LESZEK ZAJAC VS. RAMSEY OFFICE COURT (L-8531-18, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1641-19T2
LESZEK ZAJAC,
Plaintiff-Appellant,
v.
RAMSEY OFFICE COURT, LLC,
d/b/a RAMSEY OFFICE COURT,
BHN REALTY ASSOCIATES,
INC., d/b/a/ BHN ASSOCIATES,
ROBYN DOUCETTE and
BARUCH ROSENFELD,
Defendants-Respondents.
_____________________________
Argued October 20, 2020 – Decided November 19, 2020
Before Judges Yannotti, Haas and Mawla.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-8531-18.
Christine E. Burke argued the cause for appellant
(Karpf, Karpf & Cerutti, PC, attorneys; Christine E.
Burke and Ari R. Karpf, on the briefs).
Randi A. Wolf argued the cause for respondents
(Spector Gadon Rosen Vinci, PC, attorneys; Randi A.
Wolf, on the brief).
PER CURIAM
Plaintiff appeals from orders entered by the Law Division on November
22, 2019, which denied his motion for attorney's fees and costs, and granted
defendants' cross-motion to enforce a settlement between the parties. We affirm.
I.
This appeal arises from the following facts. For about thirty years,
plaintiff has provided handyman, painting, and maintenance services at a
commercial office park/complex called The Office Court of Ramsey. According
to defendants, plaintiff provided the services at the complex through and on
behalf of ABS Pajac Construction and Painting, LLC (ABS), an entity owned
by plaintiff's wife.
Defendants assert that in June 2018, Baruch Rosenfeld purchased the
property, and thereafter Ramsey Office Court, LLC (ROC) was created to
provide administrative management for the property. Plaintiff claims BHN
Realty Associates, Inc. (BHN) acquired the property in June 2018, but
defendants assert BHN never owned, operated, managed, or had any relationship
to the property.
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Plaintiff alleged that when the new owners began to operate and manage
the complex in 2018, he experienced discrimination based on his age, health
problems, and national ancestry. Defendants assert that between June 2018 and
October 2018, the owners decided to cancel the contracts with vendors who had
been providing services at the complex to save money. In November 2018,
ABS's contract was terminated.
Following the termination of his contract, plaintiff filed a complaint
naming ROC, BHN, and Robyn Doucette as defendants. He later filed an
amended complaint, adding Rosenfeld as a defendant. Plaintiff alleged that
from June 2018 to November 2018, Doucette was his immediate manager, and
Rosenfeld supervised Doucette. Plaintiff claimed he was subjected to unlawful
discrimination on the basis of his age, disabilities, and national origin, in
violation of the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-
1 to -49.
Plaintiff also claimed defendants failed to pay him for regular work and
overtime in violation of the federal Fair Labor Standards Act (FLSA), 29 U.S.C.
§§ 201 to 219. In addition, he claimed defendants did not pay him in accordance
with the requirements of New Jersey's Wage and Hours Law (NJWHL), N.J.S.A.
34:11-56a1 to -56a41.
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Plaintiff sought an injunction prohibiting defendants from continuing their
alleged unlawful policies and practices; reimbursement for all pay and benefits
he should have received, including increases, bonuses, and promotions; punitive
damages; other equitable and legal relief the court deems just and proper; and
the award of attorney's fees, costs, and expenses.
Defendants filed an answer denying liability, and thereafter, the parties
exchanged discovery. Among other things, defendants produced its insurance
policy, which provided $100,000 in coverage, inclusive of counsel fees and
costs. In December 2018, plaintiff sent defendants a letter demanding one
million dollars to settle plaintiff's claims. The demand included all attorney's
fees and costs. In response to plaintiff's demand, defendants offered $25,000 to
settle the matter, which was based on plaintiff's tax returns from 2014 to 2018.
Plaintiff rejected the offer.
In September 2019, the parties participated in mediation, which was not
successful. Thereafter, the attorneys for the parties discussed the matter.
Plaintiff's attorney said she might be able to settle the case for $125,000 and she
would not settle for less. On October 9, 2019, defendants filed with the court a
written offer of judgment pursuant to Rule 4:58-1(a). The offer stated in part,
"[defendants] hereby offer judgment to the [p]laintiff . . . in full and final
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satisfaction of all claims asserted within [p]laintiff's [c]omplaint directed to
[d]efendants, in the sum of [$100,000] without admission and without prejudice
. . . ."
On October 16, 2019, plaintiff filed a notice of acceptance of defendants'
offer with the court. In this acceptance, plaintiff "request[ed] entry of judgment
by the Clerk in the amount of $100,000.00 against [d]efendants." The
acceptance included a footnote stating, "[p]laintiff's [p]etition for counsel fees
and for costs will be submitted separately subsequent to this acceptance."
On the same day, the Clerk's Office issued a deficiency notice, which
stated that the court could not enter judgment based upon the filing, and that
either a motion or consent judgment was required. Later that day, plaintiff filed
an amended notice of acceptance. It stated that plaintiff accepted defendants'
offer of judgment. The footnote regarding the petition for counsel fees and costs
remained. The court's docket indicates that the case was dismissed "without
prejudice" and "closed."
The following day, plaintiff filed a motion for the award of attorney's fees
and costs. Plaintiff sought fees and costs in the amount of $55,959.59.
Defendants opposed the motion and filed a cross-motion to enforce the
settlement and compel plaintiff to execute a settlement agreement. On
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November 22, 2019, the judge heard oral argument and entered orders which
denied plaintiff's motion and granted defendants' cross-motion for reasons stated
in an attached rider. This appeal followed.
II.
On appeal, plaintiff argues that the trial court erred by denying his motion
for attorney's fees and costs. He contends that he was the prevailing party in the
litigation and therefore is entitled to the award of such fees and costs. Plaintiff
contends that in the notice of acceptance of the offer of judgment, he did not
expressly waive his right to seek attorney's fees and costs and instead expressly
reserved the right to petition the court for an award of such fees and costs. He
further argues that the motion judge erred by finding his agreement to settle the
dispute for $100,000 was for full satisfaction of plaintiff's claims, including his
claim for attorney's fees and costs incurred in the litigation.
Here, plaintiff sought the award of attorney's fees and costs pursuant to a
provision of the LAD. The statute provides in pertinent part that "[i]n any action
or proceeding . . . the prevailing party may be awarded a reasonable attorney's
fee as part of the cost, provided however, that no attorney's fee shall be awarded
to the respondent unless there is a determination that the complainant brought
the charge in bad faith." N.J.S.A. 10:5-27.1.
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Plaintiff also sought counsel fees and costs pursuant the FLSA, which
provides, in relevant part:
An action to recover the liability prescribed in the
preceding sentences may be maintained against any
employer . . . in any Federal or State court of competent
jurisdiction by any one or more employees for and in
behalf of himself or themselves and other employees
similarly situated. No employee shall be a party
plaintiff to any such action unless he gives his consent
in writing to become such a party and such consent is
filed in the court in which such action is brought. The
court in such action shall, in addition to any judgment
awarded to the plaintiff . . . allow a reasonable
attorney's fee to be paid by the defendant, and costs of
the action.
[29 U.S.C. § 216(b).]
In addition, plaintiff sought counsel fees and costs pursuant to the
NJWHL. The statute states that if an employer pays an employee less than the
minimum fair wage to which they are entitled under the NJWHL, "the employee
may recover in a civil action the full amount of such minimum wage less any
amount actually paid to him or her by the employer," together with costs and
such reasonable attorney's fees as determined by the court. N.J.S.A. 34:11-
56a25.
Initially, we reject plaintiff's contention that he is entitled to attorney's
fees and costs under the FLSA and the NJWHL. A judgment was never entered
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in this matter granting plaintiff any relief pursuant to the FLSA. Therefore, he
was not entitled to attorney's fees and costs under 29 U.S.C. § 216(b). Moreover,
the court did not enter a judgment awarding plaintiff the "full amount" of wages
due pursuant to the NJWHL. Consequently, he was not entitled to an award of
attorney's fees under N.J.S.A. 34:11-56a25.
We conclude, however, that plaintiff was a "prevailing party" under the
LAD. Our Supreme Court has held that "a plaintiff who is awarded some
affirmative relief by way of an enforceable judgment against defendant or other
comparable relief through a settlement or consent decree is a prevailing party
under N.J.S.A. 10:5-27.1 of the LAD." Tarr v. Ciasulli, 181 N.J. 70, 86-87
(2004).
Here, defendants filed an offer of judgment in which they offered to pay
plaintiff $100,000 "in full and final satisfaction of all claims asserted" in his
complaint. Plaintiff accepted the offer. Under the agreement, plaintiff obtained
relief comparable to an enforceable judgment on his LAD claims. Therefore, he
was a "prevailing party" under N.J.S.A. 10:5-27.1. Tarr, 181 N.J. at 86-87.
Plaintiff argues that as a prevailing party, he was entitled to an award of
counsel fees and costs. He contends the trial court erred by holding he waived
his right to seek such fees and costs. Plaintiff argues that when an offer of
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judgment does not expressly provide for the waiver of counsel fees and costs,
acceptance of the offer does not preclude the award of such fees and costs.
In support of this argument, plaintiff cites decisions of the federal courts
interpreting the federal offer of judgment rule, Fed. R. Civ. P. 68. See, e.g.,
Lima v. Newark Police Dept., 658 F.3d 324, 331 (3d Cir. 2011) (holding that
when an offer of judgment is silent as to fees and costs, they must be fixed by
the court after the offer is accepted); Torres v. Metropolitan Life Ins. Co., 189
F.3d 331, 333-35 (3d Cir. 1999) (concluding that the release of all claims or
demands asserted in the litigation did not preclude the filing of an application
for counsel fees and costs). However, our courts have not applied this bright-
line rule in all matters where a litigant has a statutory right to attorney's fees and
costs.
In Coleman v. Fiore Bros., Inc., the plaintiffs asserted claims under the
Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, arising from the installation and
financing of certain home improvements. 113 N.J. 594, 607 (1989). During the
litigation, the plaintiffs were represented by a public interest law firm. Id. at
596. The claims were settled and thereafter the plaintiffs' attorney filed an
application for attorney's fees. Id. at 608. Plaintiff's counsel took the position
that she could not negotiate damages and counsel fees simultaneously. Ibid.
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The Court held that private counsel could insist, without ethical conflict,
on a fee allowance as part of a settlement of an action in which a statute provides
for the award of counsel fees to the prevailing party. Id. at 603. However, where
the plaintiffs are represented by public-interest counsel, defense counsel may
not insist upon waiver of fees as a condition of settlement. Id. at 606.
The Court then considered whether, under the facts of the case, the
statutory claims for attorney's fees were encompassed within the negotiated
settlement and stipulation dismissing the claims. Id. at 607-11. The Court
refused to hold, based on the federal case law, that a settlement agreement
should not be interpreted as waiving an award of attorney's fees in the absence
of a specific and expressed waiver. Id. at 609 (citing Ashley v. Atlantic
Richfield Co., 794 F.2d 128, 130 (3d Cir. 1986); El Club del Barrio, Inc. v.
United Cmty. Corps., 735 F.2d 98 (3d Cir. 1984); Folsom v. Butte Cty. Ass'n of
Gov'ts, 652 P.2d 437 (Cal. 1982); Tallon v. Liberty Hose Co. No. 1, 485 A.2d
1209 (Pa. Super. Ct. 1984)).
The Coleman Court pointed out that, "there has been no attempt to reserve
the issue" and the parties' agreement stated only that "[a]ll claims for damages"
were settled. Id. at 610. The Court held the claims for counsel fees were
encompassed by the settlement, noting that "it would run counter to the fair
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expectations of counsel . . . to have surmised" that New Jersey's public policy
would not permit such a settlement. Id. at 610-11.
Thus, Coleman expressly refused to adopt the principle that a settlement
agreement will not be interpreted as waiving attorney's fees and costs unless the
agreement expressly waives such fees and costs. Under Coleman, the question
of whether the parties agreed that a settlement would encompass a statutory
claim for attorney's fees must be decided based on the facts and circumstances
of a particular matter.
The Court addressed these issues again in Pinto v. Spectrum Chemical &
Laboratory Products Corp., 200 N.J. 580 (2010). In that matter, the plaintiffs
asserted claims under the LAD and the Conscientious Employee Protection Act
(CEPA), N.J.S.A. 34:19-1 to -14. Id. at 585. The plaintiffs were represented by
a public interest law firm. Ibid.
The parties participated in court-ordered mediation, and the mediator
believed they had settled the case. Id. at 586. The parties, however, had
different understandings of the terms of the agreement, which had not been put
in writing. Ibid. The plaintiffs' attorney asserted that the parties had only
reached an agreement on the dollar amount of the substantive claims, and noted
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that under Coleman, he could not negotiate fees until a settlement was reached
on the underlying claims. Id. at 587.
The defendant's attorney asserted that the parties had settled all financial
issues, including attorney's fees. Id. at 586-87. The defendant's attorney also
stated that she told the plaintiffs' attorney that adding attorney's fees was a "deal
breaker" and her client would not agree to a settlement that did not encompass
or address attorney's fees. The trial court found the agreement was
unenforceable because there had been no meeting of the minds. Id. at 587.
The Court noted that the central issue was whether the holding of Coleman
should be extended to LAD and CEPA claims. Id. at 588. The Court held that
Coleman's ban on the simultaneous negotiation of substantive claims and
attorney's fees no longer had "continuing vitality." Id. at 598.
The Court determined that giving public interest attorneys and defendants
the authority to simultaneously negotiate these issues was consistent with the
Legislative aims of the CFA, LAD, and CEPA. Id. at 599. However, the Court
continued the prohibition of defendants conditioning settlement on the waiver
of attorney's fees in fee-shifting cases involving public interest law firms. Ibid.
The Court also upheld the trial court's determination that there was no
settlement in the matter "because the parties never had a meeting of the minds
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on the precise terms of the agreement." Id. at 600. The Court noted that had the
parties reduced the agreement to writing, the differences in their positions would
have been apparent. Ibid. The Court observed that the plaintiff believed the
settlement only applied to the merits claims and did not preclude them from
seeking statutory attorney's fees, while defendant believed the parties had reach
a global resolution of all claims. Ibid.
Significantly, the Court in Pinto did not adopt the federal case law
pertaining to the waiver of attorney's fees. Rather, the Court determined whether
the parties had reached an agreement on attorney's fees based on the relevant
facts and circumstances.
Plaintiff argues, however, that Warrington v. Village Supermarket, Inc.,
supports his contention that the trial court erred by finding he waived his right
to seek attorney's fees and costs. 328 N.J. Super. 410, 418-19 (App. Div. 2000).
In Warrington, the plaintiff brought a lawsuit against a supermarket claiming
that its facilities did not provide handicapped individuals with access as required
by law. Id. at 415.
The plaintiff in Warrington asserted claims under New Jersey’s
Handicapped Access Law, N.J.S.A. 52:32-4 to -10; the LAD; and the Americans
with Disabilities Act (ADA), 42 U.S.C. §§ 12101 to 12213. Id. at 414-15. She
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sought compensatory and punitive damages, as well as various types of
injunctive relief. Id. at 415. She also sought attorney's fees and costs under the
ADA and LAD. Ibid.
Prior to the scheduled trial date, the parties settled the substantive issues,
and a consent judgment was filed. Ibid. The consent order was silent on the
issue of attorney's fees and costs. Id. at 416. We noted that in Coleman, the
Court had examined the course of negotiations, the parties' settlement
documents, and conduct of counsel "to determine if a plaintiff has waived a right
to a statutory fee." Id. at 418 (discussing Coleman, 113 N.J. at 610-11).
We also noted that the federal courts had developed a different rule for
cases in which a plaintiff successfully pursues claims under statutes that allow
for the award of counsel fees, and have held that the prevailing party will be
entitled to attorney's fees "unless the settlement agreement expressly and
specifically waives that right." Ibid. (citing Torres, 189 F.3d at 333-34; El Club
Del Barrio, 735 F.2d at 99). We applied the federal rule because plaintiff based
her claims in part on federal law, and the consent judgment "vindicate[d] the
rights expressly secured by the ADA." Id. at 419 (footnote omitted).
However, plaintiff's reliance upon Warrington is misplaced. Here, the
record shows that plaintiff sought relief under state and federal law. He claims
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the settlement vindicates his rights under the FLSA, but the settlement merely
calls for payment of $100,000, and does not expressly vindicate any rights under
the FLSA. In Warrington, by contrast, part of the relief obtained under the
settlement was equitable relief addressing the handicap access issues that were
the basis for the federal ADA claims. Ibid.
We conclude the trial court correctly determined that the issue of whether
a party waives a statutory right to the award of attorney's fees and costs must be
decided based on the relevant facts and circumstances. The court correctly
found that under New Jersey law, there is no bright-line test for determining if
a party to a settlement has waived a claim for attorney's fees and costs when the
agreement is silent on the issue.
III.
Plaintiff further argues the trial court erred by finding that defendants'
offer of judgment was intended to include his claim for attorney's fees and costs,
and plaintiff's acceptance of that offer constituted a waiver of the claims for fees
and costs. We disagree.
Here, the trial court found based on the relevant facts and circumstances,
that plaintiff's acceptance of defendants' offer of judgment resolved all claims,
including plaintiff's claims for counsel fees. In his written statement of reasons,
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the judge noted that the parties settled the matter after conducting limited
discovery, and they disputed the value of the case from the inception of the
litigation. Initially, plaintiff was firm in his demand for $1 million, and
defendants were not willing to offer more than $25,000 since that offer had been
based on plaintiff's tax return and his disputed employment status.
Moreover, defendants' insurance coverage was limited to $100,000, with
an erosion for defense costs. Defendants offered plaintiff the maximum amount
under the policy to resolve the litigation quickly. The judge noted that the offer
was "largely driven" by the policy's limits and erosion provision.
The judge further noted that the record showed plaintiff's claims "were
subject to significant defenses." The judge found that in making the offer,
defendants understood that it was inclusive of attorney's fees. The judge stated:
While [the] better practice may have been to
specifically delineate the matter of attorney's fees, both
sides had an ability to clarify the issue. Adopting the
[p]laintiff's position would mean that the defense made
the offer recognizing that it would be subject to further
significant exposure. This is highly unlikely. It is
apparent that [d]efendant[s'] Offer of Judgment was
inclusive of attorney's fees. Counsel for [p]laintiff,
although seeking to utilize federal law to obtain
attorney's fees, cannot have understood [d]efendant[s']
counsel to have intended otherwise. No reasonable
interpretation of the course of dealings between counsel
would indicate otherwise.
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We are convinced there is sufficient credible evidence in the record to
support the trial court's findings. The record supports the court's determination
that by accepting defendants' offer of judgment, plaintiff waived his right to
petition the court for an award of attorney's fees and costs.
IV.
Plaintiff further argues that the motion judge misapplied the offer of
judgment rule by entering an order enforcing the settlement and requiring that
he execute a written settlement agreement. He contends he accepted an offer of
judgment; he did not enter into a settlement agreement. Plaintiff argues that the
motion judge misapplied his discretion by making him execute documents with
terms he never negotiated or agreed to.
The record shows that after plaintiff's attorney filed the notice accepting
the offer of judgment, defendants provided plaintiff's attorney with a written
settlement agreement and asked that it be executed. The proposed agreement:
(1) states there is no admission of liability or wrongdoing of any kind with
respect to the claims raised in the lawsuit; (2) requires defendants to pay plaintiff
$100,000 "in full and final compromise and satisfaction of all claims asserted in
the [l]awsuit . . ."; (3) requires execution of a stipulation of dismissal, Internal
Revenue Service Form W-9, and a child support judgment search; (4) states that
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payment is a full and fair settlement of the litigation; (5) indicates that the parties
agree defendants have no obligation to pay plaintiff or his attorney any
payments, benefits, or consideration other than those provided in the agreement;
(6) provides for dismissal of the lawsuit; (7) states that New Jersey law controls
the interpretation and enforcement of the agreement; (8) includes a
representation that plaintiff has consulted with counsel before entering the
agreement; (9) provides that the terms of the agreement cannot be modified
except by a written agreement signed by the party against whom enforcement of
such modification may be sought; (10) states that plaintiff represents he is not
enrolled in certain Medicare programs; (11) includes an agreement that N.J.S.A.
2A:17-56.23b requires a search of child support judgments before distribution
of any settlement proceeds to plaintiff; (12) states that the parties have had
ample opportunity to review the agreement; and (13) provides for the execution
of the agreement in counterparts and delivery by facsimile or electronic mail.
We reject plaintiff's contention that the parties did not reach a settlement
agreement. As noted previously, his acceptance of the offer of judgment
provides him with relief comparable to a settlement or consent decree.
Moreover, the proposed agreement includes provisions that are intended to
facilitate payment of the $100,000 defendants agreed to pay to resolve the
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dispute. The proposed agreement includes general terms of the sort typically
included in agreements of this kind. The motion judge did not err by enforcing
the parties' agreement and requiring plaintiff to execute the proposed written
agreement.
On appeal, plaintiff also contends the judge erred by stating that if plaintiff
did not waive his right to seek counsel fees and costs, the court had the discretion
to deny his application for such fees and costs. In view of our decision, we need
not address this issue.
Affirmed.
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