In a recent unpublished decision, the New Jersey Appellate
Division affirmed a trial court’s verdict against a home improvement
contractor, which held the contractor’s principal personally liable for
violations of the New Jersey Consumer Fraud Act (CFA). While this is by no
means a ground-breaking case, it effectively illustrates how a contractor
ignores the regulations under the CFA at their own peril. Ying v. Li, A-5728-09T1, 2013 WL 645832 (N.J. App. Div., Feb. 22,
2013). A copy of the decision may be obtained by clicking here.
The Yings hired American East Construction (owned by Li) to renovate their house. Li represented that American East Construction was licensed and insured, and the contract noted that the work would be completed “in about 20 days.” According to the Yings, the work was done poorly, and was never completed. The Yings sued Li, and expert testimony revealed that much of the work needed to be completely redone.
Li put up little defense at trial, and admitted that American East Construction was not licensed or insured, and that no permits were obtained for the work. The trial judge found that Li had engaged in “unlawful practices” under the CFA, including performing work without a license, insurance, construction permits, and for failing to provide a beginning and end date in the contract, and entered a judgment in the amount of $24,500, which was trebled to $73,500 under the CFA, and held against Li personally.
Li raised eleven separate points of error on appeal, but the Appellate Division found each without merit to discuss. The Appellate Division took the opportunity to remind contractors of their various obligations under the CFA, such as (1) registering with the DCA; (2) maintaining general liability insurance; (3) obtaining proper permits before work commences; and (4) ensuring that construction contracts include all required information, including dates on which the work is to begin and to be completed. A failure to do any of these is an unlawful act under the CFA, and may result in treble damages, as well as personal liability on the part of the contractor’s principals.