting title to the property, invalidating any transfer to defendant and declaring he "ha[d] no right to possession."3

Denise's testimony was consistent with Anthony's only in the broadest sense. She claimed to have signed documents on only one occasion and that defendant did not provide her with copies. She could not recall Ramos being there. Indeed, the judge noted in her written decision that "[d]etermining what happened in this transaction [wa]s complicated by the credibility problems of [both] plaintiffs." She found that "Anthony was an extremely non-responsive witness[,] [and] seemed totally unable to respond to a direct question." The judge also found that "Denise was a poor witness due to serious memory problems and an apparent lack of sophistication regarding financial dealings."

In contrast, the judge noted that defendant "was by far the most cogent and informative witness in this trial." He worked full-time as a sales field manager for Sears. In 1994, defendant began working with mortgage companies and "negotiating debt [and] negotiating settlements" for distressed homeowners. Defendant ran a business, "Universal Services, where [he] did credit repair."

Beginning in 1997, defendant purchased six different properties in various communities. In some instances, defendant purchased the property from, or negotiated a short sale with, the mortgagee. In other instances, he borrowed monies, purchased the properties, and immediately sold them. In 2005, defendant entered into a trust agreement with a property owner in Newark who was ill and in danger of losing her home to the mortgagee. Defendant acted as trustee, negotiated with contractors to perform repairs, and marketed the property for sale. In each instance, defendant was able to "make . . . a profit." Defendant maintained that he only advertised his services by attaching a large "magnet sign" to his car that said, "'I buy houses,'" and listed his phone number.

Defendant claimed that Anthony called him in January 2008. Defendant outlined the conversation he had with Anthony at the property:

I asked him, what is your goal? How do you feel I can help you? What would you like to do? He told me that he wanted to save the property. He did not want to lose the property. He wanted his wife out of the property. And that he wanted to save the property for the future so that . . . his children . . . would always have a place to stay. That his whole goal was to refinance his mortgage, because he told me had a friend in the business. And he was sure that he wanted to get his wife's name off the property also. Get her out, get his wife's name off the property, and hold on to it for a long term.4

 

Defendant responded that "if [he] got involved [he] would be taking ownership of the property" because that would be the only way he "would invest any of [his] time and money into this property."

Defendant described his understanding of the agreement he reached with Anthony:

The verbal agreement was that I was assuming ownership of the property. I was going to collect all the rents. I was going to keep the property fully rented. I was going to rent out the back house. And I was going to . . . get the property out of foreclosure by making a payment arrangement with the mortgage company and maintaining a payment arrangement so the property wouldn't be lost.

 

Plaintiffs could repurchase the property from him for $400,000 during the ensuing twelve months. Any excess over the mortgage balance, i.e., $40,000, would be defendant's management fee. If plaintiffs could not refinance in one year, defendant would keep the property.

However, on cross-examination defendant conceded that numerous provisions of the verbal agreement were not reduced to writing, including defendant's obligation to make repairs, collect rents, apply them to the mortgage, and stave off the mortgage foreclosure. Defendant admitted that even though plaintiffs executed the warranty deed to trustee and trust agreement, he never believed his role to be trustee of the property. Defendant did not record this deed because he did not "want the lender on the mortgage to know there was a transfer of title."

At the time the warranty deed was executed, it is undisputed that the property was worth $480,000. Defendant undertook management of the property and negotiated a payment plan with the mortgagee that required an immediate payment of $9000, and monthly payments of more than $5000 thereafter for several months, in order to bring the mortgage current. The property needed additional repairs and the rent roll proved to be insufficient.

Defendant testified that in March 2008, he gave plaintiffs the option of terminating the agreement or executing a quitclaim deed in his favor. They chose to execute the deed, which defendant recorded about one week later.

Defendant then paid the mortgagee $9000 and paid for repairs from his own funds. He secured tenants for the property. The mortgage was brought current and the foreclosure action against plaintiffs was eventually dismissed in July 2009. Defendant's expenses exceeded the rent roll, and his deficit in 2008 was $41,296.37, and in 2009, $5,882.99.

After both parties submitted written summations, the trial judge rendered her opinion. As to plaintiffs' common law fraud claim -- that they were misled into believing the property was being placed in trust for their children -- the judge concluded that Anthony's "testimony was so contradictory and unreliable that it d[id] not amount to clear and convincing evidence that he relied on a material misrepresentation of presently existing or past fact, or that [defendant] intended him to rely on such misrepresentation." Without extensive discussion, in a footnote, the judge determined that "[p]laintiffs ha[d] not met their evidentiary burden as to the breach of fiduciary duty" claim.

The judge, however, concluded that defendant had violated the CFA. She first noted that defendant "advertised for his services," "had been a party to other real estate transactions involving distressed properties," and his "past experience in this area of business . . . [wa]s sufficient to bring him under the purview of the CFA." The judge further concluded:

[A]lthough it appears to this Court that [defendant's] actions were motivated by what he viewed as legitimate profit, rather than an intent to defraud, his actions nonetheless constituted a violation of the CFA, and thus the Court is bound by the statute. . . . While [defendant] may have kept up his end of the oral agreement, his written agreements were severely one-sided and unconscionable in that they did not conform to statutory requirements and were contradictory. Additionally, he held out an unlikely prospect of repurchasing the property and thereby obtained an unreasonable profit from the transaction.

 

Regarding defendant's expenditures on the property, the judge found defendant's testimony "generally credible," but determined the lack of documentary evidence made "it . . . not completely clear . . . how much of his own money [defendant] paid to keep up the [p]roperty." She reduced the proffered amount by ten percent, and concluded defendant expended $44,653 on the property.

After analyzing plaintiff's claim for counsel fees and costs, and concluding a reasonable award was $50,590 together with costs of $1912, the judge set aside plaintiffs' conveyance of the property to defendant. She then considered plaintiffs' damages.

The judge first determined that "plaintiffs ha[d] established their ascertainable loss as being the loss in equity in their home minus the improvements made to the property by defendant," i.e., $480,000 (the value of the property) - $360,000 (the mortgage balance) - $44,653 (defendant's expenditures) = $75,347. Noting that the CFA required trebling of damages, the judge determined:

In granting the equitable relief of returning the property to the plaintiffs, the Court has -- in essence -- provided the plaintiffs with one third of the treble damages to which they are entitled. The return of the property compensates them for their ascertainable loss and makes them whole. The plaintiffs are thus entitled to the remaining two thirds of the treble damage award required by the CFA, in the amount of $150,694, as well as $50,590 in reasonable counsel fees and $1,912 in costs for a total of $203,196.

 

She entered the judgment under review and this appeal followed.

II.

Before turning to the particulars of defendant's arguments, we state some general principles that guide our review.

"Final determinations made by the trial court sitting in a non-jury case are subject to a limited and well-established scope of review: 'we do not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice[.]'" Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011) (quoting In re Trust Created By Agreement Dated December 20, 1961, ex. rel. Johnson, 194 N.J. 276, 284 (2008) (internal quotation omitted)); Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974) (the trial judge's "findings . . . should not be disturbed unless they are so wholly insupportable as to result in a denial of justice") (quotations omitted). In this regard, "[w]e do not weigh the evidence, assess the credibility of witnesses, or make conclusions about the evidence." Mountain Hill, L.L.C. v. Twp. of Middletown, 399 N.J. Super. 486, 498 (App. Div. 2008) (quotation omitted). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995).

(a)

Defendant contends that the CFA is inapplicable to the facts of this case, that even if the statute applied, he did not engage in an unconscionable commercial practice, and, alternatively, that plaintiffs are equitably estopped from pursuing a claim under the statute.

In the first instance, we must determine whether the CFA applies. Defendant argues that "he sold nothing to plaintiffs that conceivably could be covered by" the CFA. In response, plaintiffs assert that "the [t]ransaction . . . constituted a 'sale' or 'offer for sale' of 'merchandise' or 'real estate' under the [CFA] and [defendant] is not exempt as a 'casual seller.'"

The CFA was enacted to alleviate "rampant consumer complaints about fraudulent practices in the marketplace and to deter such conduct by merchants." Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 245 (2005). Accordingly, an "unlawful practice" is defined as:

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 (emphasis added).]

The CFA defines "'sale'" as "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(e), and "'merchandise'" as "any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale[,]" N.J.S.A. 56:8-1(c).

Our courts have noted that the CFA "should be liberally construed to accomplish its dual objectives of deterrence and protection." 539 Absecon Boulevard, L.L.C. v. Shan Enters. Ltd. P'ship, 406 N.J. Super. 242, 274 (App. Div.) (citing Lettenmaier v. Lube Connection, Inc., 162 N.J. 134, 139 (1999)), certif. denied, 199 N.J. 541 (2009). However, the CFA's remedial purpose is not limitless; it "does not cover every sale in the marketplace," as its "applicability hinges on the nature of a transaction, requiring a case by case analysis." Papergraphics Int'l., Inc. v. Correa, 389 N.J. Super. 8, 13 (App. Div. 2006). Furthermore, "[d]espite the CFA's reference to 'real estate' in [N.J.S.A. 56:8-2], courts have adopted a limited construction of the [statute's] applicability to real estate transactions." 539 Absecon, supra, 406 N.J. Super. at 274.

We acknowledge that the facts presented at trial are not the typical CFA claim relating to the sale of real estate. See, e.g., Gennari v. Weichert Co. Realtors, 148 N.J. 582, 604-08 (1997) (finding CFA applicable to claims made by purchasers of real estate against contractor and realtor). However, it is undeniable that defendant sold plaintiffs a "service," i.e., he would, for a fee, improve, manage, and conduct the rental business at the property, while at the same time deal directly with plaintiffs' mortgagee to forestall foreclosure.

The trial judge relied extensively on O'Brien v. Cleveland, 423 B.R. 477, 483-84 (Bankr. D.N.J. 2010). There, the defendant offered plaintiffs an "unconventional financing" plan to prevent their home from being sold at a sheriff's sale: plaintiffs agreed to deed their home to defendant; defendant stated that he would then "arrange financing to satisfy the existing mortgages on the property to save it from foreclosure"; and plaintiffs had an option to buy back the property from defendant once the mortgage was satisfied. Ibid. The court determined that this transaction fell within the purview of the CFA, and ultimately found that defendant had engaged in an "unconscionable commercial practice" pursuant to N.J.S.A. 56:8-2. Id. at 483.

While defendant points out the significant factual differences between this case and O'Brien, notably, the egregious nature of the defendant's conduct in that case, the bankruptcy court's reasoning regarding the CFA's application to the scheme is compelling. We agree, therefore, that defendant's conduct in this case came within the purview of the CFA.

Defendant takes issue with the trial judge's conclusion that his past real estate activity and limited advertising subjected him to the CFA. We have held that "the isolated sale of a single family residence by its owner" is not subject to the CFA. Di Bernardo v. Mosley, 206 N.J. Super. 371, 376 (App. Div.), certif. denied, 103 N.J. 503 (1986); see also 539 Absecon, supra, 406 N.J. Super. at 275 (citing DiBernardo and recognizing the CFA's applicability to "unconscionable practices engaged in by professional sellers") (emphasis added) (quoting Kugler v. Romain, 58 N.J. 522, 536 (1971).

However, we agree with the trial judge that defendant was not a casual participant in mortgage work-out schemes. Defendant ran a business that did "credit repair," he advertised his interest in purchasing homes, he had purchased several homes in the past, in some cases, negotiating short sales with mortgagees, and, in one case, transferring the debtor's property to a trust while he forestalled foreclosure. In short, defendant's activities in this case are governed by the CFA.

Defendant next argues that he did not engage in any "unconscionable commercial practice." We disagree.

"'Unconscionability' has been defined as '"an amorphous concept obviously designed to establish a broad business ethic. The standard of conduct that the term 'unconscionable' implies is lack of 'good faith, honesty in fact and observance of fair dealing.'"'" Jefferson Loan Co., Inc. v. Session, 397 N.J. Super. 520, 534-35 (App. Div. 2008) (quoting Cox v. Sears Roebuck, 138 N.J. 2, 18 (1994) (in turn quoting Kugler, supra, 58 N.J. at 543-44)). "The word 'unconscionable' must be interpreted liberally so as to effectuate the public purpose of the CFA." Assocs. Home Equity Servs., Inc. v. Troup, 343 N.J. Super. 254, 278 (App. Div. 2001). Unconscionability is determined on a case-by-case basis. Kugler, supra, 58 N.J. at 543.

The trial judge concluded that by the end of 2007, foreclosure was imminent and plaintiffs had little hope of salvaging the situation. Defendant presented them with paperwork that "did not comport with the parties' understanding of their agreement." The judge further found that "the documents, when taken as a whole, reflect[ed] that a $480,000 rental property changed hands for $10 with an option to buy it back within 12 months for $400,000." Even if defendant was ultimately responsible for paying off or re-financing the $360,000 mortgage, and invested some of his own money in the interim, he would have made a significant profit that was never disclosed in the documents. The judge did not err in finding defendant engaged in an unconscionable commercial practice.

Lastly, defendant argues that plaintiffs should be equitably estopped from seeking relief under the CFA because their testimony reflected that they "fully understood and participated in reaching the final agreement." We have applied the doctrine of equitable estoppel in the context of a CFA claim. See Joe D'Egidio Landscaping, Inc. v. Apicella, 337 N.J. Super. 252, 258-259 (App. Div. 2001). "The essential elements of equitable estoppel are a knowing and intentional misrepresentation by the party sought to be estopped under circumstances in which the misrepresentation would probably induce reliance, and reliance by the party seeking estoppel to his or her detriment." O'Malley v. Dep't of Energy, 109 N.J. 309, 317 (1987).

Here, even if plaintiffs understood that by executing the quitclaim deed they had conveyed title to the property, such knowledge does not alter the one-sideness of what occurred. Defendant had title to property worth $480,000 that was encumbered with $360,000 of debt. No consideration was exchanged, and defendant's promises to maintain the property and forestall the foreclosure, while kept, were not reflected in any of the documents. Invocation of the doctrine of equitable estoppel is not supported by the "totality of the circumstances." See Heuer v. Heuer, 152 N.J. 226, 235 (1998) ("Principles of equity must be applied in light of the totality of the circumstances.").

In sum, we affirm the trial court's finding that defendant violated the CFA.

(b)

Plaintiffs and defendant appeal the award of damages. According to defendant, "[b]y voiding the contract, the court effectively granted rescission, but it did not return the parties to their original positions" because "plaintiffs . . . [owned] an improved investment property" and defendant "received nothing for his full year of service." In their cross-appeal, plaintiffs assert that the court trebled the incorrect base figure; the correct number is either the full value of the property, $480,000, or alternatively, the $120,000 equity in the property without a set-off credit for defendant's expenditures. We conclude that once she set aside the deed conveying the property to defendant, the judge erred in concluding plaintiff's suffered any "ascertainable loss." Therefore, we reverse the award of damages.

The remedial section of the CFA, N.J.S.A. 56:8-19, states:

Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest.

 

[Ibid. (emphasis added).]

 

"The ascertainable loss requirement operates as an integral check upon the balance struck by the CFA between the consuming public and sellers of goods." Thiedemann, supra, 183 N.J. at 251. "[T]he term 'ascertainable loss[]' . . . means that plaintiff must suffer a definite, certain and measurable loss, rather than one that is merely theoretical." Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 558 (2009) (citing Thiedemann, supra, 183 N.J. at 248). "In addition, the CFA requires a consumer to prove that the loss is attributable to the conduct that the CFA seeks to punish by including a limitation expressed as a causal link." Id. at 555.

Here, once the judge set aside the deed conveying the property to defendant, plaintiffs were restored to the position they occupied before defendant's unconscionable practice, i.e., they owned property valued at $480,000 encumbered by the same mortgage. In Romano v. Galaxy Toyota, 399 N.J. Super. 470, 484 (App. Div.), certif. denied, 196 N.J. 344 (2008), we held that the plaintiff's election to seek rescission under the UCC, resulted in "neither loss nor gain as a result of the transaction." Therefore, the "plaintiff failed to provide proof of an ascertainable loss as required by the CFA." Ibid. The same is true in this case. We reverse that portion of the judgment awarding plaintiffs $150,694 in damages.

We also reject defendant's claim that a "great injustice" will result if he is not reimbursed for his cash outlays, determined by the judge to be $44,653. First, defendant did not file a counter-claim seeking such relief. Second, we have held in other contexts that a merchant who has violated the CFA cannot obtain damages even if the violation was innocent. See Scibek v. Longette, 339 N.J. Super. 72, 80 (App. Div. 2001).

(c)

Both plaintiffs and defendant object to the counsel fee award. Defendant claims the award is excessive because it included hours spent on the unsuccessful non-CFA counts of plaintiffs' complaint. In their cross-appeal, plaintiffs contend that the judge improperly excluded fees for five days of trial and otherwise "arbitrarily" reduced the award. We find neither argument to be persuasive.

Plaintiffs' counsel certification included total fees amounting to $92,142.50. The judge awarded $50,590, which she computed as follows:

The hourly rates charged by plaintiff[s'] counsel (the highest being $275 per hour) are reasonable in comparison to fees customarily charged in Bergen County. The hourly rates will not be altered by the Court. After review of the time sheets, certain charges are disallowed. Trial hours mistakenly charged on Sunday, April 11, 2010, ($1,457.50) and charges for the second of two lawyers to attend trial on April 12, 13, 27, 28, and May 3, 2010, (totaling $3,387.50) are disallowed. The amount of time expended in litigating this case was made excessive by the plaintiffs' conduct. Denise obtained an FRO against Anthony in September 2007, rendering them unable to contribute collaboratively to their representation. Additionally, both plaintiffs demonstrated an inability to be forthcoming on the stand -- even when being questioned by their own counsel -- which unnecessarily prolonged the trial, so that Anthony's five days of testimony were essentially useless. Charges by plaintiffs' counsel totaling $11,412.50 for these five days are disallowed. The plaintiffs' courtroom demeanor is indicative of the challenge they posed as clients and is found to be the cause of the unreasonable amount of time spent in litigating and preparing to litigate this case. It would be inequitable for the defendant to pay for unreasonable counsel fees incurred as a result of the plaintiffs' conduct. This Court finds, based on observations at trial and the fact that the restraining order likely presented an obstacle in representation, that the amount of time should be reduced by one-third beyond the $16,257.50 in reductions enumerated above. That calculation results in a total reasonable counsel fee of $50,590. . . .

 

"[A] consumer-fraud plaintiff can recover reasonable attorneys' fees, filing fees, and costs if that plaintiff can prove that the defendant committed an unlawful practice, even if the victim cannot show any ascertainable loss and thus cannot recover treble damages." Cox, supra, 138 N.J. at 24. "An award of counsel fees by the trial court will not be overturned unless there has been a clear abuse of discretion." Monogram Credit Card Bank of Georgia v. Tennesen, 390 N.J. Super. 123, 133-34 (App. Div. 2007) (citing Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). "The court must determine both the reasonableness of the rates and the reasonableness of the time actually expended in the litigation." Id. at 134 (citing Rendine, supra, 141 N.J. at 22-23). In the context of a plaintiff's limited success in a CFA case, we have said:

In cases where plaintiff presents distinctly different claims for relief in one lawsuit, work on those unrelated claims cannot be deemed in pursuit of the ultimate result achieved. However, when the plaintiff's claims for relief involve a common core of facts or will be based on related legal theories, such a suit cannot be viewed as a series of discrete claims.

 

[Silva v. Autos of Amboy, Inc., 267 N.J. Super. 546, 556 (App. Div. 1993) (citation and quotations omitted).]

 

See also Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 387 (2009) ("if the same evidence adduced to support a successful claim was also offered on an unsuccessful claim, the court should consider whether it is nevertheless reasonable to award legal fees for the time expended on the unsuccessful claim").

Here, all plaintiffs' claims were entwined within the same core set of facts. We conclude, therefore, that the judge did not abuse her discretion by failing to reduce the award to reflect plaintiffs' lack of success on non-CFA claims.

We also reject plaintiffs' argument on cross-appeal that the judge abused her discretion by reducing the award because of Anthony's obfuscatory testimony and the difficulty implicit in the representation of two clients with identical interests who were, nonetheless, separated by court order. In considering the reasonableness of a fee award, "[t]he court must not include excessive and unnecessary hours spent on the case . . . ." Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 22 (2004); see also Twp. of W. Orange v. 769 Assocs., LLC, 198 N.J. 529, 545 (2009) ("the court need not award fees . . . for advancing frivolous defenses, or for taking repetitive or delaying actions"). The trial judge had the opportunity to assess the unnecessary time spent during trial and consider the reasons that caused expenditure of attorney time. Given our deferential standard of review, we find no mistaken exercise of her broad discretion.

III.

Lastly, we consider plaintiffs' remaining arguments on cross-appeal. Plaintiffs contend the judge erred in dismissing their common law fraud claim because "defendant made intentional false misrepresentations to induce [them] into transferring legal title to the property." The judge found that plaintiffs' testimony was not credible, much less clear and convincing. See Stoecker v. Echevarria, 408 N.J. Super. 597, 617-18 (App. Div.) (quoting Stochastic Decisions, Inc. v. DiDomenico, 236 N.J. Super. 388, 395 (App. Div. 1989), certif. denied, 121 N.J. 607 (1990), certif. denied, 200 N.J. 549 (2009)) ("'Fraud is not presumed; it must be proven through clear and convincing evidence.'"). The argument lacks sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).

Plaintiffs also contend that the judge erred in dismissing their breach of fiduciary duty claim. They argue that defendant violated his fiduciary duty as trustee of the property "by effectuating a transfer of the beneficial interest of the trust to himself . . . and taking ownership of the property by way of quit claim." Plaintiffs argue that "all monies and services [defendant] . . . expended towards the [p]roperty cannot be recovered by him because they were done in furtherance of his self-dealing."

However, plaintiffs experienced no monetary damage as a result of defendant's actions, title to the property was restored, and, for reasons already expressed, defendant is not entitled to recoup any expenditure he made regarding the property. In light of our holding, plaintiffs' argument is moot.

Affirmed in part; reversed in part; remanded for entry of an amended judgment in favor of plaintiffs. The cross-appeal is dismissed.

1 When necessary to avoid confusion, we shall refer to plaintiffs by their first names. We intend no disrespect by this informality.

2 The option agreement is actually dated February 17, 2008, but defendant executed it on January 17, and Ramos notarized his signature that day. Plaintiffs executed other documents that are not relevant to resolution of this appeal.

3 The complaint asserted several causes of action against Ramos; they were subsequently dismissed by the judge before trial and are not the subject of appeal.

4 This was contradicted by the testimony of Anthony's divorce lawyer who claimed "it was always [Anthony's] position that [the property] was subject to equitable distribution."