|NEWARK –The New Jersey Division of Consumer Affairs has filed an action against an Ocean County home improvement contracting company and two of its owners for allegedly taking more than $1.1 million from Superstorm Sandy victims – including over $898,000 in federal relief grants – and failing to begin or complete the contracted-for work.
The Price Home Group Limited Liability Company of Manahawkin, and its owners Jonathan Price of Manahawkin, and Scott Cowan of Demarest, took significant initial payments to elevate or replace Sandy-damaged homes then failed to begin work, performed the work in a substandard manner and/or abandoned unfinished projects without returning for weeks, months, or at all, according to the state’s Complaint filed in Ocean County Superior Court.
“Residents who trusted Jonathan Price and Scott Cowan to help them rebuild after the devastation of Superstorm Sandy were allegedly victimized again when these contractors took their money without delivering the work the residents paid for,” said Acting Attorney General Christopher S. Porrino. “What makes this kind of greed even more repugnant is that these men allegedly preyed on people relying on financial assistance from the state to rebuild or restore their homes.”
The nine homeowners named in the Complaint were all recipients of grants from the Department of Community Affairs’ Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) Program, the state’s largest rebuilding initiative. The homeowners hired Price Home Group between September 2014 and June of 2015.
In addition to paying $898,331.11 in RREM funds to the Price Home Group, the nine homeowners collectively paid $220,483.28 out of pocket, according to the Complaint.
“This Division of Consumer Affairs will not allow unscrupulous contractors to make a quick, dishonest buck by exploiting the suffering of those who lost their homes in Superstorm Sandy,” said Steve Lee, Director of the Division of Consumer Affairs. “This action demonstrates our commitment to bringing these predatory operations to justice.”
“Dishonest contractors not only hinder Sandy-impacted families from rebuilding their homes, they also impede the state’s overall recovery effort,” said Department of Community Affairs Commissioner Charles A. Richman. “We thank the Division of Consumer Affairs for diligently investigating Sandy contractor fraud claims and taking legal action against contractors when warranted. This important work shows the state is rooting out deceptive contractors and helping Sandy survivors get their rebuilding projects back on track.”
According to the Complaint, in the wake of Superstorm Sandy that ravaged New Jersey in 2012, Price and Cowan solicited customers through the Price Home Group website, touting the company as a “one stop solution” for Sandy victims looking to elevate their storm damaged homes or replace them with modular homes.
The Price Home Group website stated that “We understand the devastation that Hurricane Sandy caused…By choosing to build with PHG, you can rest assured that we will always work our hardest to save you money, limit your tax liability and maximize your financing options and flood insurance benefits.”
As alleged in the Complaint, Price, Cowan, and Price Home Group actually failed to provide consumers with the contracted for home elevation or installation of modular homes, work which was paid for with RREM grants and the consumers’ monies. The Complaint alleges that defendants violated the Consumer Fraud Act, the Contractors’ Registration Act, the Home Elevation Regulations, the Home Improvement Regulations, and the Advertising Regulations, among other things, by:
- Advertising, offering for sale, selling and/or performing home elevations without being registered as a Home Elevation Contractor with the Division.
- Entering into contracts, accepting consumer payments and/or RREM funds and then failing to begin or complete the home elevations or the installation of modular homes.
- Repeatedly rescheduling dates for commencement of home elevation work and/or modular home installation, and then failing to commence the work.
- Failing to apply for the necessary building permit, despite indicating to the consumer that the permit had been applied for.
- Performing home improvements in a substandard manner, - including elevating a home to half a foot less than the required height, installing inferior footings for the home elevation – and then failing to make the necessary corrective repairs.
- Representing on the Price Home Group Website that defendants were committed to finishing work on time, when such was not the case.
- Failing to include in contracts all of the terms and conditions affecting price.
- Failing to include in contracts the principal products and materials to be used in the performance of the contract.
- On one occasion, abandoning a home elevation project while the home was raised on temporary supports.
- On at least on occasion, contracting with a consumer for the installation of a modular home, arranging for her existing home to be demolished by a demolition company in preparation for a modular home installation, and then failing to install the modular home.
As to Price Home Group, the Complaint seeks consumer restitution, the disgorgement of RREM funds to the Division of Community Affairs, reimbursement of attorneys’ fees and costs, and civil penalties. The state also seeks to permanently revoke the Home Improvement Contractor registration of Price Home Group, and to permanently enjoin Price and Cowan from owning or operating a home improvement business in New Jersey.
Price and Cowan have filed for bankruptcy protection in the United States Bankruptcy Court, District of New Jersey. The Division has filed adversary actions against both individuals in an attempt to ensure that the consumer restitution, civil penalties and attorneys’ fees and costs sought in the Superior Court action will not be discharged in the course of their bankruptcy proceedings.
Investigator Jared O’Cone of the Division’s Office of Consumer Protection conducted the investigation.
Deputy Attorney General Alina Wells, of the Consumer Fraud Prosecution Section within the Division of Law, is representing the state in the Superior Court and Bankruptcy Court actions.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.