Sword or Shield, or Both?

Since the enactment of the Consumer Fraud Act (“CFA”) over 50 years ago, the Legislature has greatly expanded the scope of the CFA to apply in the broad sense to all sorts of circumstances in the construction field. The case law that has developed in recent years makes clear that the CFA can be either a sword or shield in litigation stemming from construction disputes. It has been effectively employed as either a sword or shield against construction firms and their principal officers, and its broad reach should be enough to cause anyone providing construction-related services to stand up and take notice.

When suing under the CFA, a litigant is required to plead an actionable fraud or affirmative misstatement. Chattin v. Cape May Greene, Inc., 243 N.J. Super. 590, 598 (App. Div. 1990). When the alleged consumer fraud consists of an omission, the plaintiff must show that the defendant acted with knowledge and intent, essential elements of the fraud. Cox v. Sears Roebuck & Co., 138 N.J. 2, 18 (1994). In addition to fraudulent misrepresentations and omissions of material fact, in the field of residential construction, the CFA and implementing regulations can result in liability for myriad statutory violations that have the practical result of imposing strict liability on companies and their individual owners. Allen v. A&V Brothers, Inc., 414 N.J. Super. 152 (App. Div. 2010).