Aida Herrera-Jerez v. Hyundai Motor America ( 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NOT FOR PUBLICATION WITHOUT THE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-3290-22
AIDA HERRERA-JEREZ,
Plaintiff-Appellant,
v.
HYUNDAI MOTOR AMERICA,
a/k/a HYUNDAI USA,
Defendant-Respondent.
_____________________________
Argued October 10, 2024 – Decided October 22, 2024
Before Judges Mawla, Natali, and Vinci.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-8139-20.
David C. Ricci argued the cause for appellant (Law
Offices of David C. Ricci, LLC, attorneys; David C.
Ricci, on the briefs).
Mark W. Skanes (RoseWaldorf PLLC) argued the
cause for respondent.
PER CURIAM
After plaintiff Aida Herrera-Jerez settled her Magnusson-Moss Warranty
Act1 (MMWA) claim against defendant Hyundai Motor America, plaintiff
moved for an award of attorney's fees and costs pursuant to the fee-shifting
provision of the MMWA, as expressly contemplated in the parties' written
settlement agreement. Plaintiff requested oral argument if the motion was
opposed, which it was.
On May 19, 2023, without hearing oral argument, the court entered an
order, supported by a written opinion, reducing plaintiff's fee award from
$35,332.50 to $2,449. Plaintiff appeals from that order. Because the court did
not hear oral argument and did not make specific findings to explain its drastic
reduction of the fee award, we are constrained to vacate the order and remand
for reconsideration of plaintiff's motion.
On November 28, 2020, plaintiff filed a complaint against defendant
asserting a single cause of action based on the MMWA, relating to her 2017
Hyundai Sante Fe. Plaintiff alleged the vehicle had a long history of engine
defects that defendant failed to timely repair in violation of its written
warranties. The parties were unable to reach an early settlement and litigated
the action for over two years.
1
15 U.S.C. §§ 2301-2312.
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The litigation progressed in typical fashion. Plaintiff served discovery
demands on defendant. Defendant moved to quash subpoenas plaintiff served
on dealerships that serviced the vehicle resulting in briefing and oral argument
on that motion. Defendant served written discovery on plaintiff, including
interrogatories, requests for admissions, and document requests, to which
counsel was obligated to prepare responses. Defendant retained an expert who
inspected the vehicle and prepared an expert report. Defendant also deposed
plaintiff, which required counsel to expend time to prepare plaintiff for and
attend the deposition. After discovery was completed, the parties participated
in an unsuccessful non-binding arbitration.
On August 31, 2022, defendant offered to settle the action for $7,500 plus
"reasonable attorney's fees and costs to be decided by the [c]ourt on motion."
On December 22, 2022, the parties executed a written settlement agreement and
release. The agreement provides:
[Defendant] agrees to have the attorney's fees and costs
of [plaintiff's] attorneys, Law Office of David C. Ricci,
LLC, to have been reasonably incurred by [plaintiff], to
be determined by the [c]ourt upon a properly noticed
motion. Notwithstanding this provision, [defendant]
reserves all rights to challenge the reasonableness of the
attorney's fees and costs requested by [plaintiff].
However, [defendant] agrees that it will not challenge
the right of . . . [plaintiff] to receive attorney's fees and
costs as determined by the [c]ourt.
A-3290-22
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On March 15, 2023, plaintiff filed a motion for judgment awarding
attorney's fees and costs. Plaintiff requested oral argument if the motion was
opposed. Plaintiff sought costs and expenses of $552.20, and attorney's fees of
$35,884.70. The motion was supported by the certification of plaintiff's counsel
in which he certified he accepted the case on a contingent basis and, as set forth
in his attached billing records, devoted 67.3 hours to the matter. Counsel also
certified the fee application was based on his then-current hourly rate of $525,
which he contended was reasonable and consistent with hourly rates approved
in other similar litigation.
Defendant opposed the motion arguing the amount of time counsel
devoted to the case was unreasonable. It argued counsel's time was "improperly
block billed" and counsel took too long to perform certain tasks, such as his
preliminary pre-suit investigation, drafting the complaint, responding to its
motion to quash, and preparing plaintiff's arbitration statement. Defendant also
contended counsel's hourly rate was unreasonable because defense counsel's
hourly rate was less than $250 and plaintiff's counsel had only recently raised
his hourly rate from $475 to $525. Defendant argued much of the work counsel
performed could have been completed by paraprofessionals at a lower rate.
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Finally, defendant argued the fee award sought was unreasonable in relation to
the result obtained.
The court did not hear oral argument. On May 19, 2023, the court entered
an order entering judgment for award of attorney's fees and costs supported by
a written opinion. After summarizing the arguments advanced by the parties,
the court offered the following "statement of reasons":
Court finds reasonable rate in Essex County is
$395[] per hour.
Drafting [c]omplaint 2.7
Defend [d]eposition of [c]lient 2.3
Attend [a]rbitration [h]earing 1.2
Expenses: $552.20
Plaintiff's [c]ounsel has [eighteen] years of
experience and has been involved in over 1,000 matters
so he is not entitled to be reimbursed for research. The
court is awarding the reasonable fees based on the result
obtained. Plaintiff is awarded $2,449[] in fees and
$552.20 in costs.
On appeal, plaintiff argues the court erred by issuing an unexplained and
inadequately low fee award and not hearing oral argument. We are persuaded
that the court's statement of reasons lacks specific and adequate findings
regarding the reasonableness of the services performed and does not explain the
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basis for the court's determination of the reasonable hourly rate. We are also
convinced the court misapplied its discretion by not hearing oral argument.
"[F]ee determinations by trial courts will be disturbed only on the rarest
occasions, and then only because of a clear abuse of discretion." Rendine v.
Pantzer, 141 N.J. 292, 317 (1995). Although the "abuse of discretion" standard
defies precise definition, it arises when a decision is "made without a rational
explanation, inexplicably departed from established policies, or rested on an
impermissible basis." Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)
(quoting Achacoso-Sanchez v. Immigr. & Naturalization Serv., 779 F.2d 1260,
1265 (7th Cir. 1985)).
"The starting point in awarding attorney's fees is the determination of 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); see R. 4:42-9(b) (stating that application for
counsel fees shall be supported by affidavit addressing pertinent factors,
including those in RPC 1.5(a), and shall include amount of fees and
disbursements sought). RPC 1.5(a) requires that "[a] lawyer's fees shall be
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reasonable" in all cases, not just fee-shifting cases.2 "Those factors must inform
the calculation of the reasonableness of a fee award in this and every case."
Furst, 182 N.J. at 22.
"In setting the lodestar, a trial court first must determine the
reasonableness of the rates proposed by prevailing counsel in support of the fee
application." Ibid.
Generally, a reasonable hourly rate is to be calculated
according to the prevailing market rates in the relevant
2
RPC 1.5(a) sets forth the "factors to be considered in determining the
reasonableness of a fee," which include the following:
(1) time and labor required, the novelty and
difficulty of the questions involved, and the
skill requisite to perform the legal services
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 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;
[and]
(8) whether the fee is fixed or contingent.
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community. Thus, the court should assess the
experience and skill of the prevailing party's attorneys
and compare their rates to the rates prevailing in the
community for similar services by lawyers of
reasonably comparable skill, experience and reputation.
[Rendine, 141 N.J. at 335 (citing Rode v. Dellarciprete,
892 F.2d 1177, 1183 (3d Cir. 1990)).]
Second, "a trial court must determine 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 . . . .'" Furst, 182 N.J. at
22 (quoting Rendine, 141 N.J. at 337). "The court must not include excessive
and unnecessary hours spent on the case in calculating the lodestar." Ibid.(citing Rendine, 141 N.J. at 335-36). "It does not follow that the amount of time
actually expended is the amount of time reasonably expended" and "[h]ours that
are not properly billed to one's client also are not properly billed to one's
adversary . . . ." Rendine, 141 N.J. at 335 (quoting Copeland v. Marshall, 641
F.2d 880, 891 (D.C. Cir. 1980)). "Whether the hours the prevailing attorney
devoted to any part of a case are excessive ultimately requires a consideration
of what is reasonable under the circumstances." Furst, 182 N.J. at 22-23.
"Third, a trial court should decrease the lodestar if the prevailing party
achieved limited success in relation to the relief . . . sought." Id. at 23 (citing
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Rendine, 141 N.J. at 336). "However, there need not be proportionality between
the damages recovered and the attorney-fee award itself." Ibid. (citing Rendine,
141 N.J. at 336); see also Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 366
(1995) (declining to "construe New Jersey's fee-shifting statutes to require
proportionality between damages recovered and counsel-fee awards even if the
litigation . . . vindicates no rights other than those of the plaintiff").
"Fourth, when the prevailing attorney has entered into a contingent-fee
arrangement, a trial court should decide whether that attorney is entitled to a fee
enhancement." Furst, 182 N.J. at 23 (citing Rendine, 141 N.J. at 338). "In
determining and calculating a fee enhancement, the court should consider the
result achieved, the risks involved, and the relative likelihood of success in the
undertaking." Ibid. (citing Rendine, 141 N.J. at 340-41).
"The amount of attorney fees usually rests within the discretion of the trial
judge, but the reasons for the exercising of that discretion should be clearly
stated." Khoudary v. Salem Cnty. Bd. of Soc. Servs., 281 N.J. Super. 571, 578
(App. Div. 1995) (citations omitted); see also R. 1:7-4(a) (requiring a court to
"find the facts and state its conclusions of law thereon in all actions tried without
a jury, on every motion decided by a written order that is appealable as of right").
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In other words, "the court must specifically review counsel's affidavit of
services under R[ule] 4:42-9, and make specific findings regarding the
reasonableness of the legal services performed . . . ." F.S. v. L.D., 362 N.J.
Super. 161, 170 (App. Div. 2003). "Without such findings[,] it is impossible for
an appellate court to perform its function of deciding whether the determination
below is supported by substantial credible proof on the whole record." Monte
v. Monte, 212 N.J. Super. 557, 565 (App. Div. 1986). Where the court "failed
to make any findings to explain the award" of counsel fees, we remand for
reconsideration of the fee application under the guidelines set forth in Furst and
Rendine. Patterson v. Vernon Twp. Council, 386 N.J. Super. 329, 338 (App.
Div. 2006).
Here, the court awarded plaintiff fees based on a total of 6.2 hours despite
counsel's certification that he devoted 67.3 hours to the matter over the course
of more than two years. Without explanation, the court merely listed the amount
of time awarded for three discrete events: drafting the complaint, defending
plaintiff's deposition, and attending the arbitration hearing. The court did not
offer any findings to support its decision to deny plaintiff's application for the
time spent on, for example, motion practice, written discovery, preparation,
telephone conferences, participation in the pretrial conference, coordination of
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the vehicle inspection, settlement negotiations, or preparation of the settlement
agreement. Without such findings it is not possible for us to determine whether
the court properly exercised its discretion.
The court also reduced counsel's hourly rate from $525 to $395 without
providing any explanation of the basis for that decision. Again, absent specific
and adequate findings, we cannot determine whether the reduction in hourly rate
was an appropriate exercise of the court's discretion.
We also conclude the court misapplied its discretion by not hearing oral
argument. Rule 1:6(2)(d) provides: "[N]o motion shall be listed for oral
argument unless a party requires oral argument in the moving papers or in
timely-filed answering or reply papers, or unless the court directs. A party
requesting oral argument may, however, condition the request on the motion
being contested." Requests for oral argument on all motions other than those
involving pretrial discovery and the calendar "shall be granted as of right." Ibid.As expressly permitted by the Rule, plaintiff conditioned the request for
oral argument on the motion being contested. Once opposition was filed,
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plaintiff's request for oral argument should have been granted as of right. It was
not.3
Accordingly, the May 19, 2023 order is vacated and the matter is
remanded for reconsideration of plaintiff's fee application after oral argument.
On remand, the court shall make specific findings regarding the reasonableness
of the legal services performed and the basis for its determination of the hours
reasonably expended. The court must also explain the basis for its determination
of the reasonable hourly rate. Finally, the court must set forth any other factors
it considered in determining the amount awarded and state its reasons for doing
so.
Vacated and remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
3
In extremely limited circumstances, "a request for oral argument respecting a
substantive motion may be denied," Great Atl. and Pac. Tea Co. v. Checchio,
335 N.J. Super. 495, 497-98 (App. Div. 2000), but "the reason for the denial of
the request, in that circumstance, should itself be set forth on the record."
Raspantini v. Arocho, 364 N.J. Super. 528, 532 (App. Div. 2003). In this case,
the court did not set forth the reason for the denial of plaintiff's request for oral
argument. In any event, we do not perceive any basis to invoke the exception
in this case.
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