Nursing Home Abuse: Appellate Division Holds No Cause Of Action Under Consumer Fraud Act

By: Donna Russo, Esq.

Can a nursing home be sued under the N.J. Consumer Fraud Act, N.J.S.A. 56: 8-2 et. seq.?
The Appellate Division in Manahawkin Convalescent v. Frances O’Neill et. seq., decided May 31, 2011, ruled that a lawsuit cannot be filed under the N.J. Consumer Fraud Act for nursing home abuse.

The New Jersey Consumer Fraud Act prohibits:
[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with the intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby . . . .

In order to have a viable claim for a violation of the Consumer Fraud Act, a plaintiff must prove: “1) unlawful conduct by defendant; 2) an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful conduct and the ascertainable loss.” Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009) (citations omitted).

The Appellate Division in Manahawkin Convalescent applied the “learned professional” exception to the Consumer Fraud Act which exempts learned professionals from liability under the act as long as the professional is operating in his professional capacity. The learned professional exception has been previously applied to hospital services. Hampton Hosp. V. Bresang, 288 N.J. Super. 372, 383 (App. Div.) cert. denied 144 N.J. 588 (1996). The rationale was that hospitals are strongly regulated.

The Appellate Division, applying these principles to nursing homes, held that nursing homes are strictly regulated and applying the Consumer Fraud Act “would create an impermissible circumstance where divergent determinations and penalties for the same subject matter may occur.”

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