Jury Rules Against Home Improvement Contractor Over Sandy Contract

Nearly four years after Superstorm Sandy made landfall in Ocean County, NJ, a jury has rendered its first verdict in favor of  homeowners against a home improvement contractor repairing Sandy damage.  In August, an Ocean County jury sided with the homeowners in their suit against Price Homes Group (PHG).  PHG was a fledgling home building contractor that, like many others, spawned in the aftermath of Superstorm Sandy.  The entity was formed 100 days after the most powerful storm to affect the Jersey coast made landfall.  The storm caused billions of dollars in property damage as a result of wind and flood.  Despite being newly formed, PHG enjoyed the illustrious status of being a “qualified builder” under the State’s RREM (Reconstruction, Rehabilitation, Elevation and Mitigation) Program administered by the Department of Community Affairs (DCA). Under the RREM Program, the DCA checked whether a contractor was a registered Home Improvement Contractor licensed to do business in New Jersey, and whether it had been debarred from doing business with the government.  By now many have heard horror stories of the RREM program.  RREM later allowed homeowners receiving such grants to select their own contractors.  Sadly, in spite of a trial victory for the homeowners, whether they will ever see any of the $300,000 in damages awarded against PHG remains to be seen.  The three principals of the company have declared bankruptcy and PHG vows to appeal the verdict.  There are at least fifteen other such suits against PHG.

Whether embarking on a home improvement project as a result of Sandy or otherwise, the lessons of the PHG experience are apparent to homeowners and contractors alike.  As shocking as it may seem, many enter into home improvement projects, often as big or bigger than the home purchase itself, without a written contract that identifies the scope, cost and timing of such a project, and do so without checking to see whether a contractor is a registered Home Improvement Contractor. The NJ Consumer Fraud Act (CFA) requires that any residential home improvement agreement over $500 must be in writing, as well as any change orders, and include:

  • Start and completion date
  • Agreed price
  • Contractor’s HIC number
  • Three day right to rescind with full return of deposit
  • Copy of Contractor’s general liability insurance declarations page
  • The toll-free number of the NJ Division of Consumer Affairs.
A contractor that fails to comply with the CFA runs the risk of exposing itself to a consumer fraud action, in addition to the standard breach of contract action by a homeowner that the work does not meet the terms of the contract and is not completed in a workmanlike manner, and/or consistent with applicable building codes.  Any contractor found to have caused an ascertainable loss as a result of a “deceptive business practice” and to comply with the Act’s requirements, runs the risk of not only damages for  the costs of repairs to properly complete the project, but also treble (tripling of) damages, attorney’s fees and costs of suit.  There is New Jersey case law that further allows such damages to be assessed against the principals or officers of a corporation (“pierce the corporate veil”) if actual participation in such deceptive business practice by the principal or corporate officer is shown.  While budgets may be strained by any contemplated home improvement project, it behooves a homeowner to have a consultation with a qualified attorney before blindly wading into the treacherous waters of home improvement.  If you earn your living as a New Jersey Home Improvement Contractor, you must be aware of your legal obligations. You must register with the Division of Consumer Affairs consistent with the Contractor Registration Act and be sure your contracts are Consumer Fraud Act compliant, otherwise your next project may be “on the house”.  A home improvement contract that fails to comply with the CFA is deemed void and the contractor’s only right to receive compensation for such work and materials is the value of such services and materials provided (quantum meruit) without any profit.  It has been held that even quantum meruit recovery is questionable because the purposes of the CFA are to punish the wrongdoer and deter others from such conduct.Brian McAlindin, Esq. is a Partner at Bathgate, Wegener & Wolf, PC and a Certified Civil Trial Attorney with expertise in construction litigation on behalf of both homeowners and contractors, as well as personal injury actions.

What Is Guardianship In New Jersey and How Does It Work – Part 2 of 3

In Part 1 of this series, we looked at four different scenarios when a Power of Attorney or Guardianship might be appropriate.  We also looked at the basic requirements to begin a Guardianship application to the Court.  In Part 2 of this 3 part series What Is Guardianship In New Jersey and How Does It Work, we discuss what will happen at the court hearing.

 A.        Notice of Hearing Date
Approximately 2 weeks after the application to have your loved one declared incompetent is submitted, the Court will set a date for the initial hearing. Once the initial hearing is scheduled, the person who seeks to be appointed as the Guardian must notify the alleged incompetent, his or her next of kin and anyone else who has a degree of relationship superior to that of the applicant of the date and time of the hearing, and the person’s ability to challenge the application.  In certain circumstances, the Office of Public Guardian must also be notified of the application and given an opportunity to review and respond to it.  The next of kin or other interested party may hire an attorney to represent their interests in the application or they may represent themselves, pro se.  The next of kin or interested party is permitted to challenge both  the requested declaration that your loved one is  mentally incompetent and your appointment as Guardian.  Because your loved one will receive a copy of the filed papers, your loved one will be advised not only that there is a request to have him or her  declared mentally incompetent, but also of the name(s) of the person(s) seeking Guardianship. 

B.        Appointment of Temporary Guardian
On occasion, the Court will appoint a Temporary Guardian for your loved one while the Guardianship application is pending.  The Temporary Guardian serves until the Court makes its final determination regarding a permanent Guardian.  The Temporary Guardian can be the person(s) submitting the application for Guardianship, or it can be someone else selected by the Court.  If the Court does not appoint the applicant as the Temporary Guardian, the Court may appoint an attorney (separate from the court appointed attorney who will represent your loved one in the Guardianship application process) or an accountant or other professional as the Temporary Guardian. The fees charged by the Temporary Guardian are usually paid from your loved one’s assets.

C.        Court Appointed Attorney For Alleged Incompetent Person
The Court will appoint an attorney to represent your loved one.  The Court appointed attorney is not free.  He or she is usually paid from the assets of the alleged incompetent.  This attorney will not only present your loved one with a copy of the papers submitted to the court, but will also spend some time with your loved one, interview him or her, will likely interview the guardian applicant, and will research whether your loved one previously signed a Power of Attorney or a Last Will and Testament.  Once the Court appointed attorney’s research and interviews are complete, she will submit a report of recommendations to the Judge.  Although the court appointed attorney represents your loved one, your loved one may hire his or her own private attorney at your loved one’s own expense to represent his interests and challenge a Guardianship application.

D.        Conduct of the Hearing
If the Guardianship Application is not contested and the Court appointed attorney agrees with the Application, then the Court may not require anyone to be present at the hearing and the Judge  will make his decision based upon the papers presented to him.  However, if the Guardianship Application is contested, during the initial hearing the Judge will consider:  (a) the written papers submitted to it that support and oppose the Guardianship, and (b) oral arguments (but not witness testimony) regarding the Guardianship Application.  Usually, live witness testimony is not presented to the Court during the initial hearing.  In both contested and uncontested Guardianship Applications, the Court will review and consider the observations and recommendations of the court appointed attorney.  Sometimes, the Court decides that it does not have enough information to make an immediate determination on the Guardianship application.  If that is the case, the Court will schedule another hearing and may request that additional information be submitted to the Court.  At the second hearing, the Court may hear sworn testimony from (a) the person alleged to be incompetent, (b) the person applying to be the Guardian of the alleged incompetent, (c) the physicians, psychologist or psychiatrist who conducted examinations of the alleged incompetent, and (d) any other persons with an interest in the application or who have information regarding the alleged incompetent.  Only after receiving all the information, evidence and testimony that the Court deems necessary and appropriate, will the Judge decide whether your loved one needs to have a Guardian appointed, and if so, who will be appointed the Guardian.

E.        Bond Amount
In addition to deciding whether your loved one is mentally incapacitated and who should serve as Guardian, the Court will also decide the amount of the bond, i.e.,  insurance policy, that must be obtained by the person appointed as Guardian.  The amount of the bond is generally based upon the value of the assets of your loved one.  The bond is obtained by the potential Guardian, usually after a general background check, credit check and payment of a bond premium.  The bond premium must be paid every year, and usually can be paid from the incompetent person’s assets.

F.        Conclusion
If your loved one does not have the mental capacity to sign a Power of Attorney, all is not lost.  An alternative to the Power of Attorney is a Guardianship for your loved one.  A Guardianship requires an action in court and physician/psychologist certifications. Because the Guardianship process requires a Complaint being filed with the Court,  a copy of the Complaint will be provided to your loved one over whom you seek Guardianship.  Additionally, the next of kin of the alleged incapacitated person, along with those person(s) who have a degree of relationship superior to the applicant requesting to be appointed as Guardian must receive notice of the application.  This may cause tension and misunderstandings between you and your loved ones if you make the application on your own.  Only after a Judge is confident that he or she has received and reviewed all of the evidence and testimony necessary to make a determination regarding your loved one’s mental competency and appropriateness of a Guardianship will a judge make his or her ruling. If a Guardianship is granted, that ruling will include a Judgment of Legal Incapacity, the name of the person appointed as Guardian and the amount of bond that will need to be secured before the appointment of the Guardian can be finalized.   Having an attorney prepare the Guardianship application and guide you through the Guardianship process can help reduce the confusion, sense of overwhelming, tension and misunderstandings that can accompany a Guardianship application.  In Part 3 of this 3 part series, we will discuss a Guardian’s duties after being appointed by the Court.

If you wish to have a Power of Attorney or other estate planning documents drafted, or if you are concerned about your loved one’s ability to manage his or her financial affairs, medical treatment, health care decisions and overall well-being, or if you just received a copy of a  guardianship application made by someone for your loved one, contact the law firm of Bathgate, Wegener & Wolf, P.C.  to discuss your and your loved one’s legal options at 732-363-0666.

Photo by Luwadlin Bosman on Unsplash