Allen v. V.

• Decision Date: 07 July 2011
• Citation: 208 N.J. 114,26 A.3d 430
• Parties: William W. ALLEN and Vivian Allen, Plaintiffs–Respondents,v.V AND A BROTHERS, INC., d/b/a Caliper Farms Nursery and Landscaping Services, Defendants,andAngelo DiMeglio, the Estate of Vincent DiMeglio, deceased; and Thomas Taylor, Individually, Defendants–Appellants.
• Court: New Jersey Supreme Court

208 N.J. 114

26 A.3d 430

William W. ALLEN and Vivian Allen, Plaintiffs–Respondents,

v.V AND A BROTHERS, INC., d/b/a Caliper Farms Nursery and Landscaping Services, Defendants,andAngelo DiMeglio, the Estate of Vincent DiMeglio, deceased; and Thomas Taylor, Individually, Defendants–Appellants.

Supreme Court of New Jersey.

Argued Feb. 28, 2011.Decided July 7, 2011.

Paul J. Maselli, Princeton, argued the cause for appellants (Maselli Warren, attorneys).George T. Dougherty argued the cause for respondents (Katz & Dougherty, Mercerville, attorneys; Mr. Dougherty and Jack A. Butler, on the briefs).Joshua T. Rabinowitz, Deputy Attorney General, argued the cause for amicus curiae Attorney General of New Jersey (Paula T. Dow, Attorney General, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel).Gavin J. Rooney submitted a brief on behalf of amicus curiae New Jersey Lawsuit Reform Alliance (Lowenstein Sandler, attorneys; Mr. Rooney and Jamie R. Gottlieb, Roseland, on the brief).Eric L. Probst submitted a brief on behalf of amici curiae Northeast Spa and Pool Association, New Jersey Landscape Contractors Association, National Kitchen and Bath Association, Community Builders and Remodelers Association and Builders League of South Jersey (collectively, the “Home Improvement Associations”) (Porzio, Bromberg & Newman, attorneys; Mr. Probst and Raquel S. Lord, Morristown, on the briefs).Justice HOENS delivered the opinion of the Court.

This appeal involves two related questions that require us to consider the grounds for imposing individual liability based upon a violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8–1 to –20.

The first question concerns the interplay between CFA claims brought against corporate entities and individual employees or officers who are also named as defendants. More specifically, we consider whether, and under what circumstances, the owners and employees of a corporation may be individually liable for CFA violations that are directly attributable to acts undertaken by them through the corporate entity.

The second, and related, issue concerns whether those individuals may be barred by the doctrine of collateral estoppel from relitigating the quantum of damages assessed by a jury in the context of a trial in which only the corporate defendant was represented.

I.

We derive our recitation of the facts that give rise to the issues on appeal from the testimony offered at trial. In doing so, however, we recognize that the factual record relating to the individual defendants is constrained because the trial proceeded with only the corporation as a defendant. That is, although two of the individual defendants appeared at trial and testified as fact witnesses they did so after they had been dismissed as parties and they were not represented by individual counsel at trial. Moreover, the record does not reflect that either of them was even present during the trial save for the day on which each was called to testify.

With that caveat concerning the facts that can be derived from the record, it is clear that, at its core, this is a dispute between plaintiffs William and Vivian Allen and the corporate and individual defendants they hired to perform work on their house and grounds. Although it is largely a dispute concerning the quality of the work performed, plaintiffs also allege that defendants violated three separate regulations governing home improvements. Those regulatory violations form the basis for plaintiffs' CFA claims against the corporation as well as the individuals.

A.

Plaintiffs lived in Skillman, during which time an entity known as Caliper Farms performed landscaping work on their property. At all times relevant to this dispute, Caliper Farms was the name through which the corporate defendant, V and A Brothers, Inc., did business. At the time when the events giving rise to this dispute were unfolding, the corporation was wholly owned by two brothers, Vincent and Angelo DiMeglio. After the dispute arose, but before this lawsuit was filed, Vincent passed away, and Angelo purchased Vincent's shares of V and A Brothers, Inc. from Vincent's estate, thereby becoming the sole owner of the corporation.

In 2002, plaintiffs purchased a home in Princeton Township that was in need of landscaping. Because they had been satisfied with the work performed by Caliper Farms on their home in Skillman, they engaged defendant V and A Brothers, Inc. to do the landscaping work at the Princeton property. As part of the work at the residence in Princeton, plaintiffs planned to build an in-ground swimming pool in the backyard of the home. Because the lot on which the Princeton home was built was steeply sloped, the scope of that work included building a retaining wall and creating a level area on the property where the pool could be installed. Plaintiff contracted with V and A Brothers, Inc. to level the property and build the retaining wall, but hired a separate company to install the pool.

Angelo testified that his brother Vincent, who was several years older than he, had started the business and acted as the on-site manager for the work that the corporation performed. In contrast, Angelo attended to administrative matters and, although he occasionally visited sites and observed work in progress, he played a more limited role in the field than did Vincent. In addition to Angelo and Vincent, the corporation had one full-time employee, Thomas Taylor. Taylor was their sales representative and served as the corporation's principal contact with plaintiffs. He was responsible for designing the landscaping layout and evaluating the way the backyard could be configured to accommodate the pool, a task that was complicated not only by the steep slope at the rear of the property, but by wetlands restrictions and zoning constraints as well.

Plaintiffs assert that they hired V and A Brothers, Inc. to level off the slope and build the retaining wall based on their discussions with Taylor. The parties' agreement concerning the grading of the slope and the construction of the wall was not reduced to writing, but all parties agree that the estimated price was $160,000. Although V and A Brothers, Inc. designed the layout of the project, defendants relied on their block distributor, E.P. Henry, and an engineering firm, Earth Engineering, for the design of the retaining wall and for the job specifications relating to that aspect of defendants' work. According to plaintiffs, the agreed-upon work included specifications about the type and quality of backfill that could be used and that fixed the maximum height of the retaining wall. Both the backfill and the wall height eventually became sources of disagreement between the parties.

The construction of the retaining wall required the use of backfill to support the wall. There are, however, many varieties, types, and grades of backfill, each of which is capable of supporting different amounts of weight. As a result, the plans for this retaining wall specified the type of backfill required for the job. Plaintiffs assert that V and A Brothers, Inc. did not use the specified backfill, but instead substituted an inferior grade of fill that defendants trucked to plaintiffs' property from one of defendants' other construction sites. Both Angelo and Taylor testified that Vincent was responsible for obtaining backfill that was appropriate for the job.

The plans also specified that the wall would be twelve feet, four inches in height. As the overall project proceeded, however, the construction of the pool changed in two ways. First, the pool installation was impacted by subsurface conditions that were apparently unanticipated. As a result, when the other contractor completed the pool installation, the actual elevation of the pool was higher than had been expected. Second, in order to create a large enough area to install the pool, the retaining wall needed to be moved out as compared to the original plan. Moving the wall required that it be located farther down the existing slope on the property. Taken together, these two alterations meant that had the retaining wall been installed as designed, the top of it would have been below the level at which the pool was actually constructed. V and A Brothers, Inc. therefore increased the height of the retaining wall to conform with the elevation of the pool, resulting in a finished wall that significantly exceeded the height specified in the plan.

Rather than the twelve-foot, four-inch height included in the plan, the completed wall was eighteen feet, four inches high. Taylor testified that there was nothing in the engineering plan to indicate that the specified height of the wall represented the maximum permissible height, but he conceded that he did not consult further with the engineers while building a wall that exceeded the planned height by nearly fifty percent.

After V and A Brothers, Inc. completed the work but before it obtained final municipal approval for the construction, plaintiffs paid in full for all of the work that had been performed. It appears from the record that plaintiffs never received final municipal approvals for the work.

According to plaintiffs, not long after the wall was built and the swimming pool was installed, they began to notice defects in the work. First, they observed that the pool began to show signs that it was tilting in place, as evidenced by the fact that they could see that the water level at one side was significantly higher than it was at the other side. That defect was later confirmed by a formal survey. At about the same time, plaintiffs noticed that the retaining wall had developed a visible bulge in its middle section, and that cracks had begun to appear in the face of the wall.

After they saw what they perceived to be evidence of defective work, plaintiffs hired an engineer to investigate. According to their engineer, the retaining wall showed excessive...