Opinion
DOCKET NO. A-0005-14T3
01-20-2016
SBI WASTE REMOVAL SERVICES, LLC, Plaintiff-Appellant, v. HARBOR VIEW RESTORATION, d/b/a HARBOR VIEW, FRANK HOFFMAN, individually, Defendants-Respondents.
Michael S. Harwin argued the cause for appellant. Carl J. Dallarda argued the cause for respondents (Indik & McNamara, P.C., attorneys; Mr. Dallarda, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fasciale, Nugent and Higbee. On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Passaic County, Docket No. DC-11921-13. Michael S. Harwin argued the cause for appellant. Carl J. Dallarda argued the cause for respondents (Indik & McNamara, P.C., attorneys; Mr. Dallarda, on the brief). PER CURIAM
Plaintiff, SBI Waste Removal Services, LLC (SBI), appeals from a judgment, dated July 25, 2014, entering a fee award in the amount of $755.74 in its favor. SBI maintains solely that the Special Civil Part judge abused his discretion by awarding it $1,500 in counsel fees, rather than the approximately $10,000 requested. We reverse and remand for further proceedings consistent with this opinion.
SBI provides "a roll-off service of containers." SBI contracted with defendants, Frank Hoffman and Harbor View Restoration, d/b/a Harbor View, for the rental of a dumpster. The contract also included a provision stating, "[a]ll [amounts] past 60 days will go to collection and the cost of collection will be part of your bill in addition to the cost of disposal and trucking." After defendants returned the dumpster, SBI filed a complaint in the Special Civil Part for breach of contract, alleging the dumpster contained excess tonnage which defendants refused to pay for. Following a trial, the trial judge found defendants owed SBI $790.74 for excess tonnage and sales tax, plus reasonable collection costs. SBI sought attorney's fees totaling $10,191.40. Following argument held on July 18, 2014, the judge issued an order, dated July 25, 2014, awarding $1,500 in fees.
We ascertain the following facts from the record. Prior to filing of the complaint and throughout the pendency of the case, both parties engaged in numerous settlement discussions which proved unfruitful. SBI's complaint sought $755.74 in compensatory damages, as well as punitive damages and attorney's fees and costs. Thereafter, SBI served defendants with interrogatories and a demand for documents. However, following defendants' failure to provide more detailed answers to the interrogatories as requested in a Rule 1:6-2(c) letter, SBI filed a motion to compel discovery. A different judge granted SBI's motion and ordered defendants to provide more specific answers to the interrogatories. SBI then served defendants with another Rule 1:6-2(c) letter, claiming defendants never provided documents sought in its production request. Having not received a response, SBI filed a motion to strike defendants' answer or adjourn the trial date. The trial judge granted the motion, striking defendants' answer without prejudice.
SBI initially served interrogatories and a demand for documents that did not comport with Rule 6:4-3(f), resulting in SBI needing to amend their interrogatories. However, SBI's attorney did not bill for the time spent preparing the first set of interrogatories.
Trial on the breach of contract case took place on May 30, 2014. At the conclusion of his opinion, dated June 6, 2014, the trial judge stated
Plaintiff's counsel must submit a Certification of Services and must justify the reasonableness of any fee sought. It should be noted that Plaintiff's Complaint seeks damages of $755.74 (not including tax). The Court views this to be in essence a Small Claims case. This factor will play
very heavily in the Court's determination of what constitutes a reasonable collection cost.SBI later made an application for attorney's fees and provided a Certification of Services totaling $10,191.40 in attorney's fees and costs. Following oral argument on the post-judgment fee application, the trial judge issued a written decision, dated July 25, 2014. He awarded SBI $1,500 for attorney's fees, a total less than the amount of time SBI's attorney billed for the trial itself including time spent waiting for his adversary to appear. The judge found a reduction in attorney's fees to be appropriate, stating
The Court did as part of its ruling find [SBI] is entitled to collection costs which was part of a contract found by the Court to exist between the parties. Now [SBI] seeks to recover attorney's fees in the amount of $10,191.40. This amount far exceeds the stated amount in controversy which never changed. The amount now sought as a collection cost exceeds the judgment recovered (and sought) by thirteen times.
As noted by the Court in its [w]ritten [o]pinion, the true essence of this case has always been and remains a Small Claims case. The amount sought by [p]laintiff was far below the jurisdictional limit of the Small Claims Court. Plaintiff's counsel sought to file the case in the Special Civil Part because what he believed to be necessary discovery practice.
The trial judge further stated "[p]laintiff's counsel may have been overly aggressive and zealous in the discovery process and the prosecution of the claim . . . . [However,] [t]his Court cannot lose focus of the dispute between the parties. It is a relatively minor contract dispute." Ultimately, the judge concluded "the hours expended far exceeded those that were reasonably necessary to achieve a comparable result." SBI appeals the award of attorney's fees, claiming the trial court erred by failing to calculate the lodestar. SBI also claims the trial court erred by considering SBI's decision to file its complaint in Special Civil Part and request discovery as a factor in reducing attorney's fees. We reverse and remand for the following reasons.
In their brief, defendants argue SBI should not be entitled to attorney's fees under the contract. In the absence of a cross-appeal, we decline to address defendants' contention. See Franklin Discount Co. v. Ford, 27 N.J. 473, 491 (1958) ("[A respondent], in order to attack the actions below which were adverse to him, must pursue a cross-appeal."); Pressler & Verniero, Current N.J. Court Rules, comment 2 on R. 2:3-4 (2016) ("Ordinarily, a respondent . . . must cross-appeal in order to obtain relief from the judgment."). --------
We review a trial court's award of counsel fees for a clear abuse of discretion and will disturb that determination "only on the rarest of occasions[.]" Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009) (quoting Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 444 (2001)). A prevailing party may only seek attorney's fees "if they are expressly provided for by statute, court rule, or contract." Id. at 385 (quoting Packard-Bamberger, supra, 167 N.J. at 440). Therefore, a prevailing party in a breach of contract claim may seek attorney's fees where the underlying contract included an attorney fee-shifting provision. Id. at 386.
When calculating the amount of reasonable attorney's fees, courts must determine the lodestar, defined as the "number of hours reasonably expended by the successful party's counsel in the litigation, multiplied by a reasonable hourly rate." Ibid. See also Grow Co., Inc. v. Chokshi, 424 N.J. Super. 357, 367-68 (App. Div. 2012) (holding same). Factors that the court must consider when awarding attorney's fees include:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service 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.
[Litton, supra, 200 N.J. at 387 (quoting RPC 1.5(a)).]
The court may not include "excessive and unnecessary hours spent on the case in calculating the lodestar." Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 22 (2004). Therefore, the amount of the lodestar "may be reduced[.]" R.M. v. Supreme Court of N.J., 190 N.J. 1, 11 (2007). Moreover, if "the fee requested far exceeds the damages recovered, 'the trial court should consider the damages sought and the damages actually recovered.'" Litton, supra, 200 N.J. at 387 (quoting Packard-Bamberger, supra, 167 N.J. at 446).
Ultimately, the "goal is to approve a reasonable attorney's fee that is not excessive." Id. at 388. Significantly, the Supreme Court noted:
Unlike the traditional fee-shifting case in which enhancement has some relevancy as a type of encouragement to represent a party, the opposite applies in a contract case. That is, although enhancement is not a concern, the relationship between the fee requested and the damages recovered is a factor to be considered by the trial court because the notion of proportionality is integral to contract fee-shifting to meet the reasonable expectation of the parties.
[Id. at 389 (emphasis added) (internal citation omitted).]However, "[t]he award need not necessarily be proportionate to the damages recovered." Chokshi, supra, 424 N.J. Super. at 368.
Here, the trial judge issued only a brief written opinion which did not contain a lodestar calculation. Nor did he provide a sufficiently reasoned basis for the amount awarded, an amount less than what SBI's attorney billed for the trial itself. A trial court must make findings of fact and conclusions of law. Great Atl. & Pac. Tea Co., Inc. v. Checchio, 335 N.J. Super. 495, 498 (App. Div. 2000). Because the trial judge did not conduct the analysis promulgated by the Supreme Court in Litton, we conclude the trial judge abused his discretion. We do not make a determination as to the amount of fees that should be awarded by the court. We do not fault the judge for considering the proportionality of the fee and the damages recovered. However, in order to calculate the appropriate fee award, the court must set forth factual findings as to what work was required to achieve the result and what if any time was required to respond to defendant's litigation conduct. We therefore reverse and remand this matter for a hearing on SBI's fee application consistent with this opinion. We do not retain jurisdiction.
Reversed and remanded.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION