New Jersey's Consumer Fraud Act and its Potential Application to Casual Sellers

A while ago, an individual from Missouri purchased a 1970 Corvette from a New Jersey resident who advertised the vehicle on eBay and claimed that the vehicle was in " good condition". When the buyer received the vehicle it was virtually inoperable and he had to spent approximately $40,000 to fix it. The buyer sued the seller under various theories of liability, including New Jersey’s Consumer Fraud Act.(CFA)

At the trial level, the buyer obtained a judgement in the sum of $62,000 including approximately $30,000 in counsel fees. On appeal New Jersey’s Appellate Division reversed as to the CFA claim. The core of the Appellate Division’s decision was that the CFA did not apply to a casual seller, but rather, a "dealer" of services or product. The case ultimately reached New Jersey’s Supreme Court. There the court reinstate the verdict at the trial level and concluded that the seller was a "person" as defined by the CFA even though he was not a true dealer. In writing the decision, Justice Rivera- Soto observed that the buyer had pled and proven a "textbook claim" under the CFA.

The seller attorney has since complained about the Court’s ruling, contending that the CFA may now apply to individuals who conduct garage sales.