April 29, 2008
SOMERSET COUNTY SHERIFF'S OFFICERS FOP LODGE #39, PLAINTIFF-APPELLANT,
COUNTY OF SOMERSET AND SOMERSET COUNTY SHERIFF, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Somerset County, L-0268-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued Telephonically April 17, 2008
Before Judges Parrillo and S.L. Reisner.
Plaintiff, Somerset County Sheriff's Officers FOP Lodge #39 (FOP or plaintiff), appeals from a June 6, 2007 order of the trial court denying plaintiff's application for interest on an arbitration award plus counsel fees for the cost of plaintiff's action to enforce the award. We reverse and remand.
Plaintiff FOP represents the Somerset County Sheriff's Officers. Following an interest arbitration to resolve a dispute over wages and other issues, plaintiff obtained an award requiring that its members receive a wage increase. Defendants, Somerset County (County or defendant) and Somerset County Sheriff, appealed the award to the Public Employment Relations Commission (PERC), which affirmed the award on November 21, 2006. Absent a stay, the County was required by statute to pay the award within fourteen days after PERC rendered its decision, N.J.S.A. 34:13A-16f(5)(b), or by December 5, 2006.
The County filed a notice of appeal to this court from the PERC decision on December 5, 2006, but did not obtain a stay. PERC denied the County's stay application on December 6, 2006, and denied the County's reconsideration motion on December 28, 2006. On February 20, 2007, when the County still had not paid the award, the FOP filed a verified complaint and order to show cause in the Law Division, seeking to enforce the arbitration award. Plaintiff also sought counsel fees for the cost of the enforcement application, plus interest on the arbitration award from December 5, 2007, the date on which the County was legally required to make payment.
The County filed a motion with the Appellate Division on March 7, 2007, seeking a stay of PERC's decision pending appeal, but withdrew the motion on March 20, 2007, after the trial court judge dismissed plaintiff's enforcement action in the mistaken belief that she lacked jurisdiction to enforce PERC's order due to the pending appeal. Thereafter, plaintiff, supported by PERC, moved before the trial court for reconsideration of the dismissal; that motion was granted on April 13, 2007.
By letter of April 16, 2007, plaintiff's counsel contacted defendant's counsel demanding immediate payment of the award. The next day, defendant filed another stay motion with this court. We denied that motion by order dated May 10, 2007, but the County still did not pay the award, although its counsel represented to the trial judge on May 11 that if its appellate stay motion were denied, the County would pay the award. Ultimately, the County paid the award on June 30, 2007.*fn1
In the interim, on June 6, 2007, the trial court judge entered an order enforcing the award but denying plaintiff's application for counsel fees and interest. The judge's rationale was that the County had pursued its appellate remedies and had made stay applications, and that awarding attorney fees and interest would "put a chilling effect on any entity's right to appeal any decision and to go through the necessary channels."
We review the trial court's decision of a counsel fee application for abuse of discretion. See Furst v. Einstein Mooomjy, Inc., 182 N.J. 1, 25 (2004); Block v. Plosia, 390 N.J. Super. 543, 557 n.6 (App. Div. 2007). We apply the same standard in reviewing a trial court's decision concerning the award of prejudgment interest. See Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464, 478 (1988). However, our review of a trial judge's legal conclusions is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995); Elizabeth Police Superior Officers Ass'n v. City of Elizabeth, 180 N.J. Super. 511, 517 (App. Div. 1981). In this case, we are unable to agree with the trial court's legal reasoning and we conclude that it was a mistaken exercise of discretion to deny plaintiff's application.
Rule 4:42-9(a)(8) authorizes a court to award counsel fees "where permitted by statute." Pursuant to the arbitration statute, in the court's discretion, counsel fees may be awarded to a party, such as FOP, that prevails in an action to enforce an arbitration award.
a. Upon granting an order confirming, vacating without directing a rehearing, modifying, or correcting an award, the court shall enter a judgment in conformity with the arbitrator's award. The judgment may be recorded, docketed, and enforced as any other judgment in a civil action.
b. A court may allow reasonable costs of the summary action and subsequent judicial proceedings.
c. On application of a prevailing party to a contested judicial proceeding pursuant to section 22, 23, or 24 of this act, the court may add reasonable attorney's fees and other reasonable expenses of litigation incurred in a judicial proceeding after the award is made to a judgment confirming, vacating without directing a rehearing, or substantially modifying or correcting an award. [N.J.S.A. 2A:23B:25a-c (emphasis added).]
Absent a stay, the County was required to pay the arbitration award within fourteen days after PERC affirmed the award. N.J.S.A. 34:13A-16f(5)(b)("An award that is not appealed to the commission shall be implemented immediately. An award that is appealed and not set aside by the commission shall be implemented within 14 days of the receipt of the commission's decision absent a stay.") This statute reflects the Legislature's policy that labor arbitration awards be paid promptly. However, not only did the County fail to pay the award in a timely manner, it played a cat-and-mouse game with its stay application, filing for a stay with the Appellate Division when plaintiff sought to enforce the award in the trial court, then withdrawing the stay application as soon as the trial court dismissed the enforcement action, and finally refiling the stay application after the trial court reinstated the enforcement complaint. The record plainly demonstrates that the County had no intention of paying the award until it was forced to do so.*fn2
Moreover, once PERC rendered its decision, the onus was on the County to pay the award; it should not have been the FOP's burden to move for enforcement. See Elizabeth Police Superior Officers Ass'n v. City of Elizabeth, supra, 180 N.J. Super. at 520 ("Clearly, a stay would be necessary in a situation where the defendant as the party responsible for implementation of the award sought to vacate it."). A pending appeal does not automatically stay the order from which the party is appealing.
R. 2:9-5(a). Nor does a pending appeal divest a trial court of jurisdiction to enforce the order being appealed. R. 2:9-1(a). Otherwise, filing an appeal would effectively grant the losing party an automatic stay pending the appeal.
A losing party has a right to appeal and a right to apply for a stay. However, absent a stay, a losing party does not have a right to flout the order from which it is appealing. See Elizabeth Police, supra, 180 N.J. Super. at 520. Entering an order awarding counsel fees would not have precluded the County from pursuing its appeal rights, nor would it have unfairly burdened or "chilled" the right of appeal. Consequently, we conclude that it was a mistaken exercise of discretion to deny plaintiff's application for counsel fees. Plaintiff is entitled to reasonable counsel fees for the enforcement action, including time spent opposing the two stay applications.
We reach the same conclusion on the issue of post-award interest. The County was obligated to pay the award within fourteen days of the PERC decision, i.e., by December 5, 2006. See N.J.S.A. 34:13A-16f(5)(b). The County did not pay the award until June 30, 2007, despite repeated demands for payment and the filing of an enforcement complaint. During that time, the employees represented by plaintiff FOP were denied the use of wages they should have had, and the County had the opportunity to earn interest on the funds. Unlike Elizabeth Police, supra, 180 N.J. Super. at 517-18, where the union moved to vacate an arbitration award and then sought interest due to delay in payment, here the FOP actively sought to enforce the award and the County resisted payment. In the circumstances of this case, an award of interest at the rate permitted by Rule 4:42-11, is warranted from December 5, 2006 to June 30, 2007. See Fasolo v. Bd. of Trustees, 190 N.J. Super. 573, 583 (App. Div. 1983); Board of Education v. Levitt, 197 N.J. Super. 239, 245 (App. Div. 1984); Amalgamated Transit Union v. DeCamp Bus Lines, Inc., 382 N.J. Super. 418, 432 (Law Div. 2005).
Accordingly, we reverse the order denying counsel fees and interest, and we remand this matter to the trial court for further proceedings consistent with this opinion.
Reversed and remanded.