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Pinedge Associates v. Steliga Homes Corp.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 1, 2009

PINEDGE ASSOCIATES, AND PINEDGE ASSOCIATES, LLC, AS THE SUCCESSOR IN INTEREST TO PINEDGE ASSOCIATES, PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
STELIGA HOMES CORPORATION, DEFENDANT-RESPONDENT/ CROSS-APPELLANT, AND MAIN LINE REALTY, INC., DEFENDANT.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-4439-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 17, 2008

Remanded August 14, 2009

Resubmitted August 17, 2009

Before Judges Rodríguez and Waugh.

Plaintiffs, Pinedge Associates and Pinedge Associates, LLC (collectively "Pinedge"), appealed from the March 23, 2007 final judgment following a bench trial. The judge awarded $34,053.30 plus $11,952.34 in costs and counsel fees to Pinedge to be paid by defendant Steliga Homes Corporation (Steliga). This judgment represents an award of $55,558, less a setoff to Steliga on its counterclaim of $21,501.64. Steliga cross-appealed, arguing that it is entitled to the reasonable value of its services and challenging both the amount of the judgment and the award of counsel fees to Pinedge.

We affirmed on the appeal and the cross-appeal, except for the award of counsel fees to be paid by Steliga. We retained jurisdiction and remanded to the Law Division "for a statement of reasons for the award of counsel fees."

The judge has now provided the following statement of reasons:

After reviewing my trial notes to refresh my recollection, I calculated the attorney's fees in the following manner.

A judgment was entered for Plaintiff in the approximate amount of $55,558. This amount was offset by approximately $21,502 awarded to Defendant on its counterclaim.

The Plaintiff requested attorney's fees totaling approximately $19,877. This Court offset the requested $19,877 by a percentage equal to the percentage by which the initial judgment for Plaintiff was reduced by the counterclaim judgment awarded to Defendant.

$21,502/$55,558 =.387

1 -.387 =.613

$19,877*.613 = Approx. $12,000

In calculating "reasonable" attorney's fees, this Court relied on the Supreme Court's decision in Singer v. State[,] 95 N.J. 487, 494 [, cert. denied, 469 U.S. 832, 105 S.Ct. 121, 83 L.Ed. 2d 64 (1984)]. To recover attorney's fees from its adversary, "[a] party must demonstrate that his lawsuit was causally related to securing the relief obtained; a fee award is justified if [the party's] efforts are a 'necessary and important' factor in obtaining the relief." Ibid. It was abundantly clear to the Court that all attempts to resolve the dispute between the parties without litigation were non-productive. Here, Plaintiff's lawsuit was the clear cause of Plaintiff's recovery. Plaintiff's counsel effectively investigated and argued its client's case and, as a result, procured a net judgment in the client's favor. Therefore, Plaintiff's counsel is entitled to a reasonable percentage of that net judgment as a result of its efforts.

On cross-appeal, Steliga contends that "[t]he trial court erred in its award of attorney['s] fees." We disagree.

Paragraph 30(H) of the lease provides as a remedy to a breach that "[i]n addition to all remedies provided herein by law, Tenant shall pay to Landlord reasonable [attorney's] fees and court costs incurred as a result of such breach."

Therefore, here, attorney's fees may be allowed because the parties have agreed thereto in advance by agreement. Satellite Gateway Commc'ns v. Musi Dining Car Co., 110 N.J. 280, 286 (1988). An award of attorney's fees is strictly construed. N. Bergen Rex Transp. v. Trailer Leasing Co., 158 N.J. 561, 570 (1999). We will disturb a trial court's award of attorney's fees "only on the rarest of occasions, and then only because of a clear abuse of discretion." Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). We have applied the same test for reasonable attorney's fees in contract cases that we use in other attorney's fee award cases in New Jersey. See N. Bergen, supra, 158 N.J. at 570. In determining the reasonableness of an attorney's fee award, the threshold issue "is whether the party seeking the fee prevailed in the litigation." Ibid. In that regard, the party must establish that the "lawsuit was causally related to securing the relief obtained; a fee award is justified if [the party's] efforts are a 'necessary and important' factor in obtaining the relief." Ibid. (quoting Singer, supra, 95 N.J. at 494).

Recently, the Supreme Court decided Litton Indus., Inc. v. IMO Indus., Inc., __ N.J. __ (2009) (slip op. at 1). The Supreme Court recognized that to determine the "reasonableness" of attorney's fees, the judge must calculate the "lodestar," which is the amount of hours reasonably expended by the prevailing party's counsel, multiplied by a reasonable hourly rate. Id. at 15. Further, the judge must first determine the reasonableness of the hourly rate of the "prevailing attorney in comparison to rates for similar services by lawyers of reasonably comparable skill, experience, and reputation in the community." Id. at 16 (quoting Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 22 (2004)). The judge must then consider the degree of success in determining the reasonableness of the time expended. Ibid.

Applying that standard here, we must remand the award of counsel fees because the judge skipped the first step in deciding the lodestar. That is a necessary step in arriving at the proper amount of attorney's fees.

Remanded to the Law Division, Camden County for statement of reasons regarding the amount of the lodestar.

We retain jurisdiction.

20091201

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