On appeal from Superior Court, Law Division, Bergen County.
Petrella and Dreier. The opinion of the court was delivered by Petrella, P.J.A.D.
The issue on this appeal is the entitlement to costs and attorney's fees under the Arbitration of Automobile Negligence Actions rule. R. 4:21A.
Plaintiff Henry Helstoski filed a complaint against defendant alleging that she was negligent in the operation of her automobile in connection with a November 1984 accident. Victoria Helstoski asserted a per quod claim. The matter was submitted to mandatory arbitration pursuant to R. 4:21A-1 and N.J.S.A. 39:6A-24 et seq. effective January 1, 1984. The arbitrator entered an award of $14,875 for plaintiffs on April 2, 1987. Plaintiffs rejected that award and demanded a trial de novo. See R. 4:21A-6(b)(1); N.J.S.A. 39:6A-34. A trial was accordingly conducted. The jury returned a verdict finding defendant 75% negligent, Henry Helstoski 25% negligent, and damages of $6,500. After molding the verdict to $4,875 to reflect the jury's assessment of plaintiff's negligence, the judge entered a judgment of $5,637.90 which included $762.90 in prejudgment interest.
Subsequently plaintiffs moved for a new trial and for an additur. These motions were denied. Thereafter defendant moved to recover reasonable costs and attorney's fees within the limits authorized in R. 4:21A-6(c). Defense counsel certified that his reasonable expenses amounted to $2,187.50 for attorney's fees and $1,200 in expert fees. Defendant sought $750 in attorney's fees and $500 as compensation for witness costs. The motion was heard by the trial judge, rather than by the assignment judge as required by R. 4:21A-6(c)(5). Defendant has appealed from that denial.
Under the rules relative to arbitration of automobile negligence actions, "reasonable costs" (including attorney's fees not to exceed $250 per day up to a $750 aggregate), and "witness costs," including expert witnesses (not to exceed $500), are authorized against a party rejecting an arbitration award and the jury verdict is less than 20% more favorable than the award. R. 4:21A-6(c). The automobile arbitration rule was adopted by the Supreme Court in response to N.J.S.A. 39:6A-35 and implements N.J.S.A. 39:6A-34, which provides:
The party having filed for a trial de novo shall be assessed court costs and other reasonable costs of the other party to the judicial proceeding, including attorney's fees, investigation expenses and expenses for expert or other testimony or evidence, which amount shall be, if the party assessed the costs is the one to whom the award is made, offset against any damages awarded to that party by the court, and only to that extent; except that if the judgment is more favorable to the party having filed for a trial de novo, the court may reduce or eliminate the amount of the assessment in accordance with the extent to which the decision of the court is more favorable to that party than the arbitration decision, and as best serves the interest of justice. The court may waive an assessment of costs required by this section upon a finding that the imposition of costs would create a substantial economic hardship as not to be in the interest of justice.
The focus of the dispute on this appeal is R. 4:21A-6(c) which provides:
(c) Trial De Novo. An action in which a trial de novo has been demanded by any party shall be returned, as to all parties, to the trial calendar for disposition. A party demanding a trial de novo shall be required to pay $150 towards the arbitrators fee and may be liable to pay the reasonable costs, including attorney's fees, incurred after rejection of the award by those parties not demanding a trial de novo. Reasonable costs shall be awarded on motion supported by detailed certification subject to the following limitations:
(1) If a monetary award has been rejected, no costs shall be awarded if the party demanding the trial de novo has obtained a verdict at least 20 percent more favorable than the award.
(2) If the rejected arbitration award denied money damages, no costs shall be awarded if the party demanding the trial de novo has ...