DORIS GAMBRELL VS. HESS CORPORATION, INC.(L-7761-12, MIDDLESEX COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-4001-15T3
DORIS GAMBRELL and EUGENE
GAMBRELL,
Plaintiffs-Respondents,
and
FALGUNI PATEL, individually and
on behalf of herself and others
similarly situated,
Plaintiff-Appellant,
v.
HESS CORPORATION, INC.,
Defendant-Respondent.
_________________________________________________
Submitted May 2, 2017 – Decided June 1, 2017
Before Judges Yannotti, Fasciale and
Sapp-Peterson.
On appeal from Superior Court of New Jersey,
Law Division, Middlesex County, Docket No. L-
7761-12.
The Wolf Law Firm, LLC, attorneys for
appellant Falguni Patel (Matthew S. Oorbeek,
Andrew R. Wolf and Henry P. Wolfe, on the
briefs).
Wilentz, Goldman & Spitzer P.A., attorneys for
respondent Hess Corporation, Inc. (Brian J.
Molloy, of counsel and on the brief; Daniel
J. Kluska, on the brief).
PER CURIAM
Plaintiff Falguni Patel, individually and on behalf of a
class of similarly-situated persons, appeals from an order of the
Law Division dated April 29, 2016, which denied a motion by The
Wolf Law Firm, LLC (Class Counsel) for a supplemental award of
attorneys' fees. We affirm.
This appeal arises from the following facts. On October 29,
2012, Superstorm Sandy struck New Jersey and caused extensive
damage. In the immediate aftermath of the storm, Hess Corporation,
Inc. (Hess) made efforts to supply its retail stations with
gasoline. According to Hess, it made an error while transferring
gasoline to delivery trucks and some of the fuel sold to customers
at three of Hess' stations was all or part diesel fuel, but
mislabeled as regular gasoline.
Customers who purchased the mislabeled fuel reported that
they had problems with or damage to their vehicles. Hess thereupon
issued a press release acknowledging the error. It agreed to pay
customers for the losses, which included the amounts they spent
to purchase the fuel, towing costs, lost wages, and the cost to
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rent replacement vehicles. In some cases, Hess agreed to provide
customers with gift cards. Hess' total payments to these purchasers
exceeded $1 million.
Doris and Eugene Gambrell (the Gambrells) purchased the
mislabeled gasoline at one of the three affected Hess stations,
and thereafter notified Hess that they had problems with their
vehicle. The Gambrells retained Class Counsel, and on November 21,
2012, filed a complaint against Hess seeking relief on their own
behalf and on behalf of a class of other Hess customers who were
similarly situated. The Gambrells sought compensation for the
damages sustained as a result of the purchase and use of the
mislabeled gasoline.
The Gambrells asserted claims under the New Jersey Motor Fuel
Retail Sales Act, N.J.S.A. 56:6-1 to -32; the Consumer Fraud Act,
N.J.S.A. 56:8-1 to -204; and the Truth in Consumer Contract,
Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18. They
also asserted claims for breach of contract and the negligent or
reckless destruction of property. On December 4, 2012, an amended
complaint was filed, which added Patel as a named plaintiff.
The parties thereafter engaged in limited discovery. Hess
took depositions of the three named plaintiffs, as well as Patel's
sons. In addition, Hess produced about 9000 documents in response
to plaintiffs' requests. Most of the documents related to files
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that Hess had generated about customers who purchased the
mislabeled fuel. Neither party retained an expert. Patel asserts
that there were disputes about the production of records related
to the Gambrells' prior lawsuit against Hess, but Hess states that
the disputes were not significant.
In February 2014, the attorneys for the parties participated
in a mediation session. After a full day of negotiations, the
attorneys reached an agreement on the terms of a settlement. Class
Counsel drafted a memorandum of understanding, which the attorneys
for the parties signed before leaving the mediator's office.
It appears that a short time later, the Gambrells decided
that they did not want to proceed with the settlement, and
indicated that they were going to continue to prosecute their own
claims against Hess. Class Counsel filed a motion for leave to
withdraw as counsel for the Gambrells, and Hess filed a motion to
enforce the settlement with them.
The trial court granted Class Counsel's motion, and Class
Counsel continued as the attorney for Patel. The court also granted
Hess' motion and enforced its settlement with the Gambrells.
Thereafter, the parties engaged in limited discovery to
determine the number of class members, the number of vehicles
involved, and the effect that the sale of Hess' retail gas stations
to Speedway, LLC (Speedway) would have on the settlement. In
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addition, the parties attended another session with the mediator
to address certain outstanding issues.
On April 15, 2015, the parties entered into a settlement
agreement that resolved the claims under TCCWNA. Hess agreed it
would not object to Patel's application for preliminary approval
of the settlement or certification of the putative class. The
agreement stated that the class would consist of 583 persons who
purchased the mislabeled fuel at one of three Hess filling stations
in New Jersey, and relief would pertain to 645 qualified
transactions.
The agreement also stated that the settling class members
would receive gift cards totaling $125 to $425, which could be
redeemed at any Hess or Speedway retail outlet. In addition, Hess
would pay $9151 to the Gambrells, and $12,849 to Patel to resolve
their individual claims and recognize their efforts on behalf of
the class.
The agreement further provided that Class Counsel could file
an initial application for attorneys' fees and costs no later than
sixteen days before the date scheduled for the final approval of
the settlement. The agreement stated that Hess would be afforded
an opportunity to object to the application, but it would not
object to the award of "reasonable" attorneys' fees and costs.
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Thereafter, Hess provided Class Counsel with a sample of the
gift cards that it would issue to the settling class members.
Class Counsel objected to the form of the card, and demanded that
the cards specifically state that they are accepted at all Hess
and Speedway retail locations. Hess refused the demand and Class
Counsel raised this issue with the mediator, who determined that
the settlement agreement did not require Hess to issue special
cards to the settling class members.
Patel then filed a motion for preliminary approval of the
settlement, and on June 10, 2015, the trial court granted the
motion. Class Counsel later filed a motion seeking final approval
of the settlement, and an application for the award of attorneys'
fees in the amount of $310,536.50, with an enhancement of twenty-
five to fifty percent. Class Counsel also sought costs of $7830.53.
Hess opposed the fee application.
On September 30, 2015, Judge Travis L. Francis entered an
order granting final approval of the settlement. The judge reduced
the number of hours for which Class Counsel should be compensated,
and found that the hourly rates upon which Class Counsel was
seeking compensation were reasonable. The judge refused to apply
a fee enhancement because the case did not involve any novel legal
issues, Hess had conceded liability, and the matter did not involve
any issue of significance to the public. The judge noted that Hess
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had acknowledged its error in mislabeling the fuel and had paid
more than $1 million to affected customers without litigation. The
court awarded Class Counsel $274,576.50 in attorneys' fees, and
the full amount of the costs requested, for a total of $282,407.03.
The court's order of September 15, 2015, permitted Class
Counsel to submit a supplemental fee application for additional
attorneys' fees and costs incurred after July 31, 2015, the date
of the last entry addressed by the court's award. The order stated,
however, that Hess could oppose the application.
In accordance with the agreement, Hess issued 640 gift cards
in the total amount of $78,375 to settling class members. In
addition, Hess paid Patel $12,849 and the Gambrells $9151. Hess
also paid $2500 for the fees and expenses of the settlement
administrator. Hess' payments totaled $102,875.
In February 2016, Class Counsel filed a supplemental fee
application, seeking additional attorneys' fees in the amount of
$42,556.50 and costs of $957.51, which were incurred from July 31,
2015, to February 16, 2016. Hess opposed the application.
On April 29, 2016, Judge Francis filed a written opinion and
order which denied the supplemental application for attorneys'
fees, but awarded Class Counsel costs in the amount of $957.51.
In his opinion, Judge Francis found that Class Counsel had already
been "generously awarded" more than $282,000. The judge stated
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that the time entries in the supplemental application did not
reflect time expended to benefit the class and the settlement.
The judge found that, under the circumstances, the hours
expended by Class Counsel exceeded "what was necessary." The judge
wrote:
The claims asserted by the [p]laintiffs in
this action were not novel issues.
Significantly, Hess Corporation admitted to
the mistaken sale of diesel fuel to customers
in its efforts to supply the public with
gasoline in the wake of Superstorm Sandy. Hess
subsequently agreed, without the need for
litigation, to reimburse hundreds of customers
more than $1 million for their losses. Hess
has been generally cooperative in the
resolution of this matter. The matter was
settled after the parties signed a Memorandum
of Understanding during a mediation session
on February 27, 2014, over two years ago.
Plaintiffs and [d]efendant signed the Class
Action Settlement Agreement, effective as of
April 15, 2015, over a year ago.
The judge noted that many of the entries in the application
related to correspondence with the mediator or the settlement
administrator. The judge commented that such correspondence was
anticipated, and the time that Class Counsel devoted to these
matters was "subsumed by the amount previously awarded." The judge
added that Class Counsel would not be awarded fees for any work
related to preparing the briefs for the final approval hearing and
to attendance at the hearing. The judge noted that Hess did not
oppose final approval of the settlement but opposed the initial
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fee application. The judge found that these time entries also were
subsumed in the amount of attorneys' fees previously awarded. This
appeal followed.
On appeal, Patel argues the trial court erred by not granting
the application for supplemental attorneys' fees. Patel argues
that Class Counsel is entitled to the additional fees. She further
argues that this court should approve the supplemental fee
application and apply Class Counsel's current rates.
We are convinced that the trial court's denial of the
supplemental fee application was not a mistaken exercise of
discretion and Patel's arguments on that issue are without
sufficient merit to warrant extended discussion. R. 2:11-
3(e)(1)(E). We affirm the trial court's order denying the
application substantially for the reasons stated by Judge Francis
in his written opinion dated April 26, 2016. We add the following
brief comments.
A trial court's decision on an application for the award of
attorney's fees is reviewed for an abuse of discretion. Rendine
v. Pantzer, 141 N.J. 292, 317 (1995). An appellate court will set
aside a trial court's fee award "only on the rarest of occasions,
and then only because of a clear abuse of discretion." Grubbs v.
Knoll, 376 N.J. Super. 420, 430 (App. Div. 2005) (quoting Packard-
Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001)).
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Under the fee-shifting statutes, "the first step in the fee-
setting process is to determine the 'lodestar': the number of
hours reasonably expended multiplied by a reasonable hourly rate."
Rendine, supra, 141 N.J. at 334-35. "Hours are not reasonably
expended if they are excessive, redundant, or otherwise
unnecessary." Id. at 335 (quoting Rode v. Dellarciprete, 892 F.2d
1177, 1183 (3d Cir. 1990)).
[I]f the specific circumstances incidental to
a counsel-fee application demonstrate that the
hours expended, taking into account the
damages prospectively recoverable, the
interests to be vindicated, and the underlying
statutory objectives, exceed those that
competent counsel reasonably would have
expended to achieve a comparable result, a
trial court may exercise its discretion to
exclude excessive hours from the lodestar
calculation.
[Id. at 336.]
The court must then determine a reasonable hourly rate based
on prevailing market rates in the relevant community, and apply
that rate to the lodestar. Id. at 337 (citing Rode, supra, 892
F.2d at 1183). The court also may increase the fee to reflect the
risk of nonpayment "in all cases in which the attorney's
compensation entirely or substantially is contingent on a
successful outcome." Ibid.Here, Judge Francis found that additional fees should not be
awarded to Class Counsel for the time devoted to the matter after
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July 31, 2015, because Class Counsel had already been generously
compensated with the award of counsel fees in the amount of
$274,576.50, and additional fees would not be reasonable under the
circumstances. The record supports that determination.
As Judge Francis pointed out in his opinion, Hess admitted
its mistake in mislabeling the fuel shortly after learning of the
error, and Hess reimbursed affected customers in an amount
exceeding $1 million without the need for litigation. Hess' total
payments in this case were $102,875, which includes the gift cards
issued to settling class members, the amounts paid to the Gambrells
and Patel, and the fees and expenses of the settlement
administrator.
Moreover, the record shows that Hess was generally
cooperative and resolved this litigation without the need for
extensive discovery. The case did not involve any issue of genuine
public importance. In addition, the time that Class Counsel devoted
to corresponding with the settlement administrator and preparation
for the final approval hearing should have been anticipated, and
was subsumed within the attorneys' fees previously awarded.
On appeal, Patel argues that Class Counsel is entitled to be
compensated for the hours devoted to the litigation after July 31,
2015, because the prior award did not include fees for this period.
However, Class Counsel is only entitled to a reasonable fee for
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the litigation, not all counsel fees sought. Based on our review
of the record, we are convinced that the trial court properly
determined that the award of additional fees would not be
reasonable under the circumstances.
Patel further argues that the trial court's September 30,
2015 order granting final approval to the settlement agreement
suggested that Class Counsel would be compensated for any time
expended after July 31, 2015. We disagree. The order only indicated
that Class Counsel could seek additional fees. The order did not
guarantee that additional fees would be awarded. Indeed, the order
expressly provided that Hess could object to any supplemental fee
application.
Patel also argues that the trial court erred by failing to
award Class Counsel fees for the time devoted to the fee
applications. The record shows, however, that the court included
time for the preparation of the initial fee application (9.9 hours)
in the first award. Because the judge denied the supplemental fee
application, Class Counsel was not entitled to be compensated for
the time devoted to that application.
In addition, Patel contends the trial court effectively re-
wrote the settlement agreement, which allowed Class Counsel to
seek supplemental attorneys' fees. Patel recognizes that the
settlement agreement specifically allows the trial court to
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eliminate any attorneys' fees that it found to be unreasonable.
Patel argues, however, that the trial court's refusal to award
attorneys' fees for the time devoted to the case after July 31,
2015, was unreasonable and contrary to the terms of the settlement
agreement. Again, we disagree. As we have explained, the judge's
determination was supported by the record, and it is not
inconsistent with the settlement agreement, which expressly
recognizes that the court may only award attorneys' fees that are
reasonable.
In view of our decision, we need not consider Patel's
contention that, rather than remand the matter to the trial court,
we should grant the supplemental fee application and apply Class
Counsel's current hourly rates.
Affirmed.
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