The New Jersey Supreme Court today in an unanimous decision held that employees and officers of a corporation may be individually liable under the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1 et seq., for affirmative acts, knowing omissions, and regulatory violations, including violations of the Home Improvement Practices Act (“HIP”), N.J.A.C. 13:45A-16 et seq. We represented a group of home improvement contracting associations, including the Northeast Pool and Spa Association, in the appeal before the New Jersey Supreme Court. The overall outcome of the Court’s decision is disappointing. However, we along with the individual defendants were able to push the plaintiffs back from their argument that automatic individual liability for corporate officers and employees should attach. The Court recognized this, when it embraced the distinction between HIP violations and the more traditional CFA violations.
Going forward, a homeowner will have to prove more than mere knowledge of the violation to impose personal liability against corporate officers going forward. Of course, if the homeowner can prove that the corporate officer or employee participated in or facilitated the corporation’s violation of the CFA, the officer/employee would be liable for the homeowners’ attorneys’ fees, costs and triple damages of any judgment awarded connected to the CFA violation.