Ridge Property, LLC v. Peter Lee ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-1439-22
RIDGE PROPERTY, LLC,
Plaintiff-Appellant,
v.
PETER LEE and SUNAE KIM,
husband and wife,
Defendants/Third-Party
Plaintiffs-Respondents,
v.
ROBERT A. SOLOMON, PC,
ROBERT A. SOLOMON, and
JEFFREY SAUNDERS,
Third-Party Defendants.
_____________________________
PETER LEE and SUNAE KIM,
Plaintiffs-Respondents,
v.
RIDGE PROPERTY, LLC,
Defendant-Appellant.
_____________________________
Submitted February 28, 2024 – Decided September 18, 2024
Before Judges Gummer and Walcott-Henderson.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket Nos. L-0309-19 and
L-0198-22.
Metrolaw.com, attorneys for appellant (Robert A.
Solomon, on the briefs).
Peter Lee and Sunae Kim, respondents pro se.
The opinion of the court was delivered by
WALCOTT-HENDERSON, J.S.C. (temporarily assigned)
Plaintiff Ridge Property, LLC appeals from a December 21, 2022 order
granting in part and denying in part plaintiff's motion for prejudgment interest
and attorney's fees, under the offer-of-judgment rule, R. 4:58. The court
awarded $328.28 in prejudgment interest, calculated based on a September 19,
2022 discovery end date instead of the April 10, 2020 discovery end date
proposed by plaintiff; the court did not award any counsel fees. We affirm.
Plaintiff owns residential property in Norwood, which it leased to
defendants Peter Y. Lee and Sunae Kim (the defendants). Robert A. Solomon,
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Esq., is plaintiff's managing member.1 This appeal involves two consolidated
actions related to the parties' lease: the first is plaintiff's Law Division case, and
the second is defendants' Special Civil Part case filed nearly two years later.
In January 2019, plaintiff2 sued defendants for $10,693.85, which was
equal to $9,000 in past due rent and $6,200 in late fees, less $4,506.15 from a
security account. Plaintiff also sought attorney's fees at a rate of $250 per hour
and costs of suit pursuant to the lease. Plaintiff alleged defendants had remained
in possession of the property following the expiration of the lease and failed to
pay rent for two months. Defendants filed an answer with affirmative defenses,
a counterclaim, and a third-party complaint against Solomon, Saunders, and the
Solomon firm.
In their counterclaim and third-party complaint, defendants asserted
claims of fraud, negligence, breach of warranty, breach of the implied covenant
of good faith and fair dealing, and conversion. Specifically, defendants alleged
1
Solomon had a twenty-five percent interest in plaintiff; his wife, Alison
Weiner, had another twenty-five percent interest; and Jeffrey Saunders had the
remaining fifty percent.
2
Plaintiff commenced the action through its attorneys, Robert A. Solomon, PC
d/b/a/ MetroLaw.Com. Solomon is the sole shareholder of that entity (the
Solomon firm).
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that "Solomon and plaintiff's counsel also had served as [their] attorneys in
various litigation matters . . . " and that because of the parties' prior legal
relationship, defendants had remained in the property despite having endured
several maintenance issues with the property, including a broken heater and air-
conditioning system that plaintiff was slow to repair. Defendants further alleged
damages related to Solomon's actions in denying responsibility for the cost of
repairs to the air-conditioning system and additional costs incurred when they
were forced to leave the home and stay in a hotel with their children b ecause of
the "extremely harsh and oppressive" conditions in the home.
On December 19, 2019, plaintiff filed a $3,920 offer-of-judgment in the
Law Division case. At that time, the discovery end date in that action was April
10, 2020, but the case was subsequently delayed as a result of the COVID-19
pandemic. The court held a case management conference on October 4, 2021,
and scheduled the Law Division action for trial on October 25, 2021.
On October 20, 2021, defendants filed a separate action in the Special
Civil Part against plaintiff alleging a violation of the security deposit law,
N.J.S.A. 46:8-21.1, and demanding a $9,000 judgment.
On December 21, 2021, the court entered an order consolidating the Law
Division and the Special Civil Part actions. Weeks later, plaintiff filed its
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answer to the Special Civil Part action and served defendants with
interrogatories on January 6, 2022, which included questions that clearly
addressed issues in plaintiff's Law Division case. Thereafter, the court set a
discovery end date of September 19, 2022, and a trial date of October 11, 2022.
Trial commenced on October 11, 2022, and after three days of testimony,
the court entered judgment in favor of plaintiff in an order dated November 17,
2022, awarding plaintiff $4,832.96 plus interest and court costs. On November
23, 2022, plaintiff moved for prejudgment interest, fees, and costs pursuant to
Rule 4:58-2. Defendants cross-moved for their attorneys' fees. Following oral
argument, the court put its decision on the record, stating:
My decision here incorporates the decision, riders, and
orders of my colleague[s]. It is clear to me that none of
the discovery occurred under [Docket L-309-19.] [T]he
discovery end date [was] extended and the matters were
consolidated because there was like and similar claims.
And the matter was provided the opportunity of time so
that each side could get what they needed to do [from]
the discovery end date of September 19th of 2022.
In setting the amount of prejudgment interest, the court used the
September 19, 2022 discovery end date issued after the consolidation of the
cases—not the earlier discovery end date of April 10, 2020 for the Law Division
matter.
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The court also rejected the application for fees to be paid to the Solomon
firm. In support of the application for fees, Solomon and his associate Richard
Weinbaum submitted separate certifications which included dates and services
performed on behalf of plaintiff. They did not submit a retainer agreement
between plaintiff and the firm, invoices submitted by the firm to plaintiff, or
proof plaintiff had paid the firm.
In its decision denying fees, the court concluded that Solomon's "role was
appearing as a self-represented litigant," finding "there's no demonstration of a
retainer agreement; no demonstration of a bill to the LLC; no demonstration of
any fees paid by any members of the LLC; the costs being born or incurred in
any fashion by the LLC." The court further stated:
But this [c]ourt cannot find that there's an entitlement
to counsel fees. I cannot find that there would even be
counsel fees incurred in this case.
....
I do want to highlight that it was conceded, I understand
by Counselor Solomon and MetroLaw.com, did not bill
Ridge for any services and costs in this action. And I
understand it was at page [four] of your certification.
The [c]ourt has accepted that representation and relies
on same in its findings.
....
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Now, yes, he's an attorney, but he's acting as a member
for his benefit as the manager of the LLC. I cannot find
that there was a developed relationship where they're
incurring any professional costs. I cannot find that
there is any fee being charged. He is acting in his
capacity, as I said, as a member of the LLC.
I cannot find that in this case there is a fair and
reasonable ability to award fees as he is acting self-
represented. And I cannot find there was any fee
arrangement between the LLC and Counselor Solomon.
In the December 21, 2022 order, the court granted in part plaintiff's motion
for prejudgment interest awarding him $328.28 "which include[d] interest
pursuant to [Rule] 4:58-2 from September 19, 2022." The court also denied
plaintiff's motion and defendants' cross-motion for attorney's fees.
Plaintiff appealed the calculation of $328.28 in prejudgment interest—
arguing the court had used an incorrect discovery end date—September 19,
2022—rather than the earlier discovery end date of April 10, 2020, from the Law
Division matter. Plaintiff also appealed the denial of attorney's fees to Solomon
and his firm.
I.
On appeal, plaintiff argues the court erred in construing Rule 4:5-8 on his
post-trial motion under the offer-of-judgment rule by (1) finding the
consolidation of the cases extended the discovery end date in the 2019 Law
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Division case to September 19, 2022, and using that date as the basis for its
interest calculation, and (2) denying plaintiff's fee application because Solomon
was essentially appearing in these cases pro se, representing his own interest as
both a managing member of plaintiff and sole proprietor of the Solomon firm.
"We review de novo the trial [court's] factual and legal conclusions
reached after a summary proceeding, including [its] construction of Rule 4:58-
2." Malick v. Seaview Lincoln Mercury, 398 N.J. Super. 182, 186 (App. Div.
2008) (reversing a prejudgment interest award under the offer-of-judgment rule)
(citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378
(1995)). "[The] trial court's interpretation of the law and the legal consequences
that flow from established facts are not entitled to any special deference."
Manalapan Realty, L.P., 140 N.J. at 378.
The offer-of-judgment rule "was 'designed . . . to encourage, promote, and
stimulate early out-of-court settlement of . . . claims that in justice and reason
ought to be settled without trial.'" Willner v. Vertical Reality, Inc., 235 N.J. 65,
81 (2018) (quoting Schettino v. Roizman Dev., Inc., 158 N.J. 476, 482 (1999)).
"To incentivize such pre-trial settlement, 'the rule imposes financial
consequences on a party who rejects a settlement offer that turns out to be more
favorable than the ultimate judgment' by a certain amount." Ibid.A-1439-22
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Rule 4:58-1(a) and (b) provide generally for the making and accepting of
an offer-of-judgment. Rule 4:58-2 sets forth the consequences of the non-
acceptance of an offer of a claimant. Rule 4:58-2(a) explains that if the offer is
not accepted and the party making the offer obtains a money judgment in an
amount that is 120% or more of the offer, "excluding allowable prejudgment
interest and counsel fees," the claimant shall be allowed, in addition to costs of
suit:
(1) all reasonable litigation expenses incurred
following non-acceptance; (2) prejudgment interest of
eight percent on the amount of any money recovery
from the date of the offer or the date of completion of
discovery, whichever is later, but only to the extent that
such prejudgment interest exceeds the interest
prescribed by R. 4:42-11(b), which also shall be
allowable; and (3) a reasonable attorney's fee for such
subsequent services as are compelled by the non-
acceptance.
[R. 4:58-2(a).]
Rule 4:58-2(a) also provides that allowable prejudgment interest begins to
accrue "from the date of the offer or the date of completion of discovery,
whichever is later." R. 4:58-2(a) (emphasis added).
Plaintiff argues that the earlier April 10, 2020 discovery end date is the
applicable date for purposes of calculating prejudgment interest, rather than the
latter date of September 19, 2022. As defendants assert, the record, however,
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shows that following the consolidation order, plaintiff served them with
interrogatories in connection with the Special Civil Part action. Defendants
contend that in doing so, plaintiff's argument discovery had ended on April 10,
2020 is unavailing. In other words, plaintiff is not entitled to the benefit of the
earlier April 10, 2020 discovery end date when it served discovery for the
lawsuit it had filed after that date.
Plaintiff's assertion that the interrogatories pertained only to the Special
Civil matter is belied by the record as the cases had already been consolidated
and the new discovery end date applied to the consolidated matter as a whole
and by the interrogatories themselves, which included questions that clearly
addressed issues in plaintiff's Law Division case, such as requesting that
defendants "[s]tate the terms and conditions under which [defendants] remained
in [possession]" of the property after the lease had ended and requesting receipts
evidencing payment of rent for the months of December 2018 and January 2019.
The discovery end date is the date that marks the conclusion of the
exchange of discovery and readiness for trial. Although, the April 10, 2020 date
marked the end of discovery in the Law Division action, defendants' Special
Civil complaint and the ensuing consolidation order reset the clock with respect
to the cases readiness for trial. Faced with the consolidation of these two
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matters; one aged complaint and a new complaint, the court in its oral decision
reasonably set the discovery end date using the September 19, 2022 date, noting
"the matter was provided the opportunity of time so that each side could get
what they needed." The court's determination that discovery was taken for
purposes of both cases after they were consolidated is supported by the record.
We discern no legal error or abuse of discretion in the court's decision to apply
the September 19, 2022 date to calculate prejudgment interest under Rule 4:58-
2(a). Thus, we affirm the court's award of prejudgment interest based on that
date.
II.
With respect to the second issue, plaintiff contends the court erred as a
matter of law in failing to grant attorney's fees to Solomon—pursuant to Rule
4:58-2(a). Solomon, an attorney who was the sole shareholder of his firm and
the managing member of plaintiff, sought attorney's fees of $38,370 and costs
of $50 under Rule 4:58-2(a)(1).
In its decision denying fees, the court found "there's no demonstration of
a retainer agreement; no demonstration of a bill to the LLC; no demonstration
of any fees paid by any members of the LLC; the costs being born or incurred
in any fashion by the LLC." The court reviewed each of the factors set forth in
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RPC 1.5(a) and made factual findings based on Solomon's certification.
According to his certification, at all relevant times, Solomon was one of three
members of Ridge Property, LLC; held a [twenty-five percent] interest in it,
served as its in-house counsel, and was its managing member; and was the sole
shareholder of the Solomon firm. The court concluded that Solomon's "role was
appearing as a self-represented litigant," finding that while "he[ was] an attorney
. . . he[] act[ed] as a member for his benefit as the manager of the LLC." She
claimed she could not "find that there was a developed relationship [and
Solomon] act[ed] in his capacity . . . as a member of the LLC." The record
supports the court's conclusion. Aside from Solomon's certification that he
served as in-house counsel for Ridge Property, LLC through his firm, there is
no indication that Solomon's relationship with Ridge Property regarding this
case was anything but self-representation, especially as the court points out,
without a retainer agreement to show the firm was actually hired or invoices
showing it had requested payment.
The court relied in-part on our Supreme Court's decision in Segal v.
Lynch, 211 N.J. 230 (2012), reversing an award of counsel fees to a licensed
attorney who had represented herself in court. Segal was a matrimonial matter
wherein the court appointed a parenting coordinator who was also an attorney.
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Id. at 250. The parties who were husband and wife had also signed a retainer
agreement with the parenting coordinator, which set forth fees and expenses
payable to the coordinator in the underlying divorce action. Id. at 235-36. When
the court ordered the plaintiff to pay the coordinator for her appearance at
deposition and required the plaintiff to advance a retainer, the plaintiff moved
for reconsideration and the coordinator's law firm opposed that motion,
describing itself as acting pro se through the coordinator, and requested
additional counsel fees. Id. at 242. The motion court ordered the plaintiff to
pay the coordinator counsel fees for the time she had spent responding to that
motion. Ibid.The Court separately addressed two distinct issues about the award of
fees: whether the coordinator was entitled to fees based on her role as parenting
coordinator, and whether the coordinator was entitled to counsel fees for
representing herself and her firm. Id. at 257-60. Only the latter issue is relevant
here.
The Court found unpersuasive the coordinator's argument that her status
as an attorney entitled her to a counsel fee and concluded "we see no reason to
treat her more indulgently than every other pro se litigant." Id. at 259. The
Court further held
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[w]e reach no different result to the extent that the
[parenting coordinator] performed the work on behalf
of the other lawyers in her law firm who had been
subpoenaed for depositions or represented her firm in
connection with the motions for reconsideration.
Similarly, the work that she performed on appeal was
work that she prosecuted through self-representation
and not compensable under the circumstances. We see
no basis in this record on which to advantage Schofel,
the self-represented attorney, by permitting her to be
compensated for her time expended in securing relief
when others who represent themselves would be
precluded from being compensated for their time.
[Id. at 264.]
Plaintiff argues the court's reliance on Segal was misplaced because he
sought attorney's fees pursuant to the offer-of-judgment rule, and that the court
did not have discretion to deny fees because attorney's fees under Rule 4:58-2(a)
are mandatory. Plaintiff argues that in Wiese v. Dedhia the Court held the rule
"is cast in mandatory and not exhortatory terms, and, thus, accords judges no
discretion regarding whether or not to award attorney's fees and costs of suit in
an [offer-of-judgment] case." 188 N.J. 587, 592 (2006) (citing R. 4:58-2). We
disagree.
Segal, decided several years after Wiese, notes the "conflicting decisions
found in our trial and appellate courts express a variety of policy considerations
in support of or in opposition to permitting attorneys to be awarded counsel fees
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for representing themselves," 211 N.J. at 263, the Court held, however, that
"precedents that reject counsel fee awards to attorneys" are "consistent with our
broader approach to the treatment of those who represent themselves." Id. at
264.
The issue in Wiese was whether the offer-of-judgment rule covered fees
and costs on appeal. The Court held that it did, "and that the consequences of
non-acceptance under Rule 4:58 are mandatory not only for trial costs but for
those incurred on appeal." Wiese, 188 N.J. at 589. The Court did not address
the question of fees to attorneys representing themselves and, thus, its holding
that the award of attorney's fees is mandatory cannot be read to hold that an
award of fees to attorneys representing themselves is mandatory. Segal is
undoubtedly controlling on that issue as the trial court properly found.
We accordingly find no error in the court's determination that Solomon
as a self-represented litigant was not entitled to attorney's fees.
Affirmed.
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