Suarez v. Eastern International College, 428 N.J. Super. 10 (App. Div. 2012). Plaintiff enrolled at the defendant for-profit college, in its diagnostic medical ultrasound technician program. A school representative told her before she enrolled that after graduating from the college, she would be able to perform ultrasounds in hospitals and clinics and earn $65,000 per year. In fact, as plaintiff learned after she completed the program, administering ultrasounds required a certification from the American Registry for Diagnostic Medical Sonography (“ARDMS”). Because defendant was not accredited, plaintiff could not get ARDMS certification when she finished defendant’s program. Defendant did not reveal that fact. Plaintiff sued the college for common law fraud and for violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”). The Law Division granted summary judgment on both claims. On appeal, however, the Appellate Division reversed as to the CFA claim. Judge Espinosa wrote the panel’s opinion.
After describing the standard of review of a grant of summary judgment in some detail, the court affirmed the dismissal of the common law fraud claim. As to the alleged omission regarding ARDMS certification, common law fraud requires that the defendant have knowingly omitted a material fact. Judge Espinosa found no evidence that the college’s representative knew of the materiality of the certification or knowingly omitted something about ARDMS certification from his statements. The affirmative misrepresentation claim failed because the “statements regarding plaintiff’s potential employment and earning capacity were not statements of present or previously existing facts” and therefore could not serve as a basis for a common law fraud claim.
The CFA claim was different. An affirmative misrepresentation under the CFA does not require intent or knowledge. Since the jury could find that the college made a statement that was false, and because a reasonable person would have considered that statement material to the transaction, summary judgment was improperly granted to defendant.
In fact, Judge Espinosa went one step further. The alleged omissions, she concluded, were “essentially subsumed in the allegation 0f the affirmative misrepresentation.” As a result, “the omission of accurate information about that material fact rendered the statement an affirmative misrepresentation actionable under the CFA.”
This was a very important insight. As some prior caselaw has noted, many misrepresentations can also be viewed as omissions, and vice versa. The line between the concepts can be murky. Defendants sometimes try to insist that a wrongful statement is only an omission, as to which intent is required, rather than an affirmative misrepresentation, where no scienter is needed. Judge Espinosa declined to rigidly segregate the two offenses, and instead rightly recognized that the concepts can overlap. Especially given the mandate that the CFA be liberally construed in favor of consumers, the panel’s decision to treat as an affirmative misrepresentation what might otherwise have been labeled an omission, in recognition of the fact that the two offenses are often intertwined, was a very perceptive ruling.
Defendant tried to defeat the consumer fraud claim by asserting that the “learned professional” exception to the statute applied. Judge Espinosa rejected that idea. The “learned professional” exception applies only to professionals who are “subject to regulation specifically applicable to their profession, which might conflict with the regulation of activities under the CFA.” Since the college “identified no regulatory body that defines uniform standards for the services it provides or its activities as a for-profit training school, let alone regulation that would present a ‘patent and sharp’ conflict with the application of the CFA,” defendant could not invoke the “learned professional” exception.