Opinion
DOCKET NO. A-3741-12T1
04-28-2015
B & H SECURITIES, INC., Plaintiff-Respondent, v. DUANE D. PINKNEY, MARC J. PALLADINO, ADVANCED INTEGRATION SECURITY, L.L.C., and THE VORST GROUP, INC., t/a SECURITY SUPPLY STORE, PANDORA SECURITY, ADVANCED INTEGRATION SYSTEMS, and PANDORA ADVANCED INTEGRATION SECURITY, Defendants, and MICHAEL POISLER, Defendant-Appellant.
Marianne C. Tolomeo argued the cause for appellant (Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, P.C., attorneys; Ms. Tolomeo, on the briefs). Brian D. Spector argued the cause for respondent (Spector & Ehrenworth, P.C., attorneys; Mr. Spector and Caralyn E. Blaszka, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Yannotti, Fasciale and Whipple. On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1292-08. Marianne C. Tolomeo argued the cause for appellant (Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, P.C., attorneys; Ms. Tolomeo, on the briefs). Brian D. Spector argued the cause for respondent (Spector & Ehrenworth, P.C., attorneys; Mr. Spector and Caralyn E. Blaszka, on the brief). PER CURIAM
Defendant Michael Poisler ("Poisler") appeals from an order entered by the Chancery Division on January 2, 2013, awarding plaintiff B & H Securities, Inc. ("B&H") compensatory damages against Poisler, and an order entered by the court on February 28, 2013, awarding B&H counsel fees and costs. For the reasons that follow, we affirm in part, reverse in part and remand for further proceedings.
I.
This appeal arises from the following facts, which are drawn from the evidence presented at trial. B&H is a corporation that is in the business of designing, selling, maintaining, inspecting, and monitoring security systems. B&H operates primarily in New Jersey, but has customers in thirteen other states. Eliot Barry ("Barry") is B&H's president. Barry testified that much of the information that B&H deals with is confidential, consisting of the identities of its clients, the clients' security system access and central station codes, as well as information about the real and personal property that the clients' security systems are intended to protect. Other confidential information consists of B&H's security system designs, its business proposals to clients, its pricing protocols, and its lists of customers and vendors. According to Barry, much of this information is stored on computers, and B&H has installed many security and surveillance systems at its main office to protect the confidentiality of this information.
Barry also explained that B&H issues a handbook to all employees that sets out B&H's policy concerning the protection of its confidential information. The handbook included a "Confidentiality Clause," which was a separate document that imposed temporal restrictions on a terminated employee's ability to contact B&H's customers and which required agreement and signature by the employee.
In May 2005, B&H hired Duane D. Pinkney ("Pinkney") as a salesman and in 2006, he became B&H's sales manager. When Pinkney was hired, he executed an "Acknowledgement," which essentially set forth the terms of the Confidentiality Clause in the handbook. By executing the Acknowledgement, Pinkney agreed to maintain the confidentiality of B&H's information and not to contact any of B&H's customers for a period of forty-eight months after he left his employment with B&H.
In October 2005, B&H hired Marc J. Palladino ("Palladino") as a salesman, and in April 2006, on Pinkney's recommendation, B&H hired Poisler as an information technology ("IT") manager. Neither Poisler nor Palladino were required to sign the Acknowledgement, as Pinkney had done. Instead, both Poisler and Palladino signed one-sentence documents, stating only that they had received B&H's employee handbook.
In his capacities as a salesman and sales manager, Pinkney had access to practically all of B&H's confidential information. Palladino also had access to much of that confidential information, including clients' access codes and security systems. Moreover, in his capacity as B&H's IT manager, Poisler had full access to B&H's entire database.
In the spring of 2007, Pinkney, Palladino, and Poisler formulated a plan to start a security business which would compete with B&H. That security business was called Advanced Integration Security, L.L.C. ("AIS"). In June 2007, the three men executed an operating agreement for AIS, which provided that Pinkney and Palladino would each have forty-seven and one-half percent ownership of AIS. Poisler was given a conditional five percent interest in AIS, provided that he undertook certain work designing and developing AIS's computer systems within ninety days of leaving his employment with B&H.
Later in June 2007, Pinkney informed Barry that he was going to leave B&H and work for a new company which would compete with B&H for six of B&H's then-current clients. Barry reminded Pinkney that he had signed the Acknowledgment with its forty-eight month restriction on customer contact, but Pinkney did not alter his plans.
DataPipe, Inc. ("DataPipe") and Liquidnet Holdings, Inc. ("Liquidnet") were two of B&H's clients. Before resigning from B&H, Pinkney solicited DataPipe to switch its business to AIS. Also, prior to his resignation, Pinkney altered B&H's five-year maintenance agreement with Liquidnet, providing new agreements that permitted Liquidnet to cancel the contract at will merely by providing thirty days written notice to B&H. Palladino resigned from B&H as of July 1, 2007, and joined Pinkney at AIS.
Following Pinkney's and Palladino's resignations, Poisler remained employed with B&H. He testified that, while there, he transmitted information to Pinkney about "daily happenings" at B&H. Poisler also testified that he had transferred a B&H computer program (the so-called "Iris code") that had been developed for DataPipe to his home computer. Palladino testified that Poisler was performing work for AIS while he was still employed with B&H.
In August 2007, B&H filed suit against Pinkney, Palladino, and AIS, seeking damages and other relief for the alleged misappropriation of trade secrets and confidential information, breach of the confidentiality provision of their employment contracts, tortious interference with contractual relations, unfair competition, and breach of the implied covenant of good faith and fair dealing. Thereafter, Poisler filed a wage claim with the New Jersey Department of Labor ("NJDOL"), asserting that B&H owed him vacation and severance pay, as well as a $25,000 bonus.
In January 2008, with leave of court, B&H amended its complaint to add Poisler as a defendant, and to add a claim against all defendants for violations of the Computer Related Offenses Act ("CROA"), N.J.S.A. 2A:38A-1 to -6. The court also granted B&H's motion to consolidate Poisler's wage claim with the pending Superior Court action. We granted Poisler's motion for leave to appeal the order consolidating the claims, and later affirmed that order. B & H Sec., Inc. v. Pinkney, 404 N.J. Super. 42, 48 (App. Div. 2008).
B&H thereafter amended its complaint to add as defendants Liquidnet and The Vorst Group, Inc. ("Vorst"), and identified four companies through which Vorst allegedly conducted business. In March 2009, B&H settled its claims against Liquidnet and in October 2011, Pinkney, AIS and Vorst filed for bankruptcy protection. The bankruptcy court subsequently granted B&H relief from the automatic stays of the trial court proceedings, and allowed the lawsuit against Pinkney, AIS and Vorst to proceed.
In February 2012, the trial court entered a default judgment against AIS and Vorst as a result of their failure to obtain legal representation. In March 2012, B&H settled its claims against Palladino, and the court entered a default judgment against Pinkney for failing to appear. The court thereafter conducted a bench trial regarding the claims against Poisler, the sole remaining defendant, along with a proof hearing on the claims against defaulting defendants Pinkney, AIS and Vorst.
Thereafter, the judge issued a written opinion finding that B&H had proven all of its claims against Poisler and had established the requisite proofs against Pinkney, AIS, and Vorst to sustain its claims against them. The judge awarded B&H $737,087 in compensatory damages against the four defendants, as well as $100,000 in punitive damages against all defendants except Poisler. The judge indicated that he would make an award of counsel fees to B&H pursuant to CROA, following B&H's submission of a certification of attorney services and expenses. On January 2, 2013, the judge entered an order memorializing his written decision.
B&H's counsel subsequently filed its certification of services and expenses. The judge later issued an oral decision, explaining his award of counsel fees and costs to B&H. The judge determined that B&H was entitled to $756,121.59 in counsel fees and costs. The judge also determined that B&H had incurred $68,963.41 in counsel fees in the bankruptcy action involving Pinkney, AIS and Vorst. The judge entered an order dated February 28, 2013, awarding B&H $756,121.59 in attorney's fees and costs against Poisler, and $825,085 in attorney's fees and costs against Pinkney, AIS, and Vorst.
On appeal, Poisler argues: (1) the trial judge erred by finding that he violated the implied covenant of good faith and fair dealing; (2) the judge erroneously found that he violated CROA; (3) the imposition of an adverse inference as a sanction for the alleged spoliation of evidence was plain error; (4) the judge erred by finding that he breached a duty of loyalty owed to B&H; (5) the judge's finding that he misappropriated confidential information was erroneous; (6) the judge's damage calculations were erroneous; and (7) the judge erred in its award of counsel fees.
II.
We turn first to Poisler's contention that the trial judge erred by finding that he breached the implied covenant of good faith and fair dealing. This argument was not raised in the trial court. Therefore, we consider the argument under the plain error standard in Rule 2:10-2. We must determine whether the judge's finding was erroneous and, if so, whether the error was clearly capable of producing an unjust result. Ibid.
We note initially that the trial court's findings of fact are binding on appeal if supported by adequate, substantial and credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (citing N.J. Tpk. Auth. v. Sisselman, 106 N.J. Super. 358, 370 (App. Div.), certif. denied, 54 N.J. 565 (1969)). Furthermore, deference to a trial court's fact-finding is warranted "when the evidence is largely testimonial and involves questions of credibility." In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997) (citing Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 607 (1989)). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (citing State v. Brown, 118 N.J. 595, 604 (1990)).
"[E]very contract in New Jersey contains an implied covenant of good faith and fair dealing." Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420 (1997) (citing Pickett v. Lloyd's, 131 N.J. 457, 467 (1993)). Under this "implied covenant . . . 'neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.'" Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 130 (1965) (quoting 5 Williston on Contracts § 670, 159-60 (3d ed. 1961)). Thus, "[a] plaintiff may be entitled to relief under the covenant if [the plaintiff's] reasonable expectations are destroyed when a defendant acts with ill motives and without any legitimate purpose." Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 226 (2005) (citing Wilson v. Amerada Hess Corp., 168 N.J. 236, 251 (2001)).
Here, the trial judge found that the testimony presented in support of B&H's claims was "clear and believable," while Poisler's only proof, his opposing testimony, was "self-serving and unconvincing." The judge determined the evidence established that while Poisler was a signatory to AIS's operating agreement, he continued to work at B&H for about two months thereafter, downloading B&H's information to his own computer and aiding Pinkney in obtaining B&H's confidential information.
We are convinced that there is sufficient credible evidence in the record to support the judge's conclusion that, by participating in the misappropriation of B&H's confidential information, Poisler breached the implied covenant of good faith and fair dealing. The evidence supports the judge's determination that Poisler engaged in conduct that denied B&H the benefit of the bargain intended by the parties when B&H employed Poisler.
Poisler argues that B&H failed to establish that there was a contract between the parties from which the implied covenant arose. In support of his argument, Poisler relies upon Woolley v. Hoffman-La Roche, Inc., 99 N.J. 284, modified on other grounds, 101 N.J. 10 (1985). In Woolley, the Court held "that absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will." Id. at 285-86.
Poisler says there was no agreement because of the disclaimer in B&H's employee manual. The manual stated that its contents "shall not constitute nor be construed as a promise of employment or as a contract between the [c]ompany and any of its employees." The manual also stated that it was merely a "summary" of the company's policies, which were presented to employees "as a matter of information." However, Poisler is not asserting that any provision of the manual created "a promise of employment" or "a contract" between him and B&H that might affect his at-will status or otherwise affect the company's ability to terminate his employment. Thus, the Woolley case does not support Poisler's argument.
Here, the evidence presented at trial established that Poisler was employed by B&H. Indeed, he does not argue otherwise. Poisler therefore had an agreement with the company, and the covenant of good faith and fair dealing was an implied term of that agreement.
III.
Poisler contends that the trial judge erred by drawing an adverse inference for the spoliation of evidence. We disagree.
The record shows that, in mid-September 2008, B&H filed a motion to allow it to examine the hard drive of Poisler's home computer so it could ascertain whether any of its confidential information had been taken and transferred to that drive.
According to Poisler, around that time, he was going to sell his home computer to his "in-laws" in Ecuador, and he wanted to delete personal information and photographs that were on it. Poisler further testified that, in October of 2008, while B&H's motion was pending, he ran three computer programs on his home computer to delete information. Poisler indicated that two of the programs were data-wiping tools, and the third was a file consolidator.
On November 5, 2008, the trial court entered an order granting B&H's motion to examine Poisler's home computer. According to Poisler, B&H's computer experts later came to his house and examined his home computer. Barry said those experts reported that the data had been wiped from that computer. However, Poisler testified that at that time, all of the data had not been deleted.
At trial, B&H asked the judge to draw a spoliation inference based upon Poisler's deletion of B&H's confidential information and its entire database from his home computer. Poisler did not oppose the application. The judge granted the application.
In his written decision, the judge stated that he was "persuaded by [B&H's] computer experts that Poisler deleted all data from his personal computer by using three different data-wiping programs." Because the deletion of the data had prevented B&H from discovering the specific data Poisler had taken, the judge concluded that a spoliation inference was warranted.
Poisler contends that the judge's statement that B&H's computer experts said that he had deleted "all" data from his personal computer is not supported by the record. However, Poisler admitted that he ran programs on his computer and he deleted certain files. The deletion of some of the data was sufficient to support the adverse spoliation inference.
Poisler also asserts that the judge erred by stating that he ran three data-wiping programs on his computer. He insists that he only ran one such program. However, Poisler testified that two of the programs were data-wiping programs, and the third program had some data-wiping capabilities. Thus, the record indicates that Poisler ran three programs with data-wiping capabilities.
Poisler further argues that the judge failed to conduct the proper analysis in determining whether to draw the spoliation inference. He contends that the judge did not consider the relative prejudice to B&H resulting from his deletion of information from his home computer. He claims B&H could have avoided such prejudice by securing the evidence from alternative sources, such as his e-mail account and the computers that Pinkney and AIS used.
The judge did not specifically consider whether the deleted data could have been obtained by reviewing Poisler's e-mail files, or found on Pinkney's and AIS's computers. However, Poisler testified that he could not have transferred B&H's confidential information by e-mail because too much data was involved.
In addition, Palladino testified that Pinkney told him he would throw his computer "in the river" if B&H learned about it. It is reasonable to assume that Pinkney would have dealt with AIS's computers in a similar manner. Thus, even if the judge erred by failing to consider these alleged alternative sources of the evidence, it was not an error clearly capable of producing an unjust result. R. 2:10-2.
We conclude that the judge did not err by drawing the adverse inference as a result of Poisler's spoliation of evidence.
IV.
Next, Poisler argues that the trial judge erred by finding that he violated CROA, which provides that:
[a] person or enterprise damaged in business or property as a result of any of the following actions may sue the actor therefor in the Superior Court and may recover compensatory and punitive damages and the cost of the suit including a reasonable attorney's fee, costs of investigation and litigation:
a. The purposeful or knowing, and unauthorized altering, taking or destruction of any data, data base, computer program, computer software or computer equipment existing internally or externally to a computer, computer system or computer network[.]
[N.J.S.A. 2A:38A-3a.]
Poisler argues that B&H failed to present sufficient proof to show that he took B&H's confidential data and assisted Pinkney in obtaining that data. The judge found that the evidence established that Poisler had violated CROA. We agree.
Poisler maintains, however, that B&H did not prove that his use of its computer system was "unauthorized." He asserts that, as B&H's IT manager, he was authorized to access all of B&H's information and that, "[w]hen an employee is authorized to access a company computer, a CROA claim cannot be established."
However, the evidence established that while Poisler had access to B&H's computer system, he was not authorized to take that data and transfer it to his own computer. Indeed, Barry testified that while Poisler was authorized to access certain e-mail mailboxes and work with B&H's Iris code, he was not allowed to take that information and transfer it to his own computer.
Poisler further argues that B&H failed to identify the specific data that it claimed he had taken or the data that he assisted Pinkney in obtaining. B&H was hampered, however, in its ability to present evidence as to the specific evidence taken because Poisler had deleted the data on his home computer. Along with the spoliation inference, there was sufficient evidence to support the finding that Poisler purposely took B&H's confidential computerized information and that he was not authorized to do so.
Poisler also maintains that B&H did not present sufficient evidence to establish that he assisted Pinkney in taking B&H's confidential information. Again, we disagree. In his decision, the judge stated that, based on the testimony presented, it could be inferred that Poisler cooperated with Pinkney in taking the confidential computer data from B&H.
The judge pointed out that Palladino had indicated that Pinkney would have required assistance to take B&H's data. The judge stated that "[n]obody was in a position to provide such assistance except Poisler, the information technology manager who had been hired on Pinkney's recommendation, and [who] held a contingent interest in AIS." There is sufficient evidence in the record to support the judge's findings.
Poisler further argues that the judge erred by finding that Palladino was a credible witness. Although the judge at one point expressed some skepticism regarding Palladino's credibility, the judge ultimately came to the conclusion that his testimony was credible.
We have no reason to second-guess the judge's credibility finding. A trial court has "a better perspective than a reviewing court in evaluating the veracity of witnesses[]" because the court "'sees and observes the witnesses, [and] hears them testify[.]'" Pascale v. Pascale, 113 N.J. 20, 33 (1988) (citations omitted).
In addition, Poisler argues there was no evidence that B&H was damaged by the alleged unauthorized taking of B&H's computerized data. However, B&H presented evidence showing that the unlawful taking of the data led to cancellation of certain contracts and litigation between B&H and two of those customers. Therefore, the evidence showed that B&H was damaged by Poisler's violation of CROA.
V.
Poisler contends the judge erred by finding he breached a duty of loyalty that he owed to B&H. Poisler argues that there was insufficient evidence for this finding. He says that, although he signed AIS's operating agreement, this was not a breach of loyalty because he did not sign a restrictive covenant with B&H, and was not precluded from preparing to compete with B&H before he left the company. In addition, Poisler argues that the fact that he assisted AIS is insufficient to show a breach of the duty of loyalty.
These arguments are without merit. We note that "an employer may prove a prima facie case of an employee's breach of the duty of loyalty not only by showing that the employee directly competed with the employer while employed, but also by showing that the employee while employed assisted the employer's competitor." Lamorte Burns & Co., Inc. v. Walters, 167 N.J. 285, 303 (2001) (citing Cameco, Inc. v. Gedicke, 157 N.J. 504, 517 (1999)).
At trial, Palladino testified that Poisler was performing work for AIS on weekends and at night before B&H terminated his employment. Among other things, Poisler's work involved the development of codes for AIS's proposals. Poisler disputed Palladino's testimony, but the trial judge found B&H's witnesses, including Palladino, to be credible. The evidence also showed that AIS was, in fact, in direct competition with B&H. Thus, the record supports the judge's finding that Poisler breached his duty of loyalty to B&H.
VI.
Poisler next contends that the judge erred by finding that he misappropriated B&H's confidential information. Poisler asserts that he was not bound by a contractual non-disclosure obligation. He says there is no evidence that he disclosed confidential information to AIS or that B&H was damaged by any such disclosure. He also argues that, in order to merit protection, the information must be treated as confidential. He contends that B&H did not treat the Iris code as confidential, at least with regard to one of its customers.
These arguments are entirely without merit. At trial, B&H presented evidence which established that it considered the Iris code and other data as confidential. Barry testified about the measures B&H took to ensure the confidentiality of this information. Moreover, the evidence established that Poisler had transferred B&H's Iris code and other data to his personal computer. Thus, there was sufficient credible evidence to support the judge's determination that Poisler misappropriated B&H's confidential information and B&H was damaged thereby.
VII.
Poisler additionally argues that the judge erred in the award of damages. After determining that Poisler, Pinkney, AIS, and Vorst were liable for damages under various theories, the judge relied on testimony from B&H's damages expert and determined that these defendants should be required to pay compensatory damages based upon the profits that B&H lost or the profits that AIS and Vorst made from four customers that they took from B&H.
First, the judge determined the amount of compensatory damages for which Pinkney, AIS, and Vorst were liable, stating:
Ultimately, four B&H customers left B&H and began conducting business with AIS: DataPipe, Liquidnet, Spirit, and Commercial Interiors Direct. The total sales lost for these customers, initially calculated for a period of 3 9 1/2 months, amounted to $1,363,059. Based upon a gross profit of 44.5%, as determined by [B&H's] expert, . . . B&H's lost profit[s were] $606,560. Applying this to the full 48 months of
Pinkney's restrictive covenant results in a lost profits calculation of $737,087.
As the judge indicated, the compensatory damages award against Pinkney, AIS, and Vorst was based upon the Acknowledgement that Pinkney signed when he was hired by B&H. This document described certain customer information as "confidential" and stated that, upon the termination of his employment, Pinkney would keep this information confidential. The Acknowledgement also stated that Pinkney would not have any contact with a B&H customer "in any way pertaining to security services for a period of forty-eight (48) months" following such termination.
The judge then considered the damages that would be awarded against Poisler. The judge reviewed the claims that B&H had successfully asserted against him and then stated that the "compensatory damages that flow from these claims are the same lost profits previously discussed, as testified to by plaintiff's damages expert. Poisler offered no contrary evidence as to damages. Thus, damages will be awarded against Poisler in the amount of $737,087."
On appeal, Poisler maintains that the judge erred by enforcing against him the four-year, post-employment prohibition that was set out in Pinkney's Acknowledgement, even though Poisler did not sign a similar Acknowledgement and was not bound by any similar temporal restriction in the confidentiality provision in B&H's employee handbook.
The record shows that when B&H hired Poisler, he signed a one-sentence statement, which merely indicated that he acknowledged receipt of the handbook. On the last page of the handbook was a document that mirrored the Acknowledgement that Pinkney had signed, which included a place for the employee to sign. Poisler did not sign that document.
The handbook included a statement indicating that the protection of B&H's confidential information and trade secrets was vital to B&H and employees who improperly used or disclosed that information would be subject to legal action "even if they do not actually benefit from the disclosed information." However, unlike the Acknowledgement that Pinkney signed, the confidentiality provision of the handbook did not set out a time period during which the employee would be subject to suit for improper use or disclosure of B&H's confidential information.
We are convinced that the judge did not provide a sufficient explanation for awarding the same damages against Poisler as he awarded against Pinkney, AIS and Vorst. As we have explained, the award against Pinkney and these other defendants was premised upon the Acknowledgement that Pinkney signed, with its four-year limitation on competition with B&H. The judge did not explain why the damage award entered against Poisler should also be based on the profits that B&H lost over that same four-year period.
We note that the evidence showed that Pinkney, AIS and Vorst were actively operating and competing with B&H during the four-year period after Pinkney resigned from B&H on June 30, 2007. We also note that under the AIS operating agreement, Poisler had a conditional, five-percent ownership interest in AIS, but Poisler only held that interest until November 3, 2007. In addition, Poisler severed his ties with AIS in March 2009, after about twenty months of employment.
The judge may have reasoned that Pinkney, AIS and Vorst continued to make use of the confidential B&H data that Poisler had wrongfully taken after Poisler left AIS, but the judge did not say so. We are convinced that the matter must be remanded to the trial court to reconsider the amount of damages awarded against Poisler. We do not preclude the judge from awarding the same damages against Poisler that he awarded against the other defendants; however, the judge must explain his reasons for doing so and those reasons must be supported by sufficient evidence.
In addition, it appears that the judge did not take into account the settlements that B&H reached with other parties in this and related litigation. The record shows that B&H settled with Palladino and received $40,000. B&H also settled claims against DataPipe and Liquidnet for breaching their agreements with B&H when they switched to AIS. On remand, the court should consider whether the damages awarded against Poisler should be reduced by the amount of these settlements.
VIII.
Last, Poisler challenges the award of counsel fees and costs to B&H. We note that, "fee 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).
Here, the judge found that Poisler, Pinkney, AIS and Vorst had violated CROA. A person damaged as a result of such violations "may recover compensatory and punitive damages and the cost of the suit including a reasonable attorney's fee, and costs of investigation and litigation[.]" N.J.S.A. 2A:38A-3.
As stated previously, the judge awarded counsel fees and costs of $756,121.59 against Poisler. The judge also awarded counsel fees and costs of $825,085 against Pinkney, AIS and Vorst, which represented the amount awarded against Poisler and the additional fees and costs that B&H incurred in the bankruptcy litigation.
Poisler argues that the judge erred by failing to consider certain factors identified in R.P.C. 1.5(a) in determining the reasonableness of the fees sought. He says the judge failed to consider: the fees customarily charged in the locality for similar legal services; the nature and length of counsel's professional relationship with B&H; and counsel's experience, reputation and ability.
Poisler further argues that the judge erroneously failed to consider the qualifications of counsel's legal assistants, as required by Rule 4:42-9(b). He also contends the judge could not fairly evaluate the application because the supporting certification was replete with redactions, the certification improperly included "block billing," the fee request was "inflated" in several respects, and the application included services not related to the CROA claim. We are convinced that these arguments are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).
Poisler additionally contends that he should not be charged legal fees that B&H incurred before he was named a party in this case. This includes the fees incurred by B&H in its defense of Poisler's wage claim, which was filed in the NJDOL, and remained a separate proceeding in a separate venue until it was joined with this case.
Poisler was named as a defendant in this matter after discovery revealed his role in taking B&H's confidential computer-based information. Facts developed in discovery provided a basis for the finding that Poisler violated CROA. Thus, the judge did not abuse his discretion by including the counsel fees incurred by B&H in this case before Poisler was named as a defendant.
However, the trial court should reconsider its inclusion of the fees and costs incurred by B&H in defending Poisler's wage claim. We disagree with Poisler's contention that these fees and costs are not recoverable because, before it was consolidated with the claims in this case, the wage claims were raised in a separate administrative proceeding. However, the fees and costs were awarded under CROA, and the wage claim appears to be unrelated to the CROA claim.
An award of fees and costs related to the defense of the wage claim might be recoverable under CROA if information and evidence derived from that proceeding had some bearing upon B&H's CROA claim. On remand, the court should reconsider whether the fees and costs related to the defense of Poisler's wage claim are recoverable under CROA.
In summary, we affirm the trial court's finding of liability against Poisler, but reverse the award of damages against him and remand the matter to the trial court for reconsideration of the damages award. We also reverse in part the attorney's fees and costs awarded under CROA, and direct the trial court to reconsider the award of fees and costs related to B&H's defense of Poisler's wage claim.
Affirmed in part, reversed in part, and remanded to the trial court for further proceedings in conformity with this opinion. 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