NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4175-15T4
ROSEMARY STANLEY, on behalf of herself and all others similarly situated,
Plaintiff-Appellant,
v.
CAPRI TRAINING CENTER, INC., d/b/a CAPRI INSTITUTE,
Defendant-Respondent. ______________________________
Submitted May 2, 2017 – Decided September 12, 2017
Before Judges Ostrer, Leone and Vernoia.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-182-16.
DeNittis Osefchen, PC, attorneys for appellant (Stephen P. DeNittis and Joseph A. Osefchen, on the briefs).
Bielan, Miklos & Makrogiannis, PC, attorneys for respondent (Judith Q. Bielan and Robert H. Benacchio, on the brief).
Gibbons P.C., attorneys for amicus curiae Association of Cosmetology and Hairstyling Schools of New Jersey, Inc., and Robert Fiance Beauty Schools, Inc. (Michael R. McDonald and Jennifer Marino Thibodaux, on the brief). PER CURIAM
Plaintiff Rosemary Stanley appeals from an order dismissing
her putative class action complaint with prejudice for failure to
state a claim upon which relief can be granted. R. 4:6-2(e). Based
on our review of the record in light of the applicable law, we
reverse and remand for further proceedings.
I.
In our review of an order dismissing a complaint pursuant to
Rule 4:6-2(e), we limit our summary of the facts to those alleged
in the complaint, which we accept as true extending all favorable
inferences to plaintiff. See Tisby v. Camden Cty. Corr. Facility,
448 N.J. Super. 241, 247 (App. Div.), certif. denied, ___ N.J. ___
(2017). Defendant operates four cosmetology schools in New Jersey.
Each school has a clinic that provides cosmetology services to the
general public in exchange for a fee paid to defendant. The
services are "primarily and/or exclusively" provided by
defendant's unlicensed cosmetology students. In 2011 and 2012,
plaintiff visited one of defendant's clinics where she received
and paid defendant for various cosmetology services.
Plaintiff alleges that the fees she and other putative class
members paid defendant for cosmetology services exceeded those
permitted under the Cosmetology and Hairstyling Act of 1984 (the
Act), N.J.S.A. 45:5B-1 to -38. More particularly, she alleges
2 A-4175-15T4 N.J.S.A. 45:5B-3(h) bars a cosmetology school clinic from charging
the general public fees that exceed the amount required to "recoup
. . . the costs of the materials used in the performance of [the]
services."1 Plaintiff alleges defendant charged her and the
putative class members fees that exceeded the costs of the
materials used to provide the cosmetology services they received.
Based on those facts, plaintiff's complaint alleges four
causes of action: violation of the Consumer Fraud Act (CFA),
N.J.S.A. 56:8-1 to -20 (count one); violation of the Truth-in-
Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A.
56:12-14 to -18 (count two); breach of the covenant of good faith
and fair dealing (count three); and unjust enrichment (count four).
Defendant moved to dismiss the complaint for failure to state
a claim upon which relief can be granted, R. 4:6-2(e), and
requested oral argument, R. 1:6-2(d). It appears2 defendant argued
in its papers that plaintiff's claims turned on an interpretation
1 N.J.S.A. 45:5B-3(h) provides the Act's definition of "clinic": "a designated portion of a licensed school in which members of the general public may receive cosmetology and hairstyling services from registered students in exchange for a fee which shall be calculated to recoup only the cost of materials used in the performance of those services." (emphasis added). 2 We do not have the benefit of the briefs filed before the motion court and, because the court did not hear the requested oral argument or make detailed findings or legal conclusions, we are unable to definitively identify the parties' arguments presented to the motion court.
3 A-4175-15T4 of what constitutes the "cost of materials" under N.J.S.A. 45:5B-
3(h), and therefore the New Jersey Board of Cosmetology and
Hairstyling (the Board) had exclusive jurisdiction over the
claims.
The court did not hear oral argument, but issued an order
granting the dismissal motion. The order was untethered to any
findings or conclusions of law, see R. 1:7-4, other than a notation
on the order stating "[p]er N.J.S.A. 56:8-140 [and N.J.A.C.] 13:28-
6.1[,] the State Board has jurisdiction and there is no private
cause of action."
Plaintiff appealed the order dismissing the complaint. We
granted the Association of Cosmetology and Hairstyling Schools of
New Jersey, Inc. (Association) and the Robert Fiance Beauty
Schools, Inc. leave to appear as amicus curiae.
II.
We review de novo an order dismissing a complaint under Rule
4:6-2(e). See Stop & Shop Supermarket Co. v. Cty. of Bergen, 450
N.J. Super. 286, 290 (App. Div. 2017). "[O]ur inquiry is limited
to examining the legal sufficiency of the facts alleged on the
face of the complaint." Printing Mart-Morristown v. Sharp Elecs.
Corp., 116 N.J. 739, 746 (1989). A plaintiff is "entitled to every
reasonable inference of fact," and "[t]he essential test is simply
'whether a cause of action is "suggested" by the facts,'" and
4 A-4175-15T4 Green v. Morgan Props., 215 N.J. 431, 451-52 (2013) (quoting
Printing Mart, supra, 116 N.J. at 746). Nonetheless, "[a] pleading
should be dismissed if it states no basis for relief and discovery
would not provide one." Rezem Family Assocs., LP v. Borough of
Millstone, 423 N.J. Super. 103, 113 (App. Div.), certif. denied,
208 N.J. 368 (2011).
The standard "requires an assumption that the allegations of
the pleading are true and affords the pleader all reasonable
factual inferences." Seidenberg v. Summit Bank, 348 N.J. Super.
243, 249-50 (App. Div. 2002). The court must search the pleading
"in depth and with liberality to determine whether a cause of
action can be gleaned even from an obscure statement." Ibid.
To avoid a dismissal for failure to state a claim, a plaintiff
is not required "to prove the case but only to make allegations,
which, if proven, would constitute a valid cause of action."
Sickles v. Cabot Corp., 379 N.J. Super. 100, 106 (App. Div.)
(quoting Leon v. Rite Aid Corp., 340 N.J. Super. 462, 472 (App.
Div. 2001)), certif. denied, 185 N.J. 297 (2005). "However, a
court must dismiss the plaintiff's complaint if it has failed to
articulate a legal basis entitling plaintiff to relief." Ibid.
Here, the dismissal of the complaint was based on the court's
determination that the Board had exclusive jurisdiction over
plaintiff's claims and plaintiff therefore could not assert a
5 A-4175-15T4 private cause of action for the alleged violation of N.J.S.A.
45:5B-3(h), and that plaintiff's claims were barred under N.J.S.A.
56:8-140 and N.J.A.C. 13:28-6.1.3 Defendant urges that the court's
dismissal of the complaint on those grounds was proper, and also
because the Board had primary jurisdiction to address alleged
violations of N.J.S.A. 45:5B-3(h) which support each of
plaintiff's causes of action. Plaintiff argues the court erred.
We address the bases upon which the court relied to support its
dismissal order.
A. Exclusive Jurisdiction
Plaintiff argues the trial court erred to the extent it
determined the Board has exclusive jurisdiction over plaintiff's
claims. Plaintiff argues the Act does not contain an express grant
3 We are mindful that we determine the validity of a trial court's order and not its reasoning, Do-Wop Corp. v. City of Rahway, 168 N.J. 191, 199 (2001), but a motion court is required to find facts and state its conclusions of law in accordance with Rule 1:7-4. "Failure to make explicit findings and clear statements of reasoning [impedes meaningful appellate review and] 'constitutes a disservice to the litigants, the attorneys and the appellate court.'" Gnall v. Gnall, 222 N.J. 414, 428 (2015) (quoting Curtis v. Finneran, 83 N.J. 563, 569-70 (1980)). Our de novo standard of review of Rule 4:6-2(e) dismissal orders does not render Rule 1:7- 4 a nullity, does not excuse a motion court's failure to make the required conclusions of law, and is not intended to be a means by which parties learn from the first time the reasoning behind the entry of an order. The parties are entitled to the motion court's reasoning prior to deciding whether to appeal, and this court is entitled to the record required under the rules, including Rule 1:7-4, to facilitate proper appellate review.
6 A-4175-15T4 of exclusive authority to the Board and therefore the court has
jurisdiction over the asserted causes of action. Defendant argues
the trial court did not hold that the Board has exclusive
jurisdiction, but that in any event N.J.S.A. 45:5B-2(a) grants the
Board exclusive jurisdiction to enforce the Act.
Where the "Legislature has vested exclusive jurisdiction with
an agency," a trial court is preempted of original jurisdiction
over the subject matter. Smerling v. Harrah's Entm't, Inc., 389
N.J. Super. 181, 187 (App. Div. 2006). "The Legislature 'may vest
an administrative agency with exclusive primary jurisdiction over
common-law claims,' but only if it does so expressly, and by
'explicitly' granting that agency the power to 'award damages in
private matters.'" Ibid. (quoting Campione v. Adamar of N.J., 155
N.J. 245, 260-62 (1998)). "As a general rule, jurisdiction of an
administrative agency may be said to be exclusive when the remedy
which the agency is empowered to grant is the only available remedy
for the given situation." Ibid. (quoting In re Hoboken Teachers'
Ass'n, 147 N.J. Super. 240, 248 (App. Div. 1977)).
The purpose of the Act was to establish a board to
"administer, coordinate and enforce" the Act, and to promulgate
regulations "relating to the practices of cosmetology," and "the
premises at which those services are rendered and the schools at
which instruction in those practices may be obtained." N.J.S.A.
7 A-4175-15T4 45:5B-2(a). The Legislature created the Board, N.J.S.A. 45:5B-4,
authorized the Board to promulgate regulations, N.J.S.A. 45:5B-
6(r), (s),4 and granted the Board authority to enforce the Act,
N.J.S.A. 45:5B-2(a).
Under the Uniform Enforcement Act, N.J.S.A. 45:1-14 to -27,
the Board also has authority to revoke, suspend, or refuse to
renew the license of a licensee, such as defendant here, that
violates the Act. N.J.S.A. 45:1-22. Among other sanctions, the
Board may also impose civil penalties, or order a licensee to
cease and desist from any violations of the Act. N.J.S.A. 45:1-
22(b), (c). Of particular significance here, the Board has the
authority to direct that a licensee "restore to any person
aggrieved by an unlawful act or practice, any moneys or property
. . . acquired by means of such act or practice; provided, however,
[that the Board] shall [not] order restoration in a dollar amount
greater than those moneys received by a licensee or his
agent . . . violating" the Act or corresponding regulations.
N.J.S.A. 45:1-22(d).
4 The Board adopted regulations to effectuate the Act. See N.J.A.C. 13:28-1.1 to -6.36. Of particular relevance, the Board adopted N.J.A.C. 13:28-6.27, which sets forth standards under which cosmetology students may provide services to the public but does not address the fees that may be charged under N.J.S.A. 45:5B- 3(h).
8 A-4175-15T4 Although one purpose of the Act is to protect "persons of the
general public who are direct recipients of the services regulated
by [the] [A]ct . . . from . . . fraudulent and deceptive practices,"
N.J.S.A. 45:5B-2(b), the Act and the UEA are devoid of any express
or explicit grant of exclusive authority to the Board over common
law or statutory claims for damages in private matters. See
Smerling, supra, 389 N.J. Super. at 187. Our courts have uniformly
rejected claims that administrative agencies have exclusive
jurisdiction over common law and statutory causes of action where
there is no express statutory grant of such jurisdiction to the
agency. For example, in Boldt v. Correspondence Mgmt., Inc., 320
N.J. Super. 74, 77-78 (App. Div. 1999), plaintiffs filed a class
action alleging in part that a defendant medical facility violated
the CFA by overcharging for copies of medical records. The copying
fees were regulated by the New Jersey Department of Health. Id.
at 77. The defendants argued the Department of Health had exclusive
jurisdiction to hear the plaintiffs' claims under N.J.A.C. 8:43G-
15.3(d), which allowed the Department to sanction those entities
that violated the limitation on fees for medical record
photocopies. Id. at 81, 87.
We rejected the defendants' argument that the Department had
exclusive jurisdiction to issue sanctions for regulatory
violations because the plaintiffs sought "a remedy not available
9 A-4175-15T4 . . . at the agency level," and not expressed in the legislative
intent of the agency's governing statute. Id. at 87; see also New
Jersey Div., Horsemen's Benevolent Protective Ass'n v. New Jersey
Racing Comm'n, 251 N.J. Super. 589, 602-05 (App. Div. 1991)
(finding the Racing Commission lacked exclusive jurisdiction over
common law claim for misappropriation of charitable trust funds,
in part because the governing statute was "altogether silent" as
to the available remedies and forum, and also because matters of
trust enforcement were within the recognized expertise of the
Chancery Division).
Even where an agency's governing statute expressly provides
that an agency has exclusive jurisdiction over certain matters,
our courts have carefully limited the scope of the agency's
exclusive jurisdiction and permitted the prosecution of claims of
common law and statutory claims in court. In Campione, supra, 155
N.J. at 248-49, the plaintiff brought a common-law cause of action
for discrimination, arguing a casino discriminated against him for
counting cards. Under the Casino Control Act (CCA), N.J.S.A. 5:12-
1 to -233, the Legislature established the Casino Control
Commission (CCC or Commission), and vested it with quasi-
legislative and quasi-judicial power over casino regulations.
Thus, the CCC could promulgate regulations and adjudicate alleged
10 A-4175-15T4 regulatory violations. Id. at 256-57; N.J.S.A. 5:12-63(1)(a), (b),
(c).
The Campione Court noted that the CCA expressly granted the
Commission "exclusive jurisdiction over all matters delegated to
it or within the scope of its powers under the provisions of this
Act." Id. at 260 (quoting N.J.S.A. 5:12-133(b)); see also N.J.A.C.
19:40-1.5(b). However, the Court observed that the statute did not
expressly "delegate to the CCC the adjudication of a patron's
common-law claims." Ibid. The Court noted that where the
Legislature intends to authorize an agency to award damages in
private manners, it must state so explicitly. Id. at 262 (comparing
the CCC's statute with the Law Against Discrimination (LAD),
N.J.S.A. 10:5-1 to -49, which allows LAD claims to be brought in
Superior Court or the Division of Civil Rights, N.J.S.A. 10:5-13,
and authorizes the Division of Civil Rights to award damages,
N.J.S.A. 10:5-17).
Here, the Act and the UEA do not include any express grant
of exclusive authority to the Board over plaintiff's statutory and
common law claims. Under the principles in Campione, Boldt, and
Smerling, we are therefore constrained to reverse the court's
order based on its apparent determination that the Board has
11 A-4175-15T4 exclusive jurisdiction over plaintiff's statutory and common law
claims.5
B. Primary Jurisdiction
Plaintiff also argues the court erred to the extent it
dismissed the complaint based on a determination that the Board
has primary jurisdiction to interpret the meaning of the term
"cost of materials" under N.J.S.A. 45:5B-3(h).
"Primary jurisdiction is defined as the circumstance in which
a 'court declines original jurisdiction and refers to the
appropriate body those issues which, under a regulatory scheme,
have been placed within the special competence of an administrative
body.'" Muise v. GPU, Inc., 332 N.J. Super. 140, 158 (App. Div.
2000) (quoting Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 269
n.1 (1978)); accord Estate of Kotsovska ex rel. Kotsovska v.
Liebman, 221 N.J. 568, 588 (2015). One purpose of the doctrine of
primary jurisdiction "is to allow an agency to apply its expertise
5 We reject the contention that the Board has exclusive jurisdiction because it has authority under the UEA to award restitution for violations of the Act. See N.J.S.A. 45:1-22(d). A similar argument was rejected by the Court in Campione, supra, 155 N.J. at 262. In Campione, defendant contended the Commission had exclusive jurisdiction in part because its governing statute permitted the Commission to award restitution. Ibid. The Court rejected the argument finding the statute did not allow for full vindication of all aspects of the plaintiff's damages claims and did "not authorize private litigants to initiate claims for money damages before the [Commission]." Ibid. The same is true here.
12 A-4175-15T4 to questions which require interpretation of its regulations."
Muise, supra, 332 N.J. Super. at 159. "Thus, 'when enforcement of
a claim requires resolution of an issue within the special
competence of an administrative agency, a court may defer to a
decision of that agency.'" Estate of Kotksovska, supra, 221 N.J.
at 558 (quoting Campione, supra, 155 N.J. at 263-64).
Invocation of the doctrine of primary jurisdiction is within
the sound discretion of the trial court. Ibid. We review a court's
invocation of the doctrine for an abuse of discretion and will not
reverse a court's decision unless it was "made without a rational
explanation, inexplicably departed from established practices, or
rested on an impermissible basis." Ibid. (quoting Flagg v. Essex
Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
Here, it does not appear the dismissal of the complaint was
based on an invocation of the doctrine of primary jurisdiction.
The court's order does not refer to the doctrine and the order's
lack of any detailed findings or conclusions of law renders it
impossible to ascertain whether the doctrine was invoked and, if
so, whether its invocation constituted an abuse of discretion. See
ibid. We cannot review a decision for an abuse of discretion where
it appears the court did not make the decision in the first
instance.
13 A-4175-15T4 Moreover, if the court found the doctrine of primary
jurisdiction applied, it would have been an error to dismiss the
complaint on that basis. Where, as here, the Board could not grant
relief on plaintiff's claims coextensive with the relief available
in the court proceeding, invocation of the doctrine of primary
jurisdiction does not warrant dismissal of a complaint. Under such
circumstances, the primary jurisdiction doctrine requires "only a
stay of the proceedings pending the agency's determination."
Richardson v. Std. Guard. Ins. Co., 371 N.J. Super. 449, 475 (App.
Div. 2004); accord Boldt, supra, 320 N.J. Super. at 89.
Because we have determined the court erred by dismissing the
complaint based on its erroneous determination that the Board had
exclusive jurisdiction over plaintiff's claims, on remand the
court shall consider whether to invoke the doctrine of primary
jurisdiction based on the factors relevant to that determination
as defined by our Supreme Court in Estate of Kotsovska, supra, 221
N.J. at 588.6 If the court determines to invoke the doctrine, it
shall stay the court proceeding pending the Board's determination
6 In making a determination whether to invoke the doctrine of primary jurisdiction, a court is required to consider whether: "the matter at issue is within the conventional experience of judges"; "the matter is peculiarly within the agency's discretion, or requires agency expertise"; "inconsistent rulings might pose the danger of disrupting the statutory scheme"; and "prior application has been made to the agency." Ibid. (quoting Magic Petroleum Corp. v. Exxon Mobil Corp., 218 N.J. 390, 405 (2014)).
14 A-4175-15T4 of any issues the court in its discretion finds the Board should
resolve in the first instance. Richardson, supra, 371 N.J. Super.
at 475.
We offer no opinion as to whether the court should invoke the
doctrine; that determination must be made by the trial court. The
court, however, shall make detailed findings of fact and
conclusions of law supporting its decision on the issue. R. 1:7-
4.
C. N.J.S.A. 56:8-140 and N.J.A.C. 13:28-6.1
It appears the court also dismissed the complaint based on a
determination that N.J.S.A. 56:8-140 bars plaintiff's claims. The
court's order vaguely states that the dismissal was required as
"[p]er N.J.S.A. 56:8-140 [and N.J.A.C.] 13:28-6.1."
The statute is part of the Contractors Registration Act,
N.J.S.A. 56:5-136 to -152, which requires the registration of
"person[s] engaged in the business of making or selling home
improvements." N.J.S.A. 56:8-137, -138(b). N.J.S.A. 56:8-140
exempts certain persons from the coverage of the Contractors
Registration Act, but neither the act nor the exemption have any
applicability here. Plaintiff does not allege defendant was a
person engaged in the business of making or selling home
improvements and does not assert any claims under the act. The
15 A-4175-15T4 court, therefore, erred by concluding that N.J.S.A. 56:8-140
required dismissal of any of the claims asserted in the complaint.
The court also cited the regulation that "[l]icensed schools
shall comply with all laws and rules relating to the practice of
cosmetology" or "shall be subject to disciplinary action by the
Board." N.J.A.C. 13:28-6.1. However, nothing in the act or
regulation gives the Board exclusive jurisdiction or jurisdiction
to grant damages.
In sum, we are convinced the court erred in dismissing the
complaint based on its apparent determination that the Board had
exclusive jurisdiction to decide plaintiff's causes of action and
its clear determination that plaintiff's claims were legally
barred under N.J.S.A. 56:8-140 and N.J.A.C. 13:28-6.1. We remand
for further proceedings for the court to consider and decide, with
detailed findings and conclusions of law, whether it should invoke
the doctrine of primary jurisdiction.
The court also stated there was no private case of action
under N.J.S.A. 45:5B-3(h). However, plaintiff did not assert a
private cause of action under N.J.S.A. 45:5B-3(h). Rather,
plaintiff's complaint raised claims under the CFA, TCCWNA, breach
of the covenant of good faith and fair dealing, and unjust
enrichment. Plaintiff may assert claims under those statutes and
16 A-4175-15T4 common law doctrines regardless of whether there is a private
right of action under N.J.S.A. 45:5B-3(h).
Amici The Association of Cosmetology and Hairstyling Schools
of New Jersey, Inc., and the Robert Fiance Beauty Schools, Inc.,
argue there were numerous other grounds supporting the dismissal
of the complaint. The court's order and the record presented on
appeal does not permit a determination as to whether the grounds
asserted here were presented to the motion court. We generally
decline to consider arguments that were not raised before the
trial court and do not involve jurisdictional or public interest
concerns, and we discern no basis for proceeding otherwise here.
Zaman v. Felton, 219 N.J. 199, 226-27 (2014); see also Nieder v.
Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) ("[O]ur appellate
courts will decline to consider questions or issues not properly
presented to the trial court when an opportunity for such a
presentation is available 'unless the questions so raised on appeal
go to the jurisdiction of the trial court or concern matters of
great public interest.'" (quoting Reynolds Offset Co., Inc. v.
Summer, 58 N.J. Super. 542, 548 (App. Div. 1959), certif. denied,
31 N.J. 554 (1960))). In any event, because the court decided it
lacked jurisdiction and did not address any other putative bases
for its dismissal of the complaint, on remand defendant shall be
permitted to make any and all arguments supporting a motion to
17 A-4175-15T4 dismiss pursuant to Rule 4:6-2(e), other than on grounds upon
which we have directly ruled in this opinion.
Reversed and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
18 A-4175-15T4