September 18, 2019
In an August 15, 2019 published decision, captioned Jodi Shaw, et al. v. Brian Shand, et al., A-5686-17T1, the New Jersey Appellate Division reversed a trial court’s grant of partial summary judgment to a licensed home inspector, finding that home inspectors could be liable under New Jersey’s Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1 to -210. The trial court had determined that licensed home inspectors were “learned professionals,” and thus excluded from CFA liability.
The Appellate Division’s review was interlocutory, and noted that the judicially created “learned professional” exception must be narrowly construed, and should reach only “those professionals who have historically been recognized as “learned” based on the requirement of extensive learning or erudition.” The court expressly overruled Plemmons v. Blue Chip Insurance Services, Inc., 387 N.J. Super. 551 (App. Div. 2006), to the extent that it and other decisions extended the “learned professional” exception to CFA liability to “semi-professionals” who were simply regulated by a separate statutory scheme. The court noted that Plemmons, in this regard, was inconsistent with the Supreme Court’s holding in Lemelledo v. Beneficial Management Corp. of America, 150 N.J. 255 (1997). Lemelledo, the court held, made clear that the existence of a separate statutory scheme would overcome the application of the CFA only when “a direct and unavoidable conflict exists between application of the CFA and application of the other regulatory scheme or schemes.” Holding that home inspectors were neither historically recognized learned professionals, and that no direct and unavoidable conflict existed between the CFA and the regulations governing home inspectors, the court reinstated the CFA claim against the home inspector defendant.
This decision will allow CFA liability to continue to attach to “semi-professionals,” even where those professionals are subject to a regulatory scheme governing their conduct. Only where a direct and unavoidable conflict exists between application of the CFA, and application of that regulatory scheme, will CFA liability be precluded.
For more information on this topic, please contact MKC&I’s Tom Emala at (973) 822-1110 or at temala@mcgivneyandkluger.com.