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Viceroy Equity Interests, LLC v. Mount Hope Development Associates

April 09, 2002

VICEROY EQUITY INTERESTS, LLC, A DELAWARE LIMITED LIABILITY COMPANY (SUCCESSOR-IN-INTEREST TO SASCO 1997-N1 REO LLC, ALI, INC., AND CRESTMONT FEDERAL SAVINGS & LOAN ASSOCIATION), PLAINTIFF-APPELLANT,
v.
MOUNT HOPE DEVELOPMENT ASSOCIATES, JOHN J. CALI, ANGELO R. CALI AND EDWARD LESHOWITZ, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Union County, UNN-L- 0635-01.

Before Judges Wefing,*fn1 Ciancia and Parrillo.

The opinion of the court was delivered by: Ciancia, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 19, 2002

Plaintiff Viceroy Equity Interests, LLC, appeals from a dismissal of its suit for counsel fees allegedly due it from defendants Mount Hope Development Associates, John J. Cali, Angelo R. Cali, and Edward Leshowitz by virtue of contractual obligation. We find that although plaintiff's claim was improperly brought in the Law Division of Superior Court, and indeed the trial court's rationale was entirely correct, the proper remedy was to transfer the matter to this court pursuant to R. 1:13-4 rather than dismiss it with prejudice.

The present claim for attorney's fees arises from litigation initiated by plaintiff's predecessor-in-interest, SASCO 1997-N1, REO LLC (SASCO), against defendants in 1997.*fn2 The action was on a note and guarantees, the details of which we need not here recount. SASCO was successful in the trial court and was awarded summary judgment on liability with damages set at $714,476.17 plus interest and costs. The damages award included $39,869.46 in attorney's fees. Defendants appealed that judgment to this court (docket number A-5797-85T5) and on November 3, 2000, we affirmed the judgment in favor of SASCO substantially for the reasons stated by the trial judge.

The Agreement of Guarantee entered into between plaintiff's predecessor-in-interest and defendants includes the following language:

In case of any proceedings to collect any liabilities of the Guarantors to the Lender, the Guarantors shall pay all costs and expenses of every kind for collection, sale or delivery, including reasonable attorneys' fees, and after deducting such costs and expenses from the proceeds of sale or collection, the Lender shall apply any residue to the liabilities of the Guarantors who shall continue liable for any deficiency, with interest at the rate provided for in the Note.

Having been successful on appeal, plaintiff, as SASCO's successor-in-interest, sought "$19,118.57 in attorney's fees and costs directly associated with having the Appeal denied and collecting the Judgment amount from the Guarantors." This demand was initially made in a letter dated December 21, 2000 from plaintiff's counsel to defendants' counsel. When payment was refused, plaintiff initiated suit in the Law Division. It is the dismissal of that suit which is now appealed.

The problem here arises because the relevant court rules, although purporting to list those circumstances when attorney's fees may be awarded despite the general rule in this jurisdiction that each litigant pay its own fees, do not reference fees arising from contractual obligation. Thus R. 2:11-4 provides:

Attorney's Fees on Appeal

An application for a fee for legal services rendered on appeal shall be made by motion supported by affidavits as prescribed by R. 4:42-9(b) and (c), which shall be served and filed within 10 days after the determination of the appeal. The application shall state how much has been previously paid to or received by the attorney for legal services both in the trial and appellate courts or otherwise, including any amount received by way of pendente lite allowances, and what arrangements, if any, have been made for the payment of a fee in the future. Fees may be allowed by the appellate court in its discretion:

(a) In all actions in which an award of counsel fee is permitted by R. 4:42-9(a), except appeals arising out of mortgage or tax certificate foreclosures.

(b) In a worker's compensation proceeding. Where the determination of the Supreme Court reverses a denial of compensation in the Appellate Division, the Supreme Court shall determine the ...


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