Katherine Feliciano v. Jeffrey N. Faldetta

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1301-12T3
KATHERINE FELICIANO,
Plaintiff-Respondent/
Cross-Appellant, APPROVED FOR PUBLICATION
February 21, 2014
v.
APPELLATE DIVISION
JEFFREY N. FALDETTA,
Defendant-Appellant/
Cross-Respondent,
and
JENNY GONZALEZ,
Defendant.
__________________________________
Argued November 7, 2013 – Decided February 21, 2014
Before Judges Grall, Waugh, and Nugent.
On appeal from the Superior Court of New
Jersey, Law Division, Cumberland County,
Docket No. L-0132-09.
Stephen A. Rudolph argued the cause for
appellant/cross-respondent (Rudolph & Kayal,
attorneys; Mr. Rudolph, on the briefs).
Daniel E. Rosner and Edward J. Tucker argued
the cause for respondent/cross-appellant
(Rosner & Tucker P.C., attorneys; Mr. Rosner
and Mr. Tucker, of counsel and on the
brief).
Mark W. Davis argued the cause for amicus
curiae New Jersey Association of Justice
(Stark & Stark, attorneys; Mr. Davis, on the
brief).
The opinion of the court was delivered by
WAUGH, J.A.D.
Defendant Jeffrey Faldetta appeals the Law Division's award
of counsel fees under Rule 4:58-2, which governs the
consequences of a failure to accept an offer of judgment.
Plaintiff Katherine Feliciano cross-appeals, arguing that the
trial judge should have calculated the fees at a higher hourly
rate and enhanced the lodestar amount after it was established.
We affirm.
I.
We discern the following facts and procedural history from
the record on appeal.
On March 7, 2007, while driving in rainy weather, the motor
vehicle owned by defendant Jenny Gonzalez and driven by Faldetta
struck the vehicle driven by Feliciano. As a result of the
accident, Feliciano alleged that she suffered permanent injuries
to her neck and lower back, with permanent residuals including
muscle damage.
Feliciano filed a personal injury action against Faldetta
and Gonzalez in February 2009. Gonzalez was subsequently
granted summary judgment, dismissing the claim against her on
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the basis that Faldetta was not her agent at the time of the
accident. Faldetta moved for summary judgment in April 2010,
arguing that Feliciano's alleged injuries failed to satisfy the
verbal threshold established by N.J.S.A. 39:6A-8(a). The motion
was denied in May.
In June, Feliciano served and filed an offer to take
judgment in the amount of $15,000, as permitted by Rule 4:58-1.
Faldetta rejected the offer. Following a three-day trial in May
2012, the jury returned a verdict in favor of Feliciano,
determining that she had suffered permanent injuries and
awarding her $50,000 in damages for pain and suffering.
On July 3, Feliciano filed a motion seeking attorney's
fees, litigation expenses, and interest pursuant to Rule 4:58-2.
In support of the motion, Feliciano filed certifications by the
two attorneys who had worked on the case. They sought a total
of $62,780 in legal fees. Faldetta filed a brief in opposition,
arguing that the fees were unwarranted, excessive, and
unreasonable.
On September 18, the trial judge issued a written decision
explaining his reasons for awarding $42,230 in counsel fees,
$6,831.09 in litigation expenses, and $6,998.67 in interest. On
the same day, the trial judge entered judgment against Faldetta
for $109,185.27. This appeal and cross-appeal followed.
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II.
On appeal, Faldetta argues that (1) Rule 4:58 is
unconstitutional because it treats plaintiffs more favorably
than defendants, (2) the trial judge failed to consider that the
award created undue hardship for Faldetta because the insurance
policy covering the Gonzalez vehicle had a policy limit of
$50,000, (3) the award was duplicative because Feliciano's
attorneys were entitled to a contingent fee, and (4) the trial
judge erred in determining the hourly rate and the hours spent
on which the award was based. Feliciano argues in the cross-
appeal that the judge should have (1) chosen higher hourly rates
and (2) awarded an enhanced fee under the principles set forth
in Rendine v. Pantzer, 141 N.J. 292, 340-42 (1995).
Because the issue of the constitutionality of Rule 4:58 was
not raised in the trial court, we decline to consider it on
appeal. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234
(1973) (quoting Reynolds Offset Co. v. Summer, 58 N.J. Super.
542, 548 (App. Div. 1959), certif. denied, 31 N.J. 554 (1960));
see also State v. Robinson, 200 N.J. 1, 20-22 (2009). In
addition, Faldetta failed to give notice to the Attorney
General, as required by Rule 2:5-1(h) if the constitutionality
of a state "enactment" is challenged. See R.M. v. Supreme
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Court, 185 N.J. 208, 213 (2005) (noting that the Supreme Court
was represented by Attorney General in constitutional challenge
to Rule 1:20-9).
We take the same position with respect to the argument that
the trial judge erred by failing to consider and apply the
provision in Rule 4:58-2(b) that "[n]o allowances shall be
granted pursuant to paragraph (a) if they would impose undue
hardship." Although the issue of who would pay the fee award
was mentioned during oral argument, there was nothing in the
opposition to the motion, particularly certifications,
concerning Faldetta's financial position. In addition, it is
not clear whether Faldetta has a viable Rova Farms1 claim against
the carrier who defended the action and declined the offer of
judgment. If he does, the carrier would be required to pay the
judgment, including the fees and expenses awarded under Rule
4:58-2. If it is determined that Faldetta has no such claim, he
has the option of seeking relief from that portion of the
judgment under Rule 4:50, at which time he would be required to
provide the financial information he failed to provide in
opposition to the motion.
1
Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J.
474 (1974).
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We reject Faldetta's argument that the counsel fee award is
duplicative because plaintiff's attorneys are also entitled to a
contingent fee of one-third of the amount of the judgment. His
argument assumes that plaintiff's counsel is entitled to both
the contingent fee and the fees awarded under Rule 4:58-2. That
assumption is, in our opinion, inconsistent with the wording of
the rule, which provides that "the claimant shall be allowed"
costs of suit, legal fees, and interest. To hold that the
contingent fee must be deducted from the fee award under the
rule would provide a windfall to Faldetta at the expense of
Feliciano. Her attorneys are entitled to the fee awarded
pursuant to Rule 4:58-2 for the work done after the offer of
judgment was rejected and fair compensation from their client
for the period prior to that.2
Finally, we turn to the issue of the quantum of fees
awarded. Faldetta takes issue with the trial judge's acceptance
of the hours submitted by Feliciano's attorneys and the hourly
rate applied to those hours. Feliciano argues that the judge
set the hourly rates too low and erred in declining to award a
fee enhancement.
2
There may be a dispute between Feliciano and her attorneys as
to the amount of any additional compensation sought by her
attorneys. If there is such a dispute, it can be resolved
through fee arbitration pursuant to Rule 1:20A-3 or suit
following compliance with Rule 1:20A-6.
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Rule 4:58-2 "accords [the] judge no discretion regarding
whether or not to award attorney's fees and costs of suit in an
offer of judgment case." Wiese v. Dedhia, 188 N.J. 587, 592
(2006). The amount of the assessment, however, is
discretionary. Packard-Bamberger & Co. v. Collier, 167 N.J.
427, 444 (2001). "We will disturb a trial court's determination
on counsel fees only on the 'rarest occasion,' and then only
because of clear abuse of discretion." Strahan v. Strahan, 402
N.J. Super. 298, 317 (App. Div. 2008) (quoting Rendine, supra,141 N.J. at 317).
In calculating the amount of reasonable attorney's fees,
courts determine the "lodestar," defined as the "number of hours
reasonably expended" by the attorney, "multiplied by a
reasonable hourly rate." Furst v. Einstein Moomjy, Inc., 182
N.J. 1, 21 (2004); Rendine, supra, 141 N.J. at 334-35. "The
court must not include excessive and unnecessary hours spent on
the case in calculating the lodestar." Furst, supra, 182 N.J.
at 22. The court is required to make findings on each element
of the lodestar fee. Ibid.; R.M. v. Supreme Court, 190 N.J. 1,
11 (2007) (citing Hensley v. Eckerhart, 461 U.S. 424, 434, 103
S. Ct. 1933, 1940, 76 L. Ed. 2d 40, 51 (1983)).
The trial judge carefully reviewed both the hours requested
and the hourly rates sought. He found that the time spent by
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the attorneys was reasonable, that the hours were not
duplicative, and that they had not been increased to inflate the
fees. He declined to accept the requested hourly rates for the
two attorneys, $500 for trial counsel and $400 for the other
attorney. Although he did not apply the hourly rates urged by
Faldetta, he described them as more in line with the relevant
legal community. He chose hourly rates of $350 and $250,
respectively. We see no "clear abuse of discretion" in the
judge's determination of the hourly rate or the number of hours
eligible for reimbursement, which find adequate support in the
record.
Finally, the judge determined that a fee enhancement was
not appropriate in this case. Here, the judge did not explain
his reasons with the same degree of detail as required by
Rendine and subsequent case law. We, nevertheless, agree with
his conclusion that a fee enhancement was not required in this
case. We note that the purpose of the fee-shifting provisions
of Rule 4:58 is to encourage settlement rather than to provide
an incentive for representation of plaintiffs in certain types
of cases. Rendine, supra, 141 N.J. at 341-42. That is one
reason why the fee award is limited to the period after the
refusal to accept an offer of judgment. Even if the judge had
the discretion to enhance the fees, he was not required to do so
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and our review of the record convinces us that he did not abuse
any such discretion in declining to do so. The fee awarded was
fair and reasonable under the circumstances of this case.
Affirmed.
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