JOY MCDERMOTT-GUBER VS. ESTATE OF MABEL A. MCDERMOTTBART J. MCDERMOTT, INC. VS. JOY MCDERMOTT-GUBER(C-58-12 AND L-2247-12, MORRIS 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NOT FOR PUBLICATION WITHOUT THE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-1210-15T3
JOY MCDERMOTT-GUBER AND
WILLIAM GUBER,
Plaintiffs-Appellants/
Cross-Respondents,
v.
ESTATE OF MABEL A. MCDERMOTT
AND BART ALAN MCDERMOTT,
Defendants-Respondents/
Cross-Appellants.
BART J. MCDERMOTT, INC.,
Plaintiff,
v.
JOY MCDERMOTT-GUBER, a/k/a JOY
MCDERMOTT,
Defendant.
Argued April 26, 2017 – Decided May 19, 2017
Before Judges Fuentes, Carroll and Farrington.
On appeal from the Superior Court of New
Jersey, Chancery Division, Morris County,
Docket No. C-58-12 and Law Division, Docket
No. L-2247-12.
Gary Wm. Moylen argued the cause
appellants/cross-respondents.
Walter J. Fleischer, Jr. argued the cause for
respondents/cross-appellants (Drinker Biddle
& Reath LLP, attorneys; Mr. Fleischer and
Jennifer G. Chawla, on the briefs).
PER CURIAM
This appeal involves a dispute over ownership of a one-half
interest in residential real property located at 49 Arlington
Avenue, Parsippany (the property). Plaintiffs Joy McDermott-Guber
(Joy)1 and her husband William Guber appeal from a series of
Chancery Division orders that: declared Joy's brother, defendant
Bart Alan McDermott (Alan), owner of the disputed one-half property
interest; denied plaintiffs' application for partition credits
prior to the time Alan acquired title and granted Alan credit for
the rental value of the property; and awarded Alan and defendant
Estate of Mabel A. McDermott (Mabel) $20,000 in frivolous
litigation sanctions. Defendants have filed a "protective" cross-
appeal with regard to the partition credits granted by the trial
court. They also challenge the sanctions award as inadequate.
For the reasons that follow, we reverse the award of sanctions,
and affirm in all other respects.
1
Because this appeal involves several members of the McDermott
family, we refer to those individuals by their first names for
clarity and ease of reference. We intend no disrespect by this
informality.
2 A-1210-15T3
I.
The property was originally a vacant lot owned by Mabel and
her husband Bartholomew McDermott (Bartholomew), who are the
parents of Joy and Alan. On December 30, 1986, Bartholomew and
Mabel deeded a one-half interest in the property to Joy (the first
deed). The deed was recorded the same day in the Office of the
Morris County Clerk. This deed is not disputed, and the parties
agree that Joy owns this one-half interest.
In 1992, plaintiffs undertook steps to construct a single-
family ranch home on the property that they intended to occupy.
Bartholomew died on September 1, 1992, leaving Mabel as the sole
owner of the remaining one-half interest in the property.
According to Joy, Mabel thereafter asked her to change the building
plans to include construction of a second floor where Mabel could
reside. In return, Joy claims Mabel agreed to convey her remaining
half-interest in the property to Joy. Relying on Mabel's promise,
plaintiffs constructed the two-story house which was completed in
April 1996. Plaintiffs and Mabel moved into the home thereafter
without incident.
Mother, daughter, and son-in-law continued to reside there
until 2011, when Mabel obtained a temporary restraining order
against Joy under the Prevention of Domestic Violence Act, N.J.S.A.
2C:25-17 to -35. Mabel then moved in with Alan before ultimately
3 A-1210-15T3
relocating to the Franciscan Oaks assisted living facility in
Denville. Plaintiffs continue to reside in the property.
On June 11, 2012, Joy filed a quiet title action against Alan
and Mabel in the Chancery Division, General Equity Part in Morris
County, seeking a declaration that she is the sole owner of the
entire property. Joy alleged that Mabel conveyed the remaining
one-half interest in the property to her by an unrecorded deed
dated August 18, 1993 (the second deed). The complaint also sought
to invalidate an October 24, 2011 deed that was recorded in the
Morris County Clerk's Office on December 14, 2011 (the fourth
deed), pursuant to which Mabel conveyed the remaining one-half
interest to Alan. Alan filed a contesting answer and counterclaim
in which he sought a declaration that he owned an undivided one-
half interest in the property and requested that the property be
partitioned. Mabel filed a separate answer and counterclaim
seeking similar relief.
Pretrial discovery revealed that, around 2001, Henry Van
Houten, Esq. prepared the second deed to Joy at Mabel's request.
The deed acknowledged, falsely, that Mabel executed it on August
18, 1993. This second deed was printed on an All-State legal form
bearing a 1996 copyright date. Mabel later noticed that, although
the deed bore a 1993 date, it was printed on a 1996 form. Since
this discrepancy made the backdating of the second deed apparent,
4 A-1210-15T3
Mabel attested in her answers to interrogatories that she then
contacted Van Houten to prepare a new deed conveying the remaining
half-interest to Joy. Van Houten did so, on a form bearing a 1982
copyright date (the third deed). This third deed was also dated
August 18, 1993, and falsely acknowledged that Mabel executed it
on December 27, 1993. Like the second deed, the third deed was
not recorded, nor was it given to Joy. Rather, Mabel gave the
third deed to Alan to retain. Van Houten kept the second deed in
his file, and Joy purportedly became aware of its existence during
a visit to Van Houten's office in 2012.2
In her interrogatory answers, Mabel asserted that the second
deed was never recorded or delivered to Joy. She explained, "I
would [have never] given [Joy] my half[-]interest in the [p]roperty
while I am alive, because I was afraid that she would throw me out
of the [p]roperty, as she threatened to do on a number of
occasions." Mabel elaborated: "[Joy] misstates the purpose of the
[s]econd [d]eed in . . . the [c]omplaint. My intent was not to
convey my half[-]interest in the [p]roperty to her. Instead, the
intent of that deed was to avoid inheritance taxes on the
2
Defendants dispute this account and maintain that Joy removed
the original second deed from Mabel's apartment after locking
Mabel out around the time Mabel obtained the restraining order.
It was represented at oral argument before us that Mr. Van Houten
has since passed away, and that no statement was taken from him
nor was he deposed in this action.
5 A-1210-15T3
[p]roperty when it passed to her after my death." Mabel added,
"[s]ince that time, and based on [Joy's] mistreatment of me, I
made the decision to convey my interest to my son, Alan." In his
deposition testimony, Alan confirmed that, around 2000 or 2001,
Mabel discussed her wish that Joy have the property and indicated
her actions were intended "[f]or inheritance tax reasons of trying
to save on inheritance taxes."
On May 22, 2014, defendants moved for partial summary judgment
seeking a declaration that Alan owned an undivided one-half
interest in the property.3 In response, Joy's husband, William
Guber, certified that Mabel "represent[ed] to us numerous times
that she intended to deed her half[-]interest in the property
. . . to Joy[.]" Joy similarly certified that Mabel "specifically
stated on multiple occasions, and over many years, that she had
executed a deed to me conveying her half[-] interest in the
[p]roperty to me, which she delivered to our family attorney, [Van
Houten][,] [] on my behalf." In addition to these verbal
representations, plaintiffs cited documentation that they
contended supported their position, including: the unrecorded
second deed; a letter written by Mabel to Joy and Alan dated
3
By this point, Mabel had passed away on June 7, 2013, and her
estate was substituted as a defendant. Mabel's will appointed
Alan executor and intentionally made no provision for Joy.
6 A-1210-15T3
October 10, 2011, in which she stated, "Joy, I have seen to it
that you got this house free and clear;" and a schedule of several
properties owned by the family, dated November 29, 2002, on which
Mabel listed 49 Arlington Avenue as owned by Joy.
Following oral argument, the Chancery judge entered a July
2, 2014 order declaring Alan to be the owner of the disputed one-
half property interest. The judge found that, even viewing the
facts in the light most favorable to plaintiffs, they did not
establish any of the elements of their claim that Mabel made a
valid inter vivos gift of her remaining interest in the property
to Joy. In an oral opinion, the judge reasoned that actual or
constructive delivery of the deed was "not accomplished by giving
it to your own attorney." The judge also found no evidence of
donative intent. Rather, he noted Mabel herself indicated that,
while it was her intention that Joy might receive the property on
her death, she changed her intention and executed the deed to Alan
that was recorded. The judge also found no evidence that Joy had
accepted the gift. He determined there was "nothing in the record
to indicate Mabel authorized Mr. Van Houten to deliver the deed
on her behalf," and noted "[p]laintiffs' material statement of
facts admit[s] no agent, lawyer, or anyone else acting on Mabel's
behalf ever delivered the [second] deed to her." Ultimately, the
judge concluded:
7 A-1210-15T3
So [d]efendant has shown by clear and
convincing evidence that Mabel did not have
the intent to make the inter vivos gift and
that [Joy] did not accept it. There are
. . . some circumstances, some ambiguity, but
they're not material to this issue . . . . A
donee cannot accept a gift until they learn
of it. The elements of a valid inter vivos
gift were not met prior to Mabel transferring
her interest to Alan.
On July 7, 2014, plaintiffs amended their complaint to seek
a partition of the property and an accounting of partition credits
they claimed for the costs associated with improving and
maintaining the property throughout the years. Defendants
thereafter moved for partial summary judgment on the applicability
of the partition credits. Following oral argument, the trial
court entered an October 24, 2014, which granted the motion in
part and denied it in part. Pertinent to this appeal, the judge
ruled that plaintiffs were not entitled to partition credits from
Alan for any expenses they paid or improvements they made before
Alan took title to the property. The judge also ordered that Alan
was entitled to a partition credit for the rental value of the
property in an undetermined amount. On January 8, 2015, the court
denied plaintiffs' motion for reconsideration.
On February 12, 2015, the parties entered into a stipulation
that resolved many of the outstanding issues, including a credit
to plaintiffs for expenses they paid in connection with the
8 A-1210-15T3
property beginning on October 24, 2011, and a monthly rental credit
to Alan on and after that date. The parties agreed that Joy would
have priority to buy out Alan's interest, with the value of the
property being the sole remaining issue for trial. The parties
subsequently resolved the valuation issue, and a final judgment
was entered on March 9, 2015, which further provided that
enforcement of the judgment would be stayed if any party appealed
the trial court's interlocutory orders.
On March 30, 2015, defendants moved for frivolous litigation
sanctions pursuant to N.J.S.A. 2A:15-59.1 and Rule 1:4-8. On June
4, 2015, the court granted the motion and directed defense counsel
to submit an affidavit of services. Defendants' attorneys then
submitted a request for attorney's fees plus costs totaling
$263,121.16. On October 15, 2015, the court awarded defendants
counsel fees of $20,000. In his accompanying written statement
of reasons, the judge explained, in part:
The amount sought [by defendants] far
exceeds any amount the [c]ourt contemplated.
Significant elements of this litigation cannot
be deemed frivolous. As to the title issue,
there was an unrecorded deed to [Joy] as well
as [Mabel's] statements that she would convey
her interest in the house to [Joy]. As to the
partition and claims for credits, those claims
as a matter of law were not frivolous. . . .
The [c]ourt is also aware that this is a court
of equity. To order fees of this magnitude
or even a substantial portion of the amount
sought is viewed as punitive. Yet, plaintiff
9 A-1210-15T3
continued to cause legal services to be
rendered by defendant after it should have
been clear that the positions taken lacked
merit. For example, seeking to impose on
[Alan] costs relating to the house at a time
he did not own it is contrary to the law and
simply is not logical.
Plaintiffs now appeal the following orders: (1) the July 2,
2014 grant of partial summary judgment to defendants on the title
issue; (2) the October 24, 2014 grant of partial summary judgment
to defendant on the applicability of partition credits; (3) the
January 8, 2015 denial of plaintiffs' motion for reconsideration;
(4) the June 4, 2015 order granting defendants' motion for
sanctions; and (5) the October 15, 2015 counsel fee award. While
defendants urge us to affirm the first four orders, they have
filed a "protective" cross-appeal of the October 24, 2014 order,
by which they seek to preserve their right to argue for alternative
partition credits that were raised before the trial court.
Defendants also cross-appeal from the October 15, 2015 order on
the basis that the $20,000 fee award is "too low."
II.
When reviewing the grant of summary judgment, we analyze the
decision applying the "same standard as the motion judge." Globe
Motor Co. v. Igdalev, 225 N.J. 469, 479 (2016) (quoting Bhagat v.
Bhagat, 217 N.J. 22, 38 (2014)).
10 A-1210-15T3
That standard mandates that summary judgment
be granted "if the pleadings, depositions,
answers to interrogatories and admissions on
file, together with the affidavits, if any,
show that there is no genuine issue as to any
material fact challenged and that the moving
party is entitled to a judgment or order as a
matter of law."
[Templo Fuente De Vida Corp. v. Nat'l Union
Fire Ins. Co., 224 N.J. 189, 199 (2016)
(quoting R. 4:46-2(c)).]
"To defeat a motion for summary judgment, the opponent must
'come forward with evidence that creates a genuine issue of
material fact.'" Cortez v. Gindhart, 435 N.J. Super. 589, 605
(App. Div. 2014) (quoting Horizon Blue Cross Blue Shield of N.J.
v. State, 425 N.J. Super. 1, 32 (App. Div.), certif. denied, 211
N.J. 608 (2012)), certif. denied, 220 N.J. 269 (2015).
"[C]onclusory and self-serving assertions by one of the parties
are insufficient to overcome the motion." Puder v. Buechel, 183
N.J. 428, 440-41 (2005) (citations omitted). "When no issue of
fact exists, and only a question of law remains, [we] afford[] no
special deference to the legal determinations of the trial court."
Templo Fuente De Vida, supra, 224 N.J. at 199 (citing Manalapan
Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
It is well-established that state-of-mind issues are
frequently viewed as not suited for disposition through the
pretrial device of summary judgment, and must instead await plenary
11 A-1210-15T3
testimony at a trial and credibility assessments by the factfinder.
See, e.g., Mayo, Lynch & Assocs., Inc., v. Pollack, 351 N.J. Super.
486, 500 (App. Div. 2002). See also Ruvolo v. Am. Casualty Co.,
39 N.J. 490, 500 (1963) (stating a court should hesitate to grant
summary judgment when it must "resolve questions of intent and
mental capacity").
On the other hand, if the court determines there is no genuine
issue of material fact, the court is not precluded from granting
summary judgment, notwithstanding issues involving state of mind.
Fielder v. Stonack, 141 N.J. 101, 129 (1995); Bower v. The Estaugh,
146 N.J. Super. 116, 121 (App. Div.) (affirming grant of summary
judgment where court discerns "no evidence of undue influence"),
certif. denied, 74 N.J. 252 (1977). Also, "when the evidence is
so one-sided that one party must prevail as a matter of law, the
trial court should not hesitate to grant summary judgment." Brill
v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting
Anderson v. Liberty Lobby, 477 U.S. 242, 252, 106 S. Ct. 2505,
2512, 91 L. Ed. 2d 202, 214 (1986)).
A.
Plaintiffs first argue that the trial court erred in granting
partial summary judgment to Alan declaring him the owner of the
disputed one-half interest in the property. They contend that the
court failed to recognize that there were disputed questions of
12 A-1210-15T3
material fact that required a denial of the summary judgment issue.
We disagree.
Plaintiffs claim that Mabel made a valid inter vivos gift of
the disputed property interest to Joy. An inter vivos gift creates
an interest in the recipient prior to the donor's death, provided
three elements are met:
First, there must be actual or constructive
delivery; that is "the donor must perform some
act constituting the actual or symbolic
delivery of the subject matter of the gift."
Second, there must be donative intent; that
is "the donor must possess the intent to
give." Third, there must be acceptance.
[Bhagat, supra, 217 N.J. at 40 (quoting
Pascale v. Pascale, 113 N.J. 20, 29 (1988)).]
Our Supreme Court has "also recognized that the donor must
absolutely and irrevocably relinquish 'ownership and dominion over
the subject matter of the gift, at least to the extent practicable
or possible, considering the nature of the articles to be given.'"
Ibid. (quoting In re Dodge, 50 N.J. 192, 216 (1967)).
"The burden of proving an inter vivos gift is on the party
who asserts the claim." Bhagat, supra, 217 N.J. at 41 (quoting
Sadofski v. Williams, 60 N.J. 385, 395 n.3 (1972). Generally,
"the recipient [of the alleged gift] must show by 'clear, cogent
and persuasive' evidence that the donor intended to make a gift."
Ibid. (quoting Farris v. Farris Eng'g Corp., 7 N.J. 487, 501
13 A-1210-15T3
(1951)). However, when "the transfer is from a parent to a child,
the initial burden of proof on the party claiming a gift is
slight," and such transfer is presumed to be a gift. Bhagat,
supra, 217 N.J. at 41 (citing Metropolitan Life Ins. Co. v. Woolf,
136 N.J. Eq. 588, 592 (Ch. 1945), aff'd, 138 N.J. Eq. 450 (E. &
A. 1946). Nonetheless, "[a]s the child matures and acquires
experience and independence the presumption weakens and at last
ceases." Peppler v. Roffe, 122 N.J. Eq. 510, 516 (E. & A. 1937).
In the present case, plaintiffs assert that on numerous
occasions Mabel represented to them that she intended to convey
her half-interest in the property to Joy. Plaintiffs support
these verbal representations with various documents, including the
second and third deeds; Mabel's October 10, 2011 letter in which
she stated, "Joy, I have seen to it that you got this house free
and clear;" and the list of properties prepared by Mabel dated
November 29, 2002, which listed 49 Arlington Avenue as owned by
Joy. Unlike the trial court, for summary judgment purposes, we
view these proofs sufficient to satisfy the element of donative
intent.
This finding does not, however, end our analysis. "[T]he
evaluation of every motion for summary judgment requires the court
. . . to review the motion record against not only the elements
of the cause of action but also the evidential standard of that
14 A-1210-15T3
cause of action." Bhagat, supra, 217 N.J. at 40. As noted, to
establish a valid inter vivos gift, plaintiffs must also satisfy
the remaining elements. We agree with the trial court that
plaintiffs failed to adduce sufficient proofs with respect to
those elements to withstand summary judgment. Here, Mabel signed
two backdated deeds purporting to convey her remaining half-
interest to Joy. It is undisputed that neither deed was delivered
to Joy. Rather, after Mabel executed the second deed, she observed
it was on a form that facially revealed it was backdated. She
then requested that her attorney, Van Houten, prepare a replacement
deed to cure the discrepancy. Van Houten did so, and gave this
third deed to Mabel, who in turn gave it to Alan. There is nothing
in the record to indicate that Mabel wished Alan to deliver the
replacement deed to Joy at that time, or at any time prior to
Mabel's death. Even though Van Houten thereafter retained the
second deed (that arguably was superseded by the third deed) in
his files, the record is devoid of any proof that Mabel authorized
Van Houten to deliver the second deed to Joy on her behalf, as the
trial judge correctly concluded. Moreover, the undisputed proofs
show that, until she executed and delivered the fourth deed to
Alan for recording, Mabel did not absolutely and irrevocably
relinquish control of her remaining half-interest in the property.
Dodge, supra, 50 N.J. at 216.
15 A-1210-15T3
The record further establishes that Joy was not even aware
of the second deed until 2011 or 2012, or the third deed until
after this litigation commenced. Because she was unaware of the
existence of these deeds, she was not in a position to accept
them. Consequently, the trial court correctly concluded that the
remaining elements of a valid inter vivos gift were not met prior
to Mabel transferring her interest in the property to Alan. For
these reasons, we affirm the July 2, 2014 order.
B.
As noted, defendants asserted a counterclaim seeking a
partition of the property, and plaintiffs amended their complaint
to request similar relief following the court's ruling on the
title issue. The power to maintain a suit in partition dates back
to at least the reign of King Henry VIII in England. Wujciak v.
Wujciak, 140 N.J. Eq. 487, 489. (Ch. Div. 1947). It is a right
that may be exercised by an adult tenant, "without regard to the
interests of the other tenants or the inconvenience or hardship
that may result." Ibid. It is equally well settled that as
between or among tenants in common, partition may normally be had
as of course. Ibid.; see also Newman v. Chase, 70 N.J. 254, 261
(1976). Title, whether legal or equitable, and not the right to
immediate possession, is the essential underpinning to a suit for
the partition of realty. Hanson v. Levy, 141 N.J. Eq. 103, 106
16 A-1210-15T3
(Ch. 1947) (citing Scott v. Scott, 112 N.J. Eq., 195, 198 (Ch.
1933)).
Partition is an equitable doctrine. Newman, supra, 70 N.J.
at 263. "In the exercise of this power our courts of equity have
not hesitated to exercise discretion as to the particular manner
in which partition is effected between the parties." Ibid.; see
also Baker v. Drabik, 224 N.J. Super. 603, 609 (App. Div. 1988).
Among other things, a court may equitably reduce a tenant's share
in the property where his or her co-tenant has made expenditures
for taxes, mortgage interest, repairs, or other items necessary
to maintain or enhance its value. See Baird v. Moore, 50 N.J.
Super. 156, 164-65 (App. Div. 1958).
We noted in Baird that generally
there was no obligation by a cotenant in
possession who was not excluding his cotenants
to account to them affirmatively for the value
of his use and occupation. But it developed
that when such a cotenant, in a general
accounting between the parties or on
partition, sought . . . to enforce
contribution by the others for their ratable
share of maintenance expenses advanced by the
cotenant in possession, many courts deemed it
equitable that the occupying tenant give
credit for the value of his use and
occupation.
[Id. at 167-68].
We also acknowledged the prevailing rule in most jurisdictions
"that in seeking contribution for maintenance expenses the
17 A-1210-15T3
cotenant [in possession] will be charged as an offset for the
entirety of the rental value of his own occupation." Id. at 171-
72. Ultimately, we concluded "the dispositive consideration . . .
is the pervading principle . . . where there is a participation
in equity, that the allocation of charges and credits as between
the cotenants be governed by the basic justice and fairness of the
situation." Id. at 173 (citing Woolston v. Pullen, 88 N.J. Eq.
35, 40 (Ch. 1917). See also Esteves v. Esteves, 341 N.J. Super.
197, 200 (App. Div. 2001) (holding "that when plaintiffs sought
reimbursement from defendant for one-half of the costs of occupying
and maintaining the premises, plaintiffs were required to allow
defendant credit for the reasonable value of their occupancy of
the house").
The case law therefore makes clear that, in this partition
phase of the proceedings, the trial court possessed the authority
to award credit to plaintiffs for expenses they incurred in
maintaining the property, and a credit to Alan for its rental
value. Because partition is a creature of equity, our standard
of review of the terms of partition ordered by a chancery judge
is limited. In such equitable contexts, we will not set aside the
judge's determination unless it is shown to be arbitrary or
capricious or an abuse of discretion. See In re Queiro, 374 N.J.
Super. 299, 307 (App. Div. 2005) (affording "great deference" to
18 A-1210-15T3
a chancery judge's findings); Lohmann v. Lohmann, 50 N.J. Super.
37, 44-45 (App. Div. 1958) (finding that a trial court's factual
determinations should not be lightly disturbed on appeal).
Here, at the time Alan and plaintiffs asserted their
respective partition claims, Mabel no longer had title to any
portion of the property. In his October 24, 2014 ruling, the
trial judge determined that "any credits between the parties
commence on the date the two parties took title to the property."
As a result, the judge concluded plaintiffs were not entitled to
partition credits from Alan for any expenses they paid before Alan
took title to a portion of the property, or for any appreciation
in value that may have resulted from their construction of a home
on the property in the 1990s.
Plaintiffs challenge the judge's determination that a party
to a partition action cannot be held responsible for partition
credits for the period prior to his or her ownership. However,
plaintiffs offer no legal support for their position, nor do we
find any. The judge further found that "the claims that have been
raised prior to 2011, when [Alan] took title, are claims against
Mabel and the Estate." He noted those claims were not
extinguished, but rather "[t]hey are valid claims, or potentially
valid claims, but they are as to the prior owner." Thus, they
could properly be brought against Mabel's estate, but not against
19 A-1210-15T3
Alan in this partition action. We find no basis, either legal or
equitable, to disturb the trial court's ruling with respect to
partition credits. Consequently, we affirm the October 24, 2014
order, and the January 8, 2015 order denying reconsideration.
III.
Finally, plaintiffs appeal the June 4, 2015 order granting
defendants' motion for frivolous litigation sanctions, and the
October 15, 2015 order awarding defendants $20,000 in counsel
fees. Plaintiffs argue that their claims were not frivolous, and
were supported by numerous conversations with Mabel regarding
title to the property, and the unrecorded deeds and other
documentation produced during discovery. Defendants cross-appeal
from the October 15, 2015 order. They contend the $20,000 fee
award is inadequate, and that the trial judge failed to
sufficiently articulate how that fee award was calculated.
We review the trial court's decision for an abuse of
discretion. Ferolito v. Park Hill Ass'n, 408 N.J. Super. 401, 407
(App. Div.), certif. denied, 200 N.J. 502 (2009); see also McDaniel
v. Man Wai Lee, 419 N.J. Super. 482, 498 (App. Div. 2011). "[A]buse
of discretion is demonstrated if the discretionary act was not
premised upon consideration of all relevant factors, was based
upon consideration of irrelevant or inappropriate factors, or
20 A-1210-15T3
amounts to a clear error in judgment." Masone v. Levine, 382 N.J.
Super. 181, 193 (App. Div. 2005) (affirming award of sanctions).
To support an award against a represented party under N.J.S.A.
2A:15-59.1, the court must find that the claim was pursued in "bad
faith, solely for the purpose of harassment, delay or malicious
injury," N.J.S.A. 2A:15-59.1b(1), or "[t]he non-prevailing party
knew or should have known ... [it was pursued] without any
reasonable basis in law or equity and could not be supported by a
good faith argument for an extension, modification or reversal of
existing law." N.J.S.A. 2A:15-59.1b(2). When a frivolous
litigation claim is based on the lack of a reasonable basis in law
or equity, and the non-prevailing party is represented by an
attorney who presumably advised the party to proceed, an award
cannot be sustained unless the court finds that the party acted
in bad faith in pursuing or asserting the unsuccessful claim.
Ferolito, supra, 408 N.J. Super. at 408. A grant of summary
judgment without more does not support a finding of bad faith by
the losing party. Ibid. Furthermore, the party seeking sanctions
bears the burden to prove bad faith. Ibid.
Rule 1:4-8(d) authorizes a sanction against an attorney and
pro se party for a violation of Rule 1:4-8(a). It requires an
attorney to certify, based on "knowledge, information, and belief"
after reasonable inquiry, that, among other things:
21 A-1210-15T3
(1) the paper is not being presented for any
improper purpose, such as to harass or to
cause unnecessary delay or needless increase
in the cost of litigation;
. . . .
(3) the factual allegations have evidentiary
support or, as to specifically identified
allegations, they are either likely to have
evidentiary support or they will be withdrawn
or correct if reasonable opportunity for
further investigation or discovery indicates
insufficient evidentiary support[.]
The rule and statute must be interpreted strictly against the
applicant seeking an award of fees. LoBiondo v. Schwartz, 199
N.J. 62, 99 (2009); DeBrango v. Summit Bancorp, 328 N.J. Super.
219, 226 (App. Div. 2000). This strict interpretation is grounded
in "the principle that citizens should have ready access to . . .
the judiciary." Belfer v. Merling, 322 N.J. Super. 124, 144 (App.
Div.), certif. denied, 162 N.J. 196 (1999). "The statute should
not be allowed to be a counterbalance to the general rule that
each litigant bears his or her own litigation costs, even when
there is litigation of 'marginal merit.'" Ibid. (citation
omitted). Sanctions should be awarded only in exceptional cases.
Iannone v. McHale, 245 N.J. Super. 17, 28 (App. Div. 1990). "When
the [non-prevailing party's] conduct bespeaks an honest attempt
to press a perceived, though ill-founded and perhaps misguided,
22 A-1210-15T3
claim, he or she should not be found to have acted in bad faith."
Belfer, supra, 322 N.J. Super. at 144-45.
We recognize that even if there is a good faith basis to
commence a lawsuit, an attorney is obliged to withdraw it once it
becomes apparent the action is frivolous, and if the attorney does
not, he or she may be liable for sanctions to compensate the other
party for expenses incurred after that point in time. DeBrango,
supra, 328 N.J. Super. at 229-30.
In initially deciding to award sanctions, the trial judge
reasoned:
Primarily, Joy argues that her claims
were motivated by goals of great importance
to her, the preservation of her marital home,
and the recovery of credits for enhancing the
value of the property and paying the carrying
costs. . . . However, these intentions are
insufficient to justify the continuous filing
of baseless claims. This [c]ourt has rejected
every single argument advanced by Joy.
In large part, the judge retreated from his earlier findings
when confronted with defendants' $263,121.16 fee request. In his
written statement of reasons accompanying the October 15, 2015
order, the judge found that "significant elements of this
litigation cannot be deemed frivolous." The judge noted that
plaintiffs' title claim was supported by the unrecorded second
deed and Mabel's statements. The judge also found plaintiffs'
23 A-1210-15T3
claims for partition and credits "as a matter of law were not
frivolous."
Having reviewed the record, we conclude plaintiffs' claims
had some legal and factual foundation. That the trial court
ultimately disagreed, and dismissed a portion of those claims on
summary judgment, without more, did not establish that plaintiffs
acted in bad faith so as to necessitate an award of attorney's
fees for frivolous litigation. Ferolito, supra, 408 N.J. Super.
at 408. Accordingly, we are constrained to reverse and vacate the
June 4, 2015 and October 15, 2015 orders.
Affirmed in part and reversed in part.
24 A-1210-15T3