Desimone v. Springpoint Senior Living, Inc.

306 A.3d 1276

256 N.J. 172

256 N.J. 172

William DESIMONE, as Executor of the Estate of Evelyn DeSimone, deceased, individually in such capacities and on behalf of all others similarly situated, Plaintiff-Respondent,

v.SPRINGPOINT SENIOR LIVING, INC., Springpoint at Monroe Village, Inc., Springpoint at Montgomery, Inc., Springpoint at Crestwood, Inc., Springpoint at Meadow Lakes, Inc., and Springpoint at the Atrium, Inc., Defendants-Appellants.

A-37 September Term 2022

087891

Supreme Court of New Jersey.

Argued September 26, 2023

Decided January 10, 2024

On appeal from the Superior Court, Appellate Division.

Bruce W. Clark, Princeton, argued the cause for appellants (Clark Michie and Morgan Lewis & Bockius, attorneys; Bruce W. Clark, Christopher J. Michie, Stephanie R. Feingold, Princeton, and Jamie Huffman, Princeton, on the briefs).

Eric S. Pasternack argued the cause for respondent (Cohen, Placitella, & Roth and Mayer Law Group, attorneys; Eric S. Pasternack, Christopher M. Placitella, Michael Coren, William L. Kuzmin, Red Bank, and Carl Mayer, on the briefs).

Alex R. Daniel argued the cause for amicus curiae New Jersey Civil Justice Institute (New Jersey Civil Justice Institute, attorneys; Anthony M. Anastasio, of counsel, and Alex R. Daniel, of counsel and on the brief).

Edward J. Fanning, Jr., Newark, argued the cause for amici curiae New Jersey Business & Industry Association, New Jersey Chamber of Commerce, and Commerce and Industry Association of New Jersey (McCarter & English, attorneys; Edward J. Fanning, Jr., David R. Kott, Newark, and Leroy E. Foster, of counsel and on the brief).

JUSTICE FASCIALE delivered the opinion of the Court.

₁₇₅In 1960, the Legislature enacted the New Jersey Consumer Fraud Act (CFA) to protect New Jersey consumers from unconscionable and deceptive commercial practices. Over time, to , achieve that goal, the Legislature has expanded consumer protections through various supplemental statutes, one of which is central to this appeal.

Striving to combat food-related fraud, the Legislature enacted L. 1979, c. 347 (Chapter 347), codified at N.J.S.A. 56:8-2.9 to -2.13. ₁₇₆In this class action case, we address whether the refund provision contained in Section Three of Chapter 347, codified at N.J.S.A. 56:8-2.11, provides relief for all CFA violations, or whether it is limited solely to the food-related misrepresentations expressly proscribed in Section One of Chapter 347, codified at N.J.S.A. 56:8-2.9.

We hold that the refund provision is limited in scope: N.J.S.A. 56:8-2.11 provides relief only to victims of food-related fraud as identified in Chapter 347 and does not extend to all CFA violations. Here, the alleged conduct deals with misrepresentations of a senior living facility’s entrance fee, not food. Because those allegations are unrelated to misrepresentations of the "identity of food," plaintiffs are not entitled to a full refund of their entrance fees under N.J.S.A. 56:8-2.11.

We therefore reverse the order under review and enter partial summary judgment in defendants’ favor, dismissing with prejudice the part of plaintiffs’ complaint that seeks refund damages under N.J.S.A. 56:8-2.11. We remand for further proceedings.

I.

A.

We derive the pertinent facts from the allegations contained in plaintiffs’ amended complaint.

In February 2009, plaintiff William DeSimone and his siblings moved their mother; Evelyn DeSimone, into Springpoint Monroe Village, one of the "Continuing Care Retirement Communities" owned and operated by defendant Springpoint Senior Living, Inc. (Springpoint). In addition to monthly service fees and "other fees" relating to activities, incidentals, and medical care, Springpoint charges an entrance fee for residents. The amount of the entrance fee varies from $84,000 to over $700,000, depending on the Springpoint facility and living accommodation unit.

₁₇₇Springpoint offers two different "entrance fee refund" plans -- a "traditional plan" and the plan relevant to this appeal, a "90% refundable plan," The "90% refundable plan" is available upon election to pay a higher entrance fee. Through oral statements, marketing, and sales materials, Springpoint represented that under the "90% refundable plan," 90% of the entrance fee a resident paid, minus applicable deductions for medical care provided, would be refunded to the resident’s estate when the resident dies or moves out of the facility. In its disclosure statements, Springpoint likewise stated that the "90% refundable plan" "allows for up to 90% of the entrance fee to be refunded."

Those disclosures, however, also stated that the entrance fee refund policy is explained in greater detail in an attached "Residence & Care" agreement. Plaintiffs allege that the additional information is found "buried" on page 20, in Section VI of that agreement. They assert that, "contrary to all other prior representations and descriptions by Springpoint, including the Disclosure Statement," the language on page 20 provided "that the 90% refund would be paid without interest based on the lesser of the original entrance fee paid or the subsequent resident’s entrance fee," subject to certain additional deductions. (emphasis added).

The DeSimone family paid an entrance fee totaling $159,000 and selected the "90% refundable plan." According to the complaint, the DeSimone family believed that, if Evelyn moved out of the facility or passed away, 90% of the $159,000 paid entrance fee would be refunded, minus incurred medical costs. After Evelyn passed away in April 2010, Springpoint sent William a check for $80,136, accounting for approximately 50% of the entrance fee paid. When William inquired about the amount of the refund; Springpoint responded that the refund had been calculated based on the entrance fee paid by the resident who subsequently moved into Evelyn’s unit. That resident paid an entrance fee of $127,000, and Springpoint calculated the refund based on that lesser amount in keeping with Section VI of the "Residence & Care" agreement.

₁₇₈Plaintiffs allege that the DeSimone family was unaware of the "highly material ‘lesser than’ caveat" limiting the entrance fee refund policy because it was "buried on page 20 in the lengthy Residence and Care Agreement." They assert that had they known of the limiting provision, the DeSimone family would not have moved Evelyn into Springpoint Monroe Village, Plaintiffs further allege that Springpoint failed to disclose that it actively offered substantial entrance fee discounts to attract prospective residents -- discounts that, in turn, could affect the prior resident’s refund under the "90% refundable plan." They con- tend that the circumstances alleged by the DeSimone family are common to the class.

Relevant to the present appeal, plaintiffs asserted two counts of CFA violations: (1) "Misleading Advertisements/Marketing Collateral Materials" and (2) "Misleading Disclosure Statement[s]." On those two counts, and relying on N.J.S.A. 56:8-2.11, plaintiffs sought damages from Springpoint "to disgorge and make restitution by repaying all monies received or collected from" plaintiffs. Based on this language, plaintiffs sought to recover not only the full refunds that they claim they were entitled to receive under the "90% refundable plan," but also all money that each resident paid for the rental of a unit and for the services that Springpoint provided.

In June 2021, the trial judge certified the class and appointed plaintiff William DeSimone as a class representative.

B.

In June 2022, Springpoint moved for judgment on the pleadings under Rule 4:6-2, and/or partial summary judgment under Rule 4:46, to dismiss plaintiffs’ claims for a full refund under N.J.S.A. 56:8-2.11. Springpoint argued that N.J.S.A. 56:8-2.11 applies only to misrepresentations regarding food, as outlined in Chapter 347, and not to violations of other CFA provisions. The trial judge denied Springpoint’s motion, stating that she could not "ignore the precedential cases" that plaintiffs cited -- Lemelledo v. Beneficial 179Management Corp. of America, 150 N.J. 255, 696 A.2d 546 (1997), Weinberg v. Sprint Corp., 173 N.J. 233, 801 A.2d 281 (2002), and Dugan v. TGI Fridays, Inc., 231 N.J. 24, 171 A.3d 620 (2017). According to the trial judge, those cases "broadly appl[ied] the refund provision"

Springpoint moved for leave to appeal from the order denying its motion for partial dismissal of the complaint. The Appellate Division denied the motion, concluding that interlocutory "review [was] hot necessary in the interests of justice."

This Court granted leave to appeal. 253 N.J. 457, 291 A.3d 1164 (2023). We also granted motions from the New Jersey Civil Justice Institute (NJCJI), and from the New Jersey Business and Industry Association, the New Jersey Chamber of Commerce, and the Commerce and Industry Association of New Jersey (collectively, NJBIA), to appear as amici curiae.

II.

Springpoint asks us to reverse the trial judge’s order and grant partial summary judgment in its favor. Springpoint argues that the words "within" and "herein" found in N.J.S.A. 56:8-2.11 limit the refund provision to acts proscribed in Chapter 347 and not to violations of the broader CFA. Springpoint further contends that the legislative history surrounding N.J.S.A. 56:8-2.11 supports that limited reading. In Springpoint’s view, the trial judge relied on dicta contained in Lemelledo, Weinberg, and Dugan -- cases that did not address the scope of the refund remedy at issue in this appeal.

Plaintiffs argue that the word "act" in N.J.S.A. 56:8-2.11 refers to the entire CFA, relying on Lemelledo and Sun Chemical Corp. v. Fike Corp., 243 N.J. 319, 235 A.3d 145 (2020). Plaintiffs contend that, in those cases, this Court held that the phrase "this act" referred to the CFA generally when construing the cumulative remedies provision found in Section Five of Chapter 347, codified at N.J.S.A. 56:8-2.13. Plaintiffs also assert that Lemelledo, Weinberg, and Dugan...