JEFFREY S. JACOBS VS. MARK LINDSAY AND SON PLUMBING & HEATING, INC. (L-3120-14, ESSEX COUNTY AND STATEWIDE) , 458 N.J. Super. 194 ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3854-16T1
JEFFREY S. JACOBS,
Plaintiff-Appellant/ APPROVED FOR PUBLICATION
Cross-Respondent,
February 20, 2019
v. APPELLATE DIVISION
MARK LINDSAY AND SON
PLUMBING & HEATING, INC.,
JOHN STRETAVSKI, individually,
and MARK D. LINDSAY,
individually,
Defendants-Respondents/
Cross-Appellants.
______________________________
Argued September 13, 2018 – Decided February 20, 2019
Before Judges Fuentes, Accurso and Moynihan.
On appeal from Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-3120-14.
Anthony M. Rainone argued the cause for
appellant/cross-respondent (Brach Eichler, LLC,
attorneys; Anthony M. Rainone, of counsel and on the
briefs; David J. Klein and Kent D. Anderson, on the
briefs).
Steven K. Parness argued the cause for
respondents/cross-appellants (Methfessel & Werbel,
attorneys; Steven K. Parness, of counsel and on the
briefs; Boris Shapiro, on the brief).
The opinion of the court was delivered by
FUENTES, P.J.A.D.
Plaintiff Jeffrey S. Jacobs hired defendant Mark Lindsay and Son
Plumbing & Heating, Inc. (MLSP) to repair his home air conditioning unit.
Defendant made three service calls to repair the unit but was unable to correct
the problem. After each service call, defendant provided plaintiff with an
invoice that described the services performed and the parts installed. Plaintiff
issued checks for the first two service calls. After defendant's third
unsuccessful attempt to repair the unit, plaintiff refused to pay for this service
call and placed a stop-payment order 1 on the two previously issued checks.
Instead of filing a civil action against plaintiff to recover the value of the
services rendered, John Stretavski, an employee of MLSP, and defendant Mark
Lindsay, owner of MLSP, filed an incident report with the Borough of
Caldwell Police Department and accused plaintiff of theft of services. 2 After
investigating defendant's allegation, the Caldwell Police Department formally
charged plaintiff with the criminal offense of theft of services. Plaintiff
1
See N.J.S.A. 12A:4-403(a).
2
See N.J.S.A. 2C:20-8(a).
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retained an attorney to represent him in this criminal matter. The Caldwell
Municipal Court dismissed the complaint against plaintiff for lack of probable
cause.
Plaintiff thereafter filed a civil action against defendants alleging
violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -210 (CFA),
malicious prosecution, defamation, and tortious interference with economic
relationship.3 After joinder of issue and exchange of discovery, the parties
filed cross-motions for summary judgment. The Law Division Judge assigned
to the case at the time granted plaintiff's motion for summary judgment on the
CFA claims and denied defendants' cross-motion seeking the dismissal of
plaintiff's complaint in its entirety. The judge found defendants violated the
consumer protection provisions in N.J.S.A. 56:8-151 and N.J.A.C. 13:45A-
10.2 when they failed to provide plaintiff with a written contract describing the
services they agreed to provide and the methods used to determine the total
charges for labor and parts. She found defendants engaged in an
unconscionable commercial practice under N.J.S.A. 56:8-2, when they filed a
criminal complaint against plaintiff as means of collecting a consumer debt.
Finally, the judge found the attorneys' fees and related costs plaintiff incurred
3
Plaintiff's complaint originally included a count alleging intentional
infliction of emotional distress. He withdrew this count before the court
decided his motion for summary judgment.
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in the defense of the criminal charges constituted an "ascertainable loss" under
N.J.S.A. 56:8-19 as an "out-of-pocket loss." See Thiedemann v. Mercedes-
Benz USA, LLC, 183 N.J. 234, 248 (2005).
The judge held that the quantum of damages plaintiff was entitled to
receive on the CFA claim and the viability of his common law claim of
malicious prosecution were matters to be decided by a jury. The case was
thereafter assigned to a different judge. On April 28, 2016, the parties
appeared before this new judge and announced that they had reached a
settlement agreement. As described by the judge, defendants agreed to pay
plaintiff $45,000 "for any violation of the Consumer Fraud Act, except
attorneys' fees . . . incurred by the plaintiff in prosecuting the consumer fraud
action." In exchange, plaintiff agreed to dismiss the remaining common law
claims of malicious prosecution, tortious interference, and defamation. On
April 13, 2017, the judge awarded plaintiff $19,800 in attorneys' fees. On June
15, 2016, the parties executed an eighteen-page Settlement Agreement and
General Release that comprehensively describes the terms of the settlement.
Against this procedural backdrop, plaintiff appeals the April 18, 2017
order awarding only $19,800 in counsel fees and costs. Defendants cross-
appeal the December 18, 2015 order granting plaintiff's motion for summary
judgment on his CFA claim. After reviewing de novo the record developed
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before the Law Division, Davis v. Brickman Landscaping, Ltd., 219 N.J. 395,
405 (2014), and applying the standards codified in Rule 4:46-2(c), we
conclude defendants knowingly and voluntarily bargained away their right to
challenge the Law Division's December 18, 2015 order and dismiss their cross-
appeal accordingly. With respect to plaintiff's direct appeal, we reverse the
April 18, 2017 order and remand for the court to apply the standards
established by our Supreme Court to determine anew the amount of counsel
fees plaintiff is entitled to receive as a prevailing party under N.J.S.A. 56:8-19.
Rendine v. Pantzer, 141 N.J. 292, 316-45 (1995).
I
At all times relevant to this case, plaintiff worked as a financial advisor.
On July 15, 2013, plaintiff went to the home of his client Ed Kohler. During
this encounter, plaintiff told Kohler that his air conditioning unit had
malfunctioned and he could not get anyone to come fix it. Kohler contacted
his friend, defendant John Stretavski, general manager of defendant MLSP, a
home improvement contractor that services residential air conditioning units.
Stretavski agreed to go to plaintiff's home that night to attempt to repair the
unit. Stretavski also contacted his boss, defendant Mark Lindsay, for
permission to go on this service call. According to Stretavski, he told plaintiff
that he would have to charge him for the service call. Thereafter, Stretavski
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met plaintiff at Kohler's home and the three drove to plaintiff's home in
separate vehicles.
Stretavski replaced the air conditioner unit's capacitor with a new one he
had in his truck. Although he told plaintiff the unit most likely needed a new
motor, he believed he may be able to get the old motor working with a new
capacitor. According to Stretavski's deposition testimony, plaintiff approved
this attempted repair. The "blower motor" started running after Stretavski
replaced the capacitor. Stretavski testified that he explained to plaintiff that
"based upon the noise [he] heard [he] was not sure if the blower motor would
last five minutes or five months."
At this point, the three men (plaintiff, Stretavski, and Kohler) went
outside to check "the charge of the unit." Stretavski also checked the amount
of refrigerant available and found the pressure was low. Stretavski testified he
told plaintiff the unit needed more refrigerant. Once again, Stretavski testified
plaintiff approved adding more refrigerant after Stretavski told him the price.
As soon as Stretavski added the refrigerant, he heard a loud noise from the
basement. In Stretavski's words: "[s]o that was indicative that I lost air flow
and the motor went."
Stretavski told plaintiff that the unit required a new motor. Because he
did not have a replacement motor in his truck, he would have to return the next
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day to install it. According to Stretavski, he told plaintiff the price of a motor
was between $500 and $800. He also provided him with a handwritten invoice
for the work he had done that night, which amounted to $596.06. Plaintiff
wrote a check for this amount but did not sign the invoice. When asked about
plaintiff's failure to sign the invoice, Stretavski explained: "I felt comfortable
with him as far as being an acquaintance of Ed Kohler."
Stretavski returned to plaintiff's home the next day and installed the new
blower motor. However, when Stretavski started the system, he noticed "once
again that large line that we typically see condensation forming after a little bit
of time was not present yet again." Stretavski went outside and determined
"that the system had absolutely no Freon. There was zero. No Freon."
Stretavski acknowledged: (1) he had added Freon the previous day; (2) there
was a leak; and (3) he did not check if there was a leak before installing a new
blower motor because he needed air flow. Stretavski testified that plaintiff
"started to get a little bit annoyed" when he told him that he would need to
perform a nitrogen test to determine where the leak in the system was located.
Stretavski provided plaintiff with an invoice for the new motor, which pla intiff
paid with a check. On the invoice for the new motor, Stretavski also wrote the
price of the nitrogen test was an additional $289.22. Plaintiff and Stretavski
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then arranged to have two technicians from MLSP come to perform the
nitrogen test.
The two technicians arrived to perform the nitrogen test later that same
day. Plaintiff authorized the technicians to perform the test. They discovered
a leak in the coil. Technician Kenneth Bryan told plaintiff the coil needed to
be replaced. He also advised plaintiff to replace the entire unit and estimated
the coil replacement alone would cost "a couple thousand." Plaintiff told
Bryan that he did not want to replace the coil. When Bryan gave him the $289
invoice for the nitrogen test, plaintiff refused to pay it. Bryan called Stretavski
to apprise him of plaintiff's refusal to pay. Stretavski instructed Bryan to
write: "to be billed" on the invoice, and told him they would deal with it at a
later time. According to plaintiff, after this interaction, no one from MLSP
contacted him to resolve the billing dispute. In his deposition, Stretavski
testified he called plaintiff on July 16, 2013 and left a voicemail. Stretavski
claimed plaintiff did not return his call. It is undisputed that plaintiff did not
pay for the third service call and thereafter placed a stop payment order on the
two checks he previously issued to defendants.
On August 21, 2013, Stretavski gave a "Voluntary/Witness Statement" to
the Caldwell Police Department that described his interactions with plaintiff
concerning the three service calls that failed to repair the air conditioning unit.
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Stretavski also gave the police officers copies of all three invoices, and copies
of the two checks which were the subject of the stop payment orders. Caldwell
Police Detective Sergeant Brad Palatucci's investigation of this matter
consisted entirely of speaking with plaintiff, Stretavski, and Kohler. Based
exclusively on what he learned from these conversations, Palatucci issued a
Summons Complaint against plaintiff on October 15, 2013, charging him with
the criminal offense of third degree theft of services pursuant to N.J.S.A.
2C:20-8(a). Palatucci provided the following evidential basis to support this
charge:
[Jacobs] did: within the jurisdiction of this court,
commit the offense of theft by purposely obtaining
services, to wit plumbing and air conditioning repair
services (Mark Lindsay Plumbing), without payment
or offer to pay by cancelling checks for payment
before payment could be cleared and refusing to pay
for services, knowing the services are only available
for compensation, specifically by, writing check
number 1064 in the amount of $596.06 to satisfy
invoice 13901 and check number 1065 in the amount
of [$]575.55 to satisfy invoice number 13903 and
cancelling said checks before payment could be
completed and refusing to pay invoice number 16519
after all services had been rendered.
At his deposition, Palatucci admitted he told plaintiff he would not file
criminal charges against him if he agreed to pay MLSP the three disputed
invoices. When plaintiff refused, Palatucci told him he had twenty-four hours
to turn himself in or a warrant would issue for his arrest. On October 17,
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2013, plaintiff retained counsel and surrendered himself to the Caldwell Police
Department where he was photographed, fingerprinted, and otherwise
processed as a defendant facing criminal charges. On November 18, 2013,
plaintiff appeared before the Caldwell Municipal Court for arraignment. With
the consent of the municipal prosecutor, the municipal court judge dismissed
the complaint for lack of probable cause. It is undisputed, however, that
plaintiff's professional status as a financial professional required him to amend
his "Uniform Application for Securities Industry Registration or Transfer" to
reflect this criminal charge.
Defendant Lindsay also admitted that MLSP has instituted criminal
actions in the past as a means of collecting unpaid invoices. The following
deposition testimony from Lindsay illustrates this point:
Q. You mentioned before about a lawsuit that was
filed to collect money that was due, was that brought
by you individually or by your company?
A. By the company.
Q. Now, in that lawsuit was a criminal complaint filed
on behalf of the company?
A. No.
....
Q. Why did you decide to sue as opposed to file a
criminal complaint?
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A. The amount of the money.
Q. How much was the amount of the lawsuit?
A. I don't know the exact amount, about $25,000.
Q. And you mentioned that the criminal complaint that
was - - that you filed the second time - - well, the first
complaint, the first criminal complaint approximately
14 years ago, do you recall how much that was for?
A. No, I do not.
Q. Do you recall the second one?
A. Yes.
Q. How much?
A. I said that before. I think $2,500.
Q. So did you decide to - - is it fair to say that because
more was owed in connection with the lawsuit you
decided to go the civil route as opposed to the criminal
route?
....
A. Yes.
Q. . . . do you know how much Mr. Jacobs owes your
company? According to defendants do you know how
much - -
A. What I [said], [$]1,400.
Q. And the fact that it's [$]1,400, would that - - is that
why a criminal complaint was filed as opposed to a
lawsuit?
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....
A. Yes.
II
We begin our analysis by addressing the arguments defendants' raised in
their cross-appeal. Defendants' counsel prepared the consent order entered by
the court on April 18, 2017. Defendants, "by and through their insurance
carrier," agreed to pay plaintiff $45,000 to dismiss counts II, III, and IV in the
complaint, "without admitting any fault or wrongdoing." With respect to the
CFA claims, the parties acknowledged that the court had "determined that
[p]laintiff proved a violation of the Consumer Fraud Act's (CFA) technical
requirements and an unconscionable commercial practice, which resulted in an
ascertainable loss pursuant to the CFA, rendering [p]laintiff a prevailing party
and that determination is not altered or amended by this Consent Order."
(Emphasis added).
Despite these assertions, "[d]efendants reserve[d] the right to appeal the
[c]ourt's prior grant of [s]ummary [j]udgment [under] the [CFA]." The
Consent Order also paradoxically provided that:
should a higher court overturn the [c]ourt's ruling as to
the Consumer Fraud Act, such a ruling will not (i)
impact the settlement amount paid to [p]laintiff, and
that no refund of any amount of the settlement shall be
required by [p]laintiff; and (ii) [p]laintiff shall have
the right to prosecute his CFA [claims] against
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[d]efendants pursuant to an[d] in accordance with the
higher court's ruling, but in the event that [p]laintiff
does so, his remedy is limited to seeking an award of
attorneys' fees and costs.
It is a long-established principle of appellate jurisprudence in our State
that an order consented to by the attorneys for each party is ordinarily not
appealable. Winberry v. Salisbury, 5 N.J. 240, 255 (1950); see also N.J. Sch.
Constr. Corp. v. Lopez, 412 N.J. Super. 298, 309 (App. Div. 2010); Janicky v.
Point Bay Fuel, Inc., 410 N.J. Super. 203, 207 (App. Div. 2009). "This is
because the rule allowing an appeal as of right from a final judgment
contemplates a judgment entered involuntarily against the losing party." N.J.
Sch. Constr. Corp., 412 N.J. Super. at 309 (citing Cooper Med. Ctr. v. Boyd,
179 N.J. Super. 53, 56 (App. Div. 1981)). Even when the consent order
includes a clause preserving an issue for appeal, "the practice is disapproved of
because it preempts the appellate court's authority to decide whether to hear an
interlocutory appeal," improperly placing jurisdiction upon the appellate court.
Ibid. (citing Caggiano v. Fontoura, 354 N.J. Super. 111, 124 (App. Div.
2002)). Succinctly stated, including a clause in a consent order that preserves
the right to appeal does not automatically make the order appealable. Ibid.
(citing Palmieri v. Defaria, 88 F.3d 136, 141 (2d Cir. 1996)).
Here, the language we have quoted from the Consent Order reveals that
our review of the Law Division's ruling concerning defendants' liability under
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the CFA would constitute nothing more than an academic exercise. Plaintiff
retains the $45,000 settlement paid by defendants' insurance carrier regardless
of how this court views the Law Division's ruling. Stated differently,
defendants' attempt to preserve their right to appeal the Law Division's order
that found them liable under the CFA is nothing more than a transparent
subterfuge intended to obtain an advisory ruling from this court on a question
of law. We thus dismiss defendants' cross-appeal in accordance with the
Supreme Court's holding in Winberry, 5 N.J. at 255.
III
We now address plaintiff's appeal challenging the Law Division's April
18, 2017 order awarding $19,800 in counsel fees under N.J.S.A. 56:8-19, but
failing to award any compensation for filing fees and costs of suit. We begin
our analysis by reaffirming that an appellate court will disturb a fee
determination made by the trial court "on the rarest of occasions, and then only
because of a clear abuse of discretion." Packard-Bamberger & Co. v. Collier,
167 N.J. 427, 444 (2001) (quoting Rendine, 141 N.J. at 317). Guided by this
standard and the clear language in N.J.S.A. 56:8-19, we are satisfied the
judge's determination cannot stand.
Plaintiff submitted his revised and final fee application on January 24,
2017. The application included an itemized summary of the $247,701 in
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attorneys' fees sought without enhancement. The hourly rates of compensation
for the attorneys involved in this case were based on their status within the
firm. Partners sought an hourly rate of $490 and $385 for associates.
Paralegals were billed at $250 per hour. The application separated the billing
into eleven "litigation phases," and included charts that described how much
was billed in each phase of the litigation. Plaintiff's counsel also sought a
thirty-three percent enhancement, which amounted to $81,882.70. The total
attorneys' fee award sought was thus $327,776.70. Plaintiff sought an
additional $24,377.39 in costs and disbursements; this included $22,690.09 set
forth in plaintiff's initial certification of professional services dated May 31,
2016, and an additional $1,687.30 expended since that date.
The record shows that in reviewing plaintiff's counsel's fee application,
the judge did not appreciate the interrelation between facts supporting
defendants' unconscionable commercial practices claim under the CFA and the
common law torts of malicious prosecution, defamation, and tortious
interference with economic relationships. The judge thus disallowed as
unrelated to the CFA, professional time devoted by plaintiff's counsel in
discovery that touched upon or overlapped with these common law claims.
The judge also did not have a correct understanding or appreciation of
the underlying material facts that led the first judge assigned to this case to
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grant plaintiff's motion for summary judgment on the CFA claims. We
conclude this threshold error significantly tainted the judge's perception of the
case and contributed to her misapplication of the standards for awarding
counsel fees in this case. The following prefatory comments the judge made
before delivering her oral ruling on plaintiff's fee application illustrate the
magnitude of her misconception of the material facts of this case:
This is a case that's unusual for this Judge because this
Judge was not the Judge that determined there had
been a violation of the Consumer Fraud Act. This
case has its genesis in a contractor that went to the
plaintiff's home after requests of a mutual friend and
business associate because it was mid-summer, it was
very hot, [and] the plaintiff's air conditioner wasn't
working. There was some back and forth, some
attempts at repair. They weren't successful, a final
attempt at repair that wasn't successful. The plaintiff
had issued checks. Then the plaintiff stopped payment
on the checks.
The defendant then went to the police department to
seek collection on the checks. A police officer filed a
criminal complaint. It appears everybody agrees that
no - - no defendant was notified of the proceedings in
the court. The municipal court Judge dismissed the
criminal complaint that had been filed against the
plaintiff by the police officer and the plaintiff spent
$1,750 in attorneys' fees, appearing in the municipal
court on that day.
There was another Judge who heard summary
judgment motions in this case and that other Judge
ruled that the Consumer Fraud Act had been violated
by the repairer entity because of the nature of their
invoices and paperwork. Something had been
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missing. I forget exactly what is was[.] . . .
[W]hatever information is required to be there,
whatever disclosures are required to be made was not
contained in the paperwork.
And so the Judge reasoned, since that paperwork was
the foundation for going to the police, therefore, going
to the police was an unconscionable commercial
practice and the amount of attorneys' fees incurred in
defending one's self in the municipal court represented
the loss associated with that.
These "facts" bear no relation to the salient facts we have described at
length here and expressly relied on by the first judge to support her decision to
grant plaintiff's motion for summary judgment on his CFA claims.
Specifically, nowhere in the judge's rendition is a reference to Lindsay's
deposition testimony in which he admits to engaging in the unconscionable
commercial practice of using the local police department as his company's debt
collection agency. Based on her misconception of the basis for the prior
summary judgment, the judge made the following findings in support of her
decision to award plaintiff a total of $19,800 in counsel fees (which amounts
to six percent of the $327,776.70 requested by plaintiff's counsel), and zero
compensation for costs:
I believe the plaintiff is entitled to an award of
attorneys' fees for the preparation and the filing of the
summary judgment motion. . . . I don't believe that
[the] motion should have taken an entire month of a
senior person's time to prepare. That is unreasonable,
particularly, when we look at what the summary
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judgment motion would have had to have been on the
Consumer Fraud Act alone.
And so on that, the [c]ourt will allow as and for the
preparation of the summary judgment motion, the
[c]ourt will allow the plaintiff 40 hours at a blended
rate of $300 an hour. The [c]ourt has used a blended
rate because it believes that . . . it's unreasonable to
have the entire motion done by some of the most
senior people in the firm. And so the [c]ourt has
simply blended a rate of . . . what the defendant argues
and what the plaintiff argues. We'll make it a blended
rate of [$]300 an hour. And so as and for the
preparation of the summary judgment motion, plaintiff
will be awarded $12,000.
There had to be some discovery here. . . . There had
to be review of document request [sic], there had to be
some scheduling, et cetera. The [c]ourt will allow 20
hours of preparing and reviewing discovery but, again,
it's going to be at the blended rate of [$]300 because
much of that could have been delegated to a junior
person with a senior person reviewing it. And so
that's $6,000 for the discovery.
So for the discovery and the summary judgment
motion and we'll allow for some time for drafting of
the complaint and that practicality, the [c]ourt will
allow six hours for that, again, at the blended rate, so
that's $1,800. So the [c]ourt will allow $19,800.
I'll say the following. In the event of any appeal, this
[c]ourt recognizes that the difficult challenge
presented was the [c]ourt was caught between a rock
and [a] hard [place]. It was not for the [c]ourt to go
through all hundreds of entries of the plaintiff and try
and see, can I discern what is or isn't the Consumer
Fraud Act issue here. My attempts at doing that into
the wee hours of the morning advised me that that
wasn't . . . the way to do it. It couldn't be because I
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found very little distinction. So it wasn't for the
[c]ourt to do that exercise.
The [c]ourt has examined the bills. The [c]ourt has
determined that certain -- that what would a
reasonable attorney have to do to get this result and to
the extent that's not the standard, then the [c]ourt
would have had to have determined that. I couldn't
award the plaintiff any fees. And, as I said, I don't
think that's fair and plaintiff was a successful
Consumer Fraud Act claimant, and so the [c]ourt will
award that amount of fees.
Under the CFA, "the court shall . . . award reasonable attorneys' fees,
filing fees and reasonable costs of suit" to a prevailing plaintiff "who suffers
any ascertainable loss of moneys or property" because of a violation of the
statute. N.J.S.A. 56:8-19. The court's first step in awarding a reasonable
amount of attorneys' fees is determining the lodestar, "which equals 'the
number of hours reasonably expended multiplied by a reasonable hourly rate.'"
Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21 (2004) (quoting Rendine, 141
N.J. at 335). Rule 4:42-9(b) requires an application for counsel fees to be
supported by an affidavit addressing the following pertinent factors articulated
in RPC 1.5(a):
(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly; (2) the
likelihood, if apparent to the client, that the
acceptance of the particular employment will preclude
other employment by the lawyer; (3) the fee
customarily charged in the locality for similar legal
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services; (4) the amount involved and the results
obtained; (5) the time limitations imposed by the
client or by the circumstances; (6) the nature and
length of the professional relationship with the client;
(7) the experience, reputation, and ability of the
lawyer or lawyers performing the services; (8)
whether the fee is fixed or contingent.
A trial court must use a four-prong test to determine the lodestar amount.
Furst, 182 N.J. at 22-23. First, the trial court "must determine the
reasonableness of the rates proposed by prevailing counsel in support of the
fee application." Id. at 22 (citing Rendine, 141 N.J. at 335). Here, the court
evaluates the "rate of the prevailing attorney in comparison to rates 'for similar
services by lawyers of reasonably comparable skill, experience, and reputation'
in the community." Ibid. (citing Rendine, 141 N.J. at 337). The second
determination is "whether the time expended in pursuit of the 'interests to be
vindicated,' the 'underlying statutory objectives,' and recoverable damages is
equivalent to the time 'competent counsel reasonably would have expended to
achieve a comparable result. . . .'" Ibid. (citing Rendine, 141 N.J. at 336). The
court may determine that the hours expended on a case are excessive if it was
not "reasonable under the circumstances." Id. at 22-23.
Third, although proportionality is not required between the damages
recovered and the award, the court "should decrease the lodestar if the
prevailing party achieved limited success in relation to the relief he had
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sought." Id. at 23 (citing Rendine, 141 N.J. at 336). Fourth, an attorney may
be entitled to a fee enhancement if there is a contingent-fee arrangement. Ibid.
(citing Rendine, 141 N.J. at 338). If a fee enhancement is appropriate, "the
court should consider the result achieved, the risks involved, and the relative
likelihood of success in the undertaking" to determine the amount of
enhancement. Ibid. (citing Rendine, 141 N.J. at 340-41).
As an intermediate appellate court, we disturb fee determinations made
by the trial judge only if there is evidence of a clear abuse of discretion. This
"may be demonstrated 'if the discretionary act was not premised upon
consideration of all relevant factors, was based upon consideration of
irrelevant or inappropriate factors, or amounts to a clear error in judgment.'"
Heyert v. Taddese, 431 N.J. Super. 388, 444 (App. Div. 2013) (quoting
Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005)). Here, the
methodology used by the judge is untethered to the standards adopted by our
Supreme Court for determining an award of counsel fees. The ultimate
conclusions reached by the judge were thus arbitrary. The judge's comments at
the end also revealed a misunderstanding and a lack of appreciation of the
difficult task performed by attorneys in these types of cases and undermines
the salutary social policy of the CFA's fee-shifting provision.
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Plaintiff also sought an award of $24,377.39 in litigation costs and filing
fees. Although N.J.S.A. 56:8-19 expressly requires the court to award plaintiff
"filing fees and reasonable costs of suit," the judge did not award plaintiff any
compensation to cover these costs or provide any explanation for this omission
in her April 13, 2017 oral decision or the April 18, 2017 final order.
More than twenty years ago, our Supreme Court declared that "in
allowing for private suits in addition to actions instituted by the Attorney
General, [the CFA] contemplates that consumers will act as 'private attorneys
general.'" Lemelledo v. Benefit Mgmt. Corp., 150 N.J. 255, 268 (1997). Thus,
as a matter of public policy, the Legislature enacted fee-shifting provisions in
remedial statutes like the CFA to induce competent counsel and advance the
public interest through private enforcement of statutory rights that the
government alone cannot enforce. Pinto v. Spectrum Chems. & Lab. Prods.,
200 N.J. 580, 593 (2010). The Court has noted that:
In a consumer fraud action, the Legislature has
recognized that the right of access to the courts is
meaningless unless the injured party has the resources
to launch a suit. Fee-shifting provides an incentive to
competent counsel to undertake high-risk cases and to
represent victims of fraud who suffer relatively minor
losses.
[Furst, 182 N.J. at 21.]
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Here, Lindsay admitted that MLSP has a history of instituting criminal
actions as a means of collecting its unpaid invoices. This outrageous abuse of
our criminal justice system is precisely the type of unconscionable commercial
practice the CFA was designed to protect consumers from and deter
unscrupulous commercial entities from engaging in. However, the salutary
purpose of the CFA is undercut if the professional work performed by
competent private counsel in the course of representing consumers victimized
by such practices is arbitrarily undervalued by the judges entrusted to enforce
the CFA's fee-shifting provision.
Pursuant to N.J.S.A. 56:8-19, plaintiff is entitled to an award of counsel
fees that reflects the work performed to bring about a successful outcome for
the consumer, independent of the "proportionality between damages recovered
and counsel-fee awards even if the litigation, as in this case, vindicates no
rights other than those of the plaintiff." Szczepanski v. Newcomb Med. Ctr.,
141 N.J. 346, 366 (1995). Furthermore, plaintiff's counsel was entitled to have
the judge carefully consider and determine its application for a contingency
enhancement adopted in Rendine, 141 N.J. at 337 and subsequently reaffirmed
in Walker v. Giuffre, 209 N.J. 124, 128-29 (2012). Finally, in all CFA actions,
a prevailing consumer is entitled "to filing fees and reasonable costs of suit."
N.J.S.A. 56:8-19.
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Reversed and remanded. We do not retain jurisdiction.
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