By Fredrick P. Niemann, a NJ Consumer Fraud Attorney
The New Jersey Supreme Court recently held that when a company commits fraud against a consumer, individuals within the company can be held personally liable. In a case involving fraud committed by a construction company, the Court said that not only would the corporation itself be liable for the damages caused to the consumers, but the employees and other individuals within the company could also be held liable depending on the situation. This means that owners, managers, officers, directors, employees, and any other individuals who take part in the fraud can no longer hide behind the “corporate veil” in certain situations.
The New Jersey Consumer Fraud Act (CFA) is in place to protect consumers from the fraudulent acts of companies. The Supreme Court said that not only would individuals associated with fraudulent actions such as misrepresentations and omissions of material facts be liable, but those that take part in other smaller violations of the CFA could be held liable as well. The Court’s holding pertained to a construction fraud case, which may be a unique scenario. In order for a person to be individually liable for a violation of the CFA, they must have personally taken part in the action or had knowledge of the fraud. This means that directors, managers, and other higher-ups who did not know of an employee’s fraud still cannot be held personally liable for their actions, although the corporation itself can be.
If you have a question regarding consumer fraud or corporate liability, please contact Fredrick P. Niemann, Esq., a knowledgeable Corporate Lawyer, immediately. He can be reached toll free at 888 800-7442 or by email at fniemann@hnlawfirm.com/. He looks forward to hearing from you.