Anthony D'agostino v. Ricardo Maldonado (068940)

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)
Anthony D’Agostino and Denise D’Agostino v. Ricardo Maldonado (A-82/83-11) (068940)
Argued January 29, 2013 -- Decided October 3, 2013
PATTERSON, J., writing for a majority of the Court.
In this appeal, the Court considers the application of the New Jersey Consumer Fraud Act (CFA), N.J.S.A.
56:8-1 to -20 to a mortgage foreclosure rescue plan.
Beginning in 1993, plaintiffs Anthony and Denise D’Agostino resided in one unit of an inherited, multi-
unit property and rented the other units. In 2005, plaintiffs separated, and Anthony D’Agostino lost his job. After
accumulating significant debts, including a mortgage on the property, Denise D’Agostino was added as an owner so
that she could execute a new $325,000 mortgage. Plaintiffs defaulted on the mortgage in November 2007, at which
time they owed $360,000.
Defendant Ricardo Maldonado owned a business purchasing homes from financially distressed owners,
negotiating with lenders, and repairing and selling the homes. Maldonado advertised his company using a magnetic
sign on his car, showing his phone number and the phrase “I buy houses.” Anthony D’Agostino saw the sign and
contacted Maldonado in January 2008, at which time the estimated fair market value of plaintiffs’ property was
$480,000. The parties verbally agreed that plaintiffs would pay Maldonado $40,000, and he would repair the
property and bring the mortgage current using rental payments. However, the documents Maldonado prepared and
plaintiffs signed created a trust naming Maldonado the sole trustee. For consideration of ten dollars, plaintiffs
conveyed their interest to him, although Denise D’Agostino remained personally liable to pay the mortgage
balance. An option allowed plaintiffs to recover title by paying Maldonado $400,000 within one year. In March
2008, plaintiffs executed a quitclaim deed transferring full interest in the property to Maldonado. The deed stated
that Maldonado paid $360,000 for the interest although he actually paid nothing. Over the following months,
Maldonado spent $49,615 of his own money on mortgage payments, outstanding taxes, and repairs. Anthony
D’Agostino later offered $40,000 to regain title, and Maldonado declined, informing plaintiffs they could repurchase
the property for $400,000.
On March 17, 2009, plaintiffs filed a complaint, alleging a violation of the CFA. The trial court issued a
written opinion in which it noted that its decision was complicated by plaintiffs’ lack of credibility. Nevertheless,
the court found that plaintiffs had sustained their burden with respect to the CFA violation since the parties’
transaction was effected by misleading documents giving rise to an “unconscionable commercial practice” under
N.J.S.A. 56:8-2. The trial court voided the conveyance to Maldonado and restored title to plaintiffs. It also
determined that plaintiffs lost $120,000 in equity on the property. Subtracting $44,653 in improvements paid for by
Maldonado, the court arrived at a net damages amount of $75,347. Recognizing that, under the CFA, plaintiffs are
entitled to treble damages of $226,041, the court reasoned that the equitable relief of returning the property equated
to a third of that damages amount. Thus, the court awarded plaintiffs $150,694, as well as attorneys’ fees and costs.
The parties appealed, and the Appellate Division affirmed the trial court’s conclusions that Maldonado’s
conduct was governed by and violated the CFA. However, it reversed the trial court’s calculation of damages,
explaining that plaintiffs had suffered no ascertainable loss because the trial court had effectively restored them to
their position prior to Maldonado’s unconscionable conduct. The panel affirmed only the award of counsel fees.
The Court granted the parties’ cross-petitions for certification. 209 N.J. 232 (2012).
HELD: Maldonado’s execution of the transactions at issue gave rise to an unconscionable commercial practice
under N.J.S.A. 56:8-2. Notwithstanding the trial court’s restoration of plaintiffs’ equity in their home, the transfer of
that equity to Maldonado constituted an ascertainable loss within the meaning of N.J.S.A. 56:8-19, and the trial
court’s determination of damages was within its discretion.
1
1. When interpreting statutes, the Court is tasked with determining and applying the Legislature’s intent. This is
accomplished, in part, by considering the ordinary meaning of the statutory language in the context of the legislation
as a whole. The CFA is construed in light of its objective to greatly expand consumer protections. The provisions
of the CFA permitting a private cause of action aim to compensate victims for actual losses, punish wrongdoers via
treble damages, and provide incentives for competent counsel to take fraud cases involving only minor losses.
Plaintiffs seeking to prove a violation of the CFA must show unlawful conduct, an ascertainable loss, and a causal
relationship between the two. In accordance with N.J.S.A. 56:8-2, an “unconscionable commercial practice . . . in
connection with the sale or advertisement of any merchandise or real estate” constitutes unlawful conduct. N.J.S.A.
56:8-19 provides a statutory remedy to any person who suffers an ascertainable loss of money or property as a result
of such conduct. When a plaintiff has proven the requisite causal relationship between the conduct and loss, the
CFA requires an award of treble damages, as well as attorneys’ fees and costs. (pp. 15-20)
2. The Court first asks whether Maldonado committed an unconscionable commercial practice within the meaning
of N.J.S.A. 56:8-2. Keeping in mind the deterrent and protective purposes of the CFA, it finds that Maldonado’s
actions clearly qualify as “commercial practices,” and his advertised “services,” which he offered to the public for a
fee, satisfy the broad statutory definition of a “sale” of “merchandise.” Additionally, the documents memorializing
the parties’ transaction did not reflect their understanding of the agreement, causing plaintiffs to transfer a $480,000
property to Maldonado for ten dollars. The credible evidence supports the conclusion that Maldonado’s commercial
practices were unconscionable. (pp. 20-26)
3. As a threshold matter, plaintiffs must also prove an ascertainable loss, which must be capable of calculation and
is generally equivalent to any lost benefit of the bargain. Where a case involves breach of contract or
misrepresentation, an out-of-pocket loss or a demonstration of loss in value is sufficient to establish an ascertainable
loss. The damages available under the CFA are intended to make victims whole, while also punishing the
wrongdoer and deterring future violations. When an unconscionable commercial act has caused loss of money or
property, that loss can satisfy the threshold “ascertainable loss” element of the CFA claim, as well as constitute
“damages sustained” for purposes of the remedy. (pp. 26-31)
4. Maldonado’s unconscionable commercial practice caused plaintiffs to suffer an ascertainable loss, namely
deprivation of the title to their residence. Although a CFA claim may fail where no loss has occurred prior to
litigation, a judicial remedy imposed at the conclusion of litigation does not preclude a finding of ascertainable loss.
Rather, the existence of an ascertainable loss should be determined on the basis of a plaintiff’s position following the
defendant’s unlawful commercial practice. Thus, the Appellate Division improperly concluded that the trial court’s
equitable remedy restoring title to plaintiffs precluded a finding of ascertainable loss. Moreover, rendering plaintiffs
ineligible for the mandated treble damages award because they were awarded equitable relief premised upon their
ascertainable loss would contravene the goals and objectives of the CFA, which expressly authorizes equitable relief
“in addition to” treble damages. In calculating the remedy, the trial court properly weighed the damages sustained,
the impact of the court’s equitable remedy, and improvements made to the property at Maldonado’s expense. The
resulting damages award is based on competent, credible evidence and is consistent with the CFA’s expectation that
courts will fashion individualized relief. (pp. 31-40)
5. Plaintiffs’ claims are not barred by the doctrine of equitable estoppel. Nothing in the evidence suggests that
Maldonado relied on any representation by plaintiffs, and the trial court’s opinions regarding the parties’ credibility
are irrelevant to an equitable estoppel defense. (pp. 40-42)
The judgment of the Appellate Division is AFFIRMED IN PART and REVERSED IN PART and the
judgment of the trial court is REINSTATED.
JUSTICE HOENS, DISSENTING IN PART and CONCURRING IN PART, joined by JUDGE
CUFF, expresses the view that, under the plain language of the CFA, a threshold finding of “ascertainable loss” is
separate and distinct from a finding of “damages sustained” necessary for application of the statutorily required
trebling, and that, although plaintiffs here demonstrated an ascertainable loss, they failed to prove actual damages.
CHIEF JUSTICE RABNER, JUSTICES LaVECCHIA and ALBIN, and JUDGE RODRÍGUEZ
(temporarily assigned) join in JUSTICE PATTERSON’s opinion. JUSTICE HOENS filed a separate opinion
dissenting in part and concurring in part, in which JUDGE CUFF (temporarily assigned) joins.
2
SUPREME COURT OF NEW JERSEY
A-82/83 September Term 2011
068940
ANTHONY D’AGOSTINO and DENISE
D’AGOSTINO,
Plaintiffs-Appellants
and Cross-Respondents,
v.
RICARDO MALDONADO,
Defendant-Respondent
and Cross-Appellant.
Argued January 29, 2013 – Decided October 3, 2013
On certification to the Superior Court,
Appellate Division.
Jason L. Bittiger argued the cause for
appellants and cross-respondents (Bittiger
Triolo, attorneys).
Clifford J. Ramundo argued the cause for
respondent and cross-appellant.
Margaret Lambe Jurow argued the cause for
amicus curiae Legal Services of New Jersey
(Melville D. Miller, Jr., President,
attorney; Ms. Jurow, Mr. Miller, David G.
McMillin, and Rebecca Schore, on the brief).
Madeline L. Houston and Melissa J. Totaro
submitted a brief on behalf of amicus curiae
Consumers League of New Jersey (Houston &
Totaro, attorneys).
Linda E. Fisher and Kyle L. Rosenkrans
submitted a brief on behalf of amicus curiae
Seton Hall University School of Law Center
for Social Justice.
1
JUSTICE PATTERSON delivered the opinion of the Court.
In this case, the Court applies the New Jersey Consumer
Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, to a mortgage
foreclosure rescue plan. Plaintiffs Anthony and Denise
D’Agostino, in default of their residential mortgage
obligations, entered into a series of transactions with
defendant Ricardo Maldonado. As a result of those transactions,
defendant obtained title to plaintiffs’ home, valued at
$480,000, for ten dollars; plaintiffs were given the option to
repurchase their home; and plaintiff Denise D’Agostino continued
to be obligated to pay the mortgage.
Plaintiffs filed suit against defendant, asserting a cause
of action under the CFA along with other claims. The trial
court held that defendant committed an unconscionable commercial
practice within the meaning of N.J.S.A. 56:8-2 and that
plaintiffs suffered an ascertainable loss. The court combined
treble damages under the CFA with an equitable remedy. It
voided the transaction by which plaintiffs had conveyed their
residence to defendant. The court then calculated damages by
determining the equity in the home that plaintiffs lost to
defendant, subtracting the value of defendant’s improvements to
the property, trebling that net amount pursuant to N.J.S.A.
56:8-19, and subtracting the value of the equity returned to
2
plaintiffs from the trebled damages. On the basis of this
calculation, the trial court entered judgment in the amount of
$150,694, as well as reasonable attorneys’ fees and costs, in
plaintiffs’ favor.
Defendant appealed. The Appellate Division affirmed in
part, reversed in part the trial court’s determination, and
remanded the matter to the trial court. The panel affirmed the
trial court’s decision that defendant had committed an
unconscionable commercial practice contrary to N.J.S.A. 56:8-2.
It held, however, that plaintiffs had failed to demonstrate
ascertainable loss because the court’s equitable remedy had
effectively restored to plaintiffs the interest in the property
that they had before defendant violated N.J.S.A. 56:8-2.
Accordingly, the Appellate Division remanded to the trial court
for an amended judgment awarding no damages to plaintiffs. The
parties filed cross-petitions for certification in this Court.
We affirm in part and reverse in part the Appellate
Division’s determination. We concur with the trial court and
the Appellate Division that defendant’s execution of the
transactions at issue gave rise to an unconscionable commercial
practice under N.J.S.A. 56:8-2. We reverse, however, the
Appellate Division’s judgment with respect to the issues of
ascertainable loss and the damages sustained. We agree with the
trial court that the transfer of plaintiffs’ equity in their
3
home to defendant constituted an ascertainable loss for purposes
of N.J.S.A. 56:8-19, notwithstanding the trial court’s
subsequent restoration of that equity to plaintiffs. We also
find that the trial court’s determination of damages was a
proper exercise of its discretion. We further reject
defendant’s invocation of the principle of equitable estoppel to
bar plaintiffs’ claim. Accordingly, we reinstate the trial
court’s judgment in plaintiffs’ favor.
I.
In 1993, plaintiff Anthony D’Agostino inherited from his
grandmother an unencumbered property in Garfield, New Jersey,
designated as Lot 24 and the southern half of Lot 25, Block O,
Saddle River Township (the “Property”). There were two
buildings on the Property. The Property consisted of several
residential units, which Anthony D’Agostino rented out and
managed. Plaintiffs resided with their three children in one of
the residential units.
In 2005, plaintiffs separated, and Anthony D’Agostino moved
from the Property, where his wife and children remained. Later
that year, according to Anthony D’Agostino, he lost his job and
suffered a series of financial setbacks. In May 2006, in an
effort to stabilize his finances, Anthony D’Agostino executed a
mortgage on the Property in the amount of $252,000, which he
used to stabilize his cash flow and to pay off two previous
4
mortgages, outstanding real estate taxes, overdue utility bills
and substantial credit card debt. According to Anthony
D’Agostino, by 2007, plaintiffs had accrued a new series of
debts, and the Property was cited by local authorities for
housing code violations.
Anticipating that his poor credit rating would make it
difficult to secure financing, Anthony D’Agostino persuaded
Denise D’Agostino to apply for a mortgage in her name alone.
Thereafter, according to Anthony D’Agostino’s testimony, they
executed a quitclaim deed adding her name as an owner of the
Property. Denise D’Agostino executed a new mortgage in the
amount of $325,000 which may have been used to pay off the
previous mortgage. That mortgage, according to trial testimony,
was recorded on March 27, 2007. Both plaintiffs secured
substantial amounts of cash as a result of that transaction. In
the first few months of the term of the mortgage, however,
Anthony D’Agostino diverted rental payments to pay his personal
expenses. The record does not reveal any mortgage payments made
by Denise D’Agostino in 2007.
The mortgagee filed a foreclosure complaint on October 20,
2007, and the court entered a default on November 27, 2007. The
amount due on the mortgage was $360,000. It is undisputed that
in January 2008, the estimated fair market value of the Property
was $480,000.
5
Defendant Ricardo Maldonado, a sales field manager for a
major retail chain, maintained a small part-time business
purchasing homes from financially distressed homeowners,
negotiating with mortgage lenders and other entities with
interests in the properties, and repairing the homes and selling
them to third parties. At the time of the transaction at issue,
defendant’s advertising was limited to a magnetic sign on his
car that listed his telephone number and stated, “I buy houses.”
Between 1997 and 2005, defendant conducted transactions
involving six homes, earning a substantial profit.
In January 2008, plaintiff Anthony D’Agostino contacted
defendant and, according to trial testimony, requested his
assistance. Plaintiff Anthony D’Agostino testified that the
parties verbally agreed on a relatively simple transaction:
plaintiffs would pay defendant $40,000, and defendant would
repair the property and use rental payments from tenants to
bring the mortgage on the Property current.
The documents prepared by defendant to memorialize their
agreement, however, proposed a transaction far more complex than
the proposed basic service agreement that had been discussed.
Defendant prepared five documents: a Letter of Agreement, an
Agreement and Declaration of Trust, a Warranty Deed to Trustee,
an Assignment of Beneficial Interest in Trust and an Option
Agreement. By the execution of these documents, a trust was
6
created, with defendant named the sole Trustee. For
consideration of ten dollars, plaintiffs conveyed their interest
in the Property to defendant in his capacity as Trustee.
Although plaintiffs were no longer the property owners, the
documents provided that defendant had the authority to collect
rents, make repairs, pay the mortgage and pay property taxes,
and that Denise D’Agostino would be personally liable to pay the
mortgage balance. Defendant’s documents gave plaintiffs a one-
year option to recover title to the Property by paying defendant
$400,000. According to the trial court’s findings, plaintiffs
signed the papers without reading them or consulting an
attorney.
Defendant anticipated substantial profit from rental
payments. He negotiated a new payment agreement with the lender
holding the mortgage. According to defendant’s testimony,
however, he soon found that the rental payments were
insufficient to cover the increased mortgage payments due under
the revised agreement, and he realized that he would have to
contribute his own funds to pay the mortgage. On March 28,
2008, defendant prepared a quitclaim deed which transferred full
interest in the Property to defendant. Plaintiffs then executed
the quitclaim deed. Although the quitclaim deed recited that
defendant paid $360,000 for this interest, he did not pay any
money to plaintiffs in consideration for the transfer.
7
Over the following months, defendant made several mortgage
payments, satisfied the outstanding property taxes and made
repairs on both residential buildings on the Property.
According to defendant, he spent $49,615 of his own money on
these services.
Plaintiff Anthony D’Agostino contacted defendant and
offered to pay $40,000 -- an amount that plaintiff later
admitted at trial that he did not have -- to regain title to the
Property. Defendant declined and advised plaintiffs that the
Property could only be repurchased for $400,000, as required by
the option agreement signed by the parties. Plaintiffs did not
pay the money demanded by defendant, and this litigation
followed.
II.
Plaintiffs filed this action on March 17, 2009.1 They
alleged a violation of the CFA, common law fraud, negligent
misrepresentation, civil conspiracy and breach of fiduciary
duty, and sought declaratory relief quieting title to the
Property and invalidating the transfer of title to defendant.
1
In addition to suing defendant, plaintiffs sued a notary public
who had notarized some of the documents involved in the parties’
transactions, asserting claims for alleged common law fraud,
aiding and abetting, civil conspiracy and breach of fiduciary
duty. On August 25, 2009, the trial court dismissed the aiding
and abetting claim against the notary public on the ground that
plaintiffs had failed to prosecute that claim, and later
dismissed all remaining claims asserted against the notary
public.
8
The trial court conducted an eleven-day bench trial in
April and May 2010. Both plaintiffs and defendant testified at
length, and the court heard the testimony of five non-party
witnesses. The court issued its written opinion on June 30,
2010. It noted that its task was complicated by plaintiffs’
lack of credibility as witnesses and held that plaintiffs failed
to meet their burden of proof with respect to their claims for
common law fraud, negligent misrepresentation and breach of
fiduciary duty claims, none of which are before this Court.
The trial court found, however, that plaintiffs had
sustained their burden in proving a violation of the CFA. It
determined that the parties’ transaction was effected by “one-
sided and misleading documents” that gave rise to an
“unconscionable commercial practice” for purposes of N.J.S.A.
56:8-2. Citing defendant’s prior real estate dealings with
financially distressed homeowners and his use of a sign to
advertise his services, the trial court found that his
transactions were within the scope of the CFA, whether or not
they were conducted with an intent to defraud.
The trial court then fashioned a remedy. It deemed the
conveyance of the Property from plaintiffs to defendant to be
void, restoring title to plaintiffs as if no transaction had
occurred. The court then assessed plaintiffs’ damages. It
first determined that plaintiffs lost $120,000 in equity in
9
their home because of defendant’s conduct. Next, the trial
court subtracted from that figure $44,653, representing the
value of improvements (after accounting for rents) made by
defendant at his own expense, arriving at a net amount of
$75,347.
The trial court next confirmed that plaintiffs were
entitled to treble damages and factored its equitable remedy
into its damages calculation. The court reasoned that by
granting the equitable relief of returning the Property to
plaintiffs, it had already provided the plaintiffs with a third
of the treble damages to which they were entitled. Accordingly,
after trebling the loss that it had calculated -- $75,347 -- the
court subtracted $75,347, the value of the equitable remedy, and
awarded plaintiffs $150,694 in damages. Pursuant to N.J.S.A.
56:8-19, the court also awarded $50,590 in counsel fees and
$1,912 in costs to plaintiffs. The trial court did not
expressly address defendant’s contention that plaintiffs’ claims
were barred by the doctrine of equitable estoppel.
Defendant appealed, arguing that the CFA does not govern
his transactions. Plaintiffs cross-appealed, contesting the
trial court’s dismissal of their common-law claims and its
calculation of damages. The Appellate Division acknowledged
that plaintiffs’ claims were not typical real estate-related CFA
claims. Nonetheless, it affirmed the trial court’s ruling that
10
defendant had sold plaintiffs a “service” included in N.J.S.A.
56:8-1(c)’s definition of “merchandise,” and therefore, had sold
“merchandise” within the meaning of N.J.S.A. 56:8-2. It further
held that defendant was not a casual participant in foreclosure-
rescue plans and accordingly concluded that his conduct was
governed by the CFA.
With respect to ascertainable loss and the calculation of
damages, however, the Appellate Division reversed the trial
court’s determination. It concluded that because the trial
court voided the deed that had conveyed the Property to
defendant, it effectively restored plaintiffs to their position
prior to defendant’s unconscionable practice, and that
plaintiffs therefore suffered no ascertainable loss. The
Appellate Division affirmed only the trial court’s award of
counsel fees, which it deemed to be reasonable and a proper
exercise of the trial court’s discretion. The Appellate
Division also rejected defendant’s invocation of the doctrine of
equitable estoppel.
We granted the parties’ cross-petitions for certification.
209 N.J. 232 (2012). We also granted the motions of Consumers
League of New Jersey (CLNJ), Legal Services of New Jersey (LSNJ)
and Seton Hall University School of Law Center for Social
Justice (SHCSJ), for leave to appear as amici curiae.
III.
11
Plaintiffs argue that the Appellate Division properly found
the transactions at issue in this case to be within the
parameters of the CFA because defendant conducted a “sale” of
services. They assert that, consequently, defendant’s activity
met the statutory definition of “merchandise” set forth in
N.J.S.A. 56:8-1(c). Plaintiffs assert that the trial court’s
and Appellate Division’s reliance on defendant’s past
foreclosure rescue transactions to determine whether he is a
“casual seller” exempt from the CFA is irrelevant. Rather,
plaintiffs argue that, by virtue of the parties’ transaction,
defendant is not entitled to such an exemption.
Plaintiffs dispute the findings and calculations of both
the trial court and the Appellate Division with respect to
ascertainable loss and treble damages. They contend that their
ascertainable loss was the value of their equity in the property
on the date of the parties’ original transaction -- $120,000.
Furthermore, they contend that the Appellate Division’s
conclusion that the voiding of the parties’ transaction
precluded a finding of ascertainable loss undermines the
objectives of the CFA. Citing defendant’s failure to seek a
set-off in a counterclaim, plaintiffs contest the trial court’s
setoff of $44,653. Instead, plaintiffs urge the Court to treble
the $120,000 equity value of their property, with no reduction
for defendant’s improvements to the Property, for a damages
12
award of $360,000. Finally, plaintiffs argue that the trial
court and Appellate Division properly rejected defendant’s
equitable estoppel argument.
Defendant contends that the parties’ transaction is outside
the parameters of the CFA. He contests the trial court’s and
Appellate Division’s conclusion that he provided “services”
within the meaning of N.J.S.A. 56:8-1(c) because the disputed
transaction was tailored to the plaintiffs’ individual needs,
not offered to the public. He contends that, consequently, he
need not demonstrate that he is a “casual seller” or that he is
entitled to any other exemption to the CFA.
Defendant also challenges the trial court’s remedy. He
argues that this case is nothing more than a breach of contract
case, and the equitable remedy, which he characterizes as
rescission and restitution, is inconsistent with an award of
damages. Defendant contends that plaintiffs received the relief
that they sought when they filed their lawsuit – characterized
as rescission of the contract -- and that they were restored to
their pre-transaction condition. He claims that rescission of
the contract and restitution satisfy the punitive and deterrent
goals of the CFA. Accordingly, defendant urges the Court to
affirm the Appellate Division’s decision regarding the remedy.
Defendant also asserts that plaintiffs should be equitably
estopped from asserting a CFA claim, given the trial court’s
13
observations about plaintiffs’ lack of credibility as trial
witnesses and their failure to assert a claim until after
defendant had performed his contractual obligations for a year
at his own expense.
Amici curiae CLNJ, LSNJ and SHCSJ substantially support the
arguments presented by plaintiffs and urge the Court to adopt a
flexible remedy for what they assert was a fraudulent and
unconscionable transaction. CLNJ contends that because the
trial court’s equitable remedy was a product of plaintiffs’
successful litigation, it does not obviate the need for treble
damages under the CFA. LSNJ agrees and argues that plaintiffs
are entitled to $360,000 in damages less a credit of $120,000
for the value of plaintiffs’ restored equity due to the court-
ordered voiding of the transaction. It contends that the Court
should deny a set-off reduction for defendant’s expenses because
defendant perpetrated a consumer fraud. LSNJ also refutes
defendant’s equitable estoppel argument. SHCSJ contends that
ascertainable loss should be calculated on the basis of the
plaintiffs’ equity at the time of the transaction. It further
argues that the treble damages award should be adjusted due to
the voiding of the transaction, with the adjustment calculated
on the basis of the equity existing on the date that the court
granted equitable relief, not on the date of the transaction
itself.
14
IV.
We review the trial court’s determinations, premised on the
testimony of witnesses and written evidence at a bench trial, in
accordance with a deferential standard.
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) (alteration in
original) (quoting In re Trust Created by
Agreement Dated Dec. 20, 1961, ex rel.
Johnson, 194 N.J. 276, 284 (2008)); accord
Rova Farms Resort, Inc. v. Investors Ins.
Co. of Am., 65 N.J. 474, 483-84 (1974).]
To the extent that the trial court’s decision constitutes a
legal determination, we review it de novo. Manalapan Realty,
L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (“A
trial court’s interpretation of the law and the legal
consequences that flow from established facts are not entitled
to any special deference.”).
As this Court observed with respect to the CFA in Bosland
v. Warnock Dodge, Inc., “[o]ur task in statutory interpretation
is to determine and effectuate the Legislature’s intent.” 197
N.J. 543, 553 (2009) (citing D’Annunzio v. Prudential Ins. Co.
15
of Am., 192 N.J. 110, 119 (2007); Daidone v. Buterick
Bulkheading, 191 N.J. 557, 565 (2007)). We review the
Legislature’s language in light of “related provisions so as to
give sense to the legislation as a whole.” DiProspero v. Penn,
183 N.J. 477, 492 (2005). We read the Legislature’s words “in
accordance with their ordinary meaning, unless the Legislature
has used technical terms, or terms of art, which are construed
‘in accordance with those meanings.’” Bosland, supra, 197 N.J.
at 553 (quoting In re Lead Paint Litig., 191 N.J. 405, 430
(2007)) (citing D’Annunzio, supra, 192 N.J. at 119-20).
We construe the CFA in light of its objective “to greatly
expand protections for New Jersey consumers.” Id. at 555;
accord Gonzalez v. Wilshire Credit Corp., 207 N.J. 557, 576
(2011); Gennari v. Weichert Co. Realtors, 148 N.J. 582, 604
(1997). As this Court has noted, the CFA’s original purpose was
to “combat ‘sharp practices and dealings’ that victimized
consumers by luring them into purchases through fraudulent or
deceptive means.” Cox v. Sears Roebuck & Co., 138 N.J. 2, 16
(1994) (quoting D’Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J.
Super. 11, 23 (App. Div. 1985)).
In a 1971 amendment to the CFA, the Legislature
supplemented the statute’s original remedies available to the
Attorney General with a private cause of action. L. 1971, c.
247 (Governor’s Press Release). The CFA’s private cause of
16
action is an “efficient mechanism to: (1) compensate the victim
for his or her actual loss; (2) punish the wrongdoer through the
award of treble damages; and (3) attract competent counsel to
counteract the ‘community scourge’ of fraud by providing an
incentive for an attorney to take a case involving a minor loss
to the individual.” Weinberg v. Sprint Corp., 173 N.J. 233, 249
(2002) (quoting Lettenmaier v. Lube Connection, Inc., 162 N.J.
134, 139 (1999)).
The CFA requires a plaintiff to prove three elements: “1)
unlawful conduct by defendant; 2) an ascertainable loss by
plaintiff; and 3) a causal relationship between the unlawful
conduct and the ascertainable loss.” Bosland, supra, 197 N.J.
at 557; accord Int’l Union of Operating Eng’rs Local No. 68
Welfare Fund v. Merck & Co., Inc., 192 N.J. 372, 389 (2007).
Each of these elements is rooted in the statutory text.
N.J.S.A. 56:8-2 describes the conduct that gives rise to an
unlawful practice under the CFA:
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
17
or damaged thereby, is declared to be an
unlawful practice[.]
The CFA “specifies the conduct that will amount to an unlawful
practice in the disjunctive . . . [and p]roof of any one of
those acts or omissions . . . will be sufficient to establish
unlawful conduct under the Act.” Cox, supra, 138 N.J. at 19;
see also Allen v. V & A Bros., Inc., 208 N.J. 114, 131 (2011).
There is no precise formulation for an “unconscionable” act that
satisfies the statutory standard for an unlawful practice. The
statute establishes “a broad business ethic” applied “to balance
the interests of the consumer public and those of the sellers.”
Kugler v. Romain, 58 N.J. 522, 543-44 (1971).
The ascertainable loss and causation elements of a CFA
claim are set forth in N.J.S.A. 56:8-19, which authorizes a
statutory remedy for “[a]ny 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.” “[T]he plain
language of the Act unmistakably makes a claim of ascertainable
loss a prerequisite for a private cause of action.” Weinberg,
supra, 173 N.J. at 251; accord Furst v. Einstein Moomjy, Inc.,
182 N.J. 1, 12 (2004); Meshinsky v. Nichols Yacht Sales, Inc.,
110 N.J. 464, 473 (1988). An ascertainable loss under the CFA
is one that is “quantifiable or measurable,” not “hypothetical
18
or illusory.” Thiedemann v. Mercedes-Benz USA, L.L.C., 183 N.J.
234, 248 (2005).
When a plaintiff has proven the defendant’s unlawful
conduct, demonstrated an ascertainable loss and established a
causal relationship between the conduct and the ascertainable
loss, N.J.S.A. 56:8-19 requires an award of treble damages and
provides for other remedies:
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. In all actions under this
section, including those brought by the
Attorney General, the court shall also award
reasonable attorneys’ fees, filing fees and
reasonable costs of suit.
The treble damages remedy is “mandatory under N.J.S.A. 56:8-19
if a consumer-fraud plaintiff proves both an unlawful practice
under the Act and an ascertainable loss.” Cox, supra, 138 N.J.
at 24. The treble damages and injunctive remedies described in
N.J.S.A. 56:8-19 are not mutually exclusive; injunctive relief
can be combined with an award of treble damages in an
appropriate case. See Weinberg, supra, 173 N.J. at 253 (noting
CFA “allows a private cause of action to proceed for all
available remedies, including an injunction, whenever” plaintiff
asserts a bona fide CFA claim); Laufer v. U.S. Life Ins. Co.,
385 N.J. Super. 172, 185 (App. Div. 2006) (concluding “by the
express terms of [N.J.S.A. 56:8-19], a private plaintiff who
19
establishes a violation of the Consumer Fraud Act may obtain not
only monetary relief, including treble damages and attorneys’
fees, but also ‘equitable relief’”).
Guided by the language of N.J.S.A. 56:8-2, a trial court
adjudicating a CFA claim conducts a case-specific analysis of a
defendant’s conduct and the harm alleged to have resulted from
that conduct. See Meshinsky, supra, 110 N.J. at 472 (noting
that courts considering alleged CFA violations should “‘pour
content’ into the concept” of unconscionable commercial
practices under the CFA “on a case-by-case basis” (quoting
Kugler, supra, 58 N.J. at 543)); Papergraphics Int’l, Inc. v.
Correa, 389 N.J. Super. 8, 13 (App. Div. 2006) (noting that “CFA
applicability hinges on the nature of a transaction, requiring a
case by case analysis”); accord Assocs. Home Equity Servs., Inc.
v. Troup, 343 N.J. Super. 254, 278 (App. Div. 2001).
In that setting, we consider the two CFA issues raised in
this case: the applicability of the CFA to the disputed
transaction and the propriety of the trial court’s remedy.
V.
We first review the determination of the trial court and
Appellate Division that defendant committed an “unconscionable
commercial practice . . . in connection with the sale or
advertisement of any merchandise” within the meaning of N.J.S.A.
56:8-2. Our statutory interpretation is informed by the
20
“deterrent and protective purposes” of the CFA. Lettenmaier,
supra, 162 N.J. at 139. The CFA’s drafters “expected the Act to
be flexible and adaptable enough to combat newly packaged forms
of fraud and to be equal to the latest machinations exploiting
the vulnerable and unsophisticated consumer.” Gonzalez, supra,207 N.J. at 582-83.
The CFA’s plain language guides us in applying it to this
case. The statute defines “sale” to 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(e). The term “advertisement” is also broadly
defined to mean “the attempt . . . to induce directly or
indirectly any person to enter or not enter into any obligation
or acquire any title or interest in any merchandise or to
increase the consumption thereof or to make any loan.” N.J.S.A.
56:8-1(a).
The Legislature included “services” within the definition
of “merchandise,” a term that encompasses “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).
Although that definition is interpreted “broadly to protect
consumers from a wide variety of abhorrent deceptive practices,”
it has meaningful limits. Lee v. First Union Nat’l Bank, 199
N.J. 251, 258, 261 (2009) (holding that sale of securities is
21
not within statutory definition of “merchandise”); cf. Lemelledo
v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 265 (1997)
(concluding CFA term “merchandise” to be “more than sufficiently
broad to include” sale and provision of consumer credit);
Quigley v. Esquire Deposition Serv., LLC, 400 N.J. Super. 494,
505 (App. Div. 2008) (finding “provision of shorthand reporting
services and sale of transcripts of depositions” subject to CFA
under expansive definition of “merchandise”). Whether a
“service” meets the definition of “merchandise” thus turns on
the purpose and nature of that “service.”
The complex transaction crafted by defendant here --
combining the conveyance of title to the Property, an agreement
for real estate related services, a trust with the authority to
manage the property and a buy-back option -- is not exempt from
the CFA by virtue of its unique combination of terms. To the
contrary, we affirm the trial court’s finding that defendant’s
foreclosure rescue plan is governed by N.J.S.A. 56:8-2, as
adequately supported by the evidence. Defendant’s actions with
respect to plaintiffs and the Property clearly qualify as
“commercial practice[s]” for purposes of N.J.S.A. 56:8-2.
Because defendant offered “services” for a fee to the public by
advertising “I buy houses” on his vehicle and prompting
plaintiff Anthony D’Agostino’s inquiry about a foreclosure
rescue, the trial court properly found that his actions fell
22
within the broad statutory definition of a “sale” of
“merchandise.” N.J.S.A. 56:8-1(c), (e).2
In short, the trial court and Appellate Division properly
concluded that the transaction constitutes a “commercial
practice . . . in connection with the sale or advertisement of
any merchandise.” N.J.S.A. 56:8-2; see, e.g., Lemelledo, supra,150 N.J. at 265 (noting CFA “is ample enough to encompass the
sale of insurance policies as goods and services that are
marketed to consumers”); Quigley, supra, 400 N.J. Super. at 505(finding “provision of shorthand reporting services and sale of
transcripts of depositions” subject to CFA under its “expansive
definition of ‘merchandise’”); Assocs. Home Equity Servs.,
supra, 343 N.J. Super. at 278 (concluding “loans are included
in” definitions of “advertisement” and “merchandise” under the
CFA).3
2
The Foreclosure Rescue Fraud Prevention Act (the Foreclosure
Act), N.J.S.A. 46:10B-53 to -68, became effective June 17, 2012,
and does not govern this case. The Foreclosure Act requires,
among other provisions, that the obligations and promises of a
foreclosure consultant be reduced to writing and that the
written agreement contain the “consultant’s services to be
performed.” N.J.S.A. 46:10B-56(a). The rights and remedies
created by the Foreclosure Act “are not exclusive, but
cumulative, and all other remedies or rights provided by State
or federal law . . . are specifically preserved. Nothing in
th[e] act shall be construed to limit the application of the
consumer fraud act[.]” N.J.S.A. 46:10B-67(e).
3
In 1975, the Legislature added the words “real estate” to
N.J.S.A. 56:8-2, thus extending the statute’s reach to consumer
fraud committed “in connection with the sale or advertisement of
any merchandise or real estate.” L. 1975, c. 294, § 2. The
23
The trial court also found that the “commercial practice”
at issue was “unconscionable” under N.J.S.A. 56:8-2. An
unconscionable practice under the CFA “necessarily entails a
lack of good faith, fair dealing, and honesty.” Van Holt v.
Liberty Mut. Fire Ins. Co., 163 F.3d 161, 168 (3d Cir. 1998);
accord Cox, supra, 138 N.J. at 18. Our courts have been careful
to constrain the CFA to “fraudulent, deceptive or other similar
kind of selling or advertising practices.” Daaleman v.
Elizabethtown Gas Co., 77 N.J. 267, 271 (1978); accord Strawn v.
Canuso, 271 N.J. Super. 88, 108 (App. Div. 1994), aff’d, 140
N.J. 43, 49 (1995); see also Real v. Radir Wheels, Inc., 198
N.J. 511, 524, 527 (2009) (concluding defendant “intentionally
CFA, however, does not govern all real estate transactions.
“[O]ur courts have adopted a limited construction of the Act’s
applicability to real estate transactions.” 539 Absecon Blvd.,
L.L.C. v. Shan Enters. Ltd. P’ship, 406 N.J. Super. 242, 274
(App. Div. 2009). Despite limited application of the CFA in the
real estate setting, a fraudulent foreclosure rescue plan may,
in some circumstances, be governed by the Act. Johnson v.
Novastar Mortg., Inc., 698 F. Supp. 2d 463, 464-65 (D.N.J. 2010)
(finding cognizable CFA claim where plaintiff alleged two “sale-
leaseback transactions in truth created two equitable mortgages”
under alleged foreclosure rescue plan); O’Brien v. Cleveland (In
re O’Brien), 423 B.R. 477, 483 (Bankr. D.N.J. 2010) (financing
scheme involving homeowner’s conveyance of home to defendant,
with buy-back option, constituted unconscionable commercial
practice under CFA), aff’d, No. 10-3169 (D.N.J. Nov. 12, 2010)
(slip op. at 1). Given our conclusion that the unlawful conduct
at issue here falls within the meaning of “merchandise” in
N.J.S.A. 56:8-2, we do not reach the issues of whether the
transaction at issue is a sale of “real estate” within the
meaning of N.J.S.A. 56:8-2 or whether defendant is exempt from
the CFA as a non-professional seller of real estate.
24
had engaged in unconscionable commercial practices in connection
with the advertisement and sale of merchandise” by falsely
representing condition of car); Assocs. Home Equity Servs.,
supra, 343 N.J. Super. at 279-80 (concluding reasonable jury
could find plaintiff and third-party defendants engaged in
unconscionable business practice by imposing unfavorable credit
terms on loan). In contrast, “a simple breach of warranty or
breach of contract is not per se unconscionable.” Gennari v.
Weichert Co. Realtors, 288 N.J. Super. 504, 533 (App. Div.
1996), aff’d as modified, 148 N.J. 582, 590 (1997).
Here, the trial court, reviewing the extensive record of
the bench trial, concluded that the transaction designed by
defendant was an “unconscionable” commercial practice. The
trial court noted that defendant admitted that the documents
recording the transaction only memorialized the obligations of
plaintiffs and did not comport with the parties’ understanding
of their agreement. That transaction resulted in plaintiffs’
transfer of title to the Property valued at $480,000 to
defendant, for ten dollars.
Accordingly, the trial court’s ruling that defendant
committed an unconscionable commercial practice within the
meaning of N.J.S.A. 56:8-2 was adequately supported by
competent, relevant and reasonably credible evidence. We affirm
25
the Appellate Division’s determination with respect to that
issue.
VI.
This appeal also requires the Court to consider a second
issue: whether there was an ascertainable loss and, if so, the
remedy to be imposed, when a CFA plaintiff proves that a
defendant’s violation of N.J.S.A. 56:8-2 resulted in the
plaintiff’s loss of equity in a residential property. The
Appellate Division held that because the trial court voided the
parties’ transaction and restored plaintiffs’ title to the
Property, plaintiffs sustained no ascertainable loss, and
therefore were not entitled to relief under the CFA. We reverse
that determination and reinstate the trial court’s remedy.
The CFA “requires a private party to have a claim that he
or she has suffered an ascertainable loss of money or property
in order to bring a cause of action under the Act.” Weinberg,
supra, 173 N.J. at 250. Notwithstanding the importance of
ascertainable loss, we find sparse guidance in the statutory
text. Thiedemann, supra, 183 N.J. at 248 (citing Furst, supra,
182 N.J. at 11) (“There is little that illuminates the precise
meaning that the Legislature intended in respect of the term
‘ascertainable loss’ in [the CFA].”). In Thiedemann, this Court
described an ascertainable loss as one “that is not hypothetical
or illusory[, and] must be presented with some certainty
26
demonstrating that it is capable of calculation[.]” Ibid. Our
cases distinguish between a plaintiff who can demonstrate no
loss -- be it an out-of-pocket loss or the loss of the value of
his or her interest in property -- and a plaintiff who can
demonstrate that he or she has been deprived of the “benefit of
the bargain” because of a CFA violation. As the Court explained
in Bosland:
We have held that a consumer who had repairs
to a vehicle performed under warranty at no
cost did not sustain [an ascertainable]
loss. [Thiedemann, supra, 183 N.J.] at 251-
52. Nor does it exist for a customer who
considered, but never purchased, a product
and thus suffered no damages because of a
fraudulent loan application submitted by the
merchant in anticipation of a sale.
Meshinsky, supra, 110 N.J. at 475 n.4. On
the other hand, we have described our
understanding of the ascertainable loss
requirement generally in terms that make it
equivalent to any lost “benefit of [the]
bargain.” Furst, supra, 182 N.J. at 12-13 .
. . .
[Bosland, supra, 197 N.J. at 558 (alteration
in original).]
In Furst, supra, 182 N.J. at 13-14, the Court underscored
the nexus between ascertainable loss and the plaintiff’s
expected benefit of the bargain. There, a carpet bought by the
plaintiff from the defendant at a discounted sale price was
delivered in a defective condition. Id. at 6-8. The Court
determined that the plaintiff’s “ascertainable loss” in his CFA
action was “the carpet’s replacement value.” Id. at 7. The
27
plaintiff had paid the sale price of $1,199, but the carpet’s
regular price was marked at $5,775 -- what the Court deemed to
be the “replacement cost.” Id. at 7-8, 13. It consulted “well-
established remedies available in a typical breach-of-contract
case.” Id. at 11. The Court noted that an “innocent party has
a right to damages ‘based on his expectation interest as
measured by . . . the loss in the value to him’ caused by the
breaching party[.]” Id. at 13 (quoting Restatement (Second) of
Contracts § 347(a) (1981)). Thus, “a consumer who suffers an
ascertainable loss is entitled to the benefit of [his] bargain.”
Id. at 14. In Furst, that benefit of the bargain was the non-
discounted replacement value of the carpet, which the Court
trebled pursuant to the CFA. Ibid.
As the Court noted in Thiedemann, “[i]n cases involving
breach of contract or misrepresentation, either out-of-pocket
loss or a demonstration of loss in value will suffice to meet
the ascertainable loss hurdle and will set the stage for
establishing the measure of damages.” Thiedemann, supra, 183
N.J. at 248. “Among the equitable and legal remedies available
against violators of the [CFA] are treble damages, reasonable
attorneys[’] fees, and costs of suit”; the purpose of these “is
not only to make whole the victim’s loss, but also to punish the
wrongdoer and to deter others[.]” Furst, supra, 182 N.J. at 12.
“[A]n award of treble damages and attorneys’ fees is mandatory
28
under N.J.S.A. 56:8-19 if a consumer-fraud plaintiff proves both
an unlawful practice under the Act and an ascertainable loss.”
Cox, supra, 138 N.J. at 24.
Our dissenting colleagues maintain that the trial court, in
fashioning its remedy, and the majority in its appellate review
of that remedy, confuse the distinct concepts of “ascertainable
loss” and “damages sustained” as used in N.J.S.A. 56:8-19,
“permitt[ing] one to bleed into the other.” Post at ___ (slip
op. at 3). The dissent contends that the ascertainable loss
sustained by the plaintiff is irrelevant to the calculation of
damages under the CFA.
With due respect to our dissenting colleagues, neither the
trial court’s determination nor our opinion is premised on any
misunderstanding of these terms. As N.J.S.A. 56:8-19 makes
clear, ascertainable loss plays a distinct role in a CFA claim
constituting an element of the statutory cause of action. See
Bosland, supra, 197 N.J. at 557; Weinberg, supra, 173 N.J. at
251. Without a “bona fide claim of ascertainable loss that
raises a genuine issue of fact,” a CFA claim fails. Weinberg,
supra, 173 N.J. at 253. There is no calculation of “damages
sustained” unless the ascertainable loss requirement is first
satisfied. See Thiedemann, supra, 183 N.J. at 247 (citing
Weinberg, supra, 173 N.J. at 251, 253). The two concepts indeed
have separate functions in the analysis.
29
“Ascertainable loss” and “damages sustained” are not, as
the dissent suggests, unrelated to one another. When an
unconscionable commercial practice has caused the plaintiff to
lose money or other property, that loss can satisfy both the
“ascertainable loss” element of the CFA claim and constitute
“damages sustained” for purposes of the remedy imposed under the
CFA. The circumstances addressed by the Court in Furst provide
an illustration. There, the replacement cost of the defective
carpet, which the plaintiff was forced to incur because of the
unconscionable commercial practice, constituted an ascertainable
loss, thus satisfying the statutory element for a CFA claim.
Id. at 11, 13-14. That same replacement cost constituted the
measure of “damages sustained,” as that term is used in N.J.S.A.
56:8-19, and was trebled under the CFA to calculate the
plaintiff’s remedy. Id. at 14; see also Lettenmaier, supra, 162
N.J. at 140 (explaining that “[t]he damages are the
‘ascertainable loss’ (referred to in sentence one [of N.J.S.A.
56:8-19]), which is to be trebled”); Cole v. Laughrey Funeral
Home, 376 N.J. Super. 135, 144-45 (App. Div. 2005) (citations
omitted) (quotations omitted) (noting that “treble damages under
the CFA are limited only to ascertainable loss of moneys or
property”).
In short, the statute and our case law envision that a
plaintiff’s loss of money or property may constitute the
30
requisite “ascertainable loss” -- entitling the plaintiff to
collect damages -- and the “damages sustained” for purposes of
N.J.S.A. 56:8-19, which are to be trebled. In a given case, the
same quantifiable loss of money or other property, suffered by
the plaintiff as a result of the defendant’s CFA violation, may
serve both purposes in the analysis, consistent with the
statute’s remedial intent and the requirement of proving damages
with certainty. The dissent’s concern that our holding in this
regard derives from a misinterpretation of N.J.S.A. 56:8-19 is
therefore unfounded.
VII.
Applied here, the statutory language and principles
articulated in our case law support the trial court’s
determination. Plaintiffs sustained an “ascertainable loss” as
a result of defendant’s unconscionable commercial practice --
the transaction that deprived them of title to their residence.
That ascertainable loss was determined by the trial court to be
plaintiffs’ lost equity less a set-off representing the value of
defendant’s improvements to the Property.
That same lost equity was used by the trial court when it
combined two of the non-exclusive remedies authorized by the
Legislature -- treble damages and equitable remedies. It
declared the transaction void, thus restoring plaintiffs’ equity
31
interest in the Property.4 It then calculated damages, factoring
in the value of the restored interest by subtracting it from the
trebled amount of plaintiff’s loss.
Reversing the trial court, the Appellate Division held that
the court’s equitable remedy precluded a finding of
ascertainable loss and spared defendant any liability under the
CFA. We do not concur with that conclusion. A court
adjudicating a CFA claim determines whether the plaintiff has
suffered an ascertainable loss, focusing on the plaintiff’s
economic position resulting from the defendant’s consumer fraud
-- not his or her circumstances after a judicial remedy has been
imposed. In some circumstances, if the defendant or a non-party
takes action to ensure that the plaintiff sustains no out-of-
pocket loss or loss of value prior to litigation, then
4
The trial court ordered that “[t]he conveyance from plaintiffs
to defendant of title to the [Property] is hereby void. Title
to the [P]roperty remains with plaintiffs.” Although defendant
characterizes this remedy as “rescission,” that description is
imprecise. A void contract is “[a] contract that is of no legal
effect, so that there is really no contract in existence at all.
A contract may be void because it is technically defective,
contrary to public policy, or illegal.” Black’s Law Dictionary
374 (9th ed. 2009). A party’s election to void a contract is
sometimes termed as rescission: either “[a] party’s unilateral
unmaking of a contract for a legally sufficient reason,” or
“[a]n agreement by contracting parties to discharge all
remaining duties of performance and terminate the contract.”
Id. at 1420-21; see also Rutgers Cas. Ins. Co. v. LaCroix, 194
N.J. 515, 528 (2008) (explaining rescission remedy for insurance
contract misrepresentation). Neither of these two events
occurred here. The remedy in this case is more accurately
termed a declaration that the transaction was void and a
restoration of plaintiffs’ title.
32
plaintiff’s CFA claim may fail. See Thiedemann, supra, 183 N.J.
at 251-52 (finding no ascertainable loss when defendant repaired
defect in accordance with terms of warranty); Meshinsky, supra,110 N.J. at 468, 475 (finding no ascertainable loss because
defendant repaid bank loan); cf. Real, supra, 198 N.J. at 517-
18, 527 (agreeing plaintiff’s ascertainable loss was difference
between price paid for car and actual value of car delivered);
Furst, supra, 182 N.J. at 8-10 (recognizing ascertainable loss
as replacement value of defective carpet purchased by
plaintiff); Cox, supra, 138 N.J. at 22 (finding plaintiff’s
ascertainable loss was caused by “Sears’ failure to comply with
the Home Improvement Practices regulations” resulting in unsafe
kitchen).
A judicial remedy imposed at the conclusion of litigation,
however, does not preclude a finding of ascertainable loss. In
this case, when plaintiffs filed their complaint and later
submitted their proofs at trial, they had not recovered their
lost equity in the Property. In determining the existence of an
ascertainable loss, the trial court properly considered the
plaintiffs’ position when they came before the Court, not the
position to which they would subsequently be restored because of
the court’s fashioning of an equitable remedy. Indeed, it was
only after finding an ascertainable loss that the trial court
determined that plaintiffs were entitled to any remedy under
33
N.J.S.A. 56:8-19. It would contravene the goals of the CFA if a
plaintiff, who proves an unlawful practice and ascertainable
loss and is awarded equitable relief premised upon that loss, is
rendered ineligible for the mandated award of treble damages by
virtue of that equitable remedy. See Weinberg, supra, 173 N.J.
at 252-53; Cox, supra, 138 N.J. at 22-24.
Thus, the Appellate Division’s holding contravenes the
language of the CFA’s remedial provision, which provides for
treble damages “in addition to any other appropriate legal or
equitable relief.” N.J.S.A. 56:8-19. The rule advanced by the
Appellate Division would preclude a trial court from imposing
equitable relief as part of a broader statutory remedy, as the
CFA contemplates. See ibid. Such a rule would also undermine
the CFA’s legislative purpose of punishing wrongdoers and
providing an incentive for attorneys to assert CFA claims. See
Gonzalez, supra, 207 N.J. at 585; Thiedemann, supra, 183 N.J. at
246; Weinberg, supra, 173 N.J. at 248-49.
In its determination of this issue, the Appellate Division
primarily relied upon Romano v. Galaxy Toyota, 399 N.J. Super.
470 (App. Div.), certif. denied, 196 N.J. 344 (2008). In
Romano, the defendant sold the plaintiff a used car with its
odometer “rolled back” to record mileage substantially below the
actual mileage of the vehicle. Id. at 474-75. Two years after
she bought the car, the plaintiff discovered that the odometer
34
reading was falsified and confronted the defendant, who refused
to refund the purchase price. Ibid. The plaintiff asserted a
claim under the Uniform Commercial Code (UCC), N.J.S.A. 12A:2-
608(1), for “the purchase price of the vehicle less a credit for
plaintiffs’ reasonable use.” Id. at 475, 484. In addition, the
plaintiff asserted a related CFA claim. Id. at 475.
Although the parties in Romano stipulated to a CFA
violation and the jury found an ascertainable loss, the trial
court set aside the jury verdict on the CFA claim. Id. at 475-
76. The trial court found no ascertainable loss and denied the
plaintiff’s claim for treble damages under the CFA in light of
the Romano plaintiff’s failure to present evidence that the
“roll-back” of the odometer had caused plaintiff to incur any
loss of money or value. The Romano plaintiff, however, elected
to seek the remedy of rescission under the UCC, and the trial
court granted that remedy on the basis of jury findings relevant
to that claim, ordering the plaintiff to return the car in
exchange for the purchase price, less the value of the
plaintiff’s use of the vehicle. Ibid. Although the Appellate
Division affirmed the trial court’s determination, it denied the
Romano plaintiff’s claim for ascertainable loss on a different
basis than that relied upon by the trial court. Id. at 483-85.
The panel held that the trial court’s UCC remedy “restores
plaintiff to the economic position she had prior to the
35
purchase, so that she experiences neither loss nor gain as a
result of the transaction.” Id. at 484. It reasoned that
“[o]nce plaintiff [was] restored to her original position, she
suffers no loss” and therefore the “plaintiff failed to provide
proof of an ascertainable loss.” Ibid. Because this case does
not involve a plaintiff’s election among alternative forms of
relief available under different remedial statutes, we need not
determine whether the Appellate Division’s denial of the
plaintiff’s ascertainable loss claim in Romano was consonant
with the terms and objectives of N.J.S.A. 56:8-19. In this
case, only one remedial statute -- the CFA -- is at issue, and
the Appellate Division’s reliance on Romano here is misplaced.
Our dissenting colleagues opine that plaintiffs could prove
no damages because the trial court’s equitable remedy rescinded
the transaction and returned ownership of the Property to
plaintiffs, and that the trial court created “entirely fictional
damages” in order to award treble damages. Post at ___ (slip
op. at 13-14). To the dissent, the only damages that plaintiffs
may have sustained in this case would be incidental damages,
such as damages incurred to find alternative housing after they
lost title to their residence. Id. at 14.
The dissent’s proposed constraints on a trial court’s
authority to impose a remedy for a CFA violation would
contravene the letter and the purpose of the statute. N.J.S.A.
36
56:8-19 expressly authorizes equitable relief “in addition to”
an award of “threefold the damages.” If imposition of an
equitable remedy precluded a CFA plaintiff from an award of
treble damages, the Court would effectively rewrite the
statutory language to authorize either equitable relief or
treble damages, but not both. The Legislature did not provide
that if an equitable remedy is a component of the relief granted
to the plaintiff, damages must be assessed on the basis of the
plaintiff’s position after that remedy is imposed. There is
nothing in the CFA or our case law that supports such a
construction of the statutory language. Moreover, such a rule
would contravene the punitive and deterrent objectives of the
CFA. See Furst, supra, 182 N.J. at 12; Lettenmaier, supra, 162
N.J. at 139. If a defendant who unlawfully obtains title to
real property by virtue of a CFA violation risks nothing more
than the voiding of the transaction and the trebling of
incidental damages, the statute’s punitive and deterrent value
would be negligible.
In short, the existence of ascertainable loss resulting
from a defendant’s CFA violation should be determined on the
basis of the plaintiffs’ position following the defendant’s
unlawful commercial practice, not after a judicial remedy has
been imposed restoring plaintiffs’ property pursuant to the CFA.
37
Accordingly, we reverse the Appellate Division’s determination
that plaintiffs failed to demonstrate ascertainable loss.
We next consider the trial court’s calculation of treble
damages under the CFA. When it assessed damages, the trial
court was called upon to incorporate three relevant factors:
N.J.S.A. 56:8-19’s mandate that “damages sustained” by
plaintiffs be trebled; the impact of the court’s equitable
remedy on the parties’ positions; and the improvements to the
Property that enhanced its value at defendant’s expense. The
trial court elected to reconcile these factors by subtracting
the value of defendant’s contribution, deducting a $44,653 set-
off from the $120,000 equity loss incurred by plaintiffs due to
the parties’ transaction. The result of that calculation,
$75,347, was held by the trial court to represent plaintiffs’
ascertainable loss. The trial court, in accordance with the
CFA, found plaintiffs were entitled to treble damages. It
subtracted $75,347 from those damages to account for the value
of the equity in the Property returned to plaintiffs.
Plaintiffs and amici oppose the trial court’s calculation
on various grounds. They urge the Court to bar any set-off that
has not been sought by a defendant in a counterclaim, to rule
that no contribution by defendant after his CFA violation should
affect the calculation of damages and to apply a set-off to the
defendant’s benefit, if at all, only after damages have been
38
trebled. Plaintiffs and amici offer a range of alternative
calculations of damages in this case.
We decline to adopt an inflexible rule that would bar the
calculation of treble damages in the manner conducted by the
trial court. The CFA contemplates that courts will fashion
individualized relief appropriate to the specific case,
combining legal and equitable remedies in some settings.
N.J.S.A. 56:8-19; see also Laufer, supra, 385 N.J. Super. at 185
(citing N.J.S.A. 56:8-19 and finding consumer-fraud plaintiff
who establishes CFA violation “may obtain not only monetary
relief, including treble damages and attorneys’ fees, but also
‘equitable relief’”). Here, the trial court, fully familiar
with the facts and equities of this case following a bench
trial, concluded that defendant substantially contributed to the
value of the equity in the Property that the court restored to
plaintiffs. In the exercise of the broad equitable authority
granted to the trial court, it calculated a set-off reflecting
that contribution before conducting the statutory trebling of
damages. See Cuesta v. Classic Wheels, Inc., 358 N.J. Super.
512, 522 (App. Div. 2003) (noting that “general equitable
principles apply to permit . . . an offset” of damages to a
plaintiff who continued to use a car “after he revoked
acceptance” of his leased car).
39
The issue before the Court is not whether another judge
acting as the factfinder could have used a different methodology
to calculate damages under the broad guidelines of the law.
Instead, the question is whether the trial court’s findings in
this case are sufficiently grounded in the “competent, relevant
and reasonably credible evidence” so as to survive appellate
review. See Seidman, supra, 205 N.J. at 169. We answer that
question in the affirmative and reverse the Appellate Division’s
determination on the issue of ascertainable loss and damages.5
VIII.
We affirm the Appellate Division’s holding that plaintiffs’
claims are not barred by the doctrine of equitable estoppel.
Equitable estoppel applies when “‘conduct, either express or
implied, which reasonably misleads another to his prejudice so
that a repudiation of such conduct would be unjust in the eyes
of the law.’” McDade v. Siazon, 208 N.J. 463, 480 (2011)
(quoting Dambro v. Union Cnty. Park Comm’n, 130 N.J. Super. 450,
457 (Law Div. 1974)). Its elements 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,
5
The trial court’s award of attorneys’ fees and court costs to
plaintiffs, pursuant to the CFA, N.J.S.A. 56:8-19, unchallenged
in this appeal, remains in effect.
40
109 N.J. 309, 317 (1987). Equitable estoppel is based on the
principles of fairness and justice. Knorr v. Smeal, 178 N.J.
169, 180 (2003).
Defendant argues that because the trial court found him to
be a more trustworthy and helpful witness than plaintiffs at
trial and because plaintiffs did not immediately file suit after
the transaction at issue, plaintiffs should be equitably
estopped from obtaining relief. He relies in this regard upon
the Appellate Division’s decision in Joe D’Egidio Landscaping,
Inc. v. Apicella, 337 N.J. Super. 252 (App. Div. 2001). There,
the Appellate Division applied equitable estoppel to bar the
plaintiff’s claim, ruling that the defendant, who asserted a CFA
claim, had induced the plaintiff’s contractor to commit a CFA
violation by convincing the plaintiff not to sign a written
contract. Id. at 255-57. Although the court noted that the
defendant in Joe D’Egidio Landscaping lied under oath, that
observation was not the primary reason for the imposition of
equitable estoppel. Id. at 257-59.
Here, nothing in the parties’ transaction or communications
that led to this litigation suggests defendant’s reliance on any
representation by plaintiffs. The trial court’s views regarding
defendant’s credibility, plaintiffs’ shortcomings as witnesses,
and plaintiffs’ delay in filing suit, are irrelevant to an
41
equitable estoppel defense. The Appellate Division properly
rejected this claim.
VIII.
We affirm in part and reverse in part the judgment of the
Appellate Division, and reinstate the trial court’s judgment.
CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA and ALBIN; and
JUDGE RODRIGUEZ (temporarily assigned) join in JUSTICE
PATTERSON’s opinion. JUSTICE HOENS filed a separate opinion
concurring in part and dissenting in part in which JUDGE CUFF
(temporarily assigned) joins.
42
SUPREME COURT OF NEW JERSEY
A-82/83 September Term 2011
068940
ANTHONY D’AGOSTINO and DENISE
D’AGOSTINO,
Plaintiffs-Appellants
and Cross-Respondents,
v.
RICARDO MALDONADO,
Defendant-Respondent
and Cross-Appellant.
JUSTICE HOENS, concurring in part and dissenting in part.
I concur in the conclusions expressed by my colleagues in
their majority opinion, and in the reasoning that supports those
conclusions, in all respects except for the majority’s analysis
and resolution of the dispute about the appropriate remedy.
More particularly, I agree that the Consumer Fraud Act
(CFA), N.J.S.A. 56:8-1 to -20, applies to this transaction, ante
at ___ (slip op. at 20-23). That is to say, I agree that the
complicated transaction that defendant created and utilized in
his dealings with plaintiffs constituted a “commercial practice
. . . in connection with the sale or advertisement of any
merchandise[,]” N.J.S.A. 56:8-2; see ante at ___ (slip op. at
22-23), as the Legislature intended that phrase to be construed
and as we have interpreted it, see Lemelledo v. Beneficial Mgmt.
1
Corp., 150 N.J. 255, 265 (1997) (concluding that CFA terms are
broad enough to include sale of credit and insurance); accord
Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 271 (1978).
I agree, therefore, with the majority’s conclusion that the
transaction, in spite of its “unique combination of terms[,]”
ante at ___ (slip op. at 22), did not escape the broad remedial
reach of the CFA because it was, at its core, an offer to sell
foreclosure rescue services that fell within the definitions of
both “sale” and “merchandise[,]” ante at ___ (slip op. at 22-23)
(citing N.J.S.A. 56:8-1(c), (e)).
Moreover, I agree that the transaction was an
unconscionable commercial practice for the reasons expressed by
the majority, see ante at ___ (slip op. at 24-26), which are
fully in accord with the statutory language and our case law,
see, e.g., Real v. Radir Wheels, Inc., 198 N.J. 511, 524, 527
(2009) (concluding defendant “intentionally had engaged in
unconscionable commercial practices in connection with the
advertisement and sale of merchandise” by falsely representing
condition of car); Strawn v. Canuso, 140 N.J. 43, 60-61 (1995)
(describing affirmative acts and omissions that constitute
unconscionable actions for CFA purposes).
I dissent, however, because the majority’s analysis of the
appropriate remedy in this matter is not faithful to the plain
language of the CFA. As I see it, the majority, like the trial
2
court, rests its analysis of the appropriate remedy on a
fundamentally flawed understanding of the CFA, through which my
colleagues have confused the threshold concept of “ascertainable
loss[,]” see N.J.S.A. 56:8-19 (authorizing “[a]ny person who
suffers any ascertainable loss” to “bring an action” in
appropriate court), with the separate concept of “damages
sustained,” that must be trebled by the terms of the statute,
ibid. As a result of that misunderstanding, my colleagues in
the majority have embraced the trial court’s creation of a
fictional loss that served solely as the basis for awarding
treble damages in addition to the award of complete equitable
relief. Instead, I would apply the plain language of the CFA,
leading me to affirm the Appellate Division’s well-grounded
rejection of the trial court’s remedy.
Perhaps because both the terms “ascertainable loss” and
“damages sustained” are found in the same provision of the CFA,
see ibid., the majority has permitted one to bleed into the
other, but there is nothing in the structure of the CFA or in
this Court’s long history of advancing its purposes that
supports that approach. On the contrary, both the traditional
plain language approach to statutory construction, and this
Court’s general understanding of the CFA’s purposes as revealed
in our relevant precedents, demonstrates the fallacy of the
majority’s reasoning and its result.
3
I do not intend to suggest that the majority is in error in
its numerous citations to decisions of this Court in which the
two terms have been used interchangeably, see ante at ___ (slip
op. at 29-31), for it plainly has. Nor do I intend to argue
that, in many, if not most, cases the two will be identical,
because, as the majority points out, they often are. See id. at
(slip op. at 31). But this will not always be so, and in no
decision before today’s has this Court used the term
“ascertainable loss” when instead called upon to address
squarely what the Legislature meant when it instead used the
term “damages sustained[.]” See N.J.S.A. 56:8-19. In my view,
the majority’s error lies in conflating those two entirely
separate and distinct statutory concepts when the context of the
dispute demands precision. The Legislature’s choice of words
makes plain that my colleagues have missed the opportunity to
erase the confusion that has crept into our jurisprudence and
now will continue to bedevil our courts in what should be a
subject of complete clarity. I therefore respectfully dissent.
I.
The principles of statutory construction that guide us in
our interpretation of language that the Legislature has chosen
to use are so familiar, see, e.g., Bosland v. Warnock Dodge,
Inc., 197 N.J. 543, 553-54 (2009), that they need not be recited
here at length. Rather, it is sufficient to reiterate that when
4
the words chosen are plain, we read them “in accordance with
those meanings.” In re Lead Paint Litig., 191 N.J. 405, 430
(2007) (citation omitted).
In the case of the particular words that the Legislature
has used in the CFA, there is simply no lack of clarity. I
begin with the language of the CFA that forms the basis for the
remedy and is the focal point of my disagreement with my
colleagues in the majority. That section, in its entirety,
provides:
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. In all
actions under this section, including those
brought by the Attorney General, the court
shall also award reasonable attorneys’ fees,
filing fees and reasonable costs of suit.
[N.J.S.A. 56:8-19.]
Stripped to its essence, the provision has three sentences, each
of which addresses a separate concept.
The first sentence provides that “[a]ny person who suffers
any ascertainable loss [of a specific kind and resulting from a
prohibited act] . . . may bring an action[.]” Ibid.5
The second sentence, which follows that authorization to
“bring an action[,]” describes the potential remedy, including
trebling, by providing that “the court shall . . . award
threefold the damages sustained[.]” Ibid. Significantly, the
second sentence recognizes the availability of “other
appropriate legal or equitable relief” but ties trebling to “the
damages sustained[.]” Ibid. More significant for this appeal,
the sentence does not refer back to the concept of
“ascertainable loss[.]” Ibid.The third sentence, which is not germane to this appeal,
requires that reasonable attorneys’ fees be awarded, regardless
of whether the relief that plaintiff achieves is legal or
equitable in nature. Ibid.In short, the language of the statute uses the term
“ascertainable loss” only in its description of the right to
commence litigation. By linking that phrase to the commencement
of litigation, the Legislature made plain its intent that it be
merely a threshold. This Court, in the seminal decision
construing the meaning and intent of the phrase, addressed it in
that context, considering the proofs needed to demonstrate that
a particular plaintiff has sufficient evidence to proceed past a
dispositive motion. See Thiedemann v. Mercedes-Benz USA, LLC,
183 N.J. 234, 248-49 (2005). After acknowledging that the
phrase “ascertainable loss” was not defined in the statute, id.6
at 248 (citing Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 13
(2004)), we looked outside of the CFA for guidance as to the
meaning of the phrase, ibid. (citing Webster’s Third New
International Dictionary 126 (1981)).
Regardless of where it is that we looked for help in
understanding the meaning of the phrase, the role it played in
the statutory scheme was not in dispute. We explained that it
is “the legislative language describing the requisite loss for
private standing under the CFA . . . from which a factfinder
could find or infer that the plaintiff suffered an actual loss.”
Ibid.; accord Weinberg v. Sprint Corp., 173 N.J. 233, 251 (2002)
(observing that “the plain language of the Act unmistakably
makes a claim of ascertainable loss a prerequisite for a private
cause of action”). We observed that the phrase served as the
threshold showing of a measureable loss that “will set the stage
for establishing the measure of damages.” Thiedemann, supra,
183 N.J. at 248 (citing Furst, supra, 182 N.J. at 13). That
reading and that interpretation of the phrase is faithful to the
plain language of the CFA and it is consistent with the role of
ascertainable loss as a threshold showing.
Moreover, that interpretation is faithful to our analysis
of the CFA’s historical development, because it recognizes that
the phrase was added in conjunction with the expansion of the
CFA to create a private right of action. Id. at 245-47
7
(reciting history; describing role of ascertainable loss as part
of prima facie proofs in private claims). In that context, the
threshold of ascertainable loss defines what the CFA requires of
private plaintiffs and stands in contrast to the claims that, in
accordance with the CFA’s original structure, could be brought
by the Attorney General. See Bosland, supra, 197 N.J. at 554-55(reviewing history of CFA and expansion to permit private rights
of action); Thiedemann, supra, 183 N.J. at 246 (citing Meshinsky
v. Nichols Yacht Sales, Inc., 110 N.J. 464, 472-73 (1988)).
Ascertainable loss, however, has nothing to do with a CFA
plaintiff’s eventual recovery. Instead, there are two phrases
in the CFA that are relevant to this appeal and that relate to
recovery, both of which are found in the second sentence of the
provision on which this appeal turns. N.J.S.A. 56:8-19. First,
the CFA permits plaintiff to recover “any . . . appropriate
legal or equitable relief[.]” Ibid. Second, the CFA refers to
“the damages sustained” as being the basis for the required
trebling. Ibid.The phrases “legal . . . relief” and “damages sustained”
are not unfamiliar concepts, but are ordinary references to
compensatory damages that must be proven with the requisite
certainty. See Pomerantz Paper Corp. v. New Cmty. Corp., 207
N.J. 344, 375-76 (2011) (concluding that trial court erred in
basing award of damages on “expert’s wholly speculative views”);
8
Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 48
(1984) (defining compensatory damages as being “designed to
compensate a plaintiff for an actual injury or loss”); Lane v.
Oil Delivery, Inc., 216 N.J. Super. 413, 420 (App. Div. 1987)
(holding that although “[p]roof of damages need not be done with
exactitude” damages must be proven “with such certainty as the
nature of the case may permit” and may “not be a matter of
speculation”).
By using the language of ordinary awards of damages in the
second sentence of the statutory provision, the Legislature drew
a clear distinction between the concept of ascertainable loss
that serves as the threshold that a plaintiff must cross in
order to file a CFA claim and damages sustained, which is the
amount that is subject to trebling.
The former, which is to some extent permitted to be
hypothetical, is simply not the same as the latter, which the
statute requires to be proven as would any other award of
damages. Indeed, we recognized this distinction as part of our
explanation of the gatekeeping role that ascertainable loss is
designed to play. See Thiedemann, supra, 183 N.J. at 246
(explaining that amendment that created private cause of action
“advanced the CFA’s purposes by compensating victims for actual
losses, punishing wrongdoers through awards of treble damages”
and providing for attorneys’ fees).
9
I do not suggest that the precedents from this Court or
from our Appellate Division uniformly have been careful to draw
the distinction between ascertainable loss and damages sustained
and therefore to be trebled. Quite the contrary.
Our decisions have utilized the phrase “ascertainable
loss[,]” correctly, both to describe or to evaluate the
sufficiency of, and to articulate the elements of, a prima facie
case. See, e.g., Bosland, supra, 197 N.J. at 557 (describing
ascertainable loss as part of prima facie proofs); Weinberg,
supra, 173 N.J. at 240 (affirming dismissal on motion for
failure to demonstrate ascertainable loss); Meshinsky, supra,110 N.J. at 475 n.4 (describing ascertainable loss in terms of
what “plaintiff might have suffered”).
Although less frequently the focus of an appeal, our
decisions also have used the phrase “damages sustained” and the
phrase actual damages, correctly, to describe the proofs needed
for a recovery and for trebling. See, e.g., Weinberg, 173 N.J.
at 249 (observing that CFA permits recovery of “losses caused by
violations of the Act”); Lettenmaier v. Lube Connection, Inc.,
162 N.J. 134, 139 (1999) (commenting that one of three main
purposes of CFA is “to compensate the victim for his or her
actual loss”); Daaleman, supra, 77 N.J. at 271 (explaining that
CFA “permits a person, who suffers a loss . . . to sue and
recover threefold the damages sustained”).
10
Nonetheless, there are other decisions in which the phrase
“ascertainable loss” was used as a sort of short-hand reference
to what, in reality, were actual damages, or was used in a less-
than-precise manner in the discussion of general CFA concepts.
See, e.g., Furst, supra, 182 N.J. at 14 (describing
ascertainable loss in terms of benefit of bargain and
replacement value as measure of damages); Cox v. Sears Roebuck &
Co., 138 N.J. 2, 23-24 (1994) (applying traditional contract
damage principles to identify loss, but commenting that treble
damages are awarded when “plaintiff proves . . . an
ascertainable loss”).
Regardless of whether one can point to language in any of
this Court’s precedents through which the phrase “ascertainable
loss” has been used in place of the more appropriate phrase
“damages sustained[,]” this Court has not actually confused the
two concepts analytically. Instead, as I see it, the question
of what the statute demands as the basis on which there shall be
trebling has not been squarely presented prior to this appeal.
Indeed, it is the majority’s blurring of the two concepts, which
the Legislature was careful to separate, in the first case in
which the distinction is critical to the analysis, that
threatens to inject a level of uncertainty that should be
avoided.
11
Nor is there any doubt that the Court today has blurred
concepts that the statute regards as distinct. As but one
example, the majority observes, correctly, that “if the
defendant or a non-party takes action to ensure that the
plaintiff sustains no out-of-pocket loss or loss of value prior
to litigation, then plaintiff’s CFA claim may fail.” Ante at
___ (slip op. at 32-33) (citations omitted). But the majority
then concludes that “[a] judicial remedy imposed at the
conclusion of litigation, however, does not preclude a finding
of ascertainable loss.” Id. at ___ (slip op. at 33). In making
that statement, the majority leaps from “ascertainable loss” the
theoretical concept central to the prima facie case, to
evaluation of proofs, which the statute defines as “damages
sustained” that should be trebled. And it is there that the
majority, in my view, has erred.
II.
In this appeal, the focus is on the remedy to which
plaintiffs are entitled, and more particularly, on whether
plaintiffs have demonstrated a loss that the CFA requires be
trebled.
The trial court first crafted an equitable remedy,
essentially rescinding the transaction and returning ownership
of the residential property to plaintiffs. See ante at ___
(slip op. at 9). That remedy, however, did not merely restore
12
plaintiffs to the status quo ante. Instead, it gave them their
property, which in the meantime defendant had improved to remedy
the outstanding Code violations, and which carried a reduced
mortgage due to payments defendant had made. See id. at ___
(slip op. at 5-8). In an effort to determine how to calculate a
sum so that treble damages could be awarded as well, however,
the trial court looked to the concept of ascertainable loss and,
essentially, resorted to an analysis that would have been
appropriate had the court been deciding a threshold motion. See
id. at ___ (slip op. at 9-10). Rather than engaging in that
task, the trial court should have determined, as the statute
requires, what damages plaintiffs had sustained. Had the trial
court done that calculation, there would have been no damages to
treble.
That is not because, as the majority suggests, I read the
CFA to preclude an award of treble damages once the court has
created an equitable remedy, see id. at ___ (slip op. at 36-37),
for such an interpretation, as the majority points out, would
indeed be “effectively rewrit[ing] the statutory language[,]”
see ibid. (slip op. at 37). Nor is it because the trial court’s
decision to grant equitable relief created the circumstance in
which there were no damages sustained.
Instead, it is simply a reflection of the fact that
plaintiffs failed to prove actual damages when they could have
13
done so. Indeed, plaintiffs almost certainly could have proven
damages, because they surely incurred costs in moving from the
premises, renting living quarters elsewhere and the like, all of
which would have qualified as damages sustained because of
defendant’s CFA violation. Had plaintiffs proven those damages,
the trial court would have been obliged to treble them, but
plaintiffs did not offer such proofs.
Plaintiffs’ failure of proofs should not be permitted to
support the creation of entirely fictional damages, through the
guise of calculating an ascertainable loss, merely for the
purpose of awarding treble damages. That it is fictional is
clear from the trial court’s calculation itself. The court
designated the equity in the property as the ascertainable loss
but then, recognizing that the rescission of the transaction
restored to plaintiffs that equity and more, deducted sums
invested by defendant to create an amount that the court then
doubled rather than trebled.
I do not disagree that the statutory trebling is designed
to be punitive; it plainly is. But in circumstances in which
there are no actual damages sustained, and in which plaintiff is
restored to a position superior to the one in which he or she
began, using a concept like ascertainable loss to create a basis
for trebling only results in a windfall. I see nothing in the
statute’s language or history and nothing in this Court’s
14
precedents that suggests that the CFA’s goals of punishment and
deterrence require that result.
III.
As I read the plain language of the CFA, the concept of
ascertainable loss is a threshold showing that plaintiffs must
be able to identify to commence litigation and withstand a
motion for summary judgment; it is nothing more. The concept of
ascertainable loss is not part of the manner in which the
damages sustained are proven and therefore not the basis on
which treble damages are calculated.
As I see it, the Appellate Division’s analysis in this
case, and in similar, published decisions, see Romano v. Galaxy
Toyota, 399 N.J. Super. 470, 483-85 (App. Div.), certif. denied,
196 N.J. 344 (2008), is faithful to the plain language of the
CFA and fully advance its strong remedial purposes. Therefore,
the Appellate Division’s judgment in this matter should be
affirmed by this Court.
We have not previously been called upon to address the
difference between ascertainable loss and damages that are
sustained and therefore are trebled. By conflating the two
separate and distinct concepts, the majority has missed an
important opportunity to bring clarity to this statutory remedy.
Instead, the majority’s approach invites trial courts to inject
speculation into what should be routine calculations of damages
15
and has encouraged them to search out ways to impose treble
damages that far exceed the CFA’s punitive purpose.
I therefore respectfully dissent.
JUDGE CUFF (temporarily assigned) joins in this opinion.
16
SUPREME COURT OF NEW JERSEY
NO. A-82/83 SEPTEMBER TERM 2011
ON CERTIFICATION TO Appellate Division, Superior Court
ANTHONY D’AGOSTINO and DENISE
D’AGOSTINO,
Plaintiffs-Appellants
and Cross-Respondents,
v.
RICARDO MALDONADO,
Defendant-Respondent
and Cross-Appellant.
DECIDED October 3, 2013
Chief Justice Rabner PRESIDING
OPINION BY Justice Patterson
CONCURRING/DISSENTING OPINIONS BY Justice Hoens
DISSENTING OPINION BY
AFFIRM IN PART/
CHECKLIST REVERSE IN PART/
REINSTATE
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE HOENS X
JUSTICE PATTERSON X
JUDGE RODRÍGUEZ (t/a) X
JUDGE CUFF (t/a) X
TOTALS 5 2
1