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Intermodal Management System, LLC v. Worldwide Express


November 2, 2009


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, Docket No. DC-7076-08.

Per curiam.


Argued October 19, 2009

Before Judges Lisa and Baxter.

This appeal arises out of a commercial dispute that was resolved after a bench trial in the Special Civil Part. Intermodal Management System, LLC (Intermodal) shipped two truckloads of cargo from Kentucky to California for Worldwide Express, Inc. (Worldwide). The contractual arrangements for this service were not set forth in a formal contract, but were the subject of price quotes set forth in various documents. The dispute boiled down to whether the quoted price was on a "per job" or "per truckload" basis. Worldwide contended that the price quoted by Intermodal, $3829.40, was for the entire job, not for each truckload. Intermodal took the opposite view and billed for two truckloads, each at the quoted price of $3829.40. Worldwide paid only $3829.40, not twice that amount. Intermodal sued Worldwide for the remaining $3829.40 it claimed was due. It also sought counsel fees, costs, and prejudgment interest. It is undisputed that the contractual arrangements provided for recovery of these items in the event litigation became necessary for collection of amounts due.

After a bench trial, the judge agreed with Intermodal's interpretation of the contractual arrangements and awarded it judgment for the full principal amount requested, $3829.40, plus prejudgment interest at the contractual rate of two percent per month and attorney's fees. Costs were taxed by the court in the amount of $57.

Neither party appeals from the judgment on the substantive issue of the contractual obligation. Intermodal appeals from the $1300 counsel fee award, contending it was too low and constituted a mistaken exercise of discretion. Intermodal also appeals from the amount of prejudgment interest awarded, contending the judge made a mathematical error. We reject these arguments and affirm.

Intermodal's complaint was filed on or after March 20, 2008.*fn1 Worldwide filed its answer, dated April 28, 2008. No depositions were conducted, and discovery was limited to an exchange of documents. The case was tried on June 30, 2008. The trial transcript reveals that the trial began at 10:11 a.m. and concluded at 12:30 p.m. At the conclusion of the trial, the judge announced her decision in favor of Intermodal. Intermodal's counsel then requested that counsel fees and costs be added. This colloquy then ensued:

[INTERMODAL'S COUNSEL]: So we're also entitled to receive our attorneys' fees and costs in this matter. We can either just agree right now on a number for a reasonable amount of time that I had to spend. Obviously, we've been here today, we've had some time in prep, we've drafted the complaint and had to serve it and do all those kinds of things. We can just pick some round number, or I can submit a certificate of service, as Your Honor --

THE COURT: Can you agree? How about you take a second to see if you can agree?

[INTERMODAL'S COUNSEL]: Why don't we see if we can agree?

(Counsel confer)

[WORLDWIDE'S COUNSEL]: Your Honor, I'm going to have to --

THE COURT: Let him submit a certification? Okay, that's fine.

[WORLDWIDE'S COUNSEL]: I'm not agreeing to anything.

[INTERMODAL'S COUNSEL]: And, Your Honor, also just one thing. If we're going to do that, obviously, if there is going to be an objection and we have to litigate it, I'm also going to have to prepare it; it will obviously increase the amount of time I'm going to spend.

THE COURT: Well, you do a certification and see what she has to say about it. That's not a whole lot of --

[INTERMODAL'S COUNSEL]: Yeah, it's really simple. I had suggested we just estimate ten hours in total, but --


[INTERMODAL'S COUNSEL]: I would have been happy with it.

[WORLDWIDE'S COUNSEL]: At 435 an hour, I can't agree to that, Your Honor.

[INTERMODAL'S COUNSEL]: That's my rate; and, Your Honor, I'm worth every penny.

THE COURT: Whoa, the Court will have to say whether or not --

[WORLDWIDE'S COUNSEL]: I can't agree to that, Your Honor.

[INTERMODAL'S COUNSEL]: Well, you know, you pay peanuts, you get monkeys. What can I tell you?

THE COURT: Okay. The judgment is 30 -- what is it? Did I --

THE CLERK: 3829.40.

THE COURT: Okay. And you can amend it with your certification. Okay?

[INTERMODAL'S COUNSEL]: And, obviously, also prejudgment interest, Your Honor. We're also --

THE COURT: You have to calculate that. You do that in your --

[INTERMODAL'S COUNSEL]: I will. That's fine. Plus costs.

THE COURT: Yes. All right? Take all your stuff.

The clerk of the Special Civil Part taxed costs in the amount of $57 and entered judgment for the total amount of $3886.40, effective June 30, 2008. See R. 6:6-5 (providing that in the Special Civil Part, "upon determination by a judge sitting without a jury, the clerk shall note the judgment on the jacket and it shall take effect forthwith. The clerk shall thereupon enter the judgment and tax the costs.").

Intermodal's counsel then submitted a certification of services. He attached billing records to Intermodal, reflecting entries for time he expended and time a legal assistant expended in this case. Counsel billed his time at $435 per hour and that of the legal assistant at $105 per hour. Counsel contended that Intermodal agreed to pay these rates in a retainer agreement (which was not attached), and that it did pay the full amounts billed. The total amount requested in counsel fees was $12,303.65.

Counsel for Worldwide objected in a letter to the court, which we set forth in its entirety:

We object to the amount of attorney's fees claimed by Intermodal. The credit agreement is for a total of $5,000. It calls for reasonable attorney's fees. The amount due per the court order is $3,600.

The cost of collection should be 20%. The rate per hour of $435 plus the cost of a legal assistant at $105 per hour is not reasonable. The amount requested of $12,303.65 is not reasonable in light of the amount legitimately in dispute. Legal fees for collecting a book account should not be $12,303.65 that is not reasonable. There was a legitimate dispute in what was owed and my client is now to pay excessive collection costs. There is no retainer agreement to show that the rate should be $435 plus the cost of a legal assistant at $105 per hour. Thank you in advance for your kind consideration in this matter.

The judge awarded $1300. She did so by inserting that amount in a form of proposed final judgment submitted by Intermodal's counsel. The judge did not express any reasons.

Intermodal filed a motion to amend, alter, or correct the judgment. It sought additional prejudgment interest and an attorney's fee in the full amount requested, $12,303.65. Counsel for Worldwide objected in a letter to the court which included the following:

Mr. Schreiber's legal bill was not only unreasonable it is over stated and untrue. Mr. Schreiber charged my client 3 hours for the fact that his client was not a registered corporation in New Jersey. Intermodal had no right to even file suit. Their corporate charter had been revoked. Mr. Schreiber charged my client for reinstating his client's corporate charter. Mr. Schreiber charged 9 hours for a 3 hour trial. I have no way of knowing what else Mr. Schreiber was less than candid about. Mr. Schreiber stated in court there was only 10 hours in the file which itself is ridiculous for a $3,500 disputed book account. Mr. Schreiber claims to have spent 3 hours working on his initial book account simple complaint. There is so much in his bill that is questionable to say the least. His assistant spent .5 hours faxing. The entire bill is questionable. There is no retainer agreement, no proof of payment by the client (ie copies of checks). Legal fees have to be reasonable and are awarded at the discretion of the court.

The judge denied the motion. She entered an order which continued the provisions contained in the prior order. Again, the judge did not set forth reasons. This appeal followed.

We can dispose of Intermodal's prejudgment interest argument quite summarily. In accordance with the rules pertaining to the Special Civil Part, judgment was entered by the clerk immediately upon conclusion of the trial and the determination made by the judge on June 30, 2008. No prejudgment interest can be allowed beyond that date.*fn2

As to the counsel fee award, it is well settled that trial courts are granted broad discretion in making such awards, which we review using an abuse of discretion standard. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 443-44 (2001). The trial judge is in the best position to evaluate the reasonableness of the request and weigh the equities and arguments of the parties. Id. at 447. The award made by a trial court "will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion." Rendine v. Pantzer, 141 N.J. 292, 317 (1995).

In order for us to assess whether the trial judge acted within the broad discretionary range provided for such determinations, we should have a statement of reasons explaining the determination. The judge should have provided such a statement when initially rendering the award, and certainly when reaffirming it upon Intermodal's motion to amend, alter, or correct the award. See R. 1:7-4(a). The judge did not do so.

Further, after the appeal was filed, the judge did not avail herself of the opportunity provided by Rule 2:5-1(b) to furnish a statement of reasons during the pendency of the appeal. We recognize that the Special Civil Part is a high volume court that places substantial demands on the judges who sit there. Nevertheless, the absence of a statement of reasons in a situation such as this impedes the appellate review process. Although a remand for a statement of reasons would be warranted, we decline to take that action. Instead, we choose to dispose of the matter on the record before us.

Start to finish, this lawsuit lasted only three months. It was a claim to collect on a book account. Indeed, the opening words of Intermodal's appellate brief are: "This was a simple book account case . . . ." It does not appear that there was any pretrial motion practice. Only paper discovery was conducted and it was minimal. Worldwide did nothing to protract the litigation or make it more burdensome for Intermodal. The trial was conducted in one session and lasted less than two-andone-half hours. A single issue was in dispute, namely whether Worldwide's obligation was on a per truckloads or per job basis for the two truckload's of cargo that were the subject of the dispute. The amount in dispute was $3829.40.

At the conclusion of the trial, Intermodal's counsel sought to resolve the counsel fee issue without submitting a formal certification of services and estimated his total time expended on the case at ten hours. Worldwide's counsel refused to agree to the hourly rate requested, contending that it was unreasonable for a matter such as this.

In a fee shifting setting, an attorney cannot necessarily seek to recover from his or her adversary all fees charged. The prevailing standard is that an allowance will be made only for reasonable fees. Kellam Assocs., Inc. v. Angel Projects, LLC, 357 N.J. Super. 132, 142 (App. Div. 2003). The determination of reasonableness requires consideration of the time and labor required, the novelty and difficulty of the issues involved, the skill required to deal with such issues, the amount involved, the fees customarily charged in the locality for similar legal services, and the like. RPC 1.5(a). Here, the amount in dispute was relatively low. The issue was simple and straightforward. Although the certification of Intermodal's counsel stated that his fees were consistent with those charged by other attorneys and paraprofessionals "with comparable levels of experience within our locality," there is no qualification as to the nature of services rendered justifying such fees. Perhaps $435 per hour is reasonable for more complex matters in the locality involved. That does not make it reasonable for a case such as this, which requires a lower skill and experience level.

We have reviewed the billing statements attached to counsel's certification. We share the concerns raised by Worldwide's counsel in opposing the fee application, and we infer that the trial judge also agreed that the number of hours required to handle this case were substantially overstated, some services were not reasonably related to the litigation, and the hourly rate for this type of case was excessive. All of this is against the backdrop of counsel's representation at the conclusion of trial that he spent only about ten hours in total on the case.

In our view the $1300 fee was within a range of reasonableness for services required to litigate this case.


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