NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0002-04T5

HAYES YOUNG,

Plaintiff-Respondent,

v.

BLOOMINGDALE'S AND XYZ

CORPORATION,

Defendants,

and

STAINSAFE, INC.,

Defendant-Appellant.

___________________________________

Submitted March 15, 2005 - Decided

Before Judges Wecker and S.L. Reisner.

On appeal from the Superior Court of New

Jersey, Law Division, Monmouth County,

DC-44222-03.

Wilson, Elser, Moskowitz, Edelman & Dicker,

attorneys for appellant (Stephen R. Knox,

of counsel; Reema Desai, on the brief).

Shestack & Young, attorneys for respondent

(Rita Aronov, on the brief).

PER CURIAM

Defendant, Stainsafe, Inc., appeals from an order denying its motion to vacate a default judgment entered in favor of plaintiff, Hayes Young. Plaintiff is an attorney who filed suit pro se, against Bloomingdale's, the department store chain, and Stainsafe, Inc., alleging breach of warranty, violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -106, and breach of contract. The underlying transaction involved a five-year furniture warranty and an upholstered sofa, both of which plaintiff purchased from Bloomingdale's for $5,996.42. The price for the warranty, the Stainsafe "5 YEAR COMPREHENSIVE FURNITURE PROTECTION PLAN," was $149.

Plaintiff reached a settlement with Bloomingdale's for an undisclosed amount. Stainsafe never filed an answer, and default judgment was entered against it on July 3, 2003. The court awarded plaintiff treble damages of $15,000 (the jurisdictional limit) plus $3,980.97 in attorney's fees and costs, apparently under the Consumer Fraud Act.

Stainsafe filed a motion to vacate the default judgment on June 1, 2004, within the requisite one-year period for a motion under Rule 4:50-1(a) based upon excusable neglect. The motion judge concluded, however, that excusable neglect had not been shown. We agree. Defendant's arguments that his original attorney failed to act because he thought the matter had been settled, and its current attorney's contention that he could not determine whether a judgment had been entered, hardly meet the standard for Rule 4:50-1(a) relief. Defendant sought relief in the alternative under Rule 4:50-1(f), which requires exceptional circumstances but may afford relief where the totality of the circumstances demonstrates that enforcement of the judgment would be unjust, oppressive or inequitable. See Pressler, Current N.J. Court Rules, comment 1.7 on R. 4:50-1(2006); see Lawson Mardon Wheaton Inc. v. Smith, 160 N.J. 383, 404-07 (1999); see also Greenberg v. Owens, 31 N.J. 402, 410-11 (1960).

The motion judge held that Stainsafe presented no evidence of a meritorious defense. With respect to the breach of warranty claim, we agree that plaintiff's allegations on their face established defendant's refusal to honor the warranty. We reject Stainsafe's contention that its written warranty, which provided an exclusion for "failure to comply with the manufacturer's instructions for cleaning and use" and for "stains caused by non-approved cleaners," deprived plaintiff of coverage and excused defendant's performance. Plaintiff admitted that he used club soda in an attempt to clean a red wine spill from the sofa's fabric. But nothing in the warranty language supports the contention that club soda was an unauthorized cleaner. Defendant also contends that written instructions for care of the sofa warned against such an attempt; but defendant did not provide any evidence of such instructions. Thus liability for failure to honor the warranty was fairly established by default.

Damages on the breach of warranty count, however, were erroneously imposed in two respects. First, plaintiff's recovery by settlement with Bloomingdale's must be credited against any damage award against Stainsafe. Second, some credit against the purchase price of the sofa must be allowed for its use, undamaged, for the time prior to the spill as well as for its continued use, albeit in a damaged state. Thus a remand is necessary for modification of the judgment.

Entry of default judgment on the consumer fraud count is another matter. We cannot find, on the record before us, that plaintiff established a prima facie case of an unconscionable business practice on Stainsafe's part, irrespective of the breach of warranty. See Palmucci v. Brunswick Corp., 311 N.J. Super. 607, 616 (App. Div. 1998) (breach of warranty is not per se unconscionable and does not alone violate the Consumer Fraud Act); DiNicola v. Watchung Furniture's Country Manor, 232 N.J. Super. 69, 73 (App. Div. 1989) (breach of warranty not involving unconscionable commercial practice is not a violation of the Consumer Fraud Act).

Moreover, plaintiff relied solely upon hearsay contained in a newspaper article, a Better Business Bureau report issued in another state, and a supposed television report expose. These are not competent evidence. The judge did not conduct a proof hearing, as authorized by Rule 4:43-2(b), before awarding treble damages and attorney's fees, which would be available only on the consumer fraud claim. It is therefore unjust to allow that judgment to stand.

We affirm the judgment insofar as it establishes liability for breach of warranty, vacate the judgment on liability for consumer fraud, and vacate the award of money damages and attorney's fees. We reverse and remand for a proof hearing on damages for defendant's breach of warranty. At that hearing plaintiff also shall have an opportunity to offer competent evidence in support of his consumer fraud claim. Defendant shall be permitted to cross-examine any witnesses offered by plaintiff and may argue against plaintiff's claims, but shall not be permitted to present affirmative evidence.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

The judgment did not explicitly refer to any of the causes of action set forth in the complaint. We infer that the court found both a breach of warranty and a violation of the Consumer Fraud Act.

It was also error to award attorney's fees and costs in light of plaintiff's failure to file an appropriate certification. See R. 4:42-9(b).

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A-0002-04T5

September 21, 2005