CB CONSTRUCTION, INC. VS. JILL PANICO (L-0150-16, HUNTERDON COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-0833-17T2
CB CONSTRUCTION, INC.,
Plaintiff-Respondent/
Cross-Appellant,
v.
JILL PANICO,
Defendant/Third-Party Plaintiff-
Appellant/Cross-Respondent,
v.
CHRISTOPHER BOURKE,
Third-Party Defendant-
Cross-Appellant.
________________________________
Submitted January 7, 2019 Decided – June 26, 2019
Before Judges Sabatino and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Hunterdon County, Docket No. L-0150-16.
Trinity & Farsiou, attorneys for appellant/cross-
respondent (Joseph F. Trinity, on the briefs).
William H. Michelson, attorney for respondent/cross-
appellant.
PER CURIAM
Defendant Jill Panico entered into a contract with plaintiff CB
Construction, Inc. ("CB Construction") to renovate her upstairs bathroom. After
disputes ensued regarding the renovation and contract payments, CB
Construction sued Panico for breach of contract and other equitable claims,
seeking to recover the unpaid contract balance of $6,289. Panico
counterclaimed, alleging breach of contract, breach of warranty, and violations
of the Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 to -210.1 Following a
bench trial, the trial court awarded CB Construction $2,831 on its claim and
awarded Panico $1,500 on her counterclaims. After considering defense
counsel's certification of services and further briefing, the trial court found that
Panico was entitled to only 10% of her claimed attorneys' fees under the CFA
and issued an order awarding her $3,429.09 in attorneys' fees.
Panico appeals both the trial court's entry of judgment and order awarding
attorneys' fees. CB Construction cross-appealed the order awarding Panico
1
Panico also filed a third-party complaint against C.B. Construction's sole
principal, Christopher Bourke.
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attorneys' fees, contending that she was not entitled to any fees on her CFA
counterclaims.2 Having reviewed the record in light of the applicable legal
standards, we affirm all of the orders on appeal.
I.
Judge Michael F. O'Neil presided over a bench trial on May 1 and 2, 2017
at which Bourke, Panico, and Panico's expert testified.3 After the trial, Judge
O'Neil rendered a comprehensive oral decision detailing his factual findings and
legal conclusions.
Initially, Judge O'Neil ruled on pre-trial motions filed by each party.
Relevant to this appeal, the judge denied defendant's motion for summary
judgment on the grounds that Panico was precluded from recovering the value
of services rendered because it violated the CFA. Relying on Scibek v.
2
The cross-appeal was also asserted on behalf of third-party defendant
Christopher Bourke, who contends he should not have been impleaded and
should not bear personal liability for technical violations of the CFA. C.B.
Construction and Bourke's appellate brief states: "With respect to making []
Bourke co-liable, a protective [c]ross-appeal was filed in the event a large award
of counsel fees should occur, as a result of [d]efendant's main [a]ppeal. If the
numbers are the same as the [t]rial [c]ourt ruled, the [c]ourt can disregard this
issue."
3
Plaintiff filed its complaint in the Special Civil Part, but the matter was
transferred to the Law Division on defendant's motion because she claimed
damages in excess of $15,000 on her counterclaims.
A-0833-17T2
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Longette, 339 N.J. Super. 72, 82 (App. Div. 2001), the judge found that plaintiff
was not precluded from seeking the value of services rendered because Panico
only established minor, technical violations of the CFA.
Judge O'Neil then made detailed findings of fact. First, the judge
addressed the disputed factual issue of when the parties signed the contract for
the bathroom renovation. Finding Bourke's testimony on this point to be more
credible than Panico's because it was corroborated by emails, the judge found
that Bourke signed the contract on May 15, 2015, but Panico did not sign the
contract until May 30 due entirely to her own delay.
Next, the judge found that between May 15 and May 30, Panico requested
additional work that was not specified in the contract, including the installation
of a shower seat bench and recessed niches. Again, the judge found that Bourke
testified more credibly than Panico did because his testimony was corroborated
by emails. Because Bourke agreed to perform this additional work without
increasing the contract price, and because time was not of the essence, the judge
found that C.B. Construction was not required to provide a written change order
under the CFA.
Judge O'Neil found that in June 2015, disputes arose between the parties
regarding some aspects of the renovation, including the quality of the tile work,
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the location of a "bull nose" in the bathroom, raising the bathroom floor, and the
design of the shower. Due to these disputes, Panico began withholding
installment payments under the contract. Based on correspondence between the
parties, Judge O'Neil found that CB Construction stood ready to complete the
renovation, but that Panico terminated the contract.
Judge O'Neil then turned to the CFA violations claimed by Panico. The
judge rejected most of Panico's claims as unsupported by the evidence, including
that CB Construction violated the CFA by: (1) starting work before Panico
signed the contract; (2) working on other jobs simultaneously to Panico's; (3)
using a subcontractor to install the tiles; (4) performing design changes at
Panico's request without written change orders; (5) not providing a written
notice of termination of the contract; 4 (6) not providing a written change order
with regard to the project completion date; (7) requesting installment payment
on the contract; (8) using tile of inadequate quality; and (8) leaving a dumpster
on Panico's property for a period of time.
4
The judge found that the changed completion date was due to extra work
requested by Panico and was not "a material change that required it to be in
writing." In any event, the judge found the changed completion date "was in
writing, it simply wasn't signed. If anything, it was a technical violation, and
resulted in no ascertainable loss."
A-0833-17T2
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Judge O'Neil did find that CB Construction committed three technical
violations of the CFA, none of which resulted in ascertainable loss by Panico.
First, the judge found that the contract did not include a copy of CB
Construction's certificate of commercial general liability insurance. See
N.J.S.A. 56:8-142(d). Second, the judge found that the contract failed to provide
the toll free number of the New Jersey Division of Consumer Affairs hotline.
See N.J.S.A. 56:8-144(b). Third, the judge found that contract may not have
provided the required notice of cancellation information. See N.J.S.A. 56:8-
151(b). Judge O'Neil found that none of these technical CFA violations
proximately caused Panico an ascertainable loss; rather the judge found that the
"breach of contract dispute centered over the quality of [CB Construction]'s
work but was generated in large part by [Panico]'s own changing of her mind as
to what she wanted, how she wanted the job done, her own . . . meddling in the
contractor's work or, . . . changing her mind how she wanted to order certain
materials."
Turning to Panico's poor workmanship claims, Judge O'Neil first rejected
Panico's claim for damages relating to the raised bathroom floor. The judge
found that Panico did not testify credibly that she complained about the floor
height while the renovation was taking place, and that defendant's expert did not
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testify persuasively regarding the alleged defects in the floor height and based
his opinion largely on personal opinion. Likewise, the judge rejected Panico's
claims for damages relating to the design of the shower and other miscellaneous
work, finding that the defense expert did not testify credibly or persuasively
regarding these claimed defects. The judge, however, awarded Panico $500 in
damages for poor workmanship in the installation of the shower seat and $1,000
for poor workmanship in the performance of tile work and uneven tile in the
shower.
As to CB Construction's claims for the balance of the contract price, Judge
O'Neil found that it was entitled to recover the reasonable value of the services
rendered in quantum meruit. At trial, Bourke testified that the renovation was
approximately 90 to 95% complete, but the defense expert testified the work
was approximately 70% complete. Judge O'Neil found that the work was
approximately 80% complete. Based on the contract price of $17,289 5 and CB
Construction having already received $11,000 payments, the judge determined
that CB Construction was entitled to $2,831 on its quantum meruit claim.
5
The judge found that the parties agreed to this contract price, finding that
Bourke testified credibly as to how the contract price was reached and that
Panico's testimony to the contrary was not credible. The judge also found t hat
Panico was properly credited on the contract balance for the value of supplies
she purchased.
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Judge O'Neil reserved decision on whether Panico was entitled to
attorneys' fees under the CFA, requesting that Panico's attorney submit a
certification of services and that the parties provide further briefing on the
issue.6 After receiving the additional submissions, Judge O'Neil issued a written
opinion addressing attorneys' fees.
Judge O'Neil determined that Panico was entitled to some quantum of
attorneys' fees as a matter of law because her CFA counterclaims were of
sufficient merit to survive summary judgment. Taking into account the context
in which the CFA claims arose and the degree of success obtained, however, the
judge found that defense counsel's claimed fees should be reduced by 90%. In
this regard, the judge reasoned:
The litigation could have been resolved in the Special
Civil Part at minimal legal expense to the parties, but
for defendant's decision to utilize the CFA as a sword
in an effort to win a large judgment and attorneys' fees
award. Defendant made the decision to transform this
case from a simple dispute over a book account, into,
relatively speaking, a "high stakes" multi-count, multi-
issue dispute. That defendant failed on almost all of her
factual defenses and legal theories must also weigh
heavily on this court as it tries to determine a fair and
proportionate counsel fee award.
6
The judge ruled that Bourke would be personally liable for any attorneys' fee
award under Allen v. V & A Bros., 208 N.J. 114 (2011).
A-0833-17T2
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Accordingly, the judge issued an order awarding Panico 10% of her
attorney's claimed fees in the reduced sum of $3,429.09.
II.
On appeal, Panico raises the following arguments:
Point I – The [t]rial [c]ourt erred in failing to dismiss
[p]laintiff's complaint despite finding multiple
violations of the New Jersey's Consumer Protection
Regulations.
Point II – The [t]rial [c]ourt erred in failing to find
multiple substantive violations in the form of
unconscionable commercial practices that were
established at trial.
Point III – The [t]rial [c]ourt erred in failing to find that
defendant sustained "ascertainable losses" as a result of
the regulatory and substantive [CFA] and regulatory act
violations, thereby entitling defendant to treble
damages, attorneys' fees and costs.
Point IV – The [t]rial [c]ourt erred in failing to follow
de Garmeaux v. DNV Concepts, Inc. in failing to
consider the public policy of the [CFA] and in applying
"proportionality" in its determination of Defendant's
award of counsel fees.
Point V – Defendant proved by a preponderance of the
evidence compensatory damages of $19,850.00 and the
[t]rial court's failure to award defendant the full amount
of claimed damages was against the weight of the
evidence.
Point VI – The [t]rial [c]ourt failed to apply the law and
award defendant treble damages, reasonable attorney
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fees, filing fees, and costs awarded, pursuant to
N.J.S.A. 56:8-19.
After reviewing the record, we conclude that Judge O'Neil's factual
findings are amply supported by the record and, in light of those facts, his legal
conclusions are unassailable. We therefore affirm substantially for the reasons
expressed in his Judge O'Neil's well-reasoned oral and written opinions. We
add only the following comments.
As to Panico's argument that plaintiff's complaint should have been
dismissed as a result of the CFA violations, Judge O'Neil correctly found that
C.B. Construction could recover the reasonable value of the services rendered
in quantum meruit notwithstanding the technical CFA violations. See Marascio
v. Campanella, 298 N.J. Super. 491, 504-05 (App. Div. 1997) (permitting a
contractor to proceed in quantum meruit despite CFA violations). In this regard,
the judge appropriately analyzed our dicta in Scibek that where "there is no
dispute as to the work authorized to be done and the agreed upon price, it seems
highly unfair to deny [a contractor] any affirmative right to recover merely
because of technical, inadvertent violation of the [CFA]'s prescriptions." 339
N.J. Super. at 82. Here, defendant claimed many CFA violations, but ultimately
established only minor, technical violations of the CFA that caused no
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ascertainable loss. Under these circumstances, Judge O'Neil appropriately
allowed C.B. Construction to recover in quantum meruit.
With respect to Panico's arguments that the trial court failed to find
substantive violations of the CFA and ascertainable losses and award greater
compensatory damages and treble damages, our review of a bench trial is
limited. "Findings by the trial judge are considered binding on appeal when
supported by adequate, substantial and credible evidence." Rova Farms Resort,
Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). "[W]e do not disturb the
factual findings and legal conclusions of the trial judge unless we are convinced
that they are so manifestly unsupported by or inconsistent with the competent,
relevant and reasonable credible evidence as to offend the interests of justice."
Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011) (quotations
omitted). We give particular deference to the trial judge's credibility
determinations. See In re Return of Weapons to J.W.D., 149 N.J. 108, 117
(1997). Giving appropriate deference to Judge O'Neil's detailed credibility
determinations and feel for the case, we find that his factual findings regarding
the CFA violations and damages are adequately supported by substantial,
credible evidence in the record.
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Our review of a trial court's award of attorneys' fees is also deferential.
We review an award of attorneys' fees for an abuse of discretion. Packard-
Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001). We will reverse an award
"only on the rarest of occasions, and then only because of a clear abuse of
discretion." Litton Indus. v. IMO Indus., 200 N.J. 372, 386 (2009) (quoting
Packard-Bamberger, 167 N.J. at 444).
In this case, Judge O'Neil correctly found that Panico was entitled to some
quantum of fees because at least some of her CFA counterclaims were sufficient
to survive summary judgment, notwithstanding the fact that she ultimately
established only technical violations that caused no ascertainable loss. See
Weinberg v. Sprint Corp., 173 N.J. 233, 253-54 (2002); Romano v. Galaxy
Toyota, 399 N.J. Super. 470, 484 (App. Div. 2008); Sema v. Automall 46 Inc.,
384 N.J. Super. 145, 151-52 (App. Div. 2006). Judge O'Neil also properly
reduced the lodestar amount by taking into account the Rule of Professional
Conduct 1.5(a) factors and considering Panico's modest degree of success within
the context of the litigation. See Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 22-
23 (2004); Branigan v. Level on the Level, Inc., 326 N.J. Super. 24, 31 (App.
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Div. 1999).7 Accordingly, we detect no abuse of discretion in Judge O'Neil's
award of attorneys' fees in these distinctive circumstances and deny the appeal
and cross-appeal regarding the award.
To the extent we have not specifically addressed any of parties' arguments,
we conclude they lack sufficient merit to warrant discussion in a written opinion.
R. 2:11-3(e)(1)(E).
Affirmed.
7
We reject Panico's contention that the trial court failed to adhere to the
principles enunciated in Garmeaux v. DNV Concepts, Inc., 448 N.J. Super. 148,
(App. Div. 2016). In the case, we noted that "[i]n Szczepanski [v. Newcomb
Med. Ctr. Inc., 141 N.J. 346, 366 (1995)], our Supreme Court explicitly rejected
a proportionality requirement between damages recovered and the attorney fee
award, although noting the degree of success obtained remains an important
factor." Id. at 161. In this case, Judge O'Neil recognized that Panico's limited
success in defending CB Construction's claims largely resulted from her breach
of warranty counterclaims, not from her CFA counterclaims. Accordingly,
Judge O'Neil adequately accounted for the specific factual and procedural
circumstances of this case in reducing the fee award. Id. at 162 ("[W]e recognize
that a trial court's determination of an appropriate counsel fee award in CFA fee-
shifting cases is premised upon fact-sensitive scenarios. We also recognize that
there is no 'precise formula' that uniformly produces a reasonable counsel fee
award." (quoting Litton, 200 N.J. at 388)).
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