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S&A Realty Corp. v. Kearny Industrial Associates

August 16, 2007

S&A REALTY CORP., PLAINTIFF-RESPONDENT,
v.
KEARNY INDUSTRIAL ASSOCIATES, LLP, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. 486-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued August 7, 2007

Before Judges S.L. Reisner and Lyons.

Defendant, Kearny Industrial Associates, LLP (Kearny), appeals from a final judgment entered August 26, 2005, awarding plaintiff, S&A Realty Corp. (S&A), $106,073 in legal fees and costs arising out of an earlier lawsuit between the parties and this lawsuit.

The relevant facts and procedural history are as follows. On May 7, 2002, S&A filed a complaint against Kearny alleging that Kearny breached a real estate purchase agreement between the parties dated February 7, 2001. S&A alleged that pursuant to the agreement, Kearny was contractually obligated to vacate the property on October 31, 2001, and if it failed to do so, it became a tenant at sufferance and was committed to make payment at the rate of $25,000 per month to S&A for the use and occupancy of the site. In addition, S&A alleged that Kearny owed money to S&A for real estate and sewer charges on the property during that holdover period. S&A also alleged that pursuant to the agreement, Kearny had represented that there were no significant events which would have a material adverse effect on the premises, but that Kearny had failed to disclose significant information regarding friable asbestos contamination on the property.

S&A's allegations were embodied in two counts. The first count was for breach of contract for failure to pay the monthly use and occupancy charges as well as taxes and sewer charges, and the second count was for concealment of a real property defect. A trial in the matter was held in July 2003, and at the end of S&A's proofs, the trial judge granted Kearny's motion to dismiss count two, the concealment of a real property defect, based on insufficient legal proofs advanced by S&A.

On September 22, 2003, the trial judge ruled in favor of S&A on count one and entered judgment in S&A's favor for $86,588. In this first action, there was no mention of counsel fees in S&A's complaint, nor was any application for same sought. On December 23, 2004, our court affirmed the trial judge's judgment in favor of S&A. S&A did not appeal the dismissal of count two of the complaint.

On January 24, 2005, S&A filed a new complaint against Kearny. In this complaint, S&A alleged that under Section 20(l) of the real estate purchase agreement between the parties dated February 7, 2001, it was the prevailing party in the earlier action between S&A and Kearny and, therefore, was entitled to its costs of litigation, including its court fees and reasonable attorney's fees. Section 20(l) reads as follows:

[t]he prevailing party in any litigation or arbitration arising under this Agreement shall be entitled to receive from the losing party the prevailing party's cost of litigation or arbitration incurred to enforce this Agreement (including, without limitation, its court fees and reasonable attorneys' fees).

Kearny filed an answer and counterclaim in response. It raised as a separate defense, the entire controversy doctrine as well as estoppel and other defenses. In count one of its counterclaim, Kearny sought its fees and costs for having prevailed with respect to the dismissal of count two contained in the earlier lawsuit. In count two of its counterclaim, Kearny asserted that it was entitled to counsel fees under the frivolous claim statute, N.J.S.A. 2A:15-59.1, and under Rule 1:4-8.

Kearny moved for summary judgment against S&A and counsel fees. Its motion sought summary judgment dismissing counts one, two, and three of plaintiff's complaint and granting summary judgment to it on count two of its counterclaim, awarding counsel fees under the frivolous claim statute and rule.

S&A cross-moved for summary judgment seeking an order granting it summary judgment for its attorney's fees and costs for trial, its collection efforts, the appeal in the earlier matter and this case, and denying Kearny's motion entirely. Following oral argument, the trial judge granted S&A's motion for summary judgment and denied Kearny's motion for summary judgment. The trial judge then reviewed S&A's fee submission, and on August 26, 2005 entered final judgment.

In the first paragraph of the final judgment, the trial judge awarded fees to S&A incurred during the preparation and trial of the first lawsuit. In paragraph two, she awarded fees incurred during the "enforcement of Judgment No. J-288672-03," the docketed judgment in the earlier suit. In paragraph three, she awarded attorney's fees incurred in connection with the direct appeal of the final judgment of the earlier suit. In paragraph four, the trial judge awarded fees incurred in obtaining summary judgment in this case, and in paragraph five, she awarded costs incurred in the preparation and trial of the underlying case, the ...


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