Gabriel Redmond

Business Law 3000

Section I
Professor Leapheart

ALBERT COX, AS EXECUTOR OF THE ESTATE OF WILLIAM COX,
PLAINTIFF-APPELLANT, v. SEARS ROEBUCK & COMPANY,
DEFENDANT-RESPONDENT.
SUPREME COURT OF NEW JERSEY

138 N.J. 2; 647 A.2d 454; 1994 N.J. LEXIS 845

March 15, 1994, Argued
September 15, 1994, Decided
2. FACTS:
In August of 1988, Mr. William Cox contracted Sears Roebuck & Co. (Sears) to renovate his
kitchen. The contract with Sears required the defendant to install a vinyl floor, a countertop, a sink, and
faucet with a full backsplash, wallpaper, a microwave hood, a garbage disposal, an additional electrical
outlet, removal of cabinets and installation of new ones. In addition to the previous requirements, Sears
was to reinstall all appliances, to sheetrock walls as necessary , to the cover the exhaust fan, and to vent
the microwave hood outside. Cox agreed to finance the $7,295.69 cost of the renovations on his Sears
credit card. On December 5, 1988, Cox agreed to $1,500 of additional work that included the rewiring
and updating the electrical work in the kitchen, bringing the total bill to $8,795.69. Cox believed Sears
work to be substandard based upon apparent unattractive appearance, incomplete and substandard wiring
in the kitchen, and the project failed to comply with electrical and building codes and home-repair
regulations. Sears also neglected to request the building and electrical permits from the municipality in
which the renovations took place. Nor were any issued to the Cox residence before, during or after Sears
work on the kitchen. That being said, Cox sued on theories of breach of contract as well as violations of
the Consumer Fraud Act (Act). Sears counterclaimed for the full contract price of $8,795.95. The jury
ruled in favor of Cox on Breach of Contract, awarding incurred damages of $6,830. The trial court
entered a no cause of action, in favor of Sears on the topics of contract and consumer fraud counts. The
court dismissed Sears counterclaim and ordered them to remove any charges to Coxs Sears credit card.
In regards to Coxs accusation of Sears violation of the Consumer Fraud Act, the court concluded that
Cox had failed to prove any ascertainable loss as a result of the defendants substandard completion of the
contracted job. The trial court also denied Coxs request for attorneys fees. Cox appealed on the basis
that Sears Roebuck & Company's conduct constituted an unlawful practice under the Consumer Fraud
Act and William Cox suffered an ascertainable loss caused by Sears' violation of that Act. Therefore, Cox
is entitled to recover treble damages, reasonable attorneys' fees, filing fees and costs under the Act.
When filing for appeal, the majority of the Appellate Division affirmed the trial courts decision in
regards to the denying Coxs claim that Sears violated the Consumer Fraud Act. One member of the
Appellate Divisions panel disagreed however. The dissent noted that the jurys verdict supported the
conclusion that Sears engaged in an unconscionable commercial practice. The dissent noted that trial
court should have cancelled Coxs contract indebtedness, denied sears any reasonable attorneys fees,
filing fees, and costs because a charge on a credit card is a legal obligation which would account it as a
loss under the Consumer Fraud Act.
Gabriel Redmond
Business Law 3000
Section I
Professor Leapheart
3. ISSUE
Was the decision of the trial court incorrect due to the fact that the jurys verdict that implied that
Sears had performed a substandard job on Coxs kitchen thus engaging in a reprehensible commercial
practice. Thus, should Sears have to pay for repairs to kitchen that would bring it to a useable state, as
well as attorneys fees, filing fees, and costs?
4. DECISION
The judgment of the Appellate Division was reversed, and sent the case back to the trial court for
the judgment for Mr. Cox on the sixth count of the Complaint, alleging Consumer Fraud Act violations,
the damages to be trebled as provided in this opinion, and for entry of judgment for attorneys fees, filing
fees, and costs as provided herein.
5. REASON
The decision to remand the case to the trail court for the judgment in regards to the alleged
violation of the Act was made because the amount calculated in damages was based upon the agreed
contract price. The contract price would not be the correct measurement of consumer-fraud damages
because the consumer fraud occurred in the course of the performance and not in contracting for the home
improvement. In regards to the attorneys fees, it was decided because the provisions for attorneys fees
were implemented to minimize the financial cost to the plaintiff and maximize their compensation.