On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1385-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Stern and A. A. Rodríguez.
Defendant, Councilmen Mulligan and Carlson ("appellants"), appeal, and plaintiff cross-appeals, from an order of March 16, 2006, based on an oral opinion of January 6, 2006, awarding both appellants $930 in attorneys' fees and costs based on a finding under N.J.S.A. 2A:15-59.1 that the complaint against the individual defendants was frivolous. Defendants contend that "there is no nexus between the trial court's findings and the de minimus award of legal fees," while plaintiff asserts that an award of less than all fees may be awarded as a matter of discretion. On his cross-appeal, plaintiff contends the statute does not apply, and no award should have been granted, because defendants "have refused to be dismissed and have opposed a motion to dismiss them," and that the court did not make, or have a basis for making, the necessary findings of bad faith and "purpose of harassment, delay or malicious injury." Plaintiff also asserts that defendants' attorney "accepted payment of his counsel fees [from] the Borough" and the "appeal became moot."*fn1
On or about March 3, 2005, plaintiff filed a "Verified Complaint for Summary Action," naming the Borough of Bergenfield, its mayor, and six council members as defendants. The complaint sought specific performance of his contract as Borough Administrator, Borough Clerk and Director of Recreation, and an agreement relating to his resignation. On or about March 23, 2005, appellants filed Answers and a Counterclaim to plaintiff's complaint.*fn2 Defendant Councilwoman Dolores Butler also filed an Answer and separate defenses. The remaining council members were represented by the Borough's attorney.*fn3
After their answers were filed, counsel for appellants was advised by a letter, dated March 30, 2005, from plaintiff's attorney that they were not "served . . . personally" or "sued personally or in their individual capacities," and had "no standing to filing a counterclaim." Plaintiff asserted the counterclaim was "frivolous" and "exposed" defendants "to potential liability under the Frivolous Lawsuit Statute."
Following a court ordered mediation and an administrative dismissal of the case for lack of prosecution, plaintiff moved to file an amended complaint which did not include the mayor and council members as defendants. Appellants opposed the motion because: 1) they had moved for discovery only with respect to the original complaint; 2) their involvement was deemed necessary to "protect the interest of the people of the Borough of Bergenfield," in the litigation' and 3) they felt it necessary to protect their counterclaim and an expected request for counsel fees based on the frivolous litigation. Plaintiff's motion was granted on November 18, 2005.
On or about December 2, 2005, plaintiff filed an Amended Complaint, which removed all individuals, including the mayor and the individual council members from the suit. Councilwoman Butler thereafter filed a "Notice of Motion for Litigation Costs and Counsel Fees." On December 20, 2005, appellants filed a "Motion Pursuant to [N.J.S.A. 2A:]15:59.1" (sic), for litigation costs and fees.*fn4
Oral argument on the motions was held on January 6, 2006. The judge concluded that "naming the individual members of the Mayor and Council of the defendant Borough of Bergenfield as defendants, is deemed frivolous, as that term is defined statutorily." He ordered plaintiff to "pay to each of the attorneys for the moving parties the sum of $930.00, representing six hours at $150.00 per hour for legal fees and $30.00 as the cost had there been filing of motions to dismiss with the court." As already noted, defendants seek additional fees and plaintiff insists they are entitled to none. Appellants requested a total of $31,350.23 in legal fees and costs, representing over ninety-five hours of attorney work hours at a price of $300 an hour.
On June 13, 2006, while the appeal was pending, the Borough adopted a resolution that authorized the sum of $45,000.00 to be paid to "Steven T. Muller, Esq. [appellants' attorney] and Carmine R. Alampi, Esq. [Butler's attorney] in full and complete settlement of any and all monies alleged to be due them in respect of the Hess and Eckel matters, and that said attorneys and the Borough execute appropriate instruments designed to achieve full and complete resolution of all such issues." The resolution did not break down the amount by case or attorney. However, on June 20, 2006, the Borough paid Stephen Muller, appellants' counsel, $21,000.00 "for legal services" and $9,000 for "professional services." A municipal purchase order certification and payment record reflects a $21,000 payment to appellants' counsel for this case and $9,000 for a case entitled Eckel v. Mulligan and Carlson. The invoice for this matter was originally in the amount of $31,350.23.
In response to a letter written by plaintiff's attorney asserting that the appeal was rendered moot in light of the resolution and payment, appellants' counsel wrote that he was "still owed $11,950.23 in fees from the Hess case," and that the matter was not moot as he "agreed to reimburse the Borough for any monies in excess of that recovery" from Hess.
The Frivolous Litigation Statute, N.J.S.A. 2A:15-59.1, provides:
A party who prevails in a civil action, either as plaintiff or defendant, against any other party may be awarded all reasonable litigation costs and reasonable attorney fees, if the judge finds at any time during the proceedings or upon judgment that a complaint, ...