October 9, 2007
DEANNA CONOMOS, PLAINTIFF-RESPONDENT,
EDWIN SALAZAR, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-5016-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 25, 2007
Before Judges Skillman and Yannotti.
Defendant filed a complaint against plaintiff in the Small Claims Division of the Special Civil Part, alleging that plaintiff owed defendant $1,585 for plumbing services and $500 in attorney fees. Plaintiff filed a motion to remove the Small Claims action to the Law Division, based upon potential counterclaims that could result in a recovery exceeding the $15,000 jurisdictional limit of the Special Civil Part. The trial court denied this motion.
Plaintiff then filed a separate action in the Law Division alleging (1) consumer fraud in violation of N.J.S.A. 56:8-1 to -20; (2) breach of an oral contract; (3) breach of the covenant of good faith and fair dealing; (4) violation of the Fair Debt Collections Practice Act [15 U.S.C.A. §§ 1692 to 1692(o)]; (5) breach of express and implied warranties; and (6) unconscionable commercial practices. Plaintiff moved to consolidate defendant's previously filed Special Civil Part action with her Law Division action. Defendant responded by serving plaintiff with a notice of frivolous litigation pursuant to Rule 1:4-8.
The trial court denied plaintiff's motion to consolidate the Special Civil Part and Law Division actions. Defendant then filed a motion for attorneys fees and costs for frivolous litigation in the amount of $6,842.50. The trial court concluded that plaintiff's Law Division complaint constituted "frivolous litigation" and awarded defendant $250 for attorneys fees. The court required plaintiff's attorney to pay this amount.
In concluding that plaintiff's Law Division complaint was frivolous, the court stated:
I can remember trying a case in tax court as an attorney a long, long time ago against officers in the Internal Revenue Service or attorneys in the Internal Revenue Service. And what they had was a scorched earth policy of litigation. They gave nothing. They compromised on nothing.
. . . This is called scorched earth.
I am -- I don't think that that's really the way that law should be practiced. There were reasonable positions that Counsel could take. Counsel can present their defenses. I understand that [the judge in the Special Civil Part] might not have articulated his reasons even if you were able to get the tape. I understand that maybe he just wrote some cryptic comments that Ms. Hill read into the record. I understand that this case did not proceed efficiently. But when [the judge in the Special Civil Part] denied the application to transfer, you had two choices. You could have dismissed the case without prejudice in Special Civil or you could have filed a whole new complaint here. That would have made it a whole lot easier without having this whiplash effect of not knowing which court you're in and not knowing the reasons for a Judge deciding it.
I am satisfied that sanctions are appropriate in this case, and I'm going to award sanctions against you, Mr. Nieschmidt, in the sum of $250. I will not award anything more than that.
Defendant filed a motion for reconsideration of the amount of the $250 award in his favor and requested instead an award of $8,622.50. In the course of colloquy with counsel regarding this motion, the trial court expressed the opinion that plaintiff's counsel had "made a mistake" in filing a separate Law Division action while the Special Civil Part action was still pending.
The trial court denied defendant's motion for reconsideration. The court also indicated that it believed the fees defendant's counsel had charged her client for legal services in connection with the case were excessive and that the court was going to refer the matter to "the local ethics board."
Defendant has filed a notice of appeal from the $250 award for attorneys fees incurred in connection with what the trial court found to be frivolous litigation and from the denial of his motion for reconsideration. Although plaintiff did not file a cross-appeal, defendant has briefed the issue of the propriety of an award of attorneys fees for frivolous litigation and we consider this to be the threshold issue in the appeal.
The only authority for an award of attorneys fees against a litigant's attorney is Rule 1:4-8(a), which provides in pertinent part that
[b]y signing, filing or advocating a pleading, . . . an attorney . . . certifies that to the best of his or her knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
(1) the paper is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law[.]
This rule is "interpreted restrictively so as not to discourage creative advocacy or access to the courts." Port-O-San Corp. v. Teamsters Local Union No. 863 Welfare & Pension Funds, 363 N.J. Super. 431, 440 (App. Div. 2003).
The trial court made no factual findings to support its conclusion that plaintiff's Law Division complaint was frivolous within the intent of either Rule 1:4-8(a)(1) or (2). In its original opinion, the court simply expressed its views about "scorched earth" litigation tactics and stated: "I don't really think that's the way that law should be practiced." In its opinion denying defendant's motion for reconsideration, the court stated that plaintiff's counsel had "made a mistake" in filing this complaint and that "his tactics were wrong." These comments do not support an award of counsel fees against opposing counsel under Rule 1:4-8(a).
Moreover, the filing of the Law Division complaint does not appear to have been frivolous. Plaintiff asserted claims and sought damages that exceeded the monetary limits on the jurisdiction of the Special Civil Part. It is not clear on this record that the claims were frivolous or asserted in bad faith.
Accordingly, the October 6, 2006 order of the trial court awarding defendant $250 against plaintiff's counsel for attorneys fees and costs is reversed.
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