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               APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NO. A-2901-10T2



OREST CHAYKOWSKY,

     Plaintiff-Respondent,

v.

LOUIS MARUT, L & M LANDSCAPING,
BRANDIELLON, INC., and
DEBORAH MARUT,

     Defendants-Appellants/
     Third-Party Plaintiffs,

v.

STEVEN CHAYKOWSKY,

     Third-Party Defendant-
     Respondent.
____________________________________________________________

          Submitted September 21, 2011 - Decided    September 7, 2012

          Before Judges Graves, J. N. Harris, and Koblitz.

          On appeal from Superior Court of New Jersey,
          Law Division, Mercer County, Docket No.
          L-2320-08.

          David A. Gies, attorney for appellants.

          Pellettieri, Rabstein and Altman, attorneys
          for respondents Orest Chaykowsky and Steven
          Chaykowsky (Neal S. Solomon and Elyse Herman,
          of counsel and on the brief).

PER CURIAM
    Defendants Louis Marut (Louis) and his wife, Deborah Marut

(Deborah), are the owners of Brandiellon, Inc. (Brandiellon), a

New Jersey     corporation doing business as L & M Landscaping.

Defendants     appeal     from   an     order      dated   February       5,    2010,

dismissing their answer, counterclaim, and third-party complaint

with prejudice; a subsequent order denying defendants' motion to

restore their pleadings; and a final judgment in the amount of

$2,510,798.22 following a proof hearing.               We affirm except for a

limited remand for the purpose of determining an appropriate

award   of    reasonable    attorneys'       fees    and    costs    of    suit    to

plaintiff Orest Chaykowsky; and for further findings regarding

plaintiff's claims against Deborah.

    The relevant facts adduced from the record and the proof

hearing are not complicated.             Plaintiff owns several acres of

land in Hopewell with two structures on it.                 The main house has

approximately 8500 square feet of living space, and there is a

smaller guest house on the property.                 In the summer of 2005,

Louis contacted plaintiff with a proposal to improve plaintiff's

property.     The proposal included construction of a new 1200-foot

driveway to the main house; a stone courtyard for vehicles in

front of the house; a driveway connecting the main house to the

guest house with a parking area for the guest house; a swimming

pool; decorative boulders and stone walls; stone pillars for

electric     gates;   a   pathway     from   the    main   house    to    the   guest



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house; landscape lighting; clearing and grading of plaintiff's

property; planting of trees and shrubs; and the installation of

a drainage system.

      Following their initial discussion,          plaintiff paid Louis

$3500 for more detailed designs.           According to plaintiff, Louis

said the cost of the improvements shown on the design plans

would not exceed $750,000, and plaintiff agreed to have the work

done.    Plaintiff paid for the work as it was performed based on

invoices that Louis presented.             However, the parties' verbal

agreement was never reduced to writing, and plaintiff was never

provided with a list of the materials that would be used to

complete the project.

      Defendants began clearing trees from plaintiff's property

in the fall of 2005, and plaintiff made regular payments based

on invoices that Louis presented.          Most of the payments were by

check.   But plaintiff also made some cash payments because Louis

"said he had to pay his amigos in cash."             Whenever plaintiff

made a cash payment, he had Louis initial the invoice to confirm

the payment.

      By late May or early June 2006, plaintiff had paid Louis

more than $750,000 and plaintiff was concerned because Louis and

his   crew   began   showing   up   less   frequently.   When   plaintiff

confronted him, Louis said he needed another $100,000 to finish




                                      3                          A-2901-10T2
the job, and plaintiff agreed to the additional payment because

he wanted the job finished.

      In August 2006, plaintiff noticed "the property where the

drainage was supposedly installed was soaking wet after almost

any     rainfall,"      and   in    September,           after    returning     from     a

vacation, plaintiff observed that nothing had been done while he

was away.      When plaintiff asked Louis "what was going on," Louis

said he needed another $100,000, but plaintiff refused to give

him   any    more    money.        In    a    letter      dated    October     4,   2006,

plaintiff's attorney terminated defendants' services.

      Plaintiff commenced this action in September 2008, alleging

among    other      things,   breach         of   contract;       violations    of     the

Consumer Fraud Act (CFA), N.J.S.A. 56:8-2 to -20; and fraud.

Defendants filed an answer and counterclaim, and a third-party

complaint against plaintiff's son, Steven Chaykowsky.                          In their

counterclaim,       defendants     alleged        they    had     not   been   paid    for

labor and materials in the amount of $277,207.                          In their third-

party      complaint,    defendants          alleged      damages       resulting     from

Steven's "misrepresentations."

      In     February     2009,         plaintiff        served     defendants        with

interrogatories and a notice to produce documents.                           On June 5,

2009, defendants responded to the discovery requests but failed

to produce:         (1) 1099 or W-2 forms for the individuals who

performed work on plaintiff's property; (2) documents relating



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to lawsuits filed against defendants; (3) documents relating to

judgments     against        defendants;       (4)     documents        relating    to

complaints made by defendants' clients to various agencies; (5)

defendants' payroll records for the time period they performed

work on plaintiff's property; (6) defendants' books and records

from 2005 to the date of the request; (7) invoices for materials

defendants'       purchased    for   work     they    performed    on    plaintiff's

property; and (8) documents regarding all subcontractors that

performed work on plaintiff's property.

    Due to defendants' incomplete discovery response, plaintiff

filed a motion to dismiss defendants' pleading without prejudice

pursuant to Rule 4:23-5(a)(1).               That application was granted on

November 6, 2009.           In a subsequent motion, which was filed on

January     15,     2010,    plaintiff      sought     to   dismiss      defendants'

pleading     with     prejudice.         In    a     supporting    certification,

plaintiff's       attorney    stressed      that     defendants    had    failed    to

produce critical business records:

                 [Defendants'] books and records also
            will reveal how the Defendants applied the
            money that they received from Plaintiff.
            Did they use the Plaintiff's payments to pay
            for    materials   and    for    labor   and
            subcontractors who worked at Plaintiff's
            property, or did Defendants spend the money
            on other things?   Were the funds deposited
            into the business account, or used for
            Defendants'   personal   purposes?      Were
            subcontractors paid the amounts listed on
            the invoices provided to Plaintiff?     Were
            subcontractors not paid with the money given



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          to Defendant Marut by Plaintiff, resulting
          in them leaving the job?       This goes to
          Defendants' fraudulent scheme in violation
          of the Consumer Fraud Act, which requires
          these expenses to be spelled out in a
          written contract, and to his fraudulent
          intent to commence work with no real
          intention of completing it unless he was
          paid far more than Plaintiff understood to
          be the maximum contract price.

               Defendants have brought this lawsuit
          and discovery related to this lawsuit upon
          themselves by not having a written, signed
          contract with Plaintiff, and by not having
          written, signed riders for any changes or
          additions    to    the    original   contract.
          Defendant Brandiellon, Inc. is a licensed
          Home Improvement Contractor in New Jersey.
          Defendants knew what the applicable laws and
          regulations are and chose to ignore them.
          They   should   not   be   allowed  to   avoid
          discovery that is relevant to Plaintiff's
          claims that Defendants, among other things,
          intentionally        misrepresented      their
          capabilities, the scope of the work to be
          done, and the cost of the promised work.

               For    these     reasons,    Defendants'
          responses   to   Plaintiff's   requests   for
          production of documents are not sufficient.

    During   oral   argument    on       February   5,   2010,    defendants'

attorney claimed that virtually all of defendants' books and

records   were   destroyed     in    a     storm    on   August    2,      2009.

Nevertheless, the trial court concluded that defendants failed

to comply with their discovery obligations because most of the

information plaintiff requested was available to defendants from

other sources, such as the Internal Revenue Service, defendants'

accountant, their payroll service, or their bank.                Accordingly,



                                     6                                  A-2901-10T2
the   court   granted       plaintiff's        motion   to     dismiss      defendants'

pleadings     with       prejudice   and   subsequently         denied      defendants'

motion    under      Rule    4:50-1(f)     to    vacate       "the    dismissal      with

prejudice."           The    court      found     defendants         "had    both     the

opportunity and the ability to get [the discovery] materials,

[but they] didn't do it."

      The court conducted a proof hearing on November 19, 2010,

and December 9, 2010.            Defendants' attorney was present in court

on both dates, and he was permitted to cross-examine plaintiff's

witnesses and to present a closing statement to the court.                            See

Chakravarti v. Pegasus Consulting Group, Inc., 393 N.J. Super.

203, 210-11 (App. Div. 2007) ("Even though a defendant who has

defaulted     has    relinquished       the     right   to     present      affirmative

proofs   in   the     matter,     the   right     to    challenge      a    plaintiff's

showings in a proof hearing by way of cross-examination and

argument should not ordinarily be precluded."); see also Jugan

v. Pollen, 253 N.J. Super. 123, 129-31 (App. Div. 1992).

      The trial court stated its findings and conclusions in an

oral decision on December 9, 2010.                  The court found that "Mr.

Marut    quoted      Mr.    Chaykowsky     a    price    of    $750,000"       for    the

landscaping work to be performed on plaintiff's property, and

that plaintiff sustained compensatory damages in the amount of

$802,774.     The court calculated plaintiff's damages based on his

expenditures        in     the   amount    of     $366,307       to    correct       work



                                           7                                   A-2901-10T2
improperly      performed    by     defendants;   the    estimated     cost     to

install the swimming pool and to complete the project in the

amount of $245,000; and the "overpayment on the contract price"

in the amount of $191,467.

      The court also found that defendants' failure to enter into

a   written    contract     with   plaintiff   violated    N.J.A.C.        13:45A-

16.2(a)(12) and entitled plaintiff to recover under the CFA.

Therefore,      in   addition      to   compensatory    damages,     the    court

awarded plaintiff statutory damages in the amount of $1,605,548,

attorneys' fees in the amount of $98,612.50, and costs in the

amount of $3,863.72.

      Defendants present the following arguments on appeal:

              POINT I

              THE DEFAULT SHOULD HAVE BEEN SET ASIDE WHERE
              GOOD CAUSE IS PRESENT IN LIGHT OF THE
              DEFENDANTS' ATTEMPT BOTH BEFORE AND AFTER
              DISMISSAL TO COMPLY WITH THE PLAINTIFF'S
              DISCOVERY DEMANDS.

              POINT II

              THE TRIAL COURT ERRED NOT ONLY IN ANALYZING
              THE PLAINTIFF'S EVIDENCE RELATING TO HIS
              DAMAGE CLAIM, BUT IN CALCULATING THE AMOUNT
              AS WELL.

              POINT III

              DEBORAH, AN OFFICER OF BRANDIELLON, IS NOT
              INDIVIDUALLY LIABLE TO THE PLAINTIFF UNDER
              THE CFA BECAUSE SHE DID NOT PERSONALLY
              PARTICIPATE IN VIOLATING THE ADMINISTRATIVE
              REGULATIONS.




                                         8                             A-2901-10T2
         POINT IV

         NEITHER INDIVIDUAL DEFENDANT SHOULD BE HELD
         PERSONALLY LIABLE UNDER THE CFA BECAUSE THE
         PLAINTIFF'S CLAIM ONLY SOUNDS IN CONTRACT.

    We conclude from our review of the record that the trial

court did not abuse its discretion when it granted plaintiff's

motion to dismiss defendants' answer, counterclaim, and third-

party complaint with prejudice, and when it subsequently denied

defendants' motion to restore their pleadings.              In addition,

there is sufficient credible evidence in the record to support

the award of treble damages under the CFA.           However, there were

insufficient findings to justify the award of counsel fees and

costs, and those issues are remanded for reconsideration.                The

trial court must also reconsider whether Deborah is individually

liable for plaintiff's damages.

    The CFA is remedial legislation that "should be construed

liberally in favor of consumers."        Cox v. Sears Roebuck & Co.,

138 N.J. 2, 15 (1994).      To recover under the CFA, a plaintiff

must establish three elements:         "(1) unlawful conduct by the

defendants;   (2)   an   ascertainable   loss   on    the   part   of    the

plaintiff; and (3) a causal relationship between the defendants'

unlawful conduct and the plaintiff's ascertainable loss."               N.J.

Citizen Action v. Schering-Plough Corp., 367 N.J. Super. 8, 12-

13 (App. Div.), certif. denied, 178 N.J. 249 (2003); see also

N.J.S.A. 56:8-19.



                                   9                               A-2901-10T2
     In this case, the trial court concluded that plaintiff was

entitled   to    recover       under   the      CFA    because:           (1)      defendants

violated    N.J.A.C.       13:45A-16.2(a)(12),                  which        requires        home

improvement contracts in excess of $500 to be in writing and to

contain    specific       information;          (2)        plaintiff          sustained        an

ascertainable      loss       in     the   amount          of     $802,774;            and    (3)

plaintiff's      loss   was     attributable          to   the    lack        of   a    written

agreement, with a "clearly stated contract price," describing

the work to be performed and the materials to be used.

     The scope of our review is limited.                        "'[W]e do not disturb

the factual findings and legal conclusions of the trial judge

unless we are convinced that they are so manifestly unsupported

by or inconsistent with the competent, relevant and reasonably

credible evidence as to offend the interests of justice.'"                                   Rova

Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474,

484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J.

Super.    154,    155    (App.      Div.),      certif.         denied,       40    N.J.      221

(1963)).    In the present matter, there is substantial credible

evidence to support the trial court's award of treble damages

under the CFA.      However, we remand the award of attorneys' fees

and costs to the trial court to determine whether the fees and

costs requested by plaintiff are reasonable.                       See N.J.S.A. 56:8-

19   (stating     that     a       successful     plaintiff             is     entitled        to




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"reasonable attorneys' fees, filing fees and reasonable costs of

suit").

       In their third point, defendants argue that the trial court

erred when it determined that Deborah was individually liable

under the CFA "based upon her position with the corporation."

While this appeal was pending, the New Jersey Supreme Court

determined that individual liability for regulatory violations

under   the   CFA    depends     upon    "the   language     of    the   particular

regulation in issue and the nature of the actions undertaken by

the individual defendant."          Allen v. V & A Bros., Inc., 208 N.J.

114,    133   (2011).      Thus,    it    is    clear   that      Deborah   is    not

automatically liable under the CFA due to her position as Vice

President of Brandiellon, and we remand this issue to the trial

court for further consideration.

       Affirmed     in   part,   reversed       in   part,   and    remanded      for

further proceedings consistent with this opinion.                    Jurisdiction

is not retained.




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