The within matter involves a request for counsel fees by a condominium association as part of its prosecution of a lien claim against a delinquent unit owner. The resolution of plaintiff's request requires an interpretation of N.J.S.A. 46:8B-21 and its relationship to R. 4:42-9. Both sides agreed to submit this issue to the court based on stipulated facts and without oral argument.
Plaintiff, Island House Condominium Association (Association) brought suit to collect a special assessment against unit owners, David and Sandra Feldman. The assessment was necessitated as a result of costs incurred to perform certain repairs to the site, allegedly cause by the negligence of the contractor who initially built the condominium project. The total cost was approximately a million dollars and that sum was divided among the 153 unit owners, all of whom, except for defendants, paid their assessment.
During the course of the repairs, defendants allege that their unit was damaged. As a result, they not only refused to pay their assessment but also refused to pay the quarterly Association fees. Eventually, they sued the Association for damages in the Superior Court, Camden County but that suit was dismissed on procedural grounds. In the interim, the Association files its lien. N.J.S.A. 46:8B-21. Defendants continued to refuse to pay and the Association filed suit in this court to foreclose the lien. Defendant's answer not only denied liability for the lien but also counterclaimed for the damage to their unit. Although plaintiff initially sought to dismiss the counterclaim based on res adjudicata, this court allowed defendants to seek to vacate the prior dismissal in Camden County. Having succeeded in doing so, all claims were then returned here. Although the lien claim was ultimately settled when defendants agreed to pay the full assessment, no agreement could be reached on the attorney's fee request and both sides agreed to submit that issue to the court.
Plaintiff's claim amounts to $14,617.25, plus out of pocket expenses of $129.80 and reflects billings from June 12, 1987 through March 5, 1990. Although the certification submitted by counsel for the Association reflects that the lien was prepared on October 13, 1987, collection efforts against the Feldmans were not pursued with earnest until April of 1988 and this suit was not initiated until August 3, 1988. The bulk of the
legal work incurred prior to that related solely to the defense of the damage claim. For example, if one looks at the first billing to the Association, all of the entries relate to the defense of the Camden County action. That pattern continued until April 27, 1988 when plaintiff's counsel took steps to update the title work in anticipation of filing the foreclosure complaint. The next relevant entry does not occur until the drafting of the complaint on July 5, 1988. All entries thereafter appear to relate to the prosecution of the lien claim with the exception of the September 14, 1988 research regarding the motion to dismiss the counterclaim. Exhibit "A" of defense counsel's submissions highlights plaintiff's billings in a manner consistent with the above and is thereby incorporated by reference.
The primary defense to plaintiff's fee request is that the Association, having chosen to prosecute its lien by means of a foreclosure, is limited by the provisions of R. 4:42-9(a)(4). That Rule mandates that in a mortgage foreclosure action, attorney's fees are limited by the formula set forth therein. If applied in this case, the total fees allowable would be approximately $219.00. Although defendants acknowledge that the Association by-laws obligates a delinquent unit owner to pay reasonable attorney's fees incurred in the collection of an assessment, they contend that such a provision is subservient to R. 4:42-9(a)(4), citing Coastal State Bank v. Colonial Wood Products, Inc., 172 N.J. Super. 320, 324, 411 A.2d 1172 (App.Div.1980).
I find defendants' arguments unpersuasive. Plaintiff's claim is not based simply on a contract. It has both a statutory and contractual base and N.J.S.A. 46:8B-21, the ...