JP Paxton Faces Damages for Consumer Fraud

WILDWOOD — Legal and financial troubles continue for a local builder and former owner of several area restaurants.
On Thur., Sept. 23, an Appellate Division court found that Jon Paxton violated the state’s Consumer Fraud Act, by submitting false documents during the sale of four condominium units in February and March 2005.
According to the appellate decision, Paxton signed affidavits of title for the properties stating that:
“No judgment or other lien…has been filed against the property…There are no pending lawsuits or judgments against it…We are not aware that anyone has filed or intends to file a mechanic’s or construction lien or building contract relating to this property. No one has notified us that money is due and owing for construction, alteration or repair work on this property.”
However, on March 8, 2005, ABJ Sprinkler Co., which installed fire sprinklers in the condominiums, filed a construction lien against the property followed by a lawsuit against Paxton’s companies (Paxton Construction and Cresse Development) and the condominium owners.
During a deposition, Paxton also admitted that at the time the affidavits were signed, he knew that there was an ongoing dispute between his company and ABJ over the amount of money owed for the sprinkler work, and despite the dispute, his company owed an outstanding debt to ABJ.
At trial, the civil judge entered a $92,631.45 lien in favor of ABJ, but rejected the condominium owners’ Consumer Fraud Act claims against Paxton for damages and attorney fees. The judge found that Paxton’s acts were “mere negligence.”
The owners appealed.
According to the appellate decision, the Consumer Fraud Act prohibits:
“Any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate.”
The judges found Paxton’s acts fit that description.
“We have no hesitation in concluding that Paxton’s affidavits of title were issued to induce the buyers to complete the purchases of the units,” the appeals judges stated. “Had the buyers known about ABJ’s claims, they or their title insurers undoubtedly would have required Cresse to resolve those claims before the sales closed. Thus, the representations were material to the transactions, and they affirmatively and falsely stated that there were no outstanding debts, liens, or other claims against the property.”
The judges said Paxton’s deposition statements further established his guilt.
“He knew the representations were false when he made them, because he knew that Cresse still owed ABJ money for the sprinkler installation and that there was an ongoing dispute over the amount due,” the judges wrote.
Because they found violations of the Consumer Fraud Act, the appeals court reversed the order and remanded the matter to the trial court to address issues of damages and counsel fees.
This lawsuit was not Paxton’s first legal problem.
Paxton, who also owned JP Prime, Juan Pablo’s Margarita Bar, Café jonpaul, filed for Chapter 11 Bankruptcy on June 11, 2009.
According to the bankruptcy documents, Paxton’s company Late Night Inc. owed the State of New Jersey $44,372.95; US Foodservice, $49,874.12; Atlantic City Electric, $22,817.80; RJM Virtual Media LLC, $6,750; Tony’s Produce, $6,180.92; Vend Lease Company Inc., $36,000; Victorious Promotions, $12,951.25; Allied Beverage, $8,916.89; Kramer Beverage Company, $7,660.05; Coastal Broadcasting, $21,596.77; Herald Newspapers, $25,593.76; and Dot Com, $10,000.
Paxton was also arrested Feb. 9 last year for failing to appear in court over a civil lawsuit brought against him by North Wildwood. According to the city’s civil suit, Paxton did not obtain a certificate of occupancy for JP Prime. The restaurant received at least two temporary certificates of occupancy in 2006, but had been running since then on the expired temporary certificates.