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October 13, 2016


Submitted May 9, 2016 Decided

Before Judges Sabatino and Suter.

On appeal from Superior Court of New

Jersey, Law Division, Camden County,

Docket No. L-3543-12.

Matthew S. Wolf, attorney for appellants.

Reger Rizzo & Darnall, attorneys for

respondents (Andrew J. Luca, on the brief).

The opinion of the court was delivered by

SUTER, J.S.C. (temporarily assigned).

Plaintiffs Gary and Mandi Hawkins appeal the January 9, 2015 dismissal of their complaint against defendants Prudential Fox and Roach realtors and Kathleen McDonald. We affirm in part and reverse in part.


On April 24, 2010, plaintiff Mandi Hawkins attended an open house on Erie Avenue in Barrington, for a property that recently had been relisted for sale by owners, John and Sheila Dixey (the sellers). The sellers owned the property for about five years. Defendant Kathleen McDonald (McDonald), the listing agent, worked for defendant realtor, Prudential Fox and Roach (Prudential). Prudential was also the broker when the property was listed in 2009, but an agent other than McDonald had the listing at that time.

On April 29, 2010, plaintiffs signed a contract with the sellers to buy the property for $240,000. McDonald was the real estate agent for the plaintiffs, as buyers, and the sellers, making her a "disclosed dual agent" for the sale.1 On April 29, 2010, plaintiffs were given a copy of the seller's "Property Condition Disclosure Statement" that had been signed by the sellers in September 2009 when they previously listed the property for sale and by McDonald in March 2010 when she obtained the listing. The sellers' disclosure provided that the property was not in any area "designated as protected wetlands"; was not located in a flood hazard zone; and was not the subject of "drainage or other easements affecting the property." It did disclose that there were "drainage or flood problems affecting the property," with a handwritten addition referencing flooding on the street: "the street on a major storm, but the township is fixing, had to sign a form to okay the work."

On April 27, 2010, just two days before signing the contract of sale, the sellers filed a tax assessment appeal with the County Board of Taxation where they complained about the flooding on Erie Street, that their house is located "in wetlands" and that the "front and back yards are swamps." Photographs submitted by the sellers depicted these conditions.2 On June 17, 2010, the Dixeys were granted a $29,700 reduction, bringing the property's assessed value to $240,000.

McDonald was aware of the tax assessment appeal. In an April 28, 2010 e-mail, just one day before plaintiffs signed the contract of sale, McDonald responded to Sheila Dixey's questions about filling out the tax appeal forms, telling her, "[a]nd yes, put down the wetland issue/swamp/railroad tracks . . . and the rundown neighborhood to make it sound good." McDonald also mentioned that the "buyers seem very excited." McDonald thereafter received an e-mail from the Sheila Dixey who wanted "to check with you to make sure the buyers won't eventually have access to all I included in our appeal. I really laid into the neighborhood and wetlands condition and included all sorts of pictures to verify my point. I'd die if that information were to become available." In her deposition, Dixey explained that she was referring to her neighbors finding out she had taken pictures of their "ratty houses and properties."

The sellers previously listed the property for sale in 2009. Although another buyer signed a contract of sale for the property, that contract was rescinded by the buyers "because of the water issues associated with the property." The buyers noted a moldy smell in the house. Also, the November 2009 home inspection performed for those buyers and provided to Prudential and the sellers reported there was water, raw sewage and mold in the property's crawl space. The property was taken off the market and then relisted for sale early in 2010, after the sellers had a waterproofing system professionally installed in the crawl space.

Plaintiffs closed on the property on June 23, 2010. On the very next day, it rained and plaintiffs suffered "massive flooding" of their front and back yards. Flooding happened again on July 13, 2010, and at least six times after that, although according to plaintiffs, the water stopped short of coming into the house.

The Borough's engineer investigated the flooding in response to complaints by plaintiffs. In his August 19, 2010 report, the engineer noted the storm water runoff from the street discharged into an adjacent wooded wetland area and ditch. Flooding resulted from the thirty-three-acre upstream watershed, flatness of the topography, natural drainage patterns and a century of suburban development that created impervious surfaces and surface runoff to the area adjacent to the plaintiffs' home. The Borough updated the discharge point of the existing storm sewer pipe to allow more efficient discharge and help "during normal precipitation."

On August 5, 2012, plaintiffs sued the Borough, the sellers, Prudential and McDonald.3 Prudential and McDonald were sued for violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to 56:8-198, professional negligence and the tort of outrage (intentional infliction of emotional distress).4

Shortly before trial, Prudential and McDonald filed for summary judgment to dismiss the complaint. In defense of the CFA claim, defendants' residential appraisal report provided a fair market value for the property of $245,000 as of May 16, 2014, taking into consideration the flooding in the street and yard and plaintiffs' representation that water had not entered the house as a result of storm activity. The report concluded that "[b]ased on the information that we have been provided and our review of the market data, the reported occasional water infiltration on the yard areas would not affect the market value of this property." Defendants contended there was no "ascertainable loss" under the CFA because the appraisal reflected a value that was $5,000 more than plaintiffs' had paid for the property.

On the claim of professional negligence, defendants' real estate expert concluded McDonald's action did not fall below "the applicable standard of care owed by a realtor and broker in New Jersey nor did [she] violate any standard or ethical requirement regarding the sale and purchase . . . ." Although McDonald may have known the owners of the property before the sellers, there was no evidence she ever observed a drainage problem at the property or spoke with those owners about water in the street or yard. Moreover, McDonald claimed that she had not been provided a copy of the sellers' tax assessment appeal, nor the statements the sellers had made in that appeal.

Plaintiffs did not support their CFA claim with a real estate appraisal of the property. Rather, plaintiffs submitted a report from an engineering firm, which blamed the flooding on the Borough's approval of development upstream of the watershed and of this street's development in a flood prone area. The report proposed the construction of a storm water management facility and basin, which would include the acquisition of plaintiffs' property by the Borough and then demolition of the house. According to the report, this would involve "less than $300,000 including the purchase of the property at current fair market value (reportedly $240,000)."

Plaintiffs' separate expert on the issue of McDonald's professional negligence opined that McDonald failed to abide by the code of ethics and rules and regulations of the real estate commission; that her conduct was the proximate cause of plaintiffs' decision to purchase the property; and that the property was essentially uninhabitable according to the engineering report.

In an oral decision on January 9, 2015, the trial court granted summary judgment and dismissed the claims against the remaining defendants. The claims against McDonald and Prudential under the CFA were dismissed because plaintiffs had not proven an "ascertainable loss" within the meaning of the CFA, N.J.S.A. 56:8-19. Plaintiffs' proof, through an engineer and not a real estate valuation expert, that the property was "uninhabitable" because of the flooding did not dispute defendants' valuation expert, who, taking into account all the flooding, opined the property had increased in value during plaintiffs' ownership. The court found the "engineer can't opine as to fair market value . . . ." Plaintiffs had "no proof that the property in question is worth less than they paid for it." The judge determined that "the only proof before [him was] that the property in question, in its present condition with flooding, with full disclosure, can be sold for a profit."

Plaintiffs now raise the following issues on appeal

I. The Trial Court Erred in Granting Appellees' Motion for Summary Judgment

A. Standard of Review.

B. There are Disputed Issues of Fact.

C. Appellees Did Not Dispute the Counter Statement of Facts.

D. The Flooding was a Material Fact Appellees Had a Duty to Disclose.

E. Whether there was an Ascertainable Loss was a Disputed Fact.

F. The Trial Court Placed the Burden of Proof on the Appellants at the Hearing.

G. Material Facts Underlying Appellees' Experts' Opinions Were Disputed.

H. The Trial Court Never Ruled on Claims Against Appellees Other than the Consumer Fraud Claims.



Where an appeal is from a summary judgment decision, we review the decision de novo, meaning that we apply the same standards used by the trial judge. W.J.A. v. D.A., 210 N.J. 229, 237 (2012). The question is whether the evidence, when viewed in a light most favorable to the non-moving party, raises genuinely disputed issues of fact sufficient to warrant resolution by the trier of fact or whether the evidence is so one-sided that one party must prevail as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Applying this standard, we first agree with the dismissal of the CFA claim because plaintiffs did not show evidence of an ascertainable loss under that Act.

"The CFA was enacted in 1960 'to combat the increasingly widespread practice of defrauding the consumer.'" Ferguson v. JONAH, 445 N.J. Super. 129, 138 (App. Div. 2016), (quoting Weinberg v. Sprint Corp., 173 N.J. 233, 247 (2002)) (other citations omitted). The CFA is applicable to real estate transactions. See N.J.S.A. 56:8-2.

A cause of action under the CFA requires proof of three elements: "unlawful conduct by defendant; an ascertainable loss by plaintiff; and a causal relationship between the unlawful conduct and the ascertainable loss." Ferguson, supra, 445 N.J. Super. at 139; Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009). Each element is "without any question, a prerequisite to suit." Ibid. Unlawful conduct under the CFA can be shown by an affirmative act or by proof of an omission. Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 245 (2005).

An ascertainable loss under the CFA must be quantifiable or measurable, but need not have been already experienced as an out-of-pocket loss. Id. at 248. Nevertheless, the alleged loss cannot be hypothetical or illusory. Ibid. As the Supreme Court has instructed in Thiedemann

We can envision the possibility that an expert may be able to speak to a loss in value of real or personal property due to market conditions, with sufficient precision to withstand a motion for summary judgment. However, by the time of a summary judgment motion, it is the plaintiff's obligation to be able to make such a demonstration or risk dismissal of the cause.

[Id. at 249.]

We agree with the trial judge that plaintiffs did not show the required proof of an ascertainable loss. Plaintiffs were not qualified to offer an opinion about the value of the real estate in the absence of expert testimony. See Jacobitti v. Jacobitti, 263 N.J. Super. 608, 613 (App. Div. 1993), aff d, 135 N.J. 571 (1994) (cautioning judges against fixing the market value of real estate without expert appraisal); see also Cell South of N.J. v. Zoning Bd. of Adjustment, 172 N.J. 75, 87-88 (2002) (finding that the Board disregarded the weight of the evidence in relying on the testimony of lay witnesses with regard to negative effects on property values where there was contrary expert testimony).

Plaintiffs did not present evidence of the property's fair market value from a qualified real estate appraiser. See N.J.S.A. 45:14F-21(c) (except for a bank, only a "State licensed real estate appraiser, a State certified real estate appraiser or a person who assists in the preparation of an appraisal under the direct supervision of a State licensed or certified appraiser shall perform or offer to perform an appraisal assignment in regard to real estate located in this State"). Plaintiffs' proffered expert on damages was an engineer, not a real estate appraiser.

Plaintiffs did not attempt to place the property on the market or present proof of repair costs. See Cox v. Sears Roebuck & Co., 138 N.J. 2, 22-23 (1994) (finding that plaintiff suffered and adequately demonstrated an ascertainable loss amounting to the cost of repairing his kitchen due to unlawful conduct by the kitchen renovator); see also Thiedemann, supra, 183 N.J. at 244, 255 (dismissing plaintiffs claim that the cost of repair was ascertainable loss where they had not quantified any amounts they had spent or would have to spend for future repairs). Indeed, plaintiffs' engineering expert suggested that the Borough purchase plaintiffs' property at fair market value and then demolish it to create a storm water facility and basin. Under this solution, plaintiffs still would not have an ascertainable loss.

Similarly, plaintiff Gary Hawkins's testimony about his alleged heart palpitations and stress was not quantifiable or measurable because he had no proof of any out-of-pocket losses. Plaintiffs also did not present medical testimony to connect the stress and palpitations to the flooding. Therefore, we agree with the trial court that plaintiffs failed to show an ascertainable loss and that the CFA claim was properly dismissed.


In the Restated Second Amended Complaint, plaintiffs added a cause of action against McDonald and Prudential for the tort of outrage, often referred to as the intentional infliction of emotional harm. The trial judge dismissed this cause of action without comment. We choose to review this issue because the question of whether emotional distress can be found is one of law, while "the jury decides whether it has in fact been prove[n]." See Ingraham v. Ortho-McNeil Pharmaceutical, 422 N.J. Super. 12, 20 (App. Div. 2011), certif. denied, 209 N.J. 100 (2012). We review questions of law de novo. Balsamides v. Protameen Chems., 160 N.J. 352, 372 (1999). We find no error in the decision to dismiss this additional cause of action.

The tort of intentional infliction of emotional harm requires proof that: 1) defendant acted intentionally or recklessly; 2) the conduct was extreme and outrageous; 3) the actions were the proximate cause of plaintiffs' emotional distress; and 4) the emotional distress was "so severe that no reasonable [person] could be expected to endure it." See Buckley v. Trenton Saving Fund Soc'y, 111 N.J. 355, 366 (1988); Model Jury Charge (Civil), 3.30F.

We find no error in the decision to dismiss this claim because plaintiffs did not show the type of severe emotional distress contemplated by this cause of action. Plaintiffs proffered no medical testimony to connect Gary Hawkins's health issues to the flooding. Those issues started four years after the closing and had other explanations, both work related and personal. Neither plaintiff testified in their depositions to distress "so severe that no reasonable [person] could be expected to endure it." Buckley, supra, 111 N.J. at 366.


We reverse and remand, however, the court's decision to dismiss the professional negligence claims against McDonald and Prudential. The trial judge, who apparently is now fully retired from judicial service, did not provide his reasoning in dismissing these claims. See R. 1:7-4(a) (requiring findings of fact and conclusion of law on every motion decided by a written order that is appealable as of right).

Professional negligence depends on proof that defendants deviated from an applicable standard of care, that the deviation was a substantial factor in causing the plaintiff to be injured and proof of damages. See Model Jury Charge (Civil), 5.50A; see generally Levine v. Wiss & Co., 97 N.J. 242, 246 (1984). These factors need to be addressed in the first instance by the trial court, in light of the record.

We make no judgment on the outcome of this issue on remand, and decline to exercise original jurisdiction over it. We do note, however, that there are competing expert reports on the issues of standards and deviation from those standards, and there are factual questions about what McDonald and Prudential knew about this property in 2009 and then during the critical period of April to June 2010.

Additionally, because this claim, if it is deemed viable, involves negligence, plaintiffs would be entitled to fair and reasonable compensation for pain and suffering, even if these damages did not amount to an ascertainable loss within the meaning of the CFA. As we have previously observed

Proof of damages need not be done with exactitude . . . . It is . . . sufficient that the plaintiff prove damages with such certainty as the nature of the case may permit, laying a foundation which will enable the trier of the facts to make a fair and reasonable estimate.

[Lane v. Oil Delivery, 216 N.J. Super. 413, 420 (App. Div. 1987).]

"[C]ourts will fashion a remedy even though the proof on damages is inexact." Kozlowski v. Kozlowski, 80 N.J. 378, 388 (1979) (citations omitted).

Affirmed in part; reversed and remanded in part as to the professional negligence claims. The remand shall be completed within sixty days; thereafter any aggrieved party may seek appellate review in a new appeal or motion for leave to appeal, as may be appropriate. We do not retain jurisdiction.

1 Pursuant to N.J.A.C. 11:5-6.9(h), the agent must deliver a Consumer Information Statement describing a dual agent as follows

A disclosed dual agent WORKS FOR BOTH THE BUYER AND THE SELLER . . . a disclosed dual agent will not be able to put one party's interests ahead of those of the other party and cannot advise or counsel either party on how to gain an advantage at the expense of the other party on the basis of confidential information obtained from or about the other party.

2 Poor quality photocopies were included in the appendix.

3 The complaint was amended to add First American Title Insurance Company, which provided plaintiffs' title insurance policy; Franklin American Mortgage Company, which provided plaintiffs' loan commitment and issued the mortgage; and Wells Fargo Home Mortgage, to whom the mortgage was assigned.

4 The sellers were dismissed as parties by the plaintiffs, but without a settlement. By the time this summary judgment motion was filed, only the Borough, Prudential and McDonald remained as party defendants.


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