Opinion
DOCKET NO. A-4461-13T2
02-02-2017
THE FOUR FELDS, INC., d/b/a L. EPSTEIN HARDWARE CO., REASONABLE LOCK & SAFE, INC., Plaintiffs, and CITY OF ORANGE PROPERTY OWNER'S ASSOCIATION, Plaintiff-Appellant, v. THE CITY OF ORANGE TOWNSHIP, Defendant-Respondent, and NOVA ENGINEERING AND ENVIRONMENTAL, LLC, Defendant.
Brach Eichler L.L.C., attorneys for appellant (Charles X. Gormally, of counsel; David J. Klein, on the briefs). Dan S. Smith, City Attorney, attorney for respondent (James H. Wolfe, III, of counsel; Jasmine A. Brown, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Sabatino and Nugent. On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-0759-11. Brach Eichler L.L.C., attorneys for appellant (Charles X. Gormally, of counsel; David J. Klein, on the briefs). Dan S. Smith, City Attorney, attorney for respondent (James H. Wolfe, III, of counsel; Jasmine A. Brown, on the brief). PER CURIAM
Plaintiff City of Orange Property Owner's Association ("the Association") appeals the trial court's order denying its motion for an award of counsel fees incurred in this litigation. For the reasons that follow, we vacate that order and remand for further consideration of the fee-shifting request.
The Association is an unincorporated organization of owners of multi-family rental properties in the City of Orange Township ("the City"). In 2010, the City's governing body adopted several ordinances increasing the periodic fees charged to multi-family property owners for City inspections of rental properties. Two such property owners, plaintiffs The Four Felds, Inc., doing business as L. Epstein Hardware Co., and Reasonable Lock & Safe, Inc., filed an action in lieu of prerogative writs in the Law Division against the City and the City's engineering firm. The lawsuit challenged the validity of the ordinances increasing the fees. The Association thereafter intervened in the litigation as a co-plaintiff, likewise alleging the ordinances were invalid.
The official name and form of government for Orange have evolved over time. Originally incorporated as a township in 1806, Orange officially became a city in 1872. In 1982, Orange changed back to a township in order to receive federal funding, but kept the name City of Orange Township. See generally The City of Orange Township: A Historical Overview, http://www.ci.orange.nj.us/history_of_orange.html (last visited January 26, 2017).
In its complaint in intervention, the Association asserted three grounds to invalidate the ordinances: (1) violation of N.J.S.A. 40:48-2.12m (regarding inspections of residential rental units); (2) violation of equal protection principles under the New Jersey Constitution; and (3) violation of the New Jersey Civil Rights Act, N.J.S.A. 10:6-2(c) ("NJCRA").
After hearing oral arguments, the trial court granted partial summary judgment to the Association and the co-plaintiffs, declaring the increased inspection fees invalid. Neither the trial court's written order nor the transcript of the oral argument and bench ruling specifies with precision the particular legal grounds on which the court based its declaration of invalidity. The court allowed discovery to proceed on other aspects of the case.
Having succeeded with the co-plaintiffs in obtaining a ruling of invalidity, the Association moved for counsel fees under the NJCRA's fee-shifting provision, N.J.S.A. 10:6-2(f). The Association contended that it was a prevailing party under the statute. The City opposed the fee-shifting application. Upon considering the motion on the papers, the trial court denied the motion for fees in the order now on appeal.
In his handwritten statement of reasons notated at the bottom of the denial order, the trial judge identified several reasons for rejecting the Association's fee request. First, the judge noted that plaintiffs are "comprised of a large number of property owners, many of whom own multiple units." The judge additionally noted that the resources of the City, by comparison, are "greatly strained" and continue to be further strained by other litigation brought by one of the co-plaintiffs.
Because the handwritten portion of the order is poorly photocopied and somewhat illegible, counsel at our request have conferred about the handwritten terms of the order, and have submitted a stipulation agreeing upon the text. We accept the stipulated language for purposes of our review. --------
Apart from these comparative resource aspects, the judge also found that the court's declaration of invalidity "came so early in the process," and that "plaintiff's constituents suffered either no damage or virtually no damage." The judge distinguished the Association's fee request from the one successfully made by the plaintiff in New Jerseyans for a Death Penalty Moratorium v. N.J. Department of Corrections ("NJDPM"), 185 N.J. 137, 149 (2005), in which "a pro bono lawyer for a grass roots association . . . was trying to effect change in New Jersey's use of the death penalty." The judge concluded that, by contrast, the present case was not "about fee shifting [where] 'the ordinary citizen would be waging a quixotic battle against a public entity [vested] with almost inexhaustible resources.'" (quoting NJDPM, supra, 185 N.J. at 153).
The litigation continued for several more years on other issues. Ultimately, a consent judgment was entered, in which the City agreed to implement the partial summary judgment order and amend its inspection fee ordinances accordingly. The entry of the consent judgment made the earlier interlocutory order denying fees to the Association appealable as of right, see R. 2:2-3(a)(1), and this appeal by the Association ensued.
Ordinarily, trial courts have wide discretion on rulings on counsel fee applications, and we afford substantial deference to those rulings on appeal. See, e.g., Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001). However, appellate courts will provide relief from such rulings in instances where the trial court has misapplied the law or relied upon impermissible grounds. See, e.g., Walker v. Giuffre, 209 N.J. 124, 148 (2012) (holding that a trial court's failure to comply with the methodology prescribed by Rendine v. Pantzer, 141 N.J. 292 (1995), constitutes an abuse of discretion).
As the Supreme Court has recognized, the NJCRA, including its fee-shifting provision, is largely patterned after the federal Civil Rights Act, 42 U.S.C.A. § 1988(b); 42 U.S.C.A. §§ 1981 to 2000h. See Tumpson v. Farina, 218 N.J. 450, 479 (2014). Under Section 1988 of the federal statute, "a prevailing plaintiff 'should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust.'" Dunn v. Dep't of Human Servs., 312 N.J. Super. 321, 333 (App. Div. 1998) (quoting Hensley v. Eckerhart, 461 U.S. 424, 429, 103 S. Ct. 1933, 1937, 76 L. Ed. 2d 40, 48 (1983)). Courts have strictly limited the permissible grounds for such special circumstances for denying a counsel fee to a prevailing plaintiff. See, e.g., Frank's Chicken House v. Manville, 208 N.J. Super. 542, 545 (App. Div. 1986) (citing Jones v. Orange Hous. Auth., 559 F. Supp. 1379, 1383-84 (D.N.J. 1983) (noting that fees should be liberally granted to a successful plaintiff under Section 1988 and special circumstances are only present when a plaintiff's injury is "one that a defendant did not create and is powerless to prevent")).
As our Supreme Court noted in Tumpson, an award of counsel fees to a prevailing plaintiff under the NJCRA is "[o]ne of the most powerful remedies" of the statute, in assuring that private counsel have sufficient incentives to represent persons who have been deprived of their civil rights by governmental action. Tumpson, supra, 218 N.J. at 479.
The trial court erred in categorically denying counsel fees to the Association as a prevailing intervenor-plaintiff in this litigation. The Association not only prevailed in obtaining, with the co-plaintiffs, a judicial declaration of the 2010 ordinances' invalidity, but also served as a catalyst in producing a permanent change of the ordinances. See, e.g., Mason v. City of Hoboken, 196 N.J. 51, 76 (2008) (analogously recognizing a catalyst theory for fee-shifting in Open Public Records Act matters); D. Russo, Inc. v. Twp. of Union, 417 N.J. Super. 384, 389 (App. Div. 2010) (similarly adopting a catalyst theory in granting fee-shifting under the Law Against Discrimination), certif. denied, 206 N.J. 328 (2011).
The fact that the Association and its members apparently had not yet been damaged by paying the increased fees is not a per se barrier to awarding reasonable fees to their counsel. See Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 23 (2004) (instructing that there need not be proportionality between the fee award and the amount of a plaintiff's damages). Nor does the fact that the court granted partial summary judgment at a time rather early in the litigation preclude a fee award. If anything, the rapid success achieved by plaintiff's counsel could be fairly considered a sign of the quality of counsel's advocacy, which the trial judge here did acknowledge despite denying the fee application.
The trial judge further erred in totally denying fees to the Association, because it is composed of businesses and persons who have the means to own and operate multifamily apartment complexes, whereas the City has weathered times of fiscal distress. As we held in Dunn, supra, "'the fact that the party to be charged is a taxpayer-supported [governmental] agency' [is] not a defense to a prevailing party's claim for counsel fees." Dunn, supra, 312 N.J. Super. at 334 (citing Hunter v. Trenton Hous. Auth., 304 N.J. Super. 70, 75 n.5 (App. Div. 1997)). That said, we do not preclude the trial court from considering the realities of economic factors in calibrating an award of what must be "reasonable" counsel fees, but the court here impermissibly denied fees in their entirety to the prevailing Association.
For these reasons, we vacate the order denying counsel fees. Inasmuch as the trial judge has retired, we remand the matter to the Law Division for reconsideration of the counsel fee application by a successor judge designated to do so. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION