                                     NOT FOR PUBLICATION WITHOUT THE
                                    APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion
                        is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                               SUPERIOR COURT OF NEW JERSEY
                                                               APPELLATE DIVISION
                                                               DOCKET NO. A-4442-15T4

MICHAEL McCARTHY and
LUCYANN McCARTHY, husband
and wife,

           Plaintiffs-Respondents,

v.

PRUDENTIAL FOX & ROACH,
THOMAS PALERMO, and MICHELLE
 WOODWARD,

           Defendants-Appellants,

and

WEICHERT REALTORS COASTAL,
and ALLEN H. VERNON, JR., ESQUIRE,

     Defendants.
____________________________________

                     Submitted April 9, 2018 – Decided September 14, 2018

                     Before Judges Accurso, O'Connor and Vernoia.

                     On appeal from Superior Court of New Jersey, Law
                     Division, Cape May County, Docket No. L-0041-11.
              Reger Rizzo & Darnall, LLP, attorneys for appellants
              (Richard M. Darnall and John M. Cinti, on the briefs).

              Castellani Law Firm, LLC, attorneys for respondents
              (David R. Castellani, on the brief).

              Greenbaum, Rowe, Smith & Davis, LLP, attorneys for
              amicus curiae New Jersey REALTORS (Barry S.
              Goodman, of counsel and on the brief; Justin P.
              Kolbenschlag and Leslie A. Barham, on the brief).

PER CURIAM

       Defendants Michelle Woodward, Thomas Palermo and their employer,

defendant Prudential Fox & Roach, appeal from a jury verdict in favor of plaintiffs

Lucyann and Michael McCarthy on claims of negligent misrepresentation and

supervision and consumer fraud arising out of plaintiffs' purchase of property near the

ocean in Cape May County. Defendants claim the trial court erred by: (1) depriving

them of their rights under the Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to -5.8,

by failing to allow the jury to apportion fault to plaintiffs; (2) depriving them of the safe

harbor exemption, N.J.S.A. 56:8-19.1, of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -

195; (3) permitting plaintiffs to present and combine claims for mutually exclusive

damages without proper limiting instructions; (4) permitting plaintiffs' experts to render

net opinions and testify about improper and irrelevant damage calculations; and (5)

improperly calculating the attorney fee award.



                                                                                     A-4442-15T4
                                              2
       Because we conclude the court's failure to allow the jury to assess plaintiffs'

comparative fault deprived defendants of a fair trial and the instructions on damages

were flawed, we reverse the judgment and remand for a new trial on all issues. See

Ahn v. Kim, 145 N.J. 423, 434 (1996) (stating the general rule that "issues in

negligence cases should be retried together unless the issue unaffected by error is

entirely distinct and separable from the other issues").

       We briefly summarize the evidence put before the jury. Lucyann and Michael

McCarthy were in the market for a vacation home at the shore in 2010. On the

recommendation of Lucyann's father, they contacted a real estate agent, Thomas

Palermo of Prudential Fox & Roach, to assist them in their search. Palermo uses a

wheelchair and relies on another Prudential Fox & Roach agent, defendant Michelle

Woodward, to act as his assistant and buyer's agent. Palermo supervised Woodward in

her efforts on behalf of plaintiffs.

       Plaintiffs were looking for a house within walking distance of the beach with at

least five bedrooms. After seeing several properties with Woodward, Lucyann asked

Woodward to research a one-bedroom, one-bath house across the street from the beach

in Strathmere, an unincorporated community within Upper Township in Cape May

County. The property was owned by a bank, which acquired title in a mortgage

foreclosure, and was offered for sale "as is" with no contingencies for approvals,


                                                                                   A-4442-15T4
                                             3
permits or inspections. Lucyann told Woodward plaintiffs were interested in

demolishing the "shack" on the property and building a new home. She testified that

the property having been in foreclosure was appealing to the couple, who were looking

to take advantage of the slump in real estate prices resulting from the economic

downturn.

      Prior to showing Lucyann the property, Woodward called the Upper Township

zoning office for information about it. The employee she spoke to told her the lot was

sixty by ninety-five feet and the zoning permitted twenty-seven percent lot coverage.

Woodward's notes of the call included those facts, the phone numbers for the county

health department and the zoning office, and some further information about building

height and set-backs. The number for the health department was on the note because

the property is serviced by a septic system and the zoning office told Woodward the

property would require an updated septic permit before anything could be built,

information Woodward passed on to plaintiffs.

      Based on the information she received from the Township, Woodward told

plaintiffs they could build a 3100 square foot home on the lot. She claimed she gave

the note to plaintiffs when they viewed the property together on February 14, 2010, and

advised them to contact both the health department and the zoning office directly for

more information. Lucyann, although acknowledging she saw Woodward's note on


                                                                                   A-4442-15T4
                                           4
that date and discussed the information on it with her, claimed Woodward just told her

they needed a septic permit and did not provide her the note until closing a month later.

      Although Michael, who worked in the financial services industry, had previously

bought and sold several properties for investment with a partner, including one in Sea

Isle, he conducted no due diligence regarding the lot he and his wife intended to

purchase for their family vacation home. Instead, after Woodward advised them the

property last sold for $850,000 a few years earlier and previously sold for $1,250,000,

plaintiffs decided to make an all-cash offer of $386,100, days after viewing the

property. Woodward directed plaintiffs to a lawyer, defendant Allen H. Vernon, Jr., to

draft the contract. Although Woodward engaged Vernon on plaintiffs' behalf, she

provided them his name and telephone number and advised them to call him to discuss

the contract. Woodward faxed a copy of the contract Vernon prepared to Lucyann for

signature on February 18.

      Plaintiffs signed the contract without reading it or speaking to Vernon, and

Woodward submitted it to the seller's agent, Weichert Realtors Coastal. The bank

accepted the offer but insisted on using its own contract. According to Palermo, he told

Michael that Weichert advised the bank would not accept any contingencies, and that

he should read the bank's contract as plaintiffs would not be able to make any changes




                                                                                    A-4442-15T4
                                            5
to the document. Plaintiffs signed the bank's form of contract on March 8 without

reading it or consulting Vernon.

       After signing the contract, Lucyann became worried about the property being

sold "as is." She claimed Woodward repeatedly assured her that people tear down

existing structures all the time, and that they would be able to build the home they

wanted. Woodward claimed she never told plaintiffs they could rely on her calculations

about the size home permitted on the lot, but conceded she told them they could build a

3100 square foot home if they obtained all the appropriate permits. Woodward had

never handled a real estate transaction involving either bay front or ocean front

property, had not dealt with the purchase or sale of homes serviced by septic systems

instead of sewers and was not familiar with CAFRA, the Coastal Area Facility Review

Act.

       After the closing, plaintiffs contacted Upper Township to obtain a septic permit

and learned the lot was subject to CAFRA and the additional permits they would need

to allow them to build. Upon learning they could only build a 900 square foot house

without additional approvals, plaintiffs put the property on the market for $650,000,

later reducing the price to $550,000. Plaintiffs received no offers at those prices and

they instead pursued a CAFRA approval from the Department of Environmental




                                                                                    A-4442-15T4
                                            6
Protection, eventually succeeding in obtaining approval to build a 2300 square foot

home in late 2010.

       In January 2011, plaintiffs filed suit against Woodward, Palermo, Prudential Fox

& Roach, Vernon and Weichert Realtors Coastal. Plaintiffs settled with Weichert prior

to trial. While the case was pending, plaintiffs received an all-cash offer of $400,000

for the property, which they turned down. After discovery closed, changes in the

property's flood zone designation in 2013 following Superstorm Sandy allowed

approval of a larger structure on the lot. In March 2014, plaintiffs obtained variance

approvals to build the 3100 square foot house Woodward told them they could build.

The court granted defendants' motion to reopen discovery to address those new facts.

Plaintiffs were permitted to update their expert reports but declined to do so.

       The case went to trial in June 2015 on claims of negligent misrepresentation and

violation of the Consumer Fraud Act against Woodward, negligent supervision against

Palermo and legal malpractice against Vernon. In addition to the testimony we

summarized above, the jury heard from an expert presented by plaintiffs, who opined

the realtors breached the standard of care for buyers agents by not alerting plaintiffs to

CAFRA and referring them to a planner, engineer or attorney for advice as to whether

they could build the home they wanted. The expert conceded on cross-examination, as

had Michael, that plaintiffs bore some responsibility for their predicament.


                                                                                    A-4442-15T4
                                             7
       An appraiser was permitted to testify to the difference in value based on

comparable sales between a 2300 square foot three-bedroom house and a 3100 five-

bedroom home built on the property on both the closing date, March 19, 2010, and June

21, 2012, the date of the appraiser's inspection. In addition to the proofs on diminished

value, plaintiffs were also permitted to testify as to their loss-of-use damages, including

the $49,000 they spent over the course of five years on rent of an alternative summer

home and the $31,364 in real estate taxes on the Strathmere lot from closing through

trial; as well as the out-of-pocket expenses they incurred in getting the necessary

approvals to build the 3100 square foot house they intended, including their closing

costs and title insurance. Plaintiffs claimed their damages totaled $420,892.

       Although initially ruling that the jury would apportion fault among plaintiffs and

defendants, with the exception of Vernon to whom the defense of comparative

negligence was not available, the court changed course just before closing statements.

Faced with the dilemma of crafting a verdict sheet with one of the three defendants a

lawyer facing a professional malpractice claim, the court determined to remove

plaintiffs from the verdict sheet, fearing that asking the jury to allocate damages among

plaintiffs and defendants would cause too much confusion. The jury returned a verdict

of $165,000 against all three defendants, finding Woodward fifty-five percent liable,

Palermo forty percent and Vernon five percent. The court entered an amended final


                                                                                   A-4442-15T4
                                             8
judgment applying a $7500 credit for the Weichert settlement and $18,730.63 in pre-

judgment interest for a total award of $176,230.63, allocated $96,926.85 to Woodward,

$70,492.25 to Palermo and $8811.53 to Vernon. The court trebled the $86,625

compensatory award to Woodward, net of pre-judgment interest, for a total award of

$259,875, which with pre-judgment interest added totaled $270,176.85.

       The court denied defendants' motion for a new trial and awarded plaintiffs

$330,617.33 in fees and costs, allocated $314,086.46 to Woodward and $16,530.87 to

Vernon. The entire judgment against Woodward totaled $584,263.31 and the

combined total against Prudential Fox & Roach agents Woodward and Palermo was

$659,755.56.1 The total judgment against Vernon was $25,342.40. This appeal

followed.

       We begin with defendants' claim that the judge erred in failing to allow the jury

to assess plaintiffs' fault pursuant to the Comparative Negligence Act. Plaintiffs counter

that claim by arguing the trial court correctly declined to impute responsibility for a

consumer fraud to the victims of the fraud by applying the Comparative Negligence

Act, and that there were no facts in the record to support the notion that plaintiffs

contributed to Palermo's negligent supervision of Woodward. As to the negligent



1
  By agreement of counsel, Prudential Fox & Roach was not included on the jury sheet
but was included in the judgment.
                                                                                    A-4442-15T4
                                             9
misrepresentation claim, plaintiffs argue the court correctly concluded the jury's

determination that plaintiffs were justified in relying on the advice of defendants was

the same as asking the jury to determine plaintiffs' comparative negligence. We

disagree with plaintiffs on all points, and conclude the trial court erred in failing to

allow the jury to assess plaintiffs' fault under the Comparative Negligence Act.

       The law is well settled that the Comparative Negligence Act applies to

Consumer Fraud Act cases. See Gennari v. Weichert Co. Realtors, 148 N.J. 582, 608-

09 (1997) (holding in Consumer Fraud Act cases "the trial court should determine

damages under N.J.S.A. 2A:15-5.1, apportioning a percentage of fault to each culpable

party"); Helmar v. Harsche, 296 N.J. Super. 194, 210 (App. Div. 1996) (reversing

Consumer Fraud Act judgment against realtor because the trial court, although

permitting the jury to assess plaintiff's comparative fault, did not permit realtor to assert

a third party contribution claim alleging malpractice by plaintiff's counsel). See also

Sullivan, New Jersey Consumer Fraud § 13:2-5 (2018) ("The fault and damage-

apportionment principles of New Jersey's Comparative Negligence Act (and the related

Joint Tortfeasors Contribution Law) are fully applicable to claims arising under the

Consumer Fraud Act.").

       To the extent the trial court determined to prevent the jury from considering the

possible comparative negligence of plaintiffs because Woodward rendered professional


                                                                                      A-4442-15T4
                                             10
advice, it clearly erred. It is certainly true that "professionals may not diminish their

liability under the Comparative Negligence Act when the alleged negligence of the

client relates to the task for which the professional was hired." Aden v. Fortsh, 169 N.J.

64, 78 (2001). The Court has explained the reason for the rule is that "when the duty of

the professional encompasses the protection of the client or patient from self-inflicted

harm, the infliction of that harm is not to be regarded as contributory negligence on the

part of the client." Id. at 75 (quoting Conklin v. Hannock Weisman, 145 N.J. 395, 412

(1996)).

       But such professionals are not subject to Consumer Fraud Act claims. See

Plemmons v. Blue Chip Ins. Servs., Inc., 387 N.J. Super. 551, 564 (App. Div. 2006)

(quoting Macedo v. Dello Russo, 178 N.J. 340, 344 (2004)) (noting "members of

'learned professions,' including those who occupy a 'semi-professional status,' engage in

'an activity beyond the pale of the [CFA]'"). Plaintiffs could bring their Consumer

Fraud Act claim against Woodward only because she is not considered a member of

one of the so-called learned professions beyond the reach of the Act. See Strawn v.

Canuso, 140 N.J. 43, 60 (1995) ("Real estate brokers, agents, and salespersons

representing professional sellers of real estate are subject to the provisions of the

Consumer Fraud Act.").




                                                                                        A-4442-15T4
                                            11
       Because Woodward was not a professional with an obligation to protect

plaintiffs "from self-inflicted harm," see Aden, 169 N.J. at 75 (quoting Conklin, 145

N.J. at 412), there was no basis for the trial court to have deprived Woodward from

having the jury assess plaintiffs' comparative negligence for entering into an "as is"

purchase of property unsuitable in the short term for their needs. We have certainly

implied, if not expressly held, that real estate agents and brokers are entitled to have the

jury charged on a plaintiff's comparative negligence when "there was evidence

presented at trial that the plaintiff may have been negligent by her own acts." Helmar,

296 N.J. Super. at 210.

       There was certainly such evidence here. Woodward testified she urged plaintiffs

to call the Township zoning office and the county health department directly to discuss

what could be built on the property and to contact Vernon to discuss the contract.

Palermo testified he told Michael to read the contract insisted upon by the bank as he

would be unable to make any changes. Plaintiffs admitted they did not do any of those

things. Michael, despite buying and selling for investment at least half a dozen

properties, including one at the shore, conceded he took no steps to ensure he and his

wife could build the home they envisioned on the lot. Plaintiffs made an all-cash offer

of $386,100 on property sold "as is," not as an approved building lot, across the street

from the beach within four days of seeing it after Woodward told them it had last sold


                                                                                    A-4442-15T4
                                            12
for $850,000 before the economic downturn and had previously sold for $1,250,000.

Michael candidly admitted on cross-examination that he and his wife bore some

responsibility for the losses they alleged transpired. There was certainly evidence in the

record to permit a jury to determine plaintiffs' cupidity and lack of due care was a

proximate cause of their ensuing problems.

       We agree with defendants and amicus New Jersey REALTORS that the trial

court's decision to deny Woodward the right to have the jury apportion plaintiffs' fault

under comparative negligence principles based on her "professional advice" while

stripping her of the protections our law provides professionals from Consumer Fraud

Act claims is without precedent in our cases and deprived her of a fair trial. Although a

leading commentator has suggested that "an assignment of a comparative-fault

percentage to the victim in a consumer-fraud case seems unlikely," as "[a] seller who

engages in deceptive or unconscionable conduct in an effort to dupe a purchaser should

not be able to avoid part of the consequences on the ground that the purchaser was

exceptionally gullible," Sullivan, § 13:2-5, we do not judge an assignment of a

comparative fault percentage to plaintiffs as unlikely on the facts presented here.

       No one disputes that Woodward merely passed on information provided by

someone in the Township zoning office, correctly calculating the size house that could

theoretically be built on the lot based on what the individual told her of the lot size and


                                                                                      A-4442-15T4
                                            13
lot coverage requirements. Plaintiffs certainly presented proof, including the opinion of

an expert, that Woodward was negligent in not more thoroughly researching the

property and referring plaintiffs to experts in CAFRA permitting, but there is no proof

in the record that she intended to dupe them into the purchase. Accordingly, we do not

view the court's error in instructing the jury on comparative negligence as harmless.

Instead, it deprived Woodward of the fair trial to which she was entitled.

       The trial court also erred in finding the Comparative Negligence Act inapplicable

to plaintiffs' claims for negligent misrepresentation because plaintiffs reasonably relied

on the misrepresentation. Further, its conclusion that the jury's determination that

plaintiffs reasonably relied on Woodward's misrepresentation was the equivalent of an

assessment of plaintiffs' comparative fault under the Comparative Negligence Act is

incorrect as a matter of law.

       The Supreme Court in H. Rosenblum, Inc. v. Adler, 93 N.J. 324, 350-51 (1983),

noted the availability of a comparative negligence defense to negligent

misrepresentation claims against an accounting firm for negligently prepared financial

statements on which reasonably foreseeable recipients relied for business purposes.

Accordingly, there is no question but that the Comparative Negligence Act applies to

claims of negligent misrepresentation.




                                                                                   A-4442-15T4
                                           14
       Of course, a plaintiff failing to prove reasonable reliance on the

misrepresentation, has failed to establish liability. See id. at 334 ("An incorrect

statement, negligently made and justifiably relied upon, may be the basis for recovery

of damages for economic loss or injury sustained as a consequence of that reliance.").

Accordingly, the trial court's ruling that the Comparative Negligence Act does not apply

when a plaintiff can show reasonable reliance on the misrepresentation would work to

deprive defendants of the defense, contrary to the Court's holding in Rosenblum.

       A defendant, of course, is free to defend a negligent misrepresentation claim by

arguing its conduct was not a proximate cause of the plaintiff's injury because plaintiff's

own conduct was solely responsible for the loss. In that way, a defendant, even one

barred from asserting the plaintiff's own negligence as a defense because of the

defendant's duty to protect the plaintiff from self-inflicted harm, could have the jury

consider plaintiff's conduct. See Aden, 169 N.J. at 82-83 (explaining that although

plaintiff's failure to read an insurance policy could not be considered comparative fault

in the insured's action against his broker for professional malpractice, the jury could

consider whether the plaintiff's failure to read the policy "severed the causal connection

between the broker's fault and the insured's harm").

       But that is not the same, obviously, as asking the jury to assess comparative fault.

A defendant in that scenario is arguing it has no liability because plaintiff's own


                                                                                      A-4442-15T4
                                            15
negligence was the sole cause of the harm. See ibid. ("The trial court did not preclude

[the defendant broker] from presenting evidence to attempt to prove that Aden's

admission that he did not read the policy until after the fire was the proximate cause of

the harm.") (emphasis added). Cf. Fabian v. Minster Mach. Co., Inc., 258 N.J. Super.

261, 276-77 (App. Div. 1992) (explaining a product manufacturer's effort to shift

responsibility to the non-party employer, claiming its conduct was the sole proximate

cause of the employee's accident, the so-called "empty chair defense," is " actually a

claim that the defendant's conduct was not a substantial contributing factor to the

accident," thus focusing the jury's attention upon the plaintiff's duty to prove the

defendant's conduct was a proximate cause of the accident).

       A jury does not consider a defendant's affirmative defense of comparative

negligence to a plaintiff's negligent misrepresentation claim until after it has already

decided the plaintiff has established all elements of the cause of action, including

reasonable reliance. Cf. Bencivenga v. J.J.A.M.M., Inc., 258 N.J. Super. 399, 410

(App. Div. 1992) ("The [Comparative Negligence Act] requires the trier of fact to

translate common liability of joint or concurrent tortfeasors, including plaintiff, into a

percentage of causal fault that contributed to plaintiff's injuries."). That it may consider

the plaintiff's conduct in determining whether the defendant's conduct was a proximate

cause of the accident in no way deprives a non-professional defendant such as


                                                                                       A-4442-15T4
                                            16
Woodward the right to have the jury separately assess whether the plaintiff's own

conduct was also a proximate cause of the harm. See Suter v. San Angelo Foundry &

Mach. Co., 81 N.J. 150, 205 (1979) ("The comparative fault scheme seeks to compel

the balancing of the respective faults of the plaintiff and defendant."). Thus the court

was simply incorrect in ruling the jury's finding that plaintiffs reasonably relied on

Woodward's misrepresentation was the equivalent of an assessment of plaintiffs'

comparative fault under the Comparative Negligence Act.

       We are also convinced the court erred in ruling the Comparative Negligence Act

did not apply to the negligent supervision claim against Palermo. In reasoning that

plaintiffs could not "contribute to negligent supervision in any way" because it involved

only conduct between Palermo and Woodward, the trial court misapprehended the

concept of plaintiffs' fault under the Comparative Negligence Act.

       We have affirmed application of the Comparative Negligence Act to a claim of

negligent supervision. See Stella v. Dean Witter Reynolds, Inc., 241 N.J. Super. 55, 63-

64, 77 (App. Div. 1990). In Stella, the plaintiff was swindled by a stockbroker

employed by Dean Witter, who duped the plaintiff into investing in a non-existing fund.

Id. at 60-62. The plaintiff sued Dean Witter on several theories, including its negligent

supervision of the stockbroker. Id. at 77. The jury found Dean Witter liable for

negligent supervision, and we found the trial judge correctly determined the plaintiff's


                                                                                    A-4442-15T4
                                            17
"recovery for negligence must be reduced to reflect the jury's finding that he was 30

percent negligent." Id. at 76.

       The plaintiff in Stella obviously had nothing to do with Dean Witter's

supervision of its swindling stockbroker, as it involved only conduct between the

defendant employer and its employee, just as here. What the Comparative Negligence

Act measures is not the plaintiff's contribution to the defendant's conduct alleged to

have caused the plaintiff's loss but the plaintiff's responsibility for the event that caused

the harm, here, the purchase of property unsuited, at least for some period of time, for

the construction of the 3100 square foot house plaintiffs intended to build. See Suter,

81 N.J. at 205 ("The plaintiff's fault relates to his failure to act as a reasonably prudent

person in regard to his own well-being, proximately resulting in his avoidable injury.

'Fault' describes the law's view of the respective parties' relationships with the

occurrence of injury.") (Clifford, J., concurring).

       Because the Comparative Negligence Act is applicable "[i]n all negligence

actions and strict liability actions in which the question of liability is in dispute,"

N.J.S.A. 2A:15-5.2(a), including those for negligent supervision, and there was

sufficient evidence in the record to permit the jury to reasonably conclude plaintiffs'

failure to act as reasonably prudent people in regard to the transaction was a proximate

cause of the unsuitable purchase, see Roman v. Mitchell, 82 N.J. 336, 343 (1980), the


                                                                                          A-4442-15T4
                                             18
trial court erred in refusing to charge the jury on plaintiffs' comparative fault on their

negligent supervision claim against Palermo.

       Defendants assert, with support in the transcript, that the trial court's failure to

charge the jury in accordance with the Comparative Negligence Act resulted from the

problem posed by having the jury consider plaintiffs' fault vis-á-vis Woodward and

Palermo but not Vernon, to whom the defense of comparative negligence was not

available. See Conklin, 145 N.J. at 412. If that is true, it is indeed unfortunate because

the Supreme Court resolved the "knotty problem" of molding the verdict in such cases

in Ryan v. KDI Sylvan Pools, Inc., 121 N.J. 276, 291-96 (1990). Instructing the jury in

accordance with the Comparative Negligence Act and molding the verdict in

accordance with Ryan was required here because of Vernon's presence on the verdict

sheet. Avoiding the difficulty of molding the verdict by depriving Woodward and

Palermo of the right to have the jury charged in accordance with the Comparative

Negligence Act was error.

       Because this matter must be retried, we consider the balance of defendants'

arguments with respect to the trial court's decision on the applicability of the safe harbor

provision of the Consumer Fraud Act and its instructions on damages and the award of

fees for its guidance in any future proceedings.




                                                                                      A-4442-15T4
                                             19
       The argument by defendants and amicus that the trial court erred in finding the

safe harbor provision of the Consumer Fraud Act, N.J.S.A. 56:8-19.1, inapplicable

requires only brief comment. N.J.S.A. 56:8-19.1 provides "there shall be no right of

recovery of punitive damages, attorney fees, or both," under the Consumer Fraud Act,

against "a real estate broker, broker-salesperson or salesperson licensed under

[N.J.S.A.] 45:15-1 et seq. for the communication of any false, misleading or deceptive

information provided to the real estate broker, broker-salesperson or salesperson, by or

on behalf of the seller of real estate located in New Jersey" so long as the licensee

"[h]ad no actual knowledge of the false, misleading or deceptive character of the

information;" and "[m]ade a reasonable and diligent inquiry to ascertain whether the

information is of a false, misleading or deceptive character." N.J.S.A. 56:8-19.1(a) and

(b) (emphasis added). Because the information Woodward obtained from the zoning

office was not provided to her "by or on behalf of the seller," the trial court ruled the

provision inapplicable here. We agree.

       Defendants and amicus's argument that Woodward met both requirements of the

exemption, that is, that she was unaware of the misleading nature of the information she

received from the Township and passed on to the plaintiffs and made a reasonable and

diligent inquiry because the information was based on the representation of a Township

employee, while perhaps true, is beside the point. We agree with the trial judge that


                                                                                     A-4442-15T4
                                            20
those qualifiers are only relevant to information provided "by or on behalf of the seller,"

which the information Woodward sought out from the Township clearly was not. See

Nicholas v. Mynster, 213 N.J. 463, 481 (2013) (advising that in order to understand a

statute it is important to "view the statute's constituent parts to see how each piece

operates within the overall scheme"). We find no error in the trial court's reading of the

plain language of the statute. See DiProspero v. Penn, 183 N.J. 477, 492 (2005)

(directing that words of the statute are to be ascribed "their ordinary meaning and

significance" and read "in context with related provisions so as to give sense to the

legislation as a whole").

       We turn to damages. Over defendants' objections, plaintiffs were permitted to

present testimony regarding the difference in value between the 3100 square foot house

they intended to build and the 2300 square foot house they were approved to build in

2010, notwithstanding that by the time of trial they had approvals to build a 3100 square

foot house. In addition to those proofs on diminished value, plaintiffs were also

permitted to testify as to their loss-of-use damages, including $49,000 in summer

rentals for five years and $31,364 in real estate taxes on the Strathmere lot from closing

through trial; as well as the out-of-pocket expenses they incurred in getting the

necessary approvals to build the 3100 square foot house they intended, including sums

for closing costs and title insurance. The trial judge justified instructing the jury it could


                                                                                     A-4442-15T4
                                             21
award damages for diminution in value, loss of use, and plaintiffs' out-of-pocket or

rescission expenses because all are available under the Consumer Fraud Act.

       Although the trial judge was no doubt correct that diminished value, loss-of-use

and out-of-pocket damages have all been applied in fraud cases, plaintiffs have

provided us no case in which all three have been permitted in the same case. "Although

specific rules regarding damages in fraud cases are formulated for sundry purposes,

they must be subordinated to the basic objective of making the injured party whole."

Correa v. Maggiore, 196 N.J. Super. 273, 285 (App. Div. 1984). "Hence, 'a given

formula is improvidently invoked if it defeats a common sense solution.'" Ibid.

(quoting 525 Main St. Corp. v. Eagle Roofing Co., 34 N.J. 251, 254 (1961)).

       Diminution in value as a damage formula was improvidently invoked here and

should not be employed on retrial.2 Although plaintiffs could not immediately build the

3100 square foot house they bargained for, they could do so at the time of trial based on

the change in the property's flood zone designation during the pendency of the

litigation. Thus instructing the jury that it could consider the difference in value

between the 3100 square foot home Woodward represented they could build on the site

and the 2300 square foot home they were initially limited to, allowed plaintiffs to


2
  Accordingly, we need not address defendants' arguments related to the appraiser's
testimony as we do not expect such testimony on retrial.


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recover for a hypothetical loss that never materialized.3 A Consumer Fraud Act

plaintiff is to be made whole, not compensated for threatened losses. See

Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 558 (2009).

       Judged from that perspective, plaintiffs should be permitted to recover only those

costs beyond what they would have incurred had the flood designation permitted a 3100

square foot house at the time of their purchase in 2010. Thus closing costs and real

estate taxes, for example, would not be recoverable as plaintiffs would have incurred

them if the property would have been as represented. The same is true for permit fees,

and the costs of lawyers, planners or architectural drawings and the like. But costs

related to delays in constructing their home, such as the costs of renting another house

for the period beyond when they could reasonably expect their house to have been

completed or costs related to the re-drawing or re-presentation of plans would be


3
   Plaintiffs' reliance on D'Agostino v. Maldonado, 216 N.J. 168, 195 (2013) to support
their argument that damages were properly assessed "at the time the fraud [was]
committed and not some other date when plaintiffs' damages may be mitigated in some
respect by a fortuitous event such as . . . a re-zoning of plaintiffs' property" is misplaced.
In D'Agostino, "when plaintiffs filed their complaint and later submitted their proofs at
trial, they had not recovered their lost equity in the Property." Ibid. D'Agostino stands
for the proposition that the court's imposition of an equitable remedy, there rescinding
the transaction and thus restoring plaintiffs' lost equity in the property, does not bar a
finding of ascertainable loss. Ibid. ("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."). D'Agostino addressed an ascertainable
loss remedied by the court, not one that never materialized.
                                                                                     A-4442-15T4
                                             23
recoverable. Of course, any such out-of-pocket or loss-of-use claims must be

measurable. Plaintiffs may not recover for intangible loss of use or enjoyment. See

Gennari, 148 N.J. at 613. The jury should be instructed it is to award no more than

reasonably necessary to make plaintiffs whole. See Chattin v. Cape May Greene, Inc.,

243 N.J. Super. 590, 605 (App. Div. 1990), aff'd o.b., 124 N.J. 520 (1991).

      Finally, we address the award of fees on retrial. Plaintiffs were awarded

$330,617.33 in legal fees, ninety-five percent of which were assessed against

Woodward and Palermo. Unfortunately, the trial court did not explain how it assessed

the extent of counsel's efforts on the non-Consumer Fraud Act claims, especially those

brought against Vernon and Weichert as they cannot be considered as intertwined with

the Consumer Fraud Act claim against Woodward. See id. at 613-14.

      "In fixing counsel fees, a trial judge must ensure that the award does not cover

effort expended on independent claims that happen to be joined with claims for

which counsel is entitled to attorney fees." Grubbs v. Knoll, 376 N.J. Super. 420, 431

(App. Div. 2005). If the billing statements were inadequate to allow the court to

segregate the fees attributable to the Consumer Fraud Act claim, the court should

require counsel to resubmit them as it is counsel's obligation to differentiate between fee

eligible and non-fee eligible claims. Further care must be taken to ensure that only fees

for prosecuting the claim are compensated, fees related to non-litigation matters,


                                                                                     A-4442-15T4
                                           24
including zoning board applications and construction loans are not properly

compensable. See Hundred E. Credit Corp. v. Eric Schuster Corp., 212 N.J. Super.

350, 361 (App. Div. 1986).

       We reverse the judgment as to defendants Woodward and Palermo and remand

for a new trial on all issues. We do not retain jurisdiction.

       Reversed and remanded.




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