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Incollingo v. Canuso

January 28, 1997

MARIE C. INCOLLINGO, ANTHONY E. INCOLLINGO, MICHELLE M. INCOLLINGO, NANCY ANN INCOLLINGO, JOANNE STRAWN, GERALD L. STRAWN, TRACEY A. STRAWN, AND BRANDON M. STRAWN, BY THEIR GUARDIAN AD LITEM JOANNE STRAWN, RUSSELL C. BURTON AND BRETT C. BURTON, BY HIS GUARDIAN AD LITEM, RUSSELL C. BURTON, FRANK CARNOT, RAFFAELA CARNOT, WILLIAM DENNIS, JACQUELINE DENNIS, NICOLE M. DENNIS AND FARRAH D. DENNIS, BY THEIR GUARDIAN AD LITEM, JACQUELINE DENNIS, MICHAEL POWELL, DOROTHY POWELL, AMY POWELL AND MOLLY POWELL, BY THEIR GUARDIAN AD LITEM DOROTHY POWELL, MICHAEL J. VITARELLI, SR., LOIS A. VITARELLI, AND JACQUELINE VITARELLI, LESLIE VITARELLI, MICHAEL VITARELLI, JR., AND ANTHONY VITARELLI, BY THEIR GUARDIAN AD LITEM LOIS VITARELLI, CHRISTOPHER CONTI, ELAYNE CONTI, DANA MARIE CONTI AND GINA CHRISTINE CONTI, BY THEIR GUARDIAN AD LITEM ELAYNE CONTI, EUGENE E. JARON, ANN T. JARON, KATHLEEN A. JARON, STEPHEN M. JARON, PAUL M. KRAMER, PATRICIA G. KRAMER, DREW KRAMER AND LAUREN KRAMER, BY THEIR GUARDIAN AD LITEM PATRICIA G. KRAMER, SANDY OBLENA, ESTRELLA OBLENA, NATHANIEL OBLENA AND MICHAEL OBLENA, BY THEIR GUARDIAN AD LITEM SANDY OBLENA, WILLIAM HEBLING, ANTHONY CHAPMAN, CATHARINE CHAPMAN, DAVID CHAPMAN AND ADRIANE CHAPMAN BY THEIR GUARDIAN AD LITEM CATHARINE CHAPMAN, JAY AGNES, JACQUELINE AGNES, ROBERT LEWIS, CELINE LEWIS AND STEPHANIE LEWIS, BY HER GUARDIAN AD LITEM ROBERT LEWIS, JUDY BECMER, EDMUND BECMER, ANTHONY ALVAREZ, RITA ALVAREZ, LISA ALVAREZ, DEBRA MURACA, FRANK MURACA, DAVID BARD, RUTH BARD, JOHN M. GAVEN, SR., ANNETTE M. GAVEN, AND JOHN M. GAVEN, JR., YOUNG D. KIM, JULIA S. KIM AND PATRICK KIM AND ROY KIM, BY THEIR GUARDIAN AD LITEM YOUNG KIM, HOWARD FRIEDMAN, DEBRA FRIEDMAN AND MICHELLE FRIEDMAN, BY HER GUARDIAN AD LITEM DEBRA FRIEDMAN, MARIANO A. PINIZZOTTO, ROSEMARY J. PINIZZOTTO, AND MARIE ROSE PINIZZOTTO BY HER GUARDIAN AD LITEM MARIANO A. PINIZZOTTO, CHESTER A. RUDDICK, JR., CARMELITA D. RIDDICK, TODD RIDDICK, AND ALLEN RIDDICK, BY HIS GUARDIAN AD LITEM, CARMELITA D. RIDDICK, ALBERT WILLIAMS, EVELYN WILLIAMS, AND STEPHEN WILLIAMS, MARTIN V. GOLDSTEIN, PATRICIA M. CORSON, FREDERICK E. CHINK, MARIA P. CHINK, MARIO CHINK AND CHRISTINA CHINK, BY THEIR GUARDIAN AD LITEM FREDERICK E. CHINK, RICHARD J. NELSON AND MARY ANN NELSON, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
JOHN B. CANUSO, SR., JOHN B. CANUSO, JR., CANETIC CORPORATION, CANUSO MANAGEMENT CORPORATION, JOCAN, INC., FOX AND LAZO, INC., WEICHERT REALTORS, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Camden County.

Approved for Publication January 30, 1997.

Before Judges Shebell, Baime and P.g. Levy. The opinion of the court was delivered by P.g. Levy, J.A.D.

The opinion of the court was delivered by: Levy

The opinion of the court was delivered by

P.G. LEVY, J.A.D.

Appellants were the attorneys for plaintiffs in Strawn v. Canuso, 271 N.J. Super. 88, 638 A.2d 141 (App. Div. 1994), aff'd, 140 N.J. 43, 657 A.2d 420 (1995), a landmark case in which the Court held that builders and selling brokers of new homes have a duty to disclose to potential buyers the existence of material off-site conditions. After the Court's decision, the defendants in the case, a developer and two brokers, reached separate settlements with plaintiffs. The total value of the settlements exceeded three million dollars. This appeal involves the sufficiency of the attorneys' fees attendant on the settlements.

At the time of settlement, the matter had been certified as a class action and the proposed settlements had to be approved by the court on notice to the members of the class. R. 4:32-4; see Chattin v. Cape May Greene, Inc., 216 N.J. Super. 618, 626-7, 524 A.2d 841 (App. Div.), certif. denied, 107 N.J. 148 (1987). Each settlement was approved by a Judge who certified the class for settlement purposes, directed Disposition of the proceeds to members of the class and determined the attorneys' fees. First, Weichert Realtors agreed to pay $200,000 of which approximately $150,000 was paid to counsel to reimburse costs and expenses of litigation; none went to attorneys' fees. Second, Fox and Lazo Realtors agreed to pay $825,000 cash and to issue coupons redeemable for credit of $1500 against real estate commissions payable to Fox and Lazo from any resale of a house by a plaintiff (the face value of the coupons totals $231,000). A Judge approved attorneys fees of $275,000 (one-third of the cash settlement) with the balance of the cash, as well as the coupons, to be distributed in equal shares to each family. Finally, the developers (the Canuso defendants) agreed to settle for $1,950,000. Another Judge was assigned to review that settlement. That Judge dealt with various claims for allocation to the respective members of the class and also considered a separate application for attorneys' fees. Counsel sought a fee of one-third of the cash settlement, as they had before, but the Judge awarded only twenty percent. A motion for reconsideration was denied and this appeal ensued. We reverse and exercise our original jurisdiction to order payment of the fee requested.

The action commenced almost ten years ago on May 5, 1987. The original plaintiffs had purchased new homes without being told of the proximity of an unlined landfill containing toxic waste. Eventually the class of plaintiffs included more than 150 families. The litigation was vigorously defended and the discovery exceedingly demanding causing this matter to drag on for many years. Although there were no reported New Jersey appellate decisions directly on point with plaintiff's claims, through perseverance of counsel they prevailed when the action was resolved by settlement. See Strawn v. Canuso, (supra) , 271 N.J. Super. at 101. After notice was sent to all possible members of the class, only one person objected to the settlement and the requested attorneys' fees, but that person's claims had already been dismissed on the merits and he was not considered a member of the class. See id. at 109-10. Counsel sought a fee of $650,000 representing one-third of the settlement with the Canuso defendants. That request was supported by a petition containing certifications of services that included data on time spent, rates charged and biographical statements of the principal attorneys and paralegal, a comprehensive brief and certifications from two independent practicing attorneys attesting to the significance of the work done by plaintiffs' counsel and the reasonableness of the fee requested.

The fee petition showed that counsel spent 9,811 hours prosecuting the action to that point. Applying their stated hourly rates, which ranged from $300 and $260 per hour for the two principal attorneys to lower rates for other attorneys, law clerks and paralegals, a lodestar of $1,951,671 resulted. However, by requesting a fee of only $650,000, the rates used to calculate the lodestar were effectively reduced to $142 and $123 per hour for what was sought by those two attorneys, and proportionately lower for all other professionals. The Judge considering the petition awarded only $390,000 which represents twenty percent of the fund in court; this made the ultimate billing rates for the two lead attorneys $102 and $89, respectively.

The Judge stated that he considered R.P.C. 1.5(a), which states:

(a) A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:

(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 ...


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