IT'S REALLY QUITE SIMPLE: CONTRACTORS, TAKE OFF THE "ORS" AND GET YOURSELF A CONTRACT!

I am always amazed when contractors come into my office looking for legal advice and they cannot understand why in the world a customer is suing them for consumer fraud.  "We were friends", "He said we did not need a contract", "Why should I have to tell her what materials I'm using" - and the list of mishaps goes on and on and on (even though the N.J. Administrative Code spells out quite clearly what every home improvement contract must have).  If you care about your contracting business, then you need to start incorporating into your thought process scenarios where you can envision a problem (i.e., will I get sued for this?).  If you don't, then you (yes, you, individually) and your company are just asking for a problem.  I am a firm believer that everyone needs to read Sun Tzu, "The opportunity to secure ourselves against defeat lies in our own hands".  Had the defendant in Chaykowsky v. Marut followed that advice, they would not be looking at a judgment of over $2.5 million dollars!

In Chaykowsky, the defendant operated a landscaping business and entered into an agreement with a homeowner to build a number of projects for the agreed upon sum of $750,000.  Plaintiff paid the entire sum as invoices were presented.  Of course, the defendant never used a contract, never informed the homeowner about the materials it would supply and use at the job and never provided a schedule of when the project would begin and end.  Coupled with nearly $200,000 in additional monies that had to be paid, inexcusable delays by the defendant (or no work at all) and requests for even more money to complete the project, the plaintiff eventually got tired of the defendant's antics and sued the company and the individual owners of the company for violating the N.J. Consumer Fraud Act ("CFA").

We need not bother ourselves with the nitty gritty procedural aspects of the case but needless to say the defendant did not comply with its discovery obligations thus resulting in dismissal of their answer counterclaim and third-party complaint with prejudice.  The lower court also denied defendant's subsequent attempt to restore their pleadings and entered judgment against them in the amount of $2,510,798.22 - finding that plaintiff sustained compensatory damages in the amount of $802,774.00 and that defendant violated N.J.A.C. 13:45A-16.2(a)(12) by failing to have a written contract.  The lower court thereafter awarded plaintiff $1,605,548 in statutory damages (remember the CFA provides for TREBLE/TRIPLE damages), $98,612.50 in attorney's fees and $3,863.72 in costs (all recoverable by a plaintiff who successfully pleads consumer fraud).

The Appellate Division upheld the lower court's findings and judgment and remanded the case (meaning sent it back) to the lower court for the purpose of determining an appropriate award of legal fees and costs of suit to the plaintiff and to determine whether whether the individual defendants are liable for the plaintiff's damages.

Click on Chaykowsky v. Marut for the entire opinion. http://www.judiciary.state.nj.us/opinions/a2901-10.pdf

Are you a contractor who needs advice on how to protect your individual and business assets from attack.  Call us today and make an appointment to see how we can help.

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com.